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Finding 2026 - 001: Special Tests and Provisions - Return of Title IV Funds Major Program: Student Financial Assistance Cluster (ALN# 84.007, 84.033, 84.063, and 84.268) Type of Finding: Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria In accordance with 34 CFR 668.22, the U.S. Department of Education requires institutions to perform a Return of Title IV Funds calculation when a Title IV recipient withdraws before completing the payment period or period of enrollment. The calculation determines the amount of Title IV assistance earned by the student based on the percentage of the period completed, and any unearned Title IV funds must be returned in accordance with the required federal return order and applicable timeframes. For programs offered in modules, scheduled breaks of five or more consecutive days and all days between modules are excluded, as applicable, when determining the number of days in the payment period or period of enrollment for Return of Title IV Funds purposes. Condition We tested 15 of 93 Return of Title IV Funds calculations, representing approximately $231,455 of Title IV funds returned to the U.S. Department of Education or students. Although funds were returned timely and in the required order, 5 calculations overstated amounts to be returned due to unexcluded scheduled breaks of more than five calendar days or due to the use of incorrect institutional charges. Consequently, the University returned excess Title IV funds to the U.S. Department of Education or students. Cause The University’s review controls over Return of Title IV Funds calculations were not operating as designed to ensure that all calculation inputs were accurate and that the final return amount was reviewed before funds were returned to the U.S. Department of Education or student. Effect As a result of the inaccurate calculation, the University returned more Title IV funds to the U.S. Department of Education or to the student than required. Inaccurate Return of Title IV Funds calculations increase the risk of noncompliance with federal requirements and could result in incorrect student account balances, improper returns of federal funds, or delayed resolution of student aid records. Context The population of students requiring a Return of Title IV Funds calculation during the fiscal year consisted of 93 students. We tested 15 calculations and identified 5 exceptions in which scheduled breaks were not properly excluded from the calculation and/or incorrect institutional charges were used. Although the resulting errors caused the University to return more funds than required and did not result in questioned costs, the frequency of exceptions identified during testing indicates deficiencies in the review process over Return of Title IV Funds calculations. Based on the nature and frequency of the exceptions, the matter was determined to represent reportable noncompliance and a significant deficiency in internal control over compliance. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Questioned Cost: No questioned costs were identified. Repeat Finding: No Recommendation We recommend the University strengthen its review process over Return of Title IV Funds calculations by requiring an independent review of key calculation inputs, including withdrawal dates, payment period dates, institutional charges, Title IV aid disbursed and aid that could have been disbursed, and the resulting amount required to be returned. The review should be documented prior to returning funds to the U.S. Department of Education or student. The University should also provide periodic training to personnel responsible for preparing and reviewing Return of Title IV Funds calculations to promote consistent application of federal requirements. View of Responsible Officials The University agrees with the findings and recommendation. Management reviewed the identified exceptions and determined they resulted from the use of incorrect institutional charges and failure to exclude a scheduled break of five or more consecutive calendar days in certain Return of Title IV calculations. The University has implemented enhanced procedures to validate institutional charges, identify and exclude qualifying scheduled breaks, provide additional staff training, and require secondary review of Return of Title IV calculations.