Audit 392281

Federal Agency: US Department of Education (ED) Program Name: Student Financial Assistance Cluster: Federal Direct Student Loans, Federal Pell Grant Program ALNs: 84.268; 84.063 Award Numbers: P268K171370, P063P161370; Federal Awards Year 2024 – 2025 Questioned Costs: None Repeat Finding: Yes 2025-003. Finding: Errors in Reporting for NSLDS Northern Illinois University (University) did not properly report enrollment changes for certain students who received federal student aid to the National Student Loan Data System (NSLDS) and the internal controls in place did not prevent and detect errors. Condition: We noted 2 (5%) of 40 students tested in which the University did not report the correct enrollment status to the NSLDS at the Program Level. The sample was not intended to be, and was not, a statistically valid sample. Criteria: The Code of Federal Regulations (34 CFR 685.309) requires enrollment status changes for students to be reported to NSLDS within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. Regulations require the status to include an accurate effective date. According to the NSLDS Enrollment Reporting Guide, a student’s Program-Level enrollment status should be reported with the same enrollment status as that student’s campus-level enrollment status for all programs the student is enrolled in at that location, even if the student is not currently taking coursework that applies to a particular program. If the student has withdrawn or graduated from an academic program, a “terminal enrollment status” of ‘W’ or ‘G,’ as appropriate, should be reported for that program, even if the student is still taking coursework applicable to other programs in which the student is enrolled. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure enrollment reporting is completed properly. Cause: University officials indicated the two exceptions were the result of manual processing errors. Specifically, Program-Level enrollment status updates were not completed for two students who unofficially withdrew. Effect: If the NSLDS is not properly updated with the student information by the University, overawards could occur should the student transfer to another institution and the student may not properly enter the repayment period. (Finding Code No. 2025-003, 2024-003) Recommendation: We recommend the University review current processes for reporting to NSLDS and implement procedures to ensure submissions are reported timely and accurately. University Response: Accepted. The University acknowledges the importance of accurate and timely enrollment reporting to the National Student Loan Data System (NSLDS). As it relates to the prior year finding and repeat finding status, the University corrected the system configuration issue and provided additional training regarding effective date reporting requirements. The exceptions identified in the current year were unrelated to the prior system logic issue and instead resulted from manual processing errors involving Program-Level updates for unofficial withdrawals. The University will review and strengthen its current enrollment reporting procedures to ensure Program-Level updates are completed consistently, particularly in cases involving unofficial withdrawals. The University will develop a batch reporting process for unofficial withdrawals to facilitate accurate enrollment reporting at both the program and campus level. Additional verification steps will be implemented prior to submission to confirm that both campus-level and program-level enrollment statuses are properly updated. The University will also reinforce staff training related to NSLDS reporting requirements and enhance supervisory review procedures to reduce the risk of similar errors occurring in the future.

