Audit 371262

FINDING 2024-002: FINANCIAL RESPONSIBILITY FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION PROGRAM NAME: FEDERAL DIRECT LOAN PROGRAM ALN#: 84.268 FEDERAL AWARD YEAR: 2023-2024 & 2024-2025 Compliance Requirement: Special Tests and Provisions (N.) - Administrative Capability Criteria: An accredited school that participates in Federal programs authorized by Title IV of the Higher Education Act of 1965 is required to demonstrate minimum standards of financial responsibility set forth by the U.S. Department of Education (DOE). Condition: The Organization did not meet the minimum Composite Score set forth by the U.S. Department of Education for the year ended December 31, 2024. We consider this finding to be a material weakness. This finding is repeated and was reported in the prior year as Finding 2023-002. Cause: The Organization showed an operating loss for the year. Effect: The Organization will be required to adhere to additional stipulations until such ratios are met. Recommendation: The Organization needs to monitor its financial responsibility ratios throughout the year. Views of Responsible Officials: Management agrees that the ratios were not met and a response is included in the Corrective Action Plan.

FINDING 2024-003: INCORRECT REFUND CALCULATION FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION PROGRAM NAME: FEDERAL DIRECT LOAN PROGRAM ALN#: 84.268 FEDERAL AWARD YEAR: 2023-2024 & 2024-2025 Compliance Requirement: Special Tests and Provisions (N.) - Return of Title IV Funds Criteria: An institution must use the Return to Title IV refund calculation (34 CFR 668.22). Condition: We tested all four drop students and noted one incorrect refund calculation. We consider this finding to be an instance of non-compliance. Cause: The condition was caused by using an incorrect last day of attendance in Step 2 of the Return to Title IV (R2T4) refund calculation. Effect: The result is the Institution retained funds that should have been returned to the Department of Education. Question Costs: $90 Statistical sampling was not used when making sample selections. Recommendation: We recommend the Institution refund $90 to the Department of Education and increase controls over refund calculations. Views of Responsible Officials: The Institution agrees with the Single Audit Finding and a response is included in the Corrective Action Plan.

FINDING 2024-004: FAILURE TO NOTIFY SECRETARY OF HCM1 REPORTING EVENTS WILE PARTICIPATING UNDER THE ZONE ALTERNATIVE FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION PROGRAM NAME: FEDERAL DIRECT LOAN PROGRAM ALN#: 84.268 FEDERAL AWARD YEAR: 2023-2024 & 2024-2025 Compliance Requirement: Special Tests and Provisions (N.) - Zone Alternative Criteria: As a participant under the zone alternative, an institution is required to provide timely notification to the Department of Education of HCM1 Reporting events. (34 CFR 668.175(d)(3)(i)) Condition: The Institution failed to properly notify the Secretary of a violation of a loan agreement and a failure to make a payment in accordance with its debt obligations that resulted in a creditor filing suit to recover funds under those obligations. We consider this finding to be a material weakness. Cause: The condition was caused by the Institution being unaware of the Zone Alternative HCM1 Reporting requirements. Effect: As a result, the Institution may no longer qualify under the zone alternative and may be required to post an additional irrevocable letter of credit. Question Costs: $0 Statistical sampling was not used when making sample selections. Recommendation: We recommend the Institution report the HCM1 Reporting events to the Secretary and await instruction from the Department of Education. Views of Responsible Officials: The Institution agrees with the Single Audit Finding and a response is included in the Corrective Action Plan.