Finding Text
2024-003 – U.S. Department of Education Student Financial Assistance Cluster – Special Tests and Provisions: Return of Title IV Funds
Criteria: Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)).
Condition and Context: The College failed to return title IV funds to the student within the 45-day time frame for 1 student out of 3 students tested.
Known Questioned Costs: None, reporting requirement not met.
Cause: Due to turnover at the College and in the financial aid department during the year under audit, a lapse in internal controls occurred related to the timing of the return of title IV funds to students.
Effect: The College was out of compliance with the return of title IV funds for students who withdrew within the required 45-day time frame. The late return of Title IV funds may lead to potential non-compliance with federal regulations, exposing the institution to financial liability and affecting the eligibility for future federal funding.
Recommendation: The College should establish a more effective withdrawal tracking system to ensure timely identification and processing of withdrawals. Additionally, regular training should be provided to financial aid staff on compliance with Title IV fund return requirements to prevent future occurrences.