Audit 393032

FINDING 2025-001 Federal Program Information: Federal Direct Student Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. NSLDS Reporting – The School is required to report enrollment information under the Federal Direct Student Loan Program via the National Student Loan Data System (“NSLDS”) (OMB No. 1845-0035). 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. Campus Level: Institutions are responsible for accurately and timely reporting certain significant data elements under the Campus-Level Record that the U.S. Department of Education considers high risk, including enrollment status, which is the student’s enrollment status as of the reporting date; full-time (F), three-quarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). At a minimum, institutions are required to certify enrollment every 60 days or every other month. Program Level: Institutions are responsible for accurately and timely reporting certain significant data elements under the Program Level Record that the U.S. Department of Education considers high risk, including OPEID number, CIP code, CIP year, credit level, program enrollment status, program enrollment effective date, program length, and program begin date. Condition: During our testing of student enrollment reporting, we noted the following exceptions: • For 30 of 40 selected students, the campus level enrollment effective date was not correctly reported to NSLDS. • For 13 of 40 selected students, the campus level enrollment status was not correctly reported to the NSLDS. • For 33 of 40 selected students, the campus level enrollment effective date was not certified in NSLDS within the required timeframe. • For 37 of 40 selected students, the School did not accurately report the student’s program level information to NSLDS. Cause: Insufficient administrative oversight and internal controls with respect to enrollment reporting requirements. Effect or Potential Effect: The School is not properly following its policies and procedures to ensure that compliance is maintained with respect to all aspects of enrollment reporting. Questioned Costs: None. Context: We tested a sample of students and found exceptions as noted in the condition. Identification as a Repeat Finding: This is a repeat finding from prior the year. This was reported as finding 2024-001 in the 2024 report. Recommendation: We recommend that the School enhance its procedures and internal controls to ensure that all status changes are submitted to the NSLDS website within the required timeframe and all required data elements are reported on the NSLDS website. Views of Responsible Officials and Planned Corrective Actions: We concur. Due in part to frequent turnover in the Registrar's Office, there have been reporting errors in Clearinghouse which have been reflected in NSLDS. In addition to changes in personnel, the Office of the Dean will provide joint oversight with the Office of Student Affairs on matters impacting regulatory requirements. Specifically, there will be a monthly review of the NSLDS database on the second Monday of each month with a regular tracking system. The Registrar, Associate Dean of Students and Dean’s Office representative will provide quarterly “audits” to the Dean on accuracy of data and reporting compliance. Annual NSLDS training, appropriate to the role, will be provided for all team members in the Registrar's Office and others as appropriate.

FINDING 2025-002 Federal Program Information: Federal Direct Student Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management – Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition: During our cash management testing, we noted multiple instances during the fiscal year where funds drawn were held in excess of the allowable time frame and/or allowable thresholds for the Federal Direct Student Loan Program. ` Cause: Insufficient administrative oversight and internal controls with respect to cash management compliance requirements. Effect or Potential Effect: The School is not properly following its policies and procedures to ensure that excess cash is eliminated within the allowable timeframe. Questioned Costs: None. Context: We examined all draws of Title IV aid and identified multiple instances of cash held in excess of the allowable time frame and/or allowable thresholds as noted in the condition. Identification as a Repeat Finding: No similar finding was identified during the prior year. Recommendation: We recommend that the School enhance procedures and internal controls over the applicable cash management requirements to include more frequent reconciliations to ensure excess cash balances are eliminated timely. Views of Responsible Officials and Planned Corrective Actions: We concur. There were adjustments to students’ accounts resulting in funds required to be returned to the ED. The adjustment amounts were drawn down in error. Once the error was identified, the funds were returned to the ED prior to the end of the award year/fiscal year. We are implementing a second review of awards that result in adjustments, cancellation, or recovery requiring return to the DOE to ensure funds are returned within a timely manner. In addition to this review, we are instituting a weekly report that will identify timing of funds drawn and returned to ensure adherence to this requirement within 7 calendar days.

