2023-002 Significant Deficiency: Documentation Regarding Offer of a Post-Withdrawal Disbursement
(U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant
Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(a)(6), a post-withdrawal disbursement must be made to
the student for any grant funds they are eligible for within 45 days of the date of determination.
Moreover, the University must offer to disburse directly to a student, or parent in the case of a parent
PLUS loan, any amount of a post-withdrawal disbursement of loan funds that is not credited to the
student’s account. The disbursement of loan funds must occur after the University received
confirmation from the student’s or parent’s intentions, respectively.
Statement of Condition: During the 2023 audit, it was noted that the University was unable to provide
supporting documentation detailing the student was offered a post-withdrawal disbursement.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
identified is $736 in under-award. Extrapolation of this monetary error was not necessary as the 11
withdrawal students tested as part of the 2023 audit were the entire withdrawal population for the
period under audit.
Perspective Information: The 2023 audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 3, indicating an error rate of 27.3%.
Cause and Effect: Due to the University’s lack of retention of appropriate documentation, we were
unable to determine or test the post-withdrawal disbursements were appropriately offered to the
affected students resulting in the inability to appropriately review the documentation to satisfy
testing requirements.
Recommendation: The University should maintain documentation of sending the student, or parent
when applicable, notification regarding their eligibility for a post-withdrawal disbursement.
View of Responsible Officials: While the University was completing this process the lack of
documentation has been addressed. The University now has the student verify receipt of this
information on the withdrawal form itself and has other notification procedures in place to ensure
that this is completed.
2023-003 Significant Deficiency: Return to Title IV Funds (U.S. Department of Education, William D. Ford
Direct Loan Program, ALN #84.268; Federal Pell Grant Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(f), in the calculation of the percentage of payment period
and/or period of enrollment completed, the total number of calendar days in a payment and/or
enrollment period includes all days within the period, except that institutionally scheduled breaks of
at least 5 consecutive calendar days and days in which the student was on an approved leave of
absence are excluded from the total number of calendar days in a payment period and/or period of
enrollment.
Statement of Condition: During the audit, it was noted that the University used the incorrect number
of total days in the payment period or period of enrollment in calculating the percentage of payment
period and/or period of enrollment completed for the Fall 2022 semester.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
identified is $116 in under-award. Extrapolation of this monetary error was not necessary as the 11
withdrawal students tested as part of the 2023 audit were the entire withdrawal population for the
period under audit.
Perspective Information: The audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 6, indicating an error rate of 54.6%.
Cause and Effect: For withdrawal calculations performed in the fall semester, the total day count was
not performed per the instructions described in the Student Financial Aid Handbook. The University
calculated using 109 days, while the actual number was 107 days. The use of an incorrect total
number of calendar days will result in a miscalculation of percentage of Title IV aid earned and may
additionally result in monetary error.
Recommendation: The University should ensure that the total number of calendar days in the
payment period or period of enrollment are counted correctly utilizing the guidance provided by the
Compliance Supplement and the Student Financial Aid Handbook.
View of Responsible Officials: When setting the R2T4 dates in the system the University had failed to
count the Saturday and Sunday preceding the break period of five days or more. The University has
addressed the issue for the future POE periods and implemented a three-step verification process
moving forward. The three-step verification involves two additional staff verifying the dates in the
system to ensure accuracy.
2023-004 Significant Deficiency: The University Did Not Timely Complete Return to Title IV Funds (U.S.
Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant
Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(e), the amount of title IV grant or loan assistance that is
earned by the student is calculated by (i) determining the percentage of title IV grant or loan
assistance that has been earned by the student and (ii) applying the percentage of the total amount
of title IV grant or loan assistance that was disbursed and could have been disbursed to the student,
or on the student’s behalf for the payment period or period of enrollment as of the student’s
withdrawal date.
Statement of Condition: During the audit, it was noted that the University did not complete an R2T4
for unofficial withdrawal students in the Spring semester until during the audit and therefore did not
calculate the percentage of aid that was earned by the student.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
is $1,851 in over-award. Extrapolation of this monetary error was not necessary as the 11 withdrawal
students tested as part of the 2023 audit were the entire withdrawal population for the period under
audit.
