Finding Text
Student Financial Aid Cluster (FFAL #84.268 and #84.063)
Special Test: Return of Funds
Significant Deficiency in Internal Control over Compliance
Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a
payment period or period of enrollment in which the recipient began attendance, the institution
must determine the amount of Title IV aid earned by the student as of the student’s withdrawal
date. If the total amount of Title IV assistance earned by the student is less than the amount
that was disbursed to the student or on his/her behalf as of the date of the institution’s
determination that the student withdrew, the difference must be returned to the Title IV
programs as outlined by the regulations. If the amount the student earned is greater than the
amount disbursed, the difference between the amounts must be treated as a post-withdrawal
disbursement (34 CFR section 668.22(a)(1) through (a)(5)).
Condition: We identified one instance where the incorrect clock hour total was used to calculate the return
of funds that resulted in an incorrect calculation of funds to be returned.
Questioned
Costs: None reported
Effect: Use of improper clock hours in the return of funds calculation will likely result in incorrect
calculations and potential questioned costs.
Cause: This appears to be a manual process. As a result, this miscalculation is due to a matter of human
error.
Repeat finding
From Prior Year:
No
Context: One withdrawal out of the 6 sample of students tested for return of funds calculations was
incorrect. Non-statistical sampling was used.
Recommendation:
We recommend that management update their control processes to ensure that the proper
calculations are performed and reviewed. Views of Responsible Officials:
We agree with the finding.