Finding Text
Finding 2025-001 - Significant Deficiency, Compliance Federal Award No. 84.007 U.S. Department Of Education Student Financial Aid Cluster – Cash Management Criteria: The U.S. Department of Education (ED) may place institutions on a Heightened Cash Monitoring (HCM) payment method to provide additional oversight of cash management. The College was placed on Heightened Cash Monitoring 1 (HCM1) as a requirement of its provisional approval of its program participation agreement. HCM1 requires that the College makes disbursements to eligible students from institutional funds and submits disbursement records to the Common Origination and Disbursement (COD) System before drawing down funds to cover those disbursements from G5. The College must also pay any credit balance due under 34 CFR 668.14(h), before it submits a request for funds. Condition: In our nonstatistical sample of 2 cash drawdowns, we noted 1 cash drawdown completed in Fall 2024 where the Federal Supplemental Education Opportunity Grants (FSEOG) funds were drawn down for which disbursements to students were not made prior to the drawdown of the funds for the full amount of funds drawn down. We noted no instances of noncompliance for the Spring 2025 drawdown tested. Context: The College completed a drawdown of its full FSEOG award for the year ended June 30, 2025, on October 9, 2024, in the amount of $123,980. The College had disbursed the total of $62,500 in FSEOG awards to students in September 2024; however, the remaining FSEOG disbursements did not occur until the Spring 2025 semester in January 2025. Our drawdown sample selections consisted of all Title IV funds drawn down on a specific date. In our testing of the remaining funds drawn down on October 9, 2024, for Direct Loans, Pell, and TEACH grant funds which totaled $2,720,354 we noted that the amounts drawn down on that date did not exceed the disbursements to students that occurred prior to October 9, 2024. Effect: The College is not meeting the requirements of heightened cash monitoring regulations and cash drawdown regulations. Questioned Costs: None noted. Cause: Bethany College did not have proper processes and related controls in place to ensure that heightened cash monitoring requirements were being met in the Fall 2024 semester for all Title IV funding sources. Indication Of Repeat Finding: This is a repeat finding of 2024-001. Recommendation: The Financial Aid department and business office should put in place controls that would ensure that heightened cash monitoring requirements are met and that student refunds that are generated by federal awards are paid prior to drawing down funds for all Title IV funding sources. Views Of Responsible Officials (Unaudited): The College concurs with the finding and has adjusted its processes and controls beginning with the Fall 2025 semester to ensure that all Title IV funding sources including FSEOG are drawn down in accordance with the Heightened Cash Monitoring requirements. Completion Date: August 2025 Contact Person: Laura Crawley, President