Return of Title IV Funds Calculations Federal Program and Specific Federal Award Identification CFDA Title and Number 84.063 Federal PELL Grant Program (PELL) 84.268 Federal Direct Student Loan (Direct) Federal Award Year June 30, 2025 Federal Agencies U. S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR 200, Subpart F Compliance Supplement, Part 5 Section (N) (3) specifies that when a student receives Title IV assistance and withdraws from an institution, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. The difference between any amounts earned that is less than the amount disbursed must be returned to the Title IV program within the prescribed time frame. The University is a college that is not required to take attendance. Thus, the University must determine the student’s withdrawal date as either (1) the date, as determined by the institution, that the student began the withdrawal process prescribed by the institution; (2) the date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw; (3) if the student ceases attendance without providing official notification to the institution of his or her withdrawal, the midpoint of the payment period or, if applicable, the period of enrollment; (4) if the institution determines that a student did not begin the withdrawal process or otherwise notify the institution of the intent to withdraw due to illness, accident, grievous personal loss or other circumstances beyond the student’s control, the date the institution determines is related to that circumstances, (5) if a student does not return from an approved leave of absence, the date that the institution determines the student began the leave of absence; or (6) if the student takes an unapproved leave of absence, the date that the student began the leave of absence. Conditions and Contexts During my audit, I noted the following: • One (1) student withdrew from the University and may have received Title IV funds; however, the University was unable to verify whether Title IV aid was disbursed. As a result, it could not be determined whether a Return of Title IV Funds calculation was required; • For one (1) student out of five (5) students tested, the University was unable to provide documentation supporting the student’s withdrawal date; • All the Return of Title IV Funds calculations reviewed for the Spring 2025 semester were prepared incorrectly. Specifically, the total number of days in the payment period was inaccurate, and the institutional charges were not included in the calculation. As a result, the calculations reflected $-0- in funds to be returned when $18,016 should have been returned; and • The University did not provide the necessary reports to test the students who received all non-passing grades to verify that documentation supporting the last date of attendance or academically related activity was maintained. Cause The University lacked effective controls over the Return of Title IV Funds process, including preparation, review, and documentation of calculations, as well as retention and availability of supporting records. Questioned Cost For purposes of this condition, I have questioned costs totaling $18,016 as follows: Program Amount Federal PELL Grant $ 2,515 Federal Direct Loan 15,501 Total $18,016 Effect As a result of these deficiencies, the University may have failed to return the required Title IV funds in a timely and accurate manner, resulting in an identified under-return of $18,016 and potential additional unquantified errors. Additionally, the lack of documentation limits assurance over compliance with federal requirements. Repeat Finding No. Recommendation The University should strengthen internal controls over the Return of Title IV Funds process by ensuring: Accurate and complete preparation of R2T4 calculations, including correct payment period dates and inclusion of institutional charges; • Independent review of calculations prior to finalization; • Proper identification of students who require R2T4 calculations; • Adequate documentation of withdrawal dates and last dates of attendance, including for students with non-passing grades; and • Retention and availability of all supporting documentation for audit and compliance purposes. Management should also recalculate affected student accounts, return any additional funds due, and consider performing a comprehensive review to identify other potential errors. Management’s Response The University acknowledges the finding related to errors and missing documentation in the Return of Title IV Funds (R2T4) process. We recognize the importance of accurate withdrawal date determination, proper calculation of earned versus unearned aid, and timely retention of supporting documentation in accordance with federal requirements. Corrective Actions 1. Immediate Corrections and Reconciliation: The University has reviewed the identified cases and will recalculate the R2T4 amounts where required and process the return of the $18,016 owed to the U.S. Department of Education. Additional reviews are underway to identify any other students who may have been affected. 2. Strengthened Documentation and Record Retention: Procedures have been updated to ensure that withdrawal dates, last dates of attendance, and all supporting documentation are retained and readily available for audit and compliance review. 3. Revised R2T4 Calculation and Review Process: A standardized calculation template and checklist have been implemented to ensure consistency in determining payment period days, institutional charges, and earned aid. All R2T4 calculations will undergo a secondary review prior to processing. 4. Improved Coordination Between Offices: The University has enhanced communication procedures between Financial Aid, the Registrar, and Student Accounts to ensure timely access to enrollment, grade, and withdrawal information necessary for accurate R2T4 processing. 5. Staff Training and Compliance Oversight: Financial Aid staff have received updated training on R2T4 regulatory requirements, documentation standards, and calculation procedures. Periodic internal monitoring will be conducted to validate continued compliance. The University believes these corrective actions will address the root causes identified and strengthen overall compliance with federal R2T4 regulations going forward.