FAC Explorer

Finding 907 (2023-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2023-10-30
Audit: 1692
Organization: John Brown University and Affiliates (AR)
Auditor: Capincrouse LLP

AI Summary

  • Core Issue: The University failed to return unearned Title IV funds accurately and on time when students withdrew.
  • Impacted Requirements: This violates 34 CFR 668.22, leading to incorrect federal funding returns.
  • Recommended Follow-Up: Assign an experienced financial aid staff member to regularly review R2T4 calculations and returns to improve compliance.

Finding Text

Inaccurate and Untimely Return of Title IV Funds (R2T4) Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268 and 84.063 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: When students withdrew either officially or unofficially, the University did not always return unearned Title IV aid timely or accurately. Criteria: 34 CFR 668.22 Questioned Costs: $44 Context: 3 of 10 withdrawals tested were not returned timely totaling $7,676 and ranging from 6 to 178 days late. Of those, 1 student did not have the correct amount returned, resulting in a $44 under-return of federal direct loans. Additionally, out of the 10 withdraws tested, 1 student had a calculation error in the R2T4 form and had $147 more in federal direct loans returned than required. This was due to an inaccurate tuition amount used in the calculation. Cause: This was an oversight by the University. Effect: Incorrect amounts of federal funding were returned, and funds were not returned timely. Identification as repeat finding, if applicable: n/a Recommendation: We recommend an individual in financial aid with the appropriate level of experience periodically review student's R2T4 calculations and returns to help ensure that internal controls over such process can operate effectively and achieve compliance. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Corrective Action Plan

Inaccurate and Untimely Return of Title IV Funds (R2T4) Planned Corrective Action: A new administrative withdrawal procedure has been created to ensure that Title IV is both timely and accurately returned to the Federal Government in the case of an official / unofficial withdrawal from the university. A shared Office365 document was created to track the number of days in each segment of the withdrawal process. The Student Financial Services (SFS) Representative initiates the process upon notification of withdrawal from the Registrar. Appropriate documentation is gathered at the time of withdrawal to establish the correct timeline for the potential return of Title IV funds. The SFS Representative then determines if an R2T4 calculation is required. If an R2T4 calculation is required, the SFS Representative will assign the task to the Student Loan Processor or the Director of Student Financial Services. The Student Loan Processor and Director of Student Financial Services will use Microsoft Outlook, as prompted by the shared Office365 document, to assign “due dates” for both the R2T4 calculation as well as the return of funds to COD to ensure compliance. The Director of Student Financial Services and the Chief Student Finance Officer will perform a weekly review of the shared Office365 document to confirm the accuracy of R2T4 calculations and the required timeline of the return of Title IV funds. A secondary review by a financial aid representative with the appropriate level of experience will ensure that internal controls over such processes can operate effectively and achieve compliance. Person Responsible for Corrective Action Plan: David Burney, Chief Student Finance Officer Anticipated Date of Completion: Implemented August 21, 2023

Categories

Student Financial Aid Internal Control / Segregation of Duties Matching / Level of Effort / Earmarking Reporting Significant Deficiency

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $9.17M
84.063 Federal Pell Grant Program $2.06M
84.038 Federal Perkins Loan Program $496,194
84.042 Trio_student Support Services $272,066
84.425 Covid-19 Education Stabilization Fund American Rescue Plan--Elementary and Secondary School Emergencuy Relief $271,191
84.033 Federal Work-Study Program $149,454
84.425 Covid-19 Education Stabilization Fund Governor's Emergency Education Relief Fund $143,136
84.007 Federal Supplemental Educational Opportunity Grants $107,622
97.008 Non-Profit Security Program $18,149
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $18,104
93.859 Biomedical Research and Research Training $17,309
43.008 National Aeronautics and Space Administration Education $806