Finding Text
Federal Program Information: Federal Work-Study Program (ALN 84.033)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): 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 tolerance is allowed 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: An instance was identified where funds drawn were held in excess of the allowable time frame.
Cause: Administrative oversight.
Effect or Potential Effect: The University was not in compliance with Cash Management requirements.
Questioned Costs: None.
Context: An early draw of the University’s 21-22 award year carry-forward resulted in excess cash that was not eliminated timely.
Identification as a Repeat Finding: There was no similar finding identified in the prior year.
Recommendation: We recommend the University enhance its procedures to ensure that excess cash is returned timely.
Views of Responsible Officials:
Cash management of Title IV funds at the University is generally performed only on a reimbursement basis. In this situation there was a one-time error in calculating available FWS funds and year-to-date FWS earnings such that approximately $11,000 in excess cash was received near the end of the 21-22 year and then carried forward. The error was discovered early in 22-23 but by that point earnings had outpaced cash on hand and so no effort was made to return funds. A new procedure with a multi-year workbook has been established for monitoring FWS earnings across award periods to prevent a repeat occurrence.