Finding 504651 (2024-002)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2024-11-04
Audit: 327230
Organization: Life Pacific University (CA)
Auditor: Capincrouse LLP

AI Summary

  • Core Issue: Life Pacific University failed to return unearned Title IV funds accurately and on time for some students who withdrew in Spring 2024.
  • Impacted Requirements: This violates 34 CFR 668.22, leading to questioned costs of $4,036 due to late and incorrect calculations.
  • Recommended Follow-Up: Assign an experienced financial aid staff member to regularly review R2T4 calculations and returns to ensure compliance and improve internal controls.

Finding Text

Inaccurate and Untimely Return of Title IV Funds (R2T4) Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063 Federal Award Identification #: 2023-2024 Award Year Condition: For students withdrawn in the Spring 2024 semester, Life Pacific University did not always return unearned Title IV aid timely or accurately. Criteria: 34 CFR 668.22 Questioned Costs: $4,036 Context: Out of 8 students tested, 2 students who withdrew during the Spring 2024 term had R2T4 funds returned late, ranging from 92 to 158 days. The first student had an incorrect R2T4 calculation performed due to federal loans being included in the calculation when the student was ineligible to receive them, resulting in an under return of $1,285 of Pell. The second student did not have an R2T4 performed even though they withdrew during the first module, and Pell was not adjusted to reflect the correct enrollment status. This resulted in an under return of $2,751 of Pell. Another student had a correction to the R2T4 made by Life Pacific University during the Spring term resulting in an additional $159 post-withdrawal disbursement, however this was not paid out until the audit. All of these returns were corrected during the audit. Cause: Life Pacific University went through unexpected turnover at the beginning of the Spring 2024 term. All issues noted were isolated to this term. Effect: Returns of Title IV funds were not performed timely or accurately. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend an individual in financial aid with the appropriate level of experience periodically review R2T4 calculations and returns to help ensure that internal controls over such process can operate effectively and achieve compliance. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Corrective Action Plan

Inaccurate and Untimely Return of Title IV Funds (R2T4) Planned Corrective Action: The reason that R214 were done late/inaccurately was due to an employee who was new to the position and instead of seeking assistance in a timely manner, waited until the prior retired Director of Student accounts was contracted in to assist. This employee was transferred from enrollment department oversight and then transferred to business office oversight mid-year. Neither department could provide the necessary management of this position and that is when they reached out to contract back the former Director of Student Accounts. Our only other trained R2T4 employee left LPU in Spring 24 and due to staffing challenges with FAFSA Simplification, we could not get someone new trained in time. We have been working with a consulting firm, JM Solutions, and with consultants' input, we are restructuring the financial aid and Student Accounts department to fall under one direct oversight. LPU created an Associate Vice President of Enrollment Services who oversees FinancialAid, Student Accounts and Registrar. Underthe Associate VP, there is a new Director of Student FinancialServices (this combined role is the Director of Financial aid and Student Accounts). Going forward R2T4 will be done on the COD system per consultants' recommendation. Currently the Director of Student Financial Services is being trained on R2T4, and they are seeking to hire a fulltime position of a Financial Aid processor who will be trained on R2T4 as well. For now, the Associate VP and Director of Student Financial Services will be working together to ensure R2T4 are completed according to regulations, with additional oversight by consultants throughout the academic year. Person Responsible for Corrective Action Plan: Amber Burnett, Associate Vice President of Enrollment Services and Angel Cavazos, Director of Student Financial Services Anticipated Date of Completion: At this time oversight and changes are in place for the R2T4 process

Categories

Student Financial Aid Eligibility Reporting Significant Deficiency Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 504647 2024-001
    Material Weakness Repeat
  • 504648 2024-001
    Material Weakness Repeat
  • 504649 2024-001
    Material Weakness Repeat
  • 504650 2024-001
    Material Weakness Repeat
  • 504652 2024-002
    Significant Deficiency
  • 504653 2024-003
    -
  • 504654 2024-003
    -
  • 1081089 2024-001
    Material Weakness Repeat
  • 1081090 2024-001
    Material Weakness Repeat
  • 1081091 2024-001
    Material Weakness Repeat
  • 1081092 2024-001
    Material Weakness Repeat
  • 1081093 2024-002
    Significant Deficiency
  • 1081094 2024-002
    Significant Deficiency
  • 1081095 2024-003
    -
  • 1081096 2024-003
    -

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $3.48M
84.063 Federal Pell Grant Program $1.21M
84.031 Higher Education Institutional Aid $391,436
84.033 Federal Work-Study Program $31,635
84.007 Federal Supplemental Educational Opportunity Grants $30,871