Audit 300563

FINDING 2023-002 – Special Tests and Provisions-Enrollment Reporting – Significant Deficiency In Internal Controls Over Compliance (See Section III - Federal Awards Findings and Questioned Costs - Finding 2023-002 for table included) Criteria: The National Student Loan Data System (NSLDS) is the Department of Education’s (ED) centralized database for students’ enrollment information. It is California University of Science and Medicine’s (the University) responsibility to update this information timely and accurately when the enrollment status or permanent address of a student that has received federal aid changes. Unless the University expects to complete its next roster file within 60 days, the University must notify the lender or the guaranty agency within 30 days, if it discovers that a student who received federal aid either did not enroll or ceased to be enrolled on at least a half-time basis or their permeant address has changed (34 CFR section 685.309). Condition/context: We selected a sample of students identified by the University as having received some federal assistance and who either withdrew from the University, graduated from the University, or had a change to their permanent address during the period of March 1, 2023, to June 30, 2023. The period of July 1, 2022 through February 28, 2023, was not subject to testing as the Federal Student Aid (FSA) issued an Electronic Announcement ID General-23-24 to update expectations of auditors evaluating institutional compliance with enrollment reporting requirements in light of the NSLDS issues identified in the Electronic Announcement on January 12, 2023. Our sample consisted of 9 students out of a population of 101 that were identified as graduates; 3 students out of a population of 5 that were identified as withdrawn; and 4 students out of a population of 20 that had permanent address changes. We believe this to be a representative sample of the population; however, it was not considered a statistical sample. We then compared the enrollment information and withdrawal or graduation date per the University’s records to the information reported to NSLDS. We noted a total of 7 students with exceptions. Two exceptions related to students who had a permanent address change that were not reported within the required 60-day time frame. We noted 3 students that had withdrawn and 2 students who had graduated from the University and were not reported within the required 60-day time frame. Out of the 3 withdrawn students, 2 had inaccurate effective dates reported to NSLDS. Questioned costs: No questioned costs were identified as part of this finding. Cause: In discussing these conditions with the University’s management, reporting was occurring on an every-other-month basis but only for students with enrolled status. Therefore, during periods when students were not enrolled, the changes were not captured timely. Effect: Permanent addresses are used by ED for ensuring that repayment information and other communications from ED are quickly accessible to the student. A change in enrollment status impacts when loan repayment grace period ends and when a student would be required to begin paying the student loans. Therefore, this deficiency in reporting permanent address changes and enrollment status changes could result in delays in receiving this information and inaccurate loan repayment start dates. Repeat finding: This is not a repeat finding. Recommendation: We recommend the University develop additional procedures to monitor the accuracy of information reported to NSLDS. One additional monitoring control could be to review a sample of students within NSLDS after each roster file response to ensure that the enrollment status is accurate and that permanent address changes were processed. Each institution has access to correct information directly within NSLDS at any time. Views of responsible officials: Management agrees with the finding. A corrective action plan was subsequently created to begin calculating the school term periods to exclude any breaks greater than five days. See the corrective action plan.

FINDING 2023-003 – Special Tests and Provisions-Return of Title IV Funds – Significant Deficiency In Internal Controls Over Compliance (See Section III - Federal Awards Findings and Questioned Costs - Finding 2023-003 for table included) Criteria: When a recipient of Title IV loan assistance withdraws from the University during a payment period or period of enrollment in which the recipient began attendance, the University must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. The regulations (34 CFR 668.22(f )(2)) provide that the total number of calendar days in a payment period or period of enrollment include all days within the period that the student was scheduled to complete and the number of calendar days completed in the period, except that scheduled breaks of at least five consecutive days and days on which the student was on an approved leave of absence are excluded from the total number of calendar days in a payment period or period of enrollment. Condition/context: We selected a sample of 4 students out of a population of 8 that were identified by the University as having received some federal assistance and withdrew from the University during the year under audit. We believe this to be a representative sample of the population and a statistical sample. We found all 4 calculations of the return of Title IV funds contained errors related to the total number of days in the term because consideration for the exclusion of scheduled breaks was not properly implemented. This calculation error caused 2 of the 4 samples to have the wrong total of aid earned because those 2 students had withdrawn before the 60% completion threshold. Questioned costs: No questioned costs were identified as part of this finding. Cause: In discussing these conditions with the University’s management, the department was not aware of the requirement to exclude scheduled breaks of greater than five days from the total days in the term calculation. Effect: The overstated total days in term caused the calculation of aid earned to be understated and therefore more federal funding was returned than a proper calculation would have concluded. Repeat finding: This is not a repeat finding. Recommendation: We recommend the University update their policies and procedures to calculate the return of Title IV funding accordingly to ensure accurate calculations are performed. Views of responsible officials: Management agrees with the finding. A corrective action plan has been created by management.

