FINDING 2024-001 – Special Tests and Provisions – Return of Title IV: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-001 for included table)
Criteria – 34 CFR Section 668.22(e)(2): Percentage earned. The percentage of Title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student’s withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student’s withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
34 CFR Section 668.22(f)(2): The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
Condition/Context – A sample of 10 out of a population of approximately 66 federal aid recipient students whom withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year were selected. Student records were compared to the calculation of the return of Title IV funds, if any, and the federal government’s Common Origin and Disbursement system. For two of the selected students, the amount to be returned was calculated incorrectly. This resulted in an understatement of student financial assistance earned by the students.
Questioned Costs – Known questioned costs were $105. We projected the error rate over the entire universe of students whom received federal aid and withdrew, dropped out, or enrolled but never attended during Spring 2024 semester. Using this method, we determined likely questioned costs to be approximately $313.
Effect – When the return of Title IV funds is not correctly calculated, the student ultimately receives the incorrect amount of funding.
Cause – The College correctly calculated the number of days within the Spring 2024 semester, including the number of days with scheduled breaks, but typed in the incorrect number into it’s R2T4 calculation worksheet resulting in an incorrect percentage of aid earned for the selected Spring 2024 withdrawn students.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a process by which all R2T4 calculation worksheets are reviewed upon completion, with evidence of the review and approval by someone other than the preparer retained. During this review, the reviewer should ensure start and end dates of terms and the length of identified scheduled breaks align with the College’s academic calendar.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the Return of Title IV calculation finding. This error was noticed by new financial aid staff/administration hired in late spring of 2024 after the prior administration had completed all return of Title IV calculations except for the unofficial withdrawals. The new staff noticed the error and made the adjustment going forward starting with the unofficial withdrawals for spring 2024. This error only affected the days of Spring Break. No other semesters had an error in the dates used in the Return of Title IV calculations. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Financial Aid Management met with the Registrar’s Office to ensure all future semester set up dates are correct and have been reviewed. This improvement of processes to ensure a double check of the Return of Title IV calendar setup has been implemented for 2025-2026.
FINDING 2024-001 – Special Tests and Provisions – Return of Title IV: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-001 for included table)
Criteria – 34 CFR Section 668.22(e)(2): Percentage earned. The percentage of Title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student’s withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student’s withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
34 CFR Section 668.22(f)(2): The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
Condition/Context – A sample of 10 out of a population of approximately 66 federal aid recipient students whom withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year were selected. Student records were compared to the calculation of the return of Title IV funds, if any, and the federal government’s Common Origin and Disbursement system. For two of the selected students, the amount to be returned was calculated incorrectly. This resulted in an understatement of student financial assistance earned by the students.
Questioned Costs – Known questioned costs were $105. We projected the error rate over the entire universe of students whom received federal aid and withdrew, dropped out, or enrolled but never attended during Spring 2024 semester. Using this method, we determined likely questioned costs to be approximately $313.
Effect – When the return of Title IV funds is not correctly calculated, the student ultimately receives the incorrect amount of funding.
Cause – The College correctly calculated the number of days within the Spring 2024 semester, including the number of days with scheduled breaks, but typed in the incorrect number into it’s R2T4 calculation worksheet resulting in an incorrect percentage of aid earned for the selected Spring 2024 withdrawn students.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a process by which all R2T4 calculation worksheets are reviewed upon completion, with evidence of the review and approval by someone other than the preparer retained. During this review, the reviewer should ensure start and end dates of terms and the length of identified scheduled breaks align with the College’s academic calendar.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the Return of Title IV calculation finding. This error was noticed by new financial aid staff/administration hired in late spring of 2024 after the prior administration had completed all return of Title IV calculations except for the unofficial withdrawals. The new staff noticed the error and made the adjustment going forward starting with the unofficial withdrawals for spring 2024. This error only affected the days of Spring Break. No other semesters had an error in the dates used in the Return of Title IV calculations. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Financial Aid Management met with the Registrar’s Office to ensure all future semester set up dates are correct and have been reviewed. This improvement of processes to ensure a double check of the Return of Title IV calendar setup has been implemented for 2025-2026.
