Federal Program Information: Federal Pell Grant Program (ALN: 84.063) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition: During our cash management testing, we identified one instance during the year in which Title IV funds drawn were held in excess of the allowable time frame. Cause: Insufficient internal controls and administrative oversight with respect to Cash Management compliance requirements. Effect or Potential Effect: The College is not in compliance with Cash Management compliance requirements. While amounts were within allowable thresholds, certain funds were overdrawn and held in excess of the allowable time frame. Questioned Costs: None. Context: One instance of excess cash that was not eliminated within the allowable timeframe was identified for the Federal Pell Grant Program for the year ended May 31, 2025. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the College enhance its internal controls, policies and procedures to ensure that an account review occurs no later than the third business date after a federal draw to determine whether amounts were appropriately disbursed in accordance with federal regulations or require a return to ED. Views of Responsible Officials: Management acknowledges the instance in which Title IV funds were held beyond the allowable timeframe under 34 CFR §668.166. Although the amount was within allowable tolerance thresholds and no questioned costs were identified, the College recognizes the need to strengthen internal controls over cash management compliance. To address this finding, the College will: • Implement a formal Title IV drawdown and disbursement monitoring procedure requiring review no later than the third business day following receipt of funds • Establish a standardized reconciliation process between the Business Office, Financial Aid Office, and Registrar to ensure timely identification of: o Students who have withdrawn o Enrollment status changes o Required returns of Title IV (R2T4) calculations • Develop a documented weekly reconciliation of federal drawdowns to disbursements and student account activity • Assign clear responsibility for monitoring excess cash thresholds and ensuring timely return of funds to the U.S. Department of Education when required • Provide cross-functional training to reinforce compliance requirements under federal cash management regulations These measures are intended to ensure timely disbursement of Title IV funds, proper reconciliation of enrollment changes, and full compliance with federal cash management requirements.
Federal Program Information: Federal Pell Grant Program (ALN: 84.063) and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting – Financial Reporting – Federal regulations, 34 CFR 690.83, require the College to submit origination records for students to the Common Origination and Disbursement System (“COD”). Items considered key in student origination records, if applicable, are: award amount, enrollment date, verification status code (when the applicate is selected for verification), transaction number, cost of attendance, and the “Academic Start Date” and “Academic End Date”. Condition: For certain disbursements identified through our testing, errors were identified in key items reported to the COD in student origination records. Cause: Insufficient administrative oversight and internal controls with respect to accurate reporting of federal award information. Effect or Potential Effect: The College was not in compliance with COD reporting requirements. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 3 of 25 origination records tested, the student’s cost of attendance was not accurately reported. • For 1 of 25 origination records tested, the academic end date was not accurately reported. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the College enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure origination records are reported accurately and timely to the COD for Direct Loan and Pell Grant recipients, in accordance with federal regulations. Views of Responsible Officials: The College acknowledges the reporting errors identified in certain student origination records submitted to the Common Origination and Disbursement (COD) System, specifically related to cost of attendance and academic end date data elements. To address this finding, the College will enhance internal controls and oversight over federal aid reporting by implementing the following corrective actions: • Establish a documented secondary review process for all origination records prior to submission to COD, with verification of key data elements including cost of attendance, academic start and end dates, enrollment status, and award amounts. • Implement a standardized review checklist to ensure accuracy and completeness of required data fields. • Strengthen reconciliation procedures between the student information system and COD to identify and resolve discrepancies timely. • Conduct periodic internal quality assurance reviews of origination and disbursement records. • Provide additional staff training on federal reporting requirements.
