Finding Text
Special Tests and Provisions Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Aid Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: N/A Award Period: July 1, 2024 – June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance; Noncompliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR § 668.22, requires institutions administering Title IV funds to calculate Return of Title IV (R2T4) amounts using the correct number of clock hours a student was scheduled to attend as of the withdrawal date. Accurate use of scheduled hours is essential to determining the proper percentage of Title IV aid earned, the amount to be returned, and any post‑withdrawal disbursement eligibility. Condition: Financial Aid Coordinators made manual errors when determining the number of clock hours students were scheduled to complete as of their withdrawal dates. These miscalculations directly affected the accuracy of the R2T4 process, resulting in incorrect determinations of earned aid and improper calculation of post‑withdrawal disbursement amounts. In several cases, these human errors caused students to be either over-awarded or under-awarded Title IV funds. Questioned costs: $396 CLA extrapolated the questioned costs and determined this is not a material weakness that would result in a material misstatement in the F/S. Context: CLA determined that the District miscalculated scheduled clock hours for three students in the R2T4 process. Cause: Financial Aid Coordinators made manual errors when determining the number of clock hours students were scheduled to complete as of their withdrawal dates. Effect: As a result of these manual miscalculations, R2T4 determinations did not accurately reflect the amount of Title IV aid students had earned at the time of withdrawal. This led to improper post‑withdrawal disbursements, with some students receiving more aid than they were entitled to and others receiving less. Repeat Finding: No Recommendation: It is recommended that the District strengthen its internal controls over the R2T4 calculation process by implementing a secondary review or quality‑assurance check of scheduled clock hours prior to finalizing R2T4 calculations. Staff should receive targeted training on the requirements of 34 CFR § 668.22, particularly regarding the use of scheduled hours in determining earned aid and post‑withdrawal disbursement eligibility. Additionally, standardized calculation worksheets or system‑generated hour reports should be utilized to reduce reliance on manual entry and minimize the risk of human error. Views of responsible officials: There is no disagreement with the audit finding.