Finding 2025-001 – Significant Deficiency, Compliance and Control Federal Award No. 84.268, 84.063 U.S. Department Of Education Student Financial Aid Cluster – Special Tests and Provisions Criteria: According to 34 CFR Section 685.309(b), upon receipt of an enrollment report from the Secretary, a school must update all information included in the report and return it to the Secretary in the manner and format prescribed by the Secretary and with the timeframe prescribed by the Secretary. According to the Federal Student Aid Handbook, Volume 2, Chapter 3, a university must report changes in student’s enrollment status, the effective date of the status, and an anticipated completion date to NSLDS. Changes in enrollment to less than half-time, graduated, or withdrawn must be reported within 60 days of the withdrawal determination date for schools that submit roster files to NSLDS. Condition: In our nonstatistical sample of 40 students, it was noted for 8 individuals the students’ reported status within NSLDS was not updated as withdrawn or graduated within 60 days of the date of withdrawal or graduation. Context: When degrees were conferred after initial reporting, then the Registrar's office needed to manually update the Clearinghouse with the correct information. This manual process did not take place for these students. Effect: Students may not enter repayment or their grace period within the appropriate timeframe from their exit from the University or students may not receive adequate notice of the timing of their grace period. The Department of Education may not have the correct data to utilize. Questioned Costs: There were no questioned costs to report as the finding relates only to enrollment reporting and is not related to eligibility. Cause: The University does not have proper processes and related controls in place to complete the required updates to NSLDS for reporting changes in enrollment status within the 60 day requirement. Indication Of Repeat Finding: This is not a repeat finding. Recommendation: The Registrar department should review and consider revisions to its processes and related controls in place to ensure completion of updates to NSLDS within the required 60 day timeframe Views Of Responsible Officials/Corrective Action Plan (Unaudited): The Registrar and the IT department are working together to ensure timely and accurate data is being transmitted on a regular schedule to the Clearinghouse as needed. When date determination exceptions occur (e.g., degrees being conferred after initial reporting or withdrawal dates being retroactively determined for administrative purposes), the Registrar’s Office, IT, and Financial Aid will work together to determine the appropriate date adjustments needed to manually update the Clearinghouse with the correct information if needed as quickly as possible. Anticipated Completion Date: June 30, 2026 Contact Person: Julie McAdoo, University Registrar
Finding 2025-002 – Significant Deficiency, Compliance and Control Federal Award No. 84.268 & 84.063 U.S. Department of Education Student Financial Aid Cluster – Special Tests and Provisions Criteria: According to the Federal Student Aid Handbook, Volume 4, Chapter 2, a University must disburse a Title IV credit balance to a student no later than 14 days after the date it was created or no later than 14 days after the first day of class. Condition: In our nonstatistical sample of 40 students, it was noted for 11 individuals that the credit balances generated by the federal funding were paid to the students in 15 days or more after the credit balance was created. Context: For the 11 students noted, loan disbursements including PLUS Loans generated a credit balance when disbursed separately from the individual awards which were then paid to the students in 15 days or more after the credit balance was created. Effect: Funds are held by the University that should be paid to the student. Questioned Costs: There were no questioned costs to report as this finding relates to the timing of disbursements and is not related to eligibility. Cause: Ottawa University did not have proper processes and related controls in place to complete the disbursement within 14 days from the date the credit balance was created. Indication As Repeat Finding: This is a repeat finding. See the Summary Schedule for Prior Audit Findings. Recommendation: The Financial Aid department should review and consider revisions to its processes and related controls in place to complete the disbursement requirements for all students who have a credit balance no later than 14 days after the date it was created or no later than 14 days after the first day of class. Views Of Responsible Officials (Unaudited): This finding is related to the transition to a new Jenzabar One (J1) ERP system. The Jenzabar Financial Aid (JFA) module, while now integrated into the broader J1 suite, remains a stand-alone solution rather than a fully native component. As a result, Ottawa University needed to modify its financial aid refund disbursement processes to ensure accurate and efficient data flow between systems. These adjustments created challenges in achieving the timely distribution of student refunds. The primary issue involved the timely processing of PLUS Loan refunds. Parent IDs for these refunds were extracted from financial aid data in JFA and established as individual vendors in J1. These IDs then needed to be properly linked to the corresponding student before any parent refunds could be issued. To address this, Financial Aid has designated staff to oversee the creation and linking of parent IDs in J1 to ensure timely processing. Additionally, reports have been developed to identify accounts eligible for refunds, helping to ensure compliance with the 14-day requirement. The Accounting Department also encountered challenges related to vendor setup and the ability to process student refunds in batches. To address these issues, we collaborated with the J1 support team and IT to customize the system, ensuring that student refund checks could be processed and formatted in accordance with bank specifications. While we were not initially prepared for these