Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), 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): E. Eligibility – Eligibility for Individuals – In the process of applying for federal financial aid, an Institutional Student Information Record (“ISIR”) is sent electronically to the institution. The institution uses the ISIR to help determine student eligibility, award amounts, and disbursements. The ISIR may contain codes that relate to student eligibility requirements. Such codes must be resolved by the institution. In addition, federal financial aid must be coordinated among the various programs with other federal and nonfederal aid (need and non-need based aid) to ensure that total aid is not awarded in excess of the student’s financial need or cost of attendance (“COA”). The determination of need-based Student Financial Assistance (“SFA”) award amounts is based on financial need. Financial need is defined as the student’s COA minus the Student Aid Index (“SAI”). E. Eligibility – Campus-Based Programs (FSEOG) (Assistance Listing 84.007) – The Federal Supplemental Educational Opportunity Grant (FSEOG) program provides grants to eligible undergraduate students. Priority is given to students who have not previously earned a bachelor’s or first professional degree. Priority is given to Federal Pell Grant recipients who have the lowest SAIs (34 CFR 676.10). E. Eligibility – Federal Direct Student Loans (“Direct Loans”) (Assistance Listing 84.268) - Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. For undergraduate students there is a combined annual loan limit for Direct Subsidized Loans and Direct Unsubsidized Loans, of which not more than a specified amount may be comprised of Direct Subsidized Loans (annual subsidized maximum). Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan Program prior to 2010) are $31,000 for dependent undergraduate students (except for dependent students whose parents are unable to borrow Direct PLUS Loans), not more than $23,000 of which may be subsidized. Condition: For certain students tested, the University improperly calculated the student’s COA. The University also failed to resolve ISIR comments codes prior to disbursing Title IV aid. In addition, for certain students, the University awarded aid in excess of award limits. Finally, we noted that priority was not given to Pell recipients with the lowest SAI when disbursing FSEOG awards. Cause: Insufficient administrative oversight and internal controls with respect to Title IV award eligibility. Effect or Potential Effect: The University is not in compliance with aid awarding criteria under the eligibility requirements. Failure to properly calculate COA, resolve ISIR codes, properly award and disburse aid, and prioritize the correct students for FSEOG awards in accordance with the required guidelines could result in improper disbursements of Title IV aid. Questioned Costs: Known questioned costs: $3,500; total questioned costs: indeterminable. Questioned costs of $3,500 were identified as a result of over-awards disbursed to students in the selected sample; however, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 6 of 40 students selected for testing, the University failed to properly calculate the COA. • For 1 of 40 students selected for testing, the University disbursed Direct Loans in excess of the established maximums. • For 2 of 40 students selected for testing, the University did not properly resolve all ISIR comment codes prior to disbursing Title IV aid for the award year. • We examined the University’s awards disbursement detail noting that all Pell recipients did not receive FSEOG awards. In addition, we identified 3 FSEOG recipients who had a greater SAI than students who did not receive FSEOG. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-001 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that the COA is properly calculated, ISIR comment codes are resolved, Title IV aid is properly calculated, awarded, and disbursed, and priority is given to Pell recipients with the lowest SAI when disbursing FSEOG awards, consistent with federal regulations. Views of Responsible Officials: The University acknowledges that it did not consistently apply federal eligibility and awarding requirements during the 2024–2025 award year. Specifically, students with the highest financial need, as determined by the lowest Student Aid Index (SAI), were not systematically prioritized for Federal Supplemental Educational Opportunity Grant (FSEOG) awards, and eligibility documentation and ISIR comment codes were not consistently reviewed and fully resolved prior to awarding and disbursing Title IV aid. As a result, limited instances occurred in which aggregate Direct Loan limits were exceeded and discrepancies existed between cost of attendance values maintained in PowerFAIDS and those reported to the Common Origination and Disbursement (COD) system. The University determined that these deficiencies were primarily attributable to gaps in internal controls, including the absence of structured, periodic quality assurance reviews, staffing transitions within the Office of Financial Aid, and insufficient training and supervisory oversight to ensure consistent compliance with federal 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 require the University to submit origination and disbursement 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”. Institutions must also submit disbursement records to the COD for students no earlier than 7 calendar days prior to the disbursement date, and no later than 15 calendar days after the institution makes a disbursement. Key items to test on disbursement records are disbursement date and amount. Condition: For certain disbursements identified through our testing, errors were identified in key items reported to the COD in student origination and disbursement records. Additionally, the University failed to report disbursement records for certain students within the required timeframe. Cause: Insufficient administrative oversight and internal controls with respect to accurate reporting of federal award information. Effect or Potential Effect: The University was not in compliance with COD reporting requirements. Questioned Costs: Known questioned costs: none; total questioned costs: indeterminable. While no known questioned costs resulted from the COA differences identified through the sampled items, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 23 of 40 students selected for origination record testing, the student’s cost of attendance was inaccurately reported within the COD. • For 19 of 40 students selected for disbursement record testing, the disbursement date reported to the COD did not match the actual date on which related funds were credited to the student's account. • For 4 of 40 students selected for disbursement record testing, the University did not submit required disbursement information within the required timeframe. 