Finding 392942 (2023-001)

Finding 2023 001: Inaccurate Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN # and Program Expenditures: 84.063 ($9,402,496) 84.268 ($198,862,889) Federal Award Numbers: P063P211371, P063P221371 P268K221371, P268K231371, P268K241371 Federal Award Year: September 1, 2022 to August 31, 2023 Questioned Costs: None Compliance Requirement: Enrollment Reporting Criteria According to 34 CFR Sections 690.83(b)(2) and 685.309, under the Pell grant and Federal Direct loan (FDL) programs, institutions must complete and return the Enrollment Reporting Roster File via the National Student Loan Data System (NSLDS) within 15 days of receipt. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster File. Unless an institution expects to submit its next updated enrollment report to the USDE within the next 60 days, an institution must notify NSLDS within 30 days after the date that the institution discovers that (1) a Direct loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended; or (2) a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include establishing procedures to ensure student campus and program level enrollment status changes are accurately reported to the NSLDS. Condition Found The University did not accurately report student enrollment status change at both the campus level and program level to the NSLDS. USDE uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. During our testing of 25 borrowers under the FDL program and/or Pell Grant recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the status change for one graduated student was reported incorrectly to the NSLDS as a Withdrawal (W) status rather than Graduated (G) status. Upon further review, management evaluated and identified an additional 38 graduates who had the same reporting errors. We further noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment and student data submitted to NSLDS was accurate. The University disbursed FDL loans to 1,411 students during the required reporting period from March 1, 2023 through the year ended August 31, 2023 for which enrollment reporting requirements applied. Cause In discussing these conditions with University officials, they stated University records maintained students’ statuses within a certain business program as active after graduating from the program inaccurately in anticipation of potential future enrollment in classes. Possible Asserted Effect Inaccurate submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules. Repeat Finding This is not a repeat finding. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures to ensure accurate reporting of student information and enrollment status information to the NSLDS. Views of University Officials The University agrees with this finding. The University will revisit management review controls and procedures to ensure a level of precision for submitting accurate graduate student data to the NSLDS.