Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Material Weakness in Internal Controls over Compliance and Instance of Noncompliance Department of Education Federal Assistance Listing Number: 84.031 Federal Program Name: Higher Education Institutional Aid Federal Award Number: P031S210057, P031C210038 Award Year: 2023-24, 2022-23, 2021-22 Criteria – Compensation costs are allowable to the extent they satisfy requirements of 2 CFR section 200.430, and the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition/context – A sample of 13 employees out of a population of 24 employees whose compensation was charged to the awards was selected. Of the 13 samples selected we found 5 employees who either had no records to support the actual allocation of time that was charged to each award or the amount allocated to the award did not agree to the time and effort reporting. The personnel action form that is completed upon hire indicated the allocation of time worked in some instances, however in accordance with 2 CFR section 200.430 (i)(1)(viii) estimates determined before the services are performed do not qualify as support for charges to Federal awards. Our sample was not, and was not intended to be, statistically valid. Questioned costs – Undeterminable Cause/effect – The University does not have the proper controls in place to ensure time and effort reporting is completed or completed accurately. The lack of records supporting the actual allocation of time charged increases the risk of unallowable compensation costs being charged to the federal award. Repeat finding – Yes, 2023-002 Recommendation – We recommend the University implement an internal control policy that requires employees whose compensation is charged to a federal award complete time and effort reporting to accurately reflect the work performed on each federal award and ensure supporting documentation is maintained for those who do charge time and agrees to amount allocated to the award. Views of responsible officials and planned corrective actions – Heritage implemented a new system, however Heritage continues to encounter mistakes on correctly completing the time & efforts due to the differences in length of faculty contracts. Even though DOE noted that “this finding resolved and closed.” Heritage continues to work on the process to improve with further training.
Special Tests and Provisions - Enrollment Reporting – Significant Deficiency in Internal Controls over Compliance Student Financial Assistance Cluster Department of Education Federal Assistance Listing Number: 84.063, 84.268 Federal Program Name: Federal Pell Grant Program, Federal Direct Student Loans Federal Award Number: P063P2324403, P268K242403 Award Year: 2023-24, 2022-23, 2021-22 Criteria – The National Student Loan Data System (NSLDS) is the Department of Education’s (ED) centralized database for students’ enrollment information under the Pell Grant and the Direct Loan and Federal Family Education Loan programs. Uniform guidance requires institutions to have internal controls in place to ensure attendance changes for students are reported to NSLDS within at least 60 days of when the student attendance change occurs. It is the University’s responsibility to update students' enrollment information timely and accurately as outlined in 34 CFR § 685.309. Institutions are responsible for accurately reporting certain significant data elements under the Campus- Level Record and Program-Level Record that ED considers high risk, which includes the student's program as per the Classification of Instructional Programs (CIP) code, and the student's status change Effective Date. Condition/context – We selected a sample of 19 students out of a population of 208 who had received Federal aid and were reported to NSLDS during the fiscal year. We compared the significant data elements under the Campus-Level and Program-Level Records that ED considers high risk as reported to NSLDS to the data included in the student's academic records, other institutional records, and the withdrawal or graduation date per the University’s records. We noted exceptions with 3 out of the 19 students tested. Two students were not reported to NSLDS within the 60 day requirement and one student who withdrew but was not reported as such to NSLDS. In addition, one of the students who was not reported timely to NSLDS had graduated but was not reported to NSLDS as such. Our sample was not, and was not intended to be, statistically valid. Questioned costs – None. Cause/effect – This occurred because of lack of controls and oversight of the process. This resulted in incomplete and inaccurate reporting of the information to NSLDS. The enrollment information reported to NSLDS is utilized by ED, the Direct Loan program, lenders, and other institutions to determine in-school status. Repeat finding – Yes, 2023-007 Recommendation – We recommend the University follow and enhance existing policies to ensure all student changes in status are identified timely and submitted accurately within the required time frame. We also recommend the University establish a formal internal monitoring control whereby a designated individual with NSLDS access, on a sample basis, spot checks the status updates on NSLDS so to internally audit the National Student Clearinghouse submissions. Views of responsible officials and planned corrective actions – As a response to concerns about disruptions in processes and the turnover of key staff in several departments, the Enrollment Alliance group that includes director-level staff in Admissions, the Registrar, Financial Aid, Advising, Bursar, and IT began meeting under the facilitation of the VP of Student Affairs on January 7, 2025. When the registrar office sends their enrollment reporting through the clearing house, financial aid will have a person with access to NSLDS to spot check to ensure enrollment is submitted correctly and in a timely manner. A system will be developed where spot checks will be done monthly on a few random students.
