Audit 31077

FY End
2022-06-30
Total Expended
$17.18M
Findings
8
Programs
9
Organization: Mount Mercy University (IA)
Year: 2022 Accepted: 2022-12-22
Auditor: Rsm US LLP

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
36115 2022-002 - Yes EN
36116 2022-002 - Yes EN
36117 2022-001 - Yes EN
36118 2022-003 - - E
612557 2022-002 - Yes EN
612558 2022-002 - Yes EN
612559 2022-001 - Yes EN
612560 2022-003 - - E

Programs

Contacts

Name Title Type
HVXGEGDQK9U8 Brittney Burmahl Auditee
3193631323 Jackie Dammeier Auditor
No contacts on file

Notes to SEFA

Title: Loan Program Accounting Policies: Expenditures recognized 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. De Minimis Rate Used: N Rate Explanation: The University has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. FEDERAL PERKINS LOAN PROGRAM, BEGINNING LOAN BALANCE (84.038) - Balances outstanding at the end of the audit period were $449,316. NURSE FACULTY LOAN PROGRAM (NFLP) (93.264) - Balances outstanding at the end of the audit period were $108,381. There was no federal capital contribution received for the Federal Perkins Loan Program or Federal Nurse Faculty Educator Loan Program during the year ended June 30, 2022. There were no Federal Perkins Loans or Federal Nurse Faculty Education Loans made during the year. During the year ended June 30, 2022, the University issued new loans to students under the Federal Direct Loan Program (FDLP). The loan program includes subsidized and unsubsidized Stafford Loans, Parent PLUS Loans, and PLUS Loans for graduate students. The value of loans issued for the FDLP is based on disbursed amounts. The loan amounts issued during the year are disclosed in the Schedule. The University is responsible only for the performance of certain administrative duties with respect to the federally guaranteed student loan programs and, accordingly, balances and transactions relating to these loan programs are not included in the University's basic financial statements. Therefore, it is not practicable to determine the balance of loans outstanding to students and former students of the University at June 30, 2022.
Title: Basis of Presentation Accounting Policies: Expenditures recognized 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. De Minimis Rate Used: N Rate Explanation: The University has not elected 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 award activity of Mount Mercy University (the University) under programs of the federal government for the year ended June 30, 2022. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the University, it is not intended to and does not present the financial position, changes in net assets or cash flows of the University.
Title: Remaining Restricted Endowment Funds Accounting Policies: Expenditures recognized 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. De Minimis Rate Used: N Rate Explanation: The University has not elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. According to the Uniform Guidance, the cumulative balance of federal awards for endowment funds, including the U.S. Department of Educations Strengthening Institution Program, which is federally restricted, are considered awards expended in each year in which the funds are still restricted. Accordingly, the cumulative balance of the funds held in the endowment is included annually in the schedule.

