Finding Text
Finding 2025-002 – C. Cash Management Information on Federal Program(s) - Federal Direct Student Loans (ALN 84.268) and Federal Pell Grant Program (ALN: 84.063) Criteria or Specific Requirement - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition – Instances were identified where Title IV funds drawn were held in excess of the allowable time frame. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect - The University was not in compliance with Cash Management requirements. Questioned Costs – None. Context – During our audit procedures, we noted 2 instances of cash held in excess of the allowable time frame for the year ended June 30, 2025. Indication of Repeat Finding - This is a repeat of prior year Finding 2024-002. Recommendation – We recommend the University enhance its procedures and internal controls to ensure that excess cash is returned timely. Views of Responsible Officials – The University has formalized and documented financial processes to establish internal controls to ensure accurate, timely, and consistent reporting. In addition, this has created a reasonable transition plan during employee turnover, as well as ensures proper and timely filings. The corrective action involves drawing down the funds from the G5 federal website and issuing refunds to students that day. There is a checks and balance process built in, so multiple staff members are involved with the process. The financial aid department calculates the amount of a federal drawdown and relays that information to the business department. The senior accountant draws the appropriate amount of federal financial aid. The student accounts billing coordinator applies aid to the various student accounts in the software. After the aid has been applied, the student accounts billing coordinator determines if a refund is due to the students. Any student that is entitled to a refund will be cut for a refund check that day. The students will then have a window of opportunity to come pick up the refund checks. Within two business days, any students who have not picked up their refund checks will have them mailed to their address on file with the University. This process has been developed to ensure that students receive their refunds in a timely and accurate manner.