Equipment and Real Property Management – Significant Deficiency in Internal Controls over Compliance Department of Education Federal Assistance Listing Number: 84.031 Federal Program Name: Higher Education Institutional Aid Federal Award Number: P031S210057, P031C210038 Award Year: 2023-24, 2022-23 Criteria – Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) for real property and equipment management. 2 CFR 200.313(d)(1) requires that property records must be maintained that include, among other things, description of the property, source of funding for the property and percentage of Federal participation in the project costs for the Federal award under which the property was acquired. 2 CFR 200.313(d)(2) states that a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Condition/context – We selected a sample of 3 equipment purchases out of a population of 6 equipment purchases made during the year. The University did not maintain the required property records for any of the purchases. In addition, the University did not perform a physical inventory for those purchases in the last two years. Our sample was not, and was not intended to be, statistically valid. Questioned costs – None. Cause/effect – This occurred because of lack of controls and an antiquated equipment tracking system. The University is unable to satisfy the requirement that they maintain proper records for equipment and adequately safeguards and maintains equipment. Repeat finding – Yes, 2023-008 Recommendation – We recommend the University update their equipment tracking system to allow the University to identify assets purchased with federal money. In addition, we recommend the University perform a physical inventory of its fixed asset at least once every two years. Views of responsible officials and planned corrective actions – Currently an informal yearly review of fixed assets between the operations and business offices is being done. Heritage has an asset inventory that is manually maintained, which indicates the items that are purchased with federal funds. Heritage’s operations department is taking ownership of documenting university fixed assets and deploying an asset management software. This will be helpful in conducting physical inventories in the future.
Special Tests and Provisions – Return of Title IV Funds (R2T4) – Significant Deficiency in Internal Controls over Compliance Department of Education Student Financial Assistance Cluster Department of Education Federal Assistance Listing Number: 84.063, 84.379, 84.268, 84.007 Federal Program Name: Federal Pell Grant Program, Teacher Education Assistance for College and Higher Education, Federal Direct Student Loans, Supplemental Educational Opportunity Grant Federal Award Number: P063P232403, P379T242403, P268K242403, P007A234364 Award Year: 2023-24, 2022-23 Criteria – In accordance with 34 CFR 668.22 when a recipient of title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of title IV grant or loan assistance that the student earned as of the student’s withdrawal date. Condition/context – We selected a sample of 6 official and 2 unofficial withdrawals from a population of 41 total withdrawals. Two students tested were mistakenly processed as official withdrawals, however the University was unable to support the withdrawal dates. As such, the 50% rate should have been used for the R2T4 calculation. This would have resulted in one student earning more aid than originally calculated. For the second student this would have resulted in funds needing to be returned. For one sample selection the R2T4 was not completed until approximately 8 months after the student had notified the University of their withdrawal. Our sample was not, and was not intended to be, statistically valid. Questioned costs – Undeterminable. Cause/effect – This occurred because of lack of controls and processes in place to ensure supporting documentation is maintained for student’s withdrawal dates. This resulted in the calculations being incorrect and money not being returned to the federal government. Repeat finding – Yes, 2023-009 Recommendation – We recommend the University review their policies and procedures to ensure that all withdrawals have the appropriate documentation to support the withdrawal date used in the calculation. We also recommend a control be put in place to ensure the calculations are performed timely. Views of responsible officials and planned corrective actions – As a response to concerns about disruptions in processes and the turnover of key staff in several departments, the Enrollment Alliance group that includes director-level staff in Admissions, the Registrar, Financial Aid, Advising, Bursar, and IT began meeting under the facilitation of the VP of Student Affairs on January 7, 2025. This group has helped to guide the Registrar's Office in the development and workflow structure of an electronic withdrawal form that must be routed through several required offices, including Financial Aid, to ensure that processes including R2T4 calculations are completed and correct for each student who withdrawals during the semester. This structure is now in place.
Special Tests and Provisions – Federal Perkins Loan Liquidation – Significant Deficiency in Internal Controls over Compliance Department of Education Student Financial Assistance Cluster Federal Assistance Listing Number: 84.038 Federal Program Name: Federal Perkins Loan Program Award Year: 2022-23 Criteria – In accordance with 34 CFR 674.19(d) the institutional must maintain program and fiscal records of all Perkins funds since the most recent Fiscal Operations Report (FISAP) was submitted and reconcile this information at least monthly. Condition/context – The University could not provide the required reconciliations as required by 34 CFR section 674.19(d). Our sample was not, and was not intended to be, statistically valid. Questioned costs – None. Cause/effect – This occurred because of a lack of understanding of the compliance requirements for Perkins program and fiscal records. The University is unable to provide support that the program and fiscal records of all the Perkins funds reconciles to the most recent FISAP. Repeat finding – Yes, 2023-010 Recommendation – We recommend the University reconcile the information to the most recent filed FISAP to ensure the entire portfolio of Perkins loans was properly liquidated. Views of responsible officials and planned corrective actions – A letter dated August 15,2024 from the Department of Education stated “the liquidation of Heritage University’s Federal Perkins Loan portfolio is complete.”
