Audit 300675

Finding 2023-001 - Material Weakness - Required Material Adjustments Criteria: Management is responsible for reconciling the accounts at end of year and ensuring accounting records are kept in accordance with generally accepted accounting principles (GAAP). Condition: There were insufficient internal controls over financial reporting requiring material audit adjustments during the audit to prevent the financial statements from being materially misstated. Cause: Due to staffing turnover and shortages, all required entries needed were not recorded and management relied on auditors to propose entries after audit procedures. Effect or potential effect: Adjustments required were due to staffing turnover issues. The risk with this condition is that the financial statements could be material misstated, and there is no control in place to detect and correct this condition Recommendation: The College and accounting industry in general have had some significant staffing issues over the past few years that have led to the issues noted. The College needs to:  Assess accounting staff to ensure you have the correct number for size of the College and proper skill set.  Ensure processes and internal controls are documented and staff has appropriate training. Repeat finding: Yes. Prior year finding number 2022-001. The College continued to have staffing issues. Views of responsible officials: See attached.

Finding 2023-002 - Material Weakness - Borrowings from Endowment Fund Criteria: Ohio Revised Code 1715.53 (Ohio UPMIFA) Appropriations from net appreciation states that "an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which an endowment fund is established. Unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinary prudent person in a like position would exercise under similar circumstances." Condition: The College has borrowed from its endowment funds for campus renovations and to cover certain operating expenses of the College prior to and immediately following its accreditation and approval to participate in federal student financial aid programs. As such, the fair value of assets associated with the donor-restricted endowment funds has fallen below the level that the donor or UPMIFA requires the College to retain as a fund of perpetual duration. Cause: When the purchase of the College happened in 2009, the buildings were in such despair that they were not able to be used. The College deemed it prudent to borrow from endowment to repair building be able to meet accreditation standards. Effect or potential effect: The judgment of the Board of Trustees is that the endowment exists for the sole purpose of benefiting the College and that the continuing operation of the College could not be assured without borrowing of funds from the endowment. Potential effect is that donor would not agree with "prudence" of the borrowing of the endowment funds. Recommendation: The College should continue to work long-term plans for maintaining and sustaining financial stability and full restoration of the endowment. Repeat finding: Yes. Prior year finding number 2022-002. The College was not in financial position to repay loans from endowments. Views of responsible officials: See attached.

Finding 2023-003 - Significant Deficiency - Gramm-Leach Bliley Act( GLBA) - Student Information Security Criteria: Management is required to explain their information-sharing practices to their customers and to safeguard sensitive data, as dictated by GLBA. Condition: The College did not implement the GLBA policy. Cause: Due to staffing turnover this policy was not enacted. Effect or potential effect: Possible effect is that the College does not have the proper controls over information-sharing and safeguard of sensitive data of customers. Recommendation: The College should create and adopt the GLBA policy. Views of responsible officials: See attached

Finding 2023-001 - Material Weakness - Required Material Adjustments Criteria: Management is responsible for reconciling the accounts at end of year and ensuring accounting records are kept in accordance with generally accepted accounting principles (GAAP). Condition: There were insufficient internal controls over financial reporting requiring material audit adjustments during the audit to prevent the financial statements from being materially misstated. Cause: Due to staffing turnover and shortages, all required entries needed were not recorded and management relied on auditors to propose entries after audit procedures. Effect or potential effect: Adjustments required were due to staffing turnover issues. The risk with this condition is that the financial statements could be material misstated, and there is no control in place to detect and correct this condition Recommendation: The College and accounting industry in general have had some significant staffing issues over the past few years that have led to the issues noted. The College needs to:  Assess accounting staff to ensure you have the correct number for size of the College and proper skill set.  Ensure processes and internal controls are documented and staff has appropriate training. Repeat finding: Yes. Prior year finding number 2022-001. The College continued to have staffing issues. Views of responsible officials: See attached.

Finding 2023-002 - Material Weakness - Borrowings from Endowment Fund Criteria: Ohio Revised Code 1715.53 (Ohio UPMIFA) Appropriations from net appreciation states that "an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which an endowment fund is established. Unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinary prudent person in a like position would exercise under similar circumstances." Condition: The College has borrowed from its endowment funds for campus renovations and to cover certain operating expenses of the College prior to and immediately following its accreditation and approval to participate in federal student financial aid programs. As such, the fair value of assets associated with the donor-restricted endowment funds has fallen below the level that the donor or UPMIFA requires the College to retain as a fund of perpetual duration. Cause: When the purchase of the College happened in 2009, the buildings were in such despair that they were not able to be used. The College deemed it prudent to borrow from endowment to repair building be able to meet accreditation standards. Effect or potential effect: The judgment of the Board of Trustees is that the endowment exists for the sole purpose of benefiting the College and that the continuing operation of the College could not be assured without borrowing of funds from the endowment. Potential effect is that donor would not agree with "prudence" of the borrowing of the endowment funds. Recommendation: The College should continue to work long-term plans for maintaining and sustaining financial stability and full restoration of the endowment. Repeat finding: Yes. Prior year finding number 2022-002. The College was not in financial position to repay loans from endowments. Views of responsible officials: See attached.

Finding 2023-003 - Significant Deficiency - Gramm-Leach Bliley Act( GLBA) - Student Information Security Criteria: Management is required to explain their information-sharing practices to their customers and to safeguard sensitive data, as dictated by GLBA. Condition: The College did not implement the GLBA policy. Cause: Due to staffing turnover this policy was not enacted. Effect or potential effect: Possible effect is that the College does not have the proper controls over information-sharing and safeguard of sensitive data of customers. Recommendation: The College should create and adopt the GLBA policy. Views of responsible officials: See attached