Finding Text
FINDING 2026-002 Federal Program Information: Federal Pell Grant Program (ALN 84.063) Criteria or Specific Requirement: C. Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition: Certain instances in which Title IV funds drawn were held in excess of the allowable time frame were identified. Cause: Administrative oversight and insufficient internal control. Effect or Possible Effect: The University was not in compliance with the Cash Management compliance requirements. While amounts were immaterial, certain funds were overdrawn and held in excess of the allowable time frame. Questioned Costs: None. Context: Two instances of excess cash that were not eliminated within the allowable time frame were identified for the Federal Pell Grant Program for the year ended May 31, 2026. Identification of Repeat Finding: This is a repeat of prior year finding 2025-003. Recommendation: We recommend that the University enhance its procedures and internal controls over cash management to ensure timely elimination of excess cash balances. Views of Responsible Officials: The University has implemented enhanced controls over Federal Pell Grant cash draws to ensure compliance with federal cash management requirements. The University will maintain an approximate $50,000 cushion between cumulative eligible financial aid disbursements and cumulative funds drawn through the G5 portal. Prior to each draw, cumulative financial aid awarded and recorded in the University’s general ledger will be reconciled to cumulative G5 draws to ensure funds requested do not exceed eligible disbursements. Additionally, the AVP for Business and Finance will review and approve each draw prior to submission to provide an additional level of oversight and ensure continued compliance with applicable federal cash management requirements.