Finding Text
2024-002
Agency: U.S. Department of Education
Assistance Listing Numbers: 84.007, 84.033, 84.038, 84.063, 84.268 and 84.379
Programs: Student Financial Assistance Cluster
Federal Award Identification Number: Various
Federal Award Year: June 30, 2024
Criteria: Management is responsible for having internal controls and complying with the requirements when crediting and disbursing funds to a student's account.
Condition: The College's internal controls over compliance requirements over the return of title IV funds (R2T4) were not operating effectively in 2024 as the College did not comply with the federal requirements as it relates to issuing a credit to a student.
Context: There were 11 students that withdrew with Title IV aid and 2 were haphazardly selected for testing. The R2T4 calculation was correct however one of the students was entitled to have the funds returned. The College applied the funds to the students account without following the required notification process. The College did not notify the student there was an amount owed to them and proceeded with issuing a credit to the student's account without obtaining permission. The sample was not statistically valid sample.
Questioned Costs: The amount of known questioned costs was determined to be $418. The projected questioned costs was $3,432.
Cause: The College did not have effective internal controls over compliance in place to ensure that the College was following the required procedures when a student had R2T4 funds owed to them. The College did not comply with the grant by obtaining student's authorization regarding funds being returned and the College's controls did not prevent or detect the noncompliance.
Effect: The College's internal controls were not operating effectively and did not prevent or detect the noncompliance with R2T4 as the proper procedures were not followed for refunding student credit balances. The noncompliance was not identified by the College.
Recommendation: We recommend management review their internal controls over compliance currently in place and consider enhancing the controls to prevent potential noncompliance. We recommend management review their processes on refunding student credit balances related to R2T4 to ensure the College is in compliance with required procedures.
Management's Response: Management agrees and has implemented necessary procedures and management oversight to meet the requirements.