University of New England

Finding 2021-001 Information on the Federal Program Federal Agency: United States Department of Education Program Name: Student Financial Assistance Cluster AL: 84.268 - Federal Direct Student Loans Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2021 Criteria Required by 34 CFR 668.165, an institution must notify the student, or parent, in writing of (1) the date and amount of disbursement; (2) the student?s right, or parent?s right, to cancel all or a portion of that loan; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. When funds are disbursed by electronic fund transfer and an institution does not implement an affirmative confirmation process, an institution must notify a student no earlier than 30 days before, but no later than 7 days after, crediting the student?s account of their right to cancel all or part of the loan within 30 days. Condition(s) and Context During our audit, we noted the University did not send disbursement notifications during the fall semester informing the student, or their parent, of their right to cancel all or a portion of their loan to all of the students that received Federal Direct Student Loans within the required timeframe. Based on our statistically-based sample, of the 28 students selected who received Federal Direct Student Loans, 14 had disbursements in September 2020. Of those students with September disbursements, 13 of the students or their parents did not receive a disbursement notification of their right to cancel all or a portion of their loan within the required timeframe for the fall semester. Of the total direct loan disbursements included in our sample, 13 out of 75 disbursements did not receive a loan disbursement notification. The University had approximately 4,200 students who received Federal Direct Student Loan disbursements in the fall semester, and approximately 2,400 students who received Federal Direct Student Loan disbursements in September. The Federal Direct Student Loan disbursements in September primarily are completed on the same day, near the beginning of the semester. Cause During the fall semester, an error was identified in an automated system utilized to send financial aid related emails, including disbursement notifications, to students through the University?s software. The error occurred during a time when fall semester loans were scheduled to be disbursed for a number of academic programs. Through inquiry with the University, we were informed the Director of Tuition Planning & Systems (DTPS) manually sent the loan notification emails to students through the University email system. This notification was not documented and the DTPS left the University in May 2021. Subsequent to his departure, the DTPS? email history was removed. The University made attempts to recover the emails, but the attempts were ultimately unsuccessful. Questioned Costs None. Potential Effect As a result, students and parents may not have been aware of their right to cancel their loan or the procedures and time by which the loan may be canceled. Recommendation We recommend the University reinforce its existing procedure to have disbursement notification email error logs reviewed, corrected, and documented, to ensure disbursement notifications are sent to every student who received direct loan disbursement, within 7 days, to be in compliance with the requirement described above. Views of Responsible Officials Management agrees with the finding. See attached for Planned Corrective Action Plan.

Planned Corrective Action Plan for: Finding 2021-001 Information on the Federal Program Federal Agency: United States Department of Education Program Name: Student Financial Assistance Cluster AL: 84.268 - Federal Direct Student Loans Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2021 To ensure disbursement notification emails are consistently sent within the required seven days to every student who received direct loan disbursement, the Director of Financial Aid Operations (DFAO) in Student Financial Services will work closely with both the Associate Director of Systems and Associate Director of Graduate Aid (responsible for management of Direct Loan program). They will confirm the process completed daily through the Automic system is running correctly and notifications are timely sent and properly documented. The output reports produced by Automic will continue to be regularly reviewed and any found issues will be thoroughly addressed and resolved with adequate documentation of said resolution. If/when loan notification emails have to be manually sent (i.e. sent through SFS email account rather than through the Automic system) we will carefully document when they were sent, to whom they were sent and the content of the notification that was sent. Estimated Completion Date: December 2021 Primary UNE Contact Person: Paul Henderson Assistant Vice President phenderson@une.edu 207-602-2302 Secondary UNE Contact Person: Rachael Tripp Director of Financial Aid Operations rtripp@une.edu 207-602-2049

Finding 2021-002 Information on the Federal Program Federal Agency: United States Department of Education Program Name: Student Financial Assistance Cluster AL: 84.063 - Federal Pell Grant Program Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2021 Criteria Required by 34 CFR 690.83(b)(1), the institution shall submit the student's Payment Data reporting any change to the Secretary by the reporting deadlines published by the Secretary in the Federal Register. Per the Federal Register (82 FR 29061) Department of Education Notice on June 27, 2017, an institution must submit Pell Grant, Iraq and Afghanistan Service Grant, Direct Loan, and TEACH Grant disbursement records to the Department?s Common Origination and Disbursement (COD) System, no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. Condition and Context During our audit, we tested that the University reported payment data within 15 calendar days after the University makes a payment, or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. Based on our statistically-based sample, the 4 Pell students selected for testing had 8 payments. Of those students and payments selected, 1 student had 1 reported payment that was not reported to COD within the 15 days after the University made a payment. The University reviewed an additional 30 Pell payments and found 3 of these payments were not reported to COD within the 15 days after the school made a payment. The University had approximately 500 students who received Pell grants. The disbursements are primarily paid twice during the academic year. Cause The University process for reviewing and submitting the individual Pell student records to COD is a time consuming and manual process, and thus susceptible to error. Questioned Costs None. Potential Effect Per the Dear Colleague Letter ID: GEN-13-14; an institution that does not report Pell Grant disbursement within the required 15 day timeframe may be liable for any overpayment that results from another institution disbursing Pell Grant funds with incomplete information because of the late reporting. Recommendation We recommend the University reinforce the 15 day reporting deadline to all staff who are responsible for reporting to COD. If resources are available, we recommend that the University implement an automated process to streamline the time consuming and manual process to ensure timely and accurate reporting. This should lead to a reduction in the reporting timeframe and would limit those circumstances for potential overpayments. Views of Responsible Officials Management agrees with the finding. See attached for Planned Corrective Action Plan.

Planned Corrective Action Plan for: Finding 2021-002 Information on the Federal Program Federal Agency: United States Department of Education Program Name: Student Financial Assistance Cluster AL: 84.063 - Federal Pell Grant Program Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2021 To ensure Federal Pell Grants are consistently originated through the COD system within the required 15 days after disbursement, the Director of Financial Aid Operations (DFAO) will work closely with the Assistant Director and/or any other SFS staff involved with Pell Grant processing. We will reinforce the importance of compliance in this area to avoid potential overpayments that may occur due to late reporting. Specifically, the DFAO will assist with origination processing particularly at the beginning of every term when origination volumes are highest and error is more likely to possibly occur. We will also work to develop an internal method of carefully analyzing Pell disbursement on a weekly basis to ensure on-time processing and therefore compliance. Additionally, we will review our process with the Associate Director of Systems to see if there are ways to streamline this process for simplification and to minimize room for error. As part of this, we?ll research how other Banner schools complete origination process to learn more and find other possible ways of improving this process to ensure more timely and accurate reporting. Estimated Completion Date: May 2022 Primary UNE Contact Person: Paul Henderson Assistant Vice President phenderson@une.edu 207-602-2302 Secondary UNE Contact Person: Rachael Tripp Director of Financial Aid Operations rtripp@une.edu 207-602-2049

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