Finding Text
Finding 2024-001: Excess Cash – Student Financial Aid
Federal Agency: U.S. Department of Education
Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans
Assistance Listing Number: 84.268
Award Year: June 1, 2023 – May 31, 2024
Program Expenditures: $14,342,246
Questioned Costs: None
Criteria: Uniform Grant Guidance (34 CFR 668.166) states the Secretary considers excess cash to be any amount of title IV, HEA program funds, other than Federal Perkins Loan program funds, that an institution does not disburse to students by the end of the third business day following the date the institution (1) received those funds from the Secretary; or (2) deposited or transferred to its depository account previously disbursed title IV, HEA program funds, such as those resulting from awards adjustments, recoveries, or cancellations. An institution may maintain for up to seven days an amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The institution must return immediately to the Secretary any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the seven-day tolerance period.
Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure excess cash is properly handled.
Condition: The Colleges of Law (COL) had one instance of excess cash for the Federal Direct Student Loan program. During our cash management testing, we identified COL had excess cash for the Direct Loan program ranging from $172 to $10,314 for the period from March 25, 2024 to April 5, 2024. For that period, the excess cash did not exceed one percent of total prior year drawdowns, however, amounts were not returned within the seven-day period.
Cause: University officials stated the excess cash issues were due to oversight regarding refunds issued to students.
Effect: Excess cash is noncompliance with Federal regulations and could result in heightened monitoring by the U.S. Department of Education.
Questioned Costs: None
Context: For the period of March 25, 2024 to April 5, 2024, COL had excess cash in the amount ranging from $172 to $10,314. COL had excess cash for a period of 11 calendar days.
Repeat Finding: No.
Recommendation: We recommend COL strengthen internal controls around the determination of amounts to be drawn and refunded to the Secretary during the fiscal year.
Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.