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S.DOCUMENT RESUMEED 254 169TITLE.018 134'Audit Guide: StudchtFinancial Assistance4Programs.,.INSTITUTIONPUB DATENOTE,PUB ,TYPEOffice of Ipspector General (ED), Washington, DC.Mar.8463p.;elated documents, see. HE 018,112-135 andHE 01-149.Guideon-Class oom Use (055)-EDRS PRICEMFOI /PCO-DESCR I PTORSPlus P tage.AccountaiTlity.Accounting; *COmpliance 1Legal);Eligibility; * ederal Aid; Federal Regulation;Fimancialad Applicants; Grants; HigheriEducation;*Management Information Systems; Money Management;Quality. Cont0I; Reports; *Student Financial Aid;Student Loan Progams; Stddent Responsibility; WorkStudy4Programe*Auditi; College Work Study Program; Guaranteed.Student Loan Program;INational Direct Student LoanProgram; *Office of Studebt Financial Assistance;Pell Grant' Program;' Supplementaliduchtionalportunity GrantsABSTRACTAn audit guide to assist independent publicaccountants in 'perfdrming auditi of federal studilitt fihancialassistance (SFA) programspresented. The audit.assiststhetepartment.of Education in deteiinining whether a recipient has (1)provided financial data, including basic financial statements'ancUother financial reports; (2) maintained a system of internal controllover the receipt gnd expend4tures of funds; and (3) complied with theterms and conditions of federal awards. Compliance requirements arereviewed, inclujg: Oash, management, financial reporting,institutional eligibility and,participation, coordination of studentaid programs, student-file, maintenance, fiscal procedures andrecordkeeping, student eligibility, institutional disbursements toaward recipients, and refund calculation and overpaymentdeterOinatio procedures. Specific compliance requirements for thefollowing pro ams are also covered: PellGrant, campus-basedprograms (On ral), National Direct Student Loan, College Work Study,Supplemental ducgtional Opportunity Grant, and Guaranteed)StudentLoan. Reporting requirements re also examined, with selected sample.reports. Appended are a bibl ography; addresses and phone numbers ofthe regional inspectors gen al for'auditl-almd OSFA regionalandheadquarters program contac s. **********tp*******************Reproductions suppliea by EDRS are the best tht can be made*from *the original ***************;;************,t"15r-
Of EDUCATIONU.S. DEPARTMENTINSTITUTE OF EDUCATIONNATIONALINFORMATIONRESOURCESE,ATIONA1 CENTER {ERIC,teo,orturefl ashas hirer,This document the' Irvt5 .011 or organttat.on,ofteored trornorvnatmg 1114trmt r tonnesh'et,P r Pefl'mot-slut turn rJrrAtrtymade, Tr, ,mprovi.Slated r thSdOc.0NIFPnots clt YNiW nt 44).(1.0f,5mtoPsn,,t otf,"alne(oisa,orinvent du not00.10X), s or 001u y
AUDIT GUIDESTUDENT FINANCIAL ASSISTANCE PROGRAMSNational Direct Student'Loan Program (NDSL)College Work-Study PrograX(CWS)4LSupplemental EduAtional Opportunity Grant Program (SEOG)Pell Grant ProgramGuaranteed Student Loan Program (GSL)eitIU.S. Department of EducationOffice of Inspector GeneralOffice,of AuditMarch 11984
TABLE OF CONTENTSPAGESECTION I - AUDIT PLNG AND OTHER CONSIDERATIONSPURPOSE' OF AUDIT GUIDE111AUDIT APPROACHto-1AUDIT AUTHORIZATION. AND DUE DATESMATTERS'REQUIRING IMMEDIATE ACTION3PLANNING OP AUDIT3SECTION II - COMPLIANCE REQUIREMENTS4OVERVIEW4-GENERAL COMPLIANCE, REQUIREMENTS5CASH MANAGEMENTFIVANCIAL REPORTINGINSTITUTTONAk ELIGIBILITY AND PARTICIPATIONCOORDINATION OF STUDENT AID PROGRAMSVSTUDENT FILE MAINTENANCE FISCAL .PROCEDURESAND RECORD KEEPINGVISTUDENT ELIGIBILITYVIIINSTITUTIONAL DISBURSEMENTS TO AWARDRECIPIENTSVIII REFUND CALCULAT;ON AND OVERPAYMENTDETERMINATION PROCEDUREqITIIIIIV,,,SPECIFIC COMPLIANCE REQUIREMENTSPELL GRANTCAMPUS-BASED PROGRAMS (GENE1ML)NATIONAL DIRECT STUDENT LOANCOLLEGE WORK STUDYSUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTGUARANTEED STUDENT LOAN (Incjuding PLUS)SECTION ITV- REPORTING,:t5788911121414172125283034REPORTING REQUIREMENTS34SELECTED SAMPT,E REPORTS3AAPPENDIX AREFERENCE MATERIALAPPENDIX BREGIONAL INSPECTORS (ENERAL FOR AUDITAPPFINWX r REGIONAT, AND HEADQUARTERS PROC;RAM CONTACTSOFFICE. OF STUDENT FINANCIAL ASSISTANCEI.6k
