Finding Text
Finding No. 2023-004—Cash Management
U.S. Department of Education
Student Financial Assistance Cluster
Federal Direct Student Loans
Year ended June 30, 2023
ALN 84.268
Criteria: Per 34 CFR 668.166 (a), institutions must disburse title IV funds to students by the end of the third business day following the date the institution draws down the funds.
Condition: There were two drawdowns during the year for federal direct student loans which were not disbursed within three business days. The first instance resulted in the funds being held for 12 days before being disbursed or refunded and the second instance resulted in the funds being held for 38 days before being disbursed or refunded.
Cause: Due to turnover within the accounting and student financial aid departments, there was no control in place during the year to review disbursements applied to students accounts to ensure that the funds were or will be disbursed within three business days prior to drawing down funds.
Effect: Maintaining excess cash could result in the Department of Education requiring the institution to request funds under the reimbursement payment method or heightened cash monitoring program payment method.
Questioned costs: The total amount which was drawn down and not disbursed within the required time frame was $77,691. These funds were ultimately disbursed or refunded.
Prevalence: Identified two instances of excess cash throughout the year in reviewing cumulative disbursements and draw downs.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend management implement a control to regularly monitor disbursements and reconcile to drawdowns to ensure applicable requirements are met.
View of responsible officials and planned corrective actions: Management agrees with the finding. See corrective action plan.