Audit 300451

Finding 2023-001 Federal Agency: United States Department of Education Federal Program: Student Financial Aid Cluster Assistance Listing Number: 84.268 Federal Award Years: 2023 Reference: 2023-001 Criteria When Direct Loans or TEACH funds are being credited to a student’s account, the institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement (a minimum of 14 or 30 days depending on the confirmation process). Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testing of student loan notifications, KPMG identified one of forty students selected for testwork that did not receive a notification for one loan disbursement during the year. The item that was an exception described above did not result in changes to the amounts awarded or disbursed to students by the College for the current fiscal year. Cause The condition identified was the result of a student that selected to opt-out of College email notifications, which resulted in federal loan notifications to not be delivered. The College did not have adequate processes in place to ensure appropriately notification in accordance with federal regulations when a student selected to opt-out of receiving College communications. Possible Asserted Effect Failure to notify students of the timing of disbursements, their rights related to those disbursements, and the procedures and timelines for cancellation could have resulted in students not being aware that a disbursement was made or receiving loans that they did not intend to keep. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the College review and enhance its process related to disbursement notifications to ensure that they are complying with federal requirements. Views of Responsible Officials This finding was the result of students being allowed to opt out of all notifications from Endicott College, which are initiated thru a notification system called EMMA. EMMA is the system of record used for notifying students of loan disbursements and as a result of students being able to opt out of all EMMA notifications this student was not notified of their loan disbursements. As a result of this finding the college has disabled the ability for students to be able to opt out of all EMMA notifications and thus being unable to opt out of student financial notifications such as loan disbursements. This policy change was instituted in February 2024, when the college became aware of the issue.

Finding 2023-002 Federal Agency: United States Department of Education Federal Program: Student Financial Aid Cluster Assistance Listing Number: Various Federal Award Years: 2023 Reference: 2023-002 Criteria Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS. The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSDLSFAP) website. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition In testing the Campus-Level enrollment reporting data elements as reported to NSLDS, key items to test are: OPEID Number, Enrollment Effective Date, Enrollment Status, and Certification Date. In testing the Program-Level enrollment reporting data elements, key items to test, if applicable, are: OPEID Number, CIP Code, CIP Year, Credential Level, Published Program Length Measurement, Published Program Length, Program Begin Date, Program Enrollment Status, and Program Enrollment Effective Date. Of the 40 students with enrollment changes that we selected for testwork, we identified 13 students whose changes in enrollment status were not timely or accurately transmitted to NSLDS, as follows: • KPMG identified that 9 students had enrollment statuses that did not agree between campus-level and program-level NSLDS data. • KPMG identified that 2 students had Program Enrollment Effective Dates that did not agree the College’s records. • KPMG identified that 2 students had status changes that were reported to NSLDS more than 60 days after the date that the College became aware of the changes. None of the items that were exceptions described above resulted in changes to the amounts awarded or disbursed to students by the College for the current fiscal year. Cause The condition resulted from the College’s internal control processes not operating consistently to ensure that all changes in enrollment information were submitted timely and accurately to NSLDS. Possible Asserted Effect Untimely and inaccurate submission of student enrollment status information affects the determinations that lenders and servicers of students’ loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the College review and enhance its process related to enrollment reporting to ensure that status change key data elements agree to the College’s records and that status changes are reported to NSLDS in a timely manner. Views of Responsible Officials This issue was caused by a flaw in the current process for reporting enrollment status to NSLDS. Management acknowledges the issues caused by the current processes and the following action has been taken (as of February 2024 when the college became aware of the issue) to improve the situation. Endicott will review and enhance its process related to enrollment reporting. To that end, the Registrar's Office has reviewed all reports being used to gather enrollment reporting information and has created new reports to ensure that both the campus level and program level data are being reported correctly and within appropriate time controls.

Finding 2023-001 Federal Agency: United States Department of Education Federal Program: Student Financial Aid Cluster Assistance Listing Number: 84.268 Federal Award Years: 2023 Reference: 2023-001 Criteria When Direct Loans or TEACH funds are being credited to a student’s account, the institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement (a minimum of 14 or 30 days depending on the confirmation process). Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testing of student loan notifications, KPMG identified one of forty students selected for testwork that did not receive a notification for one loan disbursement during the year. The item that was an exception described above did not result in changes to the amounts awarded or disbursed to students by the College for the current fiscal year. Cause The condition identified was the result of a student that selected to opt-out of College email notifications, which resulted in federal loan notifications to not be delivered. The College did not have adequate processes in place to ensure appropriately notification in accordance with federal regulations when a student selected to opt-out of receiving College communications. Possible Asserted Effect Failure to notify students of the timing of disbursements, their rights related to those disbursements, and the procedures and timelines for cancellation could have resulted in students not being aware that a disbursement was made or receiving loans that they did not intend to keep. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the College review and enhance its process related to disbursement notifications to ensure that they are complying with federal requirements. Views of Responsible Officials This finding was the result of students being allowed to opt out of all notifications from Endicott College, which are initiated thru a notification system called EMMA. EMMA is the system of record used for notifying students of loan disbursements and as a result of students being able to opt out of all EMMA notifications this student was not notified of their loan disbursements. As a result of this finding the college has disabled the ability for students to be able to opt out of all EMMA notifications and thus being unable to opt out of student financial notifications such as loan disbursements. This policy change was instituted in February 2024, when the college became aware of the issue.

Finding 2023-002 Federal Agency: United States Department of Education Federal Program: Student Financial Aid Cluster Assistance Listing Number: Various Federal Award Years: 2023 Reference: 2023-002 Criteria Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS. The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSDLSFAP) website. There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition In testing the Campus-Level enrollment reporting data elements as reported to NSLDS, key items to test are: OPEID Number, Enrollment Effective Date, Enrollment Status, and Certification Date. In testing the Program-Level enrollment reporting data elements, key items to test, if applicable, are: OPEID Number, CIP Code, CIP Year, Credential Level, Published Program Length Measurement, Published Program Length, Program Begin Date, Program Enrollment Status, and Program Enrollment Effective Date. Of the 40 students with enrollment changes that we selected for testwork, we identified 13 students whose changes in enrollment status were not timely or accurately transmitted to NSLDS, as follows: • KPMG identified that 9 students had enrollment statuses that did not agree between campus-level and program-level NSLDS data. • KPMG identified that 2 students had Program Enrollment Effective Dates that did not agree the College’s records. • KPMG identified that 2 students had status changes that were reported to NSLDS more than 60 days after the date that the College became aware of the changes. None of the items that were exceptions described above resulted in changes to the amounts awarded or disbursed to students by the College for the current fiscal year. Cause The condition resulted from the College’s internal control processes not operating consistently to ensure that all changes in enrollment information were submitted timely and accurately to NSLDS. Possible Asserted Effect Untimely and inaccurate submission of student enrollment status information affects the determinations that lenders and servicers of students’ loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government’s payment of interest subsidies. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the College review and enhance its process related to enrollment reporting to ensure that status change key data elements agree to the College’s records and that status changes are reported to NSLDS in a timely manner. Views of Responsible Officials This issue was caused by a flaw in the current process for reporting enrollment status to NSLDS. Management acknowledges the issues caused by the current processes and the following action has been taken (as of February 2024 when the college became aware of the issue) to improve the situation. Endicott will review and enhance its process related to enrollment reporting. To that end, the Registrar's Office has reviewed all reports being used to gather enrollment reporting information and has created new reports to ensure that both the campus level and program level data are being reported correctly and within appropriate time controls.