Finding 2356 (2022-001)

Material Weakness

Requirement

Questioned Costs

Year

2022

Accepted

2023-11-22

Audit: 4043

Organization: Contemporary Oriental Medicine Foundation (FL)

Auditor: Sikich LLP

AI Summary

Core Issue: The Organization failed to meet the minimum financial responsibility standards set by the U.S. Department of Education for 2022.
Impacted Requirements: Compliance with the Administrative Capability criteria under Title IV of the Higher Education Act.
Recommended Follow-Up: The Organization should regularly monitor its financial responsibility ratios and implement the corrective actions outlined in the management response.

Finding Text

FINDING 2022-001: FINANCIAL RESPONSIBILITY FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION PROGRAM NAME: FEDERAL DIRECT LOAN PROGRAM ALN#: 84.268 YEAR ENDED: DECEMBER 31, 2022 Compliance Requirement: Administrative Capability. Criteria: An accredited school that participates in Federal programs authorized by Title IV of the Higher Education Act of 1965 is required to demonstrate minimum standards offinancial responsibility set forth by the U.S. Department of Education (DOE). Condition: The Organization did not meet the minimum financial standards set forth by DOE for the year ended December 31, 2022 as calculated in Supplementary Schedule A. Cause: The Organization showed an operating loss for the year. Effect: The Organization will be required to adhere to additional stipulations until such ratios are met. Recommendation: The Organization needs to monitor its financial responsibility ratios throughout the year. Management Response and Corrective Action: Management agrees that the ratios were not met and a response is included in the Corrective Action Plan.

Corrective Action Plan

A. Comments on Findings and Recommendations: 2022-001 – FINANCIAL RESPONSIBILITY We agree with the finding for not meeting the minimum financial standards set forth by the DOE. B. Actions Taken or Planned: 2022-001 - FINANCIAL RESPONSIBILITY The organization incurred a net loss for the year as a result of additional expenditures related to opening a second location in Bradenton, Florida, and we don’t anticipate these additional expenditures in 2023. We anticipate having operations returning to normal and growing our enrollment with the addition of a second location.

Other Findings in this Audit

2357 2022-002

Material Weakness
2358 2022-003

- Repeat
578798 2022-001

Material Weakness
578799 2022-002

Material Weakness
578800 2022-003

- Repeat

Programs in Audit

ALN	Program Name	Expenditures
84.268	Federal Direct Student Loans	$1.20M
84.425	Covid-19 Education Stabilization Fund	$12,179