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 that the University enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure origination and disbursement 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 University acknowledges that it did not consistently ensure the accuracy and timeliness of data reported to the Common Origination and Disbursement (COD) system during the 2024–2025 award year. Specifically, cost of attendance values reported to COD did not always align with the cost of attendance used for awarding aid, disbursement dates reported to COD did not consistently reflect the actual dates funds were credited to student accounts, and certain disbursement records were not transmitted within required post-disbursement reporting timeframes. As a result, the University experienced instances of inaccurate and untimely COD reporting, increasing institutional compliance risk, and limiting the University’s ability to demonstrate adherence to federal reporting requirements during audit testing. The University determined that these deficiencies were primarily attributable to weaknesses in internal controls governing origination and disbursement reporting, including reliance on legacy PowerFAIDS workflows without sufficient reconciliation, validation, or supervisory review prior to COD submission. Contributing factors also included the absence of a standardized disbursement and reporting calendar and insufficient monitoring of system transmission errors and exceptions.
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), 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 Test and Provisions – Disbursements To or On Behalf of Students - Notification of Disbursement – Prior to making a disbursement, the school must notify students of the amount and type of Title IV funds they are expected to receive, and how and when those disbursements will be made (often referred to as an award letter or college financing plan) (34 CFR 668.165(a)(1)). Condition: Certain students were not notified of the amount and type of Title IV funds they were expected to receive prior to the University disbursing Title IV funds to the student. Cause: Insufficient administrative oversight and internal controls with respect to award notifications. Effect or Potential Effect: The University was not in compliance with award notification requirements. Questioned Costs: None. Context: For 1 of 25 students tested, an award notification was not sent to the student prior to the student receiving their first disbursement of Title IV funds. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its internal controls and policies and procedures over Title IV award notifications to ensure such notifications are sent to students prior to the University disbursing aid. Views of Responsible Officials: Johnson C. Smith University acknowledges that, for one student tested, an award notification was not issued prior to the initial disbursement of Title IV funds, as required by federal regulations. Although an award notification was subsequently generated, all Title IV aid for this student had already been disbursed prior to issuance of the notification. The University determined that this exception resulted from insufficient internal controls governing the award notification process within PowerFAIDS, including the absence of a reliable audit trail to document the timing and issuance of award notifications relative to disbursement activity. Contributing factors included reliance on manual processes and limited system-enforced sequencing controls, which reduced the University’s ability to consistently verify that required notifications were issued prior to disbursement.
Federal Program Information: Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Test and Provisions – Disbursements To or On Behalf of Students – Loan Disbursement Notification - Federal regulations (34 CFR section 668.165 (a)(6)(i)) require that the institution 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 the 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 section 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. Institutions that do not implement an affirmative confirmation process must notify a student no earlier than 30 days before, but no later than seven days after, crediting the student’s account and must give the student 30 days (instead of 14) to cancel all or part of the loan. Condition: Certain student and/or parent borrowers did not receive a loan disbursement notification within the required timeframe. Additionally, certain loan disbursement notifications made to student and/or parent borrowers did not contain all required information. Cause: Insufficient administrative oversight and internal controls with respect to loan disbursement notifications. Effect or Potential Effect: Students and/or parents were not properly notified of loan disbursements and/or their right to cancel/decline loan awards. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 13 of 40 disbursements tested, the University was unable to provide documentation supporting appropriate loan disbursement notifications were sent to the student and/or parent for the selected disbursement. • For 8 of 40 disbursements tested, the loan disbursement notification sent to the student and/or parent was not issued within the required timeframe. • For 27 of 40 disbursements tested, the loan disbursement notification sent to the student and/or parent did not include the date of the disbursement, as required. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-004 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its internal controls and policies and procedures over loan disbursement notifications to ensure such notifications are sent to student and/or parent borrowers within the required timeframe. Views of Responsible Officials: The University acknowledges deficiencies in its Direct Loan disbursement notification process during the 2024–2025 award year. Specifically, the University was unable to consistently document that required loan disbursement notifications were issued to students or parents, certain notifications were not sent within the required regulatory timeframes, and required notification elements—most notably the disbursement date—were omitted from a number of notifications. The University determined that these deficiencies resulted from weaknesses in internal controls governing the generation, content validation, timing, and documentation of loan disbursement notifications. The notification process relied on manual and partially automated workflows that were not consistently monitored to ensure compliance with federal requirements under 34 CFR §668.165(a)(6). In addition, oversight of the Parent PLUS notification process was insufficient, resulting in inconsistent practices and notifications that did not always include all required disbursement information within the notification itself. The absence of a standardized, system-generated audit trail documenting the issuance, timing, and content of loan disbursement notifications limited the University’s ability to demonstrate compliance during audit testing. As a repeat finding, these conditions revealed the need for strengthened automation, standardized notification templates, and enhanced supervisory review to ensure timely, accurate, and fully documented borrower notifications.
