Finding Text
Condition: During the year, the College disbursed $43,983 of SEOG funds to students but drew down their entire authorized amount of $123,626 resulting in an overdraw of $79,643. Criteria: Under the Heightened Cash Monitoring 1 (HCM1) payment method as stated in 34 CFR 668.162(d), the College must first make distributions to eligible students and parents and pay any remaining credit balances before request or receipt of funds for the amount of those disbursements from the U.S. Department of Education (DOE). Context: A review of the entire population of drawdowns for the Student Financial Aid cluster for the entire year was performed and as such, the sample is statistically valid. Cause: The College did not follow the procedures for requesting federal funds and disbursing them to student accounts timely as required by the HCM1 payment method. Effect: The College was not in compliance with the HCM1 drawdown payment method. Questioned costs: $79,643. Recommendation: The College should review its procedures related to the request and disbursement of federal funds, including controls over compliance, to ensure they are following the HCM payment method. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding.