Finding Text
FINDING 2025‐002 – Special Tests and Provisions – Return of Title IV Funds Significant Deficiency in Internal Control over Compliance Student Financial Assistance Cluster U.S. Department of Education Assistance Listing Numbers: 84.007, 84.063, 84.268, 84.379, Federal Program Name: Student Financial Assistance Cluster Award Year: 2024-2025 Criteria: Per 34 CFR §§ 682.605 and 685.305, institutions participating in Title IV programs are required to determine the withdrawal date of a student who has unofficially withdrawn no later than 30 days after the earlier of the following: • The end of the payment period or period of enrollment, • The end of the academic year, or • The end of the student’s educational program. This requirement applies to both attendance-taking and non-attendance-taking institutions. While the method for determining the withdrawal date may differ (e.g., based on the last academically related activity), the timeframe for identifying the unofficial withdrawal remains consistent. In addition, under 34 CFR §668.22, institutions are responsible for calculating the amount of earned Title IV aid based on the student’s withdrawal date. If the student did not earn 100% of the aid disbursed, the unearned portion must be returned by the institution within the timelines prescribed by federal regulations. Condition and Context: A sample of 14 students who withdrew during the year and were recipients of Title IV funding were selected for testing. Our sample was selected using a random and judgmental sampling methodology, from a population of 91 total withdrawals. Two of the unofficial withdrawal students selected for testing we’re not identified as unofficial withdrawals for approximately 88 and 102 days after the last day or the related term which is considered late. Once identified by the University, the calculation was performed, and the funds were returned to the Department of Education in the amount of $9,975. Questioned costs: No Effect: The University did not identify and report unofficial withdrawals within the required timeframe. As a result, the students’ enrollment statuses may have been inaccurately reflected in reporting systems used by the Department of Education, the Federal Direct Loan Program, loan servicers, and other institutions. This could lead to additional delayed return of title IV funds and potential noncompliance with federal financial aid regulations. Cause: The University’s current processes for identifying unofficial withdrawals was not designed to ensure timely detection and reporting within the federally required timeframe. Repeat finding: No Recommendation: We recommend the University enhance its monitoring and review procedures to ensure that all unofficial withdrawals are identified and reported within the federally required timeframe. Strengthening this process will support timeliness of federal compliance.