Audit 414960

Finding 2026-002 – Reporting Federal Program: Student Financial Assistance Cluster Listing Number: 84.063 Federal Pell Grant Program Federal Agency: Department of Education Award Year: June 1, 2025 – May 31, 2026 Criteria: According to the Federal Register Vol. 89 No. 181, for institutions beginning their fiscal years prior to 7/1/2025, an institution must submit Pell Grant, Direct Loan, and TEACH Grant disbursement records to COD, no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement, whichever is later. Additionally, 2 CFR § 200.303 requires the recipient of federal funds to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition and Context: The University did not have effective internal controls over the review of Federal Pell Grant disbursements and did not report Pell Grant program data to the Common Origination and Disbursements (COD) system within the required timeframes. During our testwork of 40 Federal Pell Grant student disbursements totaling $122,977, we identified 18 disbursements for 18 students, totaling $47,002, that were not reported to the COD system within the required 15-day reporting period. The disbursements were made between August 25, 2025, and August 26, 2025, and were reported to COD 17 to 18 days after the disbursement dates. Upon further review, the University determined that Pell Grant program data for an additional 1,729 student disbursements was not reported to COD within the required timeframe during the fiscal year. Further, we noted the University did not have adequate review or monitoring controls in place to ensure that Pell disbursement data was reported to COD within the required timeframes. Possible Cause and Effect: The late reporting to COD was caused by insufficient monitoring over the application of federal reporting requirements for Pell Grant disbursements. University officials determined that the disbursements were not reported within the required 15-day timeframe because officials misinterpreted Electronic Announcement ID GENERAL-24-94 issued on July 30, 2024, which allowed certain Pell Grant disbursement records for the 2024-2025 award year to be submitted to COD no later than November 30, 2024. This guidance wasincorrectly applied to the 2025-2026 award year. While the University has procedures in place to report Pell Grant disbursements to COD timely, the related monitoring controls did not identify that the reporting requirements had been misapplied. As a result, the Pell Grant disbursements were reported to COD after the required deadline, resulting in noncompliance with federal reporting requirements. Isolated or Systemic: Systemic. Questioned Costs: None noted. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No. Recommendation: We recommend that the University enhances its monitoring over the application of federal reporting requirements for Pell Grant disbursements to ensure all Pell disbursements are reported to COD within the required timeframe. View of Responsible Officials: Management concurs with the finding. The University acknowledges that Pell Grant disbursements were not reported to the Common Origination and Disbursement (COD) system within the required 15-day timeframe during a portion of the 2025-26 award year. The University determined that the late reporting resulted from the continued application of Department of Education guidance that had provided extended reporting flexibility in response to FAFSA processing issues. That flexibility applied to the 2024-25 award year and did not extend to the 2025-26 award year. While the University had a process for monitoring federal guidance, the process did not sufficiently identify that the temporary reporting flexibility had expired or ensure that the standard 15-day reporting requirement was applied for the 2025-26 award year. The University was unable to determine precisely where the communication breakdown occurred.

Finding 2026-001 – Disbursements Federal Program: Student Financial Assistance Cluster Listing Number: 84.268 Federal Direct Loans Program Federal Agency: Department of Education Award Year: June 1, 2025 – May 31, 2026 Criteria: According to 34 CFR 668.165(a)(2), if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan or TEACH Grant program funds, the institution must notify the parent or student of the anticipated date and amount of disbursement. According to 34 CFR 668.165(a)(3) an institution must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution with Direct Loan or TEACH Grants. Additionally, 2 CFR § 200.303 requires the recipient of federal funds to establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition and Context: The University did not have effective internal controls to ensure required Federal Direct Loan (FDL) disbursement notifications were sent to parents or students within the required timeframe. During our testing of 40 FDL student disbursements totaling $172,884, we noted that the University did not notify 21 students, with related loan disbursements totaling $104,231, of the anticipated date and amount of their loan disbursements. Upon further review, the University determined that notifications were not sent for any Direct Loan disbursements made between mid-October 2025 through mid-May 2026. The University’s management review controls were not designed with sufficient precision to identify that the required notifications had not been sent timely. Possible Cause and Effect: The University officials determined the failure to send disbursement notifications was a result of a lack of internal controls regarding monitoring and review over FDL disbursement notifications. Failure to send required FDL disbursement notifications may prevent students or parents from receiving timely information regarding loan disbursements posted to their accounts. Isolated or Systemic: Systemic. Questioned Costs: None. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No. Recommendation: We recommend the University enhance its system of internal control to ensure notifications of disbursements are made as required by FDL program regulations. View of Responsible Officials: Management concurs with the finding. The University acknowledges that an error in the automated processing of Federal Direct Loan disbursement notifications resulted in required notifications not being generated during a portion of the 2025-2026 academic year. The University has implemented enhanced monitoring and review procedures designed to ensure that required Direct Loan disbursement notifications are generated and provided within the timeframe required by federal regulations. These procedures include weekly auditing of Direct Loan disbursement notifications, additional review when expected notification activity is not identified, enhanced controls over nightly communication processing, and periodic manual audits of automated PeopleSoft processes. The University implemented the corrective actions described below beginning June 6, 2026. These controls are intended to provide both ongoing monitoring of required communications and independent verification that automated processes continue to operate as designed.