Finding Text
Criteria According to 34 CFR 668.164(l): (1) Notwithstanding any State law (such as a law that allows funds to escheat to the State), an institution must return to the Secretary any Title IV, Higher Education Act (“HEA”) program funds, except Federal Work Study (“FWS”) program funds, that it attempts to disburse directly to a student or parent that are not received by the student or parent. For FWS program funds, the institution is required to return only the Federal portion of the payroll disbursement. (2) If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Secretary before the end of this 45-day period. (3) If a check sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued the check. Condition Federal regulations require an institution to return unclaimed Title IV funds issued by check or EFT within 240 days. During our testing, we noted 1 student, out of a sample of 7, that had an unclaimed fund exceeding the federal day limit by 78 days. Cause The College did not have appropriate internal controls in place to monitor the outstanding check aging to ensure that the 240-day timeframe was not exceeded. Effect The College did not return Title IV unclaimed funds to the Department of Education within the required 240-day time frame. Questioned Costs $132 pertained specifically to federal-sourced funds. Perspective Our sample was not, and was not intended to be, statistically valid. Of the 7 students selected for testing, 1 student, or 14% of our sample had an unclaimed fund exceeding the federal day limit. Identification as a Repeat Finding, if applicable Not applicable. Recommendation We recommend that the College consider reviewing and, if necessary, refining its policies and procedures related to unclaimed funds, including the identification of aged balances and the process for cancelling checks and returning funds to the Department of Education. View of Responsible Officials The College agrees with the finding.