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 currentyear 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 University did not properly calculate the amounts to be returned to the ED. Additionally, funds due for return were not returned in the proper order. Finally, the University made a post-withdrawal disbursement of direct loans to certain students in excess of the amount of current-year outstanding charges and without obtaining the required authorization from the student or parent. Cause: Insufficient administrative oversight and internal controls with respect to return of Title IV funds calculations. Effect or Potential Effect: The University was not in compliance with the return of Title IV funds requirements. Questioned Costs: Known questioned costs: $17,226; total questioned costs: indeterminable. Known questioned costs of $17,226 were identified as a result of the described errors in withdrawal calculations; sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 4 of 4 sampled students, return of funds calculations were not completed timely and the amount of Title IV aid due for return or post-withdrawal disbursement was not properly calculated. • For 1 of 4 sampled students, a post-withdrawal disbursement of direct loan funds was made to the student without obtaining the required student authorization, and the amount disbursed was in excess of the eligible post withdrawal disbursement amount. • For 3 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: This is a repeat finding from prior year. This was reported as Finding 2024-007 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure that student withdrawal calculations are prepared accurately. Views of Responsible Officials: The University acknowledges deficiencies in the administration of Return of Title IV (R2T4) requirements during the 2024–2025 award year. Specifically, R2T4 calculations were not consistently completed within required timeframes, resulting in inaccurate determinations of earned and unearned Title IV aid, untimely returns of funds to the U.S. Department of Education, and an improper post-withdrawal disbursement of Direct Loan funds made without required student authorization and in excess of the eligible amount. As a result, the University experienced compliance failures related to accuracy, timeliness, and authorization requirements governing R2T4 processing and post-withdrawal disbursements. The University determined that these deficiencies were primarily attributable to weaknesses in internal controls governing the timely initiation, calculation, review, and completion of R2T4 determinations, as well as insufficient controls to prevent post-withdrawal disbursements from being processed without documented authorization. Contributing factors included gaps in coordination and information flow between offices responsible for withdrawal determination, enrollment status updates, and R2T4 processing. As a repeat finding, these conditions revealed the need for strengthened system-based controls, clearer delineation of responsibilities, and enhanced oversight.
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 certain students that had a credit balance on their account resulting from Title IV aid disbursements, the University did not refund the credit balance in the correct amount within the required timeframe. Cause: Insufficient administrative oversight and internal controls with respect to Title IV credit balance refunds. Effect or Potential Effect: The University was not in compliance with Title IV credit balance refunds requirements. Questioned Costs: Know questioned costs: $1,383; total questioned costs: indeterminable. Known questioned costs of $1,383 were identified as a result of the identified errors described in the Context below; sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 3 of 22 sampled Title IV credit balances, the University did not fully refund the credit balance resulting from Title IV aid disbursements within the required timeframe. • For 1 of 22 sampled Title IV credit balances, the amount of Title IV credit balance was not resolved by the end of the payment period. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University 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: The University acknowledges deficiencies in the Title IV Refund process. The deficiencies occurred as a result of process disruptions during the system transition to Ellucian Colleague. The University has strengthened its process and controls to ensure Title IV refunds are processed within 14 days.
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 University 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 University becomes aware of the change in enrollment status. 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 University did not 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 University 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 8 of 40 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Campus-Level Record in a timely notification to the NSLDS website. • For 10 of 40 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Program-Level Record in a timely notification to the NSLDS website. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-006 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University 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 University acknowledges deficiencies in the accuracy and timeliness of enrollment status reporting to the National Student Loan Data System (NSLDS) during the 2024–2025 award year. Specifically, required Campus-Level and Program-Level enrollment data elements were not consistently reported accurately or within required federal reporting timeframes for students whose enrollment status changed. As a result, the University was unable to consistently demonstrate compliance with federal enrollment reporting requirements, increasing institutional risk related to student loan repayment status, Title IV eligibility, and audit defensibility. The University determined that these deficiencies were primarily attributable to weaknesses in the Registrar’s enrollment reporting controls, including reliance on legacy system processes without sufficient reconciliation, validation, and quality assurance review prior to NSLDS submission. Contributing factors included the absence of a standardized reporting calendar, documented review procedures, and consistent supervisory oversight. As a repeat finding, these conditions underscore the need for strengthened Registrar-led governance, formalized enrollment reporting controls, and sustained monitoring to ensure accurate and timely Campus-Level and Program-Level reporting.
Federal Program Information: Connecting Minority Communities Pilot Program (“CMC”) (ALN: 11.028), Higher Education Institutional Aid (“Title III”) (ALN: 84.031B and 84.031E) and TRIO Cluster (“TRIO”) (ALN: 84.047A, 84.042A and 84.217A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): A. Activities Allowed or Unallowed/N. Special Tests and Provisions – Per 2 Code of Federal Regulation (“CFR”) Part 220, the method used for apportioning salaries must recognize the principle of after-the-fact confirmation or determination so that costs distributed represent actual costs, unless a mutually satisfactory alternative agreement is reached. Direct cost activities as well as facilities and administration (“F&A”) cost activities may be confirmed by responsible persons with suitable means of verification that the work was performed. Confirmation by the employee is not a requirement for either direct or F&A cost activities if other responsible persons make appropriate confirmations. For after-the-fact activity records: a) Activity reports will reflect the distribution of activity expended by employees covered by the system (compensation for incidental work as described in subsection a need not be included); (b) These reports will reflect an after-the-fact reporting of the percentage distribution of activity of employees. Charges may be made initially on the basis of estimates made before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated by activity records. Labor costs charged to federal awards must reasonably reflect the actual labor effort contributed by the employee to meet the objectives of the award and that adequate documentation must be maintained to support labor costs charged to sponsored agreements. For professorial and professional staff, effort certifications will be prepared each academic term, but no less frequently than every six months. For other employees, unless alternate arrangements are agreed to, the reports will be prepared no less frequently than monthly and will coincide with one or more pay periods. B. Allowable Costs and Cost Principles - In order for costs to be allowable under federal awards, they must be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity, be accorded consistent treatment, and be determined in accordance with generally accepted accounting principles. Condition: For certain payroll costs charged to federal awards, effort certifications were not reviewed timely during the fiscal year and/or the effort certified was not commensurate with the amount charged to the grant. Additionally, for certain payroll and non-payroll expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. Cause: Insufficient administrative oversight and internal controls with respect to the University’s administration of federal awards in accordance with certain compliance requirements. Effect or Potential Effect: The University was unable to support certain amounts charged to federal awards and effort certifications supporting certain payroll costs charged to federal awards were not completed timely and/or appropriately monitored during the year. Questioned Costs: Indeterminable. For certain expenditures sufficient documentation was not available to support the amount charged to the federal award or to determine the amount that should have been charged. Additionally, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 7 of 24 payroll Title III expenditures selected for testing, the time and effort report certified by the employee was not certified timely. • For 2 of 24 payroll Title III expenditures selected for testing, the amounts charged to the federal award were not commensurate with the level of effort certified by the employee. • For 1 of 12 non-payroll TRIO expenditures selected for testing, the sampled expenditure was improperly duplicated in the system and charged to the federal award twice. • For 1 of 12 non-payroll TRIO expenditures selected for testing, the sampled expenditure was for an unallowable cost. • For 21 of 28 payroll TRIO expenditures selected for testing, time and effort reports certified by the employee were not certified timely. • For 1 of 28 payroll TRIO expenditures selected for testing, the sampled expenditure was charged to the incorrect TRIO program. • For 3 of 5 payroll CMC expenditures selected for testing, the time and effort report certified by the employee was not certified timely. • For 1 of 5 payroll CMC expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-008 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that the University has appropriate and formal documentation to support federal expenditures as required, as well as appropriately monitoring time and effort reporting in a timely manner. Views of Responsible Officials: The University experienced turnover of key positions throughout campus, particularly in the Division of Finance, Government Sponsored Programs and various federally funds programs over the last few fiscal years. The changes in staffing lead to a loss of institutional knowledge, and interrupted policy and process enforcement campus wide. During the Fall of 2024 the University began work to enhance its internal controls, policies, and procedures to ensure the appropriate documentation to support expenditures was properly maintained, and to ensure that level of effort reporting appropriately documented and timely completed. While there were some improvements (i.e., level of effort reporting), issues were not fully remediated. At the beginning of the 2025, GSPAR transitioned time and effort reporting to a semester-based reporting cycle to aid in ensuring the accuracy and timely certification of time and effort reporting. These changes aided in increasing the accuracy and efficiency of certification. Although we noticed positive progress, we still have room to improve time and effort certification.
Federal Program Information: Connecting Minority Communities Pilot Program (11.028) and Higher Education Institutional Aid (ALN: 84.031B and 84.031E) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): F. Equipment and Real Property Management - Equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every 2 years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Equipment property records should contain the following information about the equipment: description (including serial number or other identification number), source, who holds title, acquisition date and cost, percentage of Federal participation in the cost, location, condition, and any ultimate disposition data including, the date of disposal and sales price or method used to determine current fair market value. The Uniform Guidance further requires that equipment owned by the Federal Government shall be identified (tagged) to indicate Federal ownership. Condition: The University did not comply with the requirements of equipment and real property management. Cause: Insufficient administrative oversight and internal controls with respect to equipment and real property management. Effect or Potential Effect: The University did not comply with the requirements of equipment and real property management. Questioned Costs: None. Context: The University was unable to provide documentation supporting the completion of a physical inventory of equipment and real property purchased with federal funds during the most recent two fiscal years. Additionally, for 1 of 1 sampled items in the CMC program, the University was unable to provide documentation supporting the required tagging and appropriate maintenance of property records for federally funded equipment. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-010 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the equipment and real property management compliance requirements. Views of Responsible Officials: Government Sponsored Programs and Research (“GSPAR”) has implemented processes for recording and inventorying federal purchases during the Fall 2024. Early in 2025 we updated all inventory information to capture all necessary information. In addition, the grant onboarding process was revised to emphasize key federal regulations and emphasize the importance of compliance. The University will complete a physical inventory by June 30, 2026. While there was improvement the issues were not fully remediated by June 30, 2025.
Federal Program Information: Connecting Minority Communities Pilot Program (11.028) and TRIO Cluster (84.217A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting – Under the CMC grant program, grantees must submit semi-annual Federal Financial and performance reports for the periods ending March 31 and September 30 of each year. Reports are due within 30 days after the end of the reporting period. Certain key items contain critical information that should be included within the report and such information should be reconciled to the institution’s underlying records. Grantees under the TRIO program must submit an annual performance report to Department of Education each year of the project period. Certain key items contain critical information that should be included within the report and such information should be reconciled to the institution’s underlying records. Condition: The University was unable to provide documentation supporting certain other key items containing critical information included within semi-annual CMC reports and annual TRIO reports. Cause: Insufficient administrative oversight and internal controls over CMC program and TRIO program reporting requirements. Effect or Potential Effect: The University was not in compliance with the respective CMC program and TRIO program reporting requirements. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 1 of 2 reports selected for testing in the CMC program, certain key line items contained errors in the information reported. • For 1 of 1 reports selected for testing in the TRIO McNair program, certain key line items contained errors in the information reported. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-012 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures to ensure that required reports are prepared in accordance with federal regulations and that supporting documentation is appropriately retained as required. Views of Responsible Officials: The TRIO Programs (Upward Bound, Student Support Services and McNair) experienced changes in program personnel. This change led to a loss of institutional knowledge, interrupted policy and process enforcement. In many instances documentation wasn’t available due to the transition of key program personnel. During the transition for TRIO Programs, we encountered difficulty locating documentation for students who were awarded grant aid as well as official appointment and start dates. During the Spring of 2025 the University began work to enhance its internal controls, policies and procedures to ensure the appropriate documentation was properly maintained. While there was improvement across all TRIO programs, the issues were not fully remediated by June 30, 2025.