Finding Text
Finding 2025-015 - U.S. Department of Education (ED), Title IV Student Financial Aid Programs Title IV Aid Awarded Without Support for Appropriate Dependency Status (Significant Deficiency): 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 § 668.32, a student must meet applicable eligibility requirements to receive Title IV, HEA program assistance. The institution is responsible for ensuring that information used to determine a student's eligibility for Title IV assistance is complete, accurate, and appropriately supported. Additionally, 34 CFR § 668.24 requires institutions participating in Title IV programs to establish and maintain records necessary to demonstrate compliance with Title IV requirements, including documentation sufficient to support a student's eligibility for federal student aid. A student's dependency status is a component of the FAFSA eligibility determination and affects the information required to calculate the student's eligibility for Title IV assistance. Institutions must ensure that unresolved, incomplete, or conflicting information affecting a student's eligibility is appropriately reviewed and resolved before Title IV aid is disbursed. Condition – During testing of student eligibility, we noted that the ISIR maintained for one student did not reflect an appropriate dependency model and instead reflected a dependency model of “X.” The University disbursed $3,698 in Title IV aid to the student. Documentation was not provided to demonstrate that the student's appropriate dependency status had been established and supported prior to the disbursement of Title IV funds. Cause – The exception appears to have resulted from inadequate review of ISIR information and insufficient controls to ensure that a student's dependency status and applicable eligibility information are appropriately resolved and supported prior to the awarding and disbursement of Title IV aid. Effect – Failure to establish and document the student's appropriate dependency status prior to awarding Title IV aid increases the risk that federal student aid may be awarded based on incomplete or unsupported eligibility information. As a result, the University was unable to demonstrate that the $3,698 in Title IV assistance awarded to the student was properly supported. Questioned Costs - $3,698 Repeat Finding – No Auditor’s Perspective – Of the 60 students selected for testing, one (1) student, or 1.67% of the sample, had an ISIR that did not reflect an appropriate dependency model and for whom sufficient documentation was not provided to demonstrate that the student's dependency status had been appropriately established prior to the awarding/disbursement of Title IV aid. While the exception appears isolated based on the sample tested, appropriate determination and documentation of dependency status is an important component of establishing a student's eligibility and ensuring that Title IV aid is awarded based on accurate and complete FAFSA/ISIR information. Auditor’s Recommendation - The University should strengthen its procedures for reviewing ISIR transactions prior to awarding and disbursing Title IV aid. Financial Aid personnel should verify that each student's dependency status is appropriately reflected on the applicable ISIR and that any conflicting, incomplete, or unresolved dependency information is reviewed and resolved before Title IV eligibility is finalized. The University should also review the identified student's record to determine the appropriate dependency status, obtain and retain supporting documentation, submit any required corrections, and recalculate the student's Title IV eligibility, as applicable. Any Title IV funds determined to have been improperly disbursed should be returned in accordance with applicable federal requirements. 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.