Finding 638297 (2022-002)

Questioned Costs $ 812 Finding No. 2022 002: Financial Aid Administration ? Control Deficiency Federal Agency: U.S. Department of Education Assistance Listing Number and Title: 84.063 ? Federal Pell Grant Program 84.268 ? Federal Direct Student Loans Condition During our audit, we noted the following instances of noncompliance: Return of Title IV Funds ? For 1 out of 15 students selected for testing, the institution failed to remit the appropriate amount of Title IV funds for this student, resulting in a total underpayment of $812 to the Title IV program. ? For 3 out of 15 students selected for testing, the institution failed to determine the withdrawal date for students who unofficially withdrew from the institution within 30 days after the end of the period of enrollment. ? For 1 out of 15 students selected for testing, the institution failed to remit the institutional portion of unearned Title IV Funds to the Title IV program within 45 days after the institution determined that the student withdrew. Direct Student Loans ? During our audit, for 1 out of 3 months selected for testing, the institution did not have evidence that they were transmitting and properly reconciling borrower data. As such, the institution failed to perform the reconciliation between institutional records and direct loan disbursement records. Criteria Return of Title IV Funds Title 34, Section 668.22(j)(1) of the CFR requires the institution to return the amount of Title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution?s determination that the student withdrew. Title 34, Section 668.22(a)(1) through (a)(5) of the CFR requires the institution to determine the amount of Title IV aid earned by the student as of the student?s withdrawal date when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance. Title 34, Section 668.22(j)(2) of the CFR requires if an institution is not required to take attendance, the institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of 1) the payment period or period of enrollment, as applicable; 2) the academic year; or 3) the program. Direct Student Loans Title 34, Section 685.30(b)(5) of the CFR requires the institution to reconcile institution records with direct loan funds received from the Secretary of Education and direct loan disbursement records submitted to and accepted by the Secretary of Education on a monthly basis. Cause Return of Title IV Funds Due to turnover in critical positions within the financial aid office and lack of personnel training, the institution was unable to accurately perform the return of Title IV funds calculations timely. Direct Student Loans Due to turnover in critical positions within the financial aid office and lack of personnel training, the institution was unable to perform the month end direct loan reconciliation process. Effect In accordance with 34 CFR 668.84, the Secretary of Education may levy fines and/or penalties on the institution or suspend future participation in federal student financial assistance programs for failure to comply with the requirements applicable to Title IV of the HEA. Context Return of Title IV Funds A sample of 15 students who withdrew from the institution and were disbursed a total of $40,116 in Title IV funds was selected for audit from a population of 199 students who withdrew and were disbursed a total of $337,507 in Title IV funds. Our test found 1 student?s return of Title IV funds was incorrectly calculated, resulting in a total questioned cost of $812. Our sample was a statistically valid sample. A sample of 15 students who withdrew from the institution and were disbursed a total of $40,116 in Title IV funds was selected for audit from a population of 199 students who withdrew and were disbursed a total of $337,507 in Title IV funds. Our test found 3 students? return to Title IV calculation performed untimely. Our sample was a statistically valid sample. A sample of 15 students who withdrew from the institution and were disbursed a total of $41,248 in Title IV funds was selected for audit from a population of 199 students who withdrew and were disbursed a total of $337,507 in Title IV funds. Our test found 1 student?s return of Title IV funds was not remitted timely. Our sample was a statistically valid sample. Direct Student Loans A sample of 3 monthly reconciliations was selected for audit from a population of 12 monthly reconciliations. Our test found that the institution was unable to provide us with the requested reconciliations for 1 out of our 3 sampled months. Our sample was a statistically valid sample. Repeat Finding This is a not a repeat finding. Recommendation We recommend that the institution perform the following to ensure compliance with Federal requirements: Return of Title IV Funds ? Ensure that the correct information is used to prepare the return of Title IV calculation. ? Remit the institutional portion of unearned aid to the appropriate Title IV program within the required 45 day time period in accordance with federal regulations. ? Determine the withdrawal date for students who unofficially withdrew from the institution within the required 30 day time period in accordance with federal regulations. ? Remit all aid to the appropriate Title IV programs if a student fails to begin attendance during the period of enrollment. Direct Student Loans ? We recommend that the institution reconcile borrower information on a monthly basis, retain records to ensure compliance with Federal requirements, and retain secondary copies of the reconciliation support. Views of Responsible Officials and Planned Corrective Actions Return of Title IV Funds The institution is currently in the process of hiring additional personnel to assist in the preparation of the return of Title IV calculation. To ensure compliance with federal reporting guidelines, the institution will provide personnel with additional training on the return of Title IV calculation and develop a processing schedule to assist in the completion of the return of Title IV calculation in a timely and accurate manner. Direct Student Loans The institution will provide personnel with additional training on the loan reconciliation process and develop a schedule to assist in the completion of the loan reconciliation process in a timely and accurate manner.