Finding Text
The District did not timely return Title IV funds to the U.S. Department of Education, increasing the risk of reduced or terminated future awards Cluster name: Student Financial Assistance Cluster Assistance Listings number(s) and name(s): 84.007 Federal Supplemental Educational Opportunity Grants 84.033 Federal Work-Study Program 84.063 Federal Pell Grant Program 84.268 Federal Direct Student Loans Award number(s) and year(s): P007A240134 July 1, 2024 through June 30, 2025 P033A240134 July 1, 2024 through June 30, 2025 P063P242910 July 1, 2024 through June 30, 2025 P268K252910 July 1, 2024 through June 30, 2025 Federal agency: U.S. Department of Education Compliance requirement: Special tests and provisions – return of Title IV funds Questioned costs: None Condition Contrary to federal regulations, the District’s Student Financial Aid Office (Office) did not timely return $1,906 of Student Financial Assistance (SFA) Title IV funds to the U.S. Department of Education (ED) for 3 of 45 students tested who withdrew from the District during the period of enrollment in which the student began attendance. Specifically, the Office did not: Include all required institutional charges recorded in the students’ accounts, such as room and board, when calculating the unearned portion of 2 students’ Pell grant awards, resulting in underpayments to ED for $1,690 and $37. Timely notify 1 student, within 45 days, that they were required to return $179 of unearned Pell grant monies to ED. The District notified the student of the required repayment 607 days late. Effect The District’s failure to timely return Title IV funding and the Office’s lack of controls to comply with federal regulations increases the risk that additional Title IV funds could be returned past the 45-day requirement and increases the risk that ED could reduce or terminate future awards of Title IV funds for noncompliance. There were no questioned costs because, after we informed the District of the underpayments, they submitted $1,690 and $216 to ED on June 6, 2026 and July 15, 2026, respectively. The returns were submitted between 363 and 607 days late. Cause The Office’s policies and procedures did not require a second employee to review and approve the return of Title IV funds calculations to verify that the proper amounts were remitted from both the District and the student. In addition, according to Office management, they did not have the appropriate staffing to complete the secondary reviews. Criteria Federal regulations require the return of Title IV funds when a recipient of Title IV grant or loan assistance withdraws from the District during a payment period or period of enrollment in which the recipient began attendance. Specifically, the District must determine the amount of Title IV aid the student earned as of the student’s withdrawal date. If the total amount of Title IV assistance the student earned is less than the amount that was disbursed to the student or on their behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs no later than 45 days after the date the District determined that the student withdrew (34 Code of Federal Regulations [CFR] §668.22[a–j]). In addition, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations to the District Improve policies and procedures to require an independent employee to review and approve the return of Title IV funds calculations to verify that the proper amounts were remitted from both the District and the student. Perform timely return of Title IV funds calculations for all students who received Title IV funds and subsequently withdrew from the District, ensuring that all institutional charges are included. Notify students who received student financial assistance and subsequently withdrew from the District of any unearned Title IV funds they are required to repay no later than 45 days after the District’s determination that the student withdrew. Initiate returns of the institution’s and student’s portion of Title IV funds to ED no later than 45 days after the date of the District’s determination that the student withdrew. This finding is similar to prior-year finding 2024-001 and was initially reported in fiscal year 2021. Views of responsible officials District management concurs with this finding. The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials regarding these recommendations. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.