Finding Text
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN 84.007), Federal Direct Student Loans (ALN 84.268)
Criteria or Specific Requirement: Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)).
Condition: Instances were identified where funds drawn were held in excess of the allowable time frame.
Cause: Administrative oversight.
Effect or Potential Effect: The College was not in compliance with Cash Management requirements.
Questioned Costs: None.
Context: During our audit procedures, we noted the following:
• 1 instance of cash held in excess of the allowable time frame for the Federal Supplemental Educational Opportunity Grant Program.
• 1 instance of cash held in excess of the allowable time frame for the Federal Direct Student Loan Program.
Identification as a Repeat Finding: There was no similar finding identified in the prior year.
Recommendation: We recommend the College enhance its procedures to ensure that excess cash is returned timely.
Views of Responsible Officials: The College acknowledges the findings. Corrective action has occurred. The Financial Aid Office has updated policies and procedures to include a new report of all federal student aid to be sent to the Finance Office after any disbursements or adjustments of student aid. This report will include Direct Loans, Pell and SEOG.