Finding 1191477 (2025-005)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-03-27
Audit: 395393
Organization: Montcalm Community College (MI)

AI Summary

  • Core Issue: A student’s credit balance was not paid within the required 14 days due to a delay in reissuing a voided Pell Grant refund.
  • Impacted Requirements: This finding indicates noncompliance with the Uniform Guidance on timely disbursement of Title IV funds.
  • Recommended Follow-Up: Implement procedures to review and resolve voided refunds within 14 days to prevent future credit balance issues.

Finding Text

Student Credit Balance Exceeding Fourteen Days Finding Type. Immaterial Noncompliance/Significant Deficiency in Internal Control over Compliance (Special Tests and Provisions). Programs. Student Financial Assistance Cluster; U.S. Department of Education; Assistance Listing Numbers 84.007, 84.033, 84.063, and 84.268; Award Numbers P007A242049, P033A242049, P063P241644, P063Q241644 and P268K251644. Criteria. Under the Uniform Guidance, 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. An institution is permitted to hold credit balances if it obtains a voluntary authorization from the student. Condition. During our testing, we identified one instance in which a student’s credit balance remained outstanding beyond the required 14‑day timeframe. Cause. This delay resulted from a voided Pell Grant refund that wasn't reissued until seventeen days after the credit balance was created. Effect. As a result of this condition, the College was not in compliance with the Uniform Guidance requirements governing the timely disbursement of student credit balances. Questioned Costs. No costs are required to be questioned as the amounts did not exceed the reporting threshold. Recommendation. We recommend the College implement procedures to ensure all voided refunds are reviewed and resolved within the fourteen day period to ensure there are no credit balances that are unaddressed. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.

Corrective Action Plan

Student Credit Balance Exceeding Fourteen Days Auditor Description of Condition and Effect. During our testing, we identified one instance in which a student’s credit balance remained outstanding beyond the required 14‑day timeframe. As a result of this condition, the College was not in compliance with the Uniform Guidance requirements governing the timely disbursement of student credit balances. Auditor Recommendation. We recommend the College implement procedures to ensure all voided refunds are reviewed and resolved within the fourteen day period to ensure there are no credit balances that are unaddressed. Corrective Action. The College is strengthening its procedures to ensure student credit balances are processed, refunded, or returned within the federally required 14‑day timeframe. When a student requests a stop payment, hold, or void, the student must now email both the Business Office and Financial Aid Office from their official MCC student email account. Requests must include the type of action needed and the reason for it. The Directors of Accounting and Financial Aid, or designated authorized personnel, review and approve each request before any action is taken. The Business Office then issues the stop payment, hold, or void in accordance with internal procedures, while Financial Aid returns funds to the appropriate agency when applicable. For internal staff‑initiated stop or void actions, employees must email the Directors with justification explaining why the request is being initiated by staff rather than the student. Both offices collaborate to determine appropriate action, ensure the disbursement is adjusted, coordinate the timing of any required return of funds, and communicate updates to the student. These procedures ensure all credit balance transactions are processed within the 14‑day limit and are documented consistently to maintain federal compliance. Responsible Person. Scott Kemmer-Slater, Director of Accounting and Jennifer Simson, Director of Financial Aid, jointly. Anticipated Completion Date. June 30, 2026

Categories

Student Financial Aid Special Tests & Provisions Reporting Significant Deficiency

Other Findings in this Audit

  • 1191458 2025-002
    Material Weakness Repeat
  • 1191459 2025-002
    Material Weakness Repeat
  • 1191460 2025-002
    Material Weakness Repeat
  • 1191461 2025-002
    Material Weakness Repeat
  • 1191462 2025-002
    Material Weakness Repeat
  • 1191463 2025-003
    Material Weakness Repeat
  • 1191464 2025-003
    Material Weakness Repeat
  • 1191465 2025-003
    Material Weakness Repeat
  • 1191466 2025-003
    Material Weakness Repeat
  • 1191467 2025-003
    Material Weakness Repeat
  • 1191468 2025-004
    Material Weakness Repeat
  • 1191469 2025-004
    Material Weakness Repeat
  • 1191470 2025-004
    Material Weakness Repeat
  • 1191471 2025-004
    Material Weakness Repeat
  • 1191472 2025-004
    Material Weakness Repeat
  • 1191473 2025-005
    Material Weakness Repeat
  • 1191474 2025-005
    Material Weakness Repeat
  • 1191475 2025-005
    Material Weakness Repeat
  • 1191476 2025-005
    Material Weakness Repeat
  • 1191478 2025-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $943,515
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $265,248
17.268 H-1B JOB TRAINING GRANTS $123,598
84.048 CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES $114,209
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $61,793
84.033 FEDERAL WORK-STUDY PROGRAM $29,396
84.063 FEDERAL PELL GRANT PROGRAM $3,405