Finding 958823 (2023-002)

Finding No. 2023–002 - Special Tests and Provisions – Disbursements to or on behalf of students Federal Program Name Federal Supplemental Educational Opportunity Grants (FSEOG) Assistance Listing 84.007 Name of Federal Agency U.S. Department of Education Pass-through Entity N/A Criteria 34 CFR 668.164(h) states that 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 the student for allowable charges associated with that payment period. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. Condition As part of our testing of 27 students who received FSEOG funds, we noted one (1) instance for which the University did not pay the credit balance to the student within the 14 days required. Cause The provisions of Title IV allow the University to collect debts between terms through transfers during the academic year up to an amount of $200.00. In this case, the Fajardo Campus personnel attempted to collect a prior term debt from a student with an available credit balance; however, an incorrect code was inadvertently used in this transaction. Therefore, the remaining credit balance did not get paid within the 14 days as required by Title IV. Effect As a result of this instance of noncompliance, the USDE may issue warnings and/or impose penalties on the University. Questioned Costs None. Context Of the 6,423 students who received FSEOG funds from the selected campuses for 2023, we selected 27 students for testing and noted one (1) instance in which the University did not comply with the disbursements to or on behalf of students’ requirements. Identification of a Repeat Finding This is not a repeat finding from the immediate previous audit. Recommendation The University should enhance its control procedures to ensure all credit balances in a student’s account are paid directly to the student within the required timeframe. Views of Responsible Officials and Planned Corrective Actions The University management agrees with this finding. Refer to the corrective action plan on pages 68-69.