Finding Text
FINDING #2023-002 – SPECIAL TESTS AND PROVISIONS: RETURN OF TITLE IV FUNDS
Federal Agency: U.S. Department of Education
Federal Program Title: Student Financial Assistance Cluster
Assistance Listing Number: 84.007, 84.033, 84.063 and 84.268
Award Period: July 1, 2022 to June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria or Specific Requirement: In accordance with 34 CFR 668.22(j), An institution that is not required to take attendance must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the (1) payment period or period of enrollment, (2) academic year in which the student withdrew, or (3) educational program from which the student withdrew.
Condition / Context: During our audit procedures, we noted that all forms for Fall 2022 were completed in March of 2023 and all forms appeared to have used the same March date and drop date, regardless of the students actual drop date determination.
Questioned Costs: None.
Cause: Inadequate controls over the R2T4 process.
Effect: A lack of internal controls can result in noncompliance with provisions of the various programs within the Student Financial Assistance Cluster.
Repeat Finding: No.
Recommendation: We recommend the Colleges reinforce their review processes related to student drops and review all activity level controls to ensure compliance with the various requirements of the Student Financial Assistance Cluster.
Corrective Action Plan: Due to a sudden and unanticipated staffing shortage, R2T4 calculations were performed beyond the required timeframe. In the case where a student receives all F’s on their transcript, we cannot determine the students’ last date of attendance or academic activity, since F grades do not include this information (unlike W grades) and the college is a non-attendance taking institution. In this case, federal guidelines allows schools to use the midpoint of the payment period for the calculation. In these cases, all calculations would be based on the same date each term. In review of FA22 records, the calculations were performed in March 2023, but the withdrawal dates used to calculate eligibility were 10/21/22, the FA22 term midpoint.
All policies and procedures relating to R2T4 processing have been reviewed and updated, and a review of all prior year calculations will be performed as well, to ensure compliance. Additional staff have been trained in the process, and calculations are being performed. Adequate and trained staff will ensure that all required calculations are performed accurately, and according to required timelines.
In addition, the Financial Aid Office is transitioning from the SAM to the Colleague Financial Aid System (starting in 2024-25) which will provide a more automated and integrated process, with enhanced internal controls.