Finding Text
Federal Program ALN 84.063 Federal Pell Grant Program Name of Federal Agency U.S. Department of Education Category Other matters – N. Special test Return of Title IV Funds Significant deficiency of internal controls over compliance Criteria Under 34 CFR § 668.22(j), An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew. Finding No. 2025-002 Timely Return on Title IV Funds – (continued) Condition found In testing compliance with the return of Title IV funds requirement, we noted one (1) case, or three percent (3%), of the sample selected which included students that received Pell and Direct loans, in which the University failed to return the total corresponding refund within 45 days from the date the University determined that the student withdrew, dropped-out, or failed to attend to the University, as follows: Finding Number Related Audit Compliance Requirement Student Identifier OPEID Pell Disbursed ($) Pell Underpayment ($) Pell Overpayment ($) Direct Loan Disbursed ($) Direct Loan Underpayment ($) Direct Loan Overpayment ($) 2025-002 Special Tests - Timely Return of Title IV Funds Student 1 1072401 $ 396 $ - $ - $ - $ - $ - Cause The late return occurred because the Student Financial Assistance (SFA) office completed the Return of Title IV funds (R2T4) calculation on time, but the withdrawal status was not properly updated in the student information system (Ellucian/ISIS module). The discrepancy arose when the system did not flag the withdrawal as valid due to a course remaining active. This omission prevented the system from generating the cancellation payroll needed to complete the return within the 45-day timeframe. The cause reflects a systemic control gap in reconciling manual withdrawal processing with automated system updates. Effect Failure to return unearned Title IV funds within the required 45-day timeframe can result in potential financial liabilities for the institution, non-compliance penalties, and a negative impact on the institution's participation in federal financial aid programs. Questioned cost None. The funds were returned. Finding No. 2025-002 Timely Return on Title IV Funds – (continued) Context We selected a sample of forty (40) students who withdrew or had a mix of F and withdrew, and noted one (1) sample whose return was not timely reimbursed. The total amount of funds returned late was $396 out of a total of $12,250. Identification of a repeat finding This is a repeat finding from the immediate previous audit, Finding No. 2024-003. Recommendation We recommend that the institution implement enhanced monitoring controls within the financial aid system to ensure that all return of Title IV funds calculations trigger the necessary flags to prompt timely returns of unearned Title IV funds. Additionally, staff should be trained in monitoring these processes to prevent further delays in compliance with federal regulations. The institution should address the deficiencies noted and review all return of Tittle IV funds processes to avoid recurrence and to ensure compliance. Views of responsible officials and planned corrective actions The University’s management agrees with this finding. Please refer to the corrective action plan on pages 53-54.