Audit 391175

Finding 2025-001 - Material Weakness - Borrowings from Endowment Fund Criteria: Ohio Revised Code 1715.53 (Ohio UPMIFA) Appropriations from net appreciation states that "an institution may appropriate for expenditure or accumulate so much of an endowment fund as the institution determines is prudent for the uses, benefits, purposes, and duration for which an endowment fund is established. Unless stated otherwise in the gift instrument, the assets in an endowment fund are donor-restricted assets until appropriated for expenditure by the institution. In making a determination to appropriate or accumulate, the institution shall act in good faith, with the care that an ordinary prudent person in a like position would exercise under similar circumstances." Condition: The College has borrowed from its endowment funds for campus renovations and to cover certain operating expenses of the College prior to and immediately following its accreditation and approval to participate in federal student financial aid programs. As such, the fair value of assets associated with the donor-restricted endowment funds has fallen below the level that the donor or UPMIFA requires the College to retain as a fund of perpetual duration. Cause: When the purchase of the College happened in 2009, the buildings were in such despair that they were not able to be used. The College deemed it prudent to borrow from endowment to repair the buildings to be able to meet accreditation standards. Effect or potential effect: The judgment of the Board of Trustees is that the endowment exists for the sole purpose of benefiting the College and that the continuing operation of the College could not be assured without borrowing of funds from the endowment. Potential effect is that donor would not agree with "prudence" of the borrowing of the endowment funds. Recommendation: The College should continue to work long-term plans for maintaining and sustaining financial stability and full restoration of the endowment. Repeat finding: Yes. Prior year finding number 2024-001. The College was not in financial position to repay loans from endowments. Views of responsible officials: See attached.

Finding 2025-002 - Significant Deficiency in Internal Control Over Compliance - Student Financial Aid Cluster Eligibility - Student Loan Limits Criteria: Aggregate loan limits are $31,000 for dependent undergraduate students and $57,500 for independent undergraduate students, of which only $23,000 may be subsidized. Condition: One undergraduate student had aggregate subsidized loans over the aggregate limit. Cause: This overage was not flagged by the Financial Aid Department. Effect or potential effect: Possible effect is that students may receive more subsidized loans than they are eligible for. Recommendation: Ensure controls are implemented to review aggregate outstanding direct loan balances maintained in the financial aid software are compared to the National Student Loan Data System to ensure applicable loan limits are being followed before processing additional direct loans. Views of responsible officials: See attached.