Finding 1123822 (2024-001)

Finding No. 2024–001 – Special Tests and Provisions – Return of Title IV Funds - Timing of Return of Title IV Funds. Federal Program Name Student Financial Assistance Programs Cluster – Federal Pell Grant Program (PELL) Assistance Listing 84.063 Name of Federal Agency U.S. Department of Education (USDE) Category Internal Control/Compliance Compliance Requirement Special Tests and Provisions Criteria 34 CFR Section 668.173 (b) states that an institution returns unearned Title IV, HEA program funds timely if; (1) the institution deposits or transfers the funds into the bank account it maintains under §668.163 no later than forty-five (45) days after the date it determines that the student withdrew; (2) the institution initiates an electronic fund transfer (EFT) no later than forty-five (45) days after the date it determines that the student withdrew; (3) the institution initiates an electronic transaction, no later than forty five (45) days after the date it determines that the student withdrew, that informs a FFEL lender to adjust the borrower's loan account for the amount returned; or (4) the institution issues a check no later than forty-five (45) days after the date it determines that the student withdrew. Condition In testing compliance with the Return of Title IV funds requirements, we noted one (1) instance, which based on the regulation previously indicated, the return of Title IV funds as calculated by the Institution was performed after the required 45 days. (Table) Cause In November 2023, the University reported that the information technology systems had been the target of an external cyber-attack, which caused various disruptions in the operations. The delay in returning the funds within the time prescribed by the regulations was due to the disruptions caused by such event. Effect As a result of this instance of noncompliance, the USDE may issue warnings and/or impose penalties on the University. Also, the delay in the returning of Title IV funds could limit the students’ future eligibility to Title IV funds. Context Of the sixty-four (64) cases of withdrawal, we examined twenty-five (25) and determined that one (1) case that the Return of Title IV was returned late.Following is a description of the sample that included the finding identified and the population from which the sample was drawn for students that received Pell funds: (Table) Following is a description of the sample that included the finding identified and the population from which the sample was drawn for students that received Direct Loans: (Table) Identification of a repeat finding This is not a repeat finding from the immediate previous audit. Questioned cost None Recommendation The University should reinforce its internal control and procedures to ensure the return of Title IV funds in the required time frame. Views of Responsible Officials and Planned Corrective Actions Management of the University agrees with this finding. Please refer to the corrective action plan on pages 61-63.