Audit 299868

FY End
2023-06-30
Total Expended
$5.92M
Findings
14
Programs
3
Organization: Hodges University, Inc. (FL)
Year: 2023 Accepted: 2024-03-28

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
387815 2023-002 Material Weakness Yes N
387816 2023-003 Significant Deficiency Yes N
387817 2023-003 Significant Deficiency Yes N
387818 2023-003 Significant Deficiency Yes N
387819 2023-004 Significant Deficiency - N
387820 2023-005 Significant Deficiency - L
387821 2023-005 Significant Deficiency - L
964257 2023-002 Material Weakness Yes N
964258 2023-003 Significant Deficiency Yes N
964259 2023-003 Significant Deficiency Yes N
964260 2023-003 Significant Deficiency Yes N
964261 2023-004 Significant Deficiency - N
964262 2023-005 Significant Deficiency - L
964263 2023-005 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $3.96M Yes 3
84.063 Federal Pell Grant Program $1.86M Yes 3
84.007 Federal Supplemental Educational Opportunity Grants $104,800 Yes 1

Contacts

Name Title Type
HP7ND1CMGMD4 Linda Nguyen Auditee
2395986280 Aaron Crall, CPA Auditor
No contacts on file

Notes to SEFA

Title: FEDERAL LOANS DISBURSED Accounting Policies: The accompanying schedule of expenditures of federal awards includes the federal award activity of the University and is presented on the accrual basis of accounting. 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), therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements. There were no noncash awards nor any sub-recipients of federal awards and state financial assistance in the current year. De Minimis Rate Used: N Rate Explanation: The University has elected not to use the 10% de minimum indirect cost rate for allocation. The University participates in the Federal Direct Loan Program, including Federal Stafford Loans (Stafford) and Federal PLUS Loans (PLUS). The dollar amounts are listed in the schedule of expenditures of federal awards, although the University is not the recipient of the funds. Such programs are considered a component of the student financial assistance cluster. Loans processed by the University under this Loan Program were the following for the year ended June 30, 2023: Federal Direct Loan Program Stafford: Subsidized $1,015,387 Unsibsidized 2,009,578 PLUS 49,665 GRAD 10,516 Total 4,074,146

