Finding Text
2025-002—Disbursements to or on Behalf of Students (Credit Balances) U.S. Department of Education Student Financial Assistance Programs Cluster (Direct) Federal Direct Loan Program (84.268) Federal Pell Grant Program (84.063) Federal Work Study (84.033) Federal Award Year: 2024-2025 Repeat Finding: Yes Criteria The Code of Federal Regulations (34 CFR 668.164(h)(2)) requires that Title IV credit balance must be paid directly to the student or parent as soon as possible, but no later than (i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. Condition The College did not pay the Title IV credit balances to the students directly within the required timeline noted above. Out of the 40 students tested, we noted 2 students (5%) whose credit balances were not paid directly to the students within the required timeframe noted above. The incorrect timing did not have an effect on the total award given to students (timing only). The College did not have formally documented controls related to the process associated with disbursements to or on behalf of students (credit balances), which is required under Uniform Grant Guidance. Cause A refund to the students were required to be made within the required timeframe and were done outside the required timeframe. Effect Noncompliance with federal regulations could result in the loss of future federal funding. Questioned costs There were no questioned costs with respect to this finding. Context We tested 40 students who had a credit balance of Title IV funds during the fiscal year ended June 30, 2025. For each student tested, management provided documentation from their student information system, showing the when the student was in a credit balance, and when the credit balance was disbursed to the student. Out of the 40 students tested, we noted 2 students (5%) whose credit balances were not timely refunded. Recommendation We recommend the College review current processes and implement updated processes and controls for timely student credit balance refunds. Views of responsible officials Management agrees with this finding. See corrective action plan.