FAC Explorer

Finding 1172387 (2025-001)

Material Weakness Repeat Finding
Requirement
P
Questioned Costs
-
Year
2025
Accepted
2026-02-04
Audit: 385437
Organization: Frederick Community College (MD)
Auditor: SB & COMPANY LLC

AI Summary

  • Core Issue: The College failed to return Title IV funds within the required 45-day timeframe after students withdrew.
  • Impacted Requirements: Non-compliance with U.S. Department of Education guidelines for timely and accurate returns of Title IV funds.
  • Recommended Follow-up: Implement a policy to ensure accurate calculations and timely returns of Title IV funds to the Department of Education.

Finding Text

Finding 2025-001 Department of Education Assistance Listing Numbers: 84.007, 84.033, 84.063, 84.268 Student Financial Assistance Cluster Significant Deficiency with Return of Title IV Funds Repeat Finding: No Criteria: Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. The College must also ensure that they return the lesser of (1) the total amount of unearned Title IV assistance to be returned, or (2) an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. Condition and Context: For 12 of 40 selections of students that had received Title IV funds and had a required return of Title IV funds, the return of title IV funds did not occur within 45 days of the College becoming aware that the student had withdrawn. For 2 of 40 selections the return of Title IV funds to the Department of Education was different from the calculated amount of unearned Title IV assistance. Cause: The College did not consistently meet required timelines in determining the students that had withdrawn and received Title IV funds in order to return the funds in a timely manner. Additionally, the College did not consistently ensure that funds were returned with complete accuracy to the Department of Education. Effect or Potential Effect: The College failed to comply with the U.S. Department of Education’s Return of Title IV guidelines. Questioned Costs: Unknown Recommendation: We recommend that the College implement a policy to ensure that return of Title IV funds is accurately calculated and returned timely to the Department of Education. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.

Corrective Action Plan

R2T4 Audit: FY25 Corrective Action Plan To address the audit findings, the FCC has initiated the following actions: •Spring 2025, Completed: oRevised Processing Timeline: All R2T4 calculations and returns are now completedwithin 30 days, reserving the final 15 days exclusively for QA. (Responsible Leader:Director of Financial Aid) oCross-Training and Succession Planning:Staff cross-trained; onboarding/offboardingdutiesdocumented to eliminate single points of failure.(Responsible Leader: Director ofFinancial Aid) •September 2025, Underway: oLeadership Communication Protocol:A formal process is beingfinalized to ensurecompliance issues are documentedand escalatedforawareness to the President and theCFO/VP for Administration. Thisprotocol alsoreinforcesa cultureof accountability where compliance concernsare escalated promptly and transparently. (ResponsibleLeader: AVP for Student and Financial SupportServices) •Monthly Monitoring and Reporting:Compliance reviews reported monthlyto the VP for Student Experience and then to the President and the CFO/VPfor Administration for awareness. (Responsible Leader: VP for StudentExperience). oQA Tracking Form: Implemented to document each review and correction for auditverification. (Responsible Leader: Director of Financial Aid) •Fall 2025 – Spring 2026, To Be Planned and Executed: oExternal Program Review: FCC will engage an external consultant agency (TBD) toconduct a comprehensive Financial Aid Office program review in FY26, validatingcompliance, staffing adequacy, and process integrity. (Responsible Leader: AVP forStudent and Financial Support Services) •Timeline, Next Steps, Responsible FCC Leader: oOctober 6, 2025: Submit formal corrective action plan to Auditors (VPSE) oOctober 15, 2025: Receive first compliance review report for AVP to VP reporting toPresident’s Council, as part of enterprise risk management awareness. (AVP/VPSE) oJanuary to April 2026: Conduct external program review of the Financial Aid Office andreport findings to President and the CFO/VP for Administration by June 2026. (AVP) •Expected completion date: June 2026 •Person responsible: Dr. Edmund T. Cabellon, Interim Vice President for Student Experience

Categories

Student Financial Aid Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1172384 2025-001
    Material Weakness Repeat
  • 1172385 2025-001
    Material Weakness Repeat
  • 1172386 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.063 PELL $5.56M
84.268 DIRECT LOANS $2.94M
84.002 CONSOLIDATED ADULT EDUCATION & LITERACY SERVICES $448,952
11.300 ECONOMIC DEVELOPMENT ADMINSTRATION STATE TOURISM GRANT $208,885
84.007 S.E.O.G $125,919
84.048 TITLE IC PROGRAM IMPROVEMENT - REGULAR $111,977
17.285 APPRENTICESHIP USA GRANTS $104,667
84.033 FEDERAL WORK STUDY $95,928
47.076 FREDERICK COMMUNITY COLLEGE STEM SCHOLARS $91,227
47.076 BUILDING THE CELL THERAPY AND FLOW CYTOMETRY WORKFORCE $86,657
84.335 CHILD CARE ACCESS MEANS PARENTS IN SCHOOL $80,005
84.048 MD AFFILIATE FOR CTE PROGRAM IN HOMELAND SECUIRTY AND EMERGENCY PREPAREDNESS $43,287
16.823 EMERGENCY PLANNING FOR JUVENILE JUSTICE FACILITIES $30,505
84.064 HIGHER EDUCATION_VETERANS EDUCATION OUTREACH PROGRAM $4,437
47.076 COLLABORATION BETWEEN COMMUNITY COLLEGES AND A UNIVERSITY TO INCREASE TRANSFER STUDENT SUCCESS IN STEM $653