Finding Text
Criteria: According to 34 CFR Section 668.173 (b) and 2 CFR 200.303, the institutional portion of unearned aid must be returned to the appropriate Title IV, HEA program or Federal Family Education Loan (“FFEL”) lender no later than 45 days after the date of the institution’s determination that the student withdrew. Furthermore, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student’s withdrawal date. The Compliance Supplement issued by the Office of Management and Budget requires auditors to review the return of Title IV funds determinations/calculations for conformity with Title IV requirements. Furthermore, according to 34 CFR 668.22, all grant funds relating to post-withdrawal disbursements that are not disbursed to the student’s account, must be disbursed to the student no later than 180 days after the date of the institution’s determination that the student withdrew.
Condition: The institutional portion of unearned aid was not returned to the Department of Education within 45 days. This was noted for 11 out of 40 samples tested, which is a statistically valid sample.
Questioned Costs: None.
Context: The District disbursed $12,283,383 in Title IV awards during fiscal year 2023-24. The value of the sample tested was $6,689, and the portion of the unearned aid not returned timely was $3,683.
Cause: The Districts’ internal controls did not ensure compliance with the applicable Title IV regulations.
Effect: The cause identified resulted in noncompliance with Title IV regulations.
Repeat Finding: Yes, see Finding 2023-002.
Recommendation: We recommend that the District improve the existing procedures and controls to ensure compliance with the aforementioned criteria.
Views of responsible officials: Management concurs with the finding.