Corrective Action Plans

Views of Responsible Officials and Planned Corrective Actions – University personnel reviewed the four instances identified for untimely NSLDS reporting and determined that neither case resulted from a failed or rejected submission to the National Student Clearinghouse (NSC) or NSLDS. Rather, the timing difference resulted from the enrollment status effective date used for NSC reporting, which did not align with the reporting roster submission cycle. The University reports enrollment information to NSLDS through the National Student Clearinghouse on a regular monthly basis and confirmed through review of NSC acknowledgment and error reports that no transmission errors occurred. To reduce the risk of similar timing differences in the future, the University is working on process improvements in coordination with Banner support, including ensuring backdated drops and withdrawals are processed prior to initial NSC transmissions each term, reviewing the timing of enrollment reporting submissions to improve data capture, strengthening procedures for monitoring post-census backdated status changes, continuing timely review of NSC error reports, reviewing enrollment status calculations for nonstandard coursework, and implementing pre-submission validation procedures to confirm all required status calculation and extract processes have been completed prior to NSC file transmission.

Timely Exit Counseling Notification Finding: The University did not have adequate procedures or review controls to ensure that reports used to identify students requiring exit counseling notifications included all students who withdrew or otherwise ceased to be enrolled at least half-time. As a result, four students did not receive timely notifications regarding exit counseling. Corrective Actions Taken or Planned: FNU will update its exit counseling procedures to ensure that all students who withdraw or otherwise cease to be enrolled at least half-time are identified and timely notified of the exit counseling requirement. Additionally, FNU will implement controls to validate the completeness of reports used for this purpose and establish backup procedures and review controls when key personnel are unavailable. Estimated Completion Date: September 30, 2026. Responsible Personnel: Kaleena Burnett, Director of Financial Aid

Enrollment Reporting Finding: The enrollment statuses in the National Student Loan Data System for students who took a Regular Academic Hiatus were incorrect during the time of their hiatus. Corrective Actions Taken or Planned: FNU changed its reported enrollment status for all students on a regular Academic Hiatus (AH) from “Enrolled” to “Leave of Absence (LOA)” in the National Student Clearinghouse (NSC). Note that both status types indicate an enrolled status per NSC. Also, FNU revised internal procedures to ensure that students on a regular AH were coded properly in the Student Learning Management System with a status that aligned with enrollment reporting requirements for a temporary interruption in study. In September 2025, key personnel at FNU completed comprehensive training with NSC regarding reporting timelines and to set up an automated reporting feed from FNU’s Student Learning Management System. FNU repeated the training again in January 2026 to ensure new staff were educated in the process and provide a consistent understanding of the updated procedures. As a result of these actions, FNU demonstrated improved consistency in reporting and timeliness. In addition to these steps, it was determined during 2026 that students submitting late notice to withdraw require a manual update in NSC. The automated data feed does not retroactively capture changes. Training is underway to ensure the offices of Registration and Financial Aid are aware of the file feed limitation and implement a process to update students with approved exceptions to late withdraw. Estimated Completion Date: August 31, 2026. Responsible Personnel: Jessalyn Cornett, Director of Academic Records & Registrar

Finding 2026-001 Personnel Responsible for Corrective Action: Deborah Vinnola, Registrar Anticipated Completion Date: September 30, 2027 Corrective Action Plan: The Office of the Registrar has put into place a more detailed corrective action plan regarding the finding of delayed enrollment and non-enrollment reporting to NSLDS through NSC. The Office of the Registrar has adjusted the Degree Verify submission from every 45 days to every 30 days to NSC to ensure graduation dates are reported in a more timely fashion for NSLDS within the required 60 days for financial aid. Starting Summer 2026, the Office of the Registrar has begun inactivating academic programs for students who have not had registration activity within the last two to three academic years to ensure that they are not reported as enrolled to NSC/NSLDS. NSC Enrollment Reporting will continue to be submitted every 30 days and the Office of the Registrar has worked to review the reporting criteria using terms and not semesters to better report active enrollment in current courses. The Ellucian Graduation Application form and process is in the final stages of testing which will eliminate completely the need to add a pseudo course with a future date after the student’s current program has been inactivated or graduated. The Office of the Registrar will be more proactive with the colleges for identifying students who have not graduated within the six year (undergraduate), four year (graduate) and certificate time frames by working with the appropriate dean’s offices. This should eliminate those students who have completed their coursework; close to completing their coursework but were never reviewed by their advisor/program for graduation. Since Regis uses the end date of the last course completed, the Office of the Registrar will work with advising units to review the lists to increase a better reporting of degree completion.