Finding Details

2023–002 National Student Loan Data System (NSLDS) Enrollment Reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Loan Program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.309 (b) outlines that schools must update the secretary with pertinent information within 30 days (unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days) after the date the school discovers a student changed enrollment from half time/full time/graduate/withdrawal/etc. Section 4.4.2 of the NSLDS Enrollment Reporting Guide (Circa November 2018) establishes the definition of the effective date, certification date, and received date. Condition: During our detail testing of NSLDS Enrollment Reporting we noted instances where the University did not comply with the requirements noted above. Questioned costs: None. Context: During our detail testing of NSLDS Enrollment Reporting we noted the following discrepancies in our sample of 13 students: • 8 instances in which the program enrollment effective date did not match the program-level enrollment effective date per NSLDS • 10 instances for which the student's status was not reported timely • 13 instances in which the student's enrollment was not certified timely • 11 instances where the enrollment effective date was incorrect per NSLDS • 6 instances for which the student's status was not reported to NSLDS Cause: the University’s policies and procedures did not detect and correct these errors to ensure compliance. Effect: Noncompliance with federal regulations which could lead to untimely reporting of enrollment information to NSLDS. Repeat Finding: Yes, prior year finding 2022-003. Recommendation: We recommend that the University review their policies and procedures to ensure accurate reporting and responding to enrollment rosters to NSLDS. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–003 240 Day Requirement for Unclaimed Checks Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program, 84.007 – Supplemental Education Opportunity Grant program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: During our testing it was noted that the University did not return certain unclaimed checks within the required time frame. Questioned costs: Known questioned costs totaling $9,284. Context: We identified 27 checks totaling $9,284 related to Title IV funding that were outstanding for more than 240 days as of June 30, 2023. Cause: The University’s policies and procedures did not ensure that the checks were returned to the Secretary in a timely manner. Effect: Noncompliance with the 240 day requirement. Repeat Finding: Yes, prior year finding 2022-004. Recommendation: We recommend that the University review its procedures related to outstanding student checks to ensure they are being returned to the Department of Education within 240 days. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–003 240 Day Requirement for Unclaimed Checks Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program, 84.007 – Supplemental Education Opportunity Grant program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: During our testing it was noted that the University did not return certain unclaimed checks within the required time frame. Questioned costs: Known questioned costs totaling $9,284. Context: We identified 27 checks totaling $9,284 related to Title IV funding that were outstanding for more than 240 days as of June 30, 2023. Cause: The University’s policies and procedures did not ensure that the checks were returned to the Secretary in a timely manner. Effect: Noncompliance with the 240 day requirement. Repeat Finding: Yes, prior year finding 2022-004. Recommendation: We recommend that the University review its procedures related to outstanding student checks to ensure they are being returned to the Department of Education within 240 days. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–003 240 Day Requirement for Unclaimed Checks Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program, 84.007 – Supplemental Education Opportunity Grant program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: During our testing it was noted that the University did not return certain unclaimed checks within the required time frame. Questioned costs: Known questioned costs totaling $9,284. Context: We identified 27 checks totaling $9,284 related to Title IV funding that were outstanding for more than 240 days as of June 30, 2023. Cause: The University’s policies and procedures did not ensure that the checks were returned to the Secretary in a timely manner. Effect: Noncompliance with the 240 day requirement. Repeat Finding: Yes, prior year finding 2022-004. Recommendation: We recommend that the University review its procedures related to outstanding student checks to ensure they are being returned to the Department of Education within 240 days. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–004 Return to Title IV (R2T4) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.063 – Federal Pell Grant Program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: According to 34 CFR 668.22(e)(1) 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, as described in paragraph (e)(2) of this section; and (ii) Applying this percentage to the total amount of title IV grant or loan assistance that was disbursed (and that could have been disbursed, as defined in paragraph (l)(1) of this section) to the student, or on the student's behalf, for the payment period or period of enrollment as of the student's withdrawal date. Condition: During our testing we noted one instance where the University used the incorrect withdrawal date in the R2T4 calculation. Questioned costs: Known questioned costs totaling $27, likely questioned costs totaling $91. Context: In our sample of 13 students, we identified 1 student where the wrong withdrawal date was used, resulting in a $27 error in the R2T4 calculation. Cause: The University’s policies and procedures did not ensure that the correct withdrawal date was used in the calculation. Effect: An incorrect amount was returned to the Department of Education. Repeat Finding: No. Recommendation: We recommend that the University review its policies and procedures to ensure R2T4 calculations are performed accurately. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–005 Common Origination and Disbursement (COD) reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: As defined in 34 CFR 668.164(a), the disbursement date is the date that a school credits a student’s account at the school or pays a student or parent borrower directly with Title IV funds received from the U.S. Department of Education (the Department) or with institutional funds in advance of receiving Title IV program funds. This is the date that a school must report to the COD System as the actual disbursement date for a Direct Loan, as distinguished from the anticipated disbursement date. Condition: During our testing we noted instances where the wrong disbursement date was reported to COD. Questioned costs: None Context: Of the 148 disbursements tested, we noted 9 instances where the wrong disbursement date was reported. Cause: University’s policies and procedures did not ensure compliance. Effect: Noncompliance with the reporting requirements. Repeat Finding: No. Recommendation: We recommend that the University review their reporting policies and procedures to ensure accurate and timely reporting. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–005 Common Origination and Disbursement (COD) reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: As defined in 34 CFR 668.164(a), the disbursement date is the date that a school credits a student’s account at the school or pays a student or parent borrower directly with Title IV funds received from the U.S. Department of Education (the Department) or with institutional funds in advance of receiving Title IV program funds. This is the date that a school must report to the COD System as the actual disbursement date for a Direct Loan, as distinguished from the anticipated disbursement date. Condition: During our testing we noted instances where the wrong disbursement date was reported to COD. Questioned costs: None Context: Of the 148 disbursements tested, we noted 9 instances where the wrong disbursement date was reported. Cause: University’s policies and procedures did not ensure compliance. Effect: Noncompliance with the reporting requirements. Repeat Finding: No. Recommendation: We recommend that the University review their reporting policies and procedures to ensure accurate and timely reporting. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–002 National Student Loan Data System (NSLDS) Enrollment Reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Loan Program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.309 (b) outlines that schools must update the secretary with pertinent information within 30 days (unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days) after the date the school discovers a student changed enrollment from half time/full time/graduate/withdrawal/etc. Section 4.4.2 of the NSLDS Enrollment Reporting Guide (Circa November 2018) establishes the definition of the effective date, certification date, and received date. Condition: During our detail testing of NSLDS Enrollment Reporting we noted instances where the University did not comply with the requirements noted above. Questioned costs: None. Context: During our detail testing of NSLDS Enrollment Reporting we noted the following discrepancies in our sample of 13 students: • 8 instances in which the program enrollment effective date did not match the program-level enrollment effective date per NSLDS • 10 instances for which the student's status was not reported timely • 13 instances in which the student's enrollment was not certified timely • 11 instances where the enrollment effective date was incorrect per NSLDS • 6 instances for which the student's status was not reported to NSLDS Cause: the University’s policies and procedures did not detect and correct these errors to ensure compliance. Effect: Noncompliance with federal regulations which could lead to untimely reporting of enrollment information to NSLDS. Repeat Finding: Yes, prior year finding 2022-003. Recommendation: We recommend that the University review their policies and procedures to ensure accurate reporting and responding to enrollment rosters to NSLDS. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–003 240 Day Requirement for Unclaimed Checks Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program, 84.007 – Supplemental Education Opportunity Grant program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: During our testing it was noted that the University did not return certain unclaimed checks within the required time frame. Questioned costs: Known questioned costs totaling $9,284. Context: We identified 27 checks totaling $9,284 related to Title IV funding that were outstanding for more than 240 days as of June 30, 2023. Cause: The University’s policies and procedures did not ensure that the checks were returned to the Secretary in a timely manner. Effect: Noncompliance with the 240 day requirement. Repeat Finding: Yes, prior year finding 2022-004. Recommendation: We recommend that the University review its procedures related to outstanding student checks to ensure they are being returned to the Department of Education within 240 days. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–003 240 Day Requirement for Unclaimed Checks Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program, 84.007 – Supplemental Education Opportunity Grant program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: During our testing it was noted that the University did not return certain unclaimed checks within the required time frame. Questioned costs: Known questioned costs totaling $9,284. Context: We identified 27 checks totaling $9,284 related to Title IV funding that were outstanding for more than 240 days as of June 30, 2023. Cause: The University’s policies and procedures did not ensure that the checks were returned to the Secretary in a timely manner. Effect: Noncompliance with the 240 day requirement. Repeat Finding: Yes, prior year finding 2022-004. Recommendation: We recommend that the University review its procedures related to outstanding student checks to ensure they are being returned to the Department of Education within 240 days. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–003 240 Day Requirement for Unclaimed Checks Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program, 84.007 – Supplemental Education Opportunity Grant program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: During our testing it was noted that the University did not return certain unclaimed checks within the required time frame. Questioned costs: Known questioned costs totaling $9,284. Context: We identified 27 checks totaling $9,284 related to Title IV funding that were outstanding for more than 240 days as of June 30, 2023. Cause: The University’s policies and procedures did not ensure that the checks were returned to the Secretary in a timely manner. Effect: Noncompliance with the 240 day requirement. Repeat Finding: Yes, prior year finding 2022-004. Recommendation: We recommend that the University review its procedures related to outstanding student checks to ensure they are being returned to the Department of Education within 240 days. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–004 Return to Title IV (R2T4) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.063 – Federal Pell Grant Program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: According to 34 CFR 668.22(e)(1) 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, as described in paragraph (e)(2) of this section; and (ii) Applying this percentage to the total amount of title IV grant or loan assistance that was disbursed (and that could have been disbursed, as defined in paragraph (l)(1) of this section) to the student, or on the student's behalf, for the payment period or period of enrollment as of the student's withdrawal date. Condition: During our testing we noted one instance where the University used the incorrect withdrawal date in the R2T4 calculation. Questioned costs: Known questioned costs totaling $27, likely questioned costs totaling $91. Context: In our sample of 13 students, we identified 1 student where the wrong withdrawal date was used, resulting in a $27 error in the R2T4 calculation. Cause: The University’s policies and procedures did not ensure that the correct withdrawal date was used in the calculation. Effect: An incorrect amount was returned to the Department of Education. Repeat Finding: No. Recommendation: We recommend that the University review its policies and procedures to ensure R2T4 calculations are performed accurately. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–005 Common Origination and Disbursement (COD) reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: As defined in 34 CFR 668.164(a), the disbursement date is the date that a school credits a student’s account at the school or pays a student or parent borrower directly with Title IV funds received from the U.S. Department of Education (the Department) or with institutional funds in advance of receiving Title IV program funds. This is the date that a school must report to the COD System as the actual disbursement date for a Direct Loan, as distinguished from the anticipated disbursement date. Condition: During our testing we noted instances where the wrong disbursement date was reported to COD. Questioned costs: None Context: Of the 148 disbursements tested, we noted 9 instances where the wrong disbursement date was reported. Cause: University’s policies and procedures did not ensure compliance. Effect: Noncompliance with the reporting requirements. Repeat Finding: No. Recommendation: We recommend that the University review their reporting policies and procedures to ensure accurate and timely reporting. Views of responsible officials: See Corrective Action Plan prepared by the University.
2023–005 Common Origination and Disbursement (COD) reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster CFDA Number: 84.268 – Federal Direct Student Loans, 84.063 – Pell Grant Program Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance (Other Matters) Criteria or specific requirement: As defined in 34 CFR 668.164(a), the disbursement date is the date that a school credits a student’s account at the school or pays a student or parent borrower directly with Title IV funds received from the U.S. Department of Education (the Department) or with institutional funds in advance of receiving Title IV program funds. This is the date that a school must report to the COD System as the actual disbursement date for a Direct Loan, as distinguished from the anticipated disbursement date. Condition: During our testing we noted instances where the wrong disbursement date was reported to COD. Questioned costs: None Context: Of the 148 disbursements tested, we noted 9 instances where the wrong disbursement date was reported. Cause: University’s policies and procedures did not ensure compliance. Effect: Noncompliance with the reporting requirements. Repeat Finding: No. Recommendation: We recommend that the University review their reporting policies and procedures to ensure accurate and timely reporting. Views of responsible officials: See Corrective Action Plan prepared by the University.