Finding Text
Significant deficiency in internal controls over compliance with cash management requirements. Federal Agency: U.S. Department of Education Program Title: Federal Supplemental Educational Opportunity Grants Assistance Listing Number: 84.007 Award Period: 2024-25 Criteria Per 34 CFR 668.162, under the advance payment method, an institution must disburse funds requested from the Department of Education (ED) no later than three days following the date the institution received those funds. ED allows an institution to retain, for up to seven days, excess cash that does not exceed one percent of the total amount of funds drawn by the institution in the prior award year. The institution must return to ED any excess cash over the tolerable amount (one percent) and any amount remaining after the tolerance period (seven days). Condition/Context for Evaluation The University drew down $72,265 in Federal Supplemental Educational Opportunity Grants (FSEOG) funds in October 2024 and disbursed funds to students through January 2025. No amounts were disbursed to students within the required three business days from receipt of funds, and no funds were returned to ED. Effect or Potential Effect This occurred as a result of lack of understanding of cash management requirements for FSEOG funds and resulted in the University holding excess cash that should have been returned to ED beyond the tolerance period. All funds were ultimately appropriately disbursed to students, and error was only an issue for FSEOG funds. Questioned Costs $72,265 Repeat Finding Not applicable. Recommendation We recommend that the University review cash disbursement requirements, and implement control process for FSEOG funds to ensure timely disbursements to students. Views of Responsible Officials Management concurs with the finding and has provided the accompanying corrective action plan.