Maine Community College SystemNon-Profit

Finding 2025-002 Program Affected Assistance Listing - 84.007, 84.033, 84.063, 84.268 U.S. Department of Education - Direct Award Student Financial Aid Cluster Award Year July 1, 2024 through June 30, 2025 Criteria Per 34 CFR section 668.22(j), an institution must return the amount of Title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew. Condition and Context During testing of returns of Title IV funds (R2T4), we noted the following: At Eastern Maine Community College (EMCC), we selected two 2024 fall semester students for R2T4 compliance testing from a total poulation of 98 students across all of the 2025 academic year. During our testing, we noted one of the 2024 fall semester student selected had a R2T4 processed after the required 45-day timeframe from the date of determination to when the U.S. Department of Education's Common Origination and Disbursement (COD) system was notified. This was due to conversion from the PowerFAIDS student information system (SIS) to the Anthology SIS originally set to occur effective January 1, 2025. A decision was made to delay the conversion date to April 1, 2025 but also required more testing and configuration to be sure there were no more delays. This delay in the conversion from PowerFAIDS to Anthology SIS disrupted the expected sequence of events for processing student aid and, as a result, was submitted to the COD system after the 45-day deadline. Based on discussion with management, it is expected that all 2024 fall semester students at EMCC with R2T4 processed during the conversion period were filed late. At Central Maine Community College (CMCC), we selected four 2025 spring semester students for R2T4 compliance testing from a total poulation of 304 students at CMCC across all of the 2025 academic year. During our testing, we noted three of 2025 spring semester students selected had a R2T4 processed after the required 45-day timeframe from the date of determination to when COD system was notified. This was the result of the conversion from PowerFAIDS to the Anthology SIS in April 2025 which delayed the processing of R2T4 to COD. Based on discussion with management, it is expected that all 2025 spring semester students at CMCC that had a return determination after February 28, 2025, were filed late. Cause and Effect The conditions identified were caused by the transition to a new Anthology SIS that occurred during the year resulting in late submissions to COD. Questioned Costs None noted. Recommendation We recommend the System implement a process in which all refund calculations are reviewed by the appropriate level of management to ensure timely filing to the COD system is occurring. Identification as a Repeat Finding, if Applicable Not applicable. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding. See attached Corrective Action Plan.

Finding 2025-003 Program Affected Assistance Listing - 84.063 U.S. Department of Education - Direct Award Student Financial Aid Cluster Award Year July 1, 2024 through June 30, 2025 Criteria Per Volume 7, Chapter 2 of the Federal Student Aid Handbook, Pell Grant scheduled awards are based on information provided on the Free Application for Federal Student Aid (FAFSA) form, the presence of a valid Student Aid Index (SAI) on the student's FAFSA Submission Summary or Institutional Student Information Record (ISIR), the academic year structure, and the Pell Grant cost of attendance for a full-time student for a full academic year. Condition and Context During testing of Pell Grant disbursements, we noted the following: At CMCC, we noted the recalculation of one 2025 spring semester Pell Grant disbursement differed from the actual Pell Grant disbursment made resulting in an increase of $295 to the student account. After discovering the error and discussing with CMCC, the Pell Grant disbursement was adjusted for the additional $295 and reported to the COD system. Our testing included a total of 11 CMCC students with Pell Grant disbursements totalling $64,197. The one recalculation exception discovered resulted in a deviation rate of 0.46%. At York County Community College (YCCC), we noted the recalculation of one 2025 spring semester Pell Grant disbursement differed from the actual Pell Grant disbursement made resulting in a reduction of $628 to the student account. After discovering the error and discussing with YCCC, the Pell Grant disbursement was adjusted for the reduction of $628 and reported to the COD system. Our testing included a total of four YCCC students with Pell Grant disbursements totalling $13,358. The one recalculation exception discovered resulted in a deviation rate of 4.70%. Cause and Effect The conditions identified were caused by the transition to a new SIS that occurred during the year resulting in improper Pell Grant disbursements. Questioned Costs Based on the deviation rates previously identified, likely questioned costs at CMCC and YCCC would be $41,472 and $123,051, respectively, of the total Pell Grant Program funds disbursed at the respective campuses. Recommendation We recommend the System implement a process in which all disbursement calculations are checked for accuracy in the SIS. Identification as a Repeat Finding, if Applicable Not applicable. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding. See attached Corrective Action Plan.

Finding 2025-004 Program Affected Assistance Listing - 84.268 U.S. Department of Education - Direct Award Student Financial Aid Cluster Award Year July 1, 2024 through June 30, 2025 Criteria Per 34 CFR 668.165(a)(6), students that receive a direct loan disbursement, must receive notification of the right to cancel their loan. This notification must be sent no earlier than 30 days before or no later than 30 days after the student account is credited. Condition and Context During testing of Direct Loan disbursements, we noted at Kennebec Valley Community College (KVCC) and YCCC, the students that received Direct Loans were not notified within 30 days of the funds being credited to their student account. This was due to the conversion from PowerFAIDS to Anthology SIS as the financial aid office wanted to be sure the correct disbursement was made resulting in an oversight on the notification email not being sent out timely. During our testing, we did not identify any exceptions related to the calculation of need for student aid related to any of the students at KVCC and YCCC selected for testing. Based on discussion with management, it is expected all students at KVCC and YCCC with Direct Loan disbursements were not notified of their right to cancel their loan. Cause and Effect The conditions identified were caused by the transition to a new SIS that occurred during the year resulting in missed notifications to students on the right to cancel their Direct Loans. Questioned Costs None noted. Recommendation We recommend the System implement a process in which all Direct Loan disbursements receive notification within the 30-day window. Identification as a Repeat Finding, if Applicable Not applicable. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding. See attached Corrective Action Plan.