Perspective Information: The audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 3, indicating an error rate of 27.3%.
Cause and Effect: For unofficial withdrawals, an R2T4 was not performed per the instructions
described in the Student Financial Aid Handbook in certain instances due to lack of oversight by the
director. By not performing an R2T4, the University did not compute the percentage of aid that was
earned by the student and this may result in monetary error.
Recommendation: The University should ensure that the R2T4 calculations are being completed
timely.
View of Responsible Officials: When processing the R2T4s for these three students the Director
looked at the current date on the form and processed them according to the current date and not the
date of withdrawal. For these students due to the date difference went from being in the greater
than 60% category where a R2T4 was not necessary to now needing one processed. The University
has implemented an audit process whereby the date entered can be more easily verified to ensure
accuracy. This date and the withdrawal date or LDA are now added to a withdrawal form that is
shared between departments so that any variance will be easily identified.
2023-002 Significant Deficiency: Documentation Regarding Offer of a Post-Withdrawal Disbursement
(U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant
Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(a)(6), a post-withdrawal disbursement must be made to
the student for any grant funds they are eligible for within 45 days of the date of determination.
Moreover, the University must offer to disburse directly to a student, or parent in the case of a parent
PLUS loan, any amount of a post-withdrawal disbursement of loan funds that is not credited to the
student’s account. The disbursement of loan funds must occur after the University received
confirmation from the student’s or parent’s intentions, respectively.
Statement of Condition: During the 2023 audit, it was noted that the University was unable to provide
supporting documentation detailing the student was offered a post-withdrawal disbursement.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
identified is $736 in under-award. Extrapolation of this monetary error was not necessary as the 11
withdrawal students tested as part of the 2023 audit were the entire withdrawal population for the
period under audit.
Perspective Information: The 2023 audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 3, indicating an error rate of 27.3%.
Cause and Effect: Due to the University’s lack of retention of appropriate documentation, we were
unable to determine or test the post-withdrawal disbursements were appropriately offered to the
affected students resulting in the inability to appropriately review the documentation to satisfy
testing requirements.
Recommendation: The University should maintain documentation of sending the student, or parent
when applicable, notification regarding their eligibility for a post-withdrawal disbursement.
View of Responsible Officials: While the University was completing this process the lack of
documentation has been addressed. The University now has the student verify receipt of this
information on the withdrawal form itself and has other notification procedures in place to ensure
that this is completed.
2023-003 Significant Deficiency: Return to Title IV Funds (U.S. Department of Education, William D. Ford
Direct Loan Program, ALN #84.268; Federal Pell Grant Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(f), in the calculation of the percentage of payment period
and/or period of enrollment completed, the total number of calendar days in a payment and/or
enrollment period includes all days within the period, except that institutionally scheduled breaks of
at least 5 consecutive calendar days and days in which the student was on an approved leave of
absence are excluded from the total number of calendar days in a payment period and/or period of
enrollment.
Statement of Condition: During the audit, it was noted that the University used the incorrect number
of total days in the payment period or period of enrollment in calculating the percentage of payment
period and/or period of enrollment completed for the Fall 2022 semester.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
identified is $116 in under-award. Extrapolation of this monetary error was not necessary as the 11
withdrawal students tested as part of the 2023 audit were the entire withdrawal population for the
period under audit.
Perspective Information: The audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 6, indicating an error rate of 54.6%.
Cause and Effect: For withdrawal calculations performed in the fall semester, the total day count was
not performed per the instructions described in the Student Financial Aid Handbook. The University
calculated using 109 days, while the actual number was 107 days. The use of an incorrect total
number of calendar days will result in a miscalculation of percentage of Title IV aid earned and may
additionally result in monetary error.
Recommendation: The University should ensure that the total number of calendar days in the
payment period or period of enrollment are counted correctly utilizing the guidance provided by the
Compliance Supplement and the Student Financial Aid Handbook.
