Finding Text
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds must be distributed in the prescribed order (34 CFR 668.22(i)). Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Condition: For certain students that withdrew during the year, the University did not appropriately prepare the withdrawal calculation and certain unearned Title IV funds were not returned to the ED within the required timeframe. Cause: Insufficient internal controls and lack of administrative oversight over the return of Title IV funds. Effect or Potential Effect¬: The University is not in compliance with the required federal guidelines over the return of Title IV funds. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 2 of 2 sampled students, the University did not appropriately prepare the withdrawal calculation and certain unearned Title IV funds were not returned to the ED within the required timeframe. Identification of Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-007 in the prior year schedule of findings and questioned costs. Recommendation¬¬: We recommend that the University enhance its internal controls, policies, and procedures to ensure that return of funds calculations are accurately prepared and returned timely. Views of Responsible Officials: The University concurs with the finding and acknowledges the difference between the auditor’s calculations and what was determined as the variance of R2T4. To ensure full compliance with federal Return to Title IV (R2T4) requirements and to strengthen institutional oversight, Shaw University will implement enhanced processes designed to improve accuracy, documentation, and accountability. Each R2T4 calculation will undergo a dual review process in which one Financial Aid team member completes the calculation and a second independently verifies it before any returns are processed. The University will also maintain comprehensive documentation and audit trail for all R2T4 files, including withdrawal documentation, calculation worksheets, COD records, disbursement summaries, and proof of timely returns, stored systematically to support audit readiness and internal review. To reinforce oversight, management will reconcile internal Financial Aid records with the Business Office and COD on a scheduled basis, conduct monthly or biweekly reconciliations for Pell Grants, Direct Loans, and campus-based funds, and review open balances and disbursement records before posting or adjusting aid. Financial Aid staff will continue to receive annual and periodic training on R2T4 regulations, updated federal guidance, and internal process revisions to ensure consistent application of rules. Additionally, management will conduct periodic internal audits of R2T4 files to identify potential issues proactively and respond with timely corrective measures. These strengthened procedures will ensure that future R2T4 calculations are accurate, fully documented, and completed within federally required timeframes, thereby maintaining strong compliance, reinforcing internal controls, and meeting all expectations for federal oversight.