Finding Text
COMPLIANCE FINDING 2023-002- Special Tests and Provisions – Disbursements to or on behalf of Students.
Based on a sample of 2 students
Condition: We found one student with a credit balance of $12,584, entirely attributable to awarded Title IV (TIV), where the University did not make additional attempts to disburse the TIV funds to the student and did not return to funds to the Department of Education in a timely manner.
Criteria
If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected, or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Secretary before the end of this 45-day period. 34 CFR § 668.164 (i)(2).
If a check sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued the check. 34 CFR § 668.164 (l)(3).
Cause: The university had experienced transition in key unit areas that resulted in this noncompliance finding. The proper checks and balances have since been implemented.
Effect: As outlined under 34 CFR 668.164(l), an institution must have a process that ensures SFA funds never escheat to a state or revert to the institution or any other third party. A failure to have such a process in place would call into question an institution’s administrative capability, its fiscal responsibility, and its system of internal controls required under the FSA regulations.
Recommendation: We recommend that the University put in place a plan of action to monitor funds due back to the Department of Education throughout the academic term to ensure that they are returned timely.
Views of Responsible Officials and Planned Corrective Actions – See Corrective Action Plan