View of Responsible Officials: When setting the R2T4 dates in the system the University had failed to
count the Saturday and Sunday preceding the break period of five days or more. The University has
addressed the issue for the future POE periods and implemented a three-step verification process
moving forward. The three-step verification involves two additional staff verifying the dates in the
system to ensure accuracy.
2023-004 Significant Deficiency: The University Did Not Timely Complete Return to Title IV Funds (U.S.
Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant
Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(e), the amount of title IV grant or loan assistance that is
earned by the student is calculated by (i) determining the percentage of title IV grant or loan
assistance that has been earned by the student and (ii) applying the percentage of the total amount
of title IV grant or loan assistance that was disbursed and could have been disbursed to the student,
or on the student’s behalf for the payment period or period of enrollment as of the student’s
withdrawal date.
Statement of Condition: During the audit, it was noted that the University did not complete an R2T4
for unofficial withdrawal students in the Spring semester until during the audit and therefore did not
calculate the percentage of aid that was earned by the student.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
is $1,851 in over-award. Extrapolation of this monetary error was not necessary as the 11 withdrawal
students tested as part of the 2023 audit were the entire withdrawal population for the period under
audit.
Perspective Information: The audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 3, indicating an error rate of 27.3%.
Cause and Effect: For unofficial withdrawals, an R2T4 was not performed per the instructions
described in the Student Financial Aid Handbook in certain instances due to lack of oversight by the
director. By not performing an R2T4, the University did not compute the percentage of aid that was
earned by the student and this may result in monetary error.
Recommendation: The University should ensure that the R2T4 calculations are being completed
timely.
View of Responsible Officials: When processing the R2T4s for these three students the Director
looked at the current date on the form and processed them according to the current date and not the
date of withdrawal. For these students due to the date difference went from being in the greater
than 60% category where a R2T4 was not necessary to now needing one processed. The University
has implemented an audit process whereby the date entered can be more easily verified to ensure
accuracy. This date and the withdrawal date or LDA are now added to a withdrawal form that is
shared between departments so that any variance will be easily identified.
2023-005 Significant Deficiency: Disbursement Notifications (U.S. Department of Education, William D.
Ford Direct Loan Program, ALN #84.268)
Criteria: In accordance with 34 CFR 668.165(a)(2), when a University credits a student’s account, the
University must notify the student or parent of (i) the anticipated date and amount of the
disbursement, (ii) the student’s or parent’s rights to cancel all or a portion of that loan or
disbursement, and (iii) the procedures and time by which the student or parent must notify the
University that he or she wishes to cancel the loan or disbursement. This communication must occur
no earlier than 30 days before, and no later than seven days after, crediting the student’s ledger
account at the institution if the institution does not obtain affirmative confirmation from the student.
Statement of Condition: During the 2023 audit, it was noted that certain students who had received
Direct Loan funds did not receive disbursement notifications.
Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature.
Perspective Information: The 2023 audit included a detailed testing of 40 student files, of which this
significant deficiency applies to 5, indicating an error rate of 12.5%.
Cause and Effect: Due to the University’s lack of retention of the appropriate documentation, we
were unable to determine or test the disbursement notifications for Direct Loans were made to
affected students resulting in the inability to appropriately review the documentation to satisfy
testing requirements.
Recommendation: The University should verify and retain documentation that appropriate
communication is made to students receiving Direct Loan funds.
View of Responsible Officials: Once IT was made aware of the issues, we implemented changes to the
process. The action code was discontinued, and our database administrator developed a custom
database table used only for tracking Financial Aid communications. This custom table tracks the
student’s organizational ID number, email address, communication code (MAND for mandatory loan
emails), date/time the email was processed, and the status returned by the process used to send
emails. Please note that this status only checks whether the process succeeded, it does not check
whether the email was successfully sent. The Financial Aid Department is still copied in all emails sent
at their main email address (currently FinancialAidTN@Johnsonu.edu). The Financial Aid Department
has the responsibility to alert the IT Department if they are not receiving emails as expected. Once
the IT Department has been alerted of an issue, the IT Department can start working to resolve the
issue.
