Finding 1170869 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-01-29

AI Summary

  • Core Issue: The College incorrectly entered academic calendar dates in R2T4 calculations, leading to potential errors in returning Title IV funds.
  • Impacted Requirements: Compliance with 34 CFR §668.22 regarding the accurate calculation of unearned Title IV aid based on student attendance.
  • Recommended Follow-Up: Implement strict procedures to verify academic calendar dates in the financial aid system before R2T4 calculations each award year.

Finding Text

2025-001 Special Test and Provisions – Return of Title IV Funds U.S. Department of Education Student Financial Assistance Cluster Assistance Listing Numbers: 84.007, 84.033, 84.063 & 84.268 Award Year: 2024-2025 Significant Deficiency and Compliance Criteria: Under 34 CFR §668.22, the College is required to return Title IV funds in accordance with federal regulations governing the Return of Title IV (R2T4) calculation. This calculation determines the amount of unearned aid by subtracting the assistance earned by the student from the total aid disbursed. The percentage of earned and unearned funds is based on the student’s attendance within the College’s defined payment period. Condition: In a sample of 25 R2T4 calculations, it was determined that College entered the academic calendar dates incorrectly in the calculation, which resulted in two calculation errors. Cause: The College had a change to the academic calendar that did not get updated in the financial aid software. Effect: All students with a Spring R2T4 that did not complete 60% or more of the semester potentially have an incorrect R2T4 calculation of, up to, a five day difference. Questioned Costs: All questioned costs are below the known and likely questioned costs reporting threshold. Recommendation: We recommend the College implement procedures to strictly comply with the requirements of 34 CFR §668.22 as it relates to calculations of return of Title IV funds. Response: The College conducted a comprehensive review of all student accounts potentially impacted by the incorrect academic calendar dates and identified 52 students whose Return of Title IV (R2T4) calculations required review. As a result of this review, the Financial Aid Office determined that 41 students required a return of Title IV funds to the U.S. Department of Education. The total amount of funding returned was $12,590. The Financial Aid Office corrected the R2T4 calculations, updated the academic calendar dates in the financial aid system, and processed the required returns of Title IV funds. To prevent recurrence, the College has implemented internal procedures to ensure academic calendar dates are reviewed and verified in the financial aid system before performing R2T4 calculations for each award year.

Corrective Action Plan

Janaury 16, 2026 U.S. DEPARTMENT OF EDUCATION East Central College respectfully submits the following corrective action plan for the year ended June 30, 2025. Contact information for the individual responsible for the corrective action: Mr. Chris Hoelzer, Vice President of Finance & Administration East Central College 1964 Prairie Dell Road Union, MO 63084 Independent public accounting firm: KPM CPAs, PC, 1445 E Republic Rd, Springfield, Missouri 65804 Audit Period: Year Ended June 30, 2025 The finding from the June 30, 2025 audit of the financial statements is below. The finding is numbered with the number assigned in the schedule. FINDING - MAJOR FEDERAL AWARD PROGRAM AUDIT 2025-001 Special Test and Provisions - Return of Title IV Funds Recommendation: We recommend the College implement procedures to strictly comply with the requirements of 34 CFR §668.22 as it relates to calculations of return of Title IV funds. Corrective Action Taken: The college conducted a comprehensive review of all student accounts potentially impacted by the incorrect academic calendar dates and identified 52 students whose Return of Title IV (R2T4) calculations required review. As a result of this reveiw, the Financial Aid Office determined that 41 students required a return of Title IV funds to the U.S. Department of Education. The total amount of funding returned was $12,590. The Financial Aid Office corrected the R2T4 calculations, updated the academic calendar dates in the financial aid system, and processed the required returns of Title IV funds. To prevent recurrence, the College has implemented internal procedures to ensure academic calendar dates are reviewed and verified in the financial aid system before performing R2T4 calculations for each award year. Anticipated Completion Date: Fall semester 2025 and ongoing. Sincerely, Chris Hoelzer Vice President of Finance & Administration

Categories

Student Financial Aid Reporting Significant Deficiency

Other Findings in this Audit

  • 1170866 2025-001
    Material Weakness Repeat
  • 1170867 2025-001
    Material Weakness Repeat
  • 1170868 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.063 FEDERAL PELL GRANT PROGRAM $5.08M
84.268 FEDERAL DIRECT STUDENT LOANS $1.79M
17.261 WORKFORCE DATA QUALITY INITIATIVE (WDQI) $1.49M
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $866,453
84.116 FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION $717,485
84.031 HIGHER EDUCATION INSTITUTIONAL AID $433,979
84.002 ADULT EDUCATION - BASIC GRANTS TO STATES $265,682
84.048 CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES $230,379
17.285 REGISTERED APPRENTICESHIP $195,266
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $122,468
10.771 RURAL COOPERATIVE DEVELOPMENT GRANTS $106,066
84.033 FEDERAL WORK-STUDY PROGRAM $82,944
10.561 STATE ADMINISTRATIVE MATCHING GRANTS FOR THE SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM $45,957
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $13,009
17.278 WIOA DISLOCATED WORKER FORMULA GRANTS $8,333