Finding 400376 (2023-002)

Finding No. 2023-002 Federal Agency: U.S. Department of Education ALN and Title: 84.063 – Federal Pell Grant Program Federal Award Number: Unknown Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Questioned Cost: $1,496 Criteria: 2 CFR 200.303 requires that a non-federal entity must (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 34 CFR 688.22(a)(1) requires that when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student's withdrawal date. If the total amount of Title IV grant or loan assistance, or both, that the student earned is less than the amount of Title IV grant or loan assistance that was disbursed to the student as of the date of the institution's determination that the student withdrew, the difference between these amounts must be returned to the Title IV programs and no additional disbursements may be made to the student for the payment period or period of enrollment. If the total amount of Title IV grant or loan assistance, or both, that the student earned is greater than the total amount of Title IV grant or loan assistance, or both, that was disbursed to the student as of the date of the institution's determination that the student withdrew, the difference between these amounts must be treated as a post-withdrawal disbursement. 34 CFR 690.80(b)(2)(iii) requires that the institution shall recalculate the student's enrollment status to reflect only those classes for which the student actually began attendance if a student’s projected enrollment status changes during a payment period before the student begins attendance in all of his or her classes for that payment period. Condition: The College did not have effective internal controls surrounding the accurate and complete identification of students who officially and unofficially withdrew from the College for purposes of calculating amounts subject to return of Title IV funds (R2T4), whereby:  Finding No. 2023-002, continued Federal Agency: U.S. Department of Education ALN and Title: 84.063 – Federal Pell Grant Federal Award Number: Unknown Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Questioned Cost: $1,496 Condition, continued: 1. Ten students officially withdrawing from all classes have not been identified and subjected to R2T4 evaluation procedures. 2. For 1 (3%) out of 40 samples tested, a student unofficially withdrawing from all classes has not been identified and subjected to R2T4 evaluation procedures. The calculated amount for the College to return is $1,496 of which $862 is due to the College’s failure to recalculate the Pell award based on the student’s enrollment status for one course for which the student has never began attendance. Cause: The College relies on its IT application to determine the students officially withdrawing classes. The application utilizes the registration codes assigned by the Admissions Office as one of the parameters to perform the process. The lack of coordination between the Financial Aid Office and Admissions Office on the assignment of registration codes impacted the determination of students subject to R2T4. The College does not have a process to evaluate students who unofficially withdrew from all classes, particularly those receiving “TF” (technical failure) and/or “F” (failing) grades. Effect: If the College’s IT application is not producing an accurate and complete list of students officially withdrawing from classes, amounts subject to return to Title IV programs and/or post-withdrawal disbursement may not be identified. Lack of process to identify unofficial withdrawals may lead to noncompliance to R2T4 requirements.   Finding No. 2023-002, continued Federal Agency: U.S. Department of Education ALN and Title: 84.063 – Federal Pell Grant Federal Award Number: Unknown Compliance Requirement: Special Tests and Provisions – Return of Title IV Funds Questioned Cost: $1,496 Recommendation: The Financial Aid Office and Admissions Office should coordinate to determine the appropriate registration code assignment in the system to ensure the accurate and complete identification of students subject to R2T4. The College should design and implement controls to identify unofficial withdrawals, including a review of students receiving TF, F, incomplete and similar grades. Views of responsible officials: See Corrective Action Plan.