Finding 970174 (2022-002)

Finding Number: 2022-002 Federal Program: Student Financial Assistance Cluster Federal Award Identification Number and Year: N/A Assistance Listing Number (ALN): 84.063, 84.268, 84.007 Federal Awarding Agency: U.S. Department of Education Pass-through Entity: None Repeat Finding: Yes Prior Audit Finding Number: 2021-001 Material Weakness and Material Noncompliance – Return of Title IV Criteria: Federal regulation 34 CFR 668.22 establishes the treatment of Title IV funds when a student withdraws. The regulations establish the required timeframe for identification of students that are no longer attending and the subsequent return of any unearned aid by the College. Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to the Department of Education as soon as possible, but no later than 45 days after the date the institution determines the student withdrew. Furthermore, federal regulation 34 CFR 668.22(j)(2) establishes that an institution that is not required to take attendance, must determine the withdrawal date for a student that withdraws without providing notification to the institution, no later than 30 days after the earlier of the – i.) payment period or period of enrollment, ii.) academic year in which the student withdrew; or iii.) educational program from which the student withdrew. Condition: In testing, we identified a total of 32 returns that were not made to the U.S. Department of Education within the timelines required by 34 CFR 668.22. It was noted that the date of determination of withdrawal for 21 of these students were not made within 30 days of the end of the period of enrollment, as required by 34 CFR 668.22(j)(2). In addition, testing identified 11 more students in which the date of determination of withdrawal was timely, however returns were not made to the U.S. Department of Education within 45 days of the date of determination as required by 34 CFR 668.22. Questioned Costs: None. Identification of How Questioned Costs Were Computed: N/A Context: Of the 60 student withdrawals tested for proper return of Title IV funds, we identified 32 returns that were not made to the U.S. Department of Education within the timelines required by 34 CFR 668.22. Cause and Effect: The exceptions identified in our testing were primarily due to delays in identifying students that unofficially withdrew. The College’s internal control procedures failed to ensure these students were identified and funds returned within the required timelines. Recommendation: We recommend that the College implement internal controls to ensure all returns of Title IV funds are made to the Department of Education within the required time frame. Views of Responsible Officials and Corrective Action Plan: See Corrective Action Plan.