FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-001 for table)
Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section.
Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdrawals. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records.
34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section.
Condition/context-A sample of 60 students who were recipients of Title IV funding and had withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system.
National University (NU) did not identify 4 of the 60 sampled students as withdrawn. Of these 4 students, 2 students ultimately required funds to be returned. After the error was identified, NU appropriately returned the funds. For 14 of the 60 sampled students, the amount to be returned was not remitted within the required 45 days after NU's determination of withdrawal.
Cause - The attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period. In addition, there is not an established internal control in place to ensure Title IV funds are returned subsequent to the calculation.
Effect- If controls are not in place and operating correctly, NU may not timely return the required Title IV funds to the federal government.
Repeat finding - This is a repeat finding, see 2022-001.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students. We also recommend NU implement a process in which there is a final review of the Title IV return after the fact to ensure all steps are performed timely.
Views of responsible officials and planned corrective actions -National University agrees with this finding. As we continue to refine our R2T4 processes, we've had two key challenges we are addressing:
Timeliness of R2T4 calculations: In FY22, NU identified an issue with how it was identifying unofficial withdrawals at the institution. To assist in rectifying the issue, we implemented a 35-day attendance policy that resulted in a significant amount of students being attritted from the University. We were working with a third-party firm to help us complete all the R2T4 calculations, which proved challenging; between our internal staffing and external support, we did not have the ability to do all of the calculations timely. As we've analyzed the needed manpower, we've expanded our Processing and Quality Assurance teams. The establishment of two additional teams within the Processing team in 2024 underscores our commitment to ensuring the timely completion of necessary calculations. Simultaneously, the increased Quality Assurance team is poised to support the enhanced internal controls, conducting weekly reviews of R2T4 calculations to verify their accuracy and timeliness.
Missing students for R2T4 calculations who were withdrawn: We have established precise and accurate criteria for the development and execution of report queries. This initiative aims to ensure the comprehensive identification of students who discontinue attendance before the end of a payment period, thereby mitigating the risk of oversight.
To bolster the reliability of these refined processes, NU is committed to implementing regular testing of the attendance queries. By conducting these tests at established intervals, the institution seeks to verify that the queries consistently identify the correct cohort of students. This approach serves as a crucial mechanism to maintain the accuracy of our withdrawal determination processes and underscores our dedication to continuous improvement.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-002 - Special Tests and Provisions - Enrollment Reporting: Material Weakness in Internal Control
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-002 for table)
Criteria - 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that:
i. a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or
ii. A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address.
Condition/context- A sample of 75 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2022-2023 academic year. The enrollment information and withdrawal, address change, or graduation date per NU's records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes.
Of the 75 students whom had a change in address, graduated, or withdrew, 12 were not reported to the NSLDS within the required timeframe. Of the 75 students, 1 had an incorrect effective date reported to the NSLDS.
Cause - The attendance queries periodically used for change of status purposes were incomplete and failed to identify several students whom had stopped attending class prior to completion of a payment period.
Effect- The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans.
Repeat finding - This is a repeat finding. See 2022-002.
Recommendation - We recommend NU establish consistent and accurate criteria when developing and running report queries to identify students who have stopped attending prior to the end of the payment period. We also recommend testing of the queries at established intervals to ensure they are consistently identifying the appropriate students.
Views of responsible officials and planned corrective actions - Management agrees with this finding.
The institution proposes a multifaceted approach aimed at resolving the root causes of the inaccuracies and preventing their recurrence. National University has implemented regular reviews of its enrollment reporting. During this process, errors in reporting are identified and corrected. However, the timing of the review has not allowed enough time to process corrections within compliance. To allow for appropriate adjustments and corrections to be implemented after testing but before the enrollment reporting deadline, National University will shift the timing of its enrollment reporting review from 60 to 30 days.
Though NU is currently testing enrollment reporting and adjusting queries in an ongoing effort to improve accuracy, some of those adjustments inadvertently caused students to not appear in our queries. This impact on reporting occurred in edge cases not taken into account in the queries. To ensure this does not happen in the future, NU will implement a testing regime for these queries. This testing will be conducted at regular intervals to verify the effectiveness and accuracy of the queries in identifying students who have ceased attendance as required.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings. We know that these efforts will take time to fully take effect and be reflected in future audits.
FINDING 2023-003 - Eligibility - Significant Deficiency in Internal Control over Compliance
(See III. Federal Awards Findings and Questioned Costs - Finding 2023-003 for table)
Criteria- SEC. 472 of the Higher Education Act (HEA) [20 U.S.C. 108711] COST OF ATTENDANCE. For the purpose of this title, the term "cost of attendance" means: (1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study.
Condition/context- We selected 40 students from a list of all students enrolled and awarded federal student aid in fiscal year 2023. We obtained the students' cost of attendance calculations and compared them to their established cost of attendance policy, published tuition rates, and other supporting documents. Four of the selected students had cost of attendance that included the incorrect budget for fees.
Cause - The exceptions occurred as a result of the lack of effective internal controls in place to review completed financial aid packages against approved University budgets.
Effect- The students' financial need is calculated based on the students' expected family contribution and estimated cost of attendance, which in turn is used to determine eligibility for programs and packages the student's award offers. If the cost of attendance is incorrect, this could result in an over- or underaward. In our testing, we did not identify students who were over-awarded or under-awarded resulting from this specific condition.
Repeat finding - This is a repeat finding. See 2022-003
Recommendation - We recommend NU institute a process and control to ensure student cost of attendance budgets are reviewed by the appropriate person(s) in a timely manner and that the review is documented.
Views of responsible officials and planned corrective actions - Management acknowledges the audit finding and wants to reinforce that despite challenges in the cost of attendance; there were no over or under-awards to students. To address this finding, our Quality Assurance team will oversee a weekly review of the cost of attendance to ensure financial aid packages align with approved budgets, enabling early identification of discrepancies for prompt correction. Based on these reviews, individual and group coaching will be implemented to address areas of concern.
A refresher training and updated tools and guidance will be completed to reinforce best practices and align with institutional policy and procedure for calculating the cost of attendance.
Through these concerted efforts, NU hopes to demonstrate its full commitment to addressing the audit findings.