Audit 392528

Finding 2025-001 – N. Special Tests and Provisions – N6. NSLDS Reporting Identification of the federal program: Federal Agency: U.S. Department of Education Federal Cluster: Student Financial Assistance (SFA) Cluster Assistance Listing Nos.: 84.063, Federal Pell Grant Program, and 84.268, Federal Direct Student Loans Award Year: July 1, 2024–June 30, 2025 Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The recipient and subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The internal controls should align with the guidance in ”Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the ”Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: Internal controls over the review and approval of the enrollment report sent to the third-party servicer, National Student Clearinghouse (NSC), were not adequately designed or operating effectively as follows: • A record count reconciliation between the enrollment report submitted to the NSC and the number of files received by the NSC, and documentation over how any rejected records were addressed, is not performed as part of the internal control. • Details of the validation of student information included in the enrollment report for accuracy prior to being sent to the NSC were not retained by Mercy Health. • Details of the NSC error report and corrections made were not retained by Mercy Health. Cause: Mercy Health did not have adequately designed internal controls in place surrounding the enrollment reporting process to the National Student Loan Data System (NSLDS). Effect or Potential Effect: Mercy Health may not report accurate and complete enrollment data timely to the NSLDS. Questioned Costs: $0 Context: Total SFA Cluster expenditures reported in the schedule of expenditures of federal awards were $1,715,151, of which $674,824 represents Federal Pell Grant Program expenditures and $1,019,508 represents Federal Direct Student Loans. Identification as a Repeat Finding: This finding is not a repeat finding from the prior year. Recommendation: The internal control should be designed to include a reconciliation of records transmitted and received by NSC as well as maintain documentation over the review and approval of the enrollment report for accuracy and completeness prior to sending to NSC. Further, we recommend that documentation over rejections and details of NSC error report and corrections made should be retained to evidence the operating effectiveness of internal controls. Views of Responsible Officials: Mercy Health will implement a mandatory, documented reconciliation process for every submission, formalize the validation process and retain evidence of accuracy checks, and establish a procedure for downloading and retaining error reports. By implementing these actions, Southeast Missouri Hospital College of Nursing & Health Sciences will ensure compliance with federal regulations regarding the accuracy and timeliness of student enrollment reporting to the NSC and NSLDS.