Finding Details

2022-002 U.S. Department of Education Student Financial Assistance Program Cluster Federal Supplemental Educational Opportunity Grants (FSEOG) (Federal Assistance Listing Number 84.007) Federal Direct Student Loan Program (FDL) (Federal Assistance Listing Number 84.268) Federal Award Year: 2021-2022 Finding: Students were under awarded and disbursed FDL funds and under awarded and disbursed FSEOG funds. This is a repeat finding of 2021-006. Criteria: Per 34 CFR 676.16 Payment of an FSEOG (a) (1) Except as provided in paragraphs (b) and (e) of this section, an institution shall pay in each payment period a portion of an FSEOG awarded for a full academic year. (2) The institution shall determine the amount paid each payment period by the following fraction: FSEOG/N where: FSEOG = the total FSEOG awarded for an academic year and N = the number of payment periods that the institution expects the student will attend in that year. (3) An institution may pay the student, within each payment period, at such times and in such amounts as it determines best meets the student's needs. (b) If a student incurs uneven cost or estimated financial assistance amounts during an academic year and needs additional funds in a particular payment period, the institution may pay FSEOG funds to the student for those uneven costs. (c) An institution shall disburse funds to a student or the student's account in accordance with the provisions in ? 668.164. Per 34 CFR 685.200(a)(2) A Direct Subsidized Loan borrower must demonstrate financial need in accordance with title IV, part F of the Act. Per 34 CFR 685.203(a)(3) In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following: (i) $5,550 for a program of study of at least an academic year in length. Condition: A student was awarded and disbursed $262.50 FSEOG funds for the spring term but was eligible for $350 FSEOG funds. Another student was awarded $0 direct subsidized loans and $7,500 direct unsubsidized loans but was eligible for $370 direct subsidized loans and $7,130 direct unsubsidized loans. Another student was awarded $4,500 direct subsidized loans and $2,000 direct unsubsidized loans but was eligible for $5,500 direct subsidized loans and $2,000 direct unsubsidized loans. Cause: For one student, the FSEOG award for spring was incorrectly calculated. A student received $175 of FSEOG funds for the fall term and $262.50 of FSEOG funds in spring term; however, the student was enrolled full-time and should have been awarded $350 of FSEOG funds in spring term based on the University?s FSEOG awarding policies. For another student, the FDL award for both fall and spring was incorrectly calculated. The student enrolled in additional credits prior to starting the fall term and the student?s award was not properly updated. The student enrolled in additional classes, which caused her to have a financial need of $370, however was not awarded or disbursed and federal direct subsidized loans to meet this need. She should have been awarded an additional $370 of direct subsidized loans for the year and her direct unsubsidized loans should have been reduced by $370. For another student, the FDL award for both fall and spring was incorrectly calculated. The student had earned 61 credit hours, and by the University's policy was a 3rd year student, and should have been awarded federal aid accordingly. However, the student was awarded as being a second year student. She should have been awarded an additional $1,000 of direct subsidized loans for the year. Effect: Noncompliance with federal regulations for FSEOG and FDL programs. Context: One of eleven students tested with FSEOG awards. One of forty students tested with FDL awards. Questioned costs: Under award of $87.50 of FSEOG funds, under award of $1,370 direct subsidized loans and over award of $370 direct unsubsidized loans. Recommendation: Management should review its awarding policies and controls to verify awarding of FSEOG and FDL funds are in compliance with the University?s awarding policy and federal regulations.
2022-002 U.S. Department of Education Student Financial Assistance Program Cluster Federal Supplemental Educational Opportunity Grants (FSEOG) (Federal Assistance Listing Number 84.007) Federal Direct Student Loan Program (FDL) (Federal Assistance Listing Number 84.268) Federal Award Year: 2021-2022 Finding: Students were under awarded and disbursed FDL funds and under awarded and disbursed FSEOG funds. This is a repeat finding of 2021-006. Criteria: Per 34 CFR 676.16 Payment of an FSEOG (a) (1) Except as provided in paragraphs (b) and (e) of this section, an institution shall pay in each payment period a portion of an FSEOG awarded for a full academic year. (2) The institution shall determine the amount paid each payment period by the following fraction: FSEOG/N where: FSEOG = the total FSEOG awarded for an academic year and N = the number of payment periods that the institution expects the student will attend in that year. (3) An institution may pay the student, within each payment period, at such times and in such amounts as it determines best meets the student's needs. (b) If a student incurs uneven cost or estimated financial assistance amounts during an academic year and needs additional funds in a particular payment period, the institution may pay FSEOG funds to the student for those uneven costs. (c) An institution shall disburse funds to a student or the student's account in accordance with the provisions in ? 