FINDING 2024-001 – Special Tests and Provisions – Return of Title IV: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-001 for included table)
Criteria – 34 CFR Section 668.22(e)(2): Percentage earned. The percentage of Title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student’s withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student’s withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
34 CFR Section 668.22(f)(2): The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
Condition/Context – A sample of 10 out of a population of approximately 66 federal aid recipient students whom withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year were selected. Student records were compared to the calculation of the return of Title IV funds, if any, and the federal government’s Common Origin and Disbursement system. For two of the selected students, the amount to be returned was calculated incorrectly. This resulted in an understatement of student financial assistance earned by the students.
Questioned Costs – Known questioned costs were $105. We projected the error rate over the entire universe of students whom received federal aid and withdrew, dropped out, or enrolled but never attended during Spring 2024 semester. Using this method, we determined likely questioned costs to be approximately $313.
Effect – When the return of Title IV funds is not correctly calculated, the student ultimately receives the incorrect amount of funding.
Cause – The College correctly calculated the number of days within the Spring 2024 semester, including the number of days with scheduled breaks, but typed in the incorrect number into it’s R2T4 calculation worksheet resulting in an incorrect percentage of aid earned for the selected Spring 2024 withdrawn students.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a process by which all R2T4 calculation worksheets are reviewed upon completion, with evidence of the review and approval by someone other than the preparer retained. During this review, the reviewer should ensure start and end dates of terms and the length of identified scheduled breaks align with the College’s academic calendar.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the Return of Title IV calculation finding. This error was noticed by new financial aid staff/administration hired in late spring of 2024 after the prior administration had completed all return of Title IV calculations except for the unofficial withdrawals. The new staff noticed the error and made the adjustment going forward starting with the unofficial withdrawals for spring 2024. This error only affected the days of Spring Break. No other semesters had an error in the dates used in the Return of Title IV calculations. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Financial Aid Management met with the Registrar’s Office to ensure all future semester set up dates are correct and have been reviewed. This improvement of processes to ensure a double check of the Return of Title IV calendar setup has been implemented for 2025-2026.
FINDING 2024-001 – Special Tests and Provisions – Return of Title IV: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-001 for included table)
Criteria – 34 CFR Section 668.22(e)(2): Percentage earned. The percentage of Title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student’s withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student’s withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
34 CFR Section 668.22(f)(2): The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
Condition/Context – A sample of 10 out of a population of approximately 66 federal aid recipient students whom withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year were selected. Student records were compared to the calculation of the return of Title IV funds, if any, and the federal government’s Common Origin and Disbursement system. For two of the selected students, the amount to be returned was calculated incorrectly. This resulted in an understatement of student financial assistance earned by the students.
Questioned Costs – Known questioned costs were $105. We projected the error rate over the entire universe of students whom received federal aid and withdrew, dropped out, or enrolled but never attended during Spring 2024 semester. Using this method, we determined likely questioned costs to be approximately $313.
Effect – When the return of Title IV funds is not correctly calculated, the student ultimately receives the incorrect amount of funding.
Cause – The College correctly calculated the number of days within the Spring 2024 semester, including the number of days with scheduled breaks, but typed in the incorrect number into it’s R2T4 calculation worksheet resulting in an incorrect percentage of aid earned for the selected Spring 2024 withdrawn students.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a process by which all R2T4 calculation worksheets are reviewed upon completion, with evidence of the review and approval by someone other than the preparer retained. During this review, the reviewer should ensure start and end dates of terms and the length of identified scheduled breaks align with the College’s academic calendar.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the Return of Title IV calculation finding. This error was noticed by new financial aid staff/administration hired in late spring of 2024 after the prior administration had completed all return of Title IV calculations except for the unofficial withdrawals. The new staff noticed the error and made the adjustment going forward starting with the unofficial withdrawals for spring 2024. This error only affected the days of Spring Break. No other semesters had an error in the dates used in the Return of Title IV calculations. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Financial Aid Management met with the Registrar’s Office to ensure all future semester set up dates are correct and have been reviewed. This improvement of processes to ensure a double check of the Return of Title IV calendar setup has been implemented for 2025-2026.
