Finding 2024-001 Federal Programs: Student Financial Assistance Cluster • Federal Pell Grant Program (ALN 84.063) Federal Agency – U.S. Department of Education Federal Award Year – January 1, 2024 to December 31, 2024 Compliance Requirement - Reporting Criteria Requirement: Under the Pell grant and the Direct and Federal Family Education Loan programs, Institutions must submit Direct Loan and Pell Grant disbursement records to the COD System no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. See Federal Register Volume 86, Number 119, June 24, 2021. The Department considers that Title IV funds are disbursed on the date that schools (a) credit those funds in their general ledger or any subledger to a student’s account or (b) pay those funds to a student or parent directly. Title IV aid is disbursed even if schools use their own funds in advance of receiving program funds from the Department. Failure to submit disbursement records within the required time frame may result in a rejection of all or part of the reported disbursement, an audit or program review finding, or possible fines or other penalties. 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. Key items to test on origination records, if applicable, are: award amount, enrollment date, verification status code (when the applicant is selected for verification), transaction number, cost of attendance, and the “Academic Start Date” and “Academic End Date”. Key items to test on disbursement records are Under the Pell grant and the Direct and Federal Family Education Loan programs, Institutions must submit Direct Loan and Pell Grant disbursement records to the COD System no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. Failure to submit disbursement records within the required time frame may result in a rejection of all or part of the reported disbursement, an audit or program review finding, or possible fines or other penalties. 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. Key items to test on origination records, if applicable, are: award amount, enrollment date, verification status code (when the applicant is selected for verification), transaction number, cost of attendance, and the “Academic Start Date” and “Academic End Date”. Key items to test on disbursement records are disbursement date and amount. The information may be accessed by the institution for the auditor. Condition Found: For 3 students out of 60 selected for testwork, the institution inaccurately reported the date of enrollment of the student to the COD system, which represents one out of the nine required data elements to be reported to the COD. The differences in enrollment dates were 2 - 16 days. Cause and Possible Asserted Effect: The institution’s control to reconcile the data between the institution’s records and COD system was not designed effectively to ensure accurate data is reported to COD on a timely basis. Identification of Questioned Costs: There are no questioned costs related to this finding. Sampling: The sample was not intended to be and was not a statistically valid sample. Identification of Repeat Finding: This audit finding is not a repeat finding in the prior year. Recommendation: Our recommendation is for management to reinforce and provide training to individuals responsible for compliance control ownership. This will help ensure that controls are designed and implemented effectively; as well as functioning as intended and control ownership is established, thereby preventing or promptly identifying and rectifying instances of noncompliance. Further, management should maintain appropriate documentation evidencing the control performance. In particular, it is advised to enhance processes and controls related to the accurate reporting of Institution’s records to COD system for all required data elements. Views of Responsible Officials: The College agrees with the recommendation provided. The College is in process to include a full review of processes and controls related to monthly COD/NLSDS reconciliation. The College’s third-party servicer is assisting in this training as well as the update of policies, processes, and controls, as well as the maintenance of evidentiary documentation, to ensure accuracy moving forward.
Federal Programs: Student Financial Assistance Cluster • Federal Direct Student Loans (ALN 84.268) • Federal Pell Grant Program (ALN 84.063) Federal Agency – U.S. Department of Education Federal Award Year – January 1, 2024 to December 31, 2024 Compliance Requirement – Special Tests and Provisions – Enrollment Reporting Criteria Requirement: Under the Pell grant and the Direct and Federal Family Education Loan programs, institutions are required to report enrollment information via the National Student Loan Data System (NSLDS) (OMB No.1845-0035). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update and verify student enrollment statuses, program information and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information; “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Institutions are responsible for accurately reporting the following significant data elements under the Campus-Level Record that the Department of Education (ED) considers high risk: • OPEID number, enrollment effective date, enrollment status and certification date Institutions are responsible for accurately reporting the following significant data elements under the Program-Level Record that ED considers high risk • OPEID number, CIP code, CIP year, credential level, published program length measurement, published program length, program begin date, program enrollment status and program enrollment effective date Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Institutions must complete and return the Enrollment Reporting roster file placed in their Student Aid Internet Gateway (SAIG) (OMB No. 1845-0002) mailboxes sent by ED via NSLDS within 15 days. An institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in the data elements for the Campus Record and the Program Record identified above, and submit the changes electronically through the batch method, spreadsheet submittal or the NSLDS website. Additionally, in accordance with Federal requirements, the University shall maintain internal controls over Federal programs designed to provide reasonable assurance that transactions are executed in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award that could have a direct and material effect on a Federal program. Condition Found: The Institution utilizes the National Student Clearinghouse (the Clearinghouse) as a service provider for transmissions of its enrollment reporting changes to the National Student Loan Data System (NSLDS). The University receives the Enrollment Reporting Roster and updates it for changes in student status. The file is sent to the Clearinghouse who transmits the updated information to NSLDS. For a sample of 60 students who were recipients