SECTION IAUDIT PLANNING AND OTHER CONSIDERATIONSPURPOSE OFA6llfITGUIDEThis guide is to -assist independent public accountants (IPA inperforming vaits of StUdent Financial Assistance (SFA) programsin accotdanc.e with the general standards and the standards forfinancial and compliance audits of the U.S. General Accountirt1Office's (GAO) Standards for Audit of Governmental Organizations,Programs, Activities, and Funetions, 1981 Revision, issued by theComptroller General of the United States (hereinafter referred toas the GAO Standards for Audit).The objectives of an SFA auditare'to assist ,the Department of Education (ED) in determiningwhether a recipient has (a) provided financial datai,includin.gbasic financial statements and other financial reports that canbe relied upon,, (b) maintained a system of internal contrelvi Giverthe receipt and expenditures of funds, and (c) complied with theterms and conditions of Federal awards, and thus its Claims forFederal assistance were proper and supportable.This s-guide is to be used by 41 recipients of SFA funds which arenot subject to eitner Offic,6\,61 Managemen't and Budget (OMB) Circular A-110, Attachment P 'or A-102, Attachment P.In addition,until A-110, Attachment P nd the corresponding A-110 audit guideare officially issued by 0 B, this guide is to be used by allrecipients of SFA funds.ThiS guide is not intended to be a complete danual4of procedures,is it intended to supplant the auditor's judgment of auditwork required.Audit'procedures contained hn may not coverall circumstances or conditions encounteredthe.audit ofparticular institution.The auditor shoul e-e professionaljudgment to tailor the procedures so that the audit objectivesmay be achieved.However, all'compliance requirements containedin this guide should be addressed by the auditor.If the auditordesires technical assistance related to performing audits of theSFA prograMs, the auditor should contact the appropriate Department of ,Education Regional Inspector General for Audit (SeeAppendix B).,norAUDIT APPROACHThure are two allowable approaches when performing an SFA audit.The first is to integrate the auditing procedures in this guidewiththeaudit ofthebasic financialstatements1/ of an1/"Basic Financial Statements" are the entity's general purposetinancial statements or similar statements that are preparedin order to report the financial position and/or results ofoperations of the entity.1
1Supplementaryinstitution and tp.provide an opinion therein.data' (schedule of disbursements and expenditures for each SFAprogram) would also be reported -od4P to satisfy the specialinformational needs of ED. -The second option is for the auditorto limit the audit scope to that necessary to form an opinion ona statement of changes in SFA. program fund balance's for all SFAfunds taken as a whole '(the statement of changes) and, onsupplementary data (schedule of disbursements and expendituresUnder either option, the auditor isfor each SFA program).required to 'report on the .study and evaluation of internalmade.as a. part of the audit of the financialabcounting.contrstatements. or o the statement of changes and to report on theeduces to admidistrdtive Controls and programextension 'of prCiscompliance matters related to SFA programs.For-guidance in reporting under the alternate approaches, the IPAshould refer to the AICPA's SAS No. 14, Special Reports, SAS No.on Infor ation Accom an inthe BasicFinancial29, Re Ortinn .Aud for Submitted Documents, and SAS No.Statements.Reporting on Internal Accounting Control and related interpretationS%.Also, see, SectiongIII of this guide for additionalguidance on reporting.Fir purposes of keporting on the financial std ements and on thestudy and evaluation of internal accounting cotrols, materialityshould be determined in accordance with SAS No. 47, Audit Riskand Materiality in Conducting an Audit, and SAS No. 20, RequiredCommunication of Material Weaknesses in Internal AccountingControl.All compliance requirements contained in this guide should be4. :For purposes of planning and performing the tests forad rthe compliance requirements, and for reporting. 'on theeay2i.of the system of administrative controls to assureadecom.1 ance (gee Section II), materiality should be determinedThe auditor's report onbased. on the universe of SFA funds.compliance with the applicable laws and regulations shouldinclude all instances of noncompliance and questioned costs thatcome to the auditor's attention.V.AUDI4 AUTHORIZATION AND DUE DATES.Authority for audit of the NDSL, CWS4 SMOG, Pell Grant, and GSLHigher Education Act ofprograms is contained in 487 b)(1) of t1965, as amended by Public Law 94-482, tart D/ 133.raged to be made annually,If an re required not less frequently than every two years.is performed everyot o years it shall cover the two-yearsaudof the SFA programs are encan qe'irkterpreted asthis gu de, adequacyproviding a reasonable a surance that the syst6m or proceresult in the intended event ordures, if followed, wilaction occurring.z-/ For purposes 'ofa110
