FAC Explorer

Finding 1208773 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2026-04-23
Audit: 399599
Organization: Pepperdine University (CA)
Auditor: PRICEWATERHOUSECOOPERS LLP

AI Summary

  • Core Issue: The University failed to return unearned Title IV funds within the required 45 days for 8 out of 25 reviewed cases.
  • Impacted Requirements: Noncompliance with 34 CFR 668.22(j)(1) and 34 CFR 668.173(b) increases the risk of financial liabilities and regulatory actions.
  • Recommended Follow-Up: Improve staffing levels in the Financial Aid office to ensure timely processing of refunds and compliance with the 45-day requirement.

Finding Text

2025-001 – Return of Title IV Funds Cluster: Student Financial Assistance Cluster Sponsoring Agency: Department of Education Award Name: Federal Direct Student Loans Program ALN Number: 84.268 Award Period: 2024-2025 Pass-through Entity: Not applicable Criteria: In accordance with 34 CFR 668.22(j)(1) and 34 CFR 668.173(b), the University is required to return the amount of unearned Title IV funds for which it is responsible to the Department of Education. This return must be completed no later than 45 days after the University determines that the student has withdrawn. Condition: We reviewed a sample of 25 students for which the University was responsible for returning unearned Title IV funds. In evaluating the University’s compliance with Title IV fund return requirements, we identified that for 8 of these students, the elapsed time between the student’s withdrawal date and the refund date recorded in the Common Origination and Disbursement (COD) system exceeded the mandated 45-day period. Specifically, the returns to the Department of Education occurred between 66 and 187 days following the student’s withdrawal. Cause: The delay in returning unearned Title IV funds for the eight students was due to the Graduate School of Education and Psychology Financial Aid office experiencing short staffing and processing delays. This staffing shortage impacted the timely processing of refunds, resulting in the elapsed time between the COD system refund date and the student withdrawal date exceeding the required 45-day timeframe. Effect: Noncompliance with the 45-day return requirement may subject the University to potential financial liabilities and increases the risk of regulatory actions such as program review findings. Questioned Costs: None noted. Recommendation: We recommend that management work to enhance and maintain consistent staffing levels in the Graduate School of Education and Psychology Financial Aid office to prevent processing delays and ensure unearned Title IV funds are returned within the required 45-day timeframe. Management’s Views and Corrective Action Plan: Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report.

Corrective Action Plan

Management's Views and Corrective Action Plan: Re: Response to finding 2025-001 2025-001 - RETURN OF TITLE IV FUNDS Cluster: Student Financial Assistance Cluster Sponsoring Agency: Department of Education Award Name: Federal Direct Student Loans Program ALN Number: 84.268 Award Period: 2024-2025 Pass-through Entity: Not applicable Management concurs with the finding. To prevent future delays, we plan to stabilize staffing, increase oversight, and improve workflow efficiency: 1. Increase staffing Following the audit recommendation to maintain consistent staffing, the Graduate School of Education and Psychology’s (GSEP) Financial Aid Office will: • Prioritize hiring by expediting the recruitment and onboarding of full-time Financial Aid positions to fill existing vacancies within the GSEP Financial Aid office. • Cross-train staff and establish a backup schedule where multiple staff members are trained on the Return to Title IV (R2T4) process and can assist during peak withdrawal periods and unexpected staff vacancies. 2. Increase oversight To ensure compliance, the GSEP Financial Aid Office will improve the R2T4 log, tracking every student withdrawal and term cancelation from the date of determination and add internal oversight at the 30-day mark to ensure the 45-day deadline is met. A manager will complete a secondary review of all R2T4 calculations to ensure accuracy and compliance. 3. Improve workflow efficiency To alleviate the high volume of inquiries that contributed to processing backlogs, GSEP is exploring partnering with CollegeVine, a third-party technology solution, to implement school-specific AI agents. With CollegeVine handling routine inquiries via chat and phone, the Financial Aid staff will be able to focus on compliance-oriented tasks. IMPLEMENTATION TIMELINE Increase staffing: Clear existing R2T4 backlog. (Completion: May 1, 2026) Increase staffing: Cross-training Financial Aid staff and implement contingency plan. (Completion: June 1, 2026) Increase staffing: Fill all GSEP Financial Aid vacancies. (Estimated Completion: June 1, 2026) Increase oversight: Implement additional monitoring, reconciliation, and compliance checks. (Completion: June 1, 2026) Workflow efficiency: Implement CollegeVine AI Agents. (Estimated Completion: Undetermined- pending approval) CONCLUSION By stabilizing our workforce and leveraging additional efficiencies, GSEP will ensure that R2T4 processing is prioritized and completed within the 45-day regulatory timeframe. CONTACT FOR THIS PLAN: Jillian Doyle Robinson Director of Student Financial Services Pepperdine Graziadio Business School & Graduate School of Education and Psychology Jillian.Doyle@pepperdine.edu 310-568-5578

Categories

Student Financial Aid Subrecipient Monitoring

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $230.12M
84.063 FEDERAL PELL GRANT PROGRAM $5.90M
84.038 PERKINS LOANS AS OF AUGUST 1, 2024 $2.85M
84.033 FEDERAL WORK-STUDY PROGRAM $1.34M
84.007 FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS $804,725
93.855 ALLERGY AND INFECTIOUS DISEASES RESEARCH $157,602
94.006 AMERICORPS STATE AND NATIONAL 94.006 $125,218
94.011 AMERICORPS SENIORS FOSTER GRANDPARENT PROGRAM (FGP) 94.011 $89,891
10.664 COOPERATIVE FORESTRY ASSISTANCE $78,250
21.008 LOW INCOME TAXPAYER CLINICS $54,235
47.076 STEM EDUCATION (FORMERLY EDUCATION AND HUMAN RESOURCES) $39,056
16.320 SERVICES FOR TRAFFICKING VICTIMS $30,325
47.075 SOCIAL, BEHAVIORAL, AND ECONOMIC SCIENCES $18,098
93.853 EXTRAMURAL RESEARCH PROGRAMS IN THE NEUROSCIENCES AND NEUROLOGICAL DISORDERS $17,274
93.866 AGING RESEARCH $17,250
93.877 AUTISM COLLABORATION, ACCOUNTABILITY, RESEARCH, EDUCATION, AND SUPPORT $13,947
47.074 BIOLOGICAL SCIENCES $4,056