For long-term reliability of communications, Johnson University has purchased and is implementing a
new Financial Aid software platform. This will give us an opportunity to work towards reliable
communications, not just reliable logging of process failures or successes.
2023-006 Significant Deficiency: Exit Counseling (U.S. Department of Education, William D. Ford Direct
Loan Program, ALN #84.268)
Criteria: In accordance with 34 CFR 682.604(a)(1), a school must ensure that exit counseling is
conducted with each borrower either in person, by audiovisual presentation, or by interactive
electronic means. In each case, the school must ensure that this counseling is provided or conducted
within 30 days after learning that the student borrower has withdrawn from school or dropped below
half-time enrollment.
Statement of Condition: During the 2023 audit, it was noted that certain students who had dropped
below half-time enrollment or who had left the University were not provided with exit counseling in
relation to outstanding federal direct loan balances.
Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature.
Perspective Information: The 2023 audit included a detailed testing of 40 student files, of which this
significant deficiency applies to 9, indicating an error rate of 22.5%.
Cause and Effect: Due to an internal information technology error, the University was not able to
maintain documentation showing that exit counseling information was sent to the affected students.
Recommendation: The University should verify that appropriate communication is made to students
leaving the University or lowering enrollment to less than half time, who also have outstanding federal
direct loans balances, to provide each with the exit counseling resource.
View of Responsible Officials: Once IT was made aware of the issues, we implemented changes to the
process. The action code was discontinued, and our database administrator developed a custom
database table used only for tracking Financial Aid communications. This custom table tracks the
student’s organizational ID number, email address, communication code (EXIT for exit counseling
emails), date/time the email was processed, and the status returned by the process used to send
emails. Please note that this status only checks whether the process succeeded, it does not check
whether the email was successfully sent. The Financial Aid Department is still copied in all emails sent
at their main email address (currently FinancialAidTN@Johnsonu.edu). The Financial Aid Department
has the responsibility to alert the IT Department if they are not receiving emails as expected. Once
the IT Department has been alerted of an issue, the IT Department can start working to resolve the
issue.
For long-term reliability of communications, Johnson University has purchased and is implementing a
new Financial Aid software platform. This will give us an opportunity to work towards reliable
communications, not just reliable logging of process failures or successes.
2023-001 Material Weakness: Gramm-Leach-Bliley Act (GLBA) (U.S. Department of Education, William
D. Ford Direct Loan Program, ALN #84.268)
Criteria: In accordance with 16 CFR 314.4, a University shall develop, implement, and maintain a
comprehensive information security program that is written in one or more readily accessible parts
and contains administrative, technical, and physical safeguards that are appropriate to your size and
complexity, the nature and scope of your activities, and the sensitivity of any customer information
at issue and must contain all of the elements that are further described in 16 CFR 314.4.
Statement of Condition: During the 2023 audit, it was noted that the University’s Gramm-Leach-Bliley
Act Policy did not fully address all of the requirements as described by 16 CFR 314.4. In addition, the
application of the comprehensive information security program was not effectively administered by
the University for the 2023 year.
Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature.
Perspective Information: The 2023 audit included testing of the University’s Gramm-Leach-Bliley Act
Policy as outlined in Part 5 of the Compliance Supplement including the application of this program
for the year.
Cause and Effect: Due to oversight by the director of the program, the GLBA policy was not reviewed
and updated for changes to the program as required by the Compliance Supplement.
Recommendation: The University should update their Gramm-Leach-Bliley Act Policy to be in
accordance with the requirements and put in place effective controls and practices to ensure the
policy is monitored in a way to ensure it is administered effectively.
View of Responsible Officials: Due to turnover within the IT Department, GLBA requirements were
not communicated well to incoming staff or to the organization. Once GLBA requirements were
discovered, a plan was developed to begin implementing GLBA controls and revise our security plan.
The plan to bring the organization into GLBA compliance was developed for the 2023-2024 school
year and was not in effect before this audit. The IT Department, and key stakeholders within the
organization, are working to ensure GLBA compliance within the next year.