FINDING 2024-002 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-002 for included table)
Criteria – Direct Loan, 34 CFR section 685.309(b)(2)(i): An institution is required to notify the Department of Education within 30 to 60 days (depending on the method of communication) if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who enrolled at that institution but has ceased to be enrolled on at least a half-time basis.
Condition/Context – A sample of 25 out of a population of approximately 196 federal aid recipient students were selected from system generated reports of students who had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year. A comparison was made between each selected student’s National Student Loan Data System (NSLDS) enrollment detail to the student’s academic files and other institutional records to verify that the College was accurately reporting significant campus-level and program-level enrollment data within the required time frame. Of the 25 students whom had a change in address, graduated, or withdrew, 1 was not reported to the NSLDS within the required timeframe.
Questioned Costs – No questioned costs were identified as part of this finding.
Effect – Enrollment status is utilized by students, the U.S. Department of Education, the Direct Loan program, lenders, and other institutions to determine in‐school status. NSLDS also uses the newly submitted enrollment data to recalculate a student’s 150% limit for direct subsidized loans to determine if loss or protection of the subsidy should occur. Therefore, this significant deficiency in enrollment reporting could result in incorrect future eligibility for undergraduate aid, as well as impact future subsidy loss or protection related to the 150% limit.
Cause – The student status change was not timely reported due to the College not having effective internal controls established to prevent, or detect and correct, the non-compliance in a timely manner.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a detective control by which a sample of student status changes are subsequently verified within the NSLDS for accurate and timely reporting.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the finding. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Upon review of the finding, Financial Aid administration met with Registrar’s staff to create a new procedure whereby immediate reporting of withdrawals are made directly to NSLDS in addition to the regularly scheduled monthly reports to NSLDS through the National Student Clearinghouse (NSC). This immediate reporting should eliminate any timing issues with the monthly reports through NSC. In addition, a joint effort to streamline the routing of withdrawal forms to the appropriate departments for faster processing is underway. This reprocessing of the withdrawal forms will be implemented in the next 120 days.
FINDING 2024-002 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-002 for included table)
Criteria – Direct Loan, 34 CFR section 685.309(b)(2)(i): An institution is required to notify the Department of Education within 30 to 60 days (depending on the method of communication) if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who enrolled at that institution but has ceased to be enrolled on at least a half-time basis.
Condition/Context – A sample of 25 out of a population of approximately 196 federal aid recipient students were selected from system generated reports of students who had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year. A comparison was made between each selected student’s National Student Loan Data System (NSLDS) enrollment detail to the student’s academic files and other institutional records to verify that the College was accurately reporting significant campus-level and program-level enrollment data within the required time frame. Of the 25 students whom had a change in address, graduated, or withdrew, 1 was not reported to the NSLDS within the required timeframe.
Questioned Costs – No questioned costs were identified as part of this finding.
Effect – Enrollment status is utilized by students, the U.S. Department of Education, the Direct Loan program, lenders, and other institutions to determine in‐school status. NSLDS also uses the newly submitted enrollment data to recalculate a student’s 150% limit for direct subsidized loans to determine if loss or protection of the subsidy should occur. Therefore, this significant deficiency in enrollment reporting could result in incorrect future eligibility for undergraduate aid, as well as impact future subsidy loss or protection related to the 150% limit.
Cause – The student status change was not timely reported due to the College not having effective internal controls established to prevent, or detect and correct, the non-compliance in a timely manner.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a detective control by which a sample of student status changes are subsequently verified within the NSLDS for accurate and timely reporting.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the finding. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Upon review of the finding, Financial Aid administration met with Registrar’s staff to create a new procedure whereby immediate reporting of withdrawals are made directly to NSLDS in addition to the regularly scheduled monthly reports to NSLDS through the National Student Clearinghouse (NSC). This immediate reporting should eliminate any timing issues with the monthly reports through NSC. In addition, a joint effort to streamline the routing of withdrawal forms to the appropriate departments for faster processing is underway. This reprocessing of the withdrawal forms will be implemented in the next 120 days.
FINDING 2024-002 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-002 for included table)
Criteria – Direct Loan, 34 CFR section 685.309(b)(2)(i): An institution is required to notify the Department of Education within 30 to 60 days (depending on the method of communication) if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who enrolled at that institution but has ceased to be enrolled on at least a half-time basis.
