Finding Text
Condition: During testing of Return of Title IV Funds calculations, we noted two instances in which the College incorrectly calculated the refund due for a student who withdrew during the payment period. As a result of the incorrect calculation, Title IV funds that should have been returned were not refunded timely. Criteria: For students who withdraw, the College is required to determine the amount of Title IV assistance earned as of the student’s withdrawal date and calculate any unearned Title IV funds that must be returned. Any unearned Title IV funds for which the College is responsible must be returned within the required timeframe. Cause: The College did not maintain effective internal controls over the preparation and review of Return of Title IV Funds calculations to ensure the withdrawal date, percentage earned, and amount of unearned aid subject to return were calculated accurately and that any required refund was processed timely. Effect: Failure to accurately calculate and return unearned Title IV funds may result in noncompliance with federal requirements and could cause the Institution to retain federal funds to which it was not entitled. Questioned Costs: Context: Of the five Return of Title IV Funds calculations tested, two exceptions were identified related to an incorrect calculation that resulted in no refund being issued when a return of funds was required. Recommendation: We recommend the Institution strengthen internal controls over the Return of Title IV Funds process by ensuring personnel performing the calculation are adequately trained on Title IV refund requirements; implementing a documented secondary review of all Return of Title IV Funds calculations; verifying that all required refunds are processed within the prescribed timeframe; and monitoring exceptions to ensure corrective action is taken promptly.