Finding Text
The District did not disburse federal financial assistance owed to 34 students within the required 14-day time frame 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 – disbursements to or on behalf of students Questioned costs: None Condition Contrary to federal regulations, the District’s Student Financial Aid Office (Office) did not disburse Student Financial Assistance (SFA) credit balances to students or their parents within 14 days after applying the Title IV grant and loan awards to the student’s accounts. Specifically, during October 2024, the Office failed to timely disburse $39,014 in SFA credit balance funds owed to 34 students. The Office held the students’ SFA credit balances 1 to 3 days longer than the allowed 14 days after the awards were posted to the students’ accounts. Effect The Office’s lack of controls to monitor compliance with federal regulations increases the risk that students will not receive their SFA credit balances timely to help pay for additional college expenses. Further, continued District noncompliance administering its federal programs could enforce escalated penalties over its cash-monitoring requirements, which would require additional supporting records and longer periods of time for reimbursement to the District. Cause According to Office management, the late SFA credit balance payments were caused by a student information system generated reporting error for the period October 9, 2024 through October 23, 2024. Office management reported that they identified the report was incomplete but were unable to determine why the report did not capture all the required credit balances. The Office subsequently developed a new report to capture the complete population of undisbursed credit balances. However, because of the revised report’s timing, 34 students’ SFA credit balances were disbursed late. Criteria Federal regulation requires the Office to apply each student’s SFA awards to the student’s account to satisfy tuition and fees owed to the District. Any excess SFA awards results in a credit balance on the student’s account. When this occurs, the Office is required to disburse any remaining SFA award monies directly to the student or parent as soon as possible, but no later than 14 days after the award has been posted to the student’s account. If the credit balance occurred before the first day of class of that payment period, then disbursement to the student or parent would be required no later than 14 days after the first day of class of the payment period (34 Code of Federal Regulations [CFR] §668.164[h]). 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 Disburse all SFA credit balances to students or their parents within 14 days after applying the Title IV grant and loan awards to the students’ accounts. If the credit balance occurred before the first day of class of that payment period, then disbursement to the student or parent would be required no later than 14 days after the first day of class of the payment period. Verify that student information system-generated reports used to monitor credit balances accurately capture the complete population of student information, award dates, and credit balances to ensure that all impacted students receive final payment of SFA credit balances within the required 14-day time frame. 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.