Finding 22763 (2022-005)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2022
Accepted
2022-12-07
Audit: 18555
Organization: United Lutheran Seminary (PA)

AI Summary

  • Core Issue: Incorrect calculation of federal aid refunds for one student led to a failure to refund $4,547 in unearned Federal Direct Loans.
  • Impacted Requirements: Title IV regulations mandate refunds of unearned aid within 45 days of a student's withdrawal.
  • Recommended Follow-Up: Perform immediate refund calculations for the affected student and establish a procedure to ensure timely calculations for all future withdrawals.

Finding Text

Federal Program: Student Financial Assistance Cluster, Federal Direct Loan Program Federal Agency: U.S. Department of Education Pass-Through Entity: Not applicable Assistance Listing Number: 84.268 Federal Award Year: June 30, 2022 Criteria: Title IV regulations require institutions to refund any unearned portions of grants and loans to the Title IV program within 45 days after a student withdraws Condition: Federal aid refunds were not calculated correctly for one student out of three tested and resulted in the Organization not refunding correct amounts. This was not a statistically valid sample. Cause: The Organization did not perform return of Title IV refund calculations during the year. Effect: The Organization did not refund $4,547 of Federal Direct Loans that was not earned for the student. Questioned Costs: Questioned costs of $4,547 were noted during testing. The full population of withdraws was tested. Context: Error was noted for one student out of three selected for testing. There was a total population of three students who withdrew during the fiscal year under audit that received Title IV aid. The sample was not statistically valid. Recommendation: The Organization should immediately perform a return of Title IV calculation for the student and remit a refund to the Title IV program. The Organization's personnel should implement a procedure to ensure a return of Title IV refund calculation for all students who withdraw on or before a defined point in any semester. This point should be after the 60.0 percent completion mark for fully earning Title IV funds, to ensure that these calculations capture any Title IV funds that need to be refunded. Views of Responsible Official(s): Management agrees with this finding and has recognized their need for a qualified individual who is knowledgeable about financial aid requirements. The Organization has hired a new Director of Financial Aid and Student Housing who started July 1, 2022. This individual will verify the calculation and return the funds to the Title IV program. A different individual who is knowledgeable about withdrawals will monitor to ensure any required refund is made.

Corrective Action Plan

Finding 2022-005 Condition Federal Aid refunds were not calculated correctly for one student out of three tested and resulted in the Organization not refunding the correct amounts. This was not a statistically valid sample. Corrective Action Plan Corrective Action Planned: We agree with this finding and are rectifying the issue. United Lutheran Seminary has retained a new Financial Aid Specialist who possesses the required knowledge and suitable skills for the position. Name(s) of Contact Person(s) Responsible for Corrective Action: Susie Kowalski, Director of Financial Aid. Anticipated Completion Date: Ms. Kowalski started with United Lutheran Seminary July 1, 2022.

Categories

Questioned Costs Student Financial Aid Matching / Level of Effort / Earmarking Subrecipient Monitoring

Other Findings in this Audit

  • 22759 2022-001
    Material Weakness Repeat
  • 22760 2022-002
    Significant Deficiency Repeat
  • 22761 2022-003
    Significant Deficiency Repeat
  • 22762 2022-004
    Material Weakness
  • 22764 2022-006
    Significant Deficiency
  • 599201 2022-001
    Material Weakness Repeat
  • 599202 2022-002
    Significant Deficiency Repeat
  • 599203 2022-003
    Significant Deficiency Repeat
  • 599204 2022-004
    Material Weakness
  • 599205 2022-005
    Significant Deficiency
  • 599206 2022-006
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $564,857
84.425 Covid-19 Fund for the Improvement of Postsecondary Education Formula Grant $306,617
84.425 Covid-19 Higher Education Emergency Relief Fund (heerf) - Student Aid Portion $77,078
84.425 Covid-19 Higher Education Emergency Relief Fund (heerf) - Institutional Portion $35,080