Federal Program Information: Student Financial Assistance Cluster (ALN: Various), Child and Adult Care Food Program (ALN: 10.558), and Substance Abuse and Mental Health Services Projects (ALN: 93.342) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting - Per Uniform Guidance, §200.510(b), the auditees receiving federal funding are required to prepare a schedule of expenditures of Federal awards (the “Schedule”) for the period covered by the auditee's financial statements. While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the Schedule easier to use. At a minimum, the Schedule should list individual Federal programs by Federal agency and provide total Federal awards expended for each Federal program during the entity’s fiscal year. Condition: During our audit procedures, we noted that the College did not prepare the Schedule for the year ended May 31, 2025. Cause: Insufficient internal controls and administrative oversight with respect to the timely preparation and review of the Schedule. Effect or Potential Effect: Lack of appropriate and timely preparation and review of the Schedule by management increases the risk that the amounts, contract or grant names, ALN information, and classification of the awards are presented incorrectly and that federal awards are not managed in accordance with Uniform Guidance. Questioned Costs: None. Context: The College did not prepare a Schedule for the year ended May 31, 2025. Additionally, management was unaware of certain federal awards received during the year. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the College implement additional internal controls and enhance their current policies and procedures to effectively maintain a detailed Schedule that contains the correct amounts, contract or grants names, ALN information and classification of the awards, which can be more readily reconciled to the underlying general ledger detail prior to receipt by the auditors. We also recommend that frequent cross departmental communication is established to ensure that all federal expenditures incurred and federal awards received during the year are appropriately reflected within the Schedule as required. The implementation of these internal controls will ensure that the Schedule is accurate/complete and also ensure that federal awards are managed appropriately in accordance with Uniform Guidance. Views of Responsible Officials: Management acknowledges the deficiency in the preparation and oversight of the Schedule of Expenditures of Federal Awards (SEFA) for the year ended May 31, 2025. To address this finding, the College will: • Implement a formal SEFA preparation policy aligned with 2 CFR §200.510(b) • Develop and maintain a centralized federal awards tracking log identifying: o Federal agency o Program name o Assistance Listing Number (ALN) o Award number o Pass-through entity (if applicable) o Expenditures by fiscal year • Establish quarterly reconciliations between the general ledger and the federal awards tracking log • Require structured cross-departmental communication between the Business Office, Financial Aid Office, Grants Administration, and program departments to ensure all federal awards received and expended are identified timely • Implement documented management review and approval of the SEFA prior to submission to auditors These corrective measures will strengthen internal controls over federal award tracking, improve the accuracy and completeness of the SEFA, and ensure compliance with Uniform Guidance requirements.
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Title IV Credit Balance Refunds: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. As described in 34 CFR 668.164(c), institutions may credit (charge) a student’s ledger account with Title IV funds to pay for allowable charges associated with the payment period and prior year charges of not more than $200, in accordance with the timeframes described below. A prior year is any loan period or award year prior to the current loan period or award year, as applicable. An institution is permitted to hold credit balances if it obtains a voluntary authorization from the student. Regardless of any authorization obtained by the institution, the institution must pay any remaining loan balance by the end of the loan period and any other remaining Title IV funds by the end of the last payment period in the award year for which the funds were awarded. Condition: For a certain student that had credit balances on her account resulting from Title IV aid disbursements, the College did not refund the credit balances within the required timeframe. Cause: Insufficient administrative oversight and internal controls with respect to Title IV credit balance refunds. Effect or Potential Effect: The College was not in compliance with Title IV credit balance refunds requirements. Questioned Costs: None. Context: For 2 of 18 Title IV credit balances tested relating to one student, the credit balance was not paid to the student by the end of the last payment period in the award year. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the College enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure that credit balances on student accounts that are the result of Title IV aid disbursements are accurately refunded within the required timeframe. Views of Responsible Officials: Management acknowledges the instances in which Title IV credit balances were not refunded within the required regulatory timeframe under 34 CFR §668.164(c). Although no questioned costs were identified, the College recognizes the need to strengthen internal controls to ensure full compliance. To address this finding, the College will: • Implement a formal Title IV credit balance monitoring procedure requiring weekly review of student accounts with credit balances • Establish an automated report identifying all Title IV–generated credit balances and tracking the 14-day refund deadline • Strengthen coordination between the Business Office, Financial Aid Office, and Registrar to ensure enrollment status and disbursement timing are properly reflected prior to refund processing • Continued documented supervisory review of credit balance aging reports These corrective measures are designed to ensure timely refunds, improve monitoring controls, and maintain compliance with federal Title IV requirements.
