Core Issue: Incorrect refund calculations were found for two students in the Federal Direct Loan Program, marking a repeat finding.
Impacted Requirements: Compliance with the Return to Title IV refund calculation (34 CFR 668.22) was not met, leading to incorrect refunds.
Recommended Follow-Up: The Institution should refund $352 to the Department of Education and enhance controls over the refund process.
Finding Text
FINDING 2023-004: INCORRECT REFUND CALCULATIONS
FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION
PROGRAM NAME: FEDERAL DIRECT LOAN PROGRAM
ALN: 84.268
FEDERAL AWARD YEAR: 2022-2023 Compliance Requirement: Special Tests and Provisions (N.) - Return of Title IV Funds Criteria: An institution must use the Return to Title IV refund calculation (34 CFR 668.22). Condition: We tested thirteen drop students and found two incorrect refund calculations. We consider this finding to be a significant deficiency and is a repeat finding shown in Section IV of this report as prior year Finding 2022-002. Cause: The condition was caused by using incorrect amounts in Step 1 of the Return to Title IV refund calculation for one student and by using incorrect charges in Step 5 of the Return to Title IV refund calculation for the other student. Effect: The result is the Institution refunded incorrect amounts to the Department of Education. Question Costs: $352 Statistical sampling was not used when making sample selections. Recommendation: We recommend the Institution refund $352 to the Department of Education and increase controls over refunds. There is no liablity for the remaining $362, as this was due to overrefunding loans. Views of Responsible Officials: The Institution agrees with the Single Audit Finding and a response is included in the Corrective Action Plan.