Finding 384188 (2022-009)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2024-03-25
Audit: 297283
Organization: College Unbound (RI)

AI Summary

  • Core Issue: The College failed to refund Title IV credit balances to students within the required 14-day timeframe.
  • Impacted Requirements: Compliance with 34 CFR 668.164(h) regarding timely refunds of Title IV funds.
  • Recommended Follow-Up: Implement internal controls to ensure timely identification and processing of credit balances for refunds.

Finding Text

Finding number: 2022-009 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster Assistance Listing #: 84.063 and 84.268 Award year: 2022 Compliance Requirement: Special Tests Criteria According to 34 CFR 668.164(h): Title IV, Higher Education Act (“HEA”) credit balances. (1) A title IV, HEA credit balance occurs whenever the amount of title IV, HEA program funds credited to a student's ledger account for a payment period exceeds the amount assessed the student for allowable charges associated with that payment period. (1) A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than – (i) No later than 14 days after the balance occurred if the balance occurred after the first day of class of a payment period; or (ii) No later than 14 days after the first day of class of a payment period if the credit balance occurred on or before the first day of that payment period. Condition The Federal Government requires that whenever Title IV aid is disbursed on a student’s account, the account must be reviewed to determine if the disbursement caused a credit balance. If the credit balance was caused by Title IV funds, the College must refund the balance directly to the student within 14 days of the disbursement of funds. During our testing, we noted 15 students, out of a sample of 40, that were not refunded credit balances within the required timeframe by 1-14 days. Our sample was not, and was not intended to be, statistically valid. Cause The College did not implement appropriate internal controls related to disbursements over student's accounts to ensure that refunds were processed for credit balances within the required timeframe. Effect The College failed to refund Title IV credit balances within the required 14-day time frame and therefore was not in compliance with federal requirements. Questioned Costs Not applicable Identification as a Repeat Finding, if applicable Not applicable Recommendation The Business Office should implement effective internal controls to identify credit balances and refund federal aid to students within the required timeframes. This includes reviewing accounts after late disbursements of Title IV aid as well as tuition and fee adjustments, health insurance waivers and bookstore credits. View of Responsible Officials The College agrees with the finding.

Corrective Action Plan

Finding number: 2022-009 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster Assistance listing #: 84.063 and 84.268 Award year: 2022 Corrective Action Plan: College Unbound hired two new positions, a Controller and a Bursar, who both started on 10/2/23 (the role was previously filled by a single temporary employee). Part of the Bursar’s scope of work is to work with Financial Aid to ensure that credit balances are issued in the required 14-day timeframe. The full time Bursar has a solid understanding of the 14-day requirement and is committed to maintaining compliance in this area. Timeline for Implementation of Corrective Action Plan: Corrected. Contact Person: Diana Perdomo, CFO

Categories

Student Financial Aid Internal Control / Segregation of Duties Special Tests & Provisions

Other Findings in this Audit

  • 384177 2022-002
    Significant Deficiency Repeat
  • 384178 2022-003
    Significant Deficiency
  • 384179 2022-003
    Significant Deficiency
  • 384180 2022-003
    Significant Deficiency
  • 384181 2022-004
    Significant Deficiency Repeat
  • 384182 2022-004
    Significant Deficiency Repeat
  • 384183 2022-005
    Significant Deficiency
  • 384184 2022-006
    Significant Deficiency Repeat
  • 384185 2022-007
    Material Weakness Repeat
  • 384186 2022-007
    Material Weakness Repeat
  • 384187 2022-008
    Significant Deficiency Repeat
  • 384189 2022-009
    Material Weakness
  • 960619 2022-002
    Significant Deficiency Repeat
  • 960620 2022-003
    Significant Deficiency
  • 960621 2022-003
    Significant Deficiency
  • 960622 2022-003
    Significant Deficiency
  • 960623 2022-004
    Significant Deficiency Repeat
  • 960624 2022-004
    Significant Deficiency Repeat
  • 960625 2022-005
    Significant Deficiency
  • 960626 2022-006
    Significant Deficiency Repeat
  • 960627 2022-007
    Material Weakness Repeat
  • 960628 2022-007
    Material Weakness Repeat
  • 960629 2022-008
    Significant Deficiency Repeat
  • 960630 2022-009
    Material Weakness
  • 960631 2022-009
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $1.20M
84.063 Federal Pell Grant Program $709,051
84.425 Education Stabilization Fund $57,779
84.007 Federal Supplemental Educational Opportunity Grants $17,907