Audit 350102

Finding 2024-001 - Special Tests and Provisions – Verification (Significant Deficiency) U.S. Department of Education - Student Financial Assistance Cluster Federal Direct Loan Program (84.268) Federal Award Year: 2023-2024 Criteria: Pursuant to 34 CFR Section 668.54(a), except as provided in 34 CFR Section 668.54(b), an institution must require an applicant whose Free Application for Federal Student Aid (“FAFSA”) information is selected for verification by the Secretary, to verify the information specified by the Secretary pursuant to 34 CFR Section 668.56. Acceptable documentation for verification is further defined in 34 CFR Section 668.57, and specifically for the 2023-2024 award year, in Federal Register Volume 87, Number 130. Pursuant to 34 CFR Section 668.60(b), for purposes of the subsidized student financial assistance programs, excluding the Federal Pell Grant Program, if an applicant fails to provide the requested documentation within a reasonable time period established by the institution, the institution may not: (1) disburse any additional Federal Perkins Loan or FSEOG Program funds to the applicant; (2) employ, continue to employ or allow an employer to employ the applicant under Federal Work Study; or (3) originate the applicant’s Direct Subsidized Loan or disburse any additional Direct Subsidized Loan proceeds for the applicant, and the applicant must repay to the institution any Federal Perkins Loan or FSEOG received for that award year. Further, if an institution has received proceeds for a Direct Subsidized Loan on behalf of an applicant, the institution must return all or a portion of those funds as provided under 34 CFR Section 668.166(b) if the applicant does not complete verification within the time period specified. Context: The University disbursed federal aid to students whose FAFSAs were selected for verification and were thus required to verify the information specified by the Secretary pursuant to 34 CFR Section 668.56. Condition: We identified the following instances of noncompliance from a selection of sixty-five (65) students whose FAFSA information was selected for verification: • One (1) student whose income earned from work was entered incorrectly due to a transposition error. Though correcting the error impacted the student’s estimated family contribution (“EFC”), the correction did not impact the student’s federal eligibility for need-based aid, and there were no questioned costs identified. • One (1) student whose parent’s Adjusted Gross Income (“AGI”) and U.S. Income Tax Paid were not recalculated properly after the University determined a manual adjustment to the underlying tax information used in the EFC calculation was warranted based on a change in the student’s circumstances. In processing this change, the University calculated an incorrect AGI, which in turn led to the incorrect calculation of U.S. Income Tax Paid. Though correcting the errors impacted the student’s EFC, the corrections did not impact the student’s federal eligibility for need-based aid, and there were no questioned costs identified. • One (1) student whose parent’s U.S. Income Tax Paid was not recalculated properly after the University determined a manual adjustment to the underlying tax information used in the EFC calculation was warranted based on a change in the student’s circumstances. In processing this change, the University recalculated the new tax amount using the wrong taxable income based due to a transposition error. Though correcting the error impacted the student’s EFC, the correction did not impact the student’s federal eligibility for need-based aid, and there were no questioned costs identified. • One (1) student whose parents’ AGI was entered incorrectly due to a transposition error. Though correcting the error impacted the student’s EFC, the correction did not impact the student’s federal eligibility for need-based aid, and there were no questioned costs identified. Cause: During the verification review, manual data entry errors (transposition of numbers) and miscalculations led to inaccuracies finalizing EFC calculations. Effect: The University did not properly verify the FAFSA information for four (4) students. Questioned Costs: None noted Identified as a Repeat Finding: No Recommendation: The University should strengthen its policies and procedures and improve its training on verification requirements to ensure that FAFSA information is properly verified and corrected as needed. Views of Responsible Officials: The University acknowledges the finding and will have fully implemented a corrective action plan by April 15, 2025.

Finding 2024-001 - Special Tests and Provisions – Verification (Significant Deficiency) U.S. Department of Education - Student Financial Assistance Cluster Federal Direct Loan Program (84.268) Federal Award Year: 2023-2024 Criteria: Pursuant to 34 CFR Section 668.54(a), except as provided in 34 CFR Section 668.54(b), an institution must require an applicant whose Free Application for Federal Student Aid (“FAFSA”) information is selected for verification by the Secretary, to verify the information specified by the Secretary pursuant to 34 CFR Section 668.56. Acceptable documentation for verification is further defined in 34 CFR Section 668.57, and specifically for the 2023-2024 award year, in Federal Register Volume 87, Number 130. Pursuant to 34 CFR Section 668.60(b), for purposes of the subsidized student financial assistance programs, excluding the Federal Pell Grant Program, if an applicant fails to provide the requested documentation within a reasonable time period established by the institution, the institution may not: (1) disburse any additional Federal Perkins Loan or FSEOG Program funds to the applicant; (2) employ, continue to employ or allow an employer to employ the applicant under Federal Work Study; or (3) originate the applicant’s Direct Subsidized Loan or disburse any additional Direct Subsidized Loan proceeds for the applicant, and the applicant must repay to the institution any Federal Perkins Loan or FSEOG received for that award year. Further, if an institution has received proceeds for a Direct Subsidized Loan on behalf of an applicant, the institution must return all or a portion of those funds as provided under 34 CFR Section 668.166(b) if the applicant does not complete verification within the time period specified. Context: The University disbursed federal aid to students whose FAFSAs were selected for verification and were thus required to verify the information specified by the Secretary pursuant to 34 CFR Section 668.56. Condition: We identified the following instances of noncompliance from a selection of sixty-five (65) students whose FAFSA information was selected for verification: • One (1) student whose income earned from work was entered incorrectly due to a transposition error. Though correcting the error impacted the student’s estimated family contribution (“EFC”), the correction did not impact the student’s federal eligibility for need-based aid, and there were no questioned costs identified. • One (1) student whose parent’s Adjusted Gross Income (“AGI”) and U.S. Income Tax Paid were not recalculated properly after the University determined a manual adjustment to the underlying tax information used in the EFC calculation was warranted based on a change in the student’s circumstances. In processing this change, the University calculated an incorrect AGI, which in turn led to the incorrect calculation of U.S. Income Tax Paid. Though correcting the errors impacted the student’s EFC, the corrections did not impact the student’s federal eligibility for need-based aid, and there were no questioned costs identified. • One (1) student whose parent’s U.S. Income Tax Paid was not recalculated properly after the University determined a manual adjustment to the underlying tax information used in the EFC calculation was warranted based on a change in the student’s circumstances. In processing this change, the University recalculated the new tax amount using the wrong taxable income based due to a transposition error. Though correcting the error impacted the student’s EFC, the correction did not impact the student’s federal eligibility for need-based aid, and there were no questioned costs identified. • One (1) student whose parents’ AGI was entered incorrectly due to a transposition error. Though correcting the error impacted the student’s EFC, the correction did not impact the student’s federal eligibility for need-based aid, and there were no questioned costs identified. Cause: During the verification review, manual data entry errors (transposition of numbers) and miscalculations led to inaccuracies finalizing EFC calculations. Effect: The University did not properly verify the FAFSA information for four (4) students. Questioned Costs: None noted Identified as a Repeat Finding: No Recommendation: The University should strengthen its policies and procedures and improve its training on verification requirements to ensure that FAFSA information is properly verified and corrected as needed. Views of Responsible Officials: The University acknowledges the finding and will have fully implemented a corrective action plan by April 15, 2025.