Finding Text
2023–004: 14 Day Credit Balances
Federal agency: U.S. Department of Education
Federal program title: Student Financial Aid Cluster
Assistance Listing Numbers: 84.007, 84.268, 84.033, 84.038, 84.063
Award Period: July 1, 2022 through June 30, 2023
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
• Other Matters
Criteria or Specific Requirement:
The Code of Federal Regulations, 34 CFR 668.164(e) states, "Whenever an institution disburses title IV, HEA program funds by crediting a student's account and the total amount of all title IV, HEA program funds credited exceeds the amount of tuition and fees, room and board, and other authorized charges the institution assessed the student, the institution must pay the resulting credit balance directly to the student or parent as soon as possible but—
(1) No later than 14 days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or
(2) 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 class of that payment period.
Condition/Context:
Through our testing of 18 students whose accounts had a credit balance resulting from federal funds during the year, we noted that 6 students did not have the credit balance refunded within the 14-day period.
Questioned Costs:
None
Cause:
The refunds for the students in question were not completed within the 14-day period for one of the following reasons – (1) the payment file was created timely but had an error that needed correction and caused payment delay and/or (2) payment was on or around a holiday and the University’s accounts payable personnel were out of office.
Effect:
The University did not refund students within 14 days for credit balances that arose from federal funds as required by U.S. Department of Education regulations.
Repeat Finding:
No
Recommendation:
We recommend that the University put a process in place to refund student credit balances that arose from federal funds within 14 days. We also recommend that postings to student accounts of institutional charges for each payment period be posted and dated prior to disbursing federal funds to limit the number of refund checks.
Views of responsible officials:
Please refer to the attached corrective action plan.