Finding Text
Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Aid Assistance Listing Number: Student Financial Aid Cluster Award Period: July 1, 2024 to June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Code of Federal Regulations, 34 CFR §668.22(j), states institutions must return Title IV funds to the U.S. Department of Education within 45 days of the date the institution determines that the student withdrew. The Code of Federal Regulations, 34 CFR 668.22(f)(2)(i), also states that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period. Condition: During our testing of Return of Title IV (R2T4) calculations, we noted that 2 of 12 students tested did not have funds returned to the Common Origination and Disbursement (COD) system within the required 45-day timeframe after the R2T4 calculation was completed. Additionally, during our testing, we noted for 1 of the 12 individuals tested, the College had used an incorrect percentage of days attended causing the College to incorrectly calculate the return of Title IV funds. Questioned Costs: $417 Context: Federal regulations require institutions to calculate and return unearned Title IV funds when a student withdraws. The calculation is based on the percentage of days attended, and funds must be returned to the COD system within 45 days of completing the R2T4 calculation. These rules ensure compliance with U.S. Department of Education requirements and protect federal funds. Cause: The College did not have a process in place to timely return funds to the Department of Education as well as correctly calculate the students’ percentage of days attended. Effect or Potential Effect of Finding: The College is not completing accurate R2T4 calculations as defined by the regulations. Failure to return funds timely may result in noncompliance with federal regulations, potential liabilities, and risk of loss of eligibility for Title IV programs. Repeat Finding: Yes, see finding 2024-006. Recommendation: We recommend the College review the R2T4 requirements and implement procedures to ensure that calculations use the correct number of break days and are completed accurately and within the required timeframes. Views of Responsible Officials: There is no disagreement with the audit finding.