FINDING 2023-002 – Special Tests and Provisions-Enrollment Reporting – Significant Deficiency In Internal Controls Over Compliance (See Section III - Federal Awards Findings and Questioned Costs - Finding 2023-002 for table included) Criteria: The National Student Loan Data System (NSLDS) is the Department of Education’s (ED) centralized database for students’ enrollment information. It is California University of Science and Medicine’s (the University) responsibility to update this information timely and accurately when the enrollment status or permanent address of a student that has received federal aid changes. Unless the University expects to complete its next roster file within 60 days, the University must notify the lender or the guaranty agency within 30 days, if it discovers that a student who received federal aid either did not enroll or ceased to be enrolled on at least a half-time basis or their permeant address has changed (34 CFR section 685.309). Condition/context: We selected a sample of students identified by the University as having received some federal assistance and who either withdrew from the University, graduated from the University, or had a change to their permanent address during the period of March 1, 2023, to June 30, 2023. The period of July 1, 2022 through February 28, 2023, was not subject to testing as the Federal Student Aid (FSA) issued an Electronic Announcement ID General-23-24 to update expectations of auditors evaluating institutional compliance with enrollment reporting requirements in light of the NSLDS issues identified in the Electronic Announcement on January 12, 2023. Our sample consisted of 9 students out of a population of 101 that were identified as graduates; 3 students out of a population of 5 that were identified as withdrawn; and 4 students out of a population of 20 that had permanent address changes. We believe this to be a representative sample of the population; however, it was not considered a statistical sample. We then compared the enrollment information and withdrawal or graduation date per the University’s records to the information reported to NSLDS. We noted a total of 7 students with exceptions. Two exceptions related to students who had a permanent address change that were not reported within the required 60-day time frame. We noted 3 students that had withdrawn and 2 students who had graduated from the University and were not reported within the required 60-day time frame. Out of the 3 withdrawn students, 2 had inaccurate effective dates reported to NSLDS. Questioned costs: No questioned costs were identified as part of this finding. Cause: In discussing these conditions with the University’s management, reporting was occurring on an every-other-month basis but only for students with enrolled status. Therefore, during periods when students were not enrolled, the changes were not captured timely. Effect: Permanent addresses are used by ED for ensuring that repayment information and other communications from ED are quickly accessible to the student. A change in enrollment status impacts when loan repayment grace period ends and when a student would be required to begin paying the student loans. Therefore, this deficiency in reporting permanent address changes and enrollment status changes could result in delays in receiving this information and inaccurate loan repayment start dates. Repeat finding: This is not a repeat finding. Recommendation: We recommend the University develop additional procedures to monitor the accuracy of information reported to NSLDS. One additional monitoring control could be to review a sample of students within NSLDS after each roster file response to ensure that the enrollment status is accurate and that permanent address changes were processed. Each institution has access to correct information directly within NSLDS at any time. Views of responsible officials: Management agrees with the finding. A corrective action plan was subsequently created to begin calculating the school term periods to exclude any breaks greater than five days. See the corrective action plan.

FINDING 2023-003 – Special Tests and Provisions-Return of Title IV Funds – Significant Deficiency In Internal Controls Over Compliance (See Section III - Federal Awards Findings and Questioned Costs - Finding 2023-003 for table included) Criteria: When a recipient of Title IV loan assistance withdraws from the University during a payment period or period of enrollment in which the recipient began attendance, the University must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. The regulations (34 CFR 668.22(f )(2)) provide that the total number of calendar days in a payment period or period of enrollment include all days within the period that the student was scheduled to complete and the number of calendar days completed in the period, except that scheduled breaks of at least five consecutive days and days on which the student was on an approved leave of absence are excluded from the total number of calendar days in a payment period or period of enrollment. Condition/context: We selected a sample of 4 students out of a population of 8 that were identified by the University as having received some federal assistance and withdrew from the University during the year under audit. We believe this to be a representative sample of the population and a statistical sample. We found all 4 calculations of the return of Title IV funds contained errors related to the total number of days in the term because consideration for the exclusion of scheduled breaks was not properly implemented. This calculation error caused 2 of the 4 samples to have the wrong total of aid earned because those 2 students had withdrawn before the 60% completion threshold. Questioned costs: No questioned costs were identified as part of this finding. Cause: In discussing these conditions with the University’s management, the department was not aware of the requirement to exclude scheduled breaks of greater than five days from the total days in the term calculation. Effect: The overstated total days in term caused the calculation of aid earned to be understated and therefore more federal funding was returned than a proper calculation would have concluded. Repeat finding: This is not a repeat finding. Recommendation: We recommend the University update their policies and procedures to calculate the return of Title IV funding accordingly to ensure accurate calculations are performed. Views of responsible officials: Management agrees with the finding. A corrective action plan has been created by management.