Finding Text
FINDING 2025-003 Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN 84.007), Federal Pell Grant Program (ALN 84.063), Federal Direct Student Loans (ALN 84.268) Criteria or Specific Requirement: N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds must be distributed in the prescribed order (34 CFR 668.22(i)). Post-withdrawal disbursements of loan funds may be credited to the student’s account if current-year outstanding charges exist on the student’s account, up to the amount of the current-year outstanding charges only after obtaining confirmation from the student, or parent in the case of a parent PLUS loan, that he or she still wishes to have some or all of the loan funds disbursed 34 CFR 668.22(a)(6)). Condition: For a certain student that withdrew during the year, the University did not properly calculate the amounts to be returned to the ED. Cause: Administrative oversight and insufficient internal control. Effect or Potential Effect: The University was not in compliance with the return of Title IV funds requirements. Questioned Costs: Known questioned costs: $883; total questioned costs: $22,813. Known questioned costs of $883 were identified as a result of the described error in a withdrawal calculation; total questioned costs includes an error extrapolation over the entire population sampled. Subsequent to the identification of this error, the University returned the appropriate amount to the Department. Context: For 1 of 3 students tested, the University did not appropriately return the required amount of Title IV aid to the Department. Identification as a Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend that the University enhances its internal controls and policies and procedures over the applicable compliance requirements to ensure that student withdrawal calculations are prepared accurately. Views of Responsible Officials: The University relied on a paper-based withdrawal process that did not consistently reach all departments in a timely manner. As a result, withdrawal dates and status changes were not always communicated accurately or in a timely manner between campus departments. Southern Virginia University has taken the following steps to resolve the issue: • A new internal check was created to verify that withdrawal dates match the verified withdrawal date before federal aid or institutional charges are updated. • The withdrawal form is being updated to require Financial Aid and Student Accounts signatures, ensuring that all relevant offices receive the information before it is finalized. • Communication procedures between the Registrar, Financial Aid, and Student Accounts have been formalized to ensure that withdrawal information is shared consistently. Southern Virginia University has also taken the following preventive actions: • A regular withdrawal review will be completed to confirm accurate dates, status changes, and timely updates across all departments and systems. • The University will maintain and distribute an updated written withdrawal workflow to impacted departments clarifying communication, verification, and documentation requirements for university withdrawals. • Staff in all involved departments will participate in training to reinforce the updated procedures.