Finding Text
2025-005 – Special Tests and Provisions – Return of Title IV Funds (R2T4) – Material Weakness in Internal Controls over Compliance and Material Noncompliance Department of Education Student Financial Assistance Cluster Federal Assistance Listing Number: 84.063, 84.268, 84.007 Federal Program Name: Federal Pell Grant Program, Federal Direct Student Loans, Supplemental Educational Opportunity Grant Federal Award Number: P063P242403, P268K252403, P007A244364 Award Year: 2024-25, 2023-24, 2022-23 Criteria – In accordance with 34 CFR 668.22 when a recipient of title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of title IV grant or loan assistance that the student earned as of the student’s withdrawal date. Condition/context – We note that the University was unable to provide a complete population of unofficial withdrawals and during the fiscal year, controls were not properly implemented to ensure that unofficial withdrawals would be identified. We selected a sample of 3 official withdrawals from a population of 12 total withdrawals and noted exceptions with all 3 selections as follows: • For all selections, we noted that the R2T4 calculations were incomplete or calculations were not consistent with underlying support. As a result, for two of the selections, we recalculated an amount to be returned that did not match the University’s calculation. • For all three selections, the University did not return the correct amount of funds per their calculation as follows: o Student #1 returned $1,641, should have returned $2,557 o Student #2 returned $650, should have returned $568 o Student #3 returned $2,969, should have returned $3,488 • For one selection the withdrawal date used in the calculation did not match the underlying support, • For two of the selections, funds were returned outside the required timeframe. Our sample was not, and was not intended to be, statistically valid. Questioned costs – $1,353 Cause/effect – This occurred because of lack of controls and processes in place to ensure withdrawals are properly monitored and identified; and calculations are completed accurately and return of funds are completed timely. This resulted in the calculations being incorrect and money not being returned to the federal government accurately or timely. Repeat finding – Yes, 2024-005 Recommendation – We recommend the University review their policies and procedures to ensure all withdrawals, including unofficial withdrawals where the student does not give formal notification can be identified and accurately evaluated. We also recommend a control be put in place to ensure the calculations and return of funds are performed accurately and timely. Views of responsible officials and planned corrective actions – Heritage University agrees with the recommendation and is reviewing its withdrawal and Return of Title IV (R2T4) processes to strengthen both the timely identification of student withdrawals and the accurate and timely completion of required calculations and return of funds.