Finding Text
Federal Program: Student Financial Assistance Cluster (ALN: 84.007, 84.033)
Criteria or Specific Requirement (Including Statutory, Regulatory
or Other Citation): C. Cash Management - An institution submits a drawdown
request for funds utilizing ED’s electronic grants management system, known as G5, that may not exceed the amount of fundsneeded to make immediate disbursements to eligible students and parents. If the request is accepted, ED initiates an electronic funds transfer to the institution’s account. The
institution must then disburse the requested funds no later than three business days following receipt of those funds from ED. For institutions on the Advance Payment Method, any amount of Title IV funds not disbursed to recipients by the end of the third business day is considered excess cash. ED allows an institution
to retain, for up to seven days, excess cash that does not exceed one percent of the total amount of funds drawn by the institution in the prior award year. The institution must return to ED any excess cash over the tolerable amount (one percent) and any amount remaining after the tolerance period (seven days). Questioned costs would be those in excess of the one percent threshold.
Condition: The University retained excess cash for a period greater than the tolerance period three times during the year.
Cause: Insufficient administrative oversight with respect to cash management compliance requirements.
Effect or Potential Effect: The University is not in compliance with cash management
compliance requirements.
Questioned Costs: None.
Context: Three instances during the year where excess cash was retained longer than the tolerance period.
Identification as a Repeat Finding: There was not a similar finding identified in the prior year.
Recommendation: We recommend that the University properly follow its policies and procedures over the applicable compliance requirements of cash management to ensure that excess cash is returned timely.
Views of Responsible Officials and Planned Corrective Actions:
To prevent similar occurrences in the future, we will transition from monthly program reconciliations to weekly FSEOG reconciliations and bi-weekly Federal Work Study reconciliations, which will allow for more effective monitoring of award reversals or negative adjustments. Upon completion of these reconciliations, any excess cash identified will be promptly returned via G-5. Additionally, we will explore the feasibility of automating the notification process for negative adjustments posted in the ERP system, ensuring that we can capture excess cash in a more timely manner.