Finding Text
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Title IV Credit Balance Refunds: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. As described in 34 CFR 668.164(c), institutions may credit (charge) a student’s ledger account with Title IV funds to pay for allowable charges associated with the payment period and prior year charges of not more than $200, in accordance with the timeframes described below. A prior year is any loan period or award year prior to the current loan period or award year, as applicable. An institution is permitted to hold credit balances if it obtains a voluntary authorization from the student. Regardless of any authorization obtained by the institution, the institution must pay any remaining loan balance by the end of the loan period and any other remaining Title IV funds by the end of the last payment period in the award year for which the funds were awarded. Condition: For a certain student that had credit balances on her account resulting from Title IV aid disbursements, the College did not refund the credit balances within the required timeframe. Cause: Insufficient administrative oversight and internal controls with respect to Title IV credit balance refunds. Effect or Potential Effect: The College was not in compliance with Title IV credit balance refunds requirements. Questioned Costs: None. Context: For 2 of 18 Title IV credit balances tested relating to one student, the credit balance was not paid to the student by the end of the last payment period in the award year. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the College enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure that credit balances on student accounts that are the result of Title IV aid disbursements are accurately refunded within the required timeframe. Views of Responsible Officials: Management acknowledges the instances in which Title IV credit balances were not refunded within the required regulatory timeframe under 34 CFR §668.164(c). Although no questioned costs were identified, the College recognizes the need to strengthen internal controls to ensure full compliance. To address this finding, the College will: • Implement a formal Title IV credit balance monitoring procedure requiring weekly review of student accounts with credit balances • Establish an automated report identifying all Title IV–generated credit balances and tracking the 14-day refund deadline • Strengthen coordination between the Business Office, Financial Aid Office, and Registrar to ensure enrollment status and disbursement timing are properly reflected prior to refund processing • Continued documented supervisory review of credit balance aging reports These corrective measures are designed to ensure timely refunds, improve monitoring controls, and maintain compliance with federal Title IV requirements.