Finding Text
Return of Title IV Funds Type of Finding - Material noncompliance with Return of Title IV Funds compliance requirement and material weakness in internal control over compliance Program: Student Financial Assistance Cluster Assistance Listing Number: Federal Pell 84.063 and Federal Direct Student Loans 84.268 Federal Agency: U.S. Department of Education Criteria – 34 CFR 668.22(a)(1) through (a)(5) provides regulations to institutions for returning federal funds. 34 CFR 668(3)(ii) states that the institution must return federal funds no later than 45 calendar days after the student withdrawals. Internal controls over compliance should be sufficient to prevent and/or detect and correct noncompliance on a timely basis. Condition – Two students who withdrew from College did not have their federal funds returned within 45 days of the withdraw date. One student had an inaccurate withdraw date utilized in the return of title IV funds calculation resulting in the amount returned to the Federal government being $103 dollars less than what should have been returned. Cause – During 2025, the College switched financial assistance software. During the implementation period for the new software, the software was inaccessible for a period of time. The College did not have procedures in place to ensure compliance with the Federal guidelines during the software implementation period. Due to turnover at the College, there was no review of the return of title IV calculations during the year ended June 30, 2025. The software implementation period and the lack of review led to noncompliance with the requirements. Effect – Return of title IV funds occurring after the 45-day time frame and an incorrect amount of funds being sent back to Federal the government. Questioned Costs – $103 as identified in the condition above. Context – Out of a sample of five students requiring a return of title IV funds calculation, two students federal funds were not returned within the 45-day time frame and one student had the incorrect amount returned to the Federal government. Identification as a Repeat Finding – Not Applicable. Recommendation – It is recommended that the College have someone who does not complete the R2T4 calculation to review it for accuracy and timeliness and for the College to consider back-up procedures to ensure compliance when systems are unavailable.