Finding Text
2022-001 U.S. Department of Education Student Financial Assistance Programs Cluster Federal Direct Student Loan Program (Federal Assistance Listing Number 84.268) and COVID-19 Education Stabilization Fund ? ARPA Student Portion (Federal Assistance Listing Number 84.425F) Federal Award Year: 2021-2022 Finding: The College did not return excess Federal Direct Student Loan funds and the student portion of COVID-19 Education Stabilization funds within the required timeframe. Criteria: Per 34 CFR 668.162(b)(3), an institution must disburse the funds required as soon as administratively feasible, but no later than three business days by the institution. Per 34 CFR 668.166(a) and (b), an excess cash balance tolerance is allowed if that balance is less than 1% of its prior year drawdowns and is eliminated within the next seven calendar days. Condition: The College drew down excess Federal Direct Student Loan funds and the student portion of COVID-19 Education Stabilization funds that were not properly disbursed to students or returned to the Department of Education within the required timeframe. Cause: The Business Office was not aware the excess funds related to the Federal Direct Student Loan program were on hand until the month-end reconciliation process, which was beyond the refund period. In regards to the student portion of COVID-19 Education Stabilization funds, there were 8 checks that were issued to students during 2021 and not cashed, and therefore subsequently being cancelled during 2022, resulting in the excess funds on hand. Effect: Funds were drawn in excess of disbursed funds and the funds remained in excess beyond the allowed days. Context: Two of 32 drawdowns. Questioned costs: $5,224 of excess cash draw related to Federal Direct Student Loan funds and $3,776 of excess cash related to the student portion of COVID-19 Education Stabilization funds that were returned to the Department of Education after the required timeframe. Recommendation: Management should review and verify federal funds requested in excess are timely returned to the Department of Education in order to comply with federal regulations. Views of responsible officials: Management agrees with this finding. Please see corrective action plan attached.