Finding Text
Audit Finding Reference Number 2024 – 006 – Student Withdrawal Monitoring Federal Program and Specific Federal Award Identification ALN Title and Number 84.268 Federal Direct Student Loans (Direct) Federal Award Number June 30, 2024 Federal Agencies U.S. Department of Education Pass-Through Entity Not applicable Criteria OMB 2 CFR Part 200, Subpart F, Compliance Supplement, Part 5 – Student Financial Assistance Programs, Special Tests and Provisions – Enrollment Reporting and Return of Title IV Funds, requires institutions to establish procedures to identify students who withdraw from the institution and to administer Title IV financial assistance in accordance with federal regulations. Institutions are responsible for maintaining complete and accurate records of students who withdraw to ensure compliance with applicable Title IV requirements, including determining continued eligibility for Title IV assistance and, when applicable, performing Return of Title IV Funds calculations. Condition and Context During my audit, I noted that one (1) of two (2) students who received Federal Direct Loan funds and withdrew and did not appear on ABC's withdrawal listing. As a result, ABC did not provide documentation demonstrating that the student's withdrawal was identified and evaluated in accordance with Title IV requirements. Consequently, I was unable to determine whether the student remained eligible to receive the Direct Loan funds or whether a Return of Title IV Funds calculation was required. Cause ABC did not establish and implement adequate internal controls to ensure all students who withdrew from the institution were identified, included on the official withdrawal listing, and evaluated for compliance with applicable Title IV requirements. Specifically, procedures were not sufficient to ensure complete and accurate communication between the Registrar's Office and the Financial Aid Office regarding student withdrawals. Questioned Costs For purposes of this condition, I do not have any questioned costs. Effect As a result of these deficiencies, ABC was unable to demonstrate that all students who withdrew were evaluated for continued Title IV eligibility and compliance with applicable federal requirements. Consequently, the institution could not support that the student remained eligible for the Federal Direct Loan funds received or that all required post-withdrawal procedures, including a Return of Title IV Funds determination, were appropriately performed. Repeat Finding No. Recommendation I recommend that ABC strengthen its internal controls over the student withdrawal process by implementing procedures to ensure all student withdrawals are accurately identified, documented, and communicated timely between the Registrar's Office and the Financial Aid Office. Management should reconcile withdrawal records maintained in Jenzabar with financial aid records on a regular basis, verify that all withdrawn students are evaluated for continued Title IV eligibility and Return of Title IV Funds requirements, and require supervisory review of the reconciliation process to ensure no withdrawn students are omitted from the withdrawal listing. Management’s Response The Institution concurs with this finding. The College accepts the recommendation and will continue to enhance and strengthen its internal controls over the student withdrawal process by implementing procedures to ensure all student withdrawals are accurately identified, documented, and communicated in a timely manner between the Registrar's Office and the Financial Aid Office. The Institution will implement strong processes to reconcile withdrawal records maintained in Jenzabar with financial aid records on a regular basis, verify that all withdrawn students are evaluated for continued Title IV eligibility and Return of Title IV Funds requirements, and require supervisory review of the reconciliation process to ensure no withdrawn students are omitted from the withdrawal listing.