Finding Text
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN 84.007)
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 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: An instance during the year was identified where funds drawn in excess of amounts disbursed were held longer than the allowable timeframe.
Cause: Administrative oversight.
Effect or Potential Effect: The University was not in compliance with cash management requirements.
Questioned Costs: None.
Context: 1 instance of cash held in excess of the allowable timeframe for the Federal Supplement Educational Opportunity Grants Program.
Identification as a Repeat Finding: There was no similar finding identified during the prior year.
Recommendation: We recommend that the University enhance its procedures to ensure excess cash balances are eliminated timely.
Views of Responsible Officials: Corrective action steps have been taken to ensure that excess cash balances are eliminated in a timely manner. The corrective action focuses on the campus-based awards, as there was only one instance of non-compliance for the FSEOG, and adds an additional step between financial aid and the finance office to verify the amount of funds disbursed to students before initiating a drawdown of funds.