Audit 392563

Finding 2025-001: Disbursement Notification - Significant Deficiency Federal Program: Federal Direct Student Loans Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions Assistance Listing Number: 84.268 Federal Award Year: June 30, 2025 Award number: N/A Name of pass-through entity: N/A Criteria: Title IV regulations (34 CFR 668.165) states that institutions must notify students or parents 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; 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. Condition/Context: 25 students in a sample of 25 were not given notifications that met the required criteria. Students were notified of awards throughout the academic year, but notifications did not meet the required criteria above. Additionally, the required information on the timing and procedures for canceling loans was made available to students on the College’s website and financial aid office. The sample was not a statistically valid sample. Cause: The College changed systems in 2024, and the system notification was not properly set up. Effect: The students did not receive the required notifications within the required timeframe. Questioned Costs: There are no questioned costs associated with this finding. Recommendation: The College should correct the software error and create a contingency plan to manually notify students to prevent awarding Title IV funds without proper notification. Views of Responsible Official of the Auditee: The College will correct the system error and implement additional review procedures when there are software updates to ensure the automated notices are being sent to comply with notification requirements.

Finding 2025-002: Student Status Changes - Significant Deficiency Federal Program: Federal Direct Student Loans Federal Agency: U.S. Department of Education Compliance Requirement: Special Tests and Provisions Assistance Listing Number: 84.268 Federal Award Year: June 30, 2025 Award number: N/A Name of pass-through entity: N/A Repeat Finding of 2024-001 Criteria: Title IV regulations (34 CFR Section 685.309(b)) require that upon receipt of an enrollment from the Secretary, institutions must update all information included in the report and return the report to the Secretary: (i) in the manner and format prescribed by the Secretary; and (ii) within the timeframe prescribed by the Secretary. Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, an institution must notify the Secretary within 30 days after the date the institution discovers that: (i) a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or (ii) a student who is enrolled at the institution and who received a loan under Title IV of the Act has changed his or her permanent address. Condition/Context: The College did not notify the National Student Loan Data System (NSLDS) with an accurate effective date for 9 students with status changes in our sample of 25 students. Additionally, the College did not notify the NSLDS in a timely manner for 1 student with status changes in our sample of 25 students. The sample was not a statistically valid sample. Cause: The College's procedures for reporting students were not designed appropriately to allow for accurate or timely reporting to the NSLDS. Effect: The accuracy of Title IV student loan records depends heavily on the accuracy of the enrollment information reported by schools. If an institution does not review, update and verify the student's enrollment status, effective dates of the enrollment status and the anticipated completion dates, then the Title IV student loan records will be inaccurate. Questioned Costs: There are no questioned costs associated with this finding. Recommendation: We recommend that the College review its procedures for student status changes and NSLDS notifications to ensure there are follow-up and review procedures being performed for all students with status changes at the College. Views of Responsible Official of the Auditee: Management concurs with the finding and is reviewing procedures for reporting to the national student clearinghouse to ensure changes in reporting can effectively and timely report status changes.