Inaccurate Enrollment Reporting - SFA - MSU - The Montana State University - Bozeman concurs. The audit identified a gap related to unofficial withdrawals. The Office of the Registrar has developed and is implementing a procedure to capture enrollment reporting for unofficial withdrawals. Responsible Party - Antoni Campeau, Registrar, Montana State University - Bozeman Target Implementation Date - 9/30/2026

Inaccurate FISAP Reporting - SFA - MSU - The Montana State University – Bozeman partially concurs. The University concurs that additional efforts can be made to ensure data elements are reported accurately. The University has operated with transparency regarding known challenges in validating the FISAP report with the Federal Student Aid office for the Federal Perkins Loan program dating back to 2019. Reporting for the Perkins Loan, which has been discontinued, now focuses on repayment activity, and the December cash‑on‑hand update is accurate for the distribution of asset calculation. The Montana State University – Billings acknowledges that tuition and fee amounts reported on FISAP Part II, Section E, Lines 22a and 22b for award years 2022-23 and 2023-24 were based on estimates derived from undergraduate and graduate enrollment percentages rather than actual tuition and fee assessments as required by FISAP instructions. To correct this issue, the University will discontinue the use of formulated allocations and implement a process that uses actual tuition and mandatory fee assessment data for students reported in FISAP Part II, Section D. Financial Aid will work with Financial Services, Institutional Research and Business Services to develop a report that identifies actual assessed tuition and fees, net of applicable refunds, and separately reports undergraduate and graduate amounts. To prevent recurrence, the University will establish an independent review of the tuition and fee calculations before each FISAP submission. The review will verify that the reported amounts are based on actual student charges, properly classified by student level, and consistent with FISAP reporting requirements. These actions will ensure future FISAP submissions comply with federal reporting instructions and accurately reflect actual tuition and fee assessments for the reported student population. Responsible Party - James Broscheit, Director of Financial Aid, Montana State University - Bozeman Justin Beach, Director of Financial Aid & Scholarships, Montana State University - Billings Target Implementation Date - 10/31/2026

Noncompliant Excess Cash Management Controls - SFA - MSU - The Montana State University - Bozeman concurs. Because this issue was identified in the previous audit, the University implemented corrective action at the conclusion of that audit to prevent excess cash. The University does not expect this to be an issue in future audits. The Montana State University - Northern concurs. The University added a new internal control process in fiscal year 2025. Staff now receive a daily cash balance report for federal student financial aid funds that is automatically emailed to Business Services personnel. This process allows staff to monitor the balance and issue refunds as needed. The University believes this process will be effective in detecting and preventing noncompliance going forward. The Great Falls College concurs. The College will continue the controls established in July 2024, which have resulted in zero instances of excess cash since implementation. Responsible Party - James Broscheit, Director of Financial Aid, Montana State University - Bozeman Chris Wendland, Controller, Montana State University - Northern Carmen Roberts, Executive Director of Finance and Administration, Great Falls College – Montana State University Target Implementation Date - 1/31/2025

Noncompliant Return of Uncashed Title IV Funds - SFA - MSU - The Montana State University - Bozeman concurs with the finding. A process has now been implemented for Higher Education Act loans in addition to Parent Loans for Undergraduate Students. This process has been formally documented, and the University will continue to provide cross-training on these procedures. Responsible Party - Ryan Christensen, Director of Student Accounts, Montana State University - Bozeman Target Implementation Date - 8/31/2026

