Finding Text
FINDING 2023-003 – Special Tests and Provisions-Return of Title IV Funds – Significant Deficiency In Internal Controls Over Compliance
(See Section III - Federal Awards Findings and Questioned Costs - Finding 2023-003 for table included)
Criteria: When a recipient of Title IV loan assistance withdraws from the University during a payment period or period of enrollment in which the recipient began attendance, the University must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. The regulations (34 CFR 668.22(f )(2)) provide that the total number of calendar days in a payment period or period of enrollment include all days within the period that the student was scheduled to complete and the number of calendar days completed in the period, except that scheduled breaks of at least five consecutive days and days on which the student was on an approved leave of absence are excluded from the total number of calendar days in a payment period or period of enrollment.
Condition/context: We selected a sample of 4 students out of a population of 8 that were identified by the University as having received some federal assistance and withdrew from the University during the year under audit. We believe this to be a representative sample of the population and a statistical sample. We found all 4 calculations of the return of Title IV funds contained errors related to the total number of days in the term because consideration for the exclusion of scheduled breaks was not properly implemented. This calculation error caused 2 of the 4 samples to have the wrong total of aid earned because those 2 students had withdrawn before the 60% completion threshold.
Questioned costs: No questioned costs were identified as part of this finding.
Cause: In discussing these conditions with the University’s management, the department was not aware of the requirement to exclude scheduled breaks of greater than five days from the total days in the term calculation.
Effect: The overstated total days in term caused the calculation of aid earned to be understated and therefore more federal funding was returned than a proper calculation would have concluded.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend the University update their policies and procedures to calculate the return of Title IV funding accordingly to ensure accurate calculations are performed.
Views of responsible officials: Management agrees with the finding. A corrective action plan has been created by management.