Finding Text
Finding 2024-003
Student Financial Aid Cluster
Special Tests and Provisions – Return of Title IV Funds
Federal Agency: U.S. Department of Education
Program: Student Financial Assistance Cluster (ALN #’s - 84.063, 84.033, 84.007, 84.268)
Criteria: In accordance with 34 CFR section 668.22, when a recipient of Title IV grant or loan assistance withdrawals during the payment period, the institution must have proper controls in place to determine the amount of Title IV aid earned by the student as of the student’s withdrawal date, and if the total amount earned is less than the amount of Title IV funds that were disbursed, the difference must be returned to the Title IV programs. Return of Title IV funds are required to be deposited or transferred into the Student Financial Aid Account or electronic fund transfers initiated to the Department of Education no later than 45 days after the date the institution determined that the student withdrew.
Condition: Our Return of Title IV Funds sample of 25 yielded three instances where the improper amount of funding was returned to the Department of Education. The calculation of the Return of Title IV Funds for the first student was based on a withdrawal date of February 5, 2024 when the actual withdrawal date was March 25, 2024. Based on the withdrawal date utilized in the calculation, WCCC returned a total of $1,023 of the subsidized loan award; however, based on the actual withdrawal date, the amount that should have been returned was $495.18, resulting in an overpayment of $527.82. The calculation of the Return of Title IV Funds for the second student did not include the unsubsidized loan in the calculation. The amount of Title IV Funds returned was $1,096, but had the unsubsidized loan been included in the calculation, only $747.18 should have been returned, resulting in an overpayment of $348.82. The calculation of the return of Title IV Funds for the third student, calculated a required return of Pell funding in the amount of $599.67. While the calculation of the return was correct, the amount calculated was not returned to the Department of Education, resulting in an underpayment of $599.67. Additionally, our Return of Title IV Funds sample of 25 yielded five instances in which the calculation was not performed within 45 days of the students’ withdrawal dates. As a result, $2,788.31 of funds were not returned timely to the Department of Education.
Cause: Controls were not in place to ensure that Return of Title IV Funds were performed accurately and timely.
Effect: Errors in mathematical calculations resulted in incorrect amounts returned by WCCC. Additionally, calculations were not performed timely. As a result, WCCC did not comply with requirements related to the calculation and timely return of Title IV Funds as outlined in 34 CFR section 668.22.
Repeat Finding: This is a repeat finding of 2023-004.
Questioned costs: Unknown
Recommendation: We recommend that WCCC develop a process for an independent review, including reperformance of the calculations of the refund calculations to ensure calculations are being performed properly. In addition, we recommend that WCCC develop a process for ensuring calculations and subsequently, return of Title IV funding is done timely.
View of Responsible Officials and Planned Corrective Action: Management agrees. See separate Corrective Action Plan.