Finding Text
Finding 2024-001:
Federal Program:
U.S. Department of Education:
Student Financial Aid Cluster:
Federal Pell Grant, Assistance Listing No. 84.063
Federal Supplemental Education Opportunity Grant, Assistance Listing No.
84.007
Federal Work Study Program, Assistance Listing No. 84.033
Federal Perkins Loan Program, Assistance Listing No. 84.038
Federal Direct Loan Program, Assistance Listing No. 84.268
Teacher Education Assistance for College and Higher Education Grants,
Assistance Listing No. 84.379
Nursing Faculty Loan Program, Assistance Listing No. 93.264
Criteria:
The University must comply with 34 CFR Section 668.22.
Condition:
During our audit of official withdrawals, we reviewed the calculation used by the University for
the return of funds and noted various incorrect days being used within the calculations:
- Incorrect total days for Fall and Spring semesters for full-term students
- Incorrect break days for Fall and Spring semesters for full-term students
- Incorrect withdrawal date used
- Module days being used incorrectly for a full-term student
Our testing of 40 official withdrawals included 11 and 12 full-term students from the Fall and
Spring semesters, respectively, for which the return of funds calculation was improperly
calculated due to the University using incorrect total days and incorrect break days. One
student's calculation was incorrect due to the University treating them as a module student,
instead of full-term. Additionally, the University used the incorrect withdrawal date for three
students.
Additional analysis performed by the University on the remaining official withdrawals identified
an additional 21 and 25 students within the Fall and Spring semesters, respectively, for which
the incorrect total days and incorrect break days were being used in the return of funds
calculations.
Cause:
The University does not have a procedure in place to properly review days used within return of
funds calculations.
Effect:
The provisions of 34 CFR Section 668.22 were not followed and thus a total of 73 students had
incorrect return of funds calculations.
Questioned Costs:
Known questioned costs total $16,857 in Title IV aid that should have been returned as a result
of our testing of 40 official withdrawals. Additional analysis performed by the University
identified an additional $5,764 in Title IV aid that should have been returned.
Recommendation:
We recommend that the University review and revise their policies and procedures related to
the return of funds calculation. Specifically, the University should:
- Ensure the correct definition and calculation of days (end of enrollment period, break days,
etc.) is used within the calculations.
- Implement a review process to verify calculations before finalizing returns.
- Provide training to relevant staff on the proper calculation methods to enhance compliance
and accuracy.
Views of responsible officials and planned corrective actions:
Northern Kentucky University agrees with the auditors' finding and recommendations. The
following corrective action will be taken:
The University will return $22,621 in federal student financial aid to United States Department of
Education (USED) which represents the updated R2T4 accounting for the correct academic
calendar end dates and breaks periods for the 2023-24 academic year.
The University provided the external auditors with the current year academic calendar (end of
period, break day, etc) for review and validation.
The correct definition and calculation of days (end of enrollment period, break days, etc) will be
used with return calculations.
There will be a review process that will include validation from the AVP to verify calculations
before finalizing returns.
Training will be provided to all relevant staff on the proper calculation methods to ensure
compliance and accuracy which will include the review of the Federal Student Handbook -
Volume 5 - Withdrawals and the Return of Title IV Funds and other relevant guidance from
USED.