Finding 518134 (2023-002)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2025-01-08

AI Summary

  • Core Issue: The Organization failed to meet the U.S. Department of Education's financial responsibility standards for the 2022-2023 year, repeating a previous finding.
  • Impacted Requirements: Compliance with federal standards under Title IV of the Higher Education Act is mandatory for accredited schools participating in federal programs.
  • Recommended Follow-up: The Organization should actively monitor its financial responsibility ratios and implement corrective actions as outlined in the management response.

Finding Text

FINDING 2023-002: FINANCIAL RESPONSIBILITY FEDERAL AGENCY: U.S. DEPARTMENT OF EDUCATION PROGRAM NAME: FEDERAL DIRECT LOAN PROGRAM ALN: 84.268 FEDERAL AWARD YEAR: 2022-2023 & 2023-2024 Compliance Requirement: Special Tests and Provisions (N.) - 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 of financial 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, 2023 as calculated in Supplementary Schedule A. This finding is repeated and was reported in the prior year as Finding 2022-001. 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

Finding 2023-002: Financial Responsibility Comments on Finding and Recommendation: The College agrees with this finding as determined in the audit and states that the College had a net reduction in student enrollments and had incurred additional expenses as it operated at two separate locations within Florida. The College incurred additional losses in tuition revenue and services revenue as it restructured how to operate both locations appropriately during 2023. The College had additional interest expense in 2023 during the restructuring of the administration and the facilities of the College. Actions Taken or Planned: The College acted in 2024 to reduce the academic footprint to the facility it owned in Bradenton FL, while reporting the Gainesville FL location as no longer offering instruction, but maintaining a clinical facility to allow students to complete the requirements of their academic program. The College also removed and replaced the Executive Director and other members of administration that contributed to the financial issues faced by the College. Name: Dr. Dorian G. Kramer DACM Title: Director Telephone: (941)-289-2456 Email: dkramer@dragonrises.edu

Categories

Student Financial Aid Special Tests & Provisions Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 518135 2023-003
    Material Weakness
  • 518136 2023-004
    Material Weakness
  • 1094576 2023-002
    Material Weakness Repeat
  • 1094577 2023-003
    Material Weakness
  • 1094578 2023-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $1.28M