Finding Text
FINDING 2024‐002 – Special Tests and Provisions – Return of Title IV Funds
Significant Deficiency in Internal Control over Compliance
Student Financial Assistance Cluster
U.S. Department of Education
Assistance Listing Numbers: Various
Federal Program Name: Student Financial Assistance Cluster
Award Year: 2023-24
Criteria: Per 34 CFR Section 668.22, when a student withdraws from an institution before completion
of their current academic period and is determined as having not earned 100 percent of their received
Title IV assistance, an institution must return the total amount of unearned Title IV assistance
received from withdrawn students.
The amount of title IV grant or loan assistance that is earned by the student is calculated by
determining the percentage of title IV grant or loan assistance that has been earned by the student
and applying this percentage to the total amount of title IV grant or loan assistance that was
disbursed to the student for the payment period or period of enrollment as of the student's withdrawal
date.
Unearned funds returned by the institution, or the student, must be credited to outstanding balances
on title IV loans made to the student for the payment period or period of enrollment for which a return
of funds is required. Those funds must be credited to outstanding balances for the payment period or
period of enrollment for which a return of funds is required in the following order:
- Unsubsidized Federal Direct Stafford loans,
- Subsidized Federal Direct Stafford loans,
- Federal Direct PLUS received on behalf of the student.
If unearned funds remain to be returned after repayment of all outstanding loan amounts, the
remaining excess must be credited to any amount awarded for the payment period or period of
enrollment for which a return of funds is required in the following order:
- Federal Pell Grants,
- Iraq and Afghanistan Service Grants,
- FSEOG Program aid,
- TEACH Grants.
Condition and Context: A sample of 12 students who withdrew during the year and were recipients
of Title IV funding were selected for testing. Our sample was selected using a random and judgmental
sampling methodology, from a population of 100 total withdrawals. Student records were compared to
the calculation of the return of Title IV funds (R2T4). We noted that the review of the R2T4 calculation
had not taken place consistently, and therefore the amount returned to Title IV was not calculated
correctly. This resulted in additional funding of $625 returned by the institution to the Department of
Education.
Questioned costs: No
Effect: An error in the calculation of the R2T4 funds was not caught and resulted in a return greater
than required.
Cause: The review process in place was not designed effectively to catch errors prior to the return of
Title IV funds and ensure accuracy in the calculation.
Repeat finding: No
Recommendation: We recommend the University design and implement a robust review process of
all R2T4 calculations for official and unofficial withdrawals. This will help ensure the accuracy of the
calculation before the return of funding.