Finding Text
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance is allowed and considered tolerable if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)).
Condition: Various instances were identified during the year in which funds drawn were held in excess of the allowable time frame.
Cause: Administrative oversight with respect to Cash Management compliance requirements.
Effect or Potential Effect: The University was not in compliance with Cash Management compliance requirements.
Questioned Costs: None.
Context: During our testing, we identified 2 instances of cash held in excess of allowable time frames for the Federal Supplemental Educational Opportunity Grant (“FSEOG”) Program. Additionally, we identified 2 instances of cash held in excess of allowable time frames for the Federal Work Study (“FWS”) Program.
Identification of Repeat Finding: No similar findings noted in the prior year.
Recommendation: We recommend the University enhance its procedures over the cash management process to ensure that excess cash is returned timely, in accordance with federal regulations.
Views of Responsible Officials and Planned Corrective Actions: The FWS Program instances were the result of a minor type error on the federal draw reconciliation worksheet. To prevent a similar error in the future, the Business Office has modified its draw recordkeeping process to require the employees that record or approve the draw journal entry also review the draw worksheet for accuracy and correct if needed. The FSEOG Program instances resulted from reversals of student awards in fiscal year 2024 for the fiscal year 2023. The Business Office routinely monitors the general ledger for award transactions, however, reversals of student aid awarded in a prior fiscal year can be offset by current year activity and missed. The Financial Aid Office will be responsible to notify the Business Office when they initiate prior award transactions. In addition to the weekly monitoring of the related general ledger accounts, the Business Office will also generate financial aid award reporting and monitor for changes.