FAC Explorer

Audit 3116

FY End
2023-05-31
Total Expended
$12.69M
Findings
8
Programs
6
Organization: Anderson University and Subsidiaries (IN)
Year: 2023 Accepted: 2023-11-14
Auditor: Capincrouse LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1788 2023-001 Material Weakness - N
1789 2023-001 Material Weakness - N
1790 2023-002 Significant Deficiency - E
1791 2023-003 - - E
578230 2023-001 Material Weakness - N
578231 2023-001 Material Weakness - N
578232 2023-002 Significant Deficiency - E
578233 2023-003 - - E

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $7.44M Yes 2
84.038 Federal Perkins Loan Program $2.31M Yes 0
84.063 Federal Pell Grant Program $2.12M Yes 2
84.007 Federal Supplemental Educational Opportunity Grants $522,881 Yes 0
84.033 Federal Work-Study Program $272,503 Yes 0
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $15,088 Yes 0

Contacts

Name Title Type
SB3RTA7BQRD6 Douglas Giles Auditee
7656414115 Chris Dukate, CPA Auditor
No contacts on file

Notes to SEFA

Title: RELATIONSHIP TO THE CONSOLIDATED FINANCIAL STATEMENTS Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of Anderson University (University) under programs of the federal government for the year ended May 31, 2023. As described in the report on compliance on page 47, the schedule does not include the federal grant activity of Flagship Enterprise Center, Inc. and Affiliate. The information in the schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements. Expenditures 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. Negative amounts shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. If the University is required to match certain federal assistance, as defined by the grant agreements, no such matching has been included as expenditures in the schedule. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate See the Notes to the SEFA for chart/table
Title: SUBRECIPIENTS, NON-CASH ASSISTANCE, FEDERAL INSURANCE, LOANS, AND LOAN GUARANTEES Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of Anderson University (University) under programs of the federal government for the year ended May 31, 2023. As described in the report on compliance on page 47, the schedule does not include the federal grant activity of Flagship Enterprise Center, Inc. and Affiliate. The information in the schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements. Expenditures 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. Negative amounts shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. If the University is required to match certain federal assistance, as defined by the grant agreements, no such matching has been included as expenditures in the schedule. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate The University did not provide any federal funds to subrecipients nor did they receive any federal non-cash assistance, insurance, loans, or loan guarantees.
Title: FEDERAL PERKINS LOAN PROGRAM Accounting Policies: The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of Anderson University (University) under programs of the federal government for the year ended May 31, 2023. As described in the report on compliance on page 47, the schedule does not include the federal grant activity of Flagship Enterprise Center, Inc. and Affiliate. The information in the schedule is presented in accordance with the requirements of the Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the schedule may differ from amounts presented in, or used in the preparation of, the basic consolidated financial statements. Expenditures 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. Negative amounts shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. If the University is required to match certain federal assistance, as defined by the grant agreements, no such matching has been included as expenditures in the schedule. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate See the Notes to the SEFA for chart/table

