FAC Explorer

Audit 301138

FY End
2022-10-31
Total Expended
$44.17M
Findings
4
Programs
2
Organization: Northcentral University (CA)
Year: 2022 Accepted: 2024-03-29
Auditor: Moss Adams LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
390253 2023-001 Significant Deficiency - N
390254 2023-001 Significant Deficiency - N
966695 2023-001 Significant Deficiency - N
966696 2023-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $44.13M Yes 1
84.063 Federal Pell Grant Program $36,642 Yes 1

Contacts

Name Title Type
L361Q3DNFGN4 Michello Bello Auditee
8586428636 Laura Roos Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: Note 2 – Summary of Significant Accounting Policies Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through identifying numbers are presented where available. Northcentral recognizes grants to the extent that eligible grant costs are incurred. De Minimis Rate Used: N Rate Explanation: Northcentral has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal expenditure activity of Northcentral University (Northcentral or the University), an affiliate of the National University System, under programs of the federal government for the period July 1, 2022 to October 31, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Schedule presents only a selected portion of the operations of Northcentral; therefore, it is not intended to, and does not, present the financial position, changes in net assets, or cash flows of the University.
Title: Note 2 - Summary of Significant Accounting Policies Accounting Policies: Note 2 – Summary of Significant Accounting Policies Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through identifying numbers are presented where available. Northcentral recognizes grants to the extent that eligible grant costs are incurred. De Minimis Rate Used: N Rate Explanation: Northcentral has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through identifying numbers are presented where available. Northcentral recognizes grants to the extent that eligible grant costs are incurred. Northcentral has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Note 3 - Compliance with 90/10 Rule Accounting Policies: Note 2 – Summary of Significant Accounting Policies Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through identifying numbers are presented where available. Northcentral recognizes grants to the extent that eligible grant costs are incurred. De Minimis Rate Used: N Rate Explanation: Northcentral has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The University derives a substantial portion of its revenues from federal student financial assistance received by its students under the Title IV programs administered by the Department pursuant to the Higher Education Act. The regulations restrict the proportion of cash receipts for tuition and fees from eligible programs to not more than 90% from the Title IV programs. To continue to participate in the Federal Student Aid (FSA) programs, the University must derive at least 10% of its revenues for each fiscal year from sources other than the FSA programs, or be subject to sanctions. Since Northcentral University converted from a proprietary to a non-profit status, the University must report its compliance with the 90/10 revenue test for at least one complete fiscal year after the change in status has been approved by the Department. If the University failed the 90% limitation test for the first year under the new non-profit status, it would need to report an additional year. In accordance with 34 CFR 668.28, the calculation of the University’s revenue percentage must be performed using the cash basis of accounting. The table below shows the Title IV funds and total eligible cash receipts for the University during the period July 1, 2022 to October 31, 2022: (See Notes to SEFA - Note 3 - Compliance with 90/10 Rule for included table)

