Education:

Use of Department of Education Title III Grant Funds by the International Institute of the Americas of World University

HRD-84-20: Published: Apr 4, 1984. Publicly Released: Apr 4, 1984.

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Pursuant to a congressional request, GAO analyzed the use of the Higher Education Act title III grant funds by the International Institute of the Americas of World University, San Juan, Puerto Rico.

GAO found that World University's financial management system was deficient and its financial stability was questionable. There was a fundamental lack of internal controls, inadequate subsidiary accounts payable ledgers, and insufficient source records. Further, accounting records were often not supported by source documentation nor were many of the records kept up to date. GAO also found that some university withdrawals of federal funds that were earmarked for the program may not have been used as intended. The university's financial situation has shown increasing deficit unrestricted fund balances over the past several years, and GAO believes that they will continue to show a deficit. GAO concluded that the university's financial records are unreliable and its assets are susceptible to loss from unauthorized use or disposition.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The World University declared bankruptcy. Although its trustees concurred with Education's Inspector General findings, Education was unable to determine if it would be one of the creditors included in the distribution of World University assets, and, if so, when and how much it would collect.

    Recommendation: The Secretary of Education should review the World University's title III grants to identify the total amount of unallowable and/or unsupportable costs charged to the grants and require a return of those funds to the Department of Education.

    Agency Affected: Department of Education

  2. Status: Closed - Implemented

    Comments: The World University declared bankruptcy. Although its trustees concurred with Education's Inspector General findings, Education was unable to determine if it would be one of the creditors included in the distribution of World University assets, and, if so, when and how much it would collect.

    Recommendation: The Secretary of Education should review the World University's administration of title IV programs to determine whether the institution is complying with title IV regulations and whether any monies received under those programs should be returned to Education.

    Agency Affected: Department of Education

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of Education should determine whether the World University and each of its affiliates now receiving title IV funds are financially responsible, as defined under Education's regulations governing "factors of financial responsibility."

    Agency Affected: Department of Education

  4. Status: Closed - Implemented

    Comments: Settlement of the debt to VA is before the courts. The timeframe and amount of the final resolution are uncertain because of the litigation involved and the World University's bankrupt status.

    Recommendation: The Administrator of Veterans Affairs should make certain that final resolution be made concerning repayment of $544,613.56 owed the Veterans Administration by World University.

    Agency Affected: Veterans Administration

 

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