Inaccurate COA Calculations - SFA - UM - The University of Montana – Missoula conducted additional review and provided supplemental documentation and clarification for the remaining sampled student records; however, one exception could not be fully resolved. The University is committed to strengthening its documentation, retention, and review processes to ensure that support for cost-of-attendance calculations and adjustments is consistently maintained, documented, and adequately substantiated going forward. Responsible Party - Morgan Hahn, Interim Financial Aid Director, University of Montana - Missoula Target Implementation Date - 12/31/2026

Inaccurate Enrollment Reporting - SFA - UM - The University of Montana - Missoula partially concurs because the University agrees that accurate and timely enrollment reporting is essential to compliance with federal requirements and recognizes the importance of maintaining effective controls over the enrollment reporting process. However, the University is continuing to review the circumstances underlying this finding, including the interaction between institutional records, third-party reporting processes, and federal systems, and has not yet completed its assessment of all contributing factors. The University will enhance monitoring, reconciliation, and verification procedures to support accurate and timely reporting of enrollment information. Responsible Party - Morgan Hahn, Interim Financial Aid Director, University of Montana - Missoula Target Implementation Date - 3/31/2027

Inaccurate Federal Aid Return Calculations - SFA - UM - The University of Montana - Missoula will continue strengthening controls over Return of Title IV calculations through increased coordination among involved offices, enhanced review of academic calendar and system data, and additional oversight of withdrawal-related processes. The University is committed to continuous improvement and to ensuring accurate calculations going forward. Responsible Party - Morgan Hahn, Interim Financial Aid Director, University of Montana - Missoula Target Implementation Date - 1/31/2027

Inadequate FISAP Reporting Controls - SFA - UM - The Montana Technological University will establish a centralized repository and require supporting documentation for all key FISAP report line items to be retained in that location. The Helena College will establish automated procedures to reduce manual processes, as well as a centralized repository for supporting documentation pertaining to all FISAP report line items. The University of Montana - Western will establish a procedure for documenting the required tuition and fees line items that must be reported on the FISAP and that correspond to the student population reported in Section D of the FISAP. The University of Montana - Missoula will strengthen FISAP reporting controls by formalizing procedures, improving documentation retention, centralizing supporting records, and implementing additional review of reported data before submission. The university is also exploring improvements to reporting and data-management processes to support accurate and reliable reporting. Responsible Party - Carleen Cassidy, Director of Finance and Budget, Montana Technological University Valerie Curtin, Executive Director of Compliance & Financial Aid, Helena College of Technology - University of Montana Louise Driver, Financial Aid Director, University of Montana - Western Morgan Hahn, Interim Financial Aid Director, University of Montana - Missoula Target Implementation Date - 9/30/2026

Noncompliant Title IV Disbursement Notification Controls - SFA - UM - The University of Montana - Missoula has implemented changes for the 2026–2027 award year to ensure required Title IV disbursement notifications are generated, reviewed, and retained. The University will maintain documented procedures and periodic oversight to support ongoing compliance. Responsible Party - Morgan Hahn, Interim Financial Aid Director, University of Montana - Missoula Target Implementation Date - 10/1/2026

Noncompliant Direct Loan Reconciliation Controls - SFA - UM - The University of Montana - Missoula will strengthen reconciliation procedures by assigning responsibility to designated staff, requiring documented supervisory review, retaining supporting reconciliation documentation, and monitoring timely and consistent completion of reconciliations. Management will conduct periodic oversight to ensure reconciliation requirements are completed in accordance with federal regulations and institutional procedures. Responsible Party - Morgan Hahn, Interim Financial Aid Director, University of Montana - Missoula Target Implementation Date - 12/31/2026

