Finding Text
Finding 2022-004 - Authorization for Retaining Credit Balance
Federal Program - Federal Direct Loan Program
Federal Agency - U.S. Department of Education
Assistance Listing Number - 84.268
Federal Award Year - June 30, 2022
Criteria: Title IV regulations (34 CFR 668.165(b)) states that an institution must obtain written authorization from a student or parent in order to hold any Title IV program funds that would otherwise be paid directly to the student or parent as a credit balance.
Condition: During testing we noted one student had a credit balance that was held beyond the end of the loan period without authorization from the student or parent to hold the funds.
Cause: Lack of competency and turnover in the financial aid office contributed to the University not obtaining proper authorization or refunding the student's credit balance within the required time period.
Effect: The University did not properly refund the student's credit balance during the loan period.
Questioned Costs: There are no questioned costs associated with this finding.
Context: For one of 40 students, the University did not have authorization to hold a credit balance past the loan period. The sample was not a statistically valid sample.
Recommendation: The University should revise its procedures for awarding Title IV aid, to ensure that aid is awarded correctly and that controls are in place to refund credit balances within the required time period.
Management's Response: Management agrees with this finding and has recognized their need for a qualified individual who is knowledgeable about financial aid requirements.