Finding 1170887 (2025-002)

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

AI Summary

  • Core Issue: The College lacks a control to review Return of Title IV Fund calculations, risking noncompliance with federal regulations.
  • Impacted Requirements: Failure to return unearned funds within 45 days as mandated by 34 CFR 668.22 and inadequate internal controls per 2 CFR Part 200.
  • Recommended Follow-Up: Implement a robust review process for Title IV refunds, ensuring independent oversight and proper documentation of all calculations and approvals.

Finding Text

2025-002: Return of Title IV Funds Controls Significant Deficiency Federal Program: Student Financial Assistance Cluster Federal Agency: Department of Education Federal Award Year: July 1, 2024 - June 30, 2025 Assistance Listing Number(s): Student Financial Assistance Cluster • 84.007 • 84.033 • 84.038 • 84.063 • 84.268 • 84.379 • 93.925 Criteria: When a student withdraws, institutions must comply with the "Return of Title IV Funds" requirements outlined in 34 CFR 668.22, ensuring any unearned funds are returned to the Department of Education within 45 days of determining the student's withdrawal. Auditee requirements contained in Title 2 U.S. Code of Federal Regulations (2 CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post Federal Award Requirements, Section 200.303 – Internal Controls, requires the auditee to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonfederal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with a framework such as the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: There is no evidence of a control in place by the College to review Return of Title IV Fund calculations. Cause: Lack of control in place over returns of Title IV funding. Effect or Potential Effect: Returns of Title IV Funds may not be refunded within the 45-day requirement and result in instances of noncompliance with the Department of Education. Questioned Costs: None Context: The College claims to review these calculations; however, there is no evidence that such reviews were conducted or effective. Additionally, there is no retention of documentation demonstrating that an approval or review occurred, making it impossible to verify that the process was properly performed. Repeat Finding: Yes Recommendation: We recommend the College review its process and controls in place for calculating refunds from Title IV and include an independent review and sufficient documentation to support the application of the control. Views of Responsible Officials: Management agrees with the finding. See corrective action plan.

Corrective Action Plan

Corrective Action Plan Finding Number: 2025-002 – Return of Title IV Funds Controls Finding: There is no evidence of a control in place by the College to review Return of Title IV Fund calculations. Corrective Action Planned Given the size of the Financial Aid Office, the College will implement compensating internal controls to ensure R2T4 calculations are accurate, timely, and compliant with federal regulations. Effective immediately, the College will implement the following controls: 1. Standardized R2T4 Processing All R2T4 calculations will be performed using the Department of Education Common Origination & Disbursement (COD) system to ensure consistent application of federal formulas. Official withdrawal dates will be confirmed using Registrar records prior to calculation. 2. Independent Post-Calculation Review Each R2T4 calculation will be reviewed by an individual other than the preparer, where feasible, or through supervisory review when staffing is limited. The review will confirm the accuracy of withdrawal dates, days attended, calculation inputs, and Title IV funds included. 3. Coordination and Reconciliation The Office of Financial Aid will coordinate with Student Accounts to ensure R2T4 results are applied correctly to the student account and that returned funds are processed within required timelines. 4. Documentation and Retention Evidence of review, including reviewer initials and date, will be retained for each R2T4 calculation. A simple R2T4 review checklist or log will be maintained. 5. Ongoing Oversight The Director of Financial Aid will conduct periodic spot checks to ensure R2T4 calculations and reviews are completed accurately and timely. Responsible Official: De Rodrick Jonkins, Director of Financial Aid Anticipated Completion Date: Implemented effective August 1, 2025 Additional Context The Director of Financial Aid assumed the role effective April 1, 2025, after prior corrective actions had been identified. While formal independent review controls were not documented during the audit period, there were no identified R2T4 compliance issues, late returns, or calculation errors. The corrective actions above are intended to formalize review processes and further reduce compliance risk.

Categories

Student Financial Aid Allowable Costs / Cost Principles Significant Deficiency Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1170874 2025-001
    Material Weakness Repeat
  • 1170875 2025-001
    Material Weakness Repeat
  • 1170876 2025-001
    Material Weakness Repeat
  • 1170877 2025-001
    Material Weakness Repeat
  • 1170878 2025-001
    Material Weakness Repeat
  • 1170879 2025-001
    Material Weakness Repeat
  • 1170880 2025-001
    Material Weakness Repeat
  • 1170881 2025-002
    Material Weakness Repeat
  • 1170882 2025-002
    Material Weakness Repeat
  • 1170883 2025-002
    Material Weakness Repeat
  • 1170884 2025-002
    Material Weakness Repeat
  • 1170885 2025-002
    Material Weakness Repeat
  • 1170886 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $9.45M
84.063 FEDERAL PELL GRANT PROGRAM $2.80M
84.038 FEDERAL PERKINS LOAN PROGRAM_FEDERAL CAPITAL CONTRIBUTIONS $910,953
93.925 SCHOLARSHIPS FOR HEALTH PROFESSIONS STUDENTS FROM DISADVANTAGED BACKGROUNDS $579,243
93.732 MENTAL AND BEHAVIORAL HEALTH EDUCATION AND TRAINING GRANTS $341,084
84.033 FEDERAL WORK-STUDY PROGRAM $255,310
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $168,235
84.116 FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION $90,420
12.420 MILITARY MEDICAL RESEARCH AND DEVELOPMENT $44,044
81.049 OFFICE OF SCIENCE FINANCIAL ASSISTANCE PROGRAM $12,748
47.076 STEM EDUCATION (FORMERLY EDUCATION AND HUMAN RESOURCES) $7,444
84.379 TEACHER EDUCATION ASSISTANCE FOR COLLEGE AND HIGHER EDUCATION GRANTS (TEACH GRANTS) $3,772