Alvin Community College

Federal Program: Title IV - Student Financial Assistance Program Cluster (AL No. 84.063 and 84.268) Compliance Requirement: Return of Title IV Funds (R2T4) as per 34 CFR 668.22 Criteria: The College is required to ensure that R2T4 calculations are reviewed by someone other than the person performing the original calculations to ensure accuracy and compliance. Condition: During our review of the College's adherence to R2T4 requirements, we identified a significant deficiency in internal controls over compliance. Specifically, there was a lack of documented evidence showing that the R2T4 calculations were reviewed by an individual other than the one who performed the original calculations. Cause: The College did not have adequate procedures in place to ensure segregation of duties in the R2T4 review process, leading to insufficient documentation of independent reviews. Effect: The lack of segregation of duties and proper documentation could result in incorrect R2T4 calculations, non-compliance with federal regulations, and potential financial impact on the College and its students. Questioned Costs: None identified. Recommendation: The college should implement procedures that ensure segregation of duties in R2T4 calculations, designate a separate individual to review and verify the accuracy of the calculations, and maintain comprehensive documentation to provide evidence of the review process, including the reviewer's signature, date of review, and any findings or corrections made. Views of responsible officials and planned corrective actions: See Corrective Action Plan

Criteria: When a recipient of Title IV grant or loan assistance withdraws from the College during a payment period/period of enrollment, the College must determine the amount of Title IV aid earned by the student as of the student's withdrawal date. If the total amount of the Title IV assistance earned by the student is less than the amount that was disbursed to the student as of the date of the College's determination that the student withdrew, the difference must be returned to the Title IV programs as outlined by the U.S. Department of Education. The College is responsible for accurately calculating returns of Title IV funds and the timely return of the applicable amounts determined in the calculations. Condition: It was noted during the testing of Return of Title IV Funds that 7 out of the 40 samples tested appeared to have incorrect calculations or questionable amounts. Effect: The College's was not in compliance with the calculation requirements for 7 of the 40 samples tested which resulted in an underpayment of $1,748.36 of Return to Title IV funds. This is considered immaterial to the Student Financial Assistance Cluster and the basic financial statements of the College. Cause: The calculation variances were either due to the incorrect withdraw date being used, lack of support for the withdraw date that was used, or the inconsistent application of institutional charges. Question costs: $1,748.36 of costs are questioned as a result of the finding. Context: A test of 40 calculations from a population of 261 was performed. 7 out of the 40 calculations, or 17 .50 percent, had incorrect calculations or questionable amounts. The total disbursements related to the Return to Title IV population was $458,153 for the reporting period. Our sample was a statistically valid sample. Recommendation: The College should implement procedures that require the second review of both the withdraw date and the related calculations of Return to Title IV funds. In addition, the College should create documented procedures that outline the specific charges, for each situation (i.e. on-line courses, traditional courses, etc.), that will be included in the amount of institutional charges used in the calculations. Views of responsible officials and planned corrective action: see corrective action plan.