Finding Text
Finding 2024-001
Student Financial Aid Cluster
Cash Management
Federal Agency: Department of Education
Program: Student Financial Assistance Cluster – (ALN #’s - 84.063, 84.033, 84.007, 84.268)
Criteria: WCCC is required to have documented controls in place to ensure that drawdown requests for SFA Title IV funds do not exceed the amount of funds needed to make immediate disbursements to eligible students and parents. The documented controls in place should also ensure that any excess cash over the tolerable amount of one percent of the total amount of funds drawn by the institution in the prior award year and any amount remaining is returned to the Department of Education within seven days.
Condition: WCCC requests funds from the Department of Education under the Advance Payment Method. As permitted, WCCC elects to post Title IV disbursements prior to drawing funds. Although, WCCC draws funds after the SFA Title IV disbursements are posted, they are still responsible for ensuring funds were not drawn in excess of the tolerable amount and that any funds that were drawn in excess were returned within the required seven days. A documented reconciliation between the funds drawn and the funds disbursed could not be provided by WCCC. In addition, documented controls were not in place to ensure any excess cash over the tolerable amount of one percent and any remaining amounts were returned to the Department of Education within seven days. The results of our testing of Title IV draws did not identify instances in which draws exceeded disbursements by amounts in excess of the allowable one percent threshold.
Cause: Documented controls were not in place to ensure WCCC complied with the cash management requirements under the Advance Payment Method for SFA Title IV funds. WCCC implemented a new student financial aid module in March 2023 and documented procedures to address drawdown reconciliations are still being addressed.
Effect: Lack of documented controls of drawdown requests could result in excess funds being drawn and not returned to the Department of Education within the required timeframe.
Repeat Finding: This is not a repeat finding.
Questioned costs: None
Recommendation: We recommend that WCCC implement a clear, contemporaneously documented trail regarding the reconciliation process to ensure the SFA Title IV draws do not exceed SFA Title IV disbursements posted to student accounts. This documented process should include controls to ensure that any excess funds over the tolerable amount are returned to the Department of Education within the required seven days.
View of Responsible Officials and Planned Corrective Action: Management agrees. See separate Corrective Action Plan.