Federal programs: Federal Pell Grant Program; Federal Direct Loan Program ALN Number: 84.063 / 84.268 Federal award identification number: P063P214207 / P268K224207 Grant period: August 1, 2021 to July 31, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Significant Deficiency Compliance requirement: Other ? Policies and procedures requirements Condition and context When obtaining an understanding of the internal controls, policies, and procedures regarding the administration of Title IV aid and the corresponding program participation agreement requirements, we observed the following deficiencies: 1. Consumer Information Requirements ? The Institution is failing to provide their students and prospective students with specific consumer information so that students can make informed decisions regarding their own educational goals, costs, and other requirements. Specifically, the current University?s Catalog containing the general disclosures for enrolled or prospective students has not been updated since the academic years 2014-2016. The Institution revised the Catalog, and an updated version was submitted to the Institution?s Board of Directors for their review and approval. The new school Catalog covering the academic years 2022 to 2024 was approved by the Board of Trustees on December 17, 2022, and published on December 22, 2022. As a result of this matter, the catalog made available to the students during the academic year 2022 did not include actual academic programs offered for all prospective students. It must be provided on an individual basis through an appropriate mailing or publication, including direct mailing through the U.S. Postal Service, campus mail, or electronic mail. Posting on an Internet or intranet website does not constitute a notice. This is a repeated finding. 2. Drug and Alcohol Abuse Prevention Program ? For the academic year 2022, the Institution did not design and implemented a policy of Drug and Alcohol Abuse Prevention Program as required by 34 CFR 86. This policy must be distributed in writing to each student and to each employee of the institution annually. Students who enroll or employees who are hired after the annual distribution must also receive the information. In addition, the Institution must make available, upon request, to the U.S. Department of Education and to the public, the information distributed to students and employees and the results of a biennial review of the school?s program. On March 27, 2023, the policy was approved by the Board of Trustees and was distributed to the students on April 4, 2023. This is a repeated finding. Criteria 34 CFR 668.41(c) and (d) establish that an institution must distribute annually to all enrolled students a notice of the availability of the information required to be disclosed pursuant to paragraphs (d), (e), and (g) of this section. Also, 34 CFR 99.7 sets forth the notification requirements of the Family Educational Rights and Privacy Act of 1974. The notice must list and briefly describe the information and tell the student how to obtain the information. An institution that discloses information to enrolled students as required under paragraphs (d), (e), (g), or (h) of this section by posting the information on an Internet website or an Intranet website must include in the notice described in paragraph (c)(1) of this section - (i) The exact electronic address at which the information is posted; and (ii) A statement that the institution will provide a paper copy of the information on request. An institution must make available to any enrolled student or prospective student through appropriate publications, mailings or electronic media, information concerning - (1) Financial assistance available to students enrolled in the institution (pursuant to ?668.42); (2) The institution (pursuant to ?668.43). 34 CFR 668.42 (a), (b), and (c) establish that: (1) Information on financial assistance that the institution must publish and make readily available to current and prospective students under this subpart includes, but is not limited to, a description of all the Federal, State, local, private and institutional student financial assistance programs available to students who enroll at that institution; (2) These programs include both need-based and non-need-based programs; (3) The institution may describe its own financial assistance programs by listing them in general categories; (4) The institution must describe the terms and conditions of the loans students receive under the Federal Family Education Loan Program, the William D. Ford Federal Direct Student Loan Program, and the Federal Perkins Loan Program. For each program referred to in paragraph (a) of this section, the information provided by the institution must describe: (1) The procedures and forms by which students apply for assistance; (2) The student eligibility requirements; (3) The criteria for selecting recipients from the group of eligible applicants; and (4) The criteria for determining the amount of a student?s award. The institution must describe the rights and responsibilities of students receiving financial assistance and, specifically, assistance under the title IV, HEA programs. This description must include specific information regarding: (1) Criteria for continued student eligibility under each program; (2)(i) Standards which the student must maintain in order to be considered to be making satisfactory progress in his or her course of study for the purpose of receiving financial assistance; and (ii) Criteria by which the student who has failed to maintain satisfactory progress may re-establish his or her eligibility for financial assistance; (3) The method by which financial assistance disbursements will be made to the students and the frequency of those disbursements; (4) The terms of any loan received by a student as part of the student?s financial assistance package, a sample loan repayment schedule for sample loans and the necessity for repaying loans; (5) The general conditions and terms applicable to any employment provided to a student as part of the student?s financial assistance package; and (6) The exit counseling information the institution provides and collects as required by 34 CFR 674.42 for borrowers under the Federal Perkins Loan Program, by 34 CFR 685.304 for borrowers under the William D. Ford Federal Direct Student Loan Program, and by 34 CFR 682.604 for borrowers under the Federal Stafford Loan Program. 