RCC must give back $622,313

By Kathi Keys -- Staff Writer, The Courier-Tribune
Posted: 07/08/06 - 08:39:31 pm CDT




ASHEBORO — Randolph Community College has been asked to refund $622,313 for federal financial aid overpayments to the U.S. Department of Education.

The amount represents the total which the federal agency has formally identified for repayment as a result of its findings in a March 2005 audit of RCC’s financial aid program. RCC officials had been awaiting this federal response since January.

RCC Interim President Dr. Larry Linker, who took over the college’s helm effective July 1, said, “It is our goal to work with the U.S. Department of Education and to reconcile the findings and determinations.

“We have put comprehensive procedures in place, going forward to prevent future findings and to offer RCC students the best financial aid services possible.”

Linker said Friday that he is working on identifying possible funding sources for the repayment of the federal funds.



“It can’t be state money,” he said.

He is also pursuing the possible employment of “legal counsel to help get the amount reduced or challenged.” Such counsel would be someone who’s a financial aid specialist.

By mid-August, RCC will pursue one of three options, according to Linker, who originally retired as RCC president in 2000:

x Pay the entire amount.



x Request a payment plan which would include interest on the amount owed.

x Begin an appeals process.

Linker reiterated that RCC will continue to work with the federal agency to resolve the findings.

“The added staff we have put in place and the control procedures prohibit this type of problem from happening again in the area of financial aid.”

Linker also said, “As we learn more, we’ll share more on how this amount of money got to be so big and move this college on.”

RCC officials announced earlier this year, after turning in their responses in January to the DOE findings from its March 2005 review, that they documented a potential total liability of $874,520.

This amount was arrived at after a comprehensive review and recalculation of student financial aid awards made over a three-year period covering the 2002-03, 2003-04 and 2004-05 fiscal years.

The local effort, by a financial aid task force, involved a detailed review of every RCC student financial aid file for these three years. The group included two retired financial aid directors from other community colleges along with individuals familiar with procedures and recommended by State Community College System officials.

This liability stems from overpayments of federal financial aid made to students, due to miscalculations or improper recordkeeping related to areas such as a student’s eligibility, income and grades. Students are not accountable for the overpayments.

RCC has already repaid more than $200,000 and spent an additional $200,000 for its documentation needed to respond to the Department of Education review. This money came from institutional funds, not state or federal sources.

The $622,313 amount owed, announced on Thursday, is in addition to the more than $400,000 already repaid or spent, prior to February this year, in connection with RCC’s financial aid program.

Financial reporting deficiencies in RCC’s financial aid program were first identified in an audit by the State Auditor’s Office for the July 1, 2002, through June 30, 2003, fiscal year.

The U.S. Department of Education conducted its own review in 2005 after the first state audit identified deficiencies in RCC’s financial administration of the federal Pell Grant program. This program provides grants for a student’s tuition based on his or her family income as long as he or she maintains good grades and remains in school.

Two subsequent state audits, for the 2003-04 and 2004-05 fiscal years, also found deficiencies in RCC’s financial reporting procedures, some of these related to the financial aid program.

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REALLY GOOD ACCOUNTING SYSTEM THEY HAVE