Finding Text
FINDING 2023-001 – Special Tests and Provisions-Enrollment Reporting- Significant Deficiency Over Internal Controls Over Compliance: Criteria: The National Student Loan Data System (NSLDS) is the Department of Education’s (ED) centralized database for students’ enrollment information. It is Southern California Institute of Architecture’s (“SCI-Arc”) responsibility to update this information timely and accurately when the enrollment status or permanent address of a student that has received federal aid changes.
Unless SCI-Arc expects to complete its next roster within 60 days, SCI-Arc must notify the lender or the guaranty agency within 30 days, if it discovers that a student who received federal aid either did not enroll or ceased to be enrolled on at least a half-time basis or their permanent address has changed (34 CFR section 685.309).
Condition/context: We selected a sample of students identified by SCI-Arc as having received some federal assistance and who either withdrew from SCI-Arc, graduated from SCI-Arc, or had a change to their permanent address during the period of March 1, 2023, to August 31, 2023. The period of September 1, 2022 through February 28, 2023, was not tested as the Federal Student Aid (FSA) issued an Electronic Announcement ID General-23-24 to update expectations of auditors evaluating institutional compliance with enrollment reporting requirements in light of the NSLDS issues identified in the Electronic Announcement on January 12, 2023. Our sample consisted of 6 students out of a population of 39 that were identified as graduates; 2 students out of a population of 3 that were identified as withdrawn; and 2 students out of a population of 7 that had permanent address changes. We believe this to be a representative sample of the population. We then compared the enrollment information and withdrawal or graduation date per SCI-Arc’s records to the information reported to NSLDS.
We noted a total of three students with exceptions. One exception was a student who had a permanent address change that was not reported within the required 60-day time frame. We noted two students that had withdrawn from SCI-Arc were not reported within the required 60-day time frame and one of these students had an inaccurate effective date reported to NSLDS.
Questioned costs: No questioned costs were identified as part of this finding.
Cause: In discussing these conditions with SCI-Arc management, reporting was occurring on a monthly basis but only for students with enrolled status. Therefore, during periods when students were not enrolled the changes were not captured timely.
Effect: Permanent addresses are used by ED for ensuring that repayment information and other communications from ED are quickly accessible to the student. A change in enrollment status impacts when loan repayment grace period ends and when a student would be required to begin paying the student loans. Therefore, this deficiency in reporting permanent address changes and enrollment status changes could result in delays in receiving this information and inaccurate loan repayment start dates.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend SCI-Arc develop additional procedures to monitor the accuracy of information reported to NSLDS. One additional monitoring control could be to review a sample of students within NSLDS after each roster file response to ensure that the enrollment status is accurate and that permanent address changes were processed. Each institution has access to correct information directly within NSLDS at any time.
Views of responsible officials: Management agrees with the finding. A corrective action plan has been implemented.