Finding Text
2025-003 – Student Financial Aid Cluster – (a) Federal Supplemental Educational Opportunity Grant (b) Federal Work Study Grant (c) Federal Pell Grant Program (d) Federal Direct Loan Program, Assistance Listing No. (a) 84.007 (b) 84.033 (c) 84.063 (d) 84.268 - Year Ended June 30, 2025 Criteria: 34 CFR 668.22 (a)(1) states “When a recipient of title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with paragraph (e) of this section.” 34 CFR 668.22 (e)(2) states, “The percentage of title IV grant or loan assistance that has been earned by the student is - (i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student's withdrawal date, if this date occurs on or before - (A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or…” 34 CFR 668.22(j) notes, “(1) An institution must return the amount of title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section. The timeframe for returning funds is further described in § 668.173(b). (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the – (i) Payment period or period of enrollment, as appropriate, in accordance with paragraph (e)(5) of this section; (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew” An institution must notify the student of a post-withdrawal disbursement of Federal Direct Loans used to credit the student’s account for outstanding charges (34 CFR 668.22). Condition: The College did not accurately complete refund calculations for 2 out of 9 students (22.2%) tested that both required post-withdrawal disbursements. For one of these students, the College did not notify the student of the post-withdrawal disbursement of Federal Direct Loans before it was applied to the student’s account. We consider this finding to be a significant deficiency in relation to the Special Tests and Provisions compliance requirement and is a repeat finding shown in Section IV of this report as prior year finding 2024-007. Statistical sampling was not used in making sample selections. Questioned Costs: $319 Effect: Miscalculations in the Return of Title IV funds calculations results in incorrect amounts returned by the College or incorrect amounts disbursed to students in post-withdrawal disbursements. For the post-withdrawal disbursement notification, without notifying the student, direct loans may be applied to the student’s account that they are not aware of or would have wanted to decline the disbursement if they were notified. Recommendation: For the incorrect refund calculations, we recommend the College continually educate themselves on the requirements for the return of title IV fund and ensure the proper controls are implemented accurately to return unearned aid or disburse earned aid in post-withdrawal disbursements. For not notifying the student of the post-withdrawal disburrsement, we recommend the College reviews their policies and procedures written notification is timely provided to the student for post-withdrawal disbursements of Federal Direct Loans to allow them to decline, if they choose to do so. Views of Responsible Officials: Management agrees with this Single Audit Finding and response is included in the Corrective Action Plan.