FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-002 ? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program TEACH Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.379 ($9,410) Award Number: P268K223315 P379T223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: Nine of the forty federal student financial aid recipients in our sample did not complete or were not sent exit interview instructions to complete. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans or TEACH Grant Cause: The University thought exit interviews were being completed by the third-party servicer. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the University. Repeat Finding: See Finding 2021-004 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the University. We also recommend reviewing the student listing to determine if any other student should have completed an exit interview for the 2021-2022 award year. Management Response: Exit interview instructions were sent to the students in question in October and November 2022. Procedures have been improved to ensure an exit interview is completed when a student withdraws from the University. The process implemented is that a spreadsheet has been created that compares the enrolled credit hours for each student for the Fall -vs- Spring semester of the current Academic Year and the Spring -vs- Fall semester of the next Academic Year. This spreadsheet will identify which students should be receiving exit interview notifications, as well as, any student who needs to have NSLDS enrollment status updated.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-003 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.063 ($684,817) 84.007 ($34,837) Award Number: P268K223315 P063P213315 P007A213421 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $26.85 (84.268) $97.40 (84.007) Condition Found: Title IV funds were not returned timely for two of the forty students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for two of the three students noted above. The incorrect number of days in the semester was used for both students. The remaining R2T4s calculated by the University were reviewed. Two additional R2T4s were not completed timely and one of the additional R2T4s was not calculated correctly. Federal Pell Grant funds returned for not beginning a module course were not excluded from the R2T4 calculation. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, ?a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student?s withdrawal.? The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in a module course, the student is ineligible to receive Federal Pell Grant funds for that course. Those Federal Pell Grant funds are automatically returned to the Department of Education. The Federal Pell Grant funds must be recalculated based on the number of hours the student began attendance in. The adjusted Federal Pell Grant figure is used in the R2T4 calculation. Cause: The third-party servicer did not process the R2T4 calculation or return the funds timely. Federal Pell Grant funds were properly adjusted for a student who did not begin a module course. However, the Federal Pell Grant disbursed in the R2T4 calculation was not adjusted. The formula used to calculate the number of days did not include the last day of the semester. In addition, break days were not excluded from the number of days calculation for one student. Possible Asserted Effect: The R2T4 calculation was not completed accurately and Title IV funds were not returned timely. Repeat Finding: See Finding 2021-006 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. The three R2T4s that were not calculated correctly should be recalculated and any funds due should be returned to the Department of Education. Management Response: ? For the first student in question, the R2T4 was completed timely, but the incorrect number of days was used in the R2T4 calculation. $26.85 of Federal Direct Loans were returned to the Department of Education in December 2022. ? For the second student in question, the R2T4 was completed and accepted late by the third-party servicer. In addition, the incorrect number of days was used in the R2T4 calculation. An additional $65.59 of Federal Pell Grant funds were disbursed to the student in December 2022. ? For the third student in question, the R2T4 was not completed timely and accepted late by the third-party servicer. The R2T4 was not completed until April 2022 which was more than forty-five days after the date of determination. ? For the fourth student in question, the incorrect Federal Pell Grant disbursed figure was used in the calculation. An additional $97.40 of FSEOG funds were returned in December 2022. In addition, the R2T4 was not calculated within 45 days of the date of determination, so the original funds were returned late. ? For the fifth student in question, the R2T4 was not reviewed and approved by the TPA within 45 days of the date of determination. The correct post-withdrawal disbursement was made in August 2022.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-002 ? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program TEACH Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.379 ($9,410) Award Number: P268K223315 P379T223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: Nine of the forty federal student financial aid recipients in our sample did not complete or were not sent exit interview instructions to complete. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans or TEACH Grant Cause: The University thought exit interviews were being completed by the third-party servicer. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the University. Repeat Finding: See Finding 2021-004 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the University. We also recommend reviewing the student listing to determine if any other student should have completed an exit interview for the 2021-2022 award year. Management Response: Exit interview instructions were sent to the students in question in October and November 2022. Procedures have been improved to ensure an exit interview is completed when a student withdraws from the University. The process implemented is that a spreadsheet has been created that compares the enrolled credit hours for each student for the Fall -vs- Spring semester of the current Academic Year and the Spring -vs- Fall semester of the next Academic Year. This spreadsheet will identify which students should be receiving exit interview notifications, as well as, any student who needs to have NSLDS enrollment status updated.
