Finding Text
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.