Condition/Context – A sample of 25 out of a population of approximately 196 federal aid recipient students were selected from system generated reports of students who had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year. A comparison was made between each selected student’s National Student Loan Data System (NSLDS) enrollment detail to the student’s academic files and other institutional records to verify that the College was accurately reporting significant campus-level and program-level enrollment data within the required time frame. Of the 25 students whom had a change in address, graduated, or withdrew, 1 was not reported to the NSLDS within the required timeframe.
Questioned Costs – No questioned costs were identified as part of this finding.
Effect – Enrollment status is utilized by students, the U.S. Department of Education, the Direct Loan program, lenders, and other institutions to determine in‐school status. NSLDS also uses the newly submitted enrollment data to recalculate a student’s 150% limit for direct subsidized loans to determine if loss or protection of the subsidy should occur. Therefore, this significant deficiency in enrollment reporting could result in incorrect future eligibility for undergraduate aid, as well as impact future subsidy loss or protection related to the 150% limit.
Cause – The student status change was not timely reported due to the College not having effective internal controls established to prevent, or detect and correct, the non-compliance in a timely manner.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a detective control by which a sample of student status changes are subsequently verified within the NSLDS for accurate and timely reporting.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the finding. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Upon review of the finding, Financial Aid administration met with Registrar’s staff to create a new procedure whereby immediate reporting of withdrawals are made directly to NSLDS in addition to the regularly scheduled monthly reports to NSLDS through the National Student Clearinghouse (NSC). This immediate reporting should eliminate any timing issues with the monthly reports through NSC. In addition, a joint effort to streamline the routing of withdrawal forms to the appropriate departments for faster processing is underway. This reprocessing of the withdrawal forms will be implemented in the next 120 days.
FINDING 2024-002 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-002 for included table)
Criteria – Direct Loan, 34 CFR section 685.309(b)(2)(i): An institution is required to notify the Department of Education within 30 to 60 days (depending on the method of communication) if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who enrolled at that institution but has ceased to be enrolled on at least a half-time basis.
Condition/Context – A sample of 25 out of a population of approximately 196 federal aid recipient students were selected from system generated reports of students who had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year. A comparison was made between each selected student’s National Student Loan Data System (NSLDS) enrollment detail to the student’s academic files and other institutional records to verify that the College was accurately reporting significant campus-level and program-level enrollment data within the required time frame. Of the 25 students whom had a change in address, graduated, or withdrew, 1 was not reported to the NSLDS within the required timeframe.
Questioned Costs – No questioned costs were identified as part of this finding.
Effect – Enrollment status is utilized by students, the U.S. Department of Education, the Direct Loan program, lenders, and other institutions to determine in‐school status. NSLDS also uses the newly submitted enrollment data to recalculate a student’s 150% limit for direct subsidized loans to determine if loss or protection of the subsidy should occur. Therefore, this significant deficiency in enrollment reporting could result in incorrect future eligibility for undergraduate aid, as well as impact future subsidy loss or protection related to the 150% limit.
Cause – The student status change was not timely reported due to the College not having effective internal controls established to prevent, or detect and correct, the non-compliance in a timely manner.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a detective control by which a sample of student status changes are subsequently verified within the NSLDS for accurate and timely reporting.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the finding. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Upon review of the finding, Financial Aid administration met with Registrar’s staff to create a new procedure whereby immediate reporting of withdrawals are made directly to NSLDS in addition to the regularly scheduled monthly reports to NSLDS through the National Student Clearinghouse (NSC). This immediate reporting should eliminate any timing issues with the monthly reports through NSC. In addition, a joint effort to streamline the routing of withdrawal forms to the appropriate departments for faster processing is underway. This reprocessing of the withdrawal forms will be implemented in the next 120 days.
FINDING 2024-001 – Special Tests and Provisions – Return of Title IV: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-001 for included table)
Criteria – 34 CFR Section 668.22(e)(2): Percentage earned. The percentage of Title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student’s withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student’s withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
34 CFR Section 668.22(f)(2): The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
Condition/Context – A sample of 10 out of a population of approximately 66 federal aid recipient students whom withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year were selected. Student records were compared to the calculation of the return of Title IV funds, if any, and the federal government’s Common Origin and Disbursement system. For two of the selected students, the amount to be returned was calculated incorrectly. This resulted in an understatement of student financial assistance earned by the students.
