Finding 401662 (2023-001)

Reference Number: 2023-001 Compliance Requirement: Special Tests and Provisions Type of Finding: Compliance and Internal Control Internal Control Impact: Significant Deficiency Compliance Impact: None AL Number(s) and Title(s): Student Financial Assistance Cluster 84.063 Federal Pell Grant Program 84.007 Federal Supplemental Educational Opportunity Program 84.033 Federal Work Study Program 84.268 Federal Direct Student Loans 93.264 Nurse Faculty Loan Program (NFLP) Federal Awarding Agency: U. S. Department of Education Federal Award Number: P063P221055 P007A220074 P033A220074 P268K231055 2 E10HP39215-03-00 Pass-through Entity: None Pass-through Award Number: None Questioned Costs: None The University failed to properly determine if a return to Title IV was necessary. Finding According to 34 CFR 668.22, when a Title IV grant recipient withdraws from an institution during a period in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance earned by the student as of the student’s withdrawal date. If the total amount of Title IV grant or loan assistance that the student earned is less than the amount of Title IV grant or loan assistance that was disbursed to the student, the difference must be returned to the Title IV programs. If the amount of Title IV grant or loan assistance that the student earned is greater than the amount of Title IV grant or loan assistance that was disbursed to the student, the amounts must be treated as a post withdrawal disbursement. Title IV aid is considered 100% earned by the student if 60% of the payment period or period of enrollment has occurred after the student’s withdrawal date. Guidance indicates that regardless of when the student withdraws, a return of Title IV funds (R2T4) must be performed if all Title IV grant or loan assistance was not already disbursed prior to the withdrawal. If all aid was disbursed the financial aid administrator can just note in the student’s file that no R2T4 calculation is required after the 60 percent point and all aid was disbursed, so there cannot be a post-withdrawal disbursement. In order to test R2T4s, a sample of twenty-five students was selected from a population of 154 student records identified as receiving all F's or total withdrawals during the financial aid award year. The procedures used by the University include performing a R2T4 for students that officially withdraw up to and after the 60% point. Audit tests revealed the University did not calculate a R2T4 for one student in a payment period who was a total withdrawal. The student officially withdrew after the 60% point from four payment periods during the financial aid year, but the University only performed three R2T4 calculations. Although calculations during the audit revealed that the student had earned all of the Title IV aid and no post-withdrawal disbursement was required, the University failed to either perform a R2T4 calculation or note in the student’s file that no return or post-withdrawal disbursement was needed. Recommendation The University should develop and consistently follow procedures used to perform Title IV refund calculations for students that withdraw after the 60 percent point that comply with Title 34 of the Code of Federal Regulations, Part 668.22. Views of Responsible Officials of the Auditee Management agrees with this finding and will take corrective actions as detailed in the corrective action plan.