Finding Details

Finding 2023-001
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Significant Deficiency in Internal Control (See III. Federal Award Findings and Questioned Costs - Finding 2023-0001 for included 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 withdraws. 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 31 students of all students who were recipients of Title IV funding and had officially or unofficially withdrawn during the period 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. For one student in the sample, Northcentral University (the University) identified the student had withdrawn and calculated the amount to be returned and submitted that amount timely. Subsequently, through a standard review process it was determined there was an error in the initial calculation of the refund. This amount was returned; however, the return was outside the 45-day period described in 34 CFR section 668.220). Cause - The University does review Return of Title IV calculations at various points throughout the calculation and return process. However, these reviews did not identify the error in the original calculation timely. Effect- Errors in the calculations may not be identified timely and incorrect amounts may be refunded. Repeat Finding - This is not a repeat finding. Recommendation-We recommend the University implement a process in which there is a timely final review of the Title IV return after the fact for all students to ensure all aspects are correct and timely. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the importance of ensuring that the return of Title IV funds (R2T4) are performed both timely and accurately. The NCU Processing team has led focused R2T4 training on several subjects, including the importance of return amount inputs to ensure our R2T4 processors receive regular refresher training and coaching to prevent any R2T4 calculation inaccuracies. The Processing team will continue to conduct subject matter training monthly. The Quality Assurance team will continue to conduct weekly R2T4 calculation reviews to demonstrate internal controls and accuracy. The Quality Assurance review process includes reviewing the R2T4 calculation for accuracy and verifying that all system inputs such as EDExpress and COD are completed correctly.
Finding 2023-001
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Significant Deficiency in Internal Control (See III. Federal Award Findings and Questioned Costs - Finding 2023-0001 for included 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 withdraws. 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 31 students of all students who were recipients of Title IV funding and had officially or unofficially withdrawn during the period 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. For one student in the sample, Northcentral University (the University) identified the student had withdrawn and calculated the amount to be returned and submitted that amount timely. Subsequently, through a standard review process it was determined there was an error in the initial calculation of the refund. This amount was returned; however, the return was outside the 45-day period described in 34 CFR section 668.220). Cause - The University does review Return of Title IV calculations at various points throughout the calculation and return process. However, these reviews did not identify the error in the original calculation timely. Effect- Errors in the calculations may not be identified timely and incorrect amounts may be refunded. Repeat Finding - This is not a repeat finding. Recommendation-We recommend the University implement a process in which there is a timely final review of the Title IV return after the fact for all students to ensure all aspects are correct and timely. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the importance of ensuring that the return of Title IV funds (R2T4) are performed both timely and accurately. The NCU Processing team has led focused R2T4 training on several subjects, including the importance of return amount inputs to ensure our R2T4 processors receive regular refresher training and coaching to prevent any R2T4 calculation inaccuracies. The Processing team will continue to conduct subject matter training monthly. The Quality Assurance team will continue to conduct weekly R2T4 calculation reviews to demonstrate internal controls and accuracy. The Quality Assurance review process includes reviewing the R2T4 calculation for accuracy and verifying that all system inputs such as EDExpress and COD are completed correctly.
Finding 2023-001
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Significant Deficiency in Internal Control (See III. Federal Award Findings and Questioned Costs - Finding 2023-0001 for included 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 withdraws. 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 31 students of all students who were recipients of Title IV funding and had officially or unofficially withdrawn during the period 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. For one student in the sample, Northcentral University (the University) identified the student had withdrawn and calculated the amount to be returned and submitted that amount timely. Subsequently, through a standard review process it was determined there was an error in the initial calculation of the refund. This amount was returned; however, the return was outside the 45-day period described in 34 CFR section 668.220). Cause - The University does review Return of Title IV calculations at various points throughout the calculation and return process. However, these reviews did not identify the error in the original calculation timely. Effect- Errors in the calculations may not be identified timely and incorrect amounts may be refunded. Repeat Finding - This is not a repeat finding. Recommendation-We recommend the University implement a process in which there is a timely final review of the Title IV return after the fact for all students to ensure all aspects are correct and timely. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the importance of ensuring that the return of Title IV funds (R2T4) are performed both timely and accurately. The NCU Processing team has led focused R2T4 training on several subjects, including the importance of return amount inputs to ensure our R2T4 processors receive regular refresher training and coaching to prevent any R2T4 calculation inaccuracies. The Processing team will continue to conduct subject matter training monthly. The Quality Assurance team will continue to conduct weekly R2T4 calculation reviews to demonstrate internal controls and accuracy. The Quality Assurance review process includes reviewing the R2T4 calculation for accuracy and verifying that all system inputs such as EDExpress and COD are completed correctly.
Finding 2023-001
FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Significant Deficiency in Internal Control (See III. Federal Award Findings and Questioned Costs - Finding 2023-0001 for included 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 withdraws. 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 31 students of all students who were recipients of Title IV funding and had officially or unofficially withdrawn during the period 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. For one student in the sample, Northcentral University (the University) identified the student had withdrawn and calculated the amount to be returned and submitted that amount timely. Subsequently, through a standard review process it was determined there was an error in the initial calculation of the refund. This amount was returned; however, the return was outside the 45-day period described in 34 CFR section 668.220). Cause - The University does review Return of Title IV calculations at various points throughout the calculation and return process. However, these reviews did not identify the error in the original calculation timely. Effect- Errors in the calculations may not be identified timely and incorrect amounts may be refunded. Repeat Finding - This is not a repeat finding. Recommendation-We recommend the University implement a process in which there is a timely final review of the Title IV return after the fact for all students to ensure all aspects are correct and timely. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the importance of ensuring that the return of Title IV funds (R2T4) are performed both timely and accurately. The NCU Processing team has led focused R2T4 training on several subjects, including the importance of return amount inputs to ensure our R2T4 processors receive regular refresher training and coaching to prevent any R2T4 calculation inaccuracies. The Processing team will continue to conduct subject matter training monthly. The Quality Assurance team will continue to conduct weekly R2T4 calculation reviews to demonstrate internal controls and accuracy. The Quality Assurance review process includes reviewing the R2T4 calculation for accuracy and verifying that all system inputs such as EDExpress and COD are completed correctly.