The Colleges of Law

Finding 2024-001: Excess Cash – Student Financial Aid Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $14,342,246 Questioned Costs: None Criteria: Uniform Grant Guidance (34 CFR 668.166) states the Secretary considers excess cash to be any amount of title IV, HEA program funds, other than Federal Perkins Loan program funds, that an institution does not disburse to students by the end of the third business day following the date the institution (1) received those funds from the Secretary; or (2) deposited or transferred to its depository account previously disbursed title IV, HEA program funds, such as those resulting from awards adjustments, recoveries, or cancellations. An institution may maintain for up to seven days an amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The institution must return immediately to the Secretary any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the seven-day tolerance period. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure excess cash is properly handled. Condition: The Colleges of Law (COL) had one instance of excess cash for the Federal Direct Student Loan program. During our cash management testing, we identified COL had excess cash for the Direct Loan program ranging from $172 to $10,314 for the period from March 25, 2024 to April 5, 2024. For that period, the excess cash did not exceed one percent of total prior year drawdowns, however, amounts were not returned within the seven-day period. Cause: University officials stated the excess cash issues were due to oversight regarding refunds issued to students. Effect: Excess cash is noncompliance with Federal regulations and could result in heightened monitoring by the U.S. Department of Education. Questioned Costs: None   Context: For the period of March 25, 2024 to April 5, 2024, COL had excess cash in the amount ranging from $172 to $10,314. COL had excess cash for a period of 11 calendar days. Repeat Finding: No. Recommendation: We recommend COL strengthen internal controls around the determination of amounts to be drawn and refunded to the Secretary during the fiscal year. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.

Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.033, 84.063, 84.268 Award Year: June 1, 2020 ? May 31, 2021 Program Expenditures: $6,300,915 Questioned Costs: None Criteria: Per CFR 668.164(h), a Title IV, HEAD credit balance must be paid directly to the student or parent as soon as possible, but no later than: (i) fourteen days after the balance occurred if the credit balance occurred after the first day of class or (ii) fourteen days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. Condition: One student?s credit balance was not properly paid to the student within the required timeframe. Cause: One student?s credit balance was not paid to the student timely. COL?s internal controls failed to detect the error. Effect: Noncompliance with federal regulations could result in the loss of future federal financial aid funding. In addition, not timely returning credit balances to students within the required timeframe can impact students? ability to pay for costs associated with their education. Questioned Costs: None Context: One out of 40 students tested from a population of 288 students that received student financial aid funding did not have their credit balance paid within the required timeframe. Repeat Finding: No Recommendation: COL should enhance their internal controls related to paying credit balances to students or parents. COL should implement procedures to ensure credit balances are reviewed timely and are properly disbursed to the student or parent. Management?s response: Management agrees with this finding. Please see corrective action plan attached.

Finding: SBVCL did not meet the minimum requirement of having 7 percent of the federal work-study (FWS) allocation going towards compensating students in community service positions. Condition: SBVCL did not meet the 7 percent requirement to compensate students in community service activities. Criteria: CFR Section 675.18(g)(1) states that an institution must use at least 7 percent of the sum of its initial supplemental FWS allocations for an award year to compensate students employed in community service activities. Questioned Costs: Approximately an additional $500 should have been spent by SBVCL towards community service activities to meet the requirement. Prevalence: All FWS students. Cause: The institution had difficulty securing community service partners where students can perform work during the fiscal year. Effect: Noncompliance with federal regulations could result in the loss of future federal financial aid funding. Recommendation: We recommend that SBVCL employ additional students in community service activities to meet the requirements of the FWS program. View of responsible officials: SBVCL agrees with this finding.

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