Finding Text
2024-003 – Cash Management (Significant Deficiency) Department of Education, SFA Cluster, Cash Management Criteria: In accordance with 34 CFR 668.164, an institution submits a drawdown request for funds utilizing ED’s electronic grants management system that may not exceed the amount of funds needed to make immediate disbursements to eligible students and parents. The institution must disburse the requested funds as soon as administratively possible, but no later than three business days following receipt of those funds from ED. Any funds not disbursed by the end of the third business day are considered excess cash. Condition: A sample of twenty-six students were tested for timely distribution of federal student aid funds. Aid was distributed more than three business days after funds were received from ED for all students tested. Cause: Lack of controls over cash management. Effect: Excess federal cash retained by the institution. Repeat Finding from a Prior Year: Not a repeat finding. Recommendation: We recommend the University implement appropriate training regarding compliance regulations into the employee onboarding process and thereafter for applicable employees. In addition, we recommend the University implements timely review procedures to ensure that any overdrawn funds are returned within the tolerance period. Management Response: The University acknowledges the deficiency in the timely disbursement of Title IV funds and has taken immediate corrective action to strengthen cash management controls. Specifically, the Financial Aid Office and the Business Office collaborated to revise internal procedures to ensure that federal funds are disbursed within three business days of receipt from the U.S. Department of Education. Effective 7/16/2025, a new standard operating procedure (SOP) was implemented, which includes: 1) Weekly reconciliation between Campus Anyware and G5 drawdowns to track the timing of funds received and disbursed. 2) Mandatory compliance training on federal cash management regulations for all financial aid and student accounts staff, both during onboarding and annually thereafter. 3) Monthly internal audits to review disbursement timelines and identify exceptions. Additionally, any funds inadvertently held beyond the three-day window are now promptly returned to G5 within the regulatory tolerance period.