Finding 588200 (2023-001)

Federal Program – Federal Pell Grant Program, Federal Direct Student Loan Program Federal Agency – U.S. Department of Education Pass-Through Entity – Not Applicable CFDA Number – 84.063, 84.268 Federal Award Year – June 30, 2023 Criteria: The Uniform Guidance requires recipients of federal awards to administer its federal programs with an adequate system of internal controls over applicable compliance requirements. In addition, when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period, Title IV regulations (34 CFR 668.22) require the College to determine, through a Return of Title IV Funds (R2T4) calculation, the amount of Title IV grant or loan assistance that the student earned as of the withdrawal date and return the unearned portion of the grant or loan to the Title IV programs as soon as possible but no later than 45 days after the withdrawal date. Condition/Context: The amount of Title IV aid to be refunded was not properly calculated for two out of four students tested with Return of Title IV calculations which resulted in the College returning more aid than necessary. In addition, one student, out of four students tested with R2T4 calculations, was inadvertently disbursed funds in excess of their amount earned after withdrawing from the College. This was the only student which received a post-withdrawal disbursement at the College for the 2023 fiscal year. Cause: The College did not properly calculate the number of days in a term by excluding the total amount of days in their spring break, which resulted in the incorrect unearned aid percentage to be used in all spring 2023 refund calculations. As soon as the improper calculation was brought to the attention of the College, all fourteen students for whom a Spring R2T4 calculation was performed, had their R2T4s recalculated. In addition, the full amount of the Title IV aid which was calculated as to be disbursed in one student's R2T4 calculation was disbursed, rather than just the portion earned for their time enrolled in the semester at the College. Effect: The College returned more aid than necessary based on the students’ percentage of completion in the spring 2023 semester. In addition, one student received more funds than they earned, and the College did not return the proper amount of Title IV funds to the Department of Education as a result of the student's withdrawal. Questioned Costs: The College returned $504 more in Federal Direct Loans and $100 more in Federal Pell Grants than necessary based on the inaccurate R2T4 calculations in the spring 2023 semester. $1,009 of Federal Direct Student Loans were disbursed post-withdrawal that were not earned by the student based on the students last attendance date at the College. Recommendation: The College should reevaluate their process around completing R2T4 calculations, specifically with post-withdrawal disbursements, to ensure only the amount of aid earned by a student gets disbursed. In addition, this process should involve a secondary level of review to ensure the days completed and total days in the semester are accurate based on the College’s academic calendar. View of Responsible Officials and Planned Corrective Action: Going forward, the Assistant Vice President of Financial Aid (Asst. VP) will review the academic year calendar and determine the start and end dates of each term and each break in attendance. The Asst. VP will enter the appropriate dates into the PowerFAIDS Administration POEs and Budgets module. The Associate Director of Financial Aid (Associate Director) will then review the academic calendar and confirm that the dates entered into the PowerFAIDS Administration POEs and Budgets module are accurate. An email will be sent from the Associate Director to the Asst. VP for record keeping and confirmation of the review. In addition, for a student who may be eligible for a post withdrawal disbursement, the Associate Director will calculate the amount to be disbursed and then the Asst. VP will confirm the amount to be disbursed at the time the disbursement is authorized. The College believes this two-step confirmation approach will reduce the likelihood of an error moving forward.