Finding Text
Cash Management U.S. Department of Education Student Financial Aid Cluster: ALN: 84.063 Pell Grant ALN: 84.007 Supplemental Educational Opportunity Grant ALN 84.033 Federal Work Study ALN 84.038 Federal Perkins Loan Program ALN 84.268 Federal Direct Student Loans Criteria: The Department of Education provides funds to an institution under the advance, reimbursement, or heightened cash monitoring payment methods. With the advance payment method, it permits the institution to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either SFA funds or institutional funds. The institution must make the disbursement as soon as administratively feasible, but no later than 3 business days following the receipt of funds. The Department of Education considers excess cash to be any amount of Title IV funds that an institution does not disburse to students or parents by the end of the third business day. The Department of Education allows an institution to retain, for up to seven days, excess cash that does not exceed one percent of the total amount of funds drawn by the institution in the prior award year. The institution must return to the Department of Education any excess cash over the tolerable amount (one percent) and any amount remaining after the tolerance period (seven days). Questioned costs would be those in excess of the one percent threshold. Condition: The University drew $1,334,720 for Direct Loans on September 12, 2024, but drew down too much. They were notified by the Department of Education of the overdrawn portion, and a refund was issued on October 25, 2024, for $75,428. The University held excess cash for longer than the allowed time frame. Context: Funds are drawn from the Department of Education periodically throughout the year. This was the only instance of drawing in advance and not returning the funds timely to Department of Education. Effect: The University did not follow cash management requirements as noted in the criteria. Questioned Costs: Questioned costs are those that were reported by Department of Education of $75,428. Cause: The University converted from Banner to Jenzabar around the time this draw occurred. At this time the Student Financial Aid activity was in Jenzabar, but the other departments were still using Banner modules. The amount drawn came from totals in Banner and not Jenzabar or what had been reported as disbursed in COD (Common Origination and Disbursement system). Auditor Recommendation: We recommend the University return funds to the Department of Education as noted in the timeframe established by the Department of Education. University Response: The University is committed to following Federal Guidelines. During the fall the University went through a software conversion process, creating a downtime of two weeks. Due to the need to be able to refund students, funds were drawn directly after census date to cover the refunds using information from the prior system. Reconciliations were unable to be completed in the normal timeframe due to the availability of data.