Audit 394918

Special Tests and Provisions – Return of Title IV Funds: Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance (See table in "Schedule of Findings and Questioned Costs"). Criteria – When a recipient of Title IV grant or loan assistance withdraws from the University during a payment period or period of enrollment in which the recipient began attendance, the University must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. The regulations (34 CFR 668.22(j)(1)) provide that an institution must return the amount of title IV funds for which it is responsible under this paragraph (34 CFR 668.22(a)(6)(ii)(B)(1)) as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew. In addition, the University is required to maintain internal controls to ensure that the calculation of all returns are complete and accurate which includes documentation of reviews and approvals when completed by an individual other than who prepared them. Condition/Context – We selected a sample of 20 students out of a population of 109 that were identified by the University as having received some federal assistance and withdrew from the University during the year under audit. We believe this to be a representative sample of the population; however, it was not a statistical sample. Effect – We found exception with one student whose title IV funds were returned 48 days after it was determined that the student had withdrawn. We also could not observe retained evidence that any of the calculations were reviewed and approved by an individual other than who prepared them. Cause – The FY2024 Corrective Action Plan (CAP) was approved in November 2024, near the end of the Fall 2024 term, with a projected completion date of December 2024. The associated finding pertains to Fall 2024 unofficial withdrawals and was identified through a report developed by the Registrar’s Office in response to this CAP. Development of the report could not begin until after November 2024 and required at least two months to complete to ensure accuracy of data output. Consequently, processing for this student was delayed, as completion of the report took longer than initially anticipated. Additionally, management’s current procedures do not require retention of documentation to support reviews and approvals of R2T4 calculations. Questioned Costs – None. Repeat Finding – This is a repeat finding, see 2024-001. Recommendation – We recommend the University’s management update the internal control procedures in place to process R2T4 returns in a timely manner and ensure that documentation is retained for evidence that the calculations were reviewed and approved by someone other than who prepared them to ensure the completeness and accuracy of the calculations. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. See the corrective action plan for further detail.

FINDING 2025-002 – Cash Management: Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance (See table in "Schedule of Findings and Questioned Costs". Criteria –34 CFR 668.166 (a), Excess Cash: a) General. The Secretary considers excess cash to be any amount of title IV, HEA program funds, other than Federal Perkins Loan program funds, that an institution does not disburse to students by the end of the third business day following the date the institution— 1. Received those funds from the Secretary; or 2. Deposited or transferred to its depository account previously disbursed title IV, HEA program funds, such as those resulting from award adjustments, recoveries, or cancellations. The Department of Education allows an institution to retain, for up to seven days, excess cash that does not exceed one percent of the total amount of funds drawn by the institution in the prior award year. The institution must return to the Department of education any excess cash over the tolerable amount (one percent) and any amount remaining after the tolerance period (seven days). Questioned costs would be those in excess of the one percent threshold. Condition/Context – The University made 48 draws for various student financial assistance cluster programs. We selected a sample of 7 and believe this to be a representative sample; however, it was not a statistical sample. Effect – We noted one instance in which the University made an advance drawdown of $10,662,472 that was not disbursed to students until 18 days after receiving the cash drawdown. This drawdown exceeded 1% of total drawdowns from funding in the prior fiscal year and was retained for more than the tolerance period described in the criteria above. We noted the University calculated interest on the days outstanding and applied the interest to the program. Cause – The excess drawdown occurred due to a conservative approach taken by the University to ensure sufficient funds were available to cover anticipated February 2025 disbursements, which resulted in an advance drawdown being requested in January 2025 prior to the related disbursements. Questioned Costs – Advance drawdowns totaling $9,872,238 exceeded one percent of prior-year drawdowns that were held beyond the seven day tolerance period before disbursement to students. Repeat Finding – Not a repeat finding. Recommendation – We recommend that the University’s management continue to adhere to its established internal control procedures requiring that any excess advance drawdowns be processed within three business days. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. See the corrective action plan for further detail.

Finding 2025-003 – Special Test and Provisions – Enrollment Reporting: Significant Deficiency in Internal Control over Compliance and Instance of Noncompliance (See table in "Schedule of Findings and Questioned Costs"). Criteria – 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school 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 school, 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 school and who received a loan under title IV of the Act has changed his or her permanent address. Condition/Context – Out of a population of approximately 1,000 student status changes and 230 permanent address changes, a sample of 74 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2024-2025 academic year. We believe this to be a representative sample although not a statistical sample. The enrollment information and withdrawal, address change, or graduation date per the University’s records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes. Questioned Costs – None. Effect – Although the University generally reported enrollment status changes to NSLDS accurately, it did not fully comply with timeliness requirements for two batches of students that graduated in May and June 2025, which were reported 30 days and 4 days, respectively beyond the 60-day requirement noted in the criteria above. In addition, we noted four other withdrawn students whose status change was not reported timely. Cause – The cause was due to no internal controls in place to report enrollment status changes within a timely manner, no internal controls related to review of effective dates, and unofficially withdrawn students Repeat Finding – Not a repeat finding. Recommendation – We recommend the University to establish a formal policy requiring a review of student status information submitted to the NSLDS, by a third-party intermediary on the University’s behalf, for completeness and accuracy. We also recommend the University establish a cadence of monitoring reporting deadlines, particularly those around classes of graduating students. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding. See the corrective action plan for further detail.