Finding 370098 (2023-004)

Material Weakness
Requirement
N
Questioned Costs
$1
Year
2023
Accepted
2024-02-22

AI Summary

  • Core Issue: Incorrect amounts of Pell funding were returned due to human error in calculations, leading to noncompliance with federal regulations.
  • Impacted Requirements: Compliance with 34 CFR section 668.22 regarding the accurate return of Title IV funds when students withdraw.
  • Recommended Follow-Up: Implement an independent review process for refund calculations to catch errors and ensure initial grant amounts are accurate before processing.

Finding Text

Finding 2023-004: Student Financial Assistance Cluster Special Tests and Provisions Return of Title IV Funds Federal Agency: Department of Education Program: Student Financial Assistance Cluster Criteria: In accordance with 34 CFR section 668.22, when a recipient of Title IV grant or loan assistance withdrawals during the payment period, the institution must have proper controls in place to determine the amount of Title IV aid earned by the student as of the student’s withdrawal date, and if the total amount earned is less than the amount of Title IV funds that were disbursed, the difference must be returned to the Title IV programs. Condition: Our Return of Title IV Funds sample of 25 yielded two instances where the improper amount of Pell funding was returned to the Department of Education. These two students also received an initial grant amount higher than they were entitled to, as discussed in finding 2023-003 above. The first student was granted $1,724 when they were entitled to $862. A calculation of the Return of Title IV Funds based on them receiving $1,724 calculated that they had earned $434.51 based on their withdrawal date, and they were required to return $1,289.49. $858.42 was returned from the student’s account, causing an underpayment of $431.07. The second student was granted $1,724 when they were entitled to $862. A calculation of the Return of Title IV Funds based on them receiving $1,724 calculated that they had earned $438.82 based on their withdrawal date, and they were required to return $1,285.18. $854.11 was returned from the student’s account, causing an underpayment of $431.07. Cause: The Title IV refunds in question resulted in incorrect returned amounts due to human error in mathematical calculations. There was not a process in place for calculations to be double-checked (reperformed) by an independent person, which would have likely caught the error prior to processing the refund payment. Effect: Errors in mathematical calculations resulted in incorrect amounts returned by WCCC; resulting in noncompliance with 34 CFR section 668.22. Repeat Finding: This is not a repeat finding. Questioned costs: Unknown Recommendation: We recommend that WCCC develop a process for an independent review (including reperformance of the calculations) of the refund calculations to help catch human errors in the calculation process. It is our understanding a portion of the calculation is automated; however, WCCC should ensure initial grant amounts are correct prior to the calculation taking place. View of Responsible Officials and Planned Corrective Action: As previously noted, the root cause was human error based on the manual processes. Similar to the previous finding, the College has implemented increased internal control through the review of the R2T4 calculations. Additionally, when using the automated functionality within the system for the return of funds calculation, an independent review of the calculation will be performed moving forward. In the future, the new ERP will increase the levels of control configured in the system.

Categories

Questioned Costs Special Tests & Provisions Student Financial Aid Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 370088 2023-003
    Material Weakness
  • 370089 2023-004
    Material Weakness
  • 370090 2023-005
    Material Weakness
  • 370091 2023-003
    Material Weakness
  • 370092 2023-004
    Material Weakness
  • 370093 2023-005
    Material Weakness
  • 370094 2023-003
    Material Weakness
  • 370095 2023-004
    Material Weakness
  • 370096 2023-005
    Material Weakness
  • 370097 2023-003
    Material Weakness
  • 370099 2023-005
    Material Weakness
  • 370100 2023-001
    Material Weakness Repeat
  • 370101 2023-002
    Material Weakness
  • 370102 2023-001
    Material Weakness Repeat
  • 370103 2023-002
    Material Weakness
  • 370104 2023-001
    Material Weakness Repeat
  • 370105 2023-002
    Material Weakness
  • 370106 2023-001
    Material Weakness Repeat
  • 370107 2023-002
    Material Weakness
  • 946530 2023-003
    Material Weakness
  • 946531 2023-004
    Material Weakness
  • 946532 2023-005
    Material Weakness
  • 946533 2023-003
    Material Weakness
  • 946534 2023-004
    Material Weakness
  • 946535 2023-005
    Material Weakness
  • 946536 2023-003
    Material Weakness
  • 946537 2023-004
    Material Weakness
  • 946538 2023-005
    Material Weakness
  • 946539 2023-003
    Material Weakness
  • 946540 2023-004
    Material Weakness
  • 946541 2023-005
    Material Weakness
  • 946542 2023-001
    Material Weakness Repeat
  • 946543 2023-002
    Material Weakness
  • 946544 2023-001
    Material Weakness Repeat
  • 946545 2023-002
    Material Weakness
  • 946546 2023-001
    Material Weakness Repeat
  • 946547 2023-002
    Material Weakness
  • 946548 2023-001
    Material Weakness Repeat
  • 946549 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $8.41M
84.063 Federal Pell Grant Program $5.36M
84.425 Covid-19 Education Stabilization Fund $427,682
84.048 Career and Technical Education -- Basic Grants to States $391,243
84.042 Trio_student Support Services $313,180
84.007 Federal Supplemental Educational Opportunity Grants $218,500
64.027 Post-9/11 Veterans Educational Assistance $186,058
93.558 Temporary Assistance for Needy Families $94,876
17.235 Senior Community Service Employment Program $66,524
23.011 Appalachian Research, Technical Assistance, and Demonstration Projects $47,604
84.033 Federal Work-Study Program $34,440
93.324 State Health Insurance Assistance Program $33,394
94.002 Retired and Senior Volunteer Program $31,793
12.006 National Defense Education Program $14,675
64.116 Veterans Readiness and Employment $5,392
11.307 Covid-19 Economic Adjustment Assistance $207