Finding 376002 (2023-001)

2023 – 001: Return to Title IV Federal Agency: Department of Education Federal Program: Student Federal Assistance Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Various - 2023 Award Period: July 1, 2022 to June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria: According to 34 CFR Section 668.173 (b), the institutional portion of unearned aid must be returned to the appropriate Title IV, HEA program or Federal Family Education Loan (“FFEL”) lender no later than 45 days after the date of the institution’s determination that the student withdrew. Furthermore, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student’s withdrawal date. The Compliance Supplement issued by the Office of Management and Budget requires auditors to review the return of Title IV funds determinations/calculations for conformity with Title IV requirements. Furthermore, according to 34 CFR 668.22, all grant funds relating to post-withdrawal disbursements that are not disbursed to the student’s account, must be disbursed to the student no later than 180 days after the date of the institution’s determination that the student withdrew. Condition: The audit identified the following conditions: 1) The institutional portion of unearned aid was not returned to the Department of Education within 45 days. This was noted for 1 out of 40 samples tested, which is a statistically valid sample. 2) The return of funds was not properly calculated by the District. This was noted for 1 out of 40 samples, which is a statistically valid sample. Questioned Costs: None Context: The District disbursed $31,686,355 in Title IV awards during fiscal year 2022-23. Cause: The Districts’ internal controls did not ensure compliance with the applicable Title IVregulations. Effect: The cause identified resulted in noncompliance with Title IV regulations. Repeat Finding: Yes, 2022-002. Recommendation: We recommend that the District improve the existing procedures and controls to ensure compliance with the aforementioned criteria. We also recommend an additional level of review is added in the process to ensure completed Return to Title IV calculations are properly completed. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.