Finding 966645 (2023-003)

2023-003: Return of Title IV R2T4 Calculation Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria Returns of Title IV funds are required to be deposited or transferred into the SFA account or alternatively, electronic fund transfers are required to be initiated to the Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew. R2T4 refers to the calculation required when a recipient of Title IV aid withdraws from an institution during a payment period/period of enrollment in which the recipient began attendance. The calculation compares the amount of Title IV aid the recipient earned to the amount disbursed and determines whether funds must be returned, or the student is eligible for a post-withdrawal disbursement. Condition During our testing of Return of Title IV student aid, the engagement team noted for our 2 samples, the School was unable to evidence they prepared an R2T4 calculation form for either sample tested. There is a requirement to prepare the calculation to not only determine whether there is a need for a refund, but also to evaluate post-withdrawal disbursements, if applicable. The engagement team did note that both students selected for testing completed more than 60% of the term (thus not requiring a refund of aid) and further, all aid awarded had been previously disbursed, and as such, they were not owed a post-withdrawal disbursement. Cause Through discussions with management, they noted that the requirement was not met as the majority of this process is handled by one individual and that individual was not keeping appropriate and clear evidence of the preparation and review of the calculations. Effect Not preparing this calculation when required could lead to not identifying funds that need to be returned to the federal government. Questioned Costs None noted. Recommendation We recommend the School implement a clearer and formalized process of preparing and reviewing the calculations immediately once a student has withdrawn and by utilizing other team members in the preparation of the calculation and implement a secondary review. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.