Audit 389910

Finding: 2025-001 – Special Tests and Provisions – Return of Title IV Funding (R2T4): Significant Deficiency in Internal Control over Compliance (SEE FINDING 2025-001 FOR TABLE INCLUDED) Criteria – When a recipient of Title IV loan assistance withdraws from the University during a payment period or period of enrollment in which the recipient began attendance, the University must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. The regulations (34 CFR 668.22(f)(2)) provide that the total number of calendar days in a payment period or period of enrollment include all days within the period that the student was scheduled to complete and the number of calendar days completed in the period, except that scheduled breaks of at least five consecutive days and days on which the student was on an approved leave of absence are excluded from the total number of calendar days in a payment period or period of enrollment. The regulations (34 CFR 668.22(e)(4)) provide the total amount of unearned Title IV grant or loan assistance that has not been earned by the student and therefore is calculated by determining the complement of the percentage of Title IV grant or loan assistance earned by the student as described in 34 CFR 668.22(e)(2). The regulations do not prohibit a school from developing its own refund policy however, the school must comply with refund policies required by the noted regulations. Although the refund policy of the school will determine the charges a student will owe after withdrawing, those policies will not affect the amount of Title IV aid the student has earned under the R2T4 calculation. Condition/context: We selected a sample of 12 students out of a population of 148 that were identified by the University as having received some federal assistance and withdrew from the University during the year under audit. We believe this to be a representative sample of the population. We found one calculation of the return of Title IV funds contained an error related to the total number of days in the term because consideration for the exclusion of certain days from the scheduled break were not properly implemented. This calculation error caused a selection to have the wrong total of aid earned because the student had withdrawn before the 60% completion threshold. This error caused an overpayment of $71 to be returned to the Department of Education for a direct loan. Cause: The department had miscalculated the scheduled break for certain degree programs which erroneously removed a weekend day from the calculation. Effect or potential effect: The overstated total days in the payment period caused the calculation of aid earned to be understated and therefore more federal funding was returned than a proper calculation would have concluded. Recommendation: We recommend that the University strengthen the R2T4 calculation review process to ensure that all scheduled breaks of five or more consecutive days are accurately identified and excluded from the total number of days in the payment period. Although a review process is already in place, the University could enhance the existing controls with additional checklist steps that require documentation of how scheduled breaks were identified to ensure reviewers consistently verify the correct treatment of scheduled breaks in the R2T4 calculation. Repeat Finding: Not a repeat finding. Views of responsible officials: Management agrees with the finding. A corrective action plan has been created by management.

Finding: 2025-002 – Special Tests and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control Over Compliance (SEE FINDING 2025-002 FOR TABLE INCLUDED) Criteria: The National Student Loan Data System (NSLDS) is the Department of Education’s centralized database for students’ enrollment information. It is the University’s responsibility to update this information timely and accurately when the enrollment status of a student that has received federal loans changes. The University is ultimately responsible for the timeliness and accuracy of this information even when a third-party servicer is used as an intermediary to report on the University’s behalf. The University currently contracts with a third-party servicer and has elected to receive an enrollment reporting roster file every 30 days from NSLDS. At a minimum, institutions must certify the enrollment status of all students included on the roster file within 15 days of receiving the roster file. If errors are identified, the University has 10 days to resubmit a corrected response. Unless the University expects to complete its next roster file within 60 days, the University must notify the secretary within 30 days, if it discovers that a student who received a loan under Title IV of the Act either did not enroll or ceased to be enrolled on at least a half-time basis (34 CFR section 685.309). Condition/context: From a system generated population of 595 students who received federal aid and either graduated, withdrew, or changed their permanent address during the year ended June 30, 2025, we selected 40 students who received direct loans. We find this sample representative to the population. The enrollment information and withdrawal or graduation date per the University’s records were compared to the information reported to NSLDS to determine if status changes were reported accurately and within the required timeframes. Of the 40 students selected for testing, 14 were not reported to the NSLDS within the required timeframe and 8 had accuracy errors for status reported to the NSLDS. Cause: The challenges with timely and accurate reporting was caused by turnover in the Registrar’s office. Effect or potential effect: The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by the Department of Education, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans. Recommendation: We recommend that the University strengthen its monitoring and review procedures over enrollment reporting to ensure all student status changes are submitted to NSLDS accurately and within required timeframes. This may include enhancing communication and oversight of the third-party servicer. Repeat finding: Not a repeat finding. Views of responsible officials: Management agrees with the finding. A corrective action plan has been created by management.