Finding Text
2025-001: Late Refunding of Credit Balance U.S. Department of Education Student Financial Assistance Cluster (Direct) Federal Direct Student Loans (84.268) Federal Award Year: 2025 Finding: The Foundation and College did not timely refund a student’s credit balance. Criteria: Per 34 CFR 668.164, when Title IV funds are credited to a student account and they exceed the amount of tuition, fees and other allowable charges assessed to the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if the credit balance occurred after the first day of class. Condition: During audit procedures performed, it was identified that one student did not receive a credit balance refund within the 14 day timeframe as required by federal guidelines. Cause: The criteria used to compile the report that the Foundation and College used to monitor credit balances had a flaw, which resulted in the omission of this student and the delayed refund. There were not sufficiently detailed reviews in place to identify delinquent refunds. Effect or potential effect: Noncompliance with federal regulations for credit balances could impact future funding. Questioned costs: None. Context: One of the forty students selected and tested was not refunded timely in accordance with federal guidelines. This delay only occurred for one trimester for the selected student. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: The Foundation and College should review the controls and procedures in place to verify that credit balances on student’s account are refunded within the 14 day timeframe. Views of responsible officials: Management agrees with this finding. See corrective action plan.