Finding Text
Finding 2025-003: Cash Management Federal Program - Student Financial Aid Cluster, Federal Direct Student Loans Federal Agency - U.S. Department of Education Assistance Listing Number - 84.268 Federal Award Year - June 30, 2025 Criteria: For institutions on the Advance Payment Method, any amount of Title IV funds not disbursed to recipients by the end of the third business day is considered excess cash. ED allows an institution to retain, for up to seven days, excess cash that does not exceed one percent of the total amount of funds drawn by the institution in the prior award year. The institution must return to ED any excess cash over the tolerable amount (one percent) and any amount remaining after the tolerable period (seven days). Condition: The Corporation did not disburse all funds that were drawn down within three business days of the initial draw down. The Corporation disbursed the funds over 30 days and did not return the excess funds for 1 drawdown in our sample of 5 drawdowns. The sample was not a statistically valid sample. Questioned Costs: There are $99,711 in known questioned costs associated with this finding. Cause: The Corporation drew down funds in December 2024 in anticipation of the Corporation being unable to draw funds in January 2025 due to the government shutdown. Effect: The Corporation was in possession of the funds for longer than three business days and therefore was in possession of excess cash longer than the allowable period. Recommendations: The Corporation should increase emphasis on timely disbursement of funds that are drawn down. Views of Responsible Officials: Management acknowledges and concurs with the finding. Management believes that the occurrence was a one-time event due to the anticipated government shutdown. They have no plans to draw down funds without planned disbursements within three business days in the future.