Questioned Costs – Known questioned costs were $105. We projected the error rate over the entire universe of students whom received federal aid and withdrew, dropped out, or enrolled but never attended during Spring 2024 semester. Using this method, we determined likely questioned costs to be approximately $313.
Effect – When the return of Title IV funds is not correctly calculated, the student ultimately receives the incorrect amount of funding.
Cause – The College correctly calculated the number of days within the Spring 2024 semester, including the number of days with scheduled breaks, but typed in the incorrect number into it’s R2T4 calculation worksheet resulting in an incorrect percentage of aid earned for the selected Spring 2024 withdrawn students.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a process by which all R2T4 calculation worksheets are reviewed upon completion, with evidence of the review and approval by someone other than the preparer retained. During this review, the reviewer should ensure start and end dates of terms and the length of identified scheduled breaks align with the College’s academic calendar.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the Return of Title IV calculation finding. This error was noticed by new financial aid staff/administration hired in late spring of 2024 after the prior administration had completed all return of Title IV calculations except for the unofficial withdrawals. The new staff noticed the error and made the adjustment going forward starting with the unofficial withdrawals for spring 2024. This error only affected the days of Spring Break. No other semesters had an error in the dates used in the Return of Title IV calculations. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Financial Aid Management met with the Registrar’s Office to ensure all future semester set up dates are correct and have been reviewed. This improvement of processes to ensure a double check of the Return of Title IV calendar setup has been implemented for 2025-2026.
FINDING 2024-001 – Special Tests and Provisions – Return of Title IV: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-001 for included table)
Criteria – 34 CFR Section 668.22(e)(2): Percentage earned. The percentage of Title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student’s withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student’s withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
34 CFR Section 668.22(f)(2): The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
Condition/Context – A sample of 10 out of a population of approximately 66 federal aid recipient students whom withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year were selected. Student records were compared to the calculation of the return of Title IV funds, if any, and the federal government’s Common Origin and Disbursement system. For two of the selected students, the amount to be returned was calculated incorrectly. This resulted in an understatement of student financial assistance earned by the students.
Questioned Costs – Known questioned costs were $105. We projected the error rate over the entire universe of students whom received federal aid and withdrew, dropped out, or enrolled but never attended during Spring 2024 semester. Using this method, we determined likely questioned costs to be approximately $313.
Effect – When the return of Title IV funds is not correctly calculated, the student ultimately receives the incorrect amount of funding.
Cause – The College correctly calculated the number of days within the Spring 2024 semester, including the number of days with scheduled breaks, but typed in the incorrect number into it’s R2T4 calculation worksheet resulting in an incorrect percentage of aid earned for the selected Spring 2024 withdrawn students.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a process by which all R2T4 calculation worksheets are reviewed upon completion, with evidence of the review and approval by someone other than the preparer retained. During this review, the reviewer should ensure start and end dates of terms and the length of identified scheduled breaks align with the College’s academic calendar.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the Return of Title IV calculation finding. This error was noticed by new financial aid staff/administration hired in late spring of 2024 after the prior administration had completed all return of Title IV calculations except for the unofficial withdrawals. The new staff noticed the error and made the adjustment going forward starting with the unofficial withdrawals for spring 2024. This error only affected the days of Spring Break. No other semesters had an error in the dates used in the Return of Title IV calculations. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Financial Aid Management met with the Registrar’s Office to ensure all future semester set up dates are correct and have been reviewed. This improvement of processes to ensure a double check of the Return of Title IV calendar setup has been implemented for 2025-2026.
FINDING 2024-001 – Special Tests and Provisions – Return of Title IV: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-001 for included table)
Criteria – 34 CFR Section 668.22(e)(2): Percentage earned. The percentage of Title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student’s withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student’s withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
34 CFR Section 668.22(f)(2): The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
Condition/Context – A sample of 10 out of a population of approximately 66 federal aid recipient students whom withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year were selected. Student records were compared to the calculation of the return of Title IV funds, if any, and the federal government’s Common Origin and Disbursement system. For two of the selected students, the amount to be returned was calculated incorrectly. This resulted in an understatement of student financial assistance earned by the students.