2023-002 Significant Deficiency: Documentation Regarding Offer of a Post-Withdrawal Disbursement
(U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant
Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(a)(6), a post-withdrawal disbursement must be made to
the student for any grant funds they are eligible for within 45 days of the date of determination.
Moreover, the University must offer to disburse directly to a student, or parent in the case of a parent
PLUS loan, any amount of a post-withdrawal disbursement of loan funds that is not credited to the
student’s account. The disbursement of loan funds must occur after the University received
confirmation from the student’s or parent’s intentions, respectively.
Statement of Condition: During the 2023 audit, it was noted that the University was unable to provide
supporting documentation detailing the student was offered a post-withdrawal disbursement.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
identified is $736 in under-award. Extrapolation of this monetary error was not necessary as the 11
withdrawal students tested as part of the 2023 audit were the entire withdrawal population for the
period under audit.
Perspective Information: The 2023 audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 3, indicating an error rate of 27.3%.
Cause and Effect: Due to the University’s lack of retention of appropriate documentation, we were
unable to determine or test the post-withdrawal disbursements were appropriately offered to the
affected students resulting in the inability to appropriately review the documentation to satisfy
testing requirements.
Recommendation: The University should maintain documentation of sending the student, or parent
when applicable, notification regarding their eligibility for a post-withdrawal disbursement.
View of Responsible Officials: While the University was completing this process the lack of
documentation has been addressed. The University now has the student verify receipt of this
information on the withdrawal form itself and has other notification procedures in place to ensure
that this is completed.
2023-003 Significant Deficiency: Return to Title IV Funds (U.S. Department of Education, William D. Ford
Direct Loan Program, ALN #84.268; Federal Pell Grant Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(f), in the calculation of the percentage of payment period
and/or period of enrollment completed, the total number of calendar days in a payment and/or
enrollment period includes all days within the period, except that institutionally scheduled breaks of
at least 5 consecutive calendar days and days in which the student was on an approved leave of
absence are excluded from the total number of calendar days in a payment period and/or period of
enrollment.
Statement of Condition: During the audit, it was noted that the University used the incorrect number
of total days in the payment period or period of enrollment in calculating the percentage of payment
period and/or period of enrollment completed for the Fall 2022 semester.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
identified is $116 in under-award. Extrapolation of this monetary error was not necessary as the 11
withdrawal students tested as part of the 2023 audit were the entire withdrawal population for the
period under audit.
Perspective Information: The audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 6, indicating an error rate of 54.6%.
Cause and Effect: For withdrawal calculations performed in the fall semester, the total day count was
not performed per the instructions described in the Student Financial Aid Handbook. The University
calculated using 109 days, while the actual number was 107 days. The use of an incorrect total
number of calendar days will result in a miscalculation of percentage of Title IV aid earned and may
additionally result in monetary error.
Recommendation: The University should ensure that the total number of calendar days in the
payment period or period of enrollment are counted correctly utilizing the guidance provided by the
Compliance Supplement and the Student Financial Aid Handbook.
View of Responsible Officials: When setting the R2T4 dates in the system the University had failed to
count the Saturday and Sunday preceding the break period of five days or more. The University has
addressed the issue for the future POE periods and implemented a three-step verification process
moving forward. The three-step verification involves two additional staff verifying the dates in the
system to ensure accuracy.
2023-004 Significant Deficiency: The University Did Not Timely Complete Return to Title IV Funds (U.S.
Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant
Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(e), the amount of title IV grant or loan assistance that is
earned by the student is calculated by (i) determining the percentage of title IV grant or loan
assistance that has been earned by the student and (ii) applying the percentage of the total amount
of title IV grant or loan assistance that was disbursed and could have been disbursed to the student,
or on the student’s behalf for the payment period or period of enrollment as of the student’s
withdrawal date.
Statement of Condition: During the audit, it was noted that the University did not complete an R2T4
for unofficial withdrawal students in the Spring semester until during the audit and therefore did not
calculate the percentage of aid that was earned by the student.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
is $1,851 in over-award. Extrapolation of this monetary error was not necessary as the 11 withdrawal
students tested as part of the 2023 audit were the entire withdrawal population for the period under
audit.