FINDING 2022-003 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.063 ($684,817) 84.007 ($34,837) Award Number: P268K223315 P063P213315 P007A213421 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $26.85 (84.268) $97.40 (84.007) Condition Found: Title IV funds were not returned timely for two of the forty students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for two of the three students noted above. The incorrect number of days in the semester was used for both students. The remaining R2T4s calculated by the University were reviewed. Two additional R2T4s were not completed timely and one of the additional R2T4s was not calculated correctly. Federal Pell Grant funds returned for not beginning a module course were not excluded from the R2T4 calculation. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, ?a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student?s withdrawal.? The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in a module course, the student is ineligible to receive Federal Pell Grant funds for that course. Those Federal Pell Grant funds are automatically returned to the Department of Education. The Federal Pell Grant funds must be recalculated based on the number of hours the student began attendance in. The adjusted Federal Pell Grant figure is used in the R2T4 calculation. Cause: The third-party servicer did not process the R2T4 calculation or return the funds timely. Federal Pell Grant funds were properly adjusted for a student who did not begin a module course. However, the Federal Pell Grant disbursed in the R2T4 calculation was not adjusted. The formula used to calculate the number of days did not include the last day of the semester. In addition, break days were not excluded from the number of days calculation for one student. Possible Asserted Effect: The R2T4 calculation was not completed accurately and Title IV funds were not returned timely. Repeat Finding: See Finding 2021-006 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. The three R2T4s that were not calculated correctly should be recalculated and any funds due should be returned to the Department of Education. Management Response: ? For the first student in question, the R2T4 was completed timely, but the incorrect number of days was used in the R2T4 calculation. $26.85 of Federal Direct Loans were returned to the Department of Education in December 2022. ? For the second student in question, the R2T4 was completed and accepted late by the third-party servicer. In addition, the incorrect number of days was used in the R2T4 calculation. An additional $65.59 of Federal Pell Grant funds were disbursed to the student in December 2022. ? For the third student in question, the R2T4 was not completed timely and accepted late by the third-party servicer. The R2T4 was not completed until April 2022 which was more than forty-five days after the date of determination. ? For the fourth student in question, the incorrect Federal Pell Grant disbursed figure was used in the calculation. An additional $97.40 of FSEOG funds were returned in December 2022. In addition, the R2T4 was not calculated within 45 days of the date of determination, so the original funds were returned late. ? For the fifth student in question, the R2T4 was not reviewed and approved by the TPA within 45 days of the date of determination. The correct post-withdrawal disbursement was made in August 2022.
FINDING 2022-005 ? NSLDS Reporting Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program ALN and Program Expenditures: 84.268 ($1,119,033) Award Number: P268K223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The incorrect enrollment status was reported to the National Student Loan Database System (?NSLDS?) for nine of the forty students selected for testing. Criteria: NSLDS informs loan servicers of changes in a student?s enrollment status that indicate when the repayments or interest accrual begins and ends. The date a student enrolls, withdraws, graduates, or drops below half-time status should be reported accurately. Cause: The University began working with a new third-party servicer in fiscal year 2021. The University was responsible for reporting enrollment status changes to the third-party servicer, and the third-party servicer was responsible for updating NSLDS. This process continued to take longer than anticipated during fiscal year 2022. Possible Asserted Effect: The loan servicers were not aware of the correct deferral, repayment, and interest calculation dates. Repeat Finding: See Finding 2021-003 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should work with the third-party servicer to update the enrollment status of the eleven affected students in NSLDS. In addition, we recommend determining the amount of time the third-party servicer needs to process enrollment status changes. The University should make any necessary changes to their procedures or timeline for reporting enrollment status changes. Management Response: The Student Financial Aid Director corrected the enrollment status and withdrawal date for the students in question in November 2022. Procedures have been improved to ensure the information is communicated timely to the third-party servicer and that third-party servicer reports the changes to NSLDS timely.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-003 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.063 ($684,817) 84.007 ($34,837) Award Number: P268K223315 P063P213315 P007A213421 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $26.85 (84.268) $97.40 (84.007) Condition Found: Title IV funds were not returned timely for two of the forty students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for two of the three students noted above. The incorrect number of days in the semester was used for both students. The remaining R2T4s calculated by the University were reviewed. Two additional R2T4s were not completed timely and one of the additional R2T4s was not calculated correctly. Federal Pell Grant funds returned for not beginning a module course were not excluded from the R2T4 calculation. