Finding Text
Finding 2025-001 – Student Financial Assistance Cluster Federal Agency – U.S. Department of Education Grant Period – Year ended August 31, 2025 Compliance Requirement – Return of Title IV Funds Criteria – Federal regulations require institutions to calculate and return unearned Title IV funds. Condition – During our testing for Return of Title IV (R2T4) calculations, we identified 2 instances out of 25 students selected for testing where the R2T4 was properly calculated. However, the Title IV funds were not correctly and accurately returned. Cause – The College had a lack of review controls and segregation of duties in their Return of Title IV Funds process. Based on discussion with the client, these errors were manual errors that were not identified due to a lack of review control and segregation of duties. As a result, the controls over Return of Title IV funds were not operating effectively. Effect – The amount and type of Title IV funds were not being returned correctly. Recommendation – We recommend that management strength internal controls over correctly and accurately returning Title IV funds by implementing formalized procedures to ensure proper review of the R2T4 calculation and review that the correct type and amount of funds are returned. Management Response – The College acknowledges the instances identified during testing where the errors in the calculation of Return to Title IV (R2T4) funds, resulted in incorrect amounts of federal aid being returned for certain withdrawn students. These instances were the result of manual processing errors that were not identified due to a lack of review control and segregation of duties. R2T4 calculations and return amounts were completed and finalized by a single staff member without a required secondary review, increasing the risk of calculation errors.