Finding Text
Finding 2025-008 – U.S. Department of Education (ED), Title IV Student Financial Aid Programs - Untimely Return of Title IV Funds and Insufficient Documentation (Material Weakness): Information on the federal program – Federal Direct Student Loans, ALN 84.268, June 30, 2025; Federal Pell Grant Program, ALN 84.063, June 30, 2025; Federal Supplemental Educational Opportunity Grant, ALN 84.007, June 30, 2025; Federal Work-Study Program, ALN 84.033, June 30, 2025. Criteria – Per 34 CFR § 668.22 (j), (1) an institution must return the amount of Title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew. Additionally, 34 CFR § 668.24 requires institutions participating in the Title IV programs to establish and maintain records necessary to demonstrate compliance with Title IV program requirements. Such records must be sufficient to support the institution's determination, calculation, and timely return of Title IV funds for students who withdraw. Condition – During testing of the University's compliance with Return of Title IV Funds (R2T4) requirements, we noted exceptions for four (4) students selected for testing. For three (3) students, the University did not return unearned Title IV funds within the required 45-day timeframe. The returns were made after the regulatory deadline. For one (1) additional student, the University did not provide all documentation requested to support the student's R2T4 determination and calculation. As a result, we were unable to determine whether the calculation was accurate, whether the appropriate amount of Title IV funds was returned, or whether any required return was completed within the required timeframe. Cause – The exceptions appear to have resulted from insufficient monitoring and internal controls over the R2T4 process, including procedures to ensure that required returns are identified and processed within the 45-day timeframe and that complete supporting documentation is maintained and readily available for review. Effect – Failure to return unearned Title IV funds within the required timeframe results in noncompliance with federal R2T4 requirements and may expose the University to repayment liabilities and additional regulatory oversight. Effect – (continued) Additionally, failure to maintain sufficient supporting documentation prevents the University from demonstrating compliance with federal requirements and increases the risk that R2T4 calculations, return amounts, and return dates may be inaccurate or unsupported. Questioned Costs – $0 Repeat Finding – Yes Auditor’s Perspective – The exceptions identified demonstrate weaknesses in the University's controls over the timeliness and documentation of the R2T4 process. Three students had confirmed untimely returns, while sufficient documentation was not provided for a fourth student to allow the auditors to determine compliance. Although the documentation exception does not, by itself, establish that an untimely or incorrect return occurred, the absence of sufficient documentation limits the University's ability to demonstrate compliance with federal requirements. Auditor’s Recommendation – The University should strengthen its procedures and internal controls over the Return of Title IV Funds process to ensure that all required R2T4 calculations are completed timely and that unearned Title IV funds are returned within 45 days of the University's determination that a student withdrew. The University should also establish procedures to ensure that complete supporting documentation is maintained for each R2T4 calculation, including the withdrawal determination, withdrawal date, calculation, institutional charges, aid disbursed or that could have been disbursed, return amounts, and evidence supporting the date funds were returned. View of Responsible Officials – Management agrees with the finding. See the accompanying Corrective Action Plan for the University's planned corrective actions, responsible officials, and implementation dates.