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, ?a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student?s withdrawal.? The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in a module course, the student is ineligible to receive Federal Pell Grant funds for that course. Those Federal Pell Grant funds are automatically returned to the Department of Education. The Federal Pell Grant funds must be recalculated based on the number of hours the student began attendance in. The adjusted Federal Pell Grant figure is used in the R2T4 calculation. Cause: The third-party servicer did not process the R2T4 calculation or return the funds timely. Federal Pell Grant funds were properly adjusted for a student who did not begin a module course. However, the Federal Pell Grant disbursed in the R2T4 calculation was not adjusted. The formula used to calculate the number of days did not include the last day of the semester. In addition, break days were not excluded from the number of days calculation for one student. Possible Asserted Effect: The R2T4 calculation was not completed accurately and Title IV funds were not returned timely. Repeat Finding: See Finding 2021-006 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. The three R2T4s that were not calculated correctly should be recalculated and any funds due should be returned to the Department of Education. Management Response: ? For the first student in question, the R2T4 was completed timely, but the incorrect number of days was used in the R2T4 calculation. $26.85 of Federal Direct Loans were returned to the Department of Education in December 2022. ? For the second student in question, the R2T4 was completed and accepted late by the third-party servicer. In addition, the incorrect number of days was used in the R2T4 calculation. An additional $65.59 of Federal Pell Grant funds were disbursed to the student in December 2022. ? For the third student in question, the R2T4 was not completed timely and accepted late by the third-party servicer. The R2T4 was not completed until April 2022 which was more than forty-five days after the date of determination. ? For the fourth student in question, the incorrect Federal Pell Grant disbursed figure was used in the calculation. An additional $97.40 of FSEOG funds were returned in December 2022. In addition, the R2T4 was not calculated within 45 days of the date of determination, so the original funds were returned late. ? For the fifth student in question, the R2T4 was not reviewed and approved by the TPA within 45 days of the date of determination. The correct post-withdrawal disbursement was made in August 2022.
FINDING 2022-004 ? COD Disbursement Dates Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: TEACH Grant Federal Pell Grant Program ALN and Program Expenditures: 84.379 ($9,410) 84.063 ($684,817) Award Number: P379T223315 P063P213315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The Common Origination and Disbursement System (?COD?) disbursement date did not agree with the disbursement date on accounts for two of the three students receiving TEACH Grants and two of the thirty students receiving Federal Pell Grant funds in our sample. A total of four students were affected by this finding. Criteria: The disbursement date to be reported to the COD is the date that the institution credits funds to a student?s account or pays funds to a student or parent directly. Cause: The University began working with a new third-party servicer in fiscal year 2021. The Student Financial Aid Director was not aware that the third-party servicer was reporting disbursements to COD that differed from the date the University posted the funds to the students? accounts. Possible Asserted Effect: The disbursement date in COD is the date interest begins accruing on the Federal Direct Loans. In order for the interest calculation to be accurate, the disbursement date in COD should be the date the students received the loan funds. Repeat Finding: See Finding 2021-005 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should either correct the disbursement dates on the student accounts or in COD so that the two disbursement dates agree. Management Response: The Student Financial Aid Director created a ticket with the third party administrator to have them correct the disbursement dates for the students in question in COD in November 2022. The corrections were made in December 2022. Going forward, the Student Financial Aid Director will verify the disbursement dates agree when the payments are made.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-002 ? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program TEACH Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.379 ($9,410) Award Number: P268K223315 P379T223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: Nine of the forty federal student financial aid recipients in our sample did not complete or were not sent exit interview instructions to complete. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans or TEACH Grant Cause: The University thought exit interviews were being completed by the third-party servicer. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the University. Repeat Finding: See Finding 2021-004 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the University. We also recommend reviewing the student listing to determine if any other student should have completed an exit interview for the 2021-2022 award year. Management Response: Exit interview instructions were sent to the students in question in October and November 2022. Procedures have been improved to ensure an exit interview is completed when a student withdraws from the University. The process implemented is that a spreadsheet has been created that compares the enrolled credit hours for each student for the Fall -vs- Spring semester of the current Academic Year and the Spring -vs- Fall semester of the next Academic Year. This spreadsheet will identify which students should be receiving exit interview notifications, as well as, any student who needs to have NSLDS enrollment status updated.
FINDING 2022-004 ? COD Disbursement Dates Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: TEACH Grant Federal Pell Grant Program ALN and Program Expenditures: 84.379 ($9,410) 84.063 ($684,817) Award Number: P379T223315 P063P213315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The Common Origination and Disbursement System (?COD?) disbursement date did not agree with the disbursement date on accounts for two of the three students receiving TEACH Grants and two of the thirty students receiving Federal Pell Grant funds in our sample. A total of four students were affected by this finding. Criteria: The disbursement date to be reported to the COD is the date that the institution credits funds to a student?s account or pays funds to a student or parent directly. Cause: The University began working with a new third-party servicer in fiscal year 2021. The Student Financial Aid Director was not aware that the third-party servicer was reporting disbursements to COD that differed from the date the University posted the funds to the students? accounts. Possible Asserted Effect: The disbursement date in COD is the date interest begins accruing on the Federal Direct Loans. In order for the interest calculation to be accurate, the disbursement date in COD should be the date the students received the loan funds. Repeat Finding: See Finding 2021-005 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should either correct the disbursement dates on the student accounts or in COD so that the two disbursement dates agree. Management Response: The Student Financial Aid Director created a ticket with the third party administrator to have them correct the disbursement dates for the students in question in COD in November 2022. The corrections were made in December 2022. Going forward, the Student Financial Aid Director will verify the disbursement dates agree when the payments are made.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-002 ? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program TEACH Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.379 ($9,410) Award Number: P268K223315 P379T223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: Nine of the forty federal student financial aid recipients in our sample did not complete or were not sent exit interview instructions to complete. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans or TEACH Grant Cause: The University thought exit interviews were being completed by the third-party servicer. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the University. Repeat Finding: See Finding 2021-004 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the University. We also recommend reviewing the student listing to determine if any other student should have completed an exit interview for the 2021-2022 award year. Management Response: Exit interview instructions were sent to the students in question in October and November 2022. Procedures have been improved to ensure an exit interview is completed when a student withdraws from the University. The process implemented is that a spreadsheet has been created that compares the enrolled credit hours for each student for the Fall -vs- Spring semester of the current Academic Year and the Spring -vs- Fall semester of the next Academic Year. This spreadsheet will identify which students should be receiving exit interview notifications, as well as, any student who needs to have NSLDS enrollment status updated.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-003 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.063 ($684,817) 84.007 ($34,837) Award Number: P268K223315 P063P213315 P007A213421 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $26.85 (84.268) $97.40 (84.007) Condition Found: Title IV funds were not returned timely for two of the forty students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for two of the three students noted above. The incorrect number of days in the semester was used for both students. The remaining R2T4s calculated by the University were reviewed. Two additional R2T4s were not completed timely and one of the additional R2T4s was not calculated correctly. Federal Pell Grant funds returned for not beginning a module course were not excluded from the R2T4 calculation. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, ?a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student?s withdrawal.? The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in a module course, the student is ineligible to receive Federal Pell Grant funds for that course. Those Federal Pell Grant funds are automatically returned to the Department of Education. The Federal Pell Grant funds must be recalculated based on the number of hours the student began attendance in. The adjusted Federal Pell Grant figure is used in the R2T4 calculation. Cause: The third-party servicer did not process the R2T4 calculation or return the funds timely. Federal Pell Grant funds were properly adjusted for a student who did not begin a module course. However, the Federal Pell Grant disbursed in the R2T4 calculation was not adjusted. The formula used to calculate the number of days did not include the last day of the semester. In addition, break days were not excluded from the number of days calculation for one student. Possible Asserted Effect: The R2T4 calculation was not completed accurately and Title IV funds were not returned timely. Repeat Finding: See Finding 2021-006 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. The three R2T4s that were not calculated correctly should be recalculated and any funds due should be returned to the Department of Education. Management Response: ? For the first student in question, the R2T4 was completed timely, but the incorrect number of days was used in the R2T4 calculation. $26.85 of Federal Direct Loans were returned to the Department of Education in December 2022. ? For the second student in question, the R2T4 was completed and accepted late by the third-party servicer. In addition, the incorrect number of days was used in the R2T4 calculation. An additional $65.59 of Federal Pell Grant funds were disbursed to the student in December 2022. ? For the third student in question, the R2T4 was not completed timely and accepted late by the third-party servicer. The R2T4 was not completed until April 2022 which was more than forty-five days after the date of determination. ? For the fourth student in question, the incorrect Federal Pell Grant disbursed figure was used in the calculation. An additional $97.40 of FSEOG funds were returned in December 2022. In addition, the R2T4 was not calculated within 45 days of the date of determination, so the original funds were returned late. ? For the fifth student in question, the R2T4 was not reviewed and approved by the TPA within 45 days of the date of determination. The correct post-withdrawal disbursement was made in August 2022.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-002 ? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program TEACH Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.379 ($9,410) Award Number: P268K223315 P379T223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: Nine of the forty federal student financial aid recipients in our sample did not complete or were not sent exit interview instructions to complete. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans or TEACH Grant Cause: The University thought exit interviews were being completed by the third-party servicer. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the University. Repeat Finding: See Finding 2021-004 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the University. We also recommend reviewing the student listing to determine if any other student should have completed an exit interview for the 2021-2022 award year. Management Response: Exit interview instructions were sent to the students in question in October and November 2022. Procedures have been improved to ensure an exit interview is completed when a student withdraws from the University. The process implemented is that a spreadsheet has been created that compares the enrolled credit hours for each student for the Fall -vs- Spring semester of the current Academic Year and the Spring -vs- Fall semester of the next Academic Year. This spreadsheet will identify which students should be receiving exit interview notifications, as well as, any student who needs to have NSLDS enrollment status updated.
FINDING 2022-003 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.063 ($684,817) 84.007 ($34,837) Award Number: P268K223315 P063P213315 P007A213421 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $26.85 (84.268) $97.40 (84.007) Condition Found: Title IV funds were not returned timely for two of the forty students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for two of the three students noted above. The incorrect number of days in the semester was used for both students. The remaining R2T4s calculated by the University were reviewed. Two additional R2T4s were not completed timely and one of the additional R2T4s was not calculated correctly. Federal Pell Grant funds returned for not beginning a module course were not excluded from the R2T4 calculation. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, ?a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student?s withdrawal.? The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in a module course, the student is ineligible to receive Federal Pell Grant funds for that course. Those Federal Pell Grant funds are automatically returned to the Department of Education. The Federal Pell Grant funds must be recalculated based on the number of hours the student began attendance in. The adjusted Federal Pell Grant figure is used in the R2T4 calculation. Cause: The third-party servicer did not process the R2T4 calculation or return the funds timely. Federal Pell Grant funds were properly adjusted for a student who did not begin a module course. However, the Federal Pell Grant disbursed in the R2T4 calculation was not adjusted. The formula used to calculate the number of days did not include the last day of the semester. In addition, break days were not excluded from the number of days calculation for one student. Possible Asserted Effect: The R2T4 calculation was not completed accurately and Title IV funds were not returned timely. Repeat Finding: See Finding 2021-006 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. The three R2T4s that were not calculated correctly should be recalculated and any funds due should be returned to the Department of Education. Management Response: ? For the first student in question, the R2T4 was completed timely, but the incorrect number of days was used in the R2T4 calculation. $26.85 of Federal Direct Loans were returned to the Department of Education in December 2022. ? For the second student in question, the R2T4 was completed and accepted late by the third-party servicer. In addition, the incorrect number of days was used in the R2T4 calculation. An additional $65.59 of Federal Pell Grant funds were disbursed to the student in December 2022. ? For the third student in question, the R2T4 was not completed timely and accepted late by the third-party servicer. The R2T4 was not completed until April 2022 which was more than forty-five days after the date of determination. ? For the fourth student in question, the incorrect Federal Pell Grant disbursed figure was used in the calculation. An additional $97.40 of FSEOG funds were returned in December 2022. In addition, the R2T4 was not calculated within 45 days of the date of determination, so the original funds were returned late. ? For the fifth student in question, the R2T4 was not reviewed and approved by the TPA within 45 days of the date of determination. The correct post-withdrawal disbursement was made in August 2022.