Noncompliant Title IV Disbursement Controls - SFA - UM - The University of Montana - Missoula has strengthened fraud prevention and detection efforts through enhanced identity verification procedures, targeted review of higher-risk populations, ongoing monitoring of suspicious activity, and increased collaboration across university departments. The university will continue to evaluate emerging fraud trends, federal guidance, and institutional controls to reduce the risk of future improper disbursements. Responsible Party - Morgan Hahn, Interim Financial Aid Director, University of Montana - Missoula Target Implementation Date - 6/30/2027

Noncompliant Return of Uncashed Title IV Funds - SFA - UM - The University of Montana - Missoula will implement procedures to identify uncashed Title IV credit balance checks, monitor applicable return deadlines, and return funds to the U.S. Department of Education when required. The university will implement written procedures, staff training, and periodic reviews to support compliance. Responsible Party - Morgan Hahn, Interim Financial Aid Director, University of Montana - Missoula Target Implementation Date - 6/30/2027

Noncompliant Direct Loan Reconciliation Controls - SFA - MSUB - The Montana State University - Billings concurs with the finding and has taken corrective action to strengthen segregation of duties within the cash management reconciliation process. While the reconciliation process has historically involved both Financial Aid and Financial Services personnel, the reconciliation and review were performed inconsistently within the Financial Aid office. Effective immediately, Financial Aid and Financial Services have implemented a monthly reconciliation meeting to jointly review and validate the cash management reconciliation. During this meeting, Financial Services provides reconciliation information from the University’s financial records, and Financial Aid independently extracts and reviews corresponding information from the Banner system and the Common Origination and Disbursement system. Any discrepancies identified are discussed and resolved collaboratively. The monthly meeting and review process will be documented and retained as evidence of review and approval. This enhanced process establishes a formal review control involving personnel from separate offices and strengthens segregation of duties over the cash management reconciliation process. Responsible Party - Justin Beach, Director of Financial Aid & Scholarships, Montana State University - Billings Rebecca Bunn, Controller, Montana State University - Billings Target Implementation Date - 8/31/2026

Management will reconfigure the system to require after-the-fact entry of actual hours worked and to restrict advance entry and approval, reinforce supervisory review procedures to ensure timely and accurate approval of timecards, and provide training to employees and supervisors on federal timekeeping requirements under 2 CFR 200.430. These actions will strengthen internal controls and ensure payroll costs charged to federal awards accurately reflect work performed going forward.

2025-008 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend that the University should implement formal review procedures to document that the Cash Management reconciliation and drawdown reviews are being performed to correct errors in a timely manner and to minimize the likelihood of errors going undetected. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University performs cash management reconciliation and drawdown reviews; however, formal documentation of these reviews has not been consistently maintained. To address this, the University is implementing formal review procedures that include documented evidence of reconciliation and drawdown review activities. As part of this process, reconciliations and drawdowns prepared by FA Solutions will be reviewed by the Financial Aid Office for accuracy and completeness prior to submission and reporting. These procedures will be formalized within a standardized SOP, which will outline review timelines, responsibilities, and required documentation to ensure errors are identified and resolved in a timely manner and to reduce the risk of discrepancies going undetected. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid Planned completion date for corrective action plan: 4/30/2026

2025-006 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University review its current procedures for awarding Title IV funds and implement any changes necessary to ensure federal funds are awarded and disbursed in accordance with federal regulations. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University has conducted a review of its procedures for awarding Title IV funds, with particular attention to the awarding of Summer Pell. Through this review, we identified that Summer Pell was not awarded to eligible students during the applicable period, due in part to a misunderstanding of awarding requirements during a transition in third-party processing support. Urshan has since partnered with FA Solutions to strengthen oversight and ensure alignment with federal awarding requirements. Updated procedures have been implemented to ensure all eligible students are properly evaluated for Title IV aid, including Summer Pell, across all applicable terms. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid Planned completion date for corrective action plan: 8/31/2026

