Audit 402646

Condition: During testing of enrollment reporting, we identified instances where the withdrawal dates reported to NSLDS did not agree to the institution’s supporting documentation (e.g., registrar records, last date of attendance, or R2T4 calculations). Criteria: The U.S. Department of Education requires institutions to accurately report student enrollment status, including withdrawal dates, to the National Student Loan Data System (NSLDS) in a timely manner. Enrollment reporting must reflect the student’s actual last date of attendance (LDA) or withdrawal date, as determined in accordance with Title IV regulations. Cause: Lack of controls to ensure consistency between the Registrar and Financial Aid offices, and information reported to NSLDS. Effect: Inaccurate reporting may result in incorrect loan servicing and repayment status for students, including delayed entry into repayment or deferment. Context: Of the five withdrawals tested, two exceptions were identified related to an inaccurate withdrawal date reported to NSLDS. Recommendation: We recommend the College implement a formal reconciliation control between Registrar records, R2T4 calculations, and NSLDS reporting files, and establish a review process to verify that withdrawal dates reported to NSLDS agree to the student’s last date of attendance.

Condition: During testing of Return of Title IV Funds calculations, we noted two instances in which the College incorrectly calculated the refund due for a student who withdrew during the payment period. As a result of the incorrect calculation, Title IV funds that should have been returned were not refunded timely. Criteria: For students who withdraw, the College is required to determine the amount of Title IV assistance earned as of the student’s withdrawal date and calculate any unearned Title IV funds that must be returned. Any unearned Title IV funds for which the College is responsible must be returned within the required timeframe. Cause: The College did not maintain effective internal controls over the preparation and review of Return of Title IV Funds calculations to ensure the withdrawal date, percentage earned, and amount of unearned aid subject to return were calculated accurately and that any required refund was processed timely. Effect: Failure to accurately calculate and return unearned Title IV funds may result in noncompliance with federal requirements and could cause the Institution to retain federal funds to which it was not entitled. Questioned Costs: Context: Of the five Return of Title IV Funds calculations tested, two exceptions were identified related to an incorrect calculation that resulted in no refund being issued when a return of funds was required. Recommendation: We recommend the Institution strengthen internal controls over the Return of Title IV Funds process by ensuring personnel performing the calculation are adequately trained on Title IV refund requirements; implementing a documented secondary review of all Return of Title IV Funds calculations; verifying that all required refunds are processed within the prescribed timeframe; and monitoring exceptions to ensure corrective action is taken promptly.

Condition: The College did not consistently distribute disbursement notices to students and properly communicate the right to cancel within the minimum required timeframe. Criteria: Based on requirements set forth by 34 CFR Section 685.165(a)(1-2), the College is responsible for notifying a student of the amount of expected Title IV funds as well as how and when those funds will be disbursed. Additionally, the College must notify the students of their right to cancel all or a portion of that loan disbursement as well as the timeline they must follow to do so. Cause: We noted that the College did not consistently send the required notices to students. Effect: Disbursement notices, including the right to cancel information, were not consistently sent to students. Context: We tested 25 students and noted that none of those students were sent disbursement notices. Repeat Finding: No Recommendation: We recommend the College implement procedures to ensure that disbursement notices are consistently sent to students.

Condition: The auditee did not submit its data collection form and reporting package to the Federal Audit Clearinghouse by the required deadline for the fiscal year ended June 30, 2026. Criteria: 2 CFR 200.512(a) requires the auditee to submit the audit, data collection form, and reporting package to the Federal Audit Clearinghouse no later than the earlier of 30 calendar days after receipt of the auditor’s reports or (2) nine months after the end of the audit period, unless an extension has been authorized by the cognizant or oversight agency for audit Cause: The delay in submission was due to the audited financial statements not being prepared in a timely manner. As described in Finding 2025-001, the auditee has a material weakness in internal control over financial reporting related to the financial statement preparation process, including inadequate review procedures and insufficient resources to ensure timely completion of the audited financial statements. Effect: Because the audited financial statements were not completed timely, the auditee was unable to meet the FAC submission requirements under 2 CFR 200.512. This resulted in noncompliance with federal regulations. Repeat Finding: No. Recommendation: We recommend the auditee strengthen its internal control over financial reporting by implementing procedures to ensure timely preparation, review, and issuance of the audited financial statements. This should include clearly defined responsibilities, enhanced review controls, and a formal closing and reporting timeline designed to meet Uniform Guidance reporting deadlines.