Finding Text
Federal Program Information: Student Financial Assistance Cluster: Federal Pell Grant Program (Assistance Listing #84.063).
Criteria or Specific Requirement: C. Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)).
Condition: The University had one instance during the year that were identified in which Title IV funds drawn were held in excess of the allowable time frame.
Cause: Administrative oversight.
Effect or Possible Effect: The University is not in compliance with the Cash Management compliance requirements. While amounts were immaterial, certain funds were overdrawn and held in excess of the allowable time frame.
Questioned Costs: Below reporting threshold.
Context: One instance of excess cash that was not eliminated within the allowable time frame was identified for the Federal Pell Grant Program for the year ended May 31, 2024.
Identification of Repeat Finding: No similar findings identified in the prior year.
Recommendation: We recommend that the University enhance its procedures over cash management to ensure timely elimination of excess cash balances.
Views of Responsible Officials: This is the first time, to the University’s knowledge, that this error has occurred. We believe it was a one-off employee manual oversight, and not a systemic issue. We believe the general procedures for performing the Title IV drawdowns are in good standing; however, we will add a process where the AVP of Business and Finance regularly reviews the Title IV drawdowns to prevent this in the future.