2025-004 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend that the University review policies and procedures related to R2T4 calculations to ensure calculations are performed accurately. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Urshan has partnered with FA Solutions, an experienced third-party processor. Through this partnership, we have strengthened our processes and implemented additional checks and balances to ensure that R2T4 determinations are identified, calculated, and processed in a timely and compliant manner. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid Planned completion date for corrective action plan: 3/31/2026

U.S. Department of Education 2025-003 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University review current processes for reporting to NSLDS and implement procedures to ensure submissions are reported timely and accurately. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Urshan is currently in the onboarding process to partner with the National Student Clearinghouse, which will improve the timeliness and accuracy of our enrollment reporting to NSLDS. In addition, we are developing and implementing a standardized SOP that establishes defined reporting schedules (at least every 60 days), clearly outlines roles and responsibilities, and includes reconciliation procedures to ensure data accuracy. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid Planned completion date for corrective action plan: 7/31/2026

Condition: The College retained interest earnings in excess of $500 in its federal bank account during fiscal year 2025. This represents noncompliance with Cash Management requirements and is a repeat finding (2024-009). Corrective Action Plan The institution has strengthened internal controls, monitoring, and procedures to ensure compliance with federal cash management requirements and to prevent recurrence in future audit periods. The institution has revised its cash management procedures to ensure timely identification and return of excess interest earnings. • To prevent recurrence, the institution will maintain a lower balance in the federal funds account to minimize interest accrual. • Any interest exceeding $500 at fiscal year-end will be returned promptly in accordance with federal requirements. • Processes now include calculating interest earned on a routine basis and confirming compliance with the $500 threshold prior to fiscal year-end. Staff Training Staff responsible for federal funds management have been retrained on cash management requirements under 34 CFR 668.163, including thresholds for retained interest and required timelines for returning excess funds. System and Manual Checks The Business Office has implemented manual tracking of interest earned on federal funds accounts. A year-end reconciliation process has been enhanced to verify that any interest exceeding $500 is identified and returned within required timeframes. Monitoring and Compliance Ongoing monitoring includes: • Periodic review of bank account balances and interest accrual • Record of interest calculation for FY2025 • Bank statements supporting interest earned • Internal reconciliation and review documentation Responsible Person for Correction Action Plan: Deana Rogers, Vice President of Administration & Finance Implementation Date for Corrective Action Plan: Immediate and ongoing

