Finding 386089 (2023-001)

Special Tests and Provisions – Return to Title IV Program Name: Student Financial Assistance Cluster Federal Assistance Listing Number: 84.007; 84.268; 84.033; 84.063 Federal Agency: U.S. Department of Education (ED) Direct funded by the U.S. Department of Education (ED) Criteria or Specific Requirements 34 CFR section 668.173(b) Returns of Title IV (R2T4) funds are required to be deposited or transferred into the Student Financial Aid (SFA) account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew. 34 CFR section 668.22(c): If an institution is not required to take attendance, the withdrawal date is (1) the date, as determined by the institution, that the student began the withdrawal process prescribed by the institution; (2) the date, as determined by the institution, that the student otherwise provided official notification to the school, in writing or orally, of his or her intent to withdraw; (3) if the student ceases attendance without providing official notification to the institution of his or her withdrawal, the midpoint of the payment period or, if applicable, the period of enrollment; (4) if the institution determines that a student did not begin the withdrawal process or otherwise notify the school of the intent to withdraw due to illness, accident, grievous personal loss or other circumstances beyond the student’s control, the date the institution determines is related to that circumstance; (5) if a student does not return from an approved leave of absence, the date that the institution determines the student began the leave of absence; or (6) if the student takes an unapproved leave of absence, the date that the student began the leave of absence. Condition Significant Deficiency in Internal Control over Compliance – During testing over Return to Title IV requirements, the following deficiencies were noted: - 26 of the 60 Return to Title IV calculations had a withdrawal determination date outside of the required timeframe. - 5 of the 60 Return to Title IV calculations were incorrectly calculated due to an error in the academic calendar loaded into the financial aid software. - 1 of the 60 Return to Title IV calculations were incorrectly calculated due to an error in the student’s academic status utilized in the calculation. Questioned Costs There are no questioned costs associated with the condition identified. All funds were returned, however, not within the 45-day requirement. Context We tested a non-statistical sample of 60 R2T4 calculations of a total 431 calculations performed by the District during the 2023 aid year. Effect Without proper monitoring of the timing of student withdrawals and calculations of R2T4, the District risks noncompliance with the above referenced criteria. Cause The District did not implement procedures to ensure that the return to Title IV funds were calculated timely and accurately, and returned in a timely manner. Repeat Finding (Yes or No) No. Recommendation The District should establish effective controls to ensure the return of funds occurs within 45 days from the date the institution determines the student withdrew from all classes and that the withdrawal determination is performed within the required timeframe. Additionally, the District should implement procedures to ensure that the academic calendar loaded in the financial aid software is accurate and based on the most up to date information. The District should also implement procedures to ensure that the correct student status is utilized in the calculation of Return to Title IV.