34 CFR 668.43 (a) (5) establishes that Institutional information that the institution must make readily available to enrolled and prospective students under this subpart includes, but is not limited to: The academic program of the institution, including - (i) The current degree programs and other educational and training programs; (ii) The instructional, laboratory, and other physical facilities which relate to the academic program; (iii) The institution?s faculty and other instructional personnel; (iv) Any plans by the institution for improving the academic program of the institution, upon a determination by the institution that such a plan exists; and (v) If an educational program is designed to meet educational requirements for a specific professional license or certification that is required for employment in an occupation, or is advertised as meeting such requirements, information regarding whether completion of that program would be sufficient to meet licensure requirements in a State for that occupation, including a list of all States for which the institution has determined that its curriculum meets the State educational requirements for licensure or certification. 34 CFR 86.3 (a) establishes that an IHE shall adopt and implement a drug prevention program as described in ?86.100 to prevent the unlawful possession, use, or distribution of illicit drugs and alcohol by all students and employees on school premises or as part of any of its activities. 34 CFR 86.100 (a) (1) to (5) establish that the IHE?s drug prevention program must, at a minimum, include the following: (a) The annual distribution in writing to each employee, and to each student who is taking one or more classes for any type of academic credit except for continuing education units, regardless of the length of the student?s program of study, of: Standards of conduct that clearly prohibit, at a minimum, the unlawful possession, use, or distribution of illicit drugs and alcohol by students and employees on its property or as part of any of its activities; A description of the applicable legal sanctions under local, State, or Federal law for the unlawful possession or distribution of illicit drugs and alcohol; A description of the health risks associated with the use of illicit drugs and the abuse of alcohol; A description of any drug or alcohol counseling, treatment, or rehabilitation or re-entry programs that are available to employees or students; and A clear statement that the IHE will impose disciplinary sanctions on students and employees (consistent with local, State, and Federal law), and a description of those sanctions, up to and including expulsion or termination of employment and referral for prosecution, for violations of the standards of conduct required by paragraph (a)(1) of this section. For the purpose of this section, a disciplinary sanction may include the completion of an appropriate rehabilitation program. 2 CFR 200.303 (a), (c) and (d) establish that the non-Federal entity must: i. establish and maintain effective internal control over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal awards. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). ii. evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards; and iii. take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. Cause Lack of an action plan identifying the Institution?s pending tasks classified by risk and priorities. The Institution has not established procedures for the evaluation of policies and procedures that should be evaluated and approved by the Board of Directors in a timely manner. Effect Noncompliance with the above-mentioned requirements could lead to administrative sanctions or civil fines by the grantor, for each violation. It could also be interpreted as a failure to achieve the programs? objectives. Also, it could lead to limiting, suspending, or terminating the participation of any school that fails to comply with the consumer information requirements. Questioned costs None. Identification as a Repeat Finding A finding related to this compliance requirement was included in the prior year audit as Finding No. 2021-001. Recommendations We recommend the Institution to review and update its policies and procedures in a timely manner to assure that they accurately represent the vision and goals for the current operations. As organizations change, the policies and procedures must be adapted to meet the new changes. Also, the Institution shall establish a work plan for the matters that the Board of Directors need to review and approve and maintain a calendar to track the frequency that the Institution?s documents, policies, and procedures need to be reviewed by the Board of Directors. The Board of Directors should appoint a Compliance Committee that shall be responsible for the evaluation and tracking of the frequency that the policies and procedures need to be reviewed to ascertain that the Institution is in compliance with federal, state, and accreditation entities. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.