Finding Text
2024-002 Disbursements to or on Behalf of Students – Credit Balances Type of Finding – Significant Deficiency and Noncompliance Student Financial Assistance Cluster: Federal Pell Grants – CFDA 84.063 and Federal Supplemental Educational Opportunity Grants – CFDA 84.007 Criteria: In accordance with 34 CFR 668.164, when Title IV funds are credited to a student’s account and exceed the amount of tuition, fees, food, housing, and other authorized charges, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. Internal controls over compliance with direct and material compliance requirements should be sufficient to prevent or detect and correct noncompliance in a timely manner. Condition: One student selected for testing who received Pell and FSEOG funds with a credit balance did not receive a refund of Title IV aid within the 14-day requirement in accordance with 34 CFR 668.164. Questioned Costs: None identified. Context: Out of a sample of 45 students, ten of the sampled students had a credit balance requiring a refund in accordance with the requirements. One of the ten students had a credit balance that was returned after the 14-day requirement. Effect: The College was not compliant with Federal requirements of the Student Financial Assistance Cluster. Cause: The internal controls over refunds for credit balances were not effective in maintaining compliance with the related compliance. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend the College review the process and related controls for refunds of student credit balances to ensure credit balances requiring refunds within the 14-day requirements are appropriately identified and resolved. Views of Responsible Officials: McPherson College agrees with the finding and the recommendations. The College is reviewing the process and will refine the process as necessary.