Finding 2024-002 Program Affected Assistance Listing - 84.007, 84.033, 84.063, 84.268 Department of Education - Direct Award Student Financial Aid Cluster Award Year July 1, 2023 through June 30, 2024 Criteria Per 34 CFR section 668.22(f)(2)(i), the total number of calendar days in a payment period or period of enrollment includes all days within the period that the student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period. Condition and Context During testing of returns of Title IV funds (R2T4), we noted the following: • At Southern Maine Community College (SMCC), we noted the original R2T4 calculation for the fall 2023 semester was calculated to include the Thanksgiving break as part of the total days count. As the Thanksgiving break was 5 calendar days, it should have been excluded. As a result, 11 students selected for SMCC R2T4 testing needed to be recalculated resulting in an additional $193 needing to be returned. • At Kennebec Valley Community College (KVCC), we noted the original R2T4 calculation for the fall 2023 semester was calculated to include the Thanksgiving break as part of the total days count. As the Thanksgiving break was 5 calendar days, it should have been excluded. One student selected did not have the proper number of days excluded from their calculation resulting in $16 needing to be returned. • At KVCC, we noted the original R2T4 calculation for the spring 2024 semester was calculated to not include the preceding weekend days for spring break as part of the total days count. As a result, total days were originally calculated as two days higher than it should have been. Three students selected for KVCC R2T4 testing needed to be recalculated resulting in an additional $19 needing to be returned. Cause and Effect The conditions identified were caused by a misunderstanding of the required number of days in a break that are included or excluded from the total semester days when performed a R2T4 calculation. Recommendation We recommend the System implement a process in which all refund calculations are reviewed by the appropriate level of management to ensure the appropriate number of days are considered in the R2T4 calculations. This review should be documented. Identification as a Repeat Finding, if Applicable Not applicable. Views of Responsible Officials and Planned Corrective Action Management agrees with the finding. See attached Corrective Action Plan.

Finding 2020-001 - Information on the Federal Program - U.S. Department of Education ? Student Financial Assistance Cluster, CFDA 84.268, award period July1, 2019 - June 30, 2020. Specific Criteria - Per 34 CFR section 685.303, if a student is enrolled in the first year of an undergraduate program of study and has not previously received a Direct Subsidized Loan or a Direct Unsubsidized Loan, a school may not disburse the proceeds of a Direct Loan until 30 days after the first day of the student's program of study unless the school has a cohort default rate, calculated under 34 CFR part 668, of less than 15% for each of the three most recent fiscal years for which data are available. Condition and Context - At Central Maine Community College (CMCC), follow-up on a prior year audit finding found that 5 out of 5 first year, first time Federal Direct Loan student borrowers had their Federal Direct Loan disbursement held for only 21 days. As CMCC's cohort default rate was not below 15% for each of the last three years, direct loan disbursements for first year, first time borrowers are required to be held for 30 days prior to disbursement. Questioned Costs - None noted. Cause - This appears to be caused by a misunderstanding of the disbursement requirements. Effect -The students did not have Direct Loan funds held for the required 30 days prior to disbursement, thus potentially exposing those funds to a refund requirement. Identification as a Repeat Finding, if Applicable - Repeat of 2019-002. Recommendation - We recommend a process be implemented to review all first year students to ensure Federal Direct Loan funds are held for 30 days prior to disbursement, unless the System meets the exception based on its cohort default rate. Views of responsible Officials and Planned Corrective Action - Management agrees with the finding. See attached for Planned Corrective Action.

Finding 2020-002 - Information on the Federal Program - U.S. Department of Education ? Student Financial Assistance Cluster, CFDA 84.268, award period July 1, 2019 - June 30, 2020. Specific Criteria - Per 34 CFR 685.309(b)(2)(i), unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted enrollment at the school, 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. Conditions and Context - During testing of enrollment reporting at Eastern Maine Community College (EMCC), noted one student that graduated in May 2020 was not submitted to the Clearinghouse until September 2020. The student's request for graduation status was reviewed in June 2020 and determined to be effective for May 2020. As a result, this notification to the Clearinghouse occurred after the 60-day requirement. EMCC has identified 267 students were determined to have graduated in May 2020, but were not reported un September 2020. Questioned Cost - None noted. Cause - This appears to be caused by a misunderstanding of the enrollment reporting requirements at EMCC. Effect - Student did not have their change in enrollment status timely reported. Recommendation - We recommend a process be implemented to complete graduation verification in June for Spring graduates and report those student to the Clearinghouse immediately after to meet the enrollment reporting requirements. Views of Responsible Officials and Planned Corrective Action - Management agrees with the finding. See attached for Planned Corrective Action.

Finding 2019-002 Information on the Federal Program U.S. Department of Education - Student Financial Assistance Cluster, CFDA 84.268, award period July 1, 2018 ? June 30, 2019. Specific Criteria Ferderal Direct Loan funds are to be held for 30 days for first year, first time Direct Loan borrowers; per 34 CFