FAC Explorer

Audit 343723

FY End
2024-06-30
Total Expended
$1.47M
Findings
6
Programs
1
Organization: Payne Theological Seminary (OH)
Year: 2024 Accepted: 2025-02-25
Auditor: Cliftonlarsonallen LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
524432 2024-001 Significant Deficiency - L
524433 2024-002 Significant Deficiency - N
524434 2024-003 Significant Deficiency Yes N
1100874 2024-001 Significant Deficiency - L
1100875 2024-002 Significant Deficiency - N
1100876 2024-003 Significant Deficiency Yes N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $1.47M Yes 3

Contacts

Name Title Type
KYNLFYN41TV5 Ray Ingram Auditee
9373762946 Chad Lassen, CPA Auditor
No contacts on file

Notes to SEFA

Title: BASIS OF PRESENTATION Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Payne Theological Seminary has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Payne Theological Seminary under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Payne Theological Seminary, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Payne Theological Seminary. There were no subrecipients in the current year.
Title: STUDENT FINANCIAL AID INSTITUTIONAL AND PROGRAM ELIGIBILITY METRICS Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: Payne Theological Seminary has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Institution is in compliance with the following institutional and program eligibility requirements under the Higher Education Act of 1965 and Federal regulations under 34 CFR 668.23: • Correspondence courses the institution offers under 34 CFR 600.7(b) and (g) • Regular students that enroll in correspondence courses under 34 CFR 600.7(b) and (g) • Institution’s regular students that are incarcerated under 34 CFR 600.7(c) and (g) • Completion rates for confined or incarcerated individuals enrolled in non-degree programs at nonprofit institutions under 34 CFR 600.7(c)(3)(ii) and (g) • Institution’s regular students that lack a high school diploma or its equivalent under 34 CFR 600.7(d) and (g) • Completion rates for short-term programs under 34 CFR 668.8(f) and (g) • Placement rates for short-term programs under https://www.ecfr.gov/current/title- 34/subtitle-B/chapter-VI/part-668/subpart-A/section-668.8 34 CFR 668.8(e)(2)