Perspective Information: The audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 3, indicating an error rate of 27.3%.
Cause and Effect: For unofficial withdrawals, an R2T4 was not performed per the instructions
described in the Student Financial Aid Handbook in certain instances due to lack of oversight by the
director. By not performing an R2T4, the University did not compute the percentage of aid that was
earned by the student and this may result in monetary error.
Recommendation: The University should ensure that the R2T4 calculations are being completed
timely.
View of Responsible Officials: When processing the R2T4s for these three students the Director
looked at the current date on the form and processed them according to the current date and not the
date of withdrawal. For these students due to the date difference went from being in the greater
than 60% category where a R2T4 was not necessary to now needing one processed. The University
has implemented an audit process whereby the date entered can be more easily verified to ensure
accuracy. This date and the withdrawal date or LDA are now added to a withdrawal form that is
shared between departments so that any variance will be easily identified.
2023-002 Significant Deficiency: Documentation Regarding Offer of a Post-Withdrawal Disbursement
(U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant
Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(a)(6), a post-withdrawal disbursement must be made to
the student for any grant funds they are eligible for within 45 days of the date of determination.
Moreover, the University must offer to disburse directly to a student, or parent in the case of a parent
PLUS loan, any amount of a post-withdrawal disbursement of loan funds that is not credited to the
student’s account. The disbursement of loan funds must occur after the University received
confirmation from the student’s or parent’s intentions, respectively.
Statement of Condition: During the 2023 audit, it was noted that the University was unable to provide
supporting documentation detailing the student was offered a post-withdrawal disbursement.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
identified is $736 in under-award. Extrapolation of this monetary error was not necessary as the 11
withdrawal students tested as part of the 2023 audit were the entire withdrawal population for the
period under audit.
Perspective Information: The 2023 audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 3, indicating an error rate of 27.3%.
Cause and Effect: Due to the University’s lack of retention of appropriate documentation, we were
unable to determine or test the post-withdrawal disbursements were appropriately offered to the
affected students resulting in the inability to appropriately review the documentation to satisfy
testing requirements.
Recommendation: The University should maintain documentation of sending the student, or parent
when applicable, notification regarding their eligibility for a post-withdrawal disbursement.
View of Responsible Officials: While the University was completing this process the lack of
documentation has been addressed. The University now has the student verify receipt of this
information on the withdrawal form itself and has other notification procedures in place to ensure
that this is completed.
2023-003 Significant Deficiency: Return to Title IV Funds (U.S. Department of Education, William D. Ford
Direct Loan Program, ALN #84.268; Federal Pell Grant Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(f), in the calculation of the percentage of payment period
and/or period of enrollment completed, the total number of calendar days in a payment and/or
enrollment period includes all days within the period, except that institutionally scheduled breaks of
at least 5 consecutive calendar days and days in which the student was on an approved leave of
absence are excluded from the total number of calendar days in a payment period and/or period of
enrollment.
Statement of Condition: During the audit, it was noted that the University used the incorrect number
of total days in the payment period or period of enrollment in calculating the percentage of payment
period and/or period of enrollment completed for the Fall 2022 semester.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
identified is $116 in under-award. Extrapolation of this monetary error was not necessary as the 11
withdrawal students tested as part of the 2023 audit were the entire withdrawal population for the
period under audit.
Perspective Information: The audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 6, indicating an error rate of 54.6%.
Cause and Effect: For withdrawal calculations performed in the fall semester, the total day count was
not performed per the instructions described in the Student Financial Aid Handbook. The University
calculated using 109 days, while the actual number was 107 days. The use of an incorrect total
number of calendar days will result in a miscalculation of percentage of Title IV aid earned and may
additionally result in monetary error.
Recommendation: The University should ensure that the total number of calendar days in the
payment period or period of enrollment are counted correctly utilizing the guidance provided by the
Compliance Supplement and the Student Financial Aid Handbook.
View of Responsible Officials: When setting the R2T4 dates in the system the University had failed to
count the Saturday and Sunday preceding the break period of five days or more. The University has
addressed the issue for the future POE periods and implemented a three-step verification process
moving forward. The three-step verification involves two additional staff verifying the dates in the
system to ensure accuracy.
2023-004 Significant Deficiency: The University Did Not Timely Complete Return to Title IV Funds (U.S.
Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant
Program, ALN #84.063)
Criteria: In accordance with 34 CFR 668.22(e), the amount of title IV grant or loan assistance that is
earned by the student is calculated by (i) determining the percentage of title IV grant or loan
assistance that has been earned by the student and (ii) applying the percentage of the total amount
of title IV grant or loan assistance that was disbursed and could have been disbursed to the student,
or on the student’s behalf for the payment period or period of enrollment as of the student’s
withdrawal date.
Statement of Condition: During the audit, it was noted that the University did not complete an R2T4
for unofficial withdrawal students in the Spring semester until during the audit and therefore did not
calculate the percentage of aid that was earned by the student.
Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error
is $1,851 in over-award. Extrapolation of this monetary error was not necessary as the 11 withdrawal
students tested as part of the 2023 audit were the entire withdrawal population for the period under
audit.
Perspective Information: The audit included a detailed testing of 11 withdrawal student files, of
which this significant deficiency applies to 3, indicating an error rate of 27.3%.
Cause and Effect: For unofficial withdrawals, an R2T4 was not performed per the instructions
described in the Student Financial Aid Handbook in certain instances due to lack of oversight by the
director. By not performing an R2T4, the University did not compute the percentage of aid that was
earned by the student and this may result in monetary error.
Recommendation: The University should ensure that the R2T4 calculations are being completed
timely.
View of Responsible Officials: When processing the R2T4s for these three students the Director
looked at the current date on the form and processed them according to the current date and not the
date of withdrawal. For these students due to the date difference went from being in the greater
than 60% category where a R2T4 was not necessary to now needing one processed. The University
has implemented an audit process whereby the date entered can be more easily verified to ensure
accuracy. This date and the withdrawal date or LDA are now added to a withdrawal form that is
shared between departments so that any variance will be easily identified.
2023-005 Significant Deficiency: Disbursement Notifications (U.S. Department of Education, William D.
Ford Direct Loan Program, ALN #84.268)
Criteria: In accordance with 34 CFR 668.165(a)(2), when a University credits a student’s account, the
University must notify the student or parent of (i) the anticipated date and amount of the
disbursement, (ii) the student’s or parent’s rights to cancel all or a portion of that loan or
disbursement, and (iii) the procedures and time by which the student or parent must notify the
University that he or she wishes to cancel the loan or disbursement. This communication must occur
no earlier than 30 days before, and no later than seven days after, crediting the student’s ledger
account at the institution if the institution does not obtain affirmative confirmation from the student.
Statement of Condition: During the 2023 audit, it was noted that certain students who had received
Direct Loan funds did not receive disbursement notifications.
Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature.
Perspective Information: The 2023 audit included a detailed testing of 40 student files, of which this
significant deficiency applies to 5, indicating an error rate of 12.5%.
Cause and Effect: Due to the University’s lack of retention of the appropriate documentation, we
were unable to determine or test the disbursement notifications for Direct Loans were made to
affected students resulting in the inability to appropriately review the documentation to satisfy
testing requirements.
Recommendation: The University should verify and retain documentation that appropriate
communication is made to students receiving Direct Loan funds.
View of Responsible Officials: Once IT was made aware of the issues, we implemented changes to the
process. The action code was discontinued, and our database administrator developed a custom
database table used only for tracking Financial Aid communications. This custom table tracks the
student’s organizational ID number, email address, communication code (MAND for mandatory loan
emails), date/time the email was processed, and the status returned by the process used to send
emails. Please note that this status only checks whether the process succeeded, it does not check
whether the email was successfully sent. The Financial Aid Department is still copied in all emails sent
at their main email address (currently FinancialAidTN@Johnsonu.edu). The Financial Aid Department
has the responsibility to alert the IT Department if they are not receiving emails as expected. Once
the IT Department has been alerted of an issue, the IT Department can start working to resolve the
issue.