.Nperiod.In either.case, the period to be audited can be based onthe entity's"fiscal or prograM year. If the institution receivesCampus-based funds, the audit reports must be submitted by March31 following the' end of the program year (which 'normdllS; tndsJune 30).If the institution does not receive Campus-basedfunds, the due date is January 31 followine endtheprograd year.If special circumstance* warrant an en ofthe submission dater a request/ for a revised Ode date mustsubmitted.to the Office of Student Financial Assistance AuditRevi. e wBranchP.O.Box 23800En ant PlazatationWashington, D.C.20026.Th request mustreceived at least30 days prior t9 the original submission date.MATTERS REQUIRING IMMEDIATE ACTIONAlthough the detection of illegal acts orgul'es is not*desthe primary function of an audit, the auditoru d 0- alert tosituations or transactions that may indicate theistee ofsuch condifiorls. If the auditor becomes -aware of illeal acts orirregularities in the audit, he shall promptly notify therecipient management afficials.above the level of involvement.It is the responsibility of thg entity receiving the informationtonotify .1 the 4ppropriate 'law enforcement authoriiieand'DepartMent of Education Regional Inspector General forAudit.The auditor should also use discretion to avoid any actions whichwould compromise the protection of an individual's rights, and theintegrity of any official inquiries.For suppletpntal guidance,'see the AICPA's Statements on Auditing Staridards, No. 16 and No.17,entitled The Independent uditor's Responsibility for theDetection of Error orClients, respectively.Irregularities, andIllegalActsby.PLANNING OF AUDITIn planning for an SFA audit, the auditor shoilld be aware thatawards are n9rmally administered by more than one organizationalcomponent within the institution and that' each 'component may-maintain a separate or differentsystem for ensuring compliance.TransactiOns within each organizational compo'nent must beselected. and tested for adherence to compliance requirements.The.transactioNs should relate to, a sample of awards within thesystem.J,,%,-For additional guidancein planning an SFA audit the auditorshould become familiar with. the AICPA's SAS No. 22,.Planning and Supervision, and its related interpretatiqn.37titledSi
SECTION IICOMPLIANCE REQUIREMENTSr.'- OVERVIEW14.3addition to the testing necessary to render an opinion on thethe'required financial statement(s), and supplementary, ditor-recipient is complying wi,th the laws,and regulations, affectingWhile testing forthe receipt and expenditure 'of'SFA funds,:compliance, the auditor should include those administrativea direct bearing' an the. reliability of the SPAcontrols that haprogram 'and ,com ent on anx.deficiencies in the compliancereport.The compliance requirements for SPA' programs are 'divided into two.parts within this section. The first part contains thegenertIllyapplicable requirements that wshould be ,considered- for anyTherecipient receiving federal funds, under 'the SPA progxams.second, part of th*s.section proyides the compliihce requirementsthat are specific,to the individual programs.,For.eadh program, the following catetjorie6 Are(a)provided:.The objective of the program(b)0A brief description of how the program operatescc)The major pompliance requirements:oooooo.(d),types -of services or products allowed or unallowedeligibilitycost sharing and matching requirementsprogram performancervorting requirementsspecific' provisionsRegulatory references,-Additionally, each requirement is accompanied by1/4suggested audit'These arebe used to test for 'compliance.procedures that cmanda-l'nauditorcanusenorarethey,not. the only proceAlthough each major compliance reqqirement should betory.addressed by the auditor, the auditor should apply professionaljudgment to determine "the specific pr'Ocedurel necessary to, beapplied under thecircum0ances.r's484-
