Finding 611440 (2022-005)

- Repeat Finding
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-03-20
Audit: 36678
Organization: Stevenson University, Inc. (MD)
Auditor: Bdo USA LLP

AI Summary

  • Core Issue: The University failed to accurately calculate the amounts to return for Title IV funds and lacked documentation for post-withdrawal loan disbursements.
  • Impacted Requirements: Non-compliance with federal regulations regarding the return of Title IV funds and documentation for disbursements.
  • Recommended Follow-up: Improve procedures for calculating returns and maintain proper records for post-withdrawal disbursements to ensure compliance.

Finding Text

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions ? Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student?s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution?s determination that the student withdrew (34 CFR 668.22(e)). Condition: The University did not properly calculate the amounts to be returned to the ED. Additionally, the University was unable to provide evidence of approval from the borrower prior to making a post-withdrawal disbursement of loan funds. Cause: Administrative oversight with respect to return of Title IV fund calculations and post-withdrawal disbursements. Effect: The University was not in compliance with the return of Title IV funds requirements. Questioned Costs: Below reporting threshold. Context: For 1 of 8 students selected for testing, the University did not properly calculate the amount of Title IV aid to be returned to the ED. For 1 of 8 students selected for testing, the University did not retain documentation of the student?s or parent?s approval obtained prior to making a post-withdrawal disbursement of loan funds. Identification of Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2021-003 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its procedures over the return of Title IV fund calculations to ensure that returns of funds are calculated accurately, and that adequate records are maintained to support proper procedures for post-withdrawal disbursements.

Categories

Student Financial Aid Special Tests & Provisions Matching / Level of Effort / Earmarking Reporting

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $25.74M
84.063 Federal Pell Grant Program $4.22M
84.425 Covid-19 - Education Stabilization Fund - Higher Education Emergency Relief Fund Student Portion $3.59M
84.425 Coivd-19 - Education Stabilization Fund - Higher Education Emergency Relief Fund Institutional Portion $3.51M
84.007 Federal Supplemental Educational Opportunity Grants $341,616
84.033 Federal Work-Study Program $184,188
84.425 Covid-19 - Education Stabilization Fund - Governor's Emergency Education Relief Fund $20,930