Audit 301715

2023-003 Department of Education Student Financial Aid Cluster CFDA # 84.268 – Federal Direct Student Loans 2022-2023 Award Year Eligibility – Calculation of the Amount of Subsidized and Unsubsidized Direct Loan Assistance Awarded Significant Deficiency in Internal Controls over Compliance and Noncompliance Criteria: 34 CFR section 685 provides the applicable criteria and guidance on awards under the Federal Direct Student Loans Program. Condition: During testing over the eligibility requirements, the following deficiency was noted: • 1 student of 61 students tested was not awarded the correct amount of subsidized loan and unsubsidized loan. Cause: The School District did not factor in the Build Dakota Scholarship in the assistance calculation to determine the amount of loans the student was eligible for. Effect: Student was overawarded the amount of aid they were eligible for. Questioned Costs: Direct Subsidized Loans: $2,233 over-awarded; Direct Unsubsidized Loans: $1,980 overawarded. Context/Sampling: A nonstatistical sample of 61 students who received Title IV disbursements out of 1,496 students who received aid. The total aid tested in sample was Direct Loans of $255,578. Repeat Finding from Prior Year(s): No. Recommendation: We recommend a review be completed when students are eligible for the Build Dakota Scholarship to determine if the student will be eligible for need and non-need based assistance. Views of Responsible Officials: Management agrees with the finding. Build Dakota funding is processed outside of the Financial Aid Office and over-award was missed in timing of loan awarding. Estimated funds will be added to and monitored in the PowerFAIDS system for additional compliance monitoring.

2023-004 Department of Education Student Financial Aid Cluster CFDA # 84.268 – Federal Direct Student Loans 2022-2023 Award Year Special Tests and Provision – Disbursements to or on Behalf of Students Significant Deficiency in Internal Controls over Compliance and Noncompliance Criteria: 34 CFR section 668.165 (a) (1) provides the applicable criteria and guidance the School District must comply with to notify students of the amount and type of Title IV funds they are expected to receive, and how and when those disbursements will be made. . Condition: During testing over disbursement notifications, one student did not receive the notification on a timely basis. Cause: The student was awarded aid at an off time in the semester, and the notification was not provided until the beginning of the semester. Effect: The student was not given the proper notification to decline the award they were receiving. Questioned Costs: None. Context/Sampling: A nonstatistical sample of 61 students who received Title IV disbursements out of 1,496 students who received aid. Repeat Finding from Prior Year(s): No. Recommendation: We recommend disbursements made be reviewed to ensure that the notifications are being provided to students on a timely basis to let the student determine if they want to decline or amend the award. Views of Responsible Officials: Management agrees with the finding. The Financial Aid Office uses system automation for compliance with notification to students. Additional match of record numbers to notification numbers has been added.

2023-005 Department of Education Student Financial Aid Cluster CFDA # 84.268 – Federal Direct Student Loans 2022-2023 Award Year Special Tests and Provision – Enrollment Reporting Material Weakness in Internal Controls over Compliance and Non-Compliance Criteria: 34 CFR section 685.309 sets forth the criteria for administrative and fiscal control and fund accounting requirements for schools participating in the Direct Loan Program in regard to enrollment reporting requirements . Condition: The following instances were identified through our testing over enrollment reporting; • 7 instances in which student’s status change was certified outside the 60-day reporting requirement. • 7 instances in which student’s status change was not reported within 60 days to National Student Loan Data System (NSLDS) nor included in reporting National Student Clearinghouse (NSC). • 2 instances in which student’s program start date reported in NSLDS did not agree with student records. Cause: For the students with certification dates outside of the required 60-day timeframe, information files were not provided timely to the third-party provider to submit to NSLDS for reporting. Errors and failure to report information was caused by entry errors by the various departments. Effect: The errors in reporting resulted in reporting dates outside of the required reporting timeframe or other information to be reported incorrectly. Questioned Costs: None. Context/Sampling: A nonstatistical sample of 60 students with a change in status out of approximately 933 students with a change in status were selected for testing of enrollment reporting requirements. Repeat Finding from Prior Year(s): No. Recommendation: We recommend the financial aid and registrar’s offices review controls over information being entered into the software for dates and other academic information that is required to be reported to ensure that status changes and other academic information are certified within 60 days of the effective date. We also recommend that a monitoring system be put in place to track status changes and reporting of those status changes that can be monitored by financial aid or the registrar’s offices. Views of Responsible Officials: Management agrees with the finding.

2023-002 Department of Education Education Stabilization Fund: Higher Education Emergency Relief Find (HEERF) Federal Financial Assistance Listing 84.425F Institutional Portion Award Number P425F202657, Award Years 2020 and 2021 Reporting Material Weakness in Internal Controls over Compliance and Non-Compliance Criteria: CRRSSA section 314 (e) and CARES Act 18004 (e) sets forth the criteria for reporting requirements. Condition: Three of the four required quarterly reports were not uploaded to the School District’s website timely. The quarterly reports were required to be uploaded to the website 10 days after quarter end and all quarterly reports were posted on June 28, 2023. Furthermore, there was no review of quarterly or annual HEERF reports prior to their submission. Cause: Inadequate controls implemented to ensure compliance with HEERF reporting requirements. Effect: The errors in reporting resulted in reporting dates outside of the required reporting timeframe. Questioned Costs: None. Context/Sampling: All quarterly reports that were required to be completed were tested. Repeat Finding from Prior Year(s): Yes, Finding 2022-002. Recommendation: We recommend that a tracking schedule is made by Southeast Technical College which is monitored to ensure the requirements, including deadlines, for reporting are met in the timeframe allowed under the grant agreements, and that there is a separate documented reviewer of the reports prior to their submission. Views of Responsible Officials: Management agrees with the finding.

