Audit 396098

Criteria The Electronic Signatures in Global and National Commerce Act (“E-Sign Act” requires a school to obtain a student's voluntary consent to participate in electronic transactions. Condition Drexel University acquired Salus University at the end of FY2024. Given the separate control environments in place during FY2025, each University was treated as a separate population for testing. We examined 25 student records for each University and noted that no consents to participate in electronic transactions were obtained. Cause The Universities do not have a process in place that prompts students to voluntarily consent to participate in electronic transactions before the federal funds are disbursed to them. Effect A lack of student consent to participate in electronic transactions may result in the transactions being denied legal effect, validity, or enforceability solely because it is in electronic form or because an electronic signature or electronic record was used in its formation. Questioned Costs None noted. Recommendation We recommend the University establish a process that prompts students to voluntarily consent to participate in electronic transactions prior to students receiving federal student financial assistance. Management’s Views and Corrective Action Plan Following this finding is Management’s View and Corrective Action Plan.

Criteria 34 CFR part 668 addresses timely return of Title IV funds (“R2T4” to the Department of Education. The regulation notes that returns of Title IV funds are required to be deposited or transferred into the Student Financial Aid account or electronic fund transfers initiated to the Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Condition Drexel University acquired Salus University at the end of FY2024. Given the separate control environments in place during FY2025, each University was treated as a separate population for testing. We examined 25 student records for each University. For three of the five students selected for testing at Salus University, the Title IV funds were not returned within 45 days of the student’s withdrawal from the University. The funds were returned between 140 and 147 days after the student’s withdrawal date, with is 95- 102 days outside of the required 45-day window. Although the funds were not returned within the required timeframe, the appropriate amount of funds were returned to the Department of Education. Cause As Salus University records were closed out the FY2025 loan year and consolidated with Drexel University in FY2025, Salus University was not able to process the return of these funds timely. During the merger process, the U.S. Department of Education required that Salus University’s academic year for federal loans be closed out in order to complete the institutional consolidation. During this closed period, several students withdrew from the Summer term, which led to Salus University being unable to process the return of these funds timely. Questioned Costs The only questioned costs were interest on Title IV funds that were held by the University, which were inconsequential. Effect The University held funds which should have been returned to the Department of Education in a timely manner. Recommendation While we acknowledge the root cause of this finding was the merger of Salus University, we recommend the University continue to enhance the execution of the Title IV return process to ensure all students that withdraw from the University have their aid reviewed and returned in a timely manner. Views of responsible officials and planned corrective actions Following this finding is Management’s View and Corrective Action Plan.

Criteria Per National Student Loan Data System (NSLDS Enrollment Reporting Guide 1.4 – At a minimum, schools are required to certify enrollment for all those who are included on your roster file (and Title IV aid recipients at least every two months and within 15 days of the date that NSLDS sends a roster file to the school or its third-party service provider. In accordance with 34 CFR 685.309(b, 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 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 halftime basis or failed to enroll on at least a half-time basis for the period for which the loan was intended. Condition Drexel University acquired Salus University at the end of FY2024. Given the separate control environments in place during FY2025, each University was treated as a separate population for testing. We examined 25 student records for each University Drexel University Of the 25 students selected for testing, three were reported to NSLDS more than 60 days after the student had left the University, ranging between 64 and 87 days. Additionally, the status change for one student was not accurately reported to NSLDS. The student was originally enrolled at half-time, then withdrew. Prior to reporting the withdrawal to NSLDS, the student re-enrolled as “less than half-time”. The student’s change to withdrawn was never reported to NSLDS. Salus University Of the 25 students selected for testing, graduation status for two were not reported to NSLDS. Cause The Financial Aid office was not aware of student enrollment changes entered by the University Registrar that occurred after the last report to the NSLDS. Effect For these students, the change in status was not reported timely or accurately, as defined in the criteria above. Additionally, loan deferment issues can arise for the graduated students as their status was not reported. Questioned Costs There are no questioned costs associated with this finding.Effect For these students, the change in status was not reported timely or accurately, as defined in the criteria above. Additionally, loan deferment issues can arise for the graduated students as their status was not reported. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend that the University enhance the review process for student enrollment changes occurring after reporting to NSLDS to ensure timely reporting of student status changes. Management’s Views and Corrective Action Plan Following these findings are management’s views and corrective action plan.

Criteria Student disbursements are required to be reported in the COD system within 15 days of disbursing the federal funds to the student. Condition Drexel University acquired Salus University at the end of FY2024. Given the separate control environments in place during FY2025, each University was treated as a separate population for testing. We examined 25 student records for each University. Through our testing of 25 selections for Drexel University, we noted that one of the 25 selections was not reported to the COD within 15 calendar days of the disbursement to the student. The noted disbursement was reported 20 calendar days late. Cause This exception was caused due to the student not answering a question on the Free Application for Federal Student Aid (FAFSA) regarding the completion of high school status, which relates to Ability to Benefit (ATB) eligibility. As the question was unanswered, the Banner system used for student accounts was not able to timely report disbursements to the COD. Effect Disbursements to the selected student were not reported timely to the COD. Additionally, late reporting could cause issues in tracking of disbursements made to students. Questioned Costs None noted. Recommendation We recommend the University establish a process, such as a checklist to report disbursements on a more frequent basis to the COD, to ensure timely transmission and error identification within the disbursement reporting. Management’s Views and Corrective Action Plan Following these findings are management’s views and corrective action plan.