Audit 380660

Program: Student Financial Assistance Cluster Criteria: In order for an institution to participate in any Title IV program, the institution must be financially responsible. One of the general standards for being considered financially responsible per 34 CFR section 668.171(b) is to obtain a composite score of at least 1.5. An institution that does not meet one or more of the general standards must comply with the alternative standards and requirements of financial responsibility under 34 CFR section 668.175. Condition: Lake Erie College's composite score based upon the audited financial statements as of June 30, 2025 was less than 1.5. Repeat Finding from Prior Year: Yes Sampling Statistically Valid: Not applicable Questioned Cost: None Context: The financial position and operating results as of and for the year ending June 30, 2025 resulted in a composite score less than 1.5.Effect: Lake Erie College did not meet the definition of being financially responsible for the year ending June 30, 2025 under the general standards and, in turn, must comply with the alternative standards. Cause: Lake Erie College was impacted by multi-year operating losses, negative working capital and a deficiency in net assets without donor restrictions. As a result, at June 30, 2025, Lake Erie College's composite score was negatively impacted. Recommendation: Lake Erie College is reviewing its operations to determine the best approach to maintain adequate levels of liquidity, in addition to improving its operating revenues. Management Response: Management agrees with the finding. Please refer to management's corrective action plan.