FAC Explorer

Audit 300889

FY End
2023-06-30
Total Expended
$6.05M
Findings
4
Programs
7
Organization: Washington Adventist University (MD)
Year: 2023 Accepted: 2024-03-29
Auditor: Cline Brandt Kochenower

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
389982 2023-001 Significant Deficiency - N
389983 2023-002 - - N
966424 2023-001 Significant Deficiency - N
966425 2023-002 - - N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $3.57M Yes 0
84.038 Federal Perkins Loan $713,353 Yes 0
84.007 Federal Supplemental Educational Opportunity Grants $121,589 Yes 0
64.028 Post-9/11 Veterans Educational Assistance $88,051 - 0
84.033 Federal Work-Study Program $57,863 Yes 0
93.364 Nursing Student Loans $50,104 Yes 0
84.063 Federal Pell Grant Program $1,285 Yes 0

Contacts

Name Title Type
YMP8VGL4TMK8 Ron Somervell Auditee
3018914077 Laura Arango Auditor
No contacts on file

Notes to SEFA

Title: GENERAL Accounting Policies: BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards has been prepared in accordance with the basis of accounting practices prescribed by the United States Department of Education. The purpose of the statement is to present, in summary form, activities of Washington Adventist University for the year ended June 30, 2023, which have been financed by the U.S. Department of Education and other federal agencies as applicable. Except as described in the following paragraph, accounting principles generally accepted in the United States of America are in agreement with the accounting practices prescribed for such programs by the Department of Education's fiscal control and fund accounting procedures. The prescribed practices for the Perkins Program and the Nursing Student Loan Program do not provide for accrual of interest on student loans receivable or for a provision of allowance for doubtful loans. Accordingly, interest on loans is recorded as received and uncollectible loans are not recognized until the loans are canceled or written-off in conformity with applicable program requirements. These practices do not conform with accounting principles generally accepted in the United States of America. Because the statement presents only a selected portion of the activities of the University, it is not intended to and does not present either the financial position, changes in net assets or the revenues, expenses, and other changes in net assets of the University. The University has not elected to use the 10% de minimis cost rate De Minimis Rate Used: N Rate Explanation: The University has not elected to use the 10% de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal awards programs of Washington Adventist University. All federal awards received directly from federal agencies, as well as federal awards passed through other government agencies
Title: BASIS OF ACCOUNTING Accounting Policies: BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards has been prepared in accordance with the basis of accounting practices prescribed by the United States Department of Education. The purpose of the statement is to present, in summary form, activities of Washington Adventist University for the year ended June 30, 2023, which have been financed by the U.S. Department of Education and other federal agencies as applicable. Except as described in the following paragraph, accounting principles generally accepted in the United States of America are in agreement with the accounting practices prescribed for such programs by the Department of Education's fiscal control and fund accounting procedures. The prescribed practices for the Perkins Program and the Nursing Student Loan Program do not provide for accrual of interest on student loans receivable or for a provision of allowance for doubtful loans. Accordingly, interest on loans is recorded as received and uncollectible loans are not recognized until the loans are canceled or written-off in conformity with applicable program requirements. These practices do not conform with accounting principles generally accepted in the United States of America. Because the statement presents only a selected portion of the activities of the University, it is not intended to and does not present either the financial position, changes in net assets or the revenues, expenses, and other changes in net assets of the University. The University has not elected to use the 10% de minimis cost rate De Minimis Rate Used: N Rate Explanation: The University has not elected to use the 10% de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards has been prepared in accordance with the basis of accounting practices prescribed by the United States Department of Education. The purpose of the statement is to present, in summary form, activities of Washington Adventist University for the year ended June 30, 2023, which have been financed by the U.S. Department of Education and other federal agencies as applicable. Except as described in the following paragraph, accounting principles generally accepted in the United States of America are in agreement with the accounting practices prescribed for such programs by the Department of Education's fiscal control and fund accounting procedures. The prescribed practices for the Perkins Program and the Nursing Student Loan Program do not provide for accrual of interest on student loans receivable or for a provision of allowance for doubtful loans. Accordingly, interest on loans is recorded as received and uncollectible loans are not recognized until the loans are canceled or written-off in conformity with applicable program requirements. These practices do not conform with accounting principles generally accepted in the United States of America. Because the statement presents only a selected portion of the activities of the University, it is not intended to and does not present either the financial position, changes in net assets or the revenues, expenses, and other changes in net assets of the University. The University has not elected to use the 10% de minimis cost rate
Title: FEDERAL LOAN PROGRAMS Accounting Policies: BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards has been prepared in accordance with the basis of accounting practices prescribed by the United States Department of Education. The purpose of the statement is to present, in summary form, activities of Washington Adventist University for the year ended June 30, 2023, which have been financed by the U.S. Department of Education and other federal agencies as applicable. Except as described in the following paragraph, accounting principles generally accepted in the United States of America are in agreement with the accounting practices prescribed for such programs by the Department of Education's fiscal control and fund accounting procedures. The prescribed practices for the Perkins Program and the Nursing Student Loan Program do not provide for accrual of interest on student loans receivable or for a provision of allowance for doubtful loans. Accordingly, interest on loans is recorded as received and uncollectible loans are not recognized until the loans are canceled or written-off in conformity with applicable program requirements. These practices do not conform with accounting principles generally accepted in the United States of America. Because the statement presents only a selected portion of the activities of the University, it is not intended to and does not present either the financial position, changes in net assets or the revenues, expenses, and other changes in net assets of the University. The University has not elected to use the 10% de minimis cost rate De Minimis Rate Used: N Rate Explanation: The University has not elected to use the 10% de minimis cost rate. The University has students who have approved loans which were received by those students during the current year. The University is not the lender of the loans, it only processes them for the lender the student chooses. The Schedule of Expenditures of Federal Awards only includes the prior year end outstanding loan balance plus the current year loans made of the Federal Perkins Loan Program and any new federal capital contribution. The total of loan fund expenditures and disbursements of the Departments of Health and Human Services' and Education's Student Financial Assistance Programs for the fiscal year are identified.

Finding Details

Finding 2023-001
SIGNIFICANT DEFICIENCY (SD) 2023-001- Special Tests and Provisions- Return to Title IV Based on a population of 7 Return to Title IV students Condition: It appears that the University is not performing the R2T4 calculations accurately and timely. We found 2 instances where the withdrawal date for the students was not determined within the required time, 2 instances where the R2T4 calculation was performed incorrectly, 2 instances where funds were not returned timely and students were over-awarded, and 1 instance where a student was under-awarded. Criteria When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in this section and no additional disbursements may be made to the student for the payment period or period of enrollment. If the amount the student earned is greater than the amount disbursed, the difference between the amounts must be treated as a post-withdrawal disbursement (34 CFR 668.22(a)(1) through (a)(5)) . The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. An institution that is not required to take attendance must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the (1) payment period or period of enrollment, (2) academic year in which the student withdrew, or (3) educational program from which the student withdrew (34 CFR 668.22(j)). The institution must also notify the recipient of Title IV loans returned (34 CFR 685.306(a)(2)). Cause: There have been several departmental transitions during the evaluated period which has led to the noncompliance of RT24 requirements, including over-award findings. This transition includes the onboarding of a new Director of Financial aid. Effect: Noncompliance of R2T4 requirements, including over-awards for two students in the amounts of $1,687 and $1,724 in Pell Grant, $300 and $4,202 in Direct Loan and $8 in SEOG. One student was under-awarded earned Pell grant in the amount of $1,225. Recommendation: We recommend for the University to put in place a plan of action to ensure that the registrar’s office and the financial aid office perform timely processes to capture unofficial withdrawals and that proper communication between departments is effective to ensure that R2T4 calculations are performed timely. We recommend that individuals involved in performing the R2T4 procedures be properly trained to ensure that the university is in compliance with the requirements under this section. Views of Responsible Officials and Planned Corrective Actions – See Corrective Action Plan
Finding 2023-002
COMPLIANCE FINDING 2023-002- Special Tests and Provisions – Disbursements to or on behalf of Students. Based on a sample of 2 students Condition: We found one student with a credit balance of $12,584, entirely attributable to awarded Title IV (TIV), where the University did not make additional attempts to disburse the TIV funds to the student and did not return to funds to the Department of Education in a timely manner. Criteria If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected, or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Secretary before the end of this 45-day period. 34 CFR § 668.164 (i)(2). If a check sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued the check. 34 CFR § 668.164 (l)(3). Cause: The university had experienced transition in key unit areas that resulted in this noncompliance finding. The proper checks and balances have since been implemented. Effect: As outlined under 34 CFR 668.164(l), an institution must have a process that ensures SFA funds never escheat to a state or revert to the institution or any other third party. A failure to have such a process in place would call into question an institution’s administrative capability, its fiscal responsibility, and its system of internal controls required under the FSA regulations. Recommendation: We recommend that the University put in place a plan of action to monitor funds due back to the Department of Education throughout the academic term to ensure that they are returned timely. Views of Responsible Officials and Planned Corrective Actions – See Corrective Action Plan
Finding 2023-001
SIGNIFICANT DEFICIENCY (SD) 2023-001- Special Tests and Provisions- Return to Title IV Based on a population of 7 Return to Title IV students Condition: It appears that the University is not performing the R2T4 calculations accurately and timely. We found 2 instances where the withdrawal date for the students was not determined within the required time, 2 instances where the R2T4 calculation was performed incorrectly, 2 instances where funds were not returned timely and students were over-awarded, and 1 instance where a student was under-awarded. Criteria When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in this section and no additional disbursements may be made to the student for the payment period or period of enrollment. If the amount the student earned is greater than the amount disbursed, the difference between the amounts must be treated as a post-withdrawal disbursement (34 CFR 668.22(a)(1) through (a)(5)) . The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. An institution that is not required to take attendance must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the (1) payment period or period of enrollment, (2) academic year in which the student withdrew, or (3) educational program from which the student withdrew (34 CFR 668.22(j)). The institution must also notify the recipient of Title IV loans returned (34 CFR 685.306(a)(2)). Cause: There have been several departmental transitions during the evaluated period which has led to the noncompliance of RT24 requirements, including over-award findings. This transition includes the onboarding of a new Director of Financial aid. Effect: Noncompliance of R2T4 requirements, including over-awards for two students in the amounts of $1,687 and $1,724 in Pell Grant, $300 and $4,202 in Direct Loan and $8 in SEOG. One student was under-awarded earned Pell grant in the amount of $1,225. Recommendation: We recommend for the University to put in place a plan of action to ensure that the registrar’s office and the financial aid office perform timely processes to capture unofficial withdrawals and that proper communication between departments is effective to ensure that R2T4 calculations are performed timely. We recommend that individuals involved in performing the R2T4 procedures be properly trained to ensure that the university is in compliance with the requirements under this section. Views of Responsible Officials and Planned Corrective Actions – See Corrective Action Plan
Finding 2023-002
COMPLIANCE FINDING 2023-002- Special Tests and Provisions – Disbursements to or on behalf of Students. Based on a sample of 2 students Condition: We found one student with a credit balance of $12,584, entirely attributable to awarded Title IV (TIV), where the University did not make additional attempts to disburse the TIV funds to the student and did not return to funds to the Department of Education in a timely manner. Criteria If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected, or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Secretary before the end of this 45-day period. 34 CFR § 668.164 (i)(2). If a check sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued the check. 34 CFR § 668.164 (l)(3). Cause: The university had experienced transition in key unit areas that resulted in this noncompliance finding. The proper checks and balances have since been implemented. Effect: As outlined under 34 CFR 668.164(l), an institution must have a process that ensures SFA funds never escheat to a state or revert to the institution or any other third party. A failure to have such a process in place would call into question an institution’s administrative capability, its fiscal responsibility, and its system of internal controls required under the FSA regulations. Recommendation: We recommend that the University put in place a plan of action to monitor funds due back to the Department of Education throughout the academic term to ensure that they are returned timely. Views of Responsible Officials and Planned Corrective Actions – See Corrective Action Plan