Finding Text
Finding No.: 2024-014 - Special Tests and Provisions – Disbursements to or on Behalf of the Students Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.063 Federal Pell Grant Program Federal Award No.: P063Q194572, P063Q204572, P063Q214572, P063Q224572, P063Q234572, P063P224572, P063P234572, P063P244572 Criteria or specific requirement (including statutory, regulatory or other citation): 34 CFR 668.165(a)(1) states that before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. 34 CFR 668.164(h) states that: (1) A title IV, HEA credit balance occurs whenever the amount of title IV, HEA program funds credited to a student’s ledger account for a payment period exceeds the amount assessed the student for allowable charges associated with that payment period. (2) A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than: (i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. Conditions: 1. The College provided students with an award letter for the whole academic year which is based on full time enrollment. However, prior to disbursements, students were not notified of the final amount of funds that the student or his or her parent can expect to receive under title IV, and how and when those funds will be disbursed. 2. The College did not pay the credit balance to the student or parent. 3. The College did not pay the credit balance directly to the student or parent within the 14-day timeframe. Cause: The College lacks adequate internal controls over compliance with applicable special tests and provisions for disbursements to or on behalf of the students’ requirements. Effect or potential effect: The College is in noncompliance with applicable special tests and provisions for disbursements to or on behalf of the student requirements. Questioned costs: $157,494 Context: We identified 3,041 disbursement transactions during the year totaling $7,423,174. We tested 60 disbursement transactions totaling $157,494. The samples were statistically valid. For 60 (or 100%) disbursement transactions tested, noncompliance was noted as follows: a. For 60 (or 100%) disbursements tested, the College provided students with an award letter for the whole academic year which is based on full-time enrollment. However, prior to disbursements, students were not notified of the final amount of funds that the student or his or her parent can expect to receive under title IV, and how and when those funds will be disbursed. b. For three (or 5%) disbursements tested, the College did not pay the credit balance to the student or parent aggregating $468. c. For 35 (or 60%) disbursements tested, the College did not pay the credit balance directly to the student or parent within the 14-day timeframe. Identification as a repeat finding, if applicable: 2023-016 Recommendation: College management should improve internal control policies and procedures requiring compliance with applicable special tests and provisions for disbursements to or on behalf of student requirements. Specifically, the College should implement a comprehensive communication strategy to ensure that all students receive clear and timely notifications regarding their Title IV funds. In addition, the College should establish a monitoring system to ensure that credit balances are disbursed within the 14-day timeframe to maintain compliance with federal regulations. Views of responsible officials: The College agrees with the finding and provides details in its Corrective Action Plan.