Finding Text
Federal Program: Student Financial Assistance Cluster Federal Assistance Listing Number: 84.007, 84.063, 84.268 Federal Agency: Department of Education (DOE) Federal Award Numbers: P007A243392, P063P242023, P268K252023; Award Year: 2025 Criteria: Federal regulations require institutions to minimize the time between the drawdown of federal funds and their disbursement to students, and to ensure that drawdowns do not exceed immediate cash needs. Institutions must maintain adequate internal controls to ensure federal funds are not drawn in excess of amounts needed for disbursement. Condition: During testing, it was noted that the University drew down Student Financial Assistance funds in excess of immediate disbursement needs at various points throughout the year. Specifically: • Pell Grant funds of up to $35,531 at different points of the year were drawn but not disbursed within the required timeframe. Funds totaling $4,224 remained overdrawn as of June 30, 2025. • SEOG funds of up to $120,508 at different points of the year were drawn but not disbursed within the required timeframe. Funds totaling $120,508 remained overdrawn as of June 30, 2025. • Federal Direct Loans of up to $351,211 at different points of the year were drawn but not disbursed within the required timeframe. Funds totaling $73,597 remained overdrawn as of June 30, 2025. Cause: The University did not have adequate monitoring controls in place to ensure that drawdowns were limited to immediate cash needs and that fund balances were reconciled timely and accurately across programs. Testing indicated reconciliations were not routinely performed between the University's systems and federal systems, resulting in these errors. Effect: The University was not in compliance with federal cash management requirements, as federal funds were drawn in excess of allowable amounts. This increases the risk of improper cash management and potential noncompliance with Department of Education regulations. Questioned Costs: None reported Context: Testing identified multiple instances of overdrawn fund positions across the SEOG, Federal Direct Loan, and Pell programs throughout the fiscal year, occurring at various points in time and in varying amounts. Overdrawn conditions were not isolated to a single period or program but were observed intermittently across all three programs. At fiscal year-end, two of the three programs tested (SEOG and Federal Direct Loan) remained in an overdrawn position, while the Pell program was resolved prior to year-end. Repeat Finding: Yes Recommendations: We recommend that the University evaluate its processes and controls to ensure cash draws are completed for appropriate amounts. Views of Responsible Officials: Management agrees with the finding. See management's corrective action plan.