Finding Text
Criteria Under 34 CFR 668.162(b)(1) and (b)(3), an institution participating in the Title IV programs under the advance payment method may request only the amount of federal funds needed for immediate disbursement to eligible students and parents, and must disburse those funds as soon as administratively feasible, but no later than three business days after receipt. Additionally, under 34 CFR 668.24(b)(2)(i)-(ii) and 668.24(d)(1), institutions are required to establish and maintain financial records, including general ledger control accounts and related subsidiary accounts, that accurately reflect each Title IV transaction and are systematically organized to support compliance and examination. Finally, pursuant to 2 CFR 200.303, institutions must establish, document, and maintain effective internal controls over federal awards to provide reasonable assurance of compliance with applicable federal statutes, regulations, and award terms, including monitoring compliance and taking prompt corrective action when instances of noncompliance are identified. Condition The University does not maintain sufficient supporting documentation to directly reconcile G5 drawdowns to specific Title IV student-level disbursements. Although reconciliations are performed on an overall basis, they do not provide sufficient detail to establish a direct correlation between individual student disbursements and related drawdowns. Therefore, the three-business day requirement could not be tested. Cause The condition resulted from internal controls over Title IV cash management that were not fully defined or implemented following the recent ERP transition to Ellucian Banner. Specifically, the University lacks a system-generated report that provides student-level disbursement detail segregated by Title IV program (e.g. Pell Grant, FSEOG, Direct Loans) needed to reconcile disbursement activity on a per-student basis to the G5 drawdown activity. During the transition, the University relied on manual, undocumented procedures and unreconciled reports to request funds. Effect The absence of detailed reconciliation documentation limits the University’s ability to clearly demonstrate compliance with federal Cash Management requirements under 34 CFR Part 668 Subpart K - Cash Management. This condition increases the risk that cash management discrepancies may not be identified on a timely basis. Questioned Costs None. Recommendation We recommend the University formalize and implement a Title IV cash management reconciliation process in accordance with 34 CFR 668.162, 668.166, 668.24, and 2 CFR 200.303. This process should require timely reconciliation of each G5 drawdown to specific Title IV disbursements at the student level, with clearly defined roles, responsibilities, and documentation requirements. The University should enhance system or supplemental reporting to support student-level linkage of drawdowns to disbursements and implement controls to monitor excess cash, including compliance with the three-business-day rule and applicable tolerance thresholds. Additionally, supporting documentation should be retained in an organized manner, and supervisory review, periodic monitoring, and staff training should be established to ensure ongoing compliance. Views of Responsible Officials Refer to Management's unaudited corrective action plan.