of Direct Loans or Pell Grants between January 1, 2024 and December 31, 2024 who had been identified as having withdrawn, graduated, or modified their enrollment status as defined by the University’s Satisfactory Academic Progress Policy through a change in course load, the following were noted: • For 2 of the 60 students selected for enrollment reporting testing, the student’s effective date of the status change was inaccurately reported to NSLDS and did not agree to the data per the institution’s records, 1 of which was also reported 48 days late. Therefore, management did not report the status change to NSLDS within the required timeframe of 60 days from the date they became aware of the change. • For 1 out of 60 students selected for testwork, comparison of the institution’s records to that of NSLDS evidenced that enrollment reporting status for these students were not reported to NSLDS accurately or on a timely basis. Therefore, management did not report the status changes to NSLDS within the required timeframe of 60 days from the date they became aware of the change. Cause and Possible Asserted Effect: The Institution’s controls over its review of the recording and communication of these status changes is not designed effectively to ensure that individuals’ enrollment statuses are completely and accurately communicated to NSLDS. Further, the institution failed to maintain adequate review and documentation over student enrollment status changes, resulting in a delay in timeliness and inaccuracy of reporting to NSLDS. Identification of Questioned Costs: There are no questioned costs related to this finding. Sampling: The sample was not intended to be and was not a statistically valid sample. Identification of Repeat Finding: This audit finding is not a repeat finding in the prior year. Recommendation: Our recommendation is for management to design and implement a control in order to ensure the compliance requirement objectives are met. In particular, it is advised to implement a system of control within the institution related to the review of enrollment statuses to ensure information is transmitted to NSLDS accurately and timely. Additionally, management should maintain appropriate documentation evidencing the control performance. Further, management should reinforce and provide training to individuals responsible for compliance control ownership. This will help ensure that there are controls in place to ensure compliance and control ownership is established, thereby preventing or promptly identifying and rectifying instances of noncompliance and ensuring the controls are appropriately designed and operate as intended. Views of Responsible Officials: The College agrees with the recommendations provided. Additional training for Registrar staff is in progress to include a full review of processes and controls related to monthly Student Information System – Clearinghouse – NLSDS reconciliation. This review will include a review of how program start dates (semester and session) vs. course starts affect reporting, as well as how multiple student status changes to registration affect reporting. The College’s third-party servicer, National Student Clearinghouse, is assisting in this training as well as the update of policies, processes, and controls, as well as the maintenance of evidentiary documentation, to ensure accuracy moving forward.
Federal Programs: Student Financial Assistance Cluster • Federal Direct Student Loans (ALN 84.268) • Federal Pell Grant Program (ALN 84.063) Federal Agency – U.S. Department of Education Federal Award Year – January 1, 2024 to December 31, 2024 Compliance Requirement - Special Tests and Provisions – Disbursements to or on behalf of students Criteria Requirement: Per the Uniform Guidance, when Title IV funds are credited to a student account and they exceed the amount of tuition and fees, room and board, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after: (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. An institution is permitted to hold credit balances if it obtains a voluntary authorization from the student. Regardless of any authorization obtained by the institution, the institution must pay any remaining loan balance by the end of the loan period and any other remaining Title IV funds by the end of the last payment period in the award year for which the funds were awarded. Condition Found: For 15 out of 47 students selected for testwork, the Title IV funds credited to the student resulted in a credit balance owed to the student. The institution did not refund the credit balances back to the student for more than a period of 14 days and did not obtain proper authorization from the student to retain the balance. The delay in repayment ranged from 18 to 83 days. Cause and Possible Asserted Effect: This is a repeat finding from the prior year. As such for the Spring semester, management did not yet design and implement a control to address the findings. Therefore, this resulted in continued failure by the institution to make payments to the students within the 14-day timeframe required by the Department of Education and did not obtain voluntary authorization from the student to retain the credit balances for the Spring semester. Therefore, this evidenced the lack of an appropriately designed control by the institution to ensure credit balances are refunded to students within the timeframe requirements. Identification of Questioned Costs: There are no questioned costs related to this finding. All credit balances were appropriately refunded by the end of the semester and therefore there were no questioned costs or misstatements that occurred as it relates to the SEFA or financial statements. Sampling: The sample was not intended to be and was not a statistically valid sample. Identification of Repeat Finding: This audit finding is a repeat of finding 2023-002 in the immediately prior year. Recommendation: Our recommendation is for management to design and implement a control in order to ensure the compliance requirement objectives are met. In particular, it is advised to implement a system of control within the institution for refunds of credit balances to be paid to students within the 14-day timeframe. Further, management should reinforce and provide training to individuals responsible for compliance control ownership. This will help ensure that there are controls in place to ensure compliance and control ownership is established, thereby preventing or promptly identifying and rectifying instances of noncompliance and ensuring the controls operate as designed. Views of Responsible Officials: The College agrees with the recommendation provided and remediated the finding for the Fall semester such that there was no further noncompliance. The College has performed a full review of processes and controls related to credit-balance payments within 14-days to ensure accuracy moving forward.