Finding Text
Finding 2023-004: Student Financial Assistance Cluster Special Tests and Provisions Return of Title IV Funds
Federal Agency: Department of Education
Program: Student Financial Assistance Cluster
Criteria: In accordance with 34 CFR section 668.22, when a recipient of Title IV grant or loan assistance withdrawals during the payment period, the institution must have proper controls in place to determine the amount of Title IV aid earned by the student as of the student’s withdrawal date, and if the total amount earned is less than the amount of Title IV funds that were disbursed, the difference must be returned to the Title IV programs.
Condition: Our Return of Title IV Funds sample of 25 yielded two instances where the improper amount of Pell funding was returned to the Department of Education. These two students also received an initial grant amount higher than they were entitled to, as discussed in finding 2023-003 above. The first student was granted $1,724 when they were entitled to $862. A calculation of the Return of Title IV Funds based on them receiving $1,724 calculated that they had earned $434.51 based on their withdrawal date, and they were required to return $1,289.49. $858.42 was returned from the student’s account, causing an underpayment of $431.07. The second student was granted $1,724 when they were entitled to $862. A calculation of the Return of Title IV Funds based on them receiving $1,724 calculated that they had earned $438.82 based on their withdrawal date, and they were required to return $1,285.18. $854.11 was returned from the student’s account, causing an underpayment of $431.07.
Cause: The Title IV refunds in question resulted in incorrect returned amounts due to human error in mathematical calculations. There was not a process in place for calculations to be double-checked (reperformed) by an independent person, which would have likely caught the error prior to processing the refund payment.
Effect: Errors in mathematical calculations resulted in incorrect amounts returned by WCCC; resulting in noncompliance with 34 CFR section 668.22.
Repeat Finding: This is not a repeat finding.
Questioned costs: Unknown
Recommendation: We recommend that WCCC develop a process for an independent review (including reperformance of the calculations) of the refund calculations to help catch human errors in the calculation process. It is our understanding a portion of the calculation is automated; however, WCCC should ensure initial grant amounts are correct prior to the calculation taking place.
View of Responsible Officials and Planned Corrective Action: As previously noted, the root cause was human error based on the manual processes. Similar to the previous finding, the College has implemented increased internal control through the review of the R2T4 calculations. Additionally, when using the automated functionality within the system for the return of funds calculation, an independent review of the calculation will be performed moving forward. In the future, the new ERP will increase the levels of control configured in the system.