The specific compliance' requirements and 'suggeiped auditprocedures for each program are provided in this guide.However,the auditor should be.familiar with the relevant statutes-andsections of th-e code of Federal Regulations 6o,' obtain a completeunderstanding of the compliance requirements.Specific require-mvts may change periodically, and auditors should be alert to*tias possibility through their contacts with the auditee organization and by other means.GENERAL COMPLIANCE REQUIREMENT"1.4I.CASH MANAGEMENTCompliance RequirementIInstitutions' financial manageMent systems shall include thenedessary controls, to ensure that program.funds are accounted forproperly and are used for authorized purposes.If the institu4*tion is "on hhe cash request system, the amount of cash in theaccounts should not exceedmonth's need.Schools receivingannual advances in excess of 120,000, and for which a continuingrelationship with the Department of Education'has eltisted for at,least 'one year, should be financed throligh a letter -of- creditrather than t'he monthly cash request systdm. Where the:institution is.on the letter-of-credit system, the amount of cash in theaccounts shall be ap-close to daily needs as administrativelypossible.(Reference;34 CFR 675.19, 676.19, 690.74, 690.82,and. Accodhtin'Recordkee n.and Re ortinbPostsecondar'Educatio al Institutionsor Federall Fun etuden t F man aIAid Programs, October 1981L (The Blue Book),) an .ED Payment§ystem Users Manual (published Mara 1982)).Suggested Audit Proceduresa. Review th institution's cash forecasting process andt' evaluate for adequacy.b.,Review the institution's system for requesting/drawing downfunds and evaluate whether it is adequate to keepPiikrequest for/drawdowns of Federal funds limited to the ingti.tution"s impediate needs and within the amount authorizedfor eachprogram.c. Determine dates AramoUnts for selected advAnces, drawdoWnsand other receipts of.SFA funds and compare to the dates theokunds werr disbursed and/or, checks were presented to thebanks for payment.4
d. Determine whether any interest was earned on Federal funds.Interest earned on non-NDSL funds indicates excess cash, ifinteres# 'was earned op non-NDSL funds, the auditor shouldreport the period of, time involved; and determine whethel theinterest was properly returned tothe Department ofFor FEL, sep specific, compliance proceduresEducation.under the NDSL section.Review the institution's system to ensure that 'SPA programfunds are not used for investments or transferred tosubaccounts for financing, activit3As other than making.awards.'II.-FINANCIAL 'REPORTINGCompliance Requirement\Institutions receiving SFA funds are required to ensure thatfinancial' status reports, cash reports) and "claims' foradvances and reimbursements contain reliable financial:data,and are presented in accordance with the terms of ap6licableBelow are some of .the reports that' should beagreements.prepared by institutions:Fiscal Opdrations Report,, and Application 'to Participate(FISAP Report/ED Form 6&6)Report of Defaulted Loans (ED Form 574)Pell Progess Report (ED Fkm 2553).ifPell Validation ioster (ED Form 255-4)Payment' Voucher on Letter bf Credit, (TFS 5401)Recipient Cash Advance Request (ED Form 874)Recipient Report of Expenditures (ED-Form(Ref er9nce:ED's Payment System Users ManualoIndividual award agreements contain the speci is reporting).Auditorsrequirement's that the recipient ks to folloshould familiarize themselves with the detaile instructionsand the Client's system for preparing and submitting federalA separate auditor's opinion -on thesefinancial reports.reports is not required. However, as a basis for comments,the auditor should examine a Sample, of reports and trace thedata on thdse reports to the underlying records on a test.basis.104
