2024 – 006 – Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Name: Extension Services at 1890 Colleges and the Education Stabilization Fund Assistance Listing Number: 10.512; 84.425 Federal Award Identification Number and Year: NI201444XXXXG008-0005; P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per 2 CFR 180 and 2 CFR 200.213, nonfederal entities must ensure that vendors are not suspended or debarred from federal programs. Verification can be performed by checking the SAM.gov 'Exclusions' list, collecting a certification from the vendor, or including a clause in the contract requiring compliance. Condition: Documentation supporting the University's suspension and debarment checks for sampled vendors was not maintained. Questioned costs: None. Context: During testing of Suspension and Debarment compliance, we noted that three out of three sampled procurement transactions tested for Program 10.512, as well as two out of two sampled transactions tested for Program 84.425, did not include documentation demonstrating that vendors were verified as not suspended or debarred prior to award. Cause: The University did not maintain records of suspension and debarment checks for sampled transactions. Effect: Without documented verification, there is an increased risk that federal funds could be expended with ineligible vendors, resulting in potential noncompliance with Uniform Guidance and exposure to questioned costs. Repeat Finding: No. Recommendation: We recommend the University implement and enforce procedures to verify vendor status through SAM.gov or other acceptable methods prior to award, retain documentation of the verification in procurement files, and train staff on suspension and debarment requirements under Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 007 – Verification Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. Condition: Supporting documentation for students who were selected for verification was not maintained. Questioned costs: None. Context: During our testing of students selected for verification, we selected a sample of twenty-two students to test for proper documentation of verification. Three of the twenty-two students tested had instances of noncompliance as the institution did not retain statements of educational purpose, as required. Cause: The University's policies and procedures did not ensure retention of required documentation. Effect: Student could report incorrect information which could lead to incorrect EFC and over awarding of aid. Repeat Finding: Yes, 2023-012 Recommendation: We recommend management retain electronic files of student verification documentation more securely within school systems/networks. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 008 – Exit Counseling Federal Agency: US Department of Education Federal Program Name: Federal Direct Student Loans Assistance Listing Number: 84.268 Federal Award Identification Number and Year: P268K230147; P268K240147 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per the Code of Federal Regulations, 34 CFR 685.304(b), if a student borrower withdraws or graduates from school, exit counseling must be provided either electronically, by mailing, or by email to the student borrower. Condition: Students who withdrew or graduated from the University did not receive exit counseling information. Questioned costs: None Context: During our testing, it was noted that eight out of the twenty-nine students who were required to receive exit counseling information did not receive it. Cause: The University’s processes and controls did not ensure that exit counseling was completed or did not retain proper support to indicate this process took place. Effect: Students are not receiving the proper loan counseling which may contribute to not repaying loans to the DoE on time. Repeat Finding: Yes, 2023-015 Recommendation: We recommend the University review its policies and procedures around sending exit counseling information to students to ensure students are receiving proper counseling. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 009 – Perkins Loan Record Retention Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Federal Award Identification Number and Year: N/A Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 674.19.(e), states an institution must retain promissory and master promissory notes (MPN), and repayment records for each Perkins Loan program loan made. The original promissory notes and repayment schedules must be kept until the loans are satisfied. An institution shall retain disbursement and electronic authentication and signature records for each loan made using an MPN for at least three years from the date the loan is canceled, repaid, or otherwise satisfied. Condition: Certain loan MPNs were not retained for the three-year retention period. Questioned costs: None Context: During our testing, Twenty-two out of forty open loans tested and forty out of forty of the loans assigned tested, the University was unable to locate the original promissory note and/or MPN. Cause: The University does not have a review process in place to ensure the MPNs are kept for at least three years from the date the loan is cancelled, repaid, or otherwise satisfied. Effect: The University does not have a proper internal control system for the Federal Perkins Loan Program. Repeat Finding: Yes, 2023-19 Recommendation: We recommend that the University keep MPNs for loans for the three-year retention period. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 010 – Capital Asset Inventory Documentation Federal Agency: US Department of Agriculture Federal Program Name: Extension Services at 1890 Colleges Assistance Listing Number: 10.512 Federal Award Identification Number and Year: NI201444XXXXG008-0005 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Regardless of whether equipment is acquired in part or its entirety under the federal award, the recipient or subrecipient must manage equipment. A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years and a control system must be in place to ensure safeguards for preventing property loss, damage, or theft. Any loss, damage, or theft of equipment must be investigated. The recipient or subrecipient must notify the Federal agency or pass-through entity of any loss, damage, or theft of equipment that will have an impact on the program. Additionally, reconciliation to property records and safeguarding of equipment are requirements under (2 CFR 200.313 (d)(2) and (3)). Condition: The University did not have documentation of inventory of federal funding being completed every two years as well as documentation supporting the safeguard of assets, nor was the auditor able to reconcile to property records or physically inspect the equipment. Questioned costs: None Context: During testing of property and equipment it was noted that none of the eight sample selections tested had been inventoried and no physical documentation supporting the property is appropriately safeguarded and maintained. Cause: The University did not have controls in place that comply with the federal regulations around inventory taking and safeguard keeping. Effect: The University is not in compliance with federal regulations around inventory taking and safeguard keeping. Failure to perform these procedures increases the risk of inaccurate property records, misstatement of federal award expenditures, and potential loss or misuse of federally funded equipment. Repeat Finding: No Recommendation: We recommend management implement procedures for physical inventory to be taken within a two-year timeframe as well as maintain evidence of assets possession such as photos of the property and equipment. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 011 – Procurement Federal Agency: US Department of Agriculture, US Department of Education Federal Program Name: Extension Services at 1890 Colleges, Education Stabilization Fund Assistance Listing Number: 10.512, 84.425 Federal Award Identification Number and Year: NI201444XXXXG008-0005, P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Uniform guidance requires auditees to follow procurement standards. Sections of the Uniform Guidance set forth five permissible procurement methods for nonfederal entities expending federal financial assistance: (1) micro-purchases (§ 200.320(a)(1)); (2) small purchases (§ 200.320(a)(2)); (3) sealed bids (§ 200.320(b)(1)); (4) proposals (§ 200.320(b)(2)); and (5) noncompetitive procurement (§ 200.320(c)(1)-(5)). Condition: The University's procurement policy does not currently match all requirements of the Uniform Guidance, and CliftonLarsonAllen LLP (CLA) was unable to sight evidence of their key control being performed. Questioned costs: None Context: The University's procurement policy does not currently match all requirements of the uniform guidance related to defining the required levels of procurement and when competitive bids are required, and CLA was unable to sight evidence of a key control being performed for five of six sample selections for the Extension Services at 1890 Colleges grant. Cause: The University did not have a process in place to ensure the procurement policy met Uniform Guidance. Effect: The University is not in compliance with Uniform Guidance for procurement. Repeat Finding: Yes, 2023-025 Recommendation: We recommend the University review its procurement policy to ensure it meets federal regulations and ensure they retain documentation of quotes received and final approval forms. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 012 – Return of Title IV Funds (R2T4) Federal Agency: US Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 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 aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in this section and no additional disbursements may be made to the student for the payment period or period of enrollment. If the amount the student earned is greater than the amount disbursed, the difference between the amounts must be treated as a post-withdrawal disbursement (34 CFR 668.22(a)(1) through (a)(5)). Condition: Student who withdrew from the University did not have accurate calculation of Title IV completed to determine the amount to be returned to the Department of Education. Questioned costs: None. Context: During our testing of seven students who withdrew, one student was determined to be refunded $3,704 of Parent Plus, while the University determined and refunded an amount of $3,954. Cause: The University did not have a control in place to calculate refunds accurately for students who withdrew from the University and needed a calculation of Title IV aid to be returned. Effect: The University is not returning the proper amounts to the Department. Repeat Finding: Yes, 2023-016 Recommendation: We recommend the calculation logic be reviewed and corrected to align with approved methodology. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 013 – National Student Loan Database System (NSLDS) Federal Agency: US Department of Education Federal Program Name: Federal Pell Grant Program; Federal Direct Student Loans Assistance Listing Number: 84.063; 84.268 Federal Award Identification Number and Year: P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per U.S. Department of Education (ED) regulations, all schools participating (or approved to participate) in the Federal Student Aid programs must have an arrangement to report student enrollment data to the NSLDS through a roster file. The school is required to report enrollment status at both the school and program level. The school is required to report changes in the student’s enrollment status, the effective date of the status and an anticipated completion date. An academic program is defined as the combination of the school’s Office of Postsecondary Education Identification (OPEID) number and the program’s Classification of Instructional Program (CIP) code, credential level, and published program length. ED requires the University to report changes in enrollment status and indicate the date that the changes occurred (34 CFR 685.309). Changes in enrollment status must be reported within 30 days. However, if a roster file is expected within 60 days, you may provide the date on that roster file. In addition, regulations require that an institution make necessary corrections and return the records within 10 days for any roster files that don’t pass the NSLDS enrollment reporting edits. ED requires the University to report changes in enrollment status within 30 or 60 days that the University determined the changes occurred (34 CFR 682.610). Condition: Certain students’ enrollment information was