FAC Explorer

Audit 291994

FY End
2023-06-30
Total Expended
$5.07M
Findings
2
Programs
3
Organization: Reach University (CA)
Year: 2023 Accepted: 2024-02-23
Auditor: McClintock and Associates PC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
370426 2023-001 Significant Deficiency - P
946868 2023-001 Significant Deficiency - P

Programs

ALN Program Spent Major Findings
84.063 Federal Pell Grant Program $3.04M Yes 1
84.336 Teacher Quality Partnership Grants $633,078 - 0
84.423 Supporting Effective Educator Development Program $343,889 - 0

Contacts

Name Title Type
W1RBB41KM6N6 James Vincent-Dunn Auditee
3175564900 Thomas Wilson Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are ecognized following, as applicable, either the cost principles in OMB Circular A-21, Cost Principles for Educational Institutions or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Used actual costs. Basis of Presentation The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award grant activity of Reach University (Organization) under programs of the federal government for the year ended June 30, 2023. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization. Basis of Accounting Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following, as applicable, either the cost principles in OMB Circular A-21, Cost Principles for Educational Institutions or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: NOTE 2 - NONCASH AND FEDERAL INSURANCE Accounting Policies: Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are ecognized following, as applicable, either the cost principles in OMB Circular A-21, Cost Principles for Educational Institutions or the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. The Organization has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: Used actual costs. The Organization did not receive noncash assistance or have Federal insurance in effect during the fiscal year.

Finding Details

Finding 2023-001
The following finding was noted: FINDING 2023-001: RETURN TO TITLE IV CALCULATION Condition For seven of the twenty-one Return to Title IV (R2T4) calculation procedures tested, we noted that the R2T4 was incorrectly calculated. The students involved were #s 42, 48, 50, 52, 53, 57 and 58. Criteria Federal regulations require that if a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the amount of Title IV grant or loan assistance earned by the student must be determined. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned. If the amount disbursed to the student is less than the amount the student earned, and for which the student is otherwise eligible, he or she is eligible to receive a post-withdrawal disbursement (PWD) of the earned aid that was not received. The institution must correctly calculate the amount of Title IV funds that must be returned. Cause For student #42, the Institution used an incorrect last date of attendance (LDA) when performing the R2T4 calculation. For the remaining students, #s 48, 50, 52, 53, 57 and 58, the Institution did not exclude the correct number of scheduled break days in the Fall 2022 semester from the R2T4 calculation. Effect and Questioned Costs As noted below, the Institution did not return the correct amount of Title IV aid. Subsequent to our testing, the Institution returned all under refunded amounts to the respective Title IV program. In addition, the Institution awarded Institutional credits to all students with over refunded amounts. Over (Under) Student # Refunded Amount Title IV Program 42 $ (896) 2022/2023 Pell Grant 48 $ 17 2022/2023 Pell Grant 50 $ 21 2022/2023 Pell Grant 52 $ 69 2022/2023 Pell Grant 53 $ 38 2022/2023 Pell Grant 57 $ 65 2022/2023 Pell Grant 58 $ 1,266 2022/2023 Pell Grant Subsequent to the audit, the Institution performed a file review of all Title IV recipients who withdrew, dropped or were terminated in the Fall 2022 semester and prepared a spreadsheet to document and identify errors as they relate to Return Title IV Calculations. Of the forty-nine student files tested as part of the file review, thirty students had incorrect R2T4 calculations performed as a result of the error in the Fall 2022 semester’s scheduled break days (including those six cited above), resulting in an error rate of 61%. The Institution over-refunded $2,648 in 2022-2023 Pell Grant funds, including the questioned costs from the six students cited above. In addition, the Institution under-awarded $3 Post-Withdrawal Disbursement of 2022-2023 Pell Grant funds. M&A confirmed all necessary Institutional credits were made per the file review. Recommendation The Institution should improve established procedures to ensure that, in the future, R2T4 calculations are properly calculated in accordance with the federal regulations. Views of Responsible Officials The Institution has reviewed the finding and concurs with the recommendation. As outlined in the Corrective Action Plan, the Institution has procedures in place to ensure compliance with the requirements.
Finding 2023-001
The following finding was noted: FINDING 2023-001: RETURN TO TITLE IV CALCULATION Condition For seven of the twenty-one Return to Title IV (R2T4) calculation procedures tested, we noted that the R2T4 was incorrectly calculated. The students involved were #s 42, 48, 50, 52, 53, 57 and 58. Criteria Federal regulations require that if a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance, the amount of Title IV grant or loan assistance earned by the student must be determined. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned. If the amount disbursed to the student is less than the amount the student earned, and for which the student is otherwise eligible, he or she is eligible to receive a post-withdrawal disbursement (PWD) of the earned aid that was not received. The institution must correctly calculate the amount of Title IV funds that must be returned. Cause For student #42, the Institution used an incorrect last date of attendance (LDA) when performing the R2T4 calculation. For the remaining students, #s 48, 50, 52, 53, 57 and 58, the Institution did not exclude the correct number of scheduled break days in the Fall 2022 semester from the R2T4 calculation. Effect and Questioned Costs As noted below, the Institution did not return the correct amount of Title IV aid. Subsequent to our testing, the Institution returned all under refunded amounts to the respective Title IV program. In addition, the Institution awarded Institutional credits to all students with over refunded amounts. Over (Under) Student # Refunded Amount Title IV Program 42 $ (896) 2022/2023 Pell Grant 48 $ 17 2022/2023 Pell Grant 50 $ 21 2022/2023 Pell Grant 52 $ 69 2022/2023 Pell Grant 53 $ 38 2022/2023 Pell Grant 57 $ 65 2022/2023 Pell Grant 58 $ 1,266 2022/2023 Pell Grant Subsequent to the audit, the Institution performed a file review of all Title IV recipients who withdrew, dropped or were terminated in the Fall 2022 semester and prepared a spreadsheet to document and identify errors as they relate to Return Title IV Calculations. Of the forty-nine student files tested as part of the file review, thirty students had incorrect R2T4 calculations performed as a result of the error in the Fall 2022 semester’s scheduled break days (including those six cited above), resulting in an error rate of 61%. The Institution over-refunded $2,648 in 2022-2023 Pell Grant funds, including the questioned costs from the six students cited above. In addition, the Institution under-awarded $3 Post-Withdrawal Disbursement of 2022-2023 Pell Grant funds. M&A confirmed all necessary Institutional credits were made per the file review. Recommendation The Institution should improve established procedures to ensure that, in the future, R2T4 calculations are properly calculated in accordance with the federal regulations. Views of Responsible Officials The Institution has reviewed the finding and concurs with the recommendation. As outlined in the Corrective Action Plan, the Institution has procedures in place to ensure compliance with the requirements.