Suggested Audit ProceduresUa.ReView the proCeduret for preparing the requiredfinancial reports apd evaluate.for,pdeqbacy,b:Sample financial reports and review for oOmOleteness,ieasonablerleis and,t1Mliness of submission.')C.Trace :tignifiCint: data to sup§prAng doCuMedtation,.i.e.,:workiheets., ledgers, etc.-Review Alagnificant adjustments made to the general,ledger amounts.affecting.StA programs and evaluate. fQtproprilqy.INSTITUTIONAL ELIGIBILITY AND PARTICIPATION.Compliance Requirementtiin order to 'participate in the tell. or Campus-based programs, an .institution-must be an eligible institution ofh,igher education'. a pUblic or priOate nonprofit institutionof higher. eytions a proprietary ,institutioneducatidn; .or a postsecoi4ery 'vocational Institution.InadditiOn to institutions of. higher education, vocationalschools :and. certain fgreign schools which meet, statutory andregulatory requirements. malt be efigiblebto participateinthe .GSL AndiEWS.programS.' 134 CFR 668,.Subpart668.11,-682.200; 682.600, 683.10,,683.80 and 6'90.,7)Suggested Audit Proceduresa. Ascertain whether the institution has a-.1etter from theEligibility and AgencY Evaluation Staff (EARS) which.lists the institution's/ current location and eligibleprograms.bd Ascertain the institutionor the j status of othemeans byacitrhedita.tion statusestablished'0c. Verify that,thetion meet the.rgible programs offereuired minimum length orbyhe institu-r tion.Compliance RequirementsDefault rates on, NDSLs in excess of'20'percent, and student.withdrawal rates in excess. of 33 percent .'ma? impair anindtitution's' capability of adequately adMinisteringTitle IV program.(34 CFR 668.16 and 17)/ft
rrS .esteudit Proceduresd. AscertaiwhetherNDSLdefaultrateexceeded, 20nd/of the student withdrawal rate' exceeded 33percent,percent.IV.theCOORDINATION OF STUDENT AID PROGRAMSCompliance RequirementThe institution mustthe Title IV programs withthe other .Federal And non-Federal programs of studentfinancial aid it ddministqrs and must establish contols topreclude the awarding of assistance in excess of students'The institution must assure that it usesfinancial needs.all information' L4 its possession regarding a student'sneed analysis documents;Title IV eligibility 'including:tax returns; knfortttion regarding a student's citizenShipprevious educations experience or other actors. (34 CFR676:14,668.16, 674.14, 675.14,682.605 and 683.84)1674.15,67515,676.15,Suggested Audit Procedures,for providing for exchange' ofproceduresa. Ascertaininformation among all appropriate institutibr41 officesand evaluate for adequacy.b. Review#selectedrecipient, recordsandevaluateforadequacy.c: Test selected recipient records to determine'that totalaid disbursed to students did not exceed their needs.V.'STUDENT FILE MAINTENANCE, - FISCAL PROCEDURES AND RECORDKEEPINGComplieinceuirementThe institution must establish and maintain on a currentbasis, fipancial records to reflect all financial transac-,The institution must identify .disbursements of Pell,tions.NDSL, CWS, SEOG, qn and PLUS funds separately from allProgram and fiscal records must showother expenditures.went eligibilitycost of attendance, stuldentsresources,(34CFR668.4,674.19, 675.19,and payment, respectively.-682.612, 683.91, 690.82 and 690.81)676,.1v8
k.4Nib1,2aSuggeSted*dittroceciuresa. Asoertit0 'themJiore institution s-related procedures and reviewuacy.Review'selected accountingiand program records and determine'institution. followed xcept for loan records and audit questions, the instituOonmust keep.spcbrds 'foian. award year,for\five. years, after itfileitFiscal Operatidns Report (for Campus-kased funds)and June 30 progress 'Report.For NDSL, the institution must keep repayment ,records for at least ,five years'from the date" Of-foaa ase,ignmenta repayment or cancellat.ion.For GSL ,and PLUS, the institution 'must keep copies ,ofreports for five years 1.kftetliltng.For GSL, all requiredrecords must be kepi for -five 4years11 inthe date, astudent, ,,graduates, withdraws or ,faild ten 11 at leasthalf-time for 'a period for which oti GSL was received.FOrPLUS, tinstitution must keep all requi d records forfivefollowing the last date of the p riod for wh4.ch. the los-intended. The institution must eep records ofany clai orby Fede al audit untilresolution of any audit questions.(34 CFR 68.12, 674.19,675.19, 676.19, 682.612, 683.91 and 690183)ted Audit Proceduresc.am-scertgIfi procedures for maintaining rocoias and evaluatefor adequacy.seleCted records to see whether theliowed prescribed procedurestestVI.STUDENT ELIGIBILITYinstitution41-General Compliance RequirementsA grant, loan and/or work-study award may be mad only to astudent who is a regular student; is enrolled 1r acceptedfor enrollment as at least a half-time stddent in-an eligible program;is a U.S.citizen, national, or permanentresident, or in another specified status; has financialneed; has signed .a , Statement of Educational Purpose; ismaintaining satisfactory progress in his or her course ofstudy; is admitted/ a) with a 'certificate of graduation fromschool providing secondary education, ( ii ) w,ith aarecognized equivalent .of such certificate or (iii) who isti