FINDING 2022-005 ? NSLDS Reporting Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program ALN and Program Expenditures: 84.268 ($1,119,033) Award Number: P268K223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The incorrect enrollment status was reported to the National Student Loan Database System (?NSLDS?) for nine of the forty students selected for testing. Criteria: NSLDS informs loan servicers of changes in a student?s enrollment status that indicate when the repayments or interest accrual begins and ends. The date a student enrolls, withdraws, graduates, or drops below half-time status should be reported accurately. Cause: The University began working with a new third-party servicer in fiscal year 2021. The University was responsible for reporting enrollment status changes to the third-party servicer, and the third-party servicer was responsible for updating NSLDS. This process continued to take longer than anticipated during fiscal year 2022. Possible Asserted Effect: The loan servicers were not aware of the correct deferral, repayment, and interest calculation dates. Repeat Finding: See Finding 2021-003 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should work with the third-party servicer to update the enrollment status of the eleven affected students in NSLDS. In addition, we recommend determining the amount of time the third-party servicer needs to process enrollment status changes. The University should make any necessary changes to their procedures or timeline for reporting enrollment status changes. Management Response: The Student Financial Aid Director corrected the enrollment status and withdrawal date for the students in question in November 2022. Procedures have been improved to ensure the information is communicated timely to the third-party servicer and that third-party servicer reports the changes to NSLDS timely.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-003 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.063 ($684,817) 84.007 ($34,837) Award Number: P268K223315 P063P213315 P007A213421 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $26.85 (84.268) $97.40 (84.007) Condition Found: Title IV funds were not returned timely for two of the forty students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for two of the three students noted above. The incorrect number of days in the semester was used for both students. The remaining R2T4s calculated by the University were reviewed. Two additional R2T4s were not completed timely and one of the additional R2T4s was not calculated correctly. Federal Pell Grant funds returned for not beginning a module course were not excluded from the R2T4 calculation. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, ?a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student?s withdrawal.? The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in a module course, the student is ineligible to receive Federal Pell Grant funds for that course. Those Federal Pell Grant funds are automatically returned to the Department of Education. The Federal Pell Grant funds must be recalculated based on the number of hours the student began attendance in. The adjusted Federal Pell Grant figure is used in the R2T4 calculation. Cause: The third-party servicer did not process the R2T4 calculation or return the funds timely. Federal Pell Grant funds were properly adjusted for a student who did not begin a module course. However, the Federal Pell Grant disbursed in the R2T4 calculation was not adjusted. The formula used to calculate the number of days did not include the last day of the semester. In addition, break days were not excluded from the number of days calculation for one student. Possible Asserted Effect: The R2T4 calculation was not completed accurately and Title IV funds were not returned timely. Repeat Finding: See Finding 2021-006 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. The three R2T4s that were not calculated correctly should be recalculated and any funds due should be returned to the Department of Education. Management Response: ? For the first student in question, the R2T4 was completed timely, but the incorrect number of days was used in the R2T4 calculation. $26.85 of Federal Direct Loans were returned to the Department of Education in December 2022. ? For the second student in question, the R2T4 was completed and accepted late by the third-party servicer. In addition, the incorrect number of days was used in the R2T4 calculation. An additional $65.59 of Federal Pell Grant funds were disbursed to the student in December 2022. ? For the third student in question, the R2T4 was not completed timely and accepted late by the third-party servicer. The R2T4 was not completed until April 2022 which was more than forty-five days after the date of determination. ? For the fourth student in question, the incorrect Federal Pell Grant disbursed figure was used in the calculation. An additional $97.40 of FSEOG funds were returned in December 2022. In addition, the R2T4 was not calculated within 45 days of the date of determination, so the original funds were returned late. ? For the fifth student in question, the R2T4 was not reviewed and approved by the TPA within 45 days of the date of determination. The correct post-withdrawal disbursement was made in August 2022.
