Finding Text
Finding 2025-05 - U.S. Department of Education (ED), Title IV Student Financial Aid Programs - Untimely Return of Unearned Title IV Funds (significant deficiency) Information on the federal program: Federal Direct Student Loans, FAL No. 84.268, June 30, 2025; Federal Pell Grant Program, FAL No. 84. 063, June 30, 2025; Federal Supplemental Educational Opportunity Grant, FAL No. 84.007, June 30, 2025; Federal Work-Study Program, FAL No. 84.033, June 30, 2025. Criteria – Per 34 CFR § 668.22 (j), (1) institutions must return the amount of Title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the College’s determination that the student withdrew. Condition – Testing of student withdrawals revealed that for three (3) students, Title IV funds identified as unearned through the Return of Title IV (R2T4) process were not returned to the U.S. Department of Education within the required timeframe. The returns were made between 209 and 349 days after the College’s date of determination (DOD), which is well beyond the 45-day requirement established by federal regulations. Cause – The condition appears to have resulted from failure to monitor and track the 45-day R2T4 return deadline, inadequate coordination between the Financial Aid Office and the Business Office regarding the processing and return of unearned funds, and insufficient supervisory review to ensure R2T4 refunds were completed timely. Effect – The College was not in compliance with federal R2T4 return requirements. Untimely returns reflect weaknesses in the College’s internal control over Title IV administration and may affect administrative capability under 34 CFR § 668.16. Questioned Costs – $0 Perspective – Returning unearned Title IV funds within 45 days is a core compliance requirement. Institutions must demonstrate the ability to promptly identify withdrawals, calculate R2T4 amounts, and process returns to maintain eligibility for participation in Title IV programs. In this instance, three (3) out of sixty (60) students tested (5%) had unearned Title IV funds that were not returned within the required 45-day timeframe. The delays ranged from 209 to 349 days after the College’s date of determination, representing returns that were more than four to seven times later than allowed under federal regulations. Repeat Finding – No Auditor’s Recommendation – The College should implement a formal R2T4 tracking system and strengthen coordination between departments. Management’s Response – The Institution has reviewed the finding and acknowledges that one student record was not submitted for review. The Institution has provided the NSLDS enrollment verification for that student. For the remaining two students, enrollment reporting was not updated within the required 30-day timeframe. The Institution has since updated their enrollment statuses in NSLDS and has provided updated records for review. The Institution respectfully requests that the finding be formally updated, if applicable, upon the auditor’s review and acceptance of all submitted NSLDS enrollment documentation. In response, the institution has updated its processes and procedures regarding student enrollment reporting with NSLDS, by ensuring accurate enrollments status matches the student transcript. Along with continuing to update within the 30 days established timeframe within NSLDS. Responsible Officials -The Registrar, the Financial Aid Office under the direction of the Vice President of Student Affairs, and Business Office under the direction of the Vice President for Business and Finance plan to have the finding resolved by its next fiscal year end audit (between July – October 2026). The College is aware of the need to review and mitigate compliance risks in this area and will use the described corrective action plan to reduce those risks and eliminate the potential for future audit findings. View of Responsible Officials – The College agrees with the finding.