Finding Text
Finding 2022-001: Significant Deficiency - Return of Title IV Funds Program: Student Financial Assistance Cluster Assistance Listing Number: 84.007 Federal Agency: U.S. Department of Education Federal Award Identification Number: P007A210558 Federal Award Year: June 30, 2022 Repeat of prior year finding 2021-001 Criteria: Title IV regulations (34 CFR 668.22) require the College to return the unearned portion of grants or loans to the Title IV program within 45 days after a student withdraws. Condition/Context: During the audit it was noted that the College provided a list of students that withdrew during the fiscal year and this differed from data that was reported internally to the Audit Committee on the number of students that withdrew in Fall 2021 and Spring 2022 (through April). The number of students that withdrew, the number of student?s that required an R2T4 calculation and the amount of the return all varied. The auditors discussed this with management who confirmed that the list provided to the auditors was complete and that the information reported to the Audit Committee was incorrect. From the withdrawal population the College did provide, a sample of 9 students were selected for testing for return of Title IV funds, of which 5 students did not require Title IV refunds and 4 students did require Title IV refunds. For the population of students with Title IV refunds, the calculations and refunds for 3 students were performed late, and for 1 of those students the calculation was also incorrect (excluded SEOG funds from the calculation). For the 3 students with refunds that were late, 100% of their Title IV funds were returned and then later re-disbursed before the R2T4 calculation and return occurred. The sample was not a statistically valid sample. Questioned Costs: A total of $375 in Federal Supplemental Educational Opportunity Grant assistance listing number 84.007. Cause: The College experienced significant staffing issues/changes in key positions in the student financial aid office and changes to procedures for the return of Title IV funds were not completed until well into the 2021-22 year when the prior single audit with finding was completed. Effect: The College returned incorrect amounts to students and/or the US Department of Education and they were in possession of funds belonging to the federal government longer than allowed. Recommendation: The College should continue to review and adhere to its procedures for refunding awards and implement a more rigorous review process, to ensure withdrawal listings are complete, refunds are calculated correctly and timely and any returns are made within the required timeframe. Management?s Response: Management acknowledges the finding. Subsequent to the 2021-2022 single audit, the College had a Financial Aid Services consultant review all R2T4 cases and 1 additional error was identified requiring the return of an additional $17.00. In the future, all R2T4 refund calculations will be performed by the Assistant Director/Systems Specialist who has received substantial training. In addition, the Assistant Director?s refund calculations will be reviewed by the Executive Director of Financial Aid for accuracy. System adjustments have also been made so that if funds are reversed they are re-disbursed at the amount the student is eligible for after the R2T4 calculation is completed.