Audit 395202

SCHEDULE OF FINDINGS AND QUESTIONED COSTS AND CORRECTIVE ACTION PLAN Federal Award Findings and Questioned Costs June 30, 2025 Comment 2025-005 PROCEDURES SHOULD BE IMPROVED TO ENSURE THAT STUDENTS ARE ELIGIBLE FOR STUDENT FINANCIAL AID STUDENT FINANCIAL AID CLUSTER PROGRAM CFDA # 84.268, 84.063, 84.007, and 84.038 (Questioned Costs-None) Condition: A student is not eligible to receive Title IV, HEA program assistance if the student has not maintained satisfactory academic progress in his or her course of study according to the Institution’s published standards of satisfactory progress that satisfy federal requirements. During our audit, we noticed nine (9) instances in our sample of sixty (60) in which a student did not meet satisfactory academic progress, qualitatively and/or quantitatively. Students were not put on academic status restrictions in a timely manner and in line with the Institution’s policies and procedures. Context: We reviewed the financial aid files of sixty (60) students selected for eligibility testing. Criteria: A student in receipt of Federal funds must maintain satisfactory academic progress in his or her course of study according to the Institution’s published standards of satisfactory progress that satisfy federal requirements [34 CFR 668.32 (f)]. Effect: Compliance with eligibility requirements as established in the Code of Federal Regulations are not met. Ineligible students may be receiving funds, resulting in additional charges to the Institution for unallowable costs. Cause: Transition to remote work environment as a result of the pandemic and inaccurate reviews of student files and miscalculation of financial awards. Recommendation: We recommend that the Institution improve its quality control procedures. Student financial aid award packages should be reviewed before aid is disbursed to ensure eligibility. Management should periodically perform monitoring activities to ensure that federal regulations are followed. All personnel involved in the compilation of the student financial aid packets should be aware of federal regulations which govern the requirements and procedures to be followed when awarding federal aid. Views of Responsible Officials and Planned Corrective Actions: During the FY21 fiscal year the University was sensitive to the significant amount of student concerns related to the abrupt transition from in class room learning to virtual learning environment. Many of them were not prepared for task virtual learning and did not have the proper equipment or experience with virtual learning because many of them had never done remote learning before. The concerns the University considered factors like student and faculty mental health, lack of resources, accessibility to the internet, etc. As a result, the University decided to provide some level of flexibility to the at-risk students and the SAP review process. Corrective action and improvements will be implemented by June 30, 2026 by the Director of Financial Aid.

SCHEDULE OF FINDINGS AND QUESTIONED COSTS Federal Award Findings and Questioned Costs June 30, 2025 Comment #2025-004 PROCEDURES GOVERNING THE RECONCILIATION AND MANAGEMENT OF FEDERAL PROGRAMS SHOULD BE IMPROVED CONNECTING MINORITY COMMUNITIES PROGRAM HIGHER EDUCATION EMERGENCY RELIEF FUND HIGHER EDUCATIONAL INSTITUTIONAL AID STRENGTHENING MINORITY-SERVING INSTITUTIONS U.S. DEPARTMENT OF EDUCATION ALN# 84.031B and E, 84.382, 84.425T U.S. DEPARTMENT OF COMMERCE ALN#11.028 (Questioned Costs - None) (Repeat 2024-004) Condition: Good internal controls over the receipt of federal funds require the reconciliation of authorized and recorded disbursements of cash drawn from the federal cash management system. This process ensures that federal funds are properly earned by the University and the University has not made a disbursement for which it has not been funded. During our audit, we noted that the University made efforts to reconcile its program activity under the Higher Educational Institutional Aid (Title III), Strengthening Minority-Serving Institutions and the Connecting Minority Communities Program. However, we did not see evidence that the reconciliation of the Title III program activity, Strengthening Minority -Serving Institutions and the Connecting Minority Communities Program is performed regularly as part of the University’s monthly and annual close-out. As a result, we noted the following: • The proper reconciliation of funds disbursed as allowed by the program requires reconciliation of the funds drawn and disbursed for each assistant listing portion (1) a reconciliation of funds disbursed to students directly (student aid portion) and funds disbursed for other allowable expenditures to the general ledger, (2) a reconciliation to the disbursement for general operating purposes and loss revenue to the approved and documented methodology and the general ledger accounts and (3) all funds requested via the G-5 reports should be accurately reconciled to the general ledger and to the various detail reports supporting the disbursements. This procedures also extends to the funds received from the Department of Commerce. The reconciliations should be summarized and reported quarterly and annually as required by the Department of Education and other funding sources. • Financial statement adjustments were needed to properly recognize the cash balance for the Title III program, Strengthening Minority-Serving Institutions and other programs. The reconciliation process, as outlined in the internal control procedures is not performed in a timely manner. Context: Review of cash management procedures related to the Title III-Strengthening Minority-Serving Institutions and the Connecting Minority Communities Program. Criteria: Standards for financial management systems [2 CFR §215.21]. (Continued) Effect: The effect is that unresolved balances could represent excess cash due back to the U.S. Department of Education, or not receipting funds that are due to the University for students who have obtained their education. Deficiency in reporting as required by the Department of Commerce. Cause: Weaknesses in procedures over reconciliation of grant activity. Recommendation: We recommend that management implement procedures to ensure that federal program activity is reconciled on a monthly basis for all open award years. This process should be coordinated between all affected departments (i.e., Grants and Contracts, Accounting Department, Sponsored Programs, Student Financial Aid, etc.). The reconciled amounts should properly reflect amounts due to or from the U.S. Department of Education and the U.S. Department of Commerce on the University’s general ledger accounting system. The reconciliations should be reviewed by a responsible official of the University. Monitoring of such reconciliation and the reporting requirements should be evidenced by internal control procedures and proper documentation of authorization. Views of Responsible Officials and Planned Corrective Actions: We concur with the auditor’s finding. The University has engaged a third party to review the reconciliation procedures and to make recommendations on improvements to our current policy. The recommendations will also include any additional documentation that showing proof that the reconciliation has been completed as timely as required. The Vice President of Business & Finance and the Director of Student Financial Aid will review the reconciliations. Monitoring reports will be completed and shared with senior management and relevant department leaders. Implementation date: Immediately and before June 30, 2026. Persons Responsible: Vice President of Business & Finance, controller and Director of Student Financial Aid.