Finding Details

Finding 2024-001
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster ALN Numbers: 84.268 – Federal Direct Loan Program Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Department of Education requires the College to report the disbursement dates and amounts to the Common Origination and Disbursement (COD) system within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309) funds to a student. Condition: During our testing, we noted 10 out of the 40 student's disbursement date per the Seminary’s record did not match the date reported to COD. Questioned Costs: None Context: During our testing, it was noted the Seminary does not have a process in place to ensure accurate reporting of disbursement dates to COD based on the regulations set forth by the Department of Education. Cause: The Seminary does not have a process in place to accurately report the date of disbursements. Effect: Students interest accrues based on disbursement date reported to COD, thus interest calculation could be skewed due to the discrepancy in disbursement dates reported. Repeat Finding: No Recommendation: We recommend the Seminary evaluate its procedures and policies around reporting Unsubsidized loan disbursements to COD to ensure that student information is reported accurately and timely. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2024-002
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster ALN Numbers: 84.268 – Federal Direct Loan Program Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(1), A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than (i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. Condition: During our testing, we noted 28 out of the 40 students tested had credit balances that were not returned to the student or parent within 14 days of the credit balance occurring. Questioned Costs: None Context: During our testing, it was noted the Seminary does not have a process in place to ensure timeliness of funds being returned to the student based on the regulations set forth by the Department of Education. Cause: The Seminary did not have a process in place to ensure the refunds are completed timely. Effect: The Seminary is not in compliance with Department of Education requirements that states student’s credit balance must be returned no later than 14 days. Repeat Finding: No Recommendation: We recommend that the Seminary implemented a process to ensure credit balances are returned timely based on the regulations set forth by the Department of Education. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2024-003
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster ALN Numbers: 84.268 – Federal Direct Loan Program Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). Institutions are required to develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts. The regulations require the written information security program to include nine elements for institutions with 5,000 or more customers, (16 CFR 314.3(a)). The written information security program (WISP) for institutions with fewer than 5,000 customers must address seven elements (16 CFR 314.3(a) and 16 CFR 314.6). The elements that an institution must address in its written information security program are at 16 CFR 314.4. At a minimum, the institution’s written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d)). Condition: During our testing, we noted several steps missing from the Written Information Security Program (WISP). Questioned Costs: None Context: These new GLBA requirements were applicable beginning on June 9, 2023 and there were several elements missing from their WISP. Cause: There was not a formal process in place to review against all the new GLBA requirements to ensure compliance. Effect: Student personal information could be vulnerable. Repeat Finding: Yes – See 2023-002 Recommendation: We recommend that the Seminary review the updated GLBA requirements and ensure their WISP includes all required elements. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2024-001
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster ALN Numbers: 84.268 – Federal Direct Loan Program Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Department of Education requires the College to report the disbursement dates and amounts to the Common Origination and Disbursement (COD) system within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309) funds to a student. Condition: During our testing, we noted 10 out of the 40 student's disbursement date per the Seminary’s record did not match the date reported to COD. Questioned Costs: None Context: During our testing, it was noted the Seminary does not have a process in place to ensure accurate reporting of disbursement dates to COD based on the regulations set forth by the Department of Education. Cause: The Seminary does not have a process in place to accurately report the date of disbursements. Effect: Students interest accrues based on disbursement date reported to COD, thus interest calculation could be skewed due to the discrepancy in disbursement dates reported. Repeat Finding: No Recommendation: We recommend the Seminary evaluate its procedures and policies around reporting Unsubsidized loan disbursements to COD to ensure that student information is reported accurately and timely. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2024-002
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster ALN Numbers: 84.268 – Federal Direct Loan Program Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(1), A title IV, HEA credit balance must be paid directly to the student or parent as soon as possible, but no later than (i) Fourteen (14) days after the balance occurred if the credit balance occurred after the first day of class of a payment period; or (ii) Fourteen (14) days after the first day of class of a payment period if the credit balance occurred on or before the first day of class of that payment period. Condition: During our testing, we noted 28 out of the 40 students tested had credit balances that were not returned to the student or parent within 14 days of the credit balance occurring. Questioned Costs: None Context: During our testing, it was noted the Seminary does not have a process in place to ensure timeliness of funds being returned to the student based on the regulations set forth by the Department of Education. Cause: The Seminary did not have a process in place to ensure the refunds are completed timely. Effect: The Seminary is not in compliance with Department of Education requirements that states student’s credit balance must be returned no later than 14 days. Repeat Finding: No Recommendation: We recommend that the Seminary implemented a process to ensure credit balances are returned timely based on the regulations set forth by the Department of Education. Views of Responsible Officials: There is no disagreement with the audit finding.
Finding 2024-003
Federal Agency: Department of Education Federal Program: Student Financial Assistance Cluster ALN Numbers: 84.268 – Federal Direct Loan Program Award Period: July 1, 2023 through June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). Institutions are required to develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts. The regulations require the written information security program to include nine elements for institutions with 5,000 or more customers, (16 CFR 314.3(a)). The written information security program (WISP) for institutions with fewer than 5,000 customers must address seven elements (16 CFR 314.3(a) and 16 CFR 314.6). The elements that an institution must address in its written information security program are at 16 CFR 314.4. At a minimum, the institution’s written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d)). Condition: During our testing, we noted several steps missing from the Written Information Security Program (WISP). Questioned Costs: None Context: These new GLBA requirements were applicable beginning on June 9, 2023 and there were several elements missing from their WISP. Cause: There was not a formal process in place to review against all the new GLBA requirements to ensure compliance. Effect: Student personal information could be vulnerable. Repeat Finding: Yes – See 2023-002 Recommendation: We recommend that the Seminary review the updated GLBA requirements and ensure their WISP includes all required elements. Views of Responsible Officials: There is no disagreement with the audit finding.