FAC Explorer

Finding 562133 (2024-004)

- Repeat Finding
Requirement
N
Questioned Costs
$1
Year
2024
Accepted
2025-06-02
Audit: 357766
Organization: Los Angeles Chapter National Tooling & MacHining Association Training Centers Trust (CA)
Auditor: Vasquez & Company LLP

AI Summary

  • Core Issue: Errors in calculating the Return of Title IV Funds for students led to both overstatements and understatements in institutional returns.
  • Impacted Requirements: The institution failed to accurately track completion dates and timely return funds, violating Title IV regulations.
  • Recommended Follow-Up: Review and correct the calculation processes for Title IV funds and ensure timely returns to avoid future compliance issues.

Finding Text

Special Tests and Provision: Return of Title IV Funds: Incorrect Calculation of Return of Title IV Funds, Untimely Return of Grant Overpayment to Secretary Incorrect Calculation of Return to Title IV Funds We noted that 3 of 7 students had an incorrect calculation of the percentage of completion based on the student’s actual number of days completed during the enrollment period. For 2 of these students, the Institution had erroneously entered the scheduled end date, which resulted in an incorrect number of calendar days in the period of enrollment. For the remaining student, the Institution had used an incorrect date of withdrawal, which resulted in an incorrect number of calendar days completed in that period as of the student’s withdrawal date. These errors caused an overstatement of institutional return by $3,517 for the 2 students and an understatement of institutional return by $176 for the remaining student. Untimely Return of Grant Overpayment to Secretary We noted that 1 of 7 students selected for Title IV funds return testing had funds deposited into the SFA account or transferred to ED beyond the required 45-day timeframe after the institution determined the student had withdrawn. The transfer was completed 55 days late.

Corrective Action Plan

To ensure full compliance with Title IV R2T4 requirements, the Institution is implementing the following corrective actions: 1. Process Improvements for Accurate R2T4 Calculations  The Institution will implement a dual-verification review process to ensure all R2T4 calculations are accurate before funds are returned.  A dedicated compliance review team member will oversee the manual entry of student withdrawal dates and enrollment period calculations to prevent miscalculations.  The Institution will utilize automated tools within Jenzabar Financial Aid (our Student Management System) to improve accuracy in calculating earned vs. unearned Title IV aid.  A preliminary audit of student accounts will be conducted before R2T4 calculations are finalized to catch errors before submission. 2. Strengthening Internal Controls & Timely Fund Returns  A tracking system will be implemented to flag all students requiring R2T4 processing, ensuring that returns are initiated and completed within the required 45-day period.  The Institution will conduct weekly internal reconciliation reviews of withdrawal records to verify compliance with notification and return due date requirements.  The financial aid office and student accounts team will coordinate weekly reconciliation meetings to monitor all outstanding Title IV returns. 3. Enhanced Staff Training on R2T4 Compliance  Specialized training will be provided to financial aid personnel on: a) Accurate calculation methodologies for R2T4, including proper determination of payment period percentage completion. b) Compliance with 34 CFR 668.22 and 668.173(b) regarding timely notification and return of unearned funds. c) Utilizing internal checklists and reconciliation tools to prevent future miscalculations or delays.  Staff will undergo mandatory annual compliance refresher training to stay current with federal regulations and best practices. 4. Strengthening Documentation & Compliance Monitoring  The Institution will implement a comprehensive R2T4 compliance checklist to ensure: a) All Title IV returns are properly calculated and reviewed. b) The correct withdrawal dates and enrollment period lengths are recorded. c) All funds are returned within the regulatory 45-day window.  A quarterly audit of all R2T4 transactions will be conducted by a designated compliance officer to assess and report on adherence to federal requirements. Personnel Responsible for Implementation: Danielle Skinner Position of Responsible Personnel: President Expected Date of Implementation: Immediate

Categories

Questioned Costs Student Financial Aid Reporting Special Tests & Provisions

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.063 Federal Pell Grant Program $832,607
84.268 Federal Direct Student Loans $495,733
84.425 Education Stabilization Fund $330,146