Finding Text
Criteria
According to 34 CFR 668.164(h):
Title IV, Higher Education Act (“HEA”) credit balances. (1) A title IV, HEA credit balance occurs whenever the amount of title IV, HEA program funds credited to a student's ledger account for a payment period exceeds the amount assessed the student for allowable charges associated with that payment period.
(2) A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but –
(i) No later than 14 days after the balance occurred if the balance occurred after the first day of class of a payment period; or
(ii) No later than 14 days after the first day of class of a payment period if the credit balance occurred on or before the first day of that payment period.
Condition
The Federal Government requires that whenever Title IV aid is disbursed on a student’s account, the account must be reviewed to determine if the disbursement caused a credit balance. If the credit balance was caused by Title IV funds, the College must refund the balance directly to the student within 14 days of the disbursement of funds.
During our testing, we noted 29 students, out of a sample of 60, that were not refunded credit balances within the required timeframe by 8-251 days.
Cause
The College failed to identify and return Title IV credit balances within required timeframe due to lack of procedures and knowledge of compliance requirements over Student Financial Assistance requirements within business office.
Effect
The College did not refund Title IV credit balances within the required 14-day time frame and therefore was not in compliance with federal requirements.
Questioned Costs
Not applicable
Perspective
Our sample was not, and was not intended to be, statistically valid. Of the 60 students selected for testing, 44 students, or 73% of our sample, had credit balances caused by financial aid. Of these 44 students, 29 students’ credit balances caused by Title IV funds were not refunded within the required time frame (65.9% of students who had credit balances). The remaining 15 students had credit balances as a result of Title IV aid, which were returned within the required time frame.
Identification as a Repeat Finding, if applicable
See finding 2023-001 included in the summary schedule of prior year findings.
Recommendation
The Business Office should continue to develop their procedures to identify credit balances caused by changes on students’ accounts as well as disbursements. This includes reviewing accounts after late disbursement of Title IV aid as well as tuition and fee adjustments, health insurance waivers and bookstore credits. Moreover, the College should provide training to employees responsible for processing such information over student accounts to ensure personnel have adequate knowledge in the related rules and regulations.
View of Responsible Officials
The College agrees with the finding and has implemented the corrective action plan listed within the management corrective action plan section of this report.