Finding Text
Assistance Listing Number. Federal Agency, and Program Name - 84.268, U.S. Department of Education, Federal Direct Student Loans
Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes - 2022-007
Criteria - In accordance With 34 CFR § 668.164-(h)(1), a Title IV, HEA credit balance occurs whenever the amount of Title IV, HEA program funds credited to a student's ledger account for a payment period exceeds the amount assessed for the student for allowable charges associated with that payment period. A Title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than (i) 14 days after the balance occurred if the credit balance occurred on the first day of class of a payment period or (ii) 14 days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period.
Condition - The Seminary did not maintain appropriate documentation to substantiate the allowable charges on the students ledger account to identity whether credit balances were created and required additional documentation from the student to hold the credit balance.
Questioned Costs - None
Identification of How Questioned Costs Were Computed - N/A
Context - Out of a sample of 19, audit testing identified 8 students who had a Title IV credit balance and did not receive a timely refund. The Seminary did not have appropriate documentation to retain the credit balance.
Cause and Effect - The Seminary's process for posting final charges until 30 days after the semester causes the inability to monitor credit balances on student accounts.
Recommendation - We recommend the Seminary implement procedures to post the allowable charges to the students' accounts within a timely manner and prior to the disbursement of federal funds to the students.
Views of Responsible Officials and Planned Corrective Actions - Beginning with the fall 2023 term, Title IV credit balances are no longer held past the 14 days with authorization from the student. The financial aid director implemented a new policy where students cannot request that these funds are retained beyond 14 days. There is a shared list where the business office enters the date that the student's credit balance was released to verify that process happens within 14 days.