FINDING 2022-004 ? COD Disbursement Dates Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: TEACH Grant Federal Pell Grant Program ALN and Program Expenditures: 84.379 ($9,410) 84.063 ($684,817) Award Number: P379T223315 P063P213315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The Common Origination and Disbursement System (?COD?) disbursement date did not agree with the disbursement date on accounts for two of the three students receiving TEACH Grants and two of the thirty students receiving Federal Pell Grant funds in our sample. A total of four students were affected by this finding. Criteria: The disbursement date to be reported to the COD is the date that the institution credits funds to a student?s account or pays funds to a student or parent directly. Cause: The University began working with a new third-party servicer in fiscal year 2021. The Student Financial Aid Director was not aware that the third-party servicer was reporting disbursements to COD that differed from the date the University posted the funds to the students? accounts. Possible Asserted Effect: The disbursement date in COD is the date interest begins accruing on the Federal Direct Loans. In order for the interest calculation to be accurate, the disbursement date in COD should be the date the students received the loan funds. Repeat Finding: See Finding 2021-005 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should either correct the disbursement dates on the student accounts or in COD so that the two disbursement dates agree. Management Response: The Student Financial Aid Director created a ticket with the third party administrator to have them correct the disbursement dates for the students in question in COD in November 2022. The corrections were made in December 2022. Going forward, the Student Financial Aid Director will verify the disbursement dates agree when the payments are made.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.
FINDING 2022-002 ? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program TEACH Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.379 ($9,410) Award Number: P268K223315 P379T223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: Nine of the forty federal student financial aid recipients in our sample did not complete or were not sent exit interview instructions to complete. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans or TEACH Grant Cause: The University thought exit interviews were being completed by the third-party servicer. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the University. Repeat Finding: See Finding 2021-004 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the University. We also recommend reviewing the student listing to determine if any other student should have completed an exit interview for the 2021-2022 award year. Management Response: Exit interview instructions were sent to the students in question in October and November 2022. Procedures have been improved to ensure an exit interview is completed when a student withdraws from the University. The process implemented is that a spreadsheet has been created that compares the enrolled credit hours for each student for the Fall -vs- Spring semester of the current Academic Year and the Spring -vs- Fall semester of the next Academic Year. This spreadsheet will identify which students should be receiving exit interview notifications, as well as, any student who needs to have NSLDS enrollment status updated.
FINDING 2022-004 ? COD Disbursement Dates Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: TEACH Grant Federal Pell Grant Program ALN and Program Expenditures: 84.379 ($9,410) 84.063 ($684,817) Award Number: P379T223315 P063P213315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The Common Origination and Disbursement System (?COD?) disbursement date did not agree with the disbursement date on accounts for two of the three students receiving TEACH Grants and two of the thirty students receiving Federal Pell Grant funds in our sample. A total of four students were affected by this finding. Criteria: The disbursement date to be reported to the COD is the date that the institution credits funds to a student?s account or pays funds to a student or parent directly. Cause: The University began working with a new third-party servicer in fiscal year 2021. The Student Financial Aid Director was not aware that the third-party servicer was reporting disbursements to COD that differed from the date the University posted the funds to the students? accounts. Possible Asserted Effect: The disbursement date in COD is the date interest begins accruing on the Federal Direct Loans. In order for the interest calculation to be accurate, the disbursement date in COD should be the date the students received the loan funds. Repeat Finding: See Finding 2021-005 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should either correct the disbursement dates on the student accounts or in COD so that the two disbursement dates agree. Management Response: The Student Financial Aid Director created a ticket with the third party administrator to have them correct the disbursement dates for the students in question in COD in November 2022. The corrections were made in December 2022. Going forward, the Student Financial Aid Director will verify the disbursement dates agree when the payments are made.