Finding Text
Finding number: 2022-009
Federal agency: U.S. Department of Education
Programs: Student Financial Assistance Cluster
Assistance Listing #: 84.063 and 84.268
Award year: 2022
Compliance Requirement: Special Tests
Criteria
According to 34 CFR 668.164(h):
Title IV, Higher Education Act (“HEA”) credit balances. (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 the student for allowable
charges associated with that payment period.
(1) A title IV, HEA credit balance must be paid directly to the student or parent as soon as
possible, but no later than –
(i) No later than 14 days after the balance occurred if the balance occurred after
the first day of class of a payment period; or
(ii) No later than 14 days after the first day of class of a payment period if the credit
balance occurred on or before the first day of that payment period.
Condition
The Federal Government requires that whenever Title IV aid is disbursed on a student’s account,
the account must be reviewed to determine if the disbursement caused a credit balance. If the credit
balance was caused by Title IV funds, the College must refund the balance directly to the student
within 14 days of the disbursement of funds. During our testing, we noted 15 students, out of a
sample of 40, that were not refunded credit balances within the required timeframe by 1-14 days.
Our sample was not, and was not intended to be, statistically valid.
Cause
The College did not implement appropriate internal controls related to disbursements over
student's accounts to ensure that refunds were processed for credit balances within the required
timeframe.
Effect
The College failed to refund Title IV credit balances within the required 14-day time frame and
therefore was not in compliance with federal requirements.
Questioned Costs
Not applicable
Identification as a Repeat Finding, if applicable
Not applicable
Recommendation
The Business Office should implement effective internal controls to identify credit balances and
refund federal aid to students within the required timeframes. This includes reviewing accounts
after late disbursements of Title IV aid as well as tuition and fee adjustments, health insurance
waivers and bookstore credits.
View of Responsible Officials
The College agrees with the finding.