Finding Text
Finding 2025-002 – Significant Deficiency, Compliance and Control Federal Award No. 84.268 & 84.063 U.S. Department of Education Student Financial Aid Cluster – Special Tests and Provisions Criteria: According to the Federal Student Aid Handbook, Volume 4, Chapter 2, a University must disburse a Title IV credit balance to a student no later than 14 days after the date it was created or no later than 14 days after the first day of class. Condition: In our nonstatistical sample of 40 students, it was noted for 11 individuals that the credit balances generated by the federal funding were paid to the students in 15 days or more after the credit balance was created. Context: For the 11 students noted, loan disbursements including PLUS Loans generated a credit balance when disbursed separately from the individual awards which were then paid to the students in 15 days or more after the credit balance was created. Effect: Funds are held by the University that should be paid to the student. Questioned Costs: There were no questioned costs to report as this finding relates to the timing of disbursements and is not related to eligibility. Cause: Ottawa University did not have proper processes and related controls in place to complete the disbursement within 14 days from the date the credit balance was created. Indication As Repeat Finding: This is a repeat finding. See the Summary Schedule for Prior Audit Findings. Recommendation: The Financial Aid department should review and consider revisions to its processes and related controls in place to complete the disbursement requirements for all students who have a credit balance no later than 14 days after the date it was created or no later than 14 days after the first day of class. Views Of Responsible Officials (Unaudited): This finding is related to the transition to a new Jenzabar One (J1) ERP system. The Jenzabar Financial Aid (JFA) module, while now integrated into the broader J1 suite, remains a stand-alone solution rather than a fully native component. As a result, Ottawa University needed to modify its financial aid refund disbursement processes to ensure accurate and efficient data flow between systems. These adjustments created challenges in achieving the timely distribution of student refunds. The primary issue involved the timely processing of PLUS Loan refunds. Parent IDs for these refunds were extracted from financial aid data in JFA and established as individual vendors in J1. These IDs then needed to be properly linked to the corresponding student before any parent refunds could be issued. To address this, Financial Aid has designated staff to oversee the creation and linking of parent IDs in J1 to ensure timely processing. Additionally, reports have been developed to identify accounts eligible for refunds, helping to ensure compliance with the 14-day requirement. The Accounting Department also encountered challenges related to vendor setup and the ability to process student refunds in batches. To address these issues, we collaborated with the J1 support team and IT to customize the system, ensuring that student refund checks could be processed and formatted in accordance with bank specifications. While we were not initially prepared for these challenges and had to adapt throughout the process, a solution has since been implemented. As a result, check printing has become an efficient and streamlined operation. The Student Accounts Receivable Office, Controller’s Office, Financial Aid, and IT departments are actively collaborating to establish a more structured and efficient process for managing Federal Student Aid. The first step has been to implement a weekly workflow with clearly defined responsibilities and completion timelines as follows: Financial Aid posts all activity at the beginning of the week, followed by Student Accounts generating credit balance refund reports and initiating student refunds. Accounting then completes the process by issuing refunds to students via check or direct deposit. In addition, Student Accounts and IT are working to develop a date-specific report to identify students with current financial aid disbursements who have outstanding credit balances. This detective control report will be reviewed weekly, and refunds will be processed in accordance with the established workflow. The departments are also developing a detailed Accounts Receivable Aging Report to help the Receivables team more effectively identify any students who have a credit balance. This effort is intended to ensure full compliance with the 14-day requirement outlined in the Federal Student Aid Handbook. Anticipated Completion Date: June 30, 2026 Contact Person: Heather Long, Director Student Accounts