Finding Text
Identification of the Federal Program - Student Financial Aid Cluster - Assistance Listing Nos. 84.007,
84.033, 84.063, and 84.268.
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 or 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 in this section and no additional
disbursements may be made to the student for the payment period or period of enrollment. 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 668.22(a)(1) through (a)(5)).
Condition - A sample of 40 students were selected from a population of all students that were withdrawn,
dropped, on a leave of absence, never began attendance or terminated during the audit period to ascertain
if returns of Title IV funds were properly calculated and timely processed.
For 1 student selected for Return to Title IV testing, it was identified that the College incorrectly calculated
the Return to Title IV (R2T4) funding due to inaccuracies in the institutional charges applied to the R2T4
calculation. The College did not use the correct institutional charges in its R2T4 calculation, which resulted
in overcalculating the return of funds by the institution and undercalculating the return of funds by the
student that needed to be returned to the U.S. Department of Education (ED).
For 2 students selected for Return to Title IV testing, the College did not properly allocate the returned
funds between the College and the student. As a result, the student’s portion of the returned funds was
either over- or under-reported, impacting both the student’s financial aid account and the College’s
compliance with federal requirements.
For 1 student selected for Return to Title IV testing, the College used incorrect enrollment start and end
dates, which resulted in the failure to properly complete an R2T4 calculation. Because the calculation was
not performed when required, the College did not determine the amount of Title IV funds to be returned for
students who withdrew, as mandated by the U.S. Department of Education.
Cause - The errors were due to inadequate internal controls over the R2T4 process. The institution's
processes for tracking enrollment dates, calculating institutional amounts, and allocating funds did not
include sufficient verification steps to ensure accuracy.
Effect - Overpayments or underpayments of R2T4 reimbursements to students and the Department of
Education.
Recommendation - We recommend the College Conduct periodic audits of the R2T4 process to ensure
ongoing compliance with federal requirements and to identify potential errors before they impact students
or the institution. We also recommend that management strengthens internal controls to ensure that the
correct institutional amounts, enrollment dates, and other relevant data are used in the R2T4 process. This
should include system checks or automated tools to flag discrepancies.
Views of Responsible Officials - Management agrees with the finding.