For long-term reliability of communications, Johnson University has purchased and is implementing a
new Financial Aid software platform. This will give us an opportunity to work towards reliable
communications, not just reliable logging of process failures or successes.
2023-006 Significant Deficiency: Exit Counseling (U.S. Department of Education, William D. Ford Direct
Loan Program, ALN #84.268)
Criteria: In accordance with 34 CFR 682.604(a)(1), a school must ensure that exit counseling is
conducted with each borrower either in person, by audiovisual presentation, or by interactive
electronic means. In each case, the school must ensure that this counseling is provided or conducted
within 30 days after learning that the student borrower has withdrawn from school or dropped below
half-time enrollment.
Statement of Condition: During the 2023 audit, it was noted that certain students who had dropped
below half-time enrollment or who had left the University were not provided with exit counseling in
relation to outstanding federal direct loan balances.
Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature.
Perspective Information: The 2023 audit included a detailed testing of 40 student files, of which this
significant deficiency applies to 9, indicating an error rate of 22.5%.
Cause and Effect: Due to an internal information technology error, the University was not able to
maintain documentation showing that exit counseling information was sent to the affected students.
Recommendation: The University should verify that appropriate communication is made to students
leaving the University or lowering enrollment to less than half time, who also have outstanding federal
direct loans balances, to provide each with the exit counseling resource.
View of Responsible Officials: Once IT was made aware of the issues, we implemented changes to the
process. The action code was discontinued, and our database administrator developed a custom
database table used only for tracking Financial Aid communications. This custom table tracks the
student’s organizational ID number, email address, communication code (EXIT for exit counseling
emails), date/time the email was processed, and the status returned by the process used to send
emails. Please note that this status only checks whether the process succeeded, it does not check
whether the email was successfully sent. The Financial Aid Department is still copied in all emails sent
at their main email address (currently FinancialAidTN@Johnsonu.edu). The Financial Aid Department
has the responsibility to alert the IT Department if they are not receiving emails as expected. Once
the IT Department has been alerted of an issue, the IT Department can start working to resolve the
issue.
For long-term reliability of communications, Johnson University has purchased and is implementing a
new Financial Aid software platform. This will give us an opportunity to work towards reliable
communications, not just reliable logging of process failures or successes.
2023-001 Material Weakness: Gramm-Leach-Bliley Act (GLBA) (U.S. Department of Education, William
D. Ford Direct Loan Program, ALN #84.268)
Criteria: In accordance with 16 CFR 314.4, a University shall develop, implement, and maintain a
comprehensive information security program that is written in one or more readily accessible parts
and contains administrative, technical, and physical safeguards that are appropriate to your size and
complexity, the nature and scope of your activities, and the sensitivity of any customer information
at issue and must contain all of the elements that are further described in 16 CFR 314.4.
Statement of Condition: During the 2023 audit, it was noted that the University’s Gramm-Leach-Bliley
Act Policy did not fully address all of the requirements as described by 16 CFR 314.4. In addition, the
application of the comprehensive information security program was not effectively administered by
the University for the 2023 year.
Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature.
Perspective Information: The 2023 audit included testing of the University’s Gramm-Leach-Bliley Act
Policy as outlined in Part 5 of the Compliance Supplement including the application of this program
for the year.
Cause and Effect: Due to oversight by the director of the program, the GLBA policy was not reviewed
and updated for changes to the program as required by the Compliance Supplement.
Recommendation: The University should update their Gramm-Leach-Bliley Act Policy to be in
accordance with the requirements and put in place effective controls and practices to ensure the
policy is monitored in a way to ensure it is administered effectively.
View of Responsible Officials: Due to turnover within the IT Department, GLBA requirements were
not communicated well to incoming staff or to the organization. Once GLBA requirements were
discovered, a plan was developed to begin implementing GLBA controls and revise our security plan.
The plan to bring the organization into GLBA compliance was developed for the 2023-2024 school
year and was not in effect before this audit. The IT Department, and key stakeholders within the
organization, are working to ensure GLBA compliance within the next year.