Condition: During our testing of forty individuals receiving federal work study, we noted three individuals (7.5%) working during scheduled class hours. We consider this condition to be an instance of noncompliance relating to the Activit ies Allowed or Unallowed compliance requirement and is a repeat finding shown in Section IV of this report as prior year finding 2024-008. Statistical sampling was not used in making sample selections. Corrective Action Plan The Work Office acknowledges the finding regarding students working during scheduled class hours and recogn izes this as a repeat finding from the prior audit period (2024-008). In response, the Work Office has implemented enhanced internal contro ls and strengthened oversight processes. These actions include: • formalized procedures prohibiting students from working during schedu led class times without prior documented class cancellation • implementation of a centralized class cancellation tracking log • enhanced payroll review processes and • expanded training for students, supervisors, and faculty Additionally, monitoring activities have been increased through routine payroll reviews and ongoing coordi nation between the Work Office and Provost Office The Work Office believes these corrective actions appropriately address the root cause of the finding and has established controls designed to ensure compliance with federal requirements and prevent recurrence in future audit periods. Clear expectations and documentation requirements have been established and communicated across campus. Process Improvement The Work Office, in coordination with the Provost Office, has strengthened procedures to ensure students are not permitted to work during scheduled class times. A formal process has been implemented requiring verification and documentation of any class cancellation prior to a student working during a scheduled class period. A centra lized class cancellation tracking log has been established and is jo intly maintained by the Work Office and Provost Office to ensure consistency and oversight. Staff Training The Dean of Work and Provost have enhanced tra ining and communication efforts to ensure all stakeholders understand compliance requirements. • Students: Informed through monthly department meetings and electronic communication that they are prohibited from working during scheduled class times. • Student Supervisors/Managers: Reinforce policies and monitor student work schedules. • Faculty: Continuously notified by the Provost of their responsibility to report class cancel lations to both the Provost Office and Work Office. • Supervisors: Receive ongoing training through monthly Supervisor Training sessions, including compliance requirements, payroll accuracy and review of payroll reports prior to submission, and maintenance of documentation standards and tracking logs. Documentation procedures are available in a shared drive accessible to supervisors. The Work Office and Provost Office will dedicate time to educating and reminding students and faculty that students are not allowed to work during schedu led class time, and how to report a cancelled class. The Work Office wi ll dedicate time to double-checking the student payrol l reports before sending them to Human Resources. System and Manual Controls • The Work Office has implemented additional internal controls designed to prevent and detect noncompliance, including • Secondary review of al l student payroll reports by the Work Office prior to submission to Human Resources • Verification of student work hours against class schedules • Requirement that students submit documentation (facu lty email or Learning Management System announcement) prior to working during a cancelled class time • Maintenance of a centralized exception log for all approved class cancellations Monitoring and Compliance Ongoing monitoring procedures have been established to ensure continued compliance, including: • Regular payroll reviews conducted by the Dean of Work • Coordination between the Work Office and Provost Office to verify reported class cancel lations ensures faculty compliance with class cancellation reporting requirements • Monthly Supervisor Training to reinforce compliance expectations by routine oversight activities that provide continuous reinforcement of institutional and federal requirements. • Continuous communication to students, supervisors, and faculty regard ing pol icy requirements Responsible Person(s) for Correction Action Plan: Leslie Johnson, Dean of Work - Responsible for student education, payroll review, and prevention of overpayments Laura Wiedlocher, Provost - Responsible for faculty communication and enforcement of class cancellation reporting Student Supervisors/Managers - Responsible for reinforcing policies and monitoring student compliance Implementation Date for Corrective Action Plan: Corrective actions were implemented throughout the 2024-2025 academic year and will continue on an ongoing basis.

Condition: We tested eight drop students and found one incorrect refund calculations. We consider this to be an instance of non-compliance. Corrective Action Plan Procedure Revision and Clarification The Financial Aid Office has updated its R2T4 procedures to clearly define how scheduled breaks are arranged. Procedures now specify that break periods must include all consecutive days between the last day of class before the break and the day before classes resume, including applicable weekend days. This aligns with federal guidance that scheduled breaks of five or more consecutive days must include interven ing weekends when no classes are held. Standardized Academic Calendar Usage A standardized, institutionally approved academic calendar has been implemented for R2T4 calculations. This calendar explicitly identifies: • Start and end dates of all scheduled breaks • Inclusion of weekend days where applicable Staff will use this calendar when determining both total and completed days in Step 2 of the R2T4 calculation. R2T4 Calculation Checklist Implementation A mandatory checklist has been implemented for all R2T4 calculations to ensure: • Accurate identification of scheduled breaks greater than 5 consecutive days • Inclusion of all appropriate days, including prior weekends when applicable • Correct calculation of both completed and total days Staff Training All financial aid staff have completed targeted training on R2T4 calculation requirements, with emphasis on: • Proper identification and treatment of scheduled breaks • Inclusion of weekends as part of a break when classes are not in session • Accurate completion of Step 2 of the R2T4 calculation Secondary Review Process A secondary review by another staff member is now required for all R2T4 calculations prior to finalization . This review specifically verifies the accuracy of break dates and day counts. Ongoing Monitoring and Quality Assurance The Financial Aid Office will conduct periodic internal audits of R2T4 calculations to ensure compliance with federal regu lations. Any discrepancies will be corrected immediately and used as part of continuous staff training. Responsible Person for Correction Action Plan: Alexis Brown, Director of Financial Aid Implementation Date for Corrective Action Plan: 03/25/26