Finding 1162117 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2025-11-07
Audit: 371919
Organization: Schreiner University (TX)

AI Summary

  • Core Issue: The University inaccurately calculated the return of Title IV funds for students who withdrew, leading to potential noncompliance with federal regulations.
  • Impacted Requirements: Compliance with 34 CFR §668.22, which mandates accurate and timely calculations of returned Title IV funds.
  • Recommended Follow-Up: Strengthen internal controls by implementing a secondary review process and ensuring accurate documentation of withdrawal dates and payment periods.

Finding Text

Special Tests and Provisions – Return of Title IV U.S. Department of Education, Student Financial Assistance Cluster, Assistance Listing Number 84.268 Federal Direct Student Loans, Assistance Listing Number 84.063 Federal Pell Grant Program, Assistance Listing Number 84.007 Federal Supplemental Educational Opportunity Grants, Assistance Listing Number 84.033 Federal Work-Study Program, Assistance Listing 84.379 Teacher Education Assistance for College and Higher Education Grants Program Year 2024–2025 Type of Finding: Other Instance of Noncompliance and Deficiency Criteria: Per 34 CFR §668.22, institutions are required to determine the amount of Title IV funds that must be returned when a student withdraws from the institution before completing the payment period or period of enrollment. The calculation must be performed accurately and timely using the prescribed formula to ensure compliance with federal regulations. Condition: The University's processes did not ensure the calculations performed to calculate required return of funds were accurate. Questioned Costs: $0 Context: Out of the population of 35 students with withdraw status subject to potential returned funds, a sample of four students were selected for testing. For two of the four samples tested, the University incorrectly calculated the amount of Title IV funds to be returned. Effect: The University returned an incorrect amount of Title IV funds to the Department of Education for the affected students, potentially resulting in noncompliance with federal regulations and financial liability. Cause: The errors appear to be the result of manual data entry and insufficient review controls within the financial aid office’s Return of Title IV funds process. Recommendation: We recommend the University strengthen its internal controls over the Return of Title IV funds calculation process. This should include implementing a secondary review of all calculations and ensuring accurate documentation of withdrawal dates and payment period parameters. Views of Responsible Officials: Management concurs with the finding and recommendation. Further information on the corrective action plan will be provided by management.

Corrective Action Plan

lmplement a Secondary Review Process: We will designate a financial aid staff member to perform a secondary review and approval of all Return of Title IV funds calculations to ensure accuracy. The Office of Accounting & Business Services will verify the calculations prior to issuing any payments. This process will be implemented within 30 days of the date of this letter. Enhance Documentation: We will develop standardized documentation procedures to accurately record withdrawal dates and payment period parameters including modifications to both PowerFAIDS and Jenzabar systems. This will be completed within 60 days of the date of this letter. Staff Training: We will provide training to staff within the following offices (Financial Services, Accounting & Business Services, Registrar) on the regulatory requirements association with Return to Title IV funds and the updated procedures and calculation processes within 30 days of the date of this letter. Quality Control: We will establish a quality control process to monitor and review Return of Title IV funds calculations on a regular basis, starting immediately. This includes installation of additional technology available to automate the calculation process in our systems. The University will also ensure the Office of Financial Services reviews system configurations at the start of each term. Responsible Personnel: The Office of Financial Services Director of Financial Aid and Student Accounts, Mr. Preston Wheeler, and Vice President for Enrollment Management, Mr. Alan Liebrecht will be responsible for implementing and overseeing the corrective action plan. In addition, the Assistant Vice President for Finance, Dr. Kaisa Holloway-Cripps will verify the implementation of the secondary review process, enhanced documentation procedures, and staff training and completed. Monitoring and Reporting: We will review the effectiveness of the corrective action plan to ensure compliance with federal regulations by mid fall 2025 semester and continue the review throughout the academic year. The Office of Financial Services will maintain records of the corrective actions taken and provide updates to the University's administration as necessary. The expected completion date of this corrective action plan is December 15, 2025.

Categories

Student Financial Aid Special Tests & Provisions

Other Findings in this Audit

  • 1162113 2025-001
    Material Weakness Repeat
  • 1162114 2025-001
    Material Weakness Repeat
  • 1162115 2025-001
    Material Weakness Repeat
  • 1162116 2025-001
    Material Weakness Repeat
  • 1162118 2025-002
    Material Weakness Repeat
  • 1162119 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $8.52M
84.063 FEDERAL PELL GRANT PROGRAM $3.37M
84.031 HIGHER EDUCATION INSTITUTIONAL AID $729,693
84.033 FEDERAL WORK-STUDY PROGRAM $191,011
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $92,767
84.379 TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER EDUCATION GRANTS (TEACH GRANTS) $46,322