Finding Text
Criteria: In accordance with 34 CFR Section 668.173 (b) and 2 CFR 200.303, the institutional portion of unearned aid must be returned to the appropriate Title IV, HEA program or Federal Family Education Loan (“FFEL”) lender no later than 45 days after the date of the institution’s determination that the student withdrew. Furthermore, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student’s withdrawal date. The Compliance Supplement issued by the Office of Management and Budget requires auditors to review the return of Title IV funds determinations/calculations for conformity with Title IV requirements. Furthermore, according to 34 CFR 668.22, all grant funds relating to post-withdrawal disbursements that are not disbursed to the student’s account, must be disbursed to the student no later than 180 days after the date of the institution’s determination that the student withdrew.
Condition: It was noted during our testing of R2T4 calculations that two of 40 students selected for testing had instances of non-compliance. Specifically, one student’s return was not received within the 45-day time limit and one student’s return was not calculated correctly.
Questioned Costs: $1,886
Context: During our audit procedures, we noted below instances for R2T4 testing:
- One of the 40 total students’ return was not returned within the 45-days requirement.
- One of the 40 total student’s R2T4 was incorrectly calculated, resulting in $1,866 in excess funds being returned by the University.
Cause: The University implemented controls during the year to improve compliance with Title IV regulations, resulting in a significant reduction in the number of instances of noncompliance (from seven in prior year to one in the current year). Due to the timing of the implementation of these controls, instances of noncompliance with Title IV regulations were still identified.
Effect: The cause identified resulted in noncompliance with Title IV regulations.
Repeat Finding: Yes, see Finding 2023-001.
Recommendation: We recommend that the University improve the existing procedures and controls to ensure compliance with the aforementioned criteria.
Views of responsible officials: Management concurs with the finding.