challenges and had to adapt throughout the process, a solution has since been implemented. As a result, check printing has become an efficient and streamlined operation. The Student Accounts Receivable Office, Controller’s Office, Financial Aid, and IT departments are actively collaborating to establish a more structured and efficient process for managing Federal Student Aid. The first step has been to implement a weekly workflow with clearly defined responsibilities and completion timelines as follows: Financial Aid posts all activity at the beginning of the week, followed by Student Accounts generating credit balance refund reports and initiating student refunds. Accounting then completes the process by issuing refunds to students via check or direct deposit. In addition, Student Accounts and IT are working to develop a date-specific report to identify students with current financial aid disbursements who have outstanding credit balances. This detective control report will be reviewed weekly, and refunds will be processed in accordance with the established workflow. The departments are also developing a detailed Accounts Receivable Aging Report to help the Receivables team more effectively identify any students who have a credit balance. This effort is intended to ensure full compliance with the 14-day requirement outlined in the Federal Student Aid Handbook. Anticipated Completion Date: June 30, 2026 Contact Person: Heather Long, Director Student Accounts
Finding 2025-004 – Significant Deficiency, Compliance and Control Federal Award No. 84.116z U.S. Department of Education Fund for the Improvement of Postsecondary Education – Procurement Criteria: Under 2 CFR Part 200 Subpart D – Procurement Standards, entities must use competitive bidding to promote full and open competition and entities must verify that vendors in covered transactions are not suspended or debarred by checking SAM.gov, obtaining certification, or including an appropriate contract clause. Condition: The University did not document price or rate quotations for an adequate number of qualified sources for procurement transactions that were higher than the micro-purchase threshold and that did not exceed the simplified acquisition threshold. The University did not document verification that a vendor receiving federal funds was not suspended or debarred. For all vendors tested, no SAM.gov check, vendor certification, or contract clause was on file. Context: For the three vendors tested, there was no documentation retained to confirm the vendors were not suspended or debarred at the time of the transaction or evidence of price or rate quotations from an adequate number of qualified sources for procurement transactions that were higher than the micro-purchase threshold and that did not exceed the simplified acquisition threshold. Effect: Federal funds could be spent with limited competition on ineligible vendors. No suspended or debarred vendors were identified during audit procedures. Questioned Costs: There were no questioned costs to report as the vendors selected for testing were verified by the auditor to be eligible at the time of the transaction. Cause: Ottawa University did not have proper processes and related controls in place to consistently require or document suspension/debarment checks or perform and document price or rate quotations. Indication As Repeat Finding: This is not a repeat finding. Recommendation: Implement controls to ensure suspension and debarment checks and price or rate quotations are completed and documented before awarding federally funded contracts. Views Of Responsible Officials (Unaudited): Management agrees with the finding. The University will update its procurement procedures to require documented verification of vendor eligibility prior to award and when using the simplified acquisition procedure and to obtain price or rate quotations from an adequate number of qualified sources. Anticipated Completion Date: June 30, 2026 Contact Person: Tom Corley, Controller
Finding 2025-003 – Significant Deficiency, Compliance and Control Federal Award No. 84.268, 84.063 U.S. Department of Education Student Financial Aid Cluster – Special Tests and Provisions Criteria: According to the Federal Student Aid Handbook, Federal regulations require institutions to maintain accounting records that accurately reflect the receipt and disbursement of Title IV funds on a current basis and provide a clear audit trail from drawdown through disbursement. Condition: In our nonstatistical sample of 40 students, it was noted for 30 individuals that the institution reported disbursements to the Common Origination and Disbursement (COD) system on dates that did not agree to the dates the disbursements were recorded in the general ledger. Context: Differences noted were between 1 and 5 days, except for one student where the difference was 8 days. Effect: The University’s accounting records did not consistently support the disbursement dates reported to COD. Questioned Costs: None Cause: Ottawa University did not have proper processes and related controls in place to complete COD documentation in the COD system on dates that agreed to the dates the disbursements were recorded in the general ledger. Indication As Repeat Finding: Not a repeat finding. Recommendation: The University should ensure that disbursement dates reported to COD agree with the actual disbursement dates recorded in the general ledger or are fully supported by subsidiary records. Views Of Responsible Officials (Unaudited): Student Financial Aid and Accounts Receivable will work in coordination to sync the process of importing files and posting to accounts on the same day. Our new ERP has streamlined reporting to COD and catches and corrects any date discrepancies between the two systems. This finding was directly related to the migration from our old system and the disruption of data flow. Additionally, a review for matching COD disbursement dates will now be included during the monthly reconciliation process moving forward as a second layer of quality control. Anticipated Completion Date: June 30, 2026 Contact Person: Mary Reed, Director of Financial Aid & Advising