Finding Text
Special Tests and Provisions – Disbursements to or on Behalf of Students: Student Financial Assistance Cluster: – AL 84.007, 84,063 and 84.268. US Department of Education Significant Deficiency and Nonmaterial Noncompliance: Criteria or specific requirements: 34 CFR 668.164(h)(2): Title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than (i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. Condition: During our testing over the return of credit balances, the following deficiencies were noted: 27 instances where credit balances were not refunded in the required time frame. 47 instances where refunds were due to students but none were posted in the ledger. 9 instances where the balances refunded to students could not be recalculated. Cause: The College did not comply with Federal disbursement requirements for students under the Pell Grant and Direct Loan programs. Effect: The College is not in compliance with the Federal requirement described in the OMB Compliance Supplement. Questioned costs: None identified. Context : The College contracts with a third-party servicer to perform one or more of the functions associated with disbursing Title IV funds on behalf of the school. A nonstatistical sample of 60 students out of 404 students were selected for disbursement testing. Identification as a repeat finding: Not a previous finding. Recommendation It is recommended the College should establish effective controls and processes to ensure that reporting of FISAP figures are properly supported and any evidence of review is maintained. View of responsible officials and corrective action plan. Management agrees with the finding. Please see separate Corrective Action Plan for procedures to be implemented.