Finding Text
Criteria: 34 CFR 668.22(j)(1) requires the University to 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 University’s determination that the student withdrew.34 CFR 668.22 requires the University to determine the amount of Title IV aid earned by a student who withdraws during a pay period or period in enrollment in which the student began attendance and calculate any Title IV funds to be returned to the U.S. Department of Education. Condition: The University did not return Title IV funds within the 45 days. In addition, the University did not perform a review of students who had Title IV funds disbursed and received all failing or incomplete grades to identify students who withdrew during the Fall 2024 term. Context: We selected a nonstatistical sample of 4 students from a population of 40 students who received all failing or incomplete grades for the Spring 2025 and Summer 2025 terms and had Title IV funds disbursed. Of the 4 students tested, 1 student required a Return of Title IV Funds (R2T4). For this student, the University did not calculate and return funds to the Department of Education within the required timeframe of 45 days. The University’s process to determine whether a student withdrew and required an R2T4 calculation includes reviewing students who were disbursed Title IV funds and received all failing or incomplete grades during a term. However, the University did not perform this review for the Fall 2024 term. Upon further inquiry, the University subsequently performed the Fall 2024 review and identified 22 students who required an R2T4 calculation to determine whether any Title IV funds should have been returned to the Department of Education. At the time of the audit, the University had not yet completed the R2T4 calculations for the students identified from the Fall 2024 review to determine whether additional Title IV funds were required to be returned to the Department of Education. Cause: Although the University has policies and procedures in place over the R2T4 process, management indicated that responsibility for performing the R2T4 process was transferred from the University’s Business Office to the Financial Aid Office prior to the Fall 2024 term. During this transition, the step to review students who received all failing or incomplete grades to identify potential unofficial withdrawals requiring an R2T4 calculation was overlooked for the Fall 2024 term. Effect: Failure to timely calculate and return Title IV funds resulted in noncompliance with the Return of Title IV Funds under the Special Tests and Provisions compliance requirement and increases the risk that Title IV funds may not be returned within the regulatory timeframe. Questioned Costs: None Identification of a repeat finding: This is a repeat finding. See prior year finding 2024-003.Recommendations: We recommend the University strengthen its controls over the R2T4 process to ensure that procedures used to identify students who receive all failing or incomplete grades are performed timely so that potential unofficial withdrawals are identified and evaluated within the required regulatory timeframe and funds are remitted within the required deadlines. The University should also establish procedures to ensure that responsibilities for the R2T4 process are clearly assigned and monitored during departmental or staffing transitions to prevent required reviews from being overlooked and to ensure required reports are generated and reviewed timely. Views of responsible officials: At the end of the 2023–24 award year, responsibility for generating Return of Title IV (R2T4) withdrawal lists transitioned from the Business Office to the Financial Aid Office. The Financial Aid Office began producing both official withdrawal and unofficial (non-passing grade) reports through Ellucian Banner. Because the two reports produced nearly identical student listings, it was assumed that the Banner-generated unofficial withdrawal report was effectively identifying all students who had received non-passing grades. During an internal audit conducted at the end of the Spring 2025 semester, the University identified one student who had failed all courses and was not included on either of the R2T4 lists. Upon further review, the issue was traced to a reporting limitation within Banner that excluded some students with all failing grades from the population used for R2T4 review. To resolve this, the Financial Aid Office coordinated with the Registrar’s Office to obtain a complete list of students who officially withdrew and students with all non-passing grades once final grades were submitted. R2T4 calculations were subsequently performed for applicable students identified in this additional list. Since Spring 2025, the University has institutionalized this revised procedure. The Registrar’s Office now provides the Financial Aid Office with a list of all students with non-passing grades at the end of each semester once grades are submitted. The Financial Aid Office reviews both reports to identify potential unofficial withdrawals and performs R2T4 calculations as required. To strengthen oversight and prevent future omissions during staffing transitions or process changes, the University will: • Document the revised R2T4 identification and review process in the Financial Aid operations manual. • Clearly assign responsibility for report generation, review, and follow-up between the Registrar’s Office and Financial Aid Office. • Implement a quarterly internal cross-check to confirm all required R2T4 reviews are completed.