Compliance Requirement: Enrollment Reporting Campus: Sacramento, Los Angeles Cluster name/program: Student Financial Assistance Cluster Federal Assistance Listing Numbers: 84.063 Federal Pell Grant Program and 84.268 Federal Direct Loans Federal Award Identification Number: None Federal Agency: U.S. Department of Education Passed through Entity: None Award Year: July 1, 2024 - June 30, 2025 Criteria: The U.S. Code of Federal Regulations 34 CFR 690.83(b)(2), 34 CFR 682.610, 34 CFR 685.309, and 34 CFR 674.19 require institutions review, update, and certify student enrollment reporting roster in a timely and accurate basis at both the campus and program level. Enrollment roster should be certified every 60 days or every other month. In addition, CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The Sacramento and Los Angeles campuses did not accurately report student status changes and enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS) and the control to ensure the student status changes and enrollment status changes was not operating effectively. The Sacramento and Los Angeles campus also did not report student status changes timely to NSLDS. During our testing of 60 student borrowers under the Federal Direct Loan Program and/or Federal Pell Grant recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the following at the Sacramento and Los Angeles Campuses: • At the Sacramento campus, the status changes for two graduates were reported late to NSLDS by up to 62 days, which is greater than the allowed 60 days after the change was known by the campus. We noted that although corrective actions were taken in response to the prior year’s finding, the events causing the findings noted above occurred prior to the implementation of the corrective action in the latter part of the fiscal year. • At the Los Angeles campus, the status change for one student was reported incorrectly to NSLDS as full-time status rather than Graduated (G) status. The campus-level enrollment status and the program-level enrollment status reported to NSLDS did not agree to campus records for this student. Further, the status change for this student was reported late to NSLDS by up to 87 days, which is greater than the allowed 60 days after the change was known by the campus. Cause and Effect: The Sacramento campus experienced personnel changes in the registrar's office and did not have adequate staffing in place to monitor the required procedures for a portion of the year. The events causing findings this year occurred prior to the implementation of the corrective action in the latter part of the fiscal year. The Los Angeles campus did not have a process in place to report graduations that occur later than the submission of the final semester file to NSLDS. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Repeat Finding: Yes – Sacramento, No – Los Angeles Recommendation: We recommend the University provide proper training on the enrollment reporting procedures and apply its existing policies and procedures. Views of Responsible Officials: The University concurs with the recommendation. The University will review and enhance its procedures to ensure timely and accurate reporting to NSLDS.
Compliance Requirement: Disbursements to or on Behalf of Students Campus: Fullerton and Los Angeles Cluster name/program: Student Financial Assistance Cluster Federal Assistance Listing Numbers: 84.063 Federal Pell Grant Program and 84.268 Federal Direct Loans Federal Award Identification Number: None Federal Agency: U.S. Department of Education Passed through Entity: None Award Year: July 1, 2024 – June 30, 2025 Criteria: The U.S. Code of Federal Regulations 34 CFR 668.165 requires that institutions must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. Institutions that implement an affirmative confirmation process (as described in 34 CFR 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution with Direct Loan or TEACH Grants. In addition, CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: The Los Angeles and Fullerton campuses did not notify students within 30 days of crediting the students' account as the controls to ensure students received disbursement notifications were not operating effectively. During the eligibility & disbursement testwork over 40 students that received loans under Title IV, we noted the following at the Fullerton and Los Angeles Campuses: • At the Fullerton campus, post award disbursement notifications were sent after the 30-day requirement for 3 sampled students. • At the Los Angeles campus, post award disbursement notifications were not sent to any of the 6 sampled students for the entire academic year. Cause and Effect: The Fullerton campus experienced personnel changes resulting in a gap in responsibility and understanding of the process, leading to missed or late notifications. The Los Angeles campus experienced personnel changes which led to a lack of awareness of who was responsible for completing the federal disbursement notification requirements. The financial aid team was not aware that they had historically been responsible for the requirement, hence there was no processes in place to send out disbursement notifications. Questioned Costs: No Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No Recommendation: We recommend the University provide proper training on the disbursement notification requirements and apply its existing policies and procedures. Views of Responsible Officials: The University concurs with the recommendation. The University will review and enhance its procedures to ensure timely disbursement notification.