not reported accurately or timely to the NSLDS. Questioned costs: None Context: Fifteen students out of a sample of sixty students had status of 'NO RECORD FOUND' on both program and campus enrollment detail, despite having changes in status and receiving federal aid Forty-five students out of a sample of sixty students change in status were not reported within the maximum timeline of sixty days to the campus-level record within NSLDS. Fourteen students out of a sample of sixty students had enrollment status dates of which were not matching between campus and program enrollment detail. Forty-five students out of a sample of sixty students did not have enrollment certification occurring at a minimum of every sixty days. Nineteen students out of a sample of sixty students had enrollment status dates on their transcripts of which did not match what was being reported within the enrollment detail in NSLDS. Cause: Management's procedures to report accurate and timely information to the NSLDS were not operating effectively. Effect: Inaccurate reporting to the NSLDS can impact when students enter repayment periods or affect their interest rates. Repeat Finding: Yes, 2023-018 Recommendation: We recommend the University evaluate its procedures and review policies in overseeing submissions to the NSLDS completed by the third-party servicer. Additionally, we recommend the University review its policies and procedures on reporting enrollment information to the NSLDS to ensure that all relevant information is being captured and reported timely in accordance with applicable regulations. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 014 – Direct Loan Reconciliations Federal Agency: US Department of Education Federal Program Name: Federal Direct Student Loans Assistance Listing Number: 84.268 Federal Award Identification Number and Year: P268K230147; P268K240147 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.300(b)(5), states though a school decides the frequency and methods it will use for internal reconciliation, Direct Loan reconciliation must occur at least monthly and should occur before the required monthly reconciliation to the Direct Loan SAS. Schools must maintain documented results of its monthly reconciliation to provide to auditors and reviewers at their request. Condition: Direct loan reconciliations between the COD, G5 and student accounts did not have evidence of being reviewed. Questioned costs: None Context: During our testing, two out of three direct loan reconciliations tested did not have evidence of being reviewed. Cause: The University did not adhere to controls in place for all reconciliations. Effect: The University is not complying with internal policy. Repeat Finding: Yes, 2023-020 Recommendation: We recommend management maintain proper recordkeeping and retention of documentation and review of such documentation. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 015 – Perkins Compliance Attestation Requirements Review Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Federal Award Identification Number and Year: N/A Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.25(a), an institution may enter into a written contract with a third-party servicer for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated. When an institution uses a third-party servicer for its Perkins Loan program, the institution must perform due diligence to ensure that the third-party servicer is in compliance with the requirements for the functions the third-party servicer is performing for the institution. Such due diligence could include obtaining and reviewing the third-party servicer’s most recent Title IV compliance audit. Condition: There is no oversight or review of the controls at the third-party servicer by the University. Questioned costs: None Context: During our testing, we noted that the University does not have a procedure or control to review the annual compliance attestation report regarding the service provider performing Perkins administration services. Cause: The University did not have a control in place to ensure review of the attestation requirements of their Perkins administrator. Effect: University does not have a procedure or control to review the annual compliance attestation report regarding the service provider performing Perkins administration services. The third-party servicer could have compliance findings that could directly impact the University. Repeat Finding: Yes, 2023-021 Recommendation: We recommend reviewing procedures and requirements regarding Perkins third party service providers and ensure compliance with regulations. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 016 – Perkins Reconciliation Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Federal Award Identification Number and Year: N/A Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.25(a), an institution may enter into a written contract with a third-party servicer for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated. When an institution uses a third-party servicer for its Perkins Loan program, the institution must reconcile funds that are reported by the third-party servicer to the University's accounting records. Condition: The University did not reconcile the Perkins Loan Program funds that are recorded on the University's accounting records to the third party servicer's report. There was also no review of the process. Questioned costs: None Context: During our testing, we noted that a control was not identified pertaining to reconciliation of Perkins loans from third party servicer report to the University's accounting records. Cause: The University did not have a control in place to ensure the reconciliation of Perkins loans from third party servicer report to the University's accounting records. Effect: The University accounting records did not reflect the current information. Repeat Finding: Yes, 2023-022 Recommendation: We recommend reviewing procedures around Perkins Loan Program funds and implementing reconciliations and review to the third-party servicer reports. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 017 – HEERF Annual and Quarterly Reporting Federal Agency: US Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The CARES Act 18004(e) and the CRRSAA 314(e) requires an institution receiving funds under Higher Education Emergency Relief Fund (HEERF) I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. Quarterly public reporting for institutional requires a new, separate form to be posted covering aggregate amounts spent for HEERF I, HEERF II, and HEERF III funds each quarterly reporting period due no later than ten days after the end of each calendar quarter. Condition: Annual and quarterly reports were not adhering to compliance requirements. Questioned costs: None Context: During our testing of quarterly reports, one of the three reports tested was not posted on the University's website within ten days of the end of the quarter. During our testing of quarterly reports, three reports tested did not have a supervisor review documented. Cause: The University did not have the controls in place to ensure reporting requirements under the CARES Act 18004(e) and the CRRSAA 314(e) were being followed and met. Effect: The University is not in compliance with the reporting requirements for HEERF funds specified by the Department of Education. Repeat Finding: Yes, 2023-030 Recommendation: We recommend the University should implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure funds are reported accurately and timely, in accordance with grant requirements. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 018 – HEERF Cash Management Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR §200.305 – Federal Payment: Requires that payment methods minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Advance payments must be limited to the minimum amounts needed and timed to meet actual, immediate cash requirements for program costs. HEERF Program Guidance: Institutions must not draw down funds in excess of immediate needs and should avoid accumulating excess cash on hand. Interest earned on excess cash over $250 per year must be remitted to the federal government. Condition: The University drew down Higher Education Emergency Relief Fund (HEERF) funds before incurring the related program expenditures. Federal regulations require that these drawdowns align with actual, immediate cash requirements to prevent excess federal cash on hand. Holding funds for extended periods before spending them can result in noncompliance. Questioned costs: None Context: During our testing of cash receipts, it was noted that the University was drawing down funds prior to incurring the related program expenditures. Cause: The University’s cash management process did not adequately align drawdown timing with actual disbursement needs. The drawdown was initiated based on anticipated expenses rather than immediate cash requirements. Effect: Drawing down funds prior to incurring expenditure creates risk of noncompliance with federal cash management regulations and may result in interest liability for excess cash held. Repeat Finding: No Recommendation: The University should revise its cash management procedures to ensure that HEERF drawdowns are based on actual, immediate cash needs rather than anticipated expenditures. Draw requests should be timed as closely as administratively feasible to the disbursement of funds for allowable program costs. Additionally, management should implement monitoring controls to prevent excess cash accumulation and ensure compliance with 2 CFR §200.305 and HEERF guidance. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 019 – Single Audit Report Submission Federal Agency: Various Federal Program Name: Extension Services at 1890 Colleges, Scholarships for Students at 1890 Institutions, Education Stabilization Fund, Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program, Federal Perkins Loan Program Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR Section 200.512(a) requires the data collection form and Single Audit reporting package be submitted the earlier of 30 days after the reports are received from the auditors or nine months after the end of the audit period. Condition: The University did not submit the single audit report package by the required time. Questioned costs: None. Context: Single audit report was due 3/31/25 and was not submitted until January 2026. Cause: The audit report on the financial statements for the year ended June 30, 2024, was issued after the March 31, 2025, deadline. Effect: The University is not in compliance with the provisions of 2 CFR Section 200.512(a) for the year ended June 30, 2024. Repeat Finding: Yes, 2023-031. Recommendation: We recommend the University should implement and maintain an effective system of internal controls over timely submission of the single audit reporting package. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 020 – HEERF Earmarking Federal Agency: US Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: P425J200025 – 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: HEERF III funds required the spending of funds in use of implementing evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines and conducting direct outreach to financial aid applicants. Spending under these categories indicates whether an institution has spent funds under a required use of funds established under the ARP. If an institution indicates zero-dollar amount spending for either or both categories, examine earlier annual reports to determine the institution had spending at some point on these two funding categories consistent with ARP FAQ Question 21. Condition: No spending of HEERF funds for implementing evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines and conducting direct outreach to financial aid applicants. Questioned costs: None Context: During our testing of annual report, it was noted that the University did not spend funds under the categories of implementing evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines and conducting direct outreach to financial aid applicants. Cause: The University did not have the controls in place to ensure earmarking requirements under the CRRSAA 314(e) were being followed and met. Effect: The University is not in compliance with the earmarking requirements for HEERF funds specified by the Department of Education. Repeat Finding: No. Recommendation: We recommend the University should implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure earmarking requirements are met. Views of responsible officials: There is no disagreement with the audit finding.