Finding Text
FINDING 2023-001
Program:
Student Financial Assistance Cluster
Criteria:
In order for an institution to participate in any Title IV program, the institution must be financially responsible. One of the general standards for being considered financially responsible per 34 CFR section 668.171(b) is to obtain a composite score of at least 1.5. An institution that does not meet one or more of the general standards must comply with the alternative standards and requirements of financial responsibility under 34 CFR section 668.175.
Condition:
Notre Dame College's composite score based upon the audited financial statements as of June 30, 2023 was less than 1.5.
Repeat Finding From Prior Year:
No
Sampling Statistically Valid:
Not applicable
Questioned Cost:
None
Context:
The financial position and operating results as of and for the year ending June 30, 2023 resulted in a composite score less than 1.5.
Effect:
Notre Dame College did not meet the definition of being financially responsible for the year ending June 30, 2023 under the general standards and, in turn, must comply with the alternative standards.
Cause:
The College was impacted by a debt covenant failure resulting in negative working capital, as well as operating losses, declining enrollment, rising costs and significant debt obligations. As a result, at June 30, 2023, Notre Dame College's composite score was negatively impacted.
Recommendation:
On February 29, 2024, the College announced that in-person instruction will conclude at the end of the 2024 spring semester and agreements have been secured with nine partner colleges and universities to help current students in good standing continue their education through a Teach-Out program or as a transfer student.
Management Response:
Management agrees with the finding. Please refer to management's corrective action plan.