Compliance Requirement: Procurement, Suspension and Debarment Campus:Sacramento Cluster name/program: Supplemental Nutrition Assistance Program Cluster Federal Assistance Listing Numbers: 10.561 Federal Award Identification Number: 21-3068 and 24-3069 Federal Agency: U.S. Department of Agriculture Passed through Entity: State of California Department of Social Services Award Year: July 1, 2024 – June 30, 2025 Criteria: According to 2 CFR 200.214, recipients and subrecipients are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Additionally, 2 CFR 180.300 requires non-federal entities (including state agencies administering federal programs like SNAP) to verify that contractors and subrecipients are not suspended or debarred from receiving federal funds CFR 200.303 also requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context: During our testing of 2 procurement samples, it was noted that the program personnel did not check if the vendors were suspended or debarred from receiving federal funds before entering into a covered transaction, nor was a certification from the vendor about verification of suspension and debarment collected from the vendor. We noted the vendors were not suspended or debarred and there were no other exceptions noted in the procurement, suspension and debarment testing. Cause and Effect: The control over the verification that vendors are not suspended or debarred prior to entering into a covered transaction was not designed effectively. As such, the suspension and debarment check requirements were not implemented for all procurement methods for this program. Questioned Costs: None Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No Recommendations: We recommend the University implement controls to verify the suspension and debarment status of all vendors prior to entering covered transactions, as well as maintaining evidence of the suspension and debarment check in the procurement file of each vendor. Views of Responsible Officials: The University concurs with the recommendations. The University will review and enhance its procedures and internal controls to verify the suspension and debarment status of all vendors prior to entering covered transactions, as well as maintaining evidence of the suspension and debarment check in the procurement file of each vendor.
Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Campus: Sacramento, Sonoma Cluster name/program: Supplemental Nutrition Assistance Program Cluster and Reserach and Development Programs Cluster Listing Numbers: 10.561, 47.076, and 84.411 Federal Agency: U.S. Department of Agriculture National Science Foundation U.S. Department of Education Passed through Entity: 10.561 - State of California Department of Social Services Federal Award Identification Numbers: 10.561: 21-3068 and 24-3069, 47.076: 1953472, and 84.411: S411B230042 Award Year: July 1, 2024 – June 30, 2025 Criteria: According to 2 CFR 200.502(a), the determination when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity related to the Federal award pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: (1) Expenditure/expense transactions associated with grants, cooperative agreements, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, and direct appropriations; (2) The disbursement of funds to subrecipients; Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws and regulations. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the Schedule of Expenditures of Federal Awards (SEFA). Condition and Context: ALN 10.561: We noted the Sacramento campus incorrectly recorded $712,979 of subrecipient expenditures which were not disbursed during FY2025. This resulted in an overstatement of expenditures on the FY2025 SEFA which management adjusted the SEFA accordingly. ALN 10.561: During our testing of nonpayroll expenditures for the Sacramento campus, we noted $25,605 related to a period outside of FY2025. The total out of period expense including the indirect cost was $32,006. This resulted in an overstatement of expenditures on the SEFA for FY2025. ALN 84.411: During our testing of indirect cost for the Sonoma campus, we noted $29,495 of expenditures related to a period outside of FY2025 resulting from management correcting the indirect cost rate for a grant that began in the prior year and recording all of the adjustment in FY2025. This resulted in an overstatement of expenditures on the FY2025 SEFA. ALN 47.076: During our payroll testing for the Sonoma campus, we noted $13,980 of expenditures related to a period outside of FY2025. The total out of period expense including the indirect cost was $21,110. This results in an overstatement of FY2025 Schedule of Expenditures of Federal Awards (SEFA). Cause and Effect: While the University’s policy is to record subrecipient expenditures on the SEFA upon the disbursement of funds to recipients, the Sacramento campus’ SEFA preparation process did not adequately consider whether amounts recorded in the SEFA had been disbursed to the subrecipient. At the Sonoma campus, the error was the results of an indirect cost rate being utilized from a previous grant versus the updated rate in the new grant. There was also a lack of internal controls over the accruals of summer payroll impacting federal awards. Failure to establish effective internal controls regarding financial reporting for the preparation of the SEFA resulted in an overstatement of expenditures. Questioned Costs: Not applicable Statistical Sampling: Not applicable Repeat Finding: Yes for 10.561 and No for 47.076 and 84.411 Recommendation: We recommend the University implement a system of internal control that is designed and operating effectively to ensure the SEFA is complete and accurate. Views of Responsible Officials: The University concurs with the recommendation. The University will review and enhance its procedures and internal controls to ensure the SEFA is complete and accurate.