Audit 383774

Finding 2025-001: Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Federal Pell Grant, Assistance Listing No. 84.063 Federal Supplemental Education Opportunity Grant, Assistance Listing No. 84.007 Federal Direct Loan Program, Assistance Listing No. 84.268 Criteria: The University must comply with 34 CFR Section 668.22. Condition: During our testing of 40 official withdrawals, we reviewed the calculation used by the University for the return of funds and noted eight students in which the calculation was improperly calculated. Our testing of 40 official withdrawals included five and three full-term students from the Fall and Spring semesters, respectively, for which the return of funds calculation was improperly calculated due to the University using various incorrect inputs. The incorrect withdrawal date was used for one student, incorrect institutional charges were used for five students, and incorrect total aid disbursed was used for two students. Cause: The University does not have a procedure in place to properly review the inputs used within return of funds calculations. Effect: The provisions of 34 CFR Section 668.22 were not followed and thus a total of eight students had incorrect return of funds calculations, however, four calculations resulted in questioned costs. The other four calculations were performed incorrectly, but students earned over 60% of aid. Questioned Costs: Known questioned costs total net $3,729 in Title IV aid that should have been earned as a result of our testing of 40 official withdrawals. Use of the incorrect withdrawal date resulted in one student who earned an additional $3,429. Use of incorrect institutional charges resulted in no additional funds needing to be returned, but did change the amount the students were responsible for returning. The University returned $600 that should have been the students' responsibility. Use of the incorrect total aid resulted in one student earning $300 less than they should have, if the proper aid had been used. The student attended more than 60% of the term, so no return was required. Recommendation: We recommend that the University review and revise their policies and procedures related to the return of funds calculation. Specifically, the University should:  Implement a review process to verify calculations before finalizing returns.  Provide training to relevant staff, including those outside of the student financial assistance department, on the proper calculation methods to enhance compliance and accuracy. Views of responsible officials and planned corrective actions: The University agrees with the auditor's finding and recommendations. The following corrective action will be taken: The University has awarded aid in the amount of $3,729 to students which represents student earned aid from an updated R2T4 calculation accounting for the proper use of the withdrawal date, institutional charges and total aid for 2024-25 academic year. The University will review, and revise policies and procedures related to the return of funds calculation. Specifically, the University will:  Update procedures to include a review of input items by AVP prior to finalizing returns.  Provide training to relevant staff, including staff outside of the Office of Student Financial Assistance, on proper calculation methods to ensure compliance and accuracy of R2T4 calculations. The University is exploring opportunities to automate partially or completely the R2T4 process to support accurate and efficient processing and enhance compliance.

Finding 2025-002: Federal Program: Corporation for National and Community Service: Kentucky Cabinet for Health & Family Services AmeriCorps State & National, Assistance Listing No. 94.006 Criteria: The University must have internal controls in place for compliance as required by 2 CFR Part 200.303. The University requires that interviews be conducted and documented prior to onboarding AmeriCorps members. Condition: During our testing of eligibility for 25 program participants, we noted that four participants did not have evidence of being interviewed prior to being hired. Cause: Until the implementation of a new system and procedure, the University's documentation process for interviews during a portion of the audit period did not include formalized controls to centralize retention and documentation of interview evidence. Interview documentation was maintained through individual staff email accounts and calendar systems lacked standardized filing and retention protocols, resulting in the inability to locate evidence that interviews were conducted for four participants. Effect: The University's internal control was not followed and thus a total of four program participants did not have evidence of being properly interviewed prior to being hired. Questioned Costs: There are no questioned costs. Recommendation: We recommend the University review controls and implement a standardized process and refine its system to ensure ongoing compliance with established controls. Views of responsible officials and planned corrective actions: The University agrees with the auditors' finding and recommendations. The following corrective actions have been taken: During the 2023-2024 academic year, EngageKY implemented a new process for recordkeeping related to the recruitment and selection of Kentucky College Coaches. As part of the implementation, site supervisors and program staff began to use Salesforce to maintain notes from screening interviews and general interviews. The missing documentation referenced in this finding was for individuals hired prior to the new process. EngageKY will continue to use Salesforce to document the recruitment and selection of Kentucky College Coaches.

Finding 2025-003: Federal Program: U.S. National Science Foundation: Research and Development Cluster Office of Integrated Activities, Assistance Listing No. 47.083 Criteria: The University must have internal controls in place for compliance as required by 2 CFR Part 200.303. The University requires review by grant department before disbursement. Condition: During our testing of awarded scholarships for eight students, we noted that two student applications did not have evidence of being reviewed prior to disbursement of the scholarship. Cause: The University does not have a procedure in place to properly review scholarship applications prior to disbursement. Effect: Two students received scholarships that were not properly reviewed prior to disbursement. Questioned Costs: There are no questioned costs. Recommendation: We recommend that the University review and revise their policies and procedures related to reviewing and approving Research & Development grant scholarships prior to disbursement. Specifically, the University should:  Implement a review process to verify scholarships are reviewed and approved by Grant Administration prior to disbursement.  Provide training to relevant staff on proper documentation procedures to forward to Grant Administration to enhance compliance and accuracy. Views of responsible officials and planned corrective actions: The University agrees with the auditors' finding and recommendations. The following corrective action will be taken: The University will review and revise policies and procedures related to reviewing and approving Research & Development grant scholarships prior to disbursement. The University will do the following:  Implement a review process to verify scholarships are reviewed and approved by Grant Administration prior to disbursement.  Provide training to relevant staff on proper documentation procedures to forward to Grant Administration to enhance compliance and accuracy.