Finding Text
Finding 2022-002: Significant Deficiency - Return of Title IV Funds Program: Student Financial Assistance Cluster Assistance Listing Number: 84.063 Federal Agency: U.S. Department of Education Federal Award Identification Number: P063P211441 Federal Award Year: June 30, 2022 Repeat Finding: 2021-001 Criteria: 34 CFR 668.22 requires that 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 in accordance with Federal regulations and return the unearned portion of the grant or loan funds to the Title IV programs as soon as possible but no later than 45 days after the withdrawal date. Condition/Context: The auditors noted that refunds were calculated incorrectly for three of five students selected for testing. Testing was performed for follow-up on the prior audit finding. ? For the first student, the original R2T4 calculation was completed incorrectly and 100% of the funds were returned. The College later revised the calculation to incorrectly include FSEOG funds that could have been disbursed that were awarded to the student months after the withdrawal and then disbursed to the student only the percentage of those funds that was calculated as earned. The result was $302 too much Pell Grant funds returned. ? For the second student, the original R2T4 calculation resulted in 100% of the funds being returned since the student did not attend. The College later revised the calculation and counted some days as being attended and aid earned although the aid was not disbursed to the student. ? For the third student, the original R2T4 calculation was completed incorrectly and included Pell Grant funds although the student had dropped below 1/2 time before withdrawing. The College later revised the calculation to incorrectly use a different withdrawal date and include FSEOG funds that could have been disbursed that were awarded to the student after the withdrawal and then disbursed to the student only the percentage of those funds that was calculated as earned. The result was $349 less Pell Grant funds than should have been returned. The sample was not a statistically valid sample. Questioned Costs: A total of $47 in Pell Grant funds (84.063). Cause: The College?s controls in place to accurately review and approve R2T4 calculations did not operate as designed. Effect: The College returned incorrect amounts the US Department of Education. Recommendation: The College should review its procedures to ensure that refunds are calculated correctly and timely and any returns are made within the required timeframe. Management?s Response: Management has reviewed internal processes and procedures to ensure that all refunds are calculated correctly and sent back or provided to the student as a post withdrawal disbursement when appropriate and within the required timeframe as stated in the federal student aid handbook. Procedures are clarified to include a student withdrawal date based on formal withdrawal by the student and despite the Loras policy to refund all charges back to the student if they fully withdraw in the first week of classes, a return of Title IV funds will be calculated to be certain the student receives any federal aid that has been earned. If a student withdraws before the 60% point of the semester, the last date of attendance as reported by faculty will be used to calculate the return of funds. All refund calculations will be completed using the Common Origination and Disbursement R2T4 calculator along with the Colleague R2T4 calculation and will then receive a final review by the Director of Student Accounts to ensure the correct type and amount of aid earned by the student and the correct type and amount of all federal funds is sent back in the timeframe outlined by the regulations.