Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (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: Multiple instances were identified during the fiscal year where funds drawn were held in excess of the allowable time frame and/or allowable thresholds. Cause: Insufficient internal controls and administrative oversight with respect to cash management compliance requirements. Effect or Potential Effect: The University is not properly following policies and procedures in place to ensure that compliance is maintained with cash management requirements. Questioned Costs: None. Context: All draws of federal funds were compared to cumulative disbursements to test for compliance with cash management requirements. Instances of cash held in excess of the allowable time frame and/or allowable thresholds were identified. Identification of Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-004 in the prior year schedule of findings and questioned costs. Recommendation¬¬: We recommend that the University enhance its internal controls, policies, and procedures to ensure that draw down requests do not exceed the amount immediately needed to disburse to students and that excess cash balances are eliminated timely. Views of Responsible Officials: The University concurs with the findings. Shaw University acknowledges that this finding is a repeat condition related to excess cash balances for Pell Grant, Direct Loan, and FSEOG funds not being eliminated within the required seven business days. Management has determined that prior corrective actions were not sufficiently formalized or consistently executed, particularly with respect to reconciliation and monitoring controls. Since that time, the University has strengthened its internal controls over Title IV cash management. A formal monthly reconciliation between G5 drawdowns and the general ledger has been implemented to ensure excess cash balances are identified and resolved timely. In addition, procedures have been revised to limit drawdowns to actual or immediate disbursement needs, and monitoring controls have been established to ensure compliance with the seven-business-day requirement. Management will continue to monitor these processes to ensure ongoing compliance with federal cash management regulations.
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): E. Eligibility – Calculation of Benefits – Student Financial Assistance (SFA) awards must be coordinated among the various programs and with other federal and nonfederal aid (need and non-need based aid) to ensure that total aid is not awarded in excess of the student’s financial need or cost of attendance (34 CFR 668.42, FWS, and FSEOG, 34 CFR 673.5 and 673.6; Direct Loan, 34 CFR 685.301). E. Eligibility – Federal Direct Student Loans (“Direct Loans”) (Assistance Listing 84.268) - Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. For undergraduate students there is a combined annual loan limit for Direct Subsidized Loans and Direct Unsubsidized Loans, of which not more than a specified amount may be comprised of Direct Subsidized Loans (annual subsidized maximum). Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan Program prior to 2010) are $31,000 for dependent undergraduate students (except for dependent students whose parents are unable to borrow Direct PLUS Loans), not more than $23,000 of which may be subsidized Condition: For a certain student tested, the University awarded aid in excess of the student’s financial need. In addition, for a certain student, the University awarded aid in excess of award limits. Cause: Insufficient administrative oversight and internal controls with respect to Title IV award eligibility. Effect or Potential Effect: The University is not in compliance with aid awarding criteria under the eligibility requirements. Failure award and disburse aid in accordance with the required guidelines could result in improper disbursements of Title IV aid. Questioned Costs: Known questioned costs: $3,663; total questioned costs: indeterminable. Questioned costs of $3,663 were identified as a result of over-awards disbursed to students in the selected sample; however, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 1 of 25 students selected for testing, the University disbursed financial aid in excess of the student’s financial need. • For 1 of 25 students selected for testing, the University disbursed Direct Loans in excess of the established maximums. Identification of Repeat Finding: No similar findings noted in the prior year. Recommendation¬¬: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that Title IV aid is properly calculated, awarded, and disbursed. Views of Responsible Officials: The University concurs with the finding and will provide professional justification for the students identified in the audit testing; however, to strengthen internal controls and prevent potential over awards, the Financial Aid Office will enhance cross departmental communication through routine reconciliation meetings and real time reporting of enrollment, housing, scholarship, and waiver changes, implement a double review process in which an assigned counselor and secondary counselor verify aid packages against COA and financial need before disbursement, and provide annual staff training on need analysis, COA construction, Title IV over award regulations (34 CFR 673.5), and proper use of SIS tools to identify conflicts, ensuring stronger compliance and proactive prevention of award discrepancies.
