Finding Text
2023-010: Special Tests and Provisions: Return of Title IV Funds
Federal agency: U.S. Department of Education
Federal program title: Student Financial Assistance
ALN Number: 84.007, 84.033, 84.063, 84.268, 84.379
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
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 668.22(j)(1), states that an institution must return the amount of title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew.
Per Uniform Guidance 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements.
Condition: The University did not properly evaluate unofficial withdrawals for the 2022-2023 aid year, correctly calculate returns or disburse return timely for Return to Title IV (R2T4) calculations. Additionally, the University did not have formal documentation of review for R2T4 calculations.
Questioned costs: $46,735
Context: During our testing of 8 R2T4s, we identified 1 instance of payment returned later than 45 days after the withdrawal was determined and 2 instances of award amounts being used instead of the net disbursed amount. Also during our testing we identified that unofficial withdrawals were not evaluated for the 2022-2023 aid year which resulted in 27 calculations to not be performed. Additionally, there was no documentation of review for R2T4 calculations.
Cause: Due to staff turnover, R2T4 calculations were not completed correctly or timely.
Effect: The University could return incorrect amounts based off of their calculations and incorrect calculations could affect student repayment amounts based off of amount earned.
Repeat finding: No.
Recommendation: We recommend the University review current processes for determining unofficial withdrawals and ensure calculations are performed correctly and returns disbursed timely. We also recommend the University document review of Return of Title IV calculations by an employee that did not prepare the calculations.
Views of responsible officials: There is no disagreement with the audit finding.