Finding Text
2024-006 Department of Education
Student Financial Aid Cluster
Federal Financial Assistance Listing 84.268 – Federal Direct Student Loans
2023-2024 Award Year
Special Tests and Provision – Disbursements to or on Behalf of Students
Significant Deficiency in Internal Controls over Compliance and Noncompliance
Criteria: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees,
food and housing, and other authorized charges assessed the student, a credit balance is created. The institution
must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first
day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred
if that was after the first day of class. Also, as allowed under 34 CFR 668.164(c)(3), a school may pay prior award
year charges up to $200. If over $200, student authorization is required to apply the payments to a prior-year
balance.
Condition: During testing over credit balances, 1) one student did not receive the refund on a timely basis; and
2) two students had amounts applied to a prior-year balance over $200.
Cause: The student was awarded aid at an off time in the semester, and the refund was not provided within the
14-day window. Also, turnover in staffing in the fall 2023 allowed disbursements to be applied to students prioryear
accounts receivable balances relating to tuition and fees or other charges.
Effect: The students were not given the refund in a timely manner or given the proper refund related to the
current award period.
Questioned Costs: None.
Context/Sampling: A nonstatistical sample of 61 students who received Title IV disbursements out of 1,491
students who received aid.
Repeat Finding from Prior Year(s): No.
Recommendation: We recommend disbursements made be reviewed to ensure that the refunds are being
provided to students on a timely basis. We also recommend controls be put into place to ensure that, if a
student has a balance over $200 from a prior award year, those accounts are reviewed to ensure that currentyear
aid is not applied to prior-year balances.
Views of Responsible Officials: Management agrees with the finding.