Finding Text
Criteria
According to 34 CFR 668.22(j)(1):
Timeframe for the return of title IV funds. An institution must return the amount of title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section.
According to 34 CFR 668.173(b):
Timely return of Title IV, HEA program funds. In accordance with procedures established by the Secretary or Federal Family Education Loan (“FFEL”) program lender, an institution returns unearned Title IV, HEA program funds timely if –
(1) The institution deposits or transfers the funds into the bank account it maintains under 34 CFR Sections 668.163 no later than 45 days after the date it determines the student withdrew;
(2) The institution initiates an electronic funds transfer no later than 45 days after the date it determines that the student withdrew;
(3) The institution initiates an electronic transaction no later than 45 days after the date it determines that the student withdrew, that informs a FFEL lender to adjust the borrower’s loan account for the amount returned; or
(4) The institution issues a check no later than 45 days after the date it determines that the student withdrew. An institution does not satisfy this requirement if –
(i) The institution’s records show that the check was issued more than 45 days after the date the institution determined the student withdrew; or
(ii) The date on the cancelled check shows that the bank used by the Secretary or FFEL Program lender endorsed that check more than 60 days after the date the institution determined that the student withdrew.
Condition
Federal regulations state that any unearned Title IV grant or loan assistance received by a student must be refunded to the Title IV programs upon a student’s withdrawal from the institution. The College has 45 days from the date they determined the student withdrew to return any unearned portions of Title IV funds. During our testing, we noted 1 student, out of a sample of 6, had unearned Title IV aid that was not returned to the Federal Government, within 45 days of the determined withdrawal date, by 7 days.
Cause
The College did not consistently follow the procedures in place to monitor student withdrawals related to Title IV funds that must be returned to the Department of Education within 45 days due to delay between student’s withdrawal date and the date in which return was moved to financing department.
Effect
The College did not return unearned Title IV funds within the required 45-day time frame.
Questioned Costs
Not applicable
Perspective
Our sample was not, and was not intended to be, statistically valid. Of the 6 students selected for testing, 1 students, or 16.67% of our sample, had unearned Title IV funds that were not returned to the Department of Education within the 45-day required time frame.
Identification as a Repeat Finding, if applicable
Not applicable
Recommendation
The College should strengthen their controls surrounding the review Return of Title IV calculations in a timely manner to ensure that all funds are returned to the Department of Education within the required time frame.
View of Responsible Officials
The College agrees with the finding and has implemented the corrective action plan listed within the management corrective action plan section of this report.