Questioned Costs – Known questioned costs were $105. We projected the error rate over the entire universe of students whom received federal aid and withdrew, dropped out, or enrolled but never attended during Spring 2024 semester. Using this method, we determined likely questioned costs to be approximately $313.
Effect – When the return of Title IV funds is not correctly calculated, the student ultimately receives the incorrect amount of funding.
Cause – The College correctly calculated the number of days within the Spring 2024 semester, including the number of days with scheduled breaks, but typed in the incorrect number into it’s R2T4 calculation worksheet resulting in an incorrect percentage of aid earned for the selected Spring 2024 withdrawn students.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a process by which all R2T4 calculation worksheets are reviewed upon completion, with evidence of the review and approval by someone other than the preparer retained. During this review, the reviewer should ensure start and end dates of terms and the length of identified scheduled breaks align with the College’s academic calendar.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the Return of Title IV calculation finding. This error was noticed by new financial aid staff/administration hired in late spring of 2024 after the prior administration had completed all return of Title IV calculations except for the unofficial withdrawals. The new staff noticed the error and made the adjustment going forward starting with the unofficial withdrawals for spring 2024. This error only affected the days of Spring Break. No other semesters had an error in the dates used in the Return of Title IV calculations. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Financial Aid Management met with the Registrar’s Office to ensure all future semester set up dates are correct and have been reviewed. This improvement of processes to ensure a double check of the Return of Title IV calendar setup has been implemented for 2025-2026.
FINDING 2024-001 – Special Tests and Provisions – Return of Title IV: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-001 for included table)
Criteria – 34 CFR Section 668.22(e)(2): Percentage earned. The percentage of Title IV grant or loan assistance that has been earned by the student is—
(i) Equal to the percentage of the payment period or period of enrollment that the student completed (as determined in accordance with paragraph (f) of this section) as of the student’s withdrawal date, if this date occurs on or before—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours; or
(ii) 100 percent, if the student’s withdrawal date occurs after—
(A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or
(B) 60 percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours.
34 CFR Section 668.22(f)(2): The total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period.
Condition/Context – A sample of 10 out of a population of approximately 66 federal aid recipient students whom withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year were selected. Student records were compared to the calculation of the return of Title IV funds, if any, and the federal government’s Common Origin and Disbursement system. For two of the selected students, the amount to be returned was calculated incorrectly. This resulted in an understatement of student financial assistance earned by the students.
Questioned Costs – Known questioned costs were $105. We projected the error rate over the entire universe of students whom received federal aid and withdrew, dropped out, or enrolled but never attended during Spring 2024 semester. Using this method, we determined likely questioned costs to be approximately $313.
Effect – When the return of Title IV funds is not correctly calculated, the student ultimately receives the incorrect amount of funding.
Cause – The College correctly calculated the number of days within the Spring 2024 semester, including the number of days with scheduled breaks, but typed in the incorrect number into it’s R2T4 calculation worksheet resulting in an incorrect percentage of aid earned for the selected Spring 2024 withdrawn students.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a process by which all R2T4 calculation worksheets are reviewed upon completion, with evidence of the review and approval by someone other than the preparer retained. During this review, the reviewer should ensure start and end dates of terms and the length of identified scheduled breaks align with the College’s academic calendar.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the Return of Title IV calculation finding. This error was noticed by new financial aid staff/administration hired in late spring of 2024 after the prior administration had completed all return of Title IV calculations except for the unofficial withdrawals. The new staff noticed the error and made the adjustment going forward starting with the unofficial withdrawals for spring 2024. This error only affected the days of Spring Break. No other semesters had an error in the dates used in the Return of Title IV calculations. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Financial Aid Management met with the Registrar’s Office to ensure all future semester set up dates are correct and have been reviewed. This improvement of processes to ensure a double check of the Return of Title IV calendar setup has been implemented for 2025-2026.