Finding Details

Finding 2023-001
Untimely and Inaccurate Return of Title IV Funds (R2T4) Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.063 Pell Grants and 84.268 Federal Direct Loans Federal Award Identification: 2022-2023 Award Year Condition: When students withdrew either officially or unofficially, the University did not always return unearned Title IV aid timely. There were also three incorrect calculations of returned funds for students that withdrew during the term. Criteria: 34 CFR 668.22 Questioned Costs: $3,703 Context: Out of 8 students tested, 2 students who withdrew during the audit period tested had funds totaling $14,811 returned late ranging from 39 to 56 days late. 3 out of the 8 students tested also had inaccurate calculations. The University miscalculated the number of days for 1 of the returns and the other 1 return had an inaccurate withdrawal date leading to the miscalculation and 1 did not have a return calculated. The questioned costs are related to the latter 2 students. The University is in the process of correcting all affected students and manually recalculating the students. Because of the error rate, this is classified as a material weakness. Cause: This was an oversight by the University. R2T4 calculations were not reviewed timely and for accuracy due to staffing. 1 of the students was in a distance education program and the University was unable to determine that the student had academic engagement and all Pell funds should have been returned rather than performing an R2T4 calculation. Effect: Return of Title IV funds were not performed timely. Incorrect amount of unearned Title IV funds returned. Identification as repeat finding, if applicable: N/A Recommendation: We recommend an individual in financial aid with the appropriate level of experience periodically review R2T4 calculations and returns to help ensure that internal controls over such a process can operate effectively and achieve compliance. We also recommend the University implement controls to track and remind when returns need to be returned once the withdrawal determination has been made. Views of Responsible Officials and Planned Corrective Action: Management is in agreement with this finding. See attached corrective action plan.
Finding 2023-001
Untimely and Inaccurate Return of Title IV Funds (R2T4) Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.063 Pell Grants and 84.268 Federal Direct Loans Federal Award Identification: 2022-2023 Award Year Condition: When students withdrew either officially or unofficially, the University did not always return unearned Title IV aid timely. There were also three incorrect calculations of returned funds for students that withdrew during the term. Criteria: 34 CFR 668.22 Questioned Costs: $3,703 Context: Out of 8 students tested, 2 students who withdrew during the audit period tested had funds totaling $14,811 returned late ranging from 39 to 56 days late. 3 out of the 8 students tested also had inaccurate calculations. The University miscalculated the number of days for 1 of the returns and the other 1 return had an inaccurate withdrawal date leading to the miscalculation and 1 did not have a return calculated. The questioned costs are related to the latter 2 students. The University is in the process of correcting all affected students and manually recalculating the students. Because of the error rate, this is classified as a material weakness. Cause: This was an oversight by the University. R2T4 calculations were not reviewed timely and for accuracy due to staffing. 1 of the students was in a distance education program and the University was unable to determine that the student had academic engagement and all Pell funds should have been returned rather than performing an R2T4 calculation. Effect: Return of Title IV funds were not performed timely. Incorrect amount of unearned Title IV funds returned. Identification as repeat finding, if applicable: N/A Recommendation: We recommend an individual in financial aid with the appropriate level of experience periodically review R2T4 calculations and returns to help ensure that internal controls over such a process can operate effectively and achieve compliance. We also recommend the University implement controls to track and remind when returns need to be returned once the withdrawal determination has been made. Views of Responsible Officials and Planned Corrective Action: Management is in agreement with this finding. See attached corrective action plan.
Finding 2023-002
Incorrect Pell Calculations Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.063 Pell Grants Federal Award Identification: 2022-2023 Award Year Condition: 3 students out of 28 tested were not properly awarded Pell based on enrollment status and eligibility. Criteria: 34 CFR 690.63(b) Questioned Costs: $1,273 Context: In the eligibility and disbursement testing, out of 28 students tested, 3 students had Pell awarding errors. 1 student was over awarded Pell by $811, 1 student was over awarded Pell by $462, and 1 student was under awarded Pell by $1,645 as Pell was not awarded and disbursed at all though the student was eligible. These were all corrected as part of the audit process. Cause: University oversight and lack of review at the census dates. Effect: Pell was not awarded correctly based on enrollment status. Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University implement procedures and controls to update Pell to be in alignment with enrollment status. Views of Responsible Officials and Planned Corrective Action: Management is in agreement with this finding. See attached corrective action plan.
Finding 2023-003
Need Analysis DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Direct Loans Federal Award Identification: 2022-2023 Award Year Condition: Students were not appropriately awarded subsidized loans based on need. Criteria: 34 CFR 668.42 and 34 CFR 685.301 Questioned Costs: $2,234 Context: Out of 60 students tested, 3 students were not awarded aid appropriately based on need analysis. One student received a subsidized loan exceeding need by $2,234, corrected by returning this over award or getting permission from the student to award as a unsubsidized loan. Two students received subsidized loans exceeding need by $236 and $2,692, respectively, corrected by reallocating the amounts from subsidized to unsubsidized. Cause: The University incorrectly set up endowed scholarships as excluded from estimated financial assistance in their new system. Effect: Students received subsidized federal aid for which they were not eligible and incorrect allocation of subsidized versus unsubsidized which affects the amount and timing of interest the student must repay. Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University ensure that all endowed scholarships are marked as estimated financial assistance and an awarding check is done accurately before disbursement is completed for the student. Views of Responsible Officials and Planned Corrective Action: Management is in agreement with this finding. See attached corrective action plan.
