New details about federal audit of CFCC

WILMINGTON, NC (WECT) - We are learning more about a federal audit of Cape Fear Community College that uncovered errors the college was making in the way it administered federal student loan money. The school is now being forced to repay the feds what could be a significant sum, plus interest.

CFCC has just released a copy of the preliminary audit report from the US Department of Education. The DOE conducted the audit in February.

According to the report, 56 percent of the college's nearly 9,000 students in the 2015-2016 school year received Federal Student Aid. The federal financial assistance for CFCC students totaled $26 million that year, which by our calculations breaks down to just over $5,000 per student receiving aid.

Out of the 30 student files in the sample studied by federal auditors, 18 were found to have mistakes in the way federal funds were processed.

The main issue has to do with a student who fails to finish their coursework. Some officially withdrawal, while other students simply stop coming to class. In those cases, the school is required to repay the Department of Education back for the portion of the semester the student did not attend class.

For 16 of the files in question, the students withdrew or effectively withdrew on an earlier date than the date reported to the National Student Loan Data System.

"CFCC does not have a procedure in place to identify all unofficially withdrawn students," the auditors write in their report. "As a result, the institution did not identify, calculate, and return unearned Title IV funds to the applicable Federal program for all students who unofficially withdrew prior to the 60 percent point of the payment period."

The Department of Education is requiring CFCC to provide a list of all Title IV recipients who received all non-passing grades during the 2015-2016 and 2016-2017 award years, and the total amount the school will have to repay the feds will then be determined.

The audit also found that CFCC had inaccurate enrollment reporting, and was not documenting counseling provided to students receiving federal financial aid.

Finally, auditors found that 2 other students from the sample were not eligible to receive Title IV funds. These were male students who do not appear to be registered with the Selective Service, and there was no documentation indicating that their registration issues has been resolved.

The feds are now requiring CFCC to submit documentation verifying the students in question are in fact registered with the Selective Service, and put in place corrective action to ensure all male students receiving Title IV funds in the future are registered with the Selective Service before they receive federal tuition assistance.

CFCC may also be liable for repaying money to the feds for this deficiency.

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