FINDING 2024-002 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-002 for included table)
Criteria – Direct Loan, 34 CFR section 685.309(b)(2)(i): An institution is required to notify the Department of Education within 30 to 60 days (depending on the method of communication) if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who enrolled at that institution but has ceased to be enrolled on at least a half-time basis.
Condition/Context – A sample of 25 out of a population of approximately 196 federal aid recipient students were selected from system generated reports of students who had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year. A comparison was made between each selected student’s National Student Loan Data System (NSLDS) enrollment detail to the student’s academic files and other institutional records to verify that the College was accurately reporting significant campus-level and program-level enrollment data within the required time frame. Of the 25 students whom had a change in address, graduated, or withdrew, 1 was not reported to the NSLDS within the required timeframe.
Questioned Costs – No questioned costs were identified as part of this finding.
Effect – Enrollment status is utilized by students, the U.S. Department of Education, the Direct Loan program, lenders, and other institutions to determine in‐school status. NSLDS also uses the newly submitted enrollment data to recalculate a student’s 150% limit for direct subsidized loans to determine if loss or protection of the subsidy should occur. Therefore, this significant deficiency in enrollment reporting could result in incorrect future eligibility for undergraduate aid, as well as impact future subsidy loss or protection related to the 150% limit.
Cause – The student status change was not timely reported due to the College not having effective internal controls established to prevent, or detect and correct, the non-compliance in a timely manner.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a detective control by which a sample of student status changes are subsequently verified within the NSLDS for accurate and timely reporting.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the finding. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Upon review of the finding, Financial Aid administration met with Registrar’s staff to create a new procedure whereby immediate reporting of withdrawals are made directly to NSLDS in addition to the regularly scheduled monthly reports to NSLDS through the National Student Clearinghouse (NSC). This immediate reporting should eliminate any timing issues with the monthly reports through NSC. In addition, a joint effort to streamline the routing of withdrawal forms to the appropriate departments for faster processing is underway. This reprocessing of the withdrawal forms will be implemented in the next 120 days.
FINDING 2024-002 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-002 for included table)
Criteria – Direct Loan, 34 CFR section 685.309(b)(2)(i): An institution is required to notify the Department of Education within 30 to 60 days (depending on the method of communication) if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who enrolled at that institution but has ceased to be enrolled on at least a half-time basis.
Condition/Context – A sample of 25 out of a population of approximately 196 federal aid recipient students were selected from system generated reports of students who had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year. A comparison was made between each selected student’s National Student Loan Data System (NSLDS) enrollment detail to the student’s academic files and other institutional records to verify that the College was accurately reporting significant campus-level and program-level enrollment data within the required time frame. Of the 25 students whom had a change in address, graduated, or withdrew, 1 was not reported to the NSLDS within the required timeframe.
Questioned Costs – No questioned costs were identified as part of this finding.
Effect – Enrollment status is utilized by students, the U.S. Department of Education, the Direct Loan program, lenders, and other institutions to determine in‐school status. NSLDS also uses the newly submitted enrollment data to recalculate a student’s 150% limit for direct subsidized loans to determine if loss or protection of the subsidy should occur. Therefore, this significant deficiency in enrollment reporting could result in incorrect future eligibility for undergraduate aid, as well as impact future subsidy loss or protection related to the 150% limit.
Cause – The student status change was not timely reported due to the College not having effective internal controls established to prevent, or detect and correct, the non-compliance in a timely manner.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a detective control by which a sample of student status changes are subsequently verified within the NSLDS for accurate and timely reporting.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the finding. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Upon review of the finding, Financial Aid administration met with Registrar’s staff to create a new procedure whereby immediate reporting of withdrawals are made directly to NSLDS in addition to the regularly scheduled monthly reports to NSLDS through the National Student Clearinghouse (NSC). This immediate reporting should eliminate any timing issues with the monthly reports through NSC. In addition, a joint effort to streamline the routing of withdrawal forms to the appropriate departments for faster processing is underway. This reprocessing of the withdrawal forms will be implemented in the next 120 days.
FINDING 2024-002 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-002 for included table)
Criteria – Direct Loan, 34 CFR section 685.309(b)(2)(i): An institution is required to notify the Department of Education within 30 to 60 days (depending on the method of communication) if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who enrolled at that institution but has ceased to be enrolled on at least a half-time basis.
Condition/Context – A sample of 25 out of a population of approximately 196 federal aid recipient students were selected from system generated reports of students who had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year. A comparison was made between each selected student’s National Student Loan Data System (NSLDS) enrollment detail to the student’s academic files and other institutional records to verify that the College was accurately reporting significant campus-level and program-level enrollment data within the required time frame. Of the 25 students whom had a change in address, graduated, or withdrew, 1 was not reported to the NSLDS within the required timeframe.
Questioned Costs – No questioned costs were identified as part of this finding.
Effect – Enrollment status is utilized by students, the U.S. Department of Education, the Direct Loan program, lenders, and other institutions to determine in‐school status. NSLDS also uses the newly submitted enrollment data to recalculate a student’s 150% limit for direct subsidized loans to determine if loss or protection of the subsidy should occur. Therefore, this significant deficiency in enrollment reporting could result in incorrect future eligibility for undergraduate aid, as well as impact future subsidy loss or protection related to the 150% limit.
Cause – The student status change was not timely reported due to the College not having effective internal controls established to prevent, or detect and correct, the non-compliance in a timely manner.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a detective control by which a sample of student status changes are subsequently verified within the NSLDS for accurate and timely reporting.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the finding. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Upon review of the finding, Financial Aid administration met with Registrar’s staff to create a new procedure whereby immediate reporting of withdrawals are made directly to NSLDS in addition to the regularly scheduled monthly reports to NSLDS through the National Student Clearinghouse (NSC). This immediate reporting should eliminate any timing issues with the monthly reports through NSC. In addition, a joint effort to streamline the routing of withdrawal forms to the appropriate departments for faster processing is underway. This reprocessing of the withdrawal forms will be implemented in the next 120 days.
FINDING 2024-002 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance (See SFQC - Section III - Finding 2024-002 for included table)
Criteria – Direct Loan, 34 CFR section 685.309(b)(2)(i): An institution is required to notify the Department of Education within 30 to 60 days (depending on the method of communication) if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who enrolled at that institution but has ceased to be enrolled on at least a half-time basis.
Condition/Context – A sample of 25 out of a population of approximately 196 federal aid recipient students were selected from system generated reports of students who had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the 2023-2024 academic year. A comparison was made between each selected student’s National Student Loan Data System (NSLDS) enrollment detail to the student’s academic files and other institutional records to verify that the College was accurately reporting significant campus-level and program-level enrollment data within the required time frame. Of the 25 students whom had a change in address, graduated, or withdrew, 1 was not reported to the NSLDS within the required timeframe.
Questioned Costs – No questioned costs were identified as part of this finding.
Effect – Enrollment status is utilized by students, the U.S. Department of Education, the Direct Loan program, lenders, and other institutions to determine in‐school status. NSLDS also uses the newly submitted enrollment data to recalculate a student’s 150% limit for direct subsidized loans to determine if loss or protection of the subsidy should occur. Therefore, this significant deficiency in enrollment reporting could result in incorrect future eligibility for undergraduate aid, as well as impact future subsidy loss or protection related to the 150% limit.
Cause – The student status change was not timely reported due to the College not having effective internal controls established to prevent, or detect and correct, the non-compliance in a timely manner.
Repeat Finding – This is not a repeat finding.
Recommendation – We recommend the College implement a detective control by which a sample of student status changes are subsequently verified within the NSLDS for accurate and timely reporting.
Views of Responsible Officials and Planned Corrective Actions – Otis College of Art and Design agrees with the finding. The Executive Director of Financial Aid and The One Stop, Michaela Matsumoto and Registrar Nicole Raef are the responsible individuals for implementation of the corrective action plan. Upon review of the finding, Financial Aid administration met with Registrar’s staff to create a new procedure whereby immediate reporting of withdrawals are made directly to NSLDS in addition to the regularly scheduled monthly reports to NSLDS through the National Student Clearinghouse (NSC). This immediate reporting should eliminate any timing issues with the monthly reports through NSC. In addition, a joint effort to streamline the routing of withdrawal forms to the appropriate departments for faster processing is underway. This reprocessing of the withdrawal forms will be implemented in the next 120 days.