Nigh school attendance in thebeyond the age ofwhich the institution, is located and has theability to benefit from the education or training offered;does not owe a refund on a Federal grant; and 'is not indefault on a Federally-funded or :insured student loanrecei*ed from or for attendance at the .institution at whichthe studett is enrolled, unless he or she had made arrangehasments satisfactory to the lender to repay the loan;'signed a 'statement indicating compliance with lltaftAlso, if'a student has beenregistration requirements.accepted into an eligible program, within which that student'takes remedial courses, ,the student would be eligible forIf .the student is not accApted into onTitle Ty aid.state' infteligible program until tte remedial program has -beehtisuccessfully completed, .he/she- would not be eligible untilaccepted into the eligible piogram.Excepti6s to General Compliance Requ,trementsIrTherepare several exceptions to the general requirements::Pell grahts and SEQGs may be made bnly to undergraduatestudents; an institution may use up to 10% of its CWS and/orSEDG'allocation to fund students enrolled less thin halftime; PLUS borrowers do not have to show financial need;PLUS borroweKs. inclup parents of dependent undergraduatestudents.Effective October 1, 1983, students must indicate compliancewith selective service registration requirements in order tobe considered eligible students. Effective January 1, 1984,institutions must have satisfa,ptory progress standatds whichmeet the regulatory requirements prescribed in the FederalRegister on October 6, 1983 as clarified and revised by theJanuary 1984 "Dear Colleague" letter #84-P-121.(344-CFR 614.9, 675,9, 676.9, 682.200 690:4, 676.22, 690.5,682.201, 674.31, 690.3,675.2, 676.2, 690.2,674.2,668.16(e), 668 Subpart A, 690.75, 668.23,-668.24, 68-411,eanda683.84)Suggested Audit Procedures,a. Review the institution's procedures for determiningstudent eligibility and evaluate for adequacy.b. Review selected awards and determine adherence toprescribed procedures.14410111
VII.INSTITUTfONALDISBURSEMAS 11'0 AWARD RECIPIENTSCompliance RequirementIf the institution is disbursing Pell or Campus-based fundsit, must obtiin a financial aid transcript if the recipientpPeviously attended another. eligible institution,(34 CFR668.14)Suggested Audit Procedurqa. Ascertain Whether the institution has a procedure toobtain or attempt to obtain transcripts, as required andhas transcripts of ?as documented its attempits .in, its.files.Compliance RequirementThe various student aid programs have maximums and minimums,as follows:NDSL - maximums:(1) 12,000for gkaduate students ,(includes anyamounts student received as an undergraduatestudent)(2) 6,000 for undergraduates with an upper limitof 3,000 on loans to undergraduates during,the *first 2 years.SEOG 4(L) , 2,000 maximum for the academic year200 minimum for the academic year.(2) Pell Grant - the amount of the award varies dependingupon t46 Payment Schedule in effect for theaward year involved, 'but may not be belowthe minimum or exceed the maximum awardestablished for that year.(34 CFR 674.31, 676,24 and 69'0.65)44*Suggested Audit Proceduresb. Ascertain whether the institution has established procedures to make awards within limits and evaluate foradequacy.c. Review selected records and determine whether the institution followed established procedures.Compliance RequirementIn general, ti, institution must, make at least' two equalpayments each academic year, for the pet'', SEOG and NDSLprograms.For these programs, the institution must make11154