Eligibility – Significant Deficiency in Internal Controls over Compliance Department of Education Student Financial Assistance Cluster Federal Assistance Listing Number: 84.063, 84.268 Federal Program Name: Federal Pell Grant Program, Federal Direct Student Loans Federal Award Number: P063P232403, P379T242403, P268K242403, P007A234364 Award Year: 2023-24 Criteria – Institutions are required to determine student eligibility for some Title IV programs who have financial need known as “need-based” programs. The total aid that a student receives from need-based programs may not exceed the student’s financial need. For other Title IV programs, eligibility is based on the student’s expected family contribution. Institutions are required to have controls in place to support the eligibility of each student for need and non-need based programs. Condition/context – We selected a sample of 42 students out of a population of 694 students who received Title IV aid during the year. Of the 42 samples selected we found errors with 5 student’s eligibility for need and non-need based programs. Our sample was not, and was not intended to be, statistically valid. Questioned costs – None Cause/effect – This occurred because of turnover in the student financial assistance office. Repeat finding – No Recommendation – We recommend the University implement the proper controls to ensure the determination of student eligibility for Title IV aid is appropriate and supported. Views of responsible officials and planned corrective actions – As a response to concerns about disruptions in processes and the turnover of key staff in several departments, the Enrollment Alliance group that includes director-level staff in Admissions, the Registrar, Financial Aid, Advising, Bursar, and IT began meeting under the facilitation of the VP of Student Affairs on January 7, 2025. This group will continue to work on implementing the proper controls to ensure that the determination of student eligibility for Title IV aid is appropriate and has supporting documentation.
Allowed or Unallowed and Allowable Costs/Cost Principles – Material Weakness in Internal Controls over Compliance and Instance of Noncompliance Department of Education Federal Assistance Listing Number: 84.184 Federal Program Name: Mental Health Service Professional Demonstration Grant Program Federal Award Number: S184X230057 Award Year: 2023-24 Criteria – Compensation costs are allowable to the extent they satisfy requirements of 2 CFR section 200.430, and the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition/context – A sample of 8 employees out of a population of 14 employees whose compensation was charged to the awards was selected. Of the 8 samples selected we found 7 employees who either had no records to support the actual allocation of time that was charged to each award or the amount allocated to the award did not agree to the time and effort reporting. The personnel action form that is completed upon hire indicated the allocation of time worked in some instances, however in accordance with 2 CFR section 200.430 (i)(1)(viii) estimates determined before the services are performed do not qualify as support for charges to Federal awards. Our sample was not, and was not intended to be, statistically valid. Questioned costs – Undeterminable Cause/effect – The University does not have the proper controls in place to ensure time and effort reporting is completed or completed accurately. The lack of records supporting the actual allocation of time charged increases the risk of unallowable compensation costs being charged to the federal award. Repeat finding – No Recommendation – We recommend the University implement an internal control policy that requires employees whose compensation is charged to a federal award complete time and effort reporting to accurately reflect the work performed on each federal award and ensure supporting documentation is maintained for those who do charge time and agrees to amount allocated to the award. Views of responsible officials and planned corrective actions – Heritage implemented a new system, however Heritage continues to encounter mistakes on correctly completing the time & efforts due to the differences in length of faculty contracts. Heritage continues to work on the process to improve with further training.
Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Material Weakness in Internal Controls over Compliance and Instance of Noncompliance National Science Foundation Federal Assistance Listing Number: Various Federal Program Name: Research and Development Cluster Federal Award Number: Various Award Year: 2023-24 Criteria – Compensation costs are allowable to the extent they satisfy requirements of 2 CFR section 200.430, and the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition/context – A sample of 6 employees out of a population of 18 employees whose compensation was charged to the awards was selected. Of the 6 samples selected we found 4 employees who either had no records to support the actual allocation of time that was charged to each award or the amount allocated to the award did not agree to the time and effort reporting. The personnel action form that is completed upon hire indicated the allocation of time worked in some instances, however in accordance with 2 CFR section 200.430 (i)(1)(viii) estimates determined before the services are performed do not qualify as support for charges to Federal awards. Our sample was not, and was not intended to be, statistically valid. Questioned costs – Undeterminable Cause/effect – The University does not have the proper controls in place to ensure time and effort reporting is completed or completed accurately. The lack of records supporting the actual allocation of time charged increases the risk of unallowable compensation costs being charged to the federal award. Repeat finding – No Recommendation – We recommend the University implement an internal control policy that requires employees whose compensation is charged to a federal award complete time and effort reporting to accurately reflect the work performed on each federal award and ensure supporting documentation is maintained for those who do charge time and agrees to amount allocated to the award. Views of responsible officials and planned corrective actions – Heritage implemented a new system, however Heritage continues to encounter mistakes on correctly completing the time & efforts due to the differences in length of faculty contracts. Heritage continues to work on the process to improve with further training.