Finding 12570 (2022-004)

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Requirement
C
Questioned Costs
-
Year
2022
Accepted
2022-12-18
Audit: 17285
Organization: Liberty University, Inc. (VA)
Auditor: Bdo USA LLP

AI Summary

  • Core Issue: The University held federal funds longer than allowed, violating cash management rules.
  • Impacted Requirements: Funds must be disbursed within 3 business days; excess cash must be returned promptly.
  • Recommended Follow-Up: Improve procedures to ensure timely elimination of excess cash balances.

Finding Text

Federal Program Information: Federal Work-Study Program (ALN: 84.033) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 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: There were two instances during the year where funds drawn were held in excess of the allowable time frame. Cause: Administrative oversight with respect to Cash Management compliance requirements. Effect or Potential Effect: The University is not in compliance with Cash Management compliance requirements. Questioned Costs: None. Context: There were two instances during the year where funds drawn were held in excess of the allowable time frame. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance its procedures to ensure that excess cash balances are eliminated timely.

Corrective Action Plan

Name of Responsible Individuals: Matthew Cooper, VP of Student Financial Services and Tracy Price, Executive Director of Accounting Corrective Action: Liberty acknowledges that there were two instances in which Federal Work Study funds were overdrawn for longer than the permissible time-frames thus creating a scenario in which cash management rules were not followed. While Liberty diligently manages the draw and disbursement of funds, some aspects are dependent on manual data entry. For the two instances in which funds were overdrawn, a data entry error was made which did not include a draw that was completed for 20-21 Federal Work Study that were to be used for 21-22. In response, the Director of Financial Aid Compliance and the Assistant Director of Financial Aid Compliance will implement an additional quality control process in which all campus-based fund draws done through Accounting are manually reviewed for accuracy within 24 hours of the initial draw. This will allow time for any corrections within the allowable time-frames. In addition, whenever funds are carried forward from one aid year to the next, workbooks for both aid years will be presented and reviewed. Anticipated Completion Date: October 31, 2022

Categories

Cash Management

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Loan Program $790.85M
84.063 Federal Pell Grant Program $111.94M
84.425 Education Stabilization Fund $9.75M
84.007 Federal Supplemental Educational Opportunity Grants $7.11M
84.033 Federal Work-Study Program $4.55M
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.10M
84.379 Teacher Education Assistance for College and Higher Education (teach) Grants $673,523
12.902 Information Security Grant Program $230,425
47.049 Mathematical and Physical Science $88,797
93.859 Biomedical Research and Research Training $85,226
47.041 Engineering $81,062
97.061 Centers for Homeland Security $26,489
93.113 Environmental Health $23,037
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $10,059
84.408 Postsecondary Education Scholarships for Veteran's Dependents (iasg) $9,187