668.164. Per 34 CFR 685.200(a)(2) A Direct Subsidized Loan borrower must demonstrate financial need in accordance with title IV, part F of the Act. Per 34 CFR 685.203(a)(3) In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following: (i) $5,550 for a program of study of at least an academic year in length. Condition: A student was awarded and disbursed $262.50 FSEOG funds for the spring term but was eligible for $350 FSEOG funds. Another student was awarded $0 direct subsidized loans and $7,500 direct unsubsidized loans but was eligible for $370 direct subsidized loans and $7,130 direct unsubsidized loans. Another student was awarded $4,500 direct subsidized loans and $2,000 direct unsubsidized loans but was eligible for $5,500 direct subsidized loans and $2,000 direct unsubsidized loans. Cause: For one student, the FSEOG award for spring was incorrectly calculated. A student received $175 of FSEOG funds for the fall term and $262.50 of FSEOG funds in spring term; however, the student was enrolled full-time and should have been awarded $350 of FSEOG funds in spring term based on the University?s FSEOG awarding policies. For another student, the FDL award for both fall and spring was incorrectly calculated. The student enrolled in additional credits prior to starting the fall term and the student?s award was not properly updated. The student enrolled in additional classes, which caused her to have a financial need of $370, however was not awarded or disbursed and federal direct subsidized loans to meet this need. She should have been awarded an additional $370 of direct subsidized loans for the year and her direct unsubsidized loans should have been reduced by $370. For another student, the FDL award for both fall and spring was incorrectly calculated. The student had earned 61 credit hours, and by the University's policy was a 3rd year student, and should have been awarded federal aid accordingly. However, the student was awarded as being a second year student. She should have been awarded an additional $1,000 of direct subsidized loans for the year. Effect: Noncompliance with federal regulations for FSEOG and FDL programs. Context: One of eleven students tested with FSEOG awards. One of forty students tested with FDL awards. Questioned costs: Under award of $87.50 of FSEOG funds, under award of $1,370 direct subsidized loans and over award of $370 direct unsubsidized loans. Recommendation: Management should review its awarding policies and controls to verify awarding of FSEOG and FDL funds are in compliance with the University?s awarding policy and federal regulations.
2022-001 U.S. Department of Education Student Financial Assistance Program Cluster Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) (Federal Assistance Listing Number 84.379) Federal Award Year: 2021-2022 Finding: A student was improperly awarded and disbursed a TEACH grant. This is a repeat finding of 2021-005. Criteria: Per 34 CFR 686.11, (a)(1)(iv)(B), ?If the student is beyond the first year of a program of undergraduate education as determined by the institution, a cumulative undergraduate GPA of at least 3.25 on a 4.0 scale, or the numeric equivalent, through the most-recently completed payment period.? Condition: An undergraduate student was improperly awarded and disbursed a TEACH grant that did not meet the GPA requirements to be eligible. Cause: The student was awarded and disbursed the TEACH grant without verifying that the student had an eligible GPA. Effect: Noncompliance with federal regulations of the TEACH grant program. Context: One of six students that received the TEACH grant. All recipients of grant were tested. Questioned costs: Over award of $3,772 in TEACH grant funds. Recommendation: Management should review its awarding policies and controls to verify eligibility determination for TEACH grants are in compliance with federal regulations.
2022-003 U.S. Department of Education Education Stabilization Fund Cluster COVID-19 - Education Stabilization Fund ? ARPA Institutional Portion (Federal Assistance Listing Number 84.425F) Federal Award Year: 2021-2022 Finding: The University improperly discharged a student?s debt who did not meet the guidelines of their debt discharge policy. Criteria: One of The University?s guidelines for students to be eligible for debt discharge was to be enrolled after March 13, 2020. Condition: A student who had left the University in 2019 received debt discharge in the amount of $2,984. However, as the student was not enrolled after March 13, 2020 they were not eligible for debt discharge. Cause: The University?s debt discharge process improperly included this student who had not been enrolled at the University since 2019, resulting in student receiving debt discharge when based on the University?s policy they were not eligible. Effect: Noncompliance with federal regulations for COVID-19 Education Stabilization programs. Context: One of forty students tested with debit discharge. Questioned costs: Over award of $2,984 of debt discharge of COVID-19 Education Stabilization funds. Recommendation: Management should review its control to verify a student was properly enrolled at March 13, 2020 and HEERF funds are in compliance with the University?s policy and federal regulations. Views of responsible officials: Management agrees with this finding. Please see corrective action plan.
