Audit 368997

2024-001 – Non-compliance with Enrollment Reporting Requirements Grantor: U.S. Department of Education Program Name: Student Financial Assistance Cluster Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Year: 1/1/2024 - 12/31/2024 Award Number: Not applicable Assistance Listing Numbers: 84.063 and 84.268 Criteria: In accordance with 34 CFR 690.83(b)(2) and 685.309, institutions are required to report enrollment information under the Federal Pell Grant and Federal Direct Loan programs through NSLDS. The enrollment information, inclusive of Campus Level and Program Level data, must be reviewed, updated and validated by the institution in a timely manner. Furthermore, specific to the Federal Direct Loan program, for a student that received a Direct Loan and was enrolled or accepted for enrollment at the institution, and the student had ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended, the institution must report the change within 60 days from which the change was identified. Condition: We reviewed a sample of twenty-five students enrolled at the AHN Schools of Nursing who received either Pell and/or Direct Loans and had a change of enrollment status during the fiscal year. Of the twenty-five students tested, one student was reported to NSLDS with an inaccurate enrollment status. Specifically, the incorrect date of withdrawal was reported for both the campus and program levels; however, the change was reported to NSLDS within the required 60-day timeframe. Cause: The root cause for the improper reporting was due to a manual process resulting in the clerical error and related improper reporting. Effect: A student’s enrollment status determines eligibility for in-school status, deferment, and grace periods, as well as for the payment of interest subsidies all of which are impacted by inaccurate reporting. Questioned Costs (If applicable): None Recommendation: We recommend the AHN Schools of Nursing perform the following: • Update the enrollment status for this particular student; • Ensure all individuals involved in processing student enrollment changes are aware of the School’s policies and procedures to process that change accurately and timely; • Review procedures and controls to ensure accurate enrollment reporting; and • Establish appropriate segregation of duties. Management’s Response: Management Response and Corrective Action Plan is included at the end of this report after the summary schedule of prior audit findings and status.

2024-002 – Non-compliance with Disbursements to or on behalf of students Grantor: U.S. Department of Education Program Name: Student Financial Assistance Cluster Award Names: Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Pell Grant Program and Federal Direct Student Loans Award Year: 1/1/2024 - 12/31/2024 Award Number: Not applicable Assistance Listing Numbers: 84.007, 84.063 and 84.268 Criteria: 34 CFR 668.165 which requires the institution, in advance of disbursement, to provide a general notification to all students receiving Title IV program funds including (1) the anticipated date and amount of the disbursement; (2) the student's or parent's right to cancel all or a portion of that loan or loan disbursement; and (3) the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. 34 CFR 668.165 (a)(6)(i) which defines affirmative confirmation as a process under which an institution obtains written confirmation of the types and amounts of Title IV program loans that a student needs for the period of enrollment. Electronic Signatures in Global and National Commerce Act (E-Sign Act) which requires that a school must obtain a student's voluntary consent to participate in electronic transactions. Condition: Based on our testing, we noted the following: • For 16 students of the 25 sampled, we noted there was no evidence of the school notifying the borrower in writing (paper or electronically) of 1) anticipated date and amount of the disbursement; 2) student's or parent's right to cancel all or a portion of a loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement and have the loan proceeds or TEACH Grant proceeds returned to the Department; and 3) procedures and deadlines by which the student or parent must notify the school that he or she wishes to cancel the loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement. • For 1 student of the 25 sampled, we noted there was no acceptance timestamp for the disbursement showing the disbursement notification was sent to the student within the proper timeline and received affirmative confirmation. • For 1 student of the 25 sampled, we noted there was no signed handbook attestation available to verify the school obtained the student’s voluntary consent to participate in electronic transactions. Cause: Individuals involved in the process did not maintain documentation to evidence that proper notifications were sent to borrowers, nor that consent for participation in electronic transactions was obtained. Effect: A lack of disbursement notifications, affirmative confirmation and student consent to participate in electronic transactions may result in less aid awarded to the School based on noncompliance with this requirement from the Department of Education. Questioned Costs (if applicable): None Recommendation: The AHN Schools of Nursing should enhance their current controls in place to ensure that sufficient documentation is retained to meet all compliance requirements, such as the following: • Establish a process for the School to receive a copy of the notification sent to the borrower receiving Title IV program funds • Establish a process that prevents the disbursement of funds until notifications are validated and approved as per the student account file • Establish a process that prompts students to voluntarily consent to participate in electronic transactions at the time of loan acceptance Management’s Response: Management Response and Corrective Action Plan is included at the end of this report after the summary schedule of prior audit findings and status