Finding Text
FINDING 2022-003 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.063 ($684,817) 84.007 ($34,837) Award Number: P268K223315 P063P213315 P007A213421 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $26.85 (84.268) $97.40 (84.007) Condition Found: Title IV funds were not returned timely for two of the forty students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for two of the three students noted above. The incorrect number of days in the semester was used for both students. The remaining R2T4s calculated by the University were reviewed. Two additional R2T4s were not completed timely and one of the additional R2T4s was not calculated correctly. Federal Pell Grant funds returned for not beginning a module course were not excluded from the R2T4 calculation. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, ?a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student?s withdrawal.? The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in a module course, the student is ineligible to receive Federal Pell Grant funds for that course. Those Federal Pell Grant funds are automatically returned to the Department of Education. The Federal Pell Grant funds must be recalculated based on the number of hours the student began attendance in. The adjusted Federal Pell Grant figure is used in the R2T4 calculation. Cause: The third-party servicer did not process the R2T4 calculation or return the funds timely. Federal Pell Grant funds were properly adjusted for a student who did not begin a module course. However, the Federal Pell Grant disbursed in the R2T4 calculation was not adjusted. The formula used to calculate the number of days did not include the last day of the semester. In addition, break days were not excluded from the number of days calculation for one student. Possible Asserted Effect: The R2T4 calculation was not completed accurately and Title IV funds were not returned timely. Repeat Finding: See Finding 2021-006 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. The three R2T4s that were not calculated correctly should be recalculated and any funds due should be returned to the Department of Education. Management Response: ? For the first student in question, the R2T4 was completed timely, but the incorrect number of days was used in the R2T4 calculation. $26.85 of Federal Direct Loans were returned to the Department of Education in December 2022. ? For the second student in question, the R2T4 was completed and accepted late by the third-party servicer. In addition, the incorrect number of days was used in the R2T4 calculation. An additional $65.59 of Federal Pell Grant funds were disbursed to the student in December 2022. ? For the third student in question, the R2T4 was not completed timely and accepted late by the third-party servicer. The R2T4 was not completed until April 2022 which was more than forty-five days after the date of determination. ? For the fourth student in question, the incorrect Federal Pell Grant disbursed figure was used in the calculation. An additional $97.40 of FSEOG funds were returned in December 2022. In addition, the R2T4 was not calculated within 45 days of the date of determination, so the original funds were returned late. ? For the fifth student in question, the R2T4 was not reviewed and approved by the TPA within 45 days of the date of determination. The correct post-withdrawal disbursement was made in August 2022.