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds must be distributed in the prescribed order (34 CFR 668.22(i)). Post-withdrawal disbursements of loan funds may be credited to the student’s account if current-year outstanding charges exist on the student’s account, up to the amount of the current-year outstanding charges only after obtaining confirmation from the student, or parent in the case of a parent PLUS loan, that he or she still wishes to have some or all of the loan funds disbursed 34 CFR 668.22(a)(6)). Condition: For certain students that withdrew during the year, the College did not timely or accurately calculate the amounts to be returned to the ED. Cause: Insufficient administrative oversight and internal controls with respect to return of Title IV funds calculations. Effect or Potential Effect: The College was not in compliance with the return of Title IV funds requirements. Questioned Costs: None. Context: For 2 of 4 sampled students, Title IV funds due for return were not returned to the ED within the required time frame. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the College enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure that student withdrawal calculations are prepared accurately, and Title IV funds due for return are returned within the required time frame. Views of Responsible Officials: The College acknowledges the exceptions identified related to the timeliness of Return of Title IV (R2T4) calculations and the return of unearned federal funds. The errors were the result of insufficient administrative oversight and internal controls over the withdrawal and R2T4 process. To address this finding, the College will strengthen internal controls and oversight to ensure compliance with federal regulations. The corrective actions include: • Implementing a documented secondary review process for all R2T4 calculations prior to finalization to ensure accuracy and compliance with regulatory requirements. • Enhancing procedures to ensure timely identification of withdrawn students and prompt initiation of the R2T4 calculation process. • Establishing standardized monitoring to ensure all required returns of Title IV funds are processed within the regulatory timeframe. • Developing and implementing a tracking system to monitor withdrawal dates, calculation completion, and return deadlines. • Providing additional training to Financial Aid staff on federal R2T4 regulations and institutional procedures. • Conducting periodic internal quality assurance reviews of R2T4 calculations and returned funds to ensure ongoing compliance.
Federal Program Information: Federal Pell Grant Program (ALN: 84.063) and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions - Enrollment Reporting: The College is required to update students’ statuses on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the College becomes aware of the change in enrollment status (OMB No. 1845-0035). There are two categories of enrollment information: “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Institutions are responsible for accurately reporting the significant data elements under the Campus-Level Record and Program-Level Record that ED considers high risk. Additionally, institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. As with any school/servicer arrangement for the administration of the Title IV programs, if the school uses a third party to meet the NSLDS enrollment reporting requirements, it is the school that must ensure that enrollment information is submitted timely, accurately, and completely. Condition: The College did not timely and/or accurately report certain significant data elements to the NSLDS website for certain students who graduated, withdrew, or had an increase/decrease in attendance level during the year. Cause: Insufficient administrative oversight and internal controls with respect to enrollment reporting compliance requirements. Effect or Potential Effect: The College is not in compliance with enrollment reporting compliance requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 6 of 40 campus level records tested, the student’s enrollment status change was not reported to NSLDS within the required timeframe. • For 2 of 40 enrollment status changes tested, the College failed to accurately report the student’s enrollment status to NSLDS at both the campus and program levels. • For 11 of 40 program level records tested, the student’s enrollment status change was not reported to NSLDS within the required timeframe. • For 7 of 40 program level records tested, the status effective date was not accurately reported to NSLDS. • For 7 of 40 program level records tested, the College failed to separately report the student’s second major. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-002 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the College enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that all status changes are submitted accurately to the NSLDS website within the required timeframe. Views of Responsible Officials: The College acknowledges the findings related to the timeliness and accuracy of enrollment reporting to the National Student Loan Data System (NSLDS). The identified exceptions were the result of insufficient administrative oversight and internal controls related to enrollment status reporting at both the campus and program levels. As this is a repeat finding, the College is committed to implementing enhanced and sustainable corrective measures. To address this finding, the College will strengthen internal controls and oversight of enrollment reporting by implementing the following corrective actions: • Establish a documented review and monitoring process to ensure all enrollment status changes, including graduation, withdrawal, attendance level changes, and second majors, are accurately and timely reported to NSLDS at both the campus and program levels. • Implement a standardized tracking and reconciliation process between the Registrar’s Office, the Student Information System, and NSLDS to ensure data consistency and completeness. • Develop and implement written policies and procedures that clearly define roles, responsibilities, timelines, and escalation protocols for enrollment reporting. • Enhance oversight of any third-party servicer, including periodic validation of submitted records to ensure accuracy and timeliness. • Provide comprehensive training to staff responsible for enrollment reporting on federal regulatory requirements and institutional procedures. • Conduct periodic internal quality assurance reviews and monitoring of enrollment reporting to identify and correct discrepancies in a timely manner. • Establish formal communication protocols between the Financial Aid and Registrar’s Offices to ensure timely notification of all enrollment changes.