Finding Text
Audit Finding Reference Number Questioned Cost
2023 - 002 - Return of Title IV Funds $22,473
Federal Program and Specific Federal Award Identification
CFDA Title and Number
84.063 Federal Pell Grant Program (PELL)
84.268 Federal Direct Student Loan (Direct)
Federal Award Year
June 30, 2023
Federal Agencies
U. S. Department of Education
Pass-Through Entity
Not applicable
Criteria
OMB 2 CFR 200, Subpart F Compliance Supplement, Part 5 Section (N) (3) specifies that when a student receives Title IV assistance and withdraws from an institution, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. The difference between any amounts earned that is less than the amount disbursed must be returned to the Title IV program within the prescribed time frame. ABC is a college that is not required to take attendance. Thus, ABC must determine the student’s withdrawal date as either (1) the date, as determined by the institution, that the student began the withdrawal process prescribed by the institution; (2) the date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw; (3) if the student ceases attendance without providing official notification to the institution of his or her withdrawal, the midpoint of the payment period or, if applicable, the period of enrollment; (4) if the institution determines that a student did not begin the withdrawal process or otherwise notify the institution of the intent to withdraw due to illness, accident, grievous personal loss or other circumstances beyond the student’s control, the date the institution determines is related to that circumstances, (5) if a student does not return from an approved leave of absence, the date that the institution determines the student began the leave of absence; or (6) if the student takes an unapproved leave of absence, the date that the student began the leave of absence.
Conditions and Contexts
During my audit, I noted the following:
• ABC did not return the required Title IV funds for one (1) student out of three (3) tested. The amount required to be returned totaled $3,446, was not returned;
• ABC did not return the required Title IV funds within the prescribed timeframe for one (1) student out of three (3) tested; and
• ABC was unable to document the last date of attendance or participation in any academic related activity for each of the students’ enrolled courses and received all non-passing grades for five (5) of the eight (8) students selected for testing resulting in $19,028 to be returned by ABC.
Cause
ABC failed to adhere to established procedures in processing certain refunds.
Questioned Costs
For purposes of this condition, I have questioned costs totaling $22,473 as follows:
Program Amount
Federal PELL Grant $ 12,977
Federal Direct Loan 9,496
Total $ 22,473
Effect
ABC has not complied with Title IV regulations that specify if a student withdraws from school within a certain time frame, a refund must be processed, calculated properly, and remitted to the Title IV program in accordance with established time frames.
Repeat Finding
Yes. See Schedule of Prior Year Audit Finding 2022-002.
Recommendation
I recommend that management immediately make the necessary determination as to whether the students unofficially withdrew from ABC, prepare the Return of Title IV Funds calculation, and return the funds to the Department of Education in a timely manner.
Management's Response
Management concurs with this finding. The College will keep accurate attendance and participation records. The College will calculate R2T4s accurately and will return the funds in a timely manner. The College will review and adhere to its practices, policies, and procedures along with federal guidelines as it relates to R2T4 regulations. The College will return any ineligible funds accordingly.
Responsible Administrators: Director of Financial Aid & Chief Financial Officer
Effective: Immediately and ongoing