Finding Text
Finding 2023-002 - Special Tests and Provisions - Disbursements (Noncompliance and Significant Deficiency) Indentification of the Federal Program - Student Financial Aid Cluster - Assistance Listing Nos. 84.007, 84.033, 84.038, 84.063, and 84.268 Criteria - The University makes disbursements of federal student financial aid to students. Periodically, these disbursements result in a credit balance when the federal student financial aid exceeds the amount assessed to the student for allowable charges. According to 34 CFR 668.164(h), these credit balances "must be paid directly to the student or parent as soon as possible, but no later than 14 days after the balance occurred after the first day of class or 14 days after the first day of class if the credit balance occured on or before the first day of class". Condition - A sample of 40 students were selected from the population of all students who received a federal student financial aid disbursement by the University during the year ended May 31, 2023. We obtained the student records and tested the student's compliance with federal regulations for the specific loans and grants for which each individual student was disbursed. For 12 out of the 40 students selected, federal student aid was disbursed, creating a credit balance which was not refunded to the student with the 14 days requirement. Cause - The University's processes of internal controls in which to process refunds timely were not adequate. Effect - The University did not disburse refunds to students within the required timeframe. Recommendation - We recommend the University put into place processes to pull all credit balances as of a certain date, review the cause of those balances, and process the corresponding refunds timely. View of Responsible Officials - Management agrees with the finding.