2022-002 U.S. Department of Education Student Financial Assistance Program Cluster Federal Supplemental Educational Opportunity Grants (FSEOG) (Federal Assistance Listing Number 84.007) Federal Direct Student Loan Program (FDL) (Federal Assistance Listing Number 84.268) Federal Award Year: 2021-2022 Finding: Students were under awarded and disbursed FDL funds and under awarded and disbursed FSEOG funds. This is a repeat finding of 2021-006. Criteria: Per 34 CFR 676.16 Payment of an FSEOG (a) (1) Except as provided in paragraphs (b) and (e) of this section, an institution shall pay in each payment period a portion of an FSEOG awarded for a full academic year. (2) The institution shall determine the amount paid each payment period by the following fraction: FSEOG/N where: FSEOG = the total FSEOG awarded for an academic year and N = the number of payment periods that the institution expects the student will attend in that year. (3) An institution may pay the student, within each payment period, at such times and in such amounts as it determines best meets the student's needs. (b) If a student incurs uneven cost or estimated financial assistance amounts during an academic year and needs additional funds in a particular payment period, the institution may pay FSEOG funds to the student for those uneven costs. (c) An institution shall disburse funds to a student or the student's account in accordance with the provisions in ? 668.164. Per 34 CFR 685.200(a)(2) A Direct Subsidized Loan borrower must demonstrate financial need in accordance with title IV, part F of the Act. Per 34 CFR 685.203(a)(3) In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following: (i) $5,550 for a program of study of at least an academic year in length. Condition: A student was awarded and disbursed $262.50 FSEOG funds for the spring term but was eligible for $350 FSEOG funds. Another student was awarded $0 direct subsidized loans and $7,500 direct unsubsidized loans but was eligible for $370 direct subsidized loans and $7,130 direct unsubsidized loans. Another student was awarded $4,500 direct subsidized loans and $2,000 direct unsubsidized loans but was eligible for $5,500 direct subsidized loans and $2,000 direct unsubsidized loans. Cause: For one student, the FSEOG award for spring was incorrectly calculated. A student received $175 of FSEOG funds for the fall term and $262.50 of FSEOG funds in spring term; however, the student was enrolled full-time and should have been awarded $350 of FSEOG funds in spring term based on the University?s FSEOG awarding policies. For another student, the FDL award for both fall and spring was incorrectly calculated. The student enrolled in additional credits prior to starting the fall term and the student?s award was not properly updated. The student enrolled in additional classes, which caused her to have a financial need of $370, however was not awarded or disbursed and federal direct subsidized loans to meet this need. She should have been awarded an additional $370 of direct subsidized loans for the year and her direct unsubsidized loans should have been reduced by $370. For another student, the FDL award for both fall and spring was incorrectly calculated. The student had earned 61 credit hours, and by the University's policy was a 3rd year student, and should have been awarded federal aid accordingly. However, the student was awarded as being a second year student. She should have been awarded an additional $1,000 of direct subsidized loans for the year. Effect: Noncompliance with federal regulations for FSEOG and FDL programs. Context: One of eleven students tested with FSEOG awards. One of forty students tested with FDL awards. Questioned costs: Under award of $87.50 of FSEOG funds, under award of $1,370 direct subsidized loans and over award of $370 direct unsubsidized loans. Recommendation: Management should review its awarding policies and controls to verify awarding of FSEOG and FDL funds are in compliance with the University?s awarding policy and federal regulations.
2022-002 U.S. Department of Education Student Financial Assistance Program Cluster Federal Supplemental Educational Opportunity Grants (FSEOG) (Federal Assistance Listing Number 84.007) Federal Direct Student Loan Program (FDL) (Federal Assistance Listing Number 84.268) Federal Award Year: 2021-2022 Finding: Students were under awarded and disbursed FDL funds and under awarded and disbursed FSEOG funds. This is a repeat finding of 2021-006. Criteria: Per 34 CFR 676.16 Payment of an FSEOG (a) (1) Except as provided in paragraphs (b) and (e) of this section, an institution shall pay in each payment period a portion of an FSEOG awarded for a full academic year. (2) The institution shall determine the amount paid each payment period by the following fraction: FSEOG/N where: FSEOG = the total FSEOG awarded for an academic year and N = the number of payment periods that the institution expects the student will attend in that year. (3) An institution may pay the student, within each payment period, at such times and in such amounts as it determines best meets the student's needs. (b) If a student incurs uneven cost or estimated financial assistance amounts during an academic year and needs additional funds in a particular payment period, the institution may pay FSEOG funds to the student for those uneven costs. (c) An institution shall disburse funds to a student or the student's account in accordance with the provisions in ? 