Finding Text
Federal Program Information: Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (“ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance is allowed and considered tolerable if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)).
Condition: Certain instances were identified during the year in which funds drawn were held in excess of the allowable time frame.
Cause: Administrative oversight and insufficient internal control.
Effect or Potential Effect: The University was not in compliance with Cash Management compliance requirements.
Questioned Costs: None.
Context: During our testing, we identified an instance of cash held in excess of allowable time frames for the Federal Work-Study Program. Additionally, we identified an instance of cash held in excess of allowable time frames for the Federal Pell Grant Program. In both instances, excess cash was less than 1% of prior year draws.
Identification of Repeat Finding: This is a repeat of prior year finding 2023-001.
Recommendation: We recommend the University enhance its procedures and internal con trols over the cash management process to ensure that excess cash is returned timely, in accordance with federal regulations.
Views of Responsible Officials and Planned Corrective Actions:The FWS Program instances were the result of retroactive award adjustments that posted subsequent to the federal draws and federal draw reconciliations. To prevent a similar error in the future, the Business Office has modified its draw recordkeeping process to require that the employees that perform the draw requests and the reconciliations review the FWS master worksheet for any pending adjustments.
The Federal Pell Grant Program instances resulted from reversals of student awards. The Business Office routinely monitors the general ledger for award transactions, however, reversals of student aid awarded late in the academic term can be missed. The Financial Aid Office will be responsible to notify the Business Office when they initiate award reversals that necessitate a refund. In addition to ongoing monitoring of the related general ledger accounts, the Business Office will also create automated reporting to notify staff of the pending account balances.