Finding 580478 (2023-001)

Finding 2023-001 Identification of the Federal Program: United States Department of Education Federal Pell Grant Program (84.063) Federal Direct Loan Program (84.268) Criteria: 34 CFR 668.22 Condition: Incorrect Return of Title IV Funds (“R2T4”) Cause: The Institution determined the errors to be due to human error. Effect: Federal funds that would have been available to other eligible Title IV recipients were not available. Further, the United States Department of Education may have been subject to unnecessary interest and special allowance. Questioned Costs: Total Questioned Costs $953. $962 in 2022-2023 Federal Pell Grant program funds. $(9) in 2022-2023 Federal Subsidized Direct Loan program funds. Description of the Nature and Extent of the Issues Reported: The Institution had a total of one thousand four hundred twenty-eight (1,428) students who withdrew during the audit period. We tested the files of twenty-five (25) of those students. It was determined that three (3) R2T4’s were not calculated correctly. For student #13, the R2T4 in question was returned on June 15, 2023, in the amount of $595 in 2022-2023 Federal Pell Grant Program funds. The institutions should have recalculated the Federal Pell Grant funds to include in the R2T4 calculation. The Institution used $1,261 as Federal Pell Grant disbursed, when it should have only used the Less-than half-time amount of $420. After recalculating the Federal Pell grant, the Institution should have returned $214 in 2022-2023 Federal Pell Grant Program funds, which resulted in an under return of $460 in 2022-2023 Federal Pell Grant program funds. The Institution also used an incorrect number of days in the payment period in the R2T4 calculation, resulting in an incorrect percentage of aid earned. For student #AR1, the R2T4 in question was returned on May 31, 2023, in the amount of $9 in 2022-2023 Federal Subsidized Direct Loan Program funds. The $9 was the amount of return of funds due by Student, and not required to be returned by the institution. The institution did not have authorization to return on the students behalf. This resulted in an over return of $9 in 2022-2023 Federal Subsidized Direct Loan Program funds. For student #AR15, the R2T4 in question was returned on October 24, 2022, in the amount of $929 in 2022-2023 Federal Pell Grant Program funds. The institution should have returned $1,431 in 2022-2023 Federal Pell Grant Program funds, which resulted in an under return of $502 in 2022-2023 Federal Pell Grant Program funds. The Institution used an incorrect number of days in the payment period in the R2T4 calculation, resulting in an incorrect percentage of aid earned. Subsequent to the audit, the Institution returned $962 to the 2022-2023 Federal Pell Grant program funds on behalf of student #13 and AR#15. The instance of noncompliance represents an error rate in the number of sampled items tested equal to 12.0% (3 of 25) from a population of 1,428 and in the dollar amount of the sampled items tested equal to 0.68% ($953 of 140,563) from a population of $6,743,942. This is a statistically valid sample. Repeat Finding: This is a repeat finding. Recommendations: The Institution needs to review and update its procedures to ensure that the R2T4 calculation process is completed correctly. Views of Responsible Officials: The institution agrees with the finding and recommendation. The Institution has planned the following immediate solutions to ensure accuracy for R2T4 calculations. • Share Corrective Action Plan (CAP) with accountable staff. • Create a scheduled hours chart for all programs to address the incorrect number of days being calculated in a payment period. Additionally, the Institution will standardize the usage of the automated calculations within the Institution’s Student Information System (Anthology) to help minimize potential human errors within our processes. • Evaluate and update R2T4 policies and procedures as necessary to incorporate these solutions. • Train staff on R2T4 calculations as well as conduct ongoing training on an annual basis. o This will also incorporate training on the Institution’s R2T4 policies, including covering the requirement that student files should be reviewed for appropriate student authorizations as well as the full-time/part-time status of a student. • Re-train staff on the Institution’s R2T4 peer review process. • Establish target dates to review CAP effectiveness. o The Institution will conduct a monthly review of the CAP’s effectiveness for the first six months after implementation of the CAP and then will conduct periodic reviews of the CAP thereafter.