668.164. Per 34 CFR 685.200(a)(2) A Direct Subsidized Loan borrower must demonstrate financial need in accordance with title IV, part F of the Act. Per 34 CFR 685.203(a)(3) In the case of an undergraduate student who has successfully completed the first and second years of a program of study of undergraduate education but has not successfully completed the remainder of the program, the total amount the student may borrow for any academic year of study under the Direct Subsidized Loan Program may not exceed the following: (i) $5,550 for a program of study of at least an academic year in length. Condition: A student was awarded and disbursed $262.50 FSEOG funds for the spring term but was eligible for $350 FSEOG funds. Another student was awarded $0 direct subsidized loans and $7,500 direct unsubsidized loans but was eligible for $370 direct subsidized loans and $7,130 direct unsubsidized loans. Another student was awarded $4,500 direct subsidized loans and $2,000 direct unsubsidized loans but was eligible for $5,500 direct subsidized loans and $2,000 direct unsubsidized loans. Cause: For one student, the FSEOG award for spring was incorrectly calculated. A student received $175 of FSEOG funds for the fall term and $262.50 of FSEOG funds in spring term; however, the student was enrolled full-time and should have been awarded $350 of FSEOG funds in spring term based on the University?s FSEOG awarding policies. For another student, the FDL award for both fall and spring was incorrectly calculated. The student enrolled in additional credits prior to starting the fall term and the student?s award was not properly updated. The student enrolled in additional classes, which caused her to have a financial need of $370, however was not awarded or disbursed and federal direct subsidized loans to meet this need. She should have been awarded an additional $370 of direct subsidized loans for the year and her direct unsubsidized loans should have been reduced by $370. For another student, the FDL award for both fall and spring was incorrectly calculated. The student had earned 61 credit hours, and by the University's policy was a 3rd year student, and should have been awarded federal aid accordingly. However, the student was awarded as being a second year student. She should have been awarded an additional $1,000 of direct subsidized loans for the year. Effect: Noncompliance with federal regulations for FSEOG and FDL programs. Context: One of eleven students tested with FSEOG awards. One of forty students tested with FDL awards. Questioned costs: Under award of $87.50 of FSEOG funds, under award of $1,370 direct subsidized loans and over award of $370 direct unsubsidized loans. Recommendation: Management should review its awarding policies and controls to verify awarding of FSEOG and FDL funds are in compliance with the University?s awarding policy and federal regulations.
2022-001 U.S. Department of Education Student Financial Assistance Program Cluster Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) (Federal Assistance Listing Number 84.379) Federal Award Year: 2021-2022 Finding: A student was improperly awarded and disbursed a TEACH grant. This is a repeat finding of 2021-005. Criteria: Per 34 CFR 686.11, (a)(1)(iv)(B), ?If the student is beyond the first year of a program of undergraduate education as determined by the institution, a cumulative undergraduate GPA of at least 3.25 on a 4.0 scale, or the numeric equivalent, through the most-recently completed payment period.? Condition: An undergraduate student was improperly awarded and disbursed a TEACH grant that did not meet the GPA requirements to be eligible. Cause: The student was awarded and disbursed the TEACH grant without verifying that the student had an eligible GPA. Effect: Noncompliance with federal regulations of the TEACH grant program. Context: One of six students that received the TEACH grant. All recipients of grant were tested. Questioned costs: Over award of $3,772 in TEACH grant funds. Recommendation: Management should review its awarding policies and controls to verify eligibility determination for TEACH grants are in compliance with federal regulations.
2022-003 U.S. Department of Education Education Stabilization Fund Cluster COVID-19 - Education Stabilization Fund ? ARPA Institutional Portion (Federal Assistance Listing Number 84.425F) Federal Award Year: 2021-2022 Finding: The University improperly discharged a student?s debt who did not meet the guidelines of their debt discharge policy. Criteria: One of The University?s guidelines for students to be eligible for debt discharge was to be enrolled after March 13, 2020. Condition: A student who had left the University in 2019 received debt discharge in the amount of $2,984. However, as the student was not enrolled after March 13, 2020 they were not eligible for debt discharge. Cause: The University?s debt discharge process improperly included this student who had not been enrolled at the University since 2019, resulting in student receiving debt discharge when based on the University?s policy they were not eligible. Effect: Noncompliance with federal regulations for COVID-19 Education Stabilization programs. Context: One of forty students tested with debit discharge. Questioned costs: Over award of $2,984 of debt discharge of COVID-19 Education Stabilization funds. Recommendation: Management should review its control to verify a student was properly enrolled at March 13, 2020 and HEERF funds are in compliance with the University?s policy and federal regulations. Views of responsible officials: Management agrees with this finding. Please see corrective action plan.