Audit 352112

Finding No.: 2024 002 – Disbursements Reporting Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Pell Grant Program ALN Number: 84.063 Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. An institution follows up with a disbursement record for that student no earlier than (1) seven calendar days prior to the disbursement date under the Advance or Heightened Cash Monitoring 1 payment methods, or (2) the date of the disbursement under the Reimbursement or Heightened Cash Monitoring 2 Payment Method. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. In testing the origination and disbursement data, the auditor should be most concerned with the data ED has categorized as accepted or accepted with corrections. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. Institutions may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For six (6) out of 40 students selected for test work, the required Pell student payment data was reported to the Common Origination and Disbursement (COD) website 17 days after disbursement, which exceeds the 15-day timeframe required by federal regulations. For one (1) out of 40 student sample selections, the Cost of Attendance was misreported to the COD website. There was no follow-up by the University to correct the discrepancy. For three (3) out of 40 student sample selections, the transaction number did not agree between the Student Aid Report (SAR) and the COD website. Cause The cause of the condition found is insufficient review to ensure that disbursement reporting is occurring on a timely basis, all records submitted to COD were accepted, and, for those that were rejected, that corrected data is submitted within the required timeframe. Possible Asserted Effect The possible effect of the condition found is that the University may not be reporting Pell disbursements to COD completely, accurately, and in a timely manner. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Views of Responsible Officials Management accepts this finding and notes there were issues with the disbursement records that prevented them from being sent to COD. Unexpected turnover in the workforce resulted in 25% normal processing capacity during the timeframe in question. Staffing levels in that area have been fully restored with appropriate training to the employees. A formal schedule has been developed whereby records are reconciled and sent to COD on a weekly basis to reduce the risk of late filings. In addition, the University is considering methods of improved redundancy and backup to prevent systemic issues going forward.

Finding No.: 2024 003 – Verification Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Federal Pell Grant Program and Federal Direct Loan Program ALN Number: 84.063 and 84.268 Federal Award Year: July 1, 2023 – June 30, 2024 Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. For students who are assigned to the Standard Verification Group (V1), the institution must verify the following: adjusted gross income; U.S. income tax paid; untaxed portions of IRA distributions; untaxed portions of pensions; IRA deductions and payments; tax-exempt interest income; education credits; household size; number in college. For students who are assigned to the Custom Verification Group (V4), the institution must verify identity/statement of educational purpose (SEP). For students who are assigned to the Aggregate Verification Group (V5), the institution must verify identity/SEP in addition to the items in the Standard Verification Group. If any discrepancies are identified, the institution is required to submit a correction and obtain an updated SAR. Additionally, Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For one (1) out of 2140 students selected for testwork, one (1) of the ten (10) required verification elements, specifically the student's income earned from work, was not verified by the University. Cause The condition resulted from the University’s internal control processes not operating consistently to ensure that each specified data element was appropriately verified. Specifically, the University’s control of completely reviewing all specified data elements was not operating at a level of precision that would cover all specified data elements. Possible Asserted Effect Failure to perform verification procedures over all required data elements could result in awarding students more or less aid than they would otherwise qualify for. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Views of Responsible Officials Management accepts this finding. The error on the verification (1 student) was made by a former staff that did not verify the student wages. Clarkson’s procedure clearly states the income is required to be verified, however the former staff member made an error in processing this verification. Improvements to the training process have been implemented including emphasis on the requirement that staff verify income as part of the review process. A multi-tier review system has been implemented whereby after the initial review process has been completed, verification documents are submitted to the Director who then performs a second review to ensure that the initial review process was correctly followed and that the data is reliable.

Finding No.: 2024 003 – Verification Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Federal Pell Grant Program and Federal Direct Loan Program ALN Number: 84.063 and 84.268 Federal Award Year: July 1, 2023 – June 30, 2024 Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. For students who are assigned to the Standard Verification Group (V1), the institution must verify the following: adjusted gross income; U.S. income tax paid; untaxed portions of IRA distributions; untaxed portions of pensions; IRA deductions and payments; tax-exempt interest income; education credits; household size; number in college. For students who are assigned to the Custom Verification Group (V4), the institution must verify identity/statement of educational purpose (SEP). For students who are assigned to the Aggregate Verification Group (V5), the institution must verify identity/SEP in addition to the items in the Standard Verification Group. If any discrepancies are identified, the institution is required to submit a correction and obtain an updated SAR. Additionally, Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For one (1) out of 2140 students selected for testwork, one (1) of the ten (10) required verification elements, specifically the student's income earned from work, was not verified by the University. Cause The condition resulted from the University’s internal control processes not operating consistently to ensure that each specified data element was appropriately verified. Specifically, the University’s control of completely reviewing all specified data elements was not operating at a level of precision that would cover all specified data elements. Possible Asserted Effect Failure to perform verification procedures over all required data elements could result in awarding students more or less aid than they would otherwise qualify for. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Views of Responsible Officials Management accepts this finding. The error on the verification (1 student) was made by a former staff that did not verify the student wages. Clarkson’s procedure clearly states the income is required to be verified, however the former staff member made an error in processing this verification. Improvements to the training process have been implemented including emphasis on the requirement that staff verify income as part of the review process. A multi-tier review system has been implemented whereby after the initial review process has been completed, verification documents are submitted to the Director who then performs a second review to ensure that the initial review process was correctly followed and that the data is reliable.

Finding No.: 2024 002 – Disbursements Reporting Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Pell Grant Program ALN Number: 84.063 Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. An institution follows up with a disbursement record for that student no earlier than (1) seven calendar days prior to the disbursement date under the Advance or Heightened Cash Monitoring 1 payment methods, or (2) the date of the disbursement under the Reimbursement or Heightened Cash Monitoring 2 Payment Method. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. In testing the origination and disbursement data, the auditor should be most concerned with the data ED has categorized as accepted or accepted with corrections. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. Institutions may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For six (6) out of 40 students selected for test work, the required Pell student payment data was reported to the Common Origination and Disbursement (COD) website 17 days after disbursement, which exceeds the 15-day timeframe required by federal regulations. For one (1) out of 40 student sample selections, the Cost of Attendance was misreported to the COD website. There was no follow-up by the University to correct the discrepancy. For three (3) out of 40 student sample selections, the transaction number did not agree between the Student Aid Report (SAR) and the COD website. Cause The cause of the condition found is insufficient review to ensure that disbursement reporting is occurring on a timely basis, all records submitted to COD were accepted, and, for those that were rejected, that corrected data is submitted within the required timeframe. Possible Asserted Effect The possible effect of the condition found is that the University may not be reporting Pell disbursements to COD completely, accurately, and in a timely manner. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Views of Responsible Officials Management accepts this finding and notes there were issues with the disbursement records that prevented them from being sent to COD. Unexpected turnover in the workforce resulted in 25% normal processing capacity during the timeframe in question. Staffing levels in that area have been fully restored with appropriate training to the employees. A formal schedule has been developed whereby records are reconciled and sent to COD on a weekly basis to reduce the risk of late filings. In addition, the University is considering methods of improved redundancy and backup to prevent systemic issues going forward.

Finding No.: 2024 003 – Verification Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Federal Pell Grant Program and Federal Direct Loan Program ALN Number: 84.063 and 84.268 Federal Award Year: July 1, 2023 – June 30, 2024 Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. For students who are assigned to the Standard Verification Group (V1), the institution must verify the following: adjusted gross income; U.S. income tax paid; untaxed portions of IRA distributions; untaxed portions of pensions; IRA deductions and payments; tax-exempt interest income; education credits; household size; number in college. For students who are assigned to the Custom Verification Group (V4), the institution must verify identity/statement of educational purpose (SEP). For students who are assigned to the Aggregate Verification Group (V5), the institution must verify identity/SEP in addition to the items in the Standard Verification Group. If any discrepancies are identified, the institution is required to submit a correction and obtain an updated SAR. Additionally, Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For one (1) out of 2140 students selected for testwork, one (1) of the ten (10) required verification elements, specifically the student's income earned from work, was not verified by the University. Cause The condition resulted from the University’s internal control processes not operating consistently to ensure that each specified data element was appropriately verified. Specifically, the University’s control of completely reviewing all specified data elements was not operating at a level of precision that would cover all specified data elements. Possible Asserted Effect Failure to perform verification procedures over all required data elements could result in awarding students more or less aid than they would otherwise qualify for. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Views of Responsible Officials Management accepts this finding. The error on the verification (1 student) was made by a former staff that did not verify the student wages. Clarkson’s procedure clearly states the income is required to be verified, however the former staff member made an error in processing this verification. Improvements to the training process have been implemented including emphasis on the requirement that staff verify income as part of the review process. A multi-tier review system has been implemented whereby after the initial review process has been completed, verification documents are submitted to the Director who then performs a second review to ensure that the initial review process was correctly followed and that the data is reliable.

Finding No.: 2024 003 – Verification Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Federal Pell Grant Program and Federal Direct Loan Program ALN Number: 84.063 and 84.268 Federal Award Year: July 1, 2023 – June 30, 2024 Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. For students who are assigned to the Standard Verification Group (V1), the institution must verify the following: adjusted gross income; U.S. income tax paid; untaxed portions of IRA distributions; untaxed portions of pensions; IRA deductions and payments; tax-exempt interest income; education credits; household size; number in college. For students who are assigned to the Custom Verification Group (V4), the institution must verify identity/statement of educational purpose (SEP). For students who are assigned to the Aggregate Verification Group (V5), the institution must verify identity/SEP in addition to the items in the Standard Verification Group. If any discrepancies are identified, the institution is required to submit a correction and obtain an updated SAR. Additionally, Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For one (1) out of 2140 students selected for testwork, one (1) of the ten (10) required verification elements, specifically the student's income earned from work, was not verified by the University. Cause The condition resulted from the University’s internal control processes not operating consistently to ensure that each specified data element was appropriately verified. Specifically, the University’s control of completely reviewing all specified data elements was not operating at a level of precision that would cover all specified data elements. Possible Asserted Effect Failure to perform verification procedures over all required data elements could result in awarding students more or less aid than they would otherwise qualify for. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Views of Responsible Officials Management accepts this finding. The error on the verification (1 student) was made by a former staff that did not verify the student wages. Clarkson’s procedure clearly states the income is required to be verified, however the former staff member made an error in processing this verification. Improvements to the training process have been implemented including emphasis on the requirement that staff verify income as part of the review process. A multi-tier review system has been implemented whereby after the initial review process has been completed, verification documents are submitted to the Director who then performs a second review to ensure that the initial review process was correctly followed and that the data is reliable.