2023-003 Department of Education Student Financial Aid Cluster CFDA # 84.268 – Federal Direct Student Loans 2022-2023 Award Year Eligibility – Calculation of the Amount of Subsidized and Unsubsidized Direct Loan Assistance Awarded Significant Deficiency in Internal Controls over Compliance and Noncompliance Criteria: 34 CFR section 685 provides the applicable criteria and guidance on awards under the Federal Direct Student Loans Program. Condition: During testing over the eligibility requirements, the following deficiency was noted: • 1 student of 61 students tested was not awarded the correct amount of subsidized loan and unsubsidized loan. Cause: The School District did not factor in the Build Dakota Scholarship in the assistance calculation to determine the amount of loans the student was eligible for. Effect: Student was overawarded the amount of aid they were eligible for. Questioned Costs: Direct Subsidized Loans: $2,233 over-awarded; Direct Unsubsidized Loans: $1,980 overawarded. Context/Sampling: A nonstatistical sample of 61 students who received Title IV disbursements out of 1,496 students who received aid. The total aid tested in sample was Direct Loans of $255,578. Repeat Finding from Prior Year(s): No. Recommendation: We recommend a review be completed when students are eligible for the Build Dakota Scholarship to determine if the student will be eligible for need and non-need based assistance. Views of Responsible Officials: Management agrees with the finding. Build Dakota funding is processed outside of the Financial Aid Office and over-award was missed in timing of loan awarding. Estimated funds will be added to and monitored in the PowerFAIDS system for additional compliance monitoring.

2023-004 Department of Education Student Financial Aid Cluster CFDA # 84.268 – Federal Direct Student Loans 2022-2023 Award Year Special Tests and Provision – Disbursements to or on Behalf of Students Significant Deficiency in Internal Controls over Compliance and Noncompliance Criteria: 34 CFR section 668.165 (a) (1) provides the applicable criteria and guidance the School District must comply with to notify students of the amount and type of Title IV funds they are expected to receive, and how and when those disbursements will be made. . Condition: During testing over disbursement notifications, one student did not receive the notification on a timely basis. Cause: The student was awarded aid at an off time in the semester, and the notification was not provided until the beginning of the semester. Effect: The student was not given the proper notification to decline the award they were receiving. Questioned Costs: None. Context/Sampling: A nonstatistical sample of 61 students who received Title IV disbursements out of 1,496 students who received aid. Repeat Finding from Prior Year(s): No. Recommendation: We recommend disbursements made be reviewed to ensure that the notifications are being provided to students on a timely basis to let the student determine if they want to decline or amend the award. Views of Responsible Officials: Management agrees with the finding. The Financial Aid Office uses system automation for compliance with notification to students. Additional match of record numbers to notification numbers has been added.

2023-005 Department of Education Student Financial Aid Cluster CFDA # 84.268 – Federal Direct Student Loans 2022-2023 Award Year Special Tests and Provision – Enrollment Reporting Material Weakness in Internal Controls over Compliance and Non-Compliance Criteria: 34 CFR section 685.309 sets forth the criteria for administrative and fiscal control and fund accounting requirements for schools participating in the Direct Loan Program in regard to enrollment reporting requirements . Condition: The following instances were identified through our testing over enrollment reporting; • 7 instances in which student’s status change was certified outside the 60-day reporting requirement. • 7 instances in which student’s status change was not reported within 60 days to National Student Loan Data System (NSLDS) nor included in reporting National Student Clearinghouse (NSC). • 2 instances in which student’s program start date reported in NSLDS did not agree with student records. Cause: For the students with certification dates outside of the required 60-day timeframe, information files were not provided timely to the third-party provider to submit to NSLDS for reporting. Errors and failure to report information was caused by entry errors by the various departments. Effect: The errors in reporting resulted in reporting dates outside of the required reporting timeframe or other information to be reported incorrectly. Questioned Costs: None. Context/Sampling: A nonstatistical sample of 60 students with a change in status out of approximately 933 students with a change in status were selected for testing of enrollment reporting requirements. Repeat Finding from Prior Year(s): No. Recommendation: We recommend the financial aid and registrar’s offices review controls over information being entered into the software for dates and other academic information that is required to be reported to ensure that status changes and other academic information are certified within 60 days of the effective date. We also recommend that a monitoring system be put in place to track status changes and reporting of those status changes that can be monitored by financial aid or the registrar’s offices. Views of Responsible Officials: Management agrees with the finding.

2023-002 Department of Education Education Stabilization Fund: Higher Education Emergency Relief Find (HEERF) Federal Financial Assistance Listing 84.425F Institutional Portion Award Number P425F202657, Award Years 2020 and 2021 Reporting Material Weakness in Internal Controls over Compliance and Non-Compliance Criteria: CRRSSA section 314 (e) and CARES Act 18004 (e) sets forth the criteria for reporting requirements. Condition: Three of the four required quarterly reports were not uploaded to the School District’s website timely. The quarterly reports were required to be uploaded to the website 10 days after quarter end and all quarterly reports were posted on June 28, 2023. Furthermore, there was no review of quarterly or annual HEERF reports prior to their submission. Cause: Inadequate controls implemented to ensure compliance with HEERF reporting requirements. Effect: The errors in reporting resulted in reporting dates outside of the required reporting timeframe. Questioned Costs: None. Context/Sampling: All quarterly reports that were required to be completed were tested. Repeat Finding from Prior Year(s): Yes, Finding 2022-002. Recommendation: We recommend that a tracking schedule is made by Southeast Technical College which is monitored to ensure the requirements, including deadlines, for reporting are met in the timeframe allowed under the grant agreements, and that there is a separate documented reviewer of the reports prior to their submission. Views of Responsible Officials: Management agrees with the finding.