Finding 2023-001
Untimely and Inaccurate Return of Title IV Funds (R2T4) Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.063 Pell Grants and 84.268 Federal Direct Loans Federal Award Identification: 2022-2023 Award Year Condition: When students withdrew either officially or unofficially, the University did not always return unearned Title IV aid timely. There were also three incorrect calculations of returned funds for students that withdrew during the term. Criteria: 34 CFR 668.22 Questioned Costs: $3,703 Context: Out of 8 students tested, 2 students who withdrew during the audit period tested had funds totaling $14,811 returned late ranging from 39 to 56 days late. 3 out of the 8 students tested also had inaccurate calculations. The University miscalculated the number of days for 1 of the returns and the other 1 return had an inaccurate withdrawal date leading to the miscalculation and 1 did not have a return calculated. The questioned costs are related to the latter 2 students. The University is in the process of correcting all affected students and manually recalculating the students. Because of the error rate, this is classified as a material weakness. Cause: This was an oversight by the University. R2T4 calculations were not reviewed timely and for accuracy due to staffing. 1 of the students was in a distance education program and the University was unable to determine that the student had academic engagement and all Pell funds should have been returned rather than performing an R2T4 calculation. Effect: Return of Title IV funds were not performed timely. Incorrect amount of unearned Title IV funds returned. Identification as repeat finding, if applicable: N/A Recommendation: We recommend an individual in financial aid with the appropriate level of experience periodically review R2T4 calculations and returns to help ensure that internal controls over such a process can operate effectively and achieve compliance. We also recommend the University implement controls to track and remind when returns need to be returned once the withdrawal determination has been made. Views of Responsible Officials and Planned Corrective Action: Management is in agreement with this finding. See attached corrective action plan.
Finding 2023-001
Untimely and Inaccurate Return of Title IV Funds (R2T4) Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.063 Pell Grants and 84.268 Federal Direct Loans Federal Award Identification: 2022-2023 Award Year Condition: When students withdrew either officially or unofficially, the University did not always return unearned Title IV aid timely. There were also three incorrect calculations of returned funds for students that withdrew during the term. Criteria: 34 CFR 668.22 Questioned Costs: $3,703 Context: Out of 8 students tested, 2 students who withdrew during the audit period tested had funds totaling $14,811 returned late ranging from 39 to 56 days late. 3 out of the 8 students tested also had inaccurate calculations. The University miscalculated the number of days for 1 of the returns and the other 1 return had an inaccurate withdrawal date leading to the miscalculation and 1 did not have a return calculated. The questioned costs are related to the latter 2 students. The University is in the process of correcting all affected students and manually recalculating the students. Because of the error rate, this is classified as a material weakness. Cause: This was an oversight by the University. R2T4 calculations were not reviewed timely and for accuracy due to staffing. 1 of the students was in a distance education program and the University was unable to determine that the student had academic engagement and all Pell funds should have been returned rather than performing an R2T4 calculation. Effect: Return of Title IV funds were not performed timely. Incorrect amount of unearned Title IV funds returned. Identification as repeat finding, if applicable: N/A Recommendation: We recommend an individual in financial aid with the appropriate level of experience periodically review R2T4 calculations and returns to help ensure that internal controls over such a process can operate effectively and achieve compliance. We also recommend the University implement controls to track and remind when returns need to be returned once the withdrawal determination has been made. Views of Responsible Officials and Planned Corrective Action: Management is in agreement with this finding. See attached corrective action plan.
Finding 2023-002
Incorrect Pell Calculations Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.063 Pell Grants Federal Award Identification: 2022-2023 Award Year Condition: 3 students out of 28 tested were not properly awarded Pell based on enrollment status and eligibility. Criteria: 34 CFR 690.63(b) Questioned Costs: $1,273 Context: In the eligibility and disbursement testing, out of 28 students tested, 3 students had Pell awarding errors. 1 student was over awarded Pell by $811, 1 student was over awarded Pell by $462, and 1 student was under awarded Pell by $1,645 as Pell was not awarded and disbursed at all though the student was eligible. These were all corrected as part of the audit process. Cause: University oversight and lack of review at the census dates. Effect: Pell was not awarded correctly based on enrollment status. Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University implement procedures and controls to update Pell to be in alignment with enrollment status. Views of Responsible Officials and Planned Corrective Action: Management is in agreement with this finding. See attached corrective action plan.
Finding 2023-003
Need Analysis DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Direct Loans Federal Award Identification: 2022-2023 Award Year Condition: Students were not appropriately awarded subsidized loans based on need. Criteria: 34 CFR 668.42 and 34 CFR 685.301 Questioned Costs: $2,234 Context: Out of 60 students tested, 3 students were not awarded aid appropriately based on need analysis. One student received a subsidized loan exceeding need by $2,234, corrected by returning this over award or getting permission from the student to award as a unsubsidized loan. Two students received subsidized loans exceeding need by $236 and $2,692, respectively, corrected by reallocating the amounts from subsidized to unsubsidized. Cause: The University incorrectly set up endowed scholarships as excluded from estimated financial assistance in their new system. Effect: Students received subsidized federal aid for which they were not eligible and incorrect allocation of subsidized versus unsubsidized which affects the amount and timing of interest the student must repay. Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University ensure that all endowed scholarships are marked as estimated financial assistance and an awarding check is done accurately before disbursement is completed for the student. Views of Responsible Officials and Planned Corrective Action: Management is in agreement with this finding. See attached corrective action plan.