FINDING 2025-004 Federal Program Information: Federal Direct Student Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) L. Reporting – Financial Reporting – Federal regulations, 34 CFR 690.83, require that the School submit origination records for students to the Common Origination and Disbursement (“COD”) system. Items considered key in student origination records, if applicable, are: award amount, enrollment date, verification status code (when the applicant is selected for verification), transaction number, cost of attendance, and the “Academic Start Date” and “Academic End Date”. Condition: During our testing of the Federal Direct Student Loan origination records, we noted the following exceptions: • For 7 of 25 students tested, certain key items within the students’ origination records reported to the COD did not agree to School’s supporting documentation. Cause: Insufficient administrative oversight and internal controls with respect to reporting of origination records. Effect or Potential Effect: The School is not properly following it policies and procedures in place to ensure that compliance is maintained with respect to origination record reporting. Failure to submit accurate COD origination records could result in improper awards of Direct Loans. Questioned Costs: None. Context: We tested a sample of 25 students and identified 7 exceptions as noted in the condition for which certain key items within students’ origination records reported to the COD did not agree to the School’s supporting documentation. Identification as a Repeat Finding: No similar finding was identified during the prior year. Recommendation: We recommend that the School adhere to its procedures and internal controls over the applicable compliance requirements for Federal Direct Student Loan origination records to ensure that the origination records submitted to COD match the School’s own records before file submission. Views of Responsible Officials and Planned Corrective Actions: We concur. The Registrar prepares the program calendars with input from the programs on an annual basis. MSM has a diversity of programs with different start and end dates. We understand that this needs to be accurately reflected in our calendars and in the Banner system or other enrollment platform. Academic calendars will be reviewed by the Registrar and program staff on an annual basis. Any changes to the academic calendars will need to be communicated to all members of the team. Updated calendars will be posted annually on the website and in the student handbook. After the Registrar’s Office confirms the academic start date and academic end date, Student Fiscal Affairs will continue to input this information in our Student Information System Banner to allow accuracy in our student records sent to the Department of Education Common Origination and Disbursement. If there is a change in the academic start dates and/or academic end dates, the Registrar’s Office will notify Student Fiscal Affairs, Admissions, and Student Accounts to allow for updates within the institution.

FINDING 2025-003 Federal Program Information: Research and Development Cluster (ALN: 93.U10) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) B. Allowable Cost/Cost Principles - Federal grant requirements, § 200.430, provide that salaries and wages charged to federal awards must be based on records that accurately reflect the work performed; be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated; be incorporated into the official records of the institution; reasonably reflect the total activity for which the employee is compensated; and support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award. Condition: During our testing of expenditures, we noted the following exceptions: • For 1 of 40 selected Research and Development Cluster expenditures, a level of effort certification to support the payroll costs charged to the federal program was not performed timely. Cause: Insufficient administrative oversight and internal controls with respect to allowable cost/cost principles compliance requirements. Effect or Potential Effect: The School is not properly following it policies and procedures to ensure that compliance is maintained with respect to supporting payroll costs charged to the federal programs which could result in unallowable costs charged to the federal agency. Questioned Costs: None. Context: We tested a sample of 40 expenditures across the major programs and noted 1 exception as noted in the condition. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as finding 2024-003 in the 2024 report. Recommendation: We recommend that the School adhere to its procedures and internal controls over the applicable compliance requirements of allowable costs/cost principles requirements to ensure that the School is appropriately monitoring level of effort reporting in a timely manner. Views of Responsible Officials and Planned Corrective Actions: We concur. Due to a change that occurred after the reporting period appropriately reallocating one employee’s effort to the federal funding source, the certification was not displayed on the effort report. The employee has certified that this effort was charged appropriately to this award. We are reviewing our policies and procedures to ensure redistribution of labor is performed within a timely manner. We have moved to an annual effort reporting process aligned to the federal regulations and are implementing the Cayuse Effort Reporting module that will more effectively track and report effort. The system will be implemented during our next effort reporting cycle.