,direct1disbursementsto students, or Ifaccounts, *.it must give studehtsitcreditsreceipts orstudents''Forotherwise notify '-students Tf thq method of payment.paythestudentdirectlyatCWS,- the institution .must(34 CFR 674.16, 675.16, 676.16, 690.3,least once a month. ,690.75, 690.76 and 690.78)Suggested Audit' Procedured. Test disburiements and- related'records.TION AND OVE1PAY1 NT DETERMINATION PROCEDURESVIII. REFUND CAL.Compliance Reguirement,Li.1If a student who .received Title ry funds other than'CWS isclue a refund, the institution must return a portion of therefund to the Title IV progiam(s) by using the followingformula:aSStudentRefundTotal amountawarded4,Total amountfor theof Title IV (Minus CWS earnings)for-thekpayment period/of aid award (minus earnings)-IPpayment periodrt.(34 CFR 668.21, 682.608, 682.609, 682.610 and 682 AppendixA, 683.87, 683.88, 683.89 and 683 Appendix A)Suggested Audit Proceduresa.for calculating refunds andallocdting refunds to the various Eti programs and /or" GSLlenders.proceduresAsceitain'tib. Review selected records and determine whether prescribedprocedures were followed and if refunds were depositedtimely in SFA accounts, or were returned to the GSLlender within 4E days.c.'Checi ft see if NDSL, Pell and SEOG refunds aredeposited into appropriate accounts, prior to the nextdrafty down of Federal funds.Compliance Requirement ,The institution is responsible for determining any overpaOverpayments can'commonly occur when ,aments to students.institution after receiving a ca hstudent L leaves andisbursement. from Pell, SEOG br NDSL programs.arA1216
The institution is to use the following formula in determining the amount of,. overpayment to be returned to theTitle IV programs:.Amounb ofOverpaymentKTotal amount-of Title TV aid (exclusive ofCV'S, GSL and PLUS) awarded for thepay rent petiodTotal amount 1of aid (exclusiye of CWS, GSL,and PLUS) warded for the payment period(34 CFR 668.21, 674.14, 67 f4, 676.14,and Federal Student Aid Handbook(s))690.78, and'690.80Suggested Audit Procedurfsd. Ascertain whether the institution has procedures fordetermining overpayments, notifying and billing studentsand collecting the overpayment.e. Ascertain whether the institution hag developed written'policies allocating Title' IV overpayments to the variousTitle IV funds and evaluate for adequacy.f. Review selected records and d9termine whether the insettution followed established piocedures.I17'13
SPECIFIC PROGRAM REQUIR3WNTSPELL GRANTI.PROGROBJECTIVE-Grant, formerly the Basi EducaThe obje iv o the Pe(BEOG), program is to make grantstival Opportuni. y GraThe Pell Gant isto eligible undergraduate studentsintended to provide a fOundatioh'of fi ancial aid.II.PROGRAM PROCEDURESA*Under the.Reqular Disbursement System, the program is administerediby the DepaAmeht of Education (ED) and costse onStudents send apglicat pns ;)fitutions.dary educationalocessor, which provides Student Aid Reportsto a centreStudents theh take the SARs to their(SARs) to applica'nts.institution, which determines award amounts based on thecost of attendance at that institution, the Student "AidIndip (SAI) and the enriglItment-status of the'student,- byusing a Payment Schedule.'rED provides funds to the institution based'on actual and estimated Pell expenditures.IfI. COMPLIANCE REQUIREMENTS AND SE GESTED AUDIT PROCEDURESA. TYPES OF SERVICES OR PRODUCTS ALLOWED OR UNALLOWEDComptnce RequirementThe institution may expend Pail funds only for grants tostudents and administration of the Pelt program. ,(34 CFR690.10 and 690.82)Suggested Audit Procedurer)related procedur sand.rs'rb. Reviewselected records and determine whetherinstitution followed establighed procedures.theinstitution'sreview them for adequacy.a. Ascertain theB. ELIGIBILITYtc.Compliance RequirementFor institutional eligibility to participate in the programs, ,see INSTITUTIONAL ELIGIBILITY AND PARTICIPATZON(III) in the GENERAL COMPLIANCE REQUIREMENTS section ofthis audit guide.1 Ea
C. COST-SHARING AND MATCHING REQUIREMENTSThere ar
This s-guide is to be used by 41 recipients of SFA funds which are not subject to eitner Offic,6\,61 Managemen't and Budget (OMB) Cir-cular A-110, Attachment P 'or A-102, Attachment P. In addition, until A-110, Attachment P nd the corresponding A-110 audit guide are officially issued by 0 B, this guide is to be used by all recipients of SFA funds.
