Finding 15868 (2022-001)

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Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-02
Audit: 19033
Organization: Simmons University (MA)

AI Summary

  • Core Issue: The University failed to return Title IV funds on time for 2 students, taking 52 days instead of the required 45 days.
  • Impacted Requirements: The University did not perform a second level of review for 6 Title IV fund calculations, violating federal regulations.
  • Recommended Follow-Up: Implement a monitoring control for Title IV returns to ensure timely processing and compliance.

Finding Text

2022-001 Returns of Title IV Funds Cluster: Student Financial Assistance Cluster Grantor: Department of Education Award Name: Federal Direct Student Loans Award Year: July 1, 2021 ? June 30, 2022 Assistance Listing Number: 84.268 Criteria 34 CFR 668.22(j): (1) An institution must return the amount of Title IV funds as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew (2) For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the - (i) Payment period or period of enrollment, as appropriate; (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew. Condition Through our testing of 16 students who were awarded Title IV aid and withdrew from the University, we noted the following: ? 2 instances where the student funds were not returned timely. More specifically, it was 52 days from when the 2 students withdrew from the University that the funds were returned and thus they were 7 days late. ? 6 instances where the Return of Title IV funds calculations were performed, but not subject to a second level of review and approval. Cause The University relies on PowerFaids to process the return of Title IV (R2T4) funds and has policies and procedures in place requiring a review of the calculation to be evidenced within PowerFaids. The University identified an issue in PowerFaids where the system was not identifying disbursements (and change of disbursements) for R2T4 students. Once the system issue was identified by management, they manually uploaded the R2T4 students to PowerFaids for disbursement to the federal government. However, the University did not have sufficient controls in place to ensure that the review of the Title IV return calculations were performed and the Title IV returns were issued timely. Effect The lack of timeliness or accuracy in the return of Title IV aid could result in the University accruing additional interest that will need to be assessed and paid back to the federal government. Questioned Costs None identified. Recommendation We recommend that the University implement a control to monitor the processing and management of Title IV returns to ensure that the refunds are completed timely. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report after the summary schedule of prior audit findings and status.

Corrective Action Plan

Management?s Views and Corrective Action Plan The University implemented two new systems (Student Information System ? Workday, and Financial Aid System ? PowerFaids) that each are an important part of managing our Federal Student Aid. Most of the building and configuring of these systems happened prior to FY22 with the full launch in production taking place for the Fall 2021. Understandably, some of the integrations of these two systems were not able to be tested prior to Fall of 2021 (ex: actual disbursement of federal loans) and therefore, required significant time and effort in the Fall and beyond to ensure everything worked and students were able to receive funding while also building out and documenting required communications, processes, and compliance protocols. Additionally, we had turnover within the Associate Director of Financial Aid and Loan Manager role in March 2022. The implementation coupled with this staffing issue created a one-time set of circumstances that are outside of the standard oversight and management of our Federal Student Aid funds and processes. Please refer to the response to each individual finding as follows: Finding 2022-001: Returns of Title IV Funds Award Information Cluster: Student Financial Assistance Cluster Grantor: Department of Education Award Name: Federal Direct Student Loans Award Year: July 1, 2021 ? June 30, 2022 Assistance Listing Number: 84.268 In implementing PowerFaids we were required to set up our own Selection Sets (set group of criteria) for managing all of the disbursements (positive or negative) for each type of fund. For all of our loan funds, we used criteria that included requiring that the particular term have at least half-time enrollment. We used this selection set to disburse (increase or decrease) both the loan to the Student Account (in Workday) as well as to get on the Books with FSA (through COD). We realized that students who took a Leave of Absence or Withdrew from the University needed their own selection set because they would have been updated to have zero credits in the term they took a leave or withdrew. The two instances where we were late in adjustment, we were in the middle of the staffing situation. Documentation had not been written by the Loan Manager at that time. Once we identified the issue with the selection set for students who were withdrawn or on a leave of absence, we reviewed all students with this condition, corrected refunds as appropriate and ensured this was corrected moving forward. The Director of Financial Aid saw a need to have greater oversight on our Federal Funds. She began a process of restructuring the Office as of February 21, 2022 so that the Loan Manager position no longer had direct reports and their main responsibility is the management of federal and private loan portfolios and the federal Pell grant fund. Processes have been documented and all selection sets and processes are managed by this new Associate Director (Loan Manager) who now reports directly to the newly created Director of Financial Aid Systems, Reporting and Compliance April 21, 2022. We do not foresee further issues with return of funds within the required 45-day timeline. The Assistant Vice President, Enrollment Student Services & Director of Financial Aid, Amy Staffier, who can be reached at amy.staffier@simmons.edu, is responsible for the implementation of this corrective action plan.

Categories

Student Financial Aid Matching / Level of Effort / Earmarking

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $80.90M
84.425 Education Stabilization Fund $2.71M
84.063 Federal Pell Grant Program $2.59M
84.038 Federal Perkins Loan Program $990,570
84.033 Federal Work-Study Program $665,770
93.732 Mental and Behavioral Health Education and Training Grants $405,287
84.007 Federal Supplemental Educational Opportunity Grants $378,212
97.088 Disaster Assistance Projects $105,252
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $94,138
94.006 Americorps State and National $86,822
45.313 Laura Bush 21st Century Librarian Program $59,637
19.021 Investing in People in the Middle East and North Africa $48,933
93.433 Acl National Institute on Disability, Independent Living, and Rehabilitation Research - Washington University in St. Louis $46,392
47.075 Social, Behavioral, and Economic Sciences $42,898
45.312 National Leadership Grants $33,994
47.074 Biological Sciences $31,295
93.866 Aging Research $21,447
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $942