Audit 301103

2023-001: Gaps in General Controls for SFA/COD Process (Significant Deficiency) Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria As part of our audit, we are required to obtain an understanding of internal controls relevant to the audit, which includes the end-to-end process around key financial reporting cycles and evidence the implementation of relevant controls. 2 CFR 200.303, Internal Controls notes that non-federal entities 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 statutes, 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 On an annual basis, approximately 250 students at the St. Luke’s Hospital School of Nursing (the “School”) receive federal student financial assistance. The student financial aid program is administered by the Financial Aid Office, which consists of a Financial Aid Coordinator who reports to the Senior Associate Dean. The Financial Aid Coordinator is experienced in administering federal student aid; however, this individual is responsible for all aspects of financial aid administration and federal compliance. We obtained an understanding of the policies, procedures and controls in place at the School, however, through our testing of relevant controls, we noted there was a lack of documentation and evidence to support that the controls were operating effectively. More specifically, we were unable to evidence formal reviews and approvals when awarding or disbursing aid to students, Title IV refund calculations and various reconciliations to the COD. Cause The School has a small group of administrators with one individual having responsibility for the federal student financial aid process. As such, there are often segregation of duties issues encountered. While certain administrative personnel participate in some of the detailed federal student aid processes, one individual is ultimately responsible for these areas and does not consistently evidence reviews or is the doer such that there is no secondary review performed. Effect The lack of proper support for the key controls over eligibility, disbursements, return of Title IV funds and reporting to the COD results in risks related to the ongoing validity, completeness, and accuracy of the data. Questioned Costs None noted. Recommendation We recommend the School assess their current control environment structure and look for opportunities to utilize administrative staff to perform certain tasks, allowing the Financial Aid Coordinator to truly partake in a review role. Additionally, we recommend maintaining evidence of support for the controls being executed, including preparing a periodic checklist of tasks to be completed and who is responsible for the preparation and review and approval. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-001: Gaps in General Controls for SFA/COD Process (Significant Deficiency) Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria As part of our audit, we are required to obtain an understanding of internal controls relevant to the audit, which includes the end-to-end process around key financial reporting cycles and evidence the implementation of relevant controls. 2 CFR 200.303, Internal Controls notes that non-federal entities 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 statutes, 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 On an annual basis, approximately 250 students at the St. Luke’s Hospital School of Nursing (the “School”) receive federal student financial assistance. The student financial aid program is administered by the Financial Aid Office, which consists of a Financial Aid Coordinator who reports to the Senior Associate Dean. The Financial Aid Coordinator is experienced in administering federal student aid; however, this individual is responsible for all aspects of financial aid administration and federal compliance. We obtained an understanding of the policies, procedures and controls in place at the School, however, through our testing of relevant controls, we noted there was a lack of documentation and evidence to support that the controls were operating effectively. More specifically, we were unable to evidence formal reviews and approvals when awarding or disbursing aid to students, Title IV refund calculations and various reconciliations to the COD. Cause The School has a small group of administrators with one individual having responsibility for the federal student financial aid process. As such, there are often segregation of duties issues encountered. While certain administrative personnel participate in some of the detailed federal student aid processes, one individual is ultimately responsible for these areas and does not consistently evidence reviews or is the doer such that there is no secondary review performed. Effect The lack of proper support for the key controls over eligibility, disbursements, return of Title IV funds and reporting to the COD results in risks related to the ongoing validity, completeness, and accuracy of the data. Questioned Costs None noted. Recommendation We recommend the School assess their current control environment structure and look for opportunities to utilize administrative staff to perform certain tasks, allowing the Financial Aid Coordinator to truly partake in a review role. Additionally, we recommend maintaining evidence of support for the controls being executed, including preparing a periodic checklist of tasks to be completed and who is responsible for the preparation and review and approval. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-002: Reporting the Common Origination and Disbursement (COD) System Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria Institutions submit Direct Loan, Pell Grant, TEACH grant, and IASB origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. The disbursement record reports the actual disbursement date and the amount of the disbursement. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. A school that participates in the Direct Loan Program is required to reconcile cash with disbursements (actual disbursement records) it submitted to the Common Origination and Disbursement (COD) system monthly. 34 CFR 668.165 notes that before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. Condition During the testing, we noted 3 exceptions related to COD reporting and disbursements, which are as follows: Through our testing of 25 selections, we noted that the date of disbursement per the COD did not match the date per the student account detail for 13 out of 25 selections. Additionally, 8 of the 25 selections were not reported to the COD within 15 calendar days of the disbursement to the student. On average, the 8 disbursements were reported 77 calendar days late. Through our testing of 25 samples, it was noted that one student who was awarded and disbursed an unsubsidized loan was not reported to the COD. Since this student was not properly reported, they were never sent a direct loan disbursement notification as required to notify the student of the date and amount of disbursement, the right to cancel, and procedures to cancel. This notification is to be sent within 30 days as required by 34 CFR 668.165(a)(3). Through our testing of disbursements, we noted that reconciliations between the disbursements and COD were not prepared. These reconciliations are required to be performed monthly. Cause Through discussions with management, they noted that the disbursement date requirement was not met as most of this process is handled by one individual and that individual was not keeping appropriate and clear supporting documentation of this disbursement process, which led to late reporting. Similarly, this lack of a formalized and clear process around disbursements and reporting led to a student not receiving a direct loan disbursement notification as they were not properly reported. Lastly, the monthly reconciliation between disbursements and COD system requirement was not met as the process owner was not aware of the monthly requirement and was not performing a timely reconciliation. Effect Inaccurate or lack of timely information within the COD system could lead to inaccurate information in reports utilized by the Department of Education. Questioned Costs None noted. Recommendation We recommend the School utilize additional team members to assist on the Financial Aid team specific to the monthly disbursement reconciliations and reporting to the COD as currently the majority of the work is being performed by one individual. Additionally, we recommend the School provide recurring training on COD reporting requirements, including on the disbursement dates that should be reported and the timeline for reporting and that additional reviews be considered to identify potential errors prior to submission into the COD. Lastly, we recommend that the School formalizes the processes that are in place with specific controls that address the reporting to the COD, the reconciliation of disbursements to the COD and the general disbursements process. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-002: Reporting the Common Origination and Disbursement (COD) System Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria Institutions submit Direct Loan, Pell Grant, TEACH grant, and IASB origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. The disbursement record reports the actual disbursement date and the amount of the disbursement. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. A school that participates in the Direct Loan Program is required to reconcile cash with disbursements (actual disbursement records) it submitted to the Common Origination and Disbursement (COD) system monthly. 34 CFR 668.165 notes that before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. Condition During the testing, we noted 3 exceptions related to COD reporting and disbursements, which are as follows: Through our testing of 25 selections, we noted that the date of disbursement per the COD did not match the date per the student account detail for 13 out of 25 selections. Additionally, 8 of the 25 selections were not reported to the COD within 15 calendar days of the disbursement to the student. On average, the 8 disbursements were reported 77 calendar days late. Through our testing of 25 samples, it was noted that one student who was awarded and disbursed an unsubsidized loan was not reported to the COD. Since this student was not properly reported, they were never sent a direct loan disbursement notification as required to notify the student of the date and amount of disbursement, the right to cancel, and procedures to cancel. This notification is to be sent within 30 days as required by 34 CFR 668.165(a)(3). Through our testing of disbursements, we noted that reconciliations between the disbursements and COD were not prepared. These reconciliations are required to be performed monthly. Cause Through discussions with management, they noted that the disbursement date requirement was not met as most of this process is handled by one individual and that individual was not keeping appropriate and clear supporting documentation of this disbursement process, which led to late reporting. Similarly, this lack of a formalized and clear process around disbursements and reporting led to a student not receiving a direct loan disbursement notification as they were not properly reported. Lastly, the monthly reconciliation between disbursements and COD system requirement was not met as the process owner was not aware of the monthly requirement and was not performing a timely reconciliation. Effect Inaccurate or lack of timely information within the COD system could lead to inaccurate information in reports utilized by the Department of Education. Questioned Costs None noted. Recommendation We recommend the School utilize additional team members to assist on the Financial Aid team specific to the monthly disbursement reconciliations and reporting to the COD as currently the majority of the work is being performed by one individual. Additionally, we recommend the School provide recurring training on COD reporting requirements, including on the disbursement dates that should be reported and the timeline for reporting and that additional reviews be considered to identify potential errors prior to submission into the COD. Lastly, we recommend that the School formalizes the processes that are in place with specific controls that address the reporting to the COD, the reconciliation of disbursements to the COD and the general disbursements process. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-003: Return of Title IV R2T4 Calculation Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria Returns of Title IV funds are required to be deposited or transferred into the SFA account or alternatively, electronic fund transfers are required to be initiated to the Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew. R2T4 refers to the calculation required when a recipient of Title IV aid withdraws from an institution during a payment period/period of enrollment in which the recipient began attendance. The calculation compares the amount of Title IV aid the recipient earned to the amount disbursed and determines whether funds must be returned, or the student is eligible for a post-withdrawal disbursement. Condition During our testing of Return of Title IV student aid, the engagement team noted for our 2 samples, the School was unable to evidence they prepared an R2T4 calculation form for either sample tested. There is a requirement to prepare the calculation to not only determine whether there is a need for a refund, but also to evaluate post-withdrawal disbursements, if applicable. The engagement team did note that both students selected for testing completed more than 60% of the term (thus not requiring a refund of aid) and further, all aid awarded had been previously disbursed, and as such, they were not owed a post-withdrawal disbursement. Cause Through discussions with management, they noted that the requirement was not met as the majority of this process is handled by one individual and that individual was not keeping appropriate and clear evidence of the preparation and review of the calculations. Effect Not preparing this calculation when required could lead to not identifying funds that need to be returned to the federal government. Questioned Costs None noted. Recommendation We recommend the School implement a clearer and formalized process of preparing and reviewing the calculations immediately once a student has withdrawn and by utilizing other team members in the preparation of the calculation and implement a secondary review. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-003: Return of Title IV R2T4 Calculation Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria Returns of Title IV funds are required to be deposited or transferred into the SFA account or alternatively, electronic fund transfers are required to be initiated to the Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew. R2T4 refers to the calculation required when a recipient of Title IV aid withdraws from an institution during a payment period/period of enrollment in which the recipient began attendance. The calculation compares the amount of Title IV aid the recipient earned to the amount disbursed and determines whether funds must be returned, or the student is eligible for a post-withdrawal disbursement. Condition During our testing of Return of Title IV student aid, the engagement team noted for our 2 samples, the School was unable to evidence they prepared an R2T4 calculation form for either sample tested. There is a requirement to prepare the calculation to not only determine whether there is a need for a refund, but also to evaluate post-withdrawal disbursements, if applicable. The engagement team did note that both students selected for testing completed more than 60% of the term (thus not requiring a refund of aid) and further, all aid awarded had been previously disbursed, and as such, they were not owed a post-withdrawal disbursement. Cause Through discussions with management, they noted that the requirement was not met as the majority of this process is handled by one individual and that individual was not keeping appropriate and clear evidence of the preparation and review of the calculations. Effect Not preparing this calculation when required could lead to not identifying funds that need to be returned to the federal government. Questioned Costs None noted. Recommendation We recommend the School implement a clearer and formalized process of preparing and reviewing the calculations immediately once a student has withdrawn and by utilizing other team members in the preparation of the calculation and implement a secondary review. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-001: Gaps in General Controls for SFA/COD Process (Significant Deficiency) Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria As part of our audit, we are required to obtain an understanding of internal controls relevant to the audit, which includes the end-to-end process around key financial reporting cycles and evidence the implementation of relevant controls. 2 CFR 200.303, Internal Controls notes that non-federal entities 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 statutes, 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 On an annual basis, approximately 250 students at the St. Luke’s Hospital School of Nursing (the “School”) receive federal student financial assistance. The student financial aid program is administered by the Financial Aid Office, which consists of a Financial Aid Coordinator who reports to the Senior Associate Dean. The Financial Aid Coordinator is experienced in administering federal student aid; however, this individual is responsible for all aspects of financial aid administration and federal compliance. We obtained an understanding of the policies, procedures and controls in place at the School, however, through our testing of relevant controls, we noted there was a lack of documentation and evidence to support that the controls were operating effectively. More specifically, we were unable to evidence formal reviews and approvals when awarding or disbursing aid to students, Title IV refund calculations and various reconciliations to the COD. Cause The School has a small group of administrators with one individual having responsibility for the federal student financial aid process. As such, there are often segregation of duties issues encountered. While certain administrative personnel participate in some of the detailed federal student aid processes, one individual is ultimately responsible for these areas and does not consistently evidence reviews or is the doer such that there is no secondary review performed. Effect The lack of proper support for the key controls over eligibility, disbursements, return of Title IV funds and reporting to the COD results in risks related to the ongoing validity, completeness, and accuracy of the data. Questioned Costs None noted. Recommendation We recommend the School assess their current control environment structure and look for opportunities to utilize administrative staff to perform certain tasks, allowing the Financial Aid Coordinator to truly partake in a review role. Additionally, we recommend maintaining evidence of support for the controls being executed, including preparing a periodic checklist of tasks to be completed and who is responsible for the preparation and review and approval. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-001: Gaps in General Controls for SFA/COD Process (Significant Deficiency) Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria As part of our audit, we are required to obtain an understanding of internal controls relevant to the audit, which includes the end-to-end process around key financial reporting cycles and evidence the implementation of relevant controls. 2 CFR 200.303, Internal Controls notes that non-federal entities 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 statutes, 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 On an annual basis, approximately 250 students at the St. Luke’s Hospital School of Nursing (the “School”) receive federal student financial assistance. The student financial aid program is administered by the Financial Aid Office, which consists of a Financial Aid Coordinator who reports to the Senior Associate Dean. The Financial Aid Coordinator is experienced in administering federal student aid; however, this individual is responsible for all aspects of financial aid administration and federal compliance. We obtained an understanding of the policies, procedures and controls in place at the School, however, through our testing of relevant controls, we noted there was a lack of documentation and evidence to support that the controls were operating effectively. More specifically, we were unable to evidence formal reviews and approvals when awarding or disbursing aid to students, Title IV refund calculations and various reconciliations to the COD. Cause The School has a small group of administrators with one individual having responsibility for the federal student financial aid process. As such, there are often segregation of duties issues encountered. While certain administrative personnel participate in some of the detailed federal student aid processes, one individual is ultimately responsible for these areas and does not consistently evidence reviews or is the doer such that there is no secondary review performed. Effect The lack of proper support for the key controls over eligibility, disbursements, return of Title IV funds and reporting to the COD results in risks related to the ongoing validity, completeness, and accuracy of the data. Questioned Costs None noted. Recommendation We recommend the School assess their current control environment structure and look for opportunities to utilize administrative staff to perform certain tasks, allowing the Financial Aid Coordinator to truly partake in a review role. Additionally, we recommend maintaining evidence of support for the controls being executed, including preparing a periodic checklist of tasks to be completed and who is responsible for the preparation and review and approval. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-002: Reporting the Common Origination and Disbursement (COD) System Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria Institutions submit Direct Loan, Pell Grant, TEACH grant, and IASB origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. The disbursement record reports the actual disbursement date and the amount of the disbursement. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. A school that participates in the Direct Loan Program is required to reconcile cash with disbursements (actual disbursement records) it submitted to the Common Origination and Disbursement (COD) system monthly. 34 CFR 668.165 notes that before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. Condition During the testing, we noted 3 exceptions related to COD reporting and disbursements, which are as follows: Through our testing of 25 selections, we noted that the date of disbursement per the COD did not match the date per the student account detail for 13 out of 25 selections. Additionally, 8 of the 25 selections were not reported to the COD within 15 calendar days of the disbursement to the student. On average, the 8 disbursements were reported 77 calendar days late. Through our testing of 25 samples, it was noted that one student who was awarded and disbursed an unsubsidized loan was not reported to the COD. Since this student was not properly reported, they were never sent a direct loan disbursement notification as required to notify the student of the date and amount of disbursement, the right to cancel, and procedures to cancel. This notification is to be sent within 30 days as required by 34 CFR 668.165(a)(3). Through our testing of disbursements, we noted that reconciliations between the disbursements and COD were not prepared. These reconciliations are required to be performed monthly. Cause Through discussions with management, they noted that the disbursement date requirement was not met as most of this process is handled by one individual and that individual was not keeping appropriate and clear supporting documentation of this disbursement process, which led to late reporting. Similarly, this lack of a formalized and clear process around disbursements and reporting led to a student not receiving a direct loan disbursement notification as they were not properly reported. Lastly, the monthly reconciliation between disbursements and COD system requirement was not met as the process owner was not aware of the monthly requirement and was not performing a timely reconciliation. Effect Inaccurate or lack of timely information within the COD system could lead to inaccurate information in reports utilized by the Department of Education. Questioned Costs None noted. Recommendation We recommend the School utilize additional team members to assist on the Financial Aid team specific to the monthly disbursement reconciliations and reporting to the COD as currently the majority of the work is being performed by one individual. Additionally, we recommend the School provide recurring training on COD reporting requirements, including on the disbursement dates that should be reported and the timeline for reporting and that additional reviews be considered to identify potential errors prior to submission into the COD. Lastly, we recommend that the School formalizes the processes that are in place with specific controls that address the reporting to the COD, the reconciliation of disbursements to the COD and the general disbursements process. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-002: Reporting the Common Origination and Disbursement (COD) System Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria Institutions submit Direct Loan, Pell Grant, TEACH grant, and IASB origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. The disbursement record reports the actual disbursement date and the amount of the disbursement. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. A school that participates in the Direct Loan Program is required to reconcile cash with disbursements (actual disbursement records) it submitted to the Common Origination and Disbursement (COD) system monthly. 34 CFR 668.165 notes that before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. Condition During the testing, we noted 3 exceptions related to COD reporting and disbursements, which are as follows: Through our testing of 25 selections, we noted that the date of disbursement per the COD did not match the date per the student account detail for 13 out of 25 selections. Additionally, 8 of the 25 selections were not reported to the COD within 15 calendar days of the disbursement to the student. On average, the 8 disbursements were reported 77 calendar days late. Through our testing of 25 samples, it was noted that one student who was awarded and disbursed an unsubsidized loan was not reported to the COD. Since this student was not properly reported, they were never sent a direct loan disbursement notification as required to notify the student of the date and amount of disbursement, the right to cancel, and procedures to cancel. This notification is to be sent within 30 days as required by 34 CFR 668.165(a)(3). Through our testing of disbursements, we noted that reconciliations between the disbursements and COD were not prepared. These reconciliations are required to be performed monthly. Cause Through discussions with management, they noted that the disbursement date requirement was not met as most of this process is handled by one individual and that individual was not keeping appropriate and clear supporting documentation of this disbursement process, which led to late reporting. Similarly, this lack of a formalized and clear process around disbursements and reporting led to a student not receiving a direct loan disbursement notification as they were not properly reported. Lastly, the monthly reconciliation between disbursements and COD system requirement was not met as the process owner was not aware of the monthly requirement and was not performing a timely reconciliation. Effect Inaccurate or lack of timely information within the COD system could lead to inaccurate information in reports utilized by the Department of Education. Questioned Costs None noted. Recommendation We recommend the School utilize additional team members to assist on the Financial Aid team specific to the monthly disbursement reconciliations and reporting to the COD as currently the majority of the work is being performed by one individual. Additionally, we recommend the School provide recurring training on COD reporting requirements, including on the disbursement dates that should be reported and the timeline for reporting and that additional reviews be considered to identify potential errors prior to submission into the COD. Lastly, we recommend that the School formalizes the processes that are in place with specific controls that address the reporting to the COD, the reconciliation of disbursements to the COD and the general disbursements process. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-003: Return of Title IV R2T4 Calculation Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria Returns of Title IV funds are required to be deposited or transferred into the SFA account or alternatively, electronic fund transfers are required to be initiated to the Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew. R2T4 refers to the calculation required when a recipient of Title IV aid withdraws from an institution during a payment period/period of enrollment in which the recipient began attendance. The calculation compares the amount of Title IV aid the recipient earned to the amount disbursed and determines whether funds must be returned, or the student is eligible for a post-withdrawal disbursement. Condition During our testing of Return of Title IV student aid, the engagement team noted for our 2 samples, the School was unable to evidence they prepared an R2T4 calculation form for either sample tested. There is a requirement to prepare the calculation to not only determine whether there is a need for a refund, but also to evaluate post-withdrawal disbursements, if applicable. The engagement team did note that both students selected for testing completed more than 60% of the term (thus not requiring a refund of aid) and further, all aid awarded had been previously disbursed, and as such, they were not owed a post-withdrawal disbursement. Cause Through discussions with management, they noted that the requirement was not met as the majority of this process is handled by one individual and that individual was not keeping appropriate and clear evidence of the preparation and review of the calculations. Effect Not preparing this calculation when required could lead to not identifying funds that need to be returned to the federal government. Questioned Costs None noted. Recommendation We recommend the School implement a clearer and formalized process of preparing and reviewing the calculations immediately once a student has withdrawn and by utilizing other team members in the preparation of the calculation and implement a secondary review. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-003: Return of Title IV R2T4 Calculation Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2022-2023 Pass-through entity: Not applicable Criteria Returns of Title IV funds are required to be deposited or transferred into the SFA account or alternatively, electronic fund transfers are required to be initiated to the Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew. R2T4 refers to the calculation required when a recipient of Title IV aid withdraws from an institution during a payment period/period of enrollment in which the recipient began attendance. The calculation compares the amount of Title IV aid the recipient earned to the amount disbursed and determines whether funds must be returned, or the student is eligible for a post-withdrawal disbursement. Condition During our testing of Return of Title IV student aid, the engagement team noted for our 2 samples, the School was unable to evidence they prepared an R2T4 calculation form for either sample tested. There is a requirement to prepare the calculation to not only determine whether there is a need for a refund, but also to evaluate post-withdrawal disbursements, if applicable. The engagement team did note that both students selected for testing completed more than 60% of the term (thus not requiring a refund of aid) and further, all aid awarded had been previously disbursed, and as such, they were not owed a post-withdrawal disbursement. Cause Through discussions with management, they noted that the requirement was not met as the majority of this process is handled by one individual and that individual was not keeping appropriate and clear evidence of the preparation and review of the calculations. Effect Not preparing this calculation when required could lead to not identifying funds that need to be returned to the federal government. Questioned Costs None noted. Recommendation We recommend the School implement a clearer and formalized process of preparing and reviewing the calculations immediately once a student has withdrawn and by utilizing other team members in the preparation of the calculation and implement a secondary review. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.