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting - Fiscal Operations Report and Application to Participate (“FISAP”) - An institution is required to submit the FISAP annually by October 1, following the end of the award year, and to accurately complete all required key line items containing critical information (34 CFR 668.24(e)(1)(i)). The deadline for submitting data corrections was December 15, 2025. Condition: Key line items as identified in the compliance supplement were not accurately reported on the 2024-2025 FISAP. Cause: Insufficient internal controls and lack of sufficient administrative oversight resulted in data errors reported in the FISAP. Effect or Potential Effect¬: The University is not in compliance with special reporting requirements. Questioned Costs: None. Context: The University submitted the annual FISAP for the 2024-2025 reporting year by the required deadline; however, errors included in the submission were not corrected by the required deadline. As of the date of our Single Audit report, these errors remain uncorrected. Identification of Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-006 in the prior year schedule of findings and questioned costs. Recommendation¬¬: We recommend the University enhance its internal controls, policies, and procedures to ensure that the FISAP is completed accurately prior to submission and that adequate supporting schedules are retained to substantiate the reported amounts. Views of Responsible Officials: The University concurs with the findings. Shaw University acknowledges the findings regarding variances between institutional records and the amounts reported on the FISAP, as well as the delay in submitting corrections by the required deadline. The variances were due to insufficient reconciliation between the University’s records and the FISAP prior to submission. In addition, controls were not adequate to ensure that identified discrepancies were corrected within the required timeframe. The University has since completed a full reconciliation of the FISAP, and further corrections will be made. To prevent recurrence, the University has implemented procedures requiring a formal reconciliation of supporting records to the FISAP prior to submission, along with enhanced review and approval controls to ensure accuracy and timely reporting. Management will continue to monitor this process to ensure ongoing compliance.
Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds must be distributed in the prescribed order (34 CFR 668.22(i)). Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Condition: For certain students that withdrew during the year, the University did not appropriately prepare the withdrawal calculation and certain unearned Title IV funds were not returned to the ED within the required timeframe. Cause: Insufficient internal controls and lack of administrative oversight over the return of Title IV funds. Effect or Potential Effect¬: The University is not in compliance with the required federal guidelines over the return of Title IV funds. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 2 of 2 sampled students, the University did not appropriately prepare the withdrawal calculation and certain unearned Title IV funds were not returned to the ED within the required timeframe. Identification of Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-007 in the prior year schedule of findings and questioned costs. Recommendation¬¬: We recommend that the University enhance its internal controls, policies, and procedures to ensure that return of funds calculations are accurately prepared and returned timely. Views of Responsible Officials: The University concurs with the finding and acknowledges the difference between the auditor’s calculations and what was determined as the variance of R2T4. To ensure full compliance with federal Return to Title IV (R2T4) requirements and to strengthen institutional oversight, Shaw University will implement enhanced processes designed to improve accuracy, documentation, and accountability. Each R2T4 calculation will undergo a dual review process in which one Financial Aid team member completes the calculation and a second independently verifies it before any returns are processed. The University will also maintain comprehensive documentation and audit trail for all R2T4 files, including withdrawal documentation, calculation worksheets, COD records, disbursement summaries, and proof of timely returns, stored systematically to support audit readiness and internal review. To reinforce oversight, management will reconcile internal Financial Aid records with the Business Office and COD on a scheduled basis, conduct monthly or biweekly reconciliations for Pell Grants, Direct Loans, and campus-based funds, and review open balances and disbursement records before posting or adjusting aid. Financial Aid staff will continue to receive annual and periodic training on R2T4 regulations, updated federal guidance, and internal process revisions to ensure consistent application of rules. Additionally, management will conduct periodic internal audits of R2T4 files to identify potential issues proactively and respond with timely corrective measures. These strengthened procedures will ensure that future R2T4 calculations are accurate, fully documented, and completed within federally required timeframes, thereby maintaining strong compliance, reinforcing internal controls, and meeting all expectations for federal oversight.
Federal Program Information: Federal Pell Grant Program (ALN: 84.063) and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions - Enrollment Reporting: The University is required to update students’ statuses on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the University becomes aware of the change in enrollment status. 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. Institutions are responsible for accurately reporting the significant data elements under the Campus-Level Record and Program-Level Record that ED considers high risk. Additionally, institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. As with any school/servicer arrangement for the administration of the Title IV programs, if the school uses a third party to meet the NSLDS enrollment reporting requirements, it is the school that must ensure that enrollment information is submitted timely, accurately, and completely. Condition: The University did not accurately report certain significant data elements to the NSLDS website for certain students who graduated, withdrew, or had an increase/decrease in attendance level during the year. Cause: Insufficient administrative oversight and internal controls with respect to enrollment reporting compliance requirements. Effect or Potential Effect: The University is not in compliance with enrollment reporting compliance requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 9 of 40 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Campus-Level Record. • For 13 of 40 students sampled whose status changed during the year, the University failed to submit the Campus-Level Record within the required timeframe. • For 5 of 40 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Program-Level Record in a timely notification to the NSLDS website. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-008 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that all status changes are submitted accurately to the NSLDS website within the required timeframe. Views of Responsible Officials: The University concurs with this finding. Shaw University acknowledges the finding regarding variances between institutional records and the status reported in NSLDS. For students 1-3 listed for campus enrollment details, the students withdrew then subsequently re-enrolled. The University, to date has had static to confer degrees which do not coincide with the required timeframe of NSLDS reporting. The University will change degree conferral dates to better coincide with timely NSLDS reporting. Management will continue to monitor this process to ensure ongoing compliance.