Audit 33587

FY End
2022-06-30
Total Expended
$7.27M
Findings
2
Programs
7
Organization: Transylvania University (KY)
Year: 2022 Accepted: 2023-02-20
Auditor: Blue & CO LLC

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
33339 2022-001 - - L
609781 2022-001 - - L

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $4.89M Yes 1
84.063 Federal Pell Grant Program $1.14M Yes 0
84.038 Federal Perkins Loans $884,968 Yes 0
84.033 Federal Work-Study Program $139,483 Yes 0
84.007 Federal Supplemental Educational Opportunity Grants $97,736 Yes 0
84.425 Education Stabilization Fund $79,107 Yes 0
47.083 Integrative Activities $36,558 - 0

Contacts

Name Title Type
RAJVK3PRXTA7 Cody Embry, CPA Auditee
8592338290 Rick Shields, CPA Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying schedule of expenditures of federal awards is presented on the accrual basis of accounting. 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, therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. FEDERAL DIRECT STUDENT LOANS (84.268) - Balances outstanding at the end of the audit period were 4893163. FEDERAL PERKINS LOANS (84.038) - Balances outstanding at the end of the audit period were 729089.
Title: General Accounting Policies: The accompanying schedule of expenditures of federal awards is presented on the accrual basis of accounting. 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, therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying schedule of expenditures of federal awards presents the activity of all federal financial assistance programs of Transylvania University (the University).The grant revenue amounts received and expensed are subject to audit and adjustment. If any expenditures are disallowed by the grantor as a result of such an audit, any claim for reimbursement to the grantor would become a liability of the University. In the opinion of management, all grant expenditures are in compliance with the terms of the grant agreements and applicable federal laws and regulations. The University did not elect to use the 10% de minimis indirect cost rate and no amounts were provided to subrecipients.
Title: Federal Supplemental Educational Opportunity Grants Accounting Policies: The accompanying schedule of expenditures of federal awards is presented on the accrual basis of accounting. 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, therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The University administers a Federal Supplemental Educational Opportunity Grants Program (CFDA No. 84.007) funded by the U.S. Department of Education. Total federal disbursements under the program for the year ended June 30, 2021, are as follows: Student grants - Institutional amount, $31,987; Federal amount, $97,388; Total amount, $129,375. Administrative cost allowance - Institutional amount, $0; Federal amount, $403; Total amount, $403. Overall - Institutional amount, $31,987; Federal amount, $97,791; Total amount, $129,778.
Title: Federal Direct Student Loans Accounting Policies: The accompanying schedule of expenditures of federal awards is presented on the accrual basis of accounting. 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, therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. For the year ended June 30, 2021, the University processed approximately $4,890,000 (net of loan and origination fees) of new loans under the Federal Direct Student Loans Program (AL No. 84.268) (which includes subsidized, unsubsidized, and Parents' Loans for Undergraduate Students). The University is responsible only for the performance of certain administrative duties with respect to the Federal Direct Student Loan Program. Accordingly, it is not practical to determine the balance of loans outstanding to students and former students of the University under the program at June 30, 2022.
Title: Federal Work-Study Program Accounting Policies: The accompanying schedule of expenditures of federal awards is presented on the accrual basis of accounting. 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, therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The University administers a Federal Work-Study Program (AL No. 84.033) funded by the U.S. Department of Education. Total disbursements under the program, including the non-federal institutional share amount the University was not obligated to provide, for the year ended June 30, 2022 are as follows: Earned compensation - Institution amount, $142,134; Federal amount, $139,483; Total - $281,617.
Title: Federal Perkins Loans Accounting Policies: The accompanying schedule of expenditures of federal awards is presented on the accrual basis of accounting. 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, therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The University administers a Federal Perkins Loans Program (AL No. 84.038) funded by the U.S. Department of Education. Student loans receivable under the program at June 30, 2021 were $884,968. Total cash on hand for Perkins Program at June 30, 2022 was approximately $160,000. Total amount considered federal expenditures for the year ended June 30, 2022 are as follows: Current advances to students, $0; Student loans receivable July 1, 2021, $884,968; Administrative cost allowance, $0; Total, $884,968.
Title: Federal Pell Grant Program Accounting Policies: The accompanying schedule of expenditures of federal awards is presented on the accrual basis of accounting. 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, therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the consolidated financial statements. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The University administers a Federal Pell Grant Program (AL No. 84.063) funded by the U.S. Department of Education. Total disbursements under the program for the year June 30, 2022 are as follows: Student grants, $1,139,700; Administrative cost allowance, $1,270; Total, $1,140,970.

Finding Details

Finding No. 2022-001: Enrollment Reporting Federal Agency: U.S. Department of Education CFDA Number and Title: 84.268, Federal Direct Student Loan Program Criteria: When a Direct Loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student ceased to be enrolled on at least a halftime basis or failed to enroll on at least a half-time basis for the period for which the loan was intended, the institution must report the change in its next updated Enrollment Reporting Roster file (due within 60 days of the change) to the lender or the guaranty agency. The school is responsible for timely reporting whether they report directly or via a third-party servicer. Condition: In testing individual student status changes, we selected a sample of 7 students who had received student financial assistance and had withdrawn from the University during the fiscal year as identified by internal records. We compared the enrollment information and withdrawal date per the University?s records to the information reported to the National Students Loan Data System (NSLDS). We noted the status changes for 2 withdrawn students were not reported to NSLDS timely. Cause: The University did not have a control in place to ensure timely reporting of all status changes. Effect: Without timely notification of withdrawals or graduation, the NSLDS is unable to accurately determine when a student enters repayment status. Recommendation: We recommend that the University establish controls to ensure student enrollment status in the NSLDS is updated in a timely manner to ensure compliance with Federal requirements. View of Responsible Officials: The University accepts this finding.
Finding No. 2022-001: Enrollment Reporting Federal Agency: U.S. Department of Education CFDA Number and Title: 84.268, Federal Direct Student Loan Program Criteria: When a Direct Loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student ceased to be enrolled on at least a halftime basis or failed to enroll on at least a half-time basis for the period for which the loan was intended, the institution must report the change in its next updated Enrollment Reporting Roster file (due within 60 days of the change) to the lender or the guaranty agency. The school is responsible for timely reporting whether they report directly or via a third-party servicer. Condition: In testing individual student status changes, we selected a sample of 7 students who had received student financial assistance and had withdrawn from the University during the fiscal year as identified by internal records. We compared the enrollment information and withdrawal date per the University?s records to the information reported to the National Students Loan Data System (NSLDS). We noted the status changes for 2 withdrawn students were not reported to NSLDS timely. Cause: The University did not have a control in place to ensure timely reporting of all status changes. Effect: Without timely notification of withdrawals or graduation, the NSLDS is unable to accurately determine when a student enters repayment status. Recommendation: We recommend that the University establish controls to ensure student enrollment status in the NSLDS is updated in a timely manner to ensure compliance with Federal requirements. View of Responsible Officials: The University accepts this finding.