Finding Text
2024-005—Disbursements to or on Behalf of Students (Credit Balances)
U.S. Department of Education
Student Financial Assistance Programs Cluster (Direct)
Federal Direct Loan Program (84.268)
Federal Pell Grant Program (84.063)
Federal Work Study (84.033)
Federal Award Year: 2023-2024
Repeat Finding: No
Criteria
The Code of Federal Regulations (34 CFR 668.164(h)(2)) requires that Title IV credit balance must be paid directly to the student or parent as soon as possible, but no later than (i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period.
Condition
The College did not pay the Title IV credit balance to the student directly for one student within the required timeline noted above. Out of the 40 students tested, we noted one student (2.5%) who’s credit balance was not paid directly to the student within the required timeframe noted above. The incorrect timing did not have an effect on the total award given to students (timing only).
The College did not have formally documented controls related to the process associated with disbursements to or on behalf of students (credit balances), which is required under Uniform Grant Guidance.
Cause
A refund to the student was required to be made within the required timeframe, and was done outside the required timeframe.
Effect
Noncompliance with federal regulations could result in the loss of future federal funding.
Questioned costs
There were no questioned costs with respect to this finding.
Context
We tested 40 students who had a credit balance of Title IV funds during the fiscal year ended June 30, 2024. For each student tested, management provided documentation from their student information system, showing the when the student was in a credit balance, and when the credit balance was disbursed to the student. Out of the 40 students tested, we noted 1 student (2.5%) whose credit balance was not timely refunded. The student had a credit balance as of March 19, 2024, and the student’s credit balance was refunded to the student on April 23, 2024.
Recommendation
We recommend the College review current processes and implement updated processes and controls for timely student credit balance refunds.
Views of responsible officials
Management agrees with this finding. See corrective action plan.