Federal Agency: US Department of Education (ED) Program Names: Fund for the Improvement of Postsecondary Education; Special Education – Personnel Development to Improve Services and Results for Children with Disabilities; Child Care Access Means Parent in Schools ALNs: 84.116; 84.325K; 84.335 Award Numbers: P116Z230260; H325K180006; P335A220131; Federal Awards Year 2024 - 2025 Questioned Costs: None Repeat Finding: Yes 2025-004. Finding: Internal Controls Over Procurement Northern Illinois University (University) included incorrect documentation within purchase requisition forms for small purchases and simplified acquisition procurement transactions at the time of approval of the purchase which did not allow a reviewer to determine the appropriateness of the procurement method. Condition: Three (100%) of three small purchase procurement transactions tested in the Fund for the Improvement of Postsecondary Education program were approved based on a form that summarized the incorrect procurement method. The University incorrectly indicated on a small purchase waiver form that the transactions were exempt from procurement under the Illinois Procurement Code (30 ILCS 500 / 1-13(b)(8)). One (100%) of one transaction tested meeting the simplified acquisition threshold in the Fund for the Improvement of Postsecondary Education program was approved based on a form that summarized the incorrect procurement method. The University incorrectly utilized a small purchase waiver form to indicate that the transaction was exempt from procurement under the Illinois Procurement Code (30 ILCS 500 / 1-13(b)(8)). One (50%) of two small purchase procurement transactions tested in the Special Education – Personnel Development to Improve Services and Results for Children with Disabilities program was approved based on a form that summarized the incorrect procurement method. The University incorrectly indicated on a small purchase waiver form that the transaction was exempt from procurement under the Illinois Procurement Code (30 ILCS 500 / 1-13(b)(8)). One (50%) of two small purchase procurement transactions tested in the Child Care Access Means Parents in School program was approved based on a form that summarized the incorrect procurement method. The University incorrectly indicated on a small purchase waiver form that the transaction was exempt from procurement under the Illinois Procurement Code (30 ILCS 500 / 1-13(b)(8)). One (100%) of one transaction tested meeting the simplified acquisition threshold in the Child Care Access Means Parents in School program was approved based on a form that summarized the incorrect procurement method. The University incorrectly indicated on a small purchase waiver form that the transaction was exempt from procurement under the Illinois Procurement Code (30 ILCS 500 / 1-13(b)(8)). Based on additional information provided to us during our testing, the University did have other documentation to support the history of the procurement, including rationale for the method of procurement, and there were no indications that procurement methods used were inappropriate. The sample was not intended to be, and was not, a statistically valid sample. Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure procurement procedures are properly followed and support is properly maintained as required by 2 CFR 200.318. Cause: University officials stated that insufficient training on procurements subject to 2 CFR 200 lead to the incorrect documentation on the purchase requisition documentation. Effect: If the purchase requisition forms contain an incorrect rationale for the procurement method selected, the University could approve payments of federal funds to vendors that do not meet federal regulations. (Finding Code No. 2025-004, 2024-004) Recommendation: We recommend the University review current processes for small purchases and simplified acquisition transactions to ensure purchase requisition forms are completed correctly. University Response: Accepted. The University implemented revised procedures and targeted training in April 2025 to strengthen compliance with the 2 CFR 200 procurement requirements. The transactions identified in the condition occurred prior to full implementation and corrective action. The University will continue to monitor procurement processes to ensure accurate and complete documentation of the procurement method selected.

Federal Agency: US Department of Education (ED) Program Name: Student Financial Assistance Cluster: Federal Pell Grant Program ALN: 84.063 Award Numbers: P063P161370; Federal Awards Year 2024 – 2025 Questioned Costs: None Repeat Finding: No 2025-005. Finding: Errors in Verification Reporting Northern Illinois University (University) did not properly code the verification status in the Common Origination and Disbursement (COD) System for students who were disbursed Pell Grant funds and later selected for verification, and the internal controls in place did not prevent and detect the exceptions. Condition: As part of verification requirements, the University is required to obtain acceptable documentation to verify the information required for the Verification Tracking Group to which the applicant is assigned; match information on the documentation to the student aid application; if necessary, submit data corrections to the Free Application for Federal Student Aid (FAFSA) Processing System and recalculate awards and; correctly code the student’s verification status in the COD System for Pell Grants. We noted 6 (24%) of 25 students tested who had been selected for verification for which the verification status code was not correctly coded in COD after the verification procedures were completed. The sample was not intended to be, and was not, a statistically valid sample. Criteria: Under 34 CFR 668.51 – 668.61, a school is required to complete the verification of information submitted by an applicant on the FAFSA if the application has been selected for verification. When a Pell Grant is disbursed, the school must report the student’s verification status through the COD System. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure verification status codes are properly reported. Cause: University officials stated that for students who were selected for verification after disbursements were made, the University’s existing procedures did not include a process to ensure verification status changes were properly updated and transmitted to the COD System after verification was completed. Effect: If the COD System is not properly updated with verification status by the University, there could be overpayments of student aid. (Finding Code No. 2025-005) Recommendation: We recommend the University review current processes for reporting verification status to the COD System and implement procedures to ensure all verification statuses are reported. University Response: Accepted. University procedures have been updated to ensure verification status updates are properly transmitted to the COD System upon completion of verification for students who were disbursed Pell Grant funds and were later selected for verification. Relevant staff have been trained in the revised procedures. Additionally, the University implemented a process to periodically review records and confirm that verification statuses are accurately reflected in the COD System. All affected student records have been reviewed. It has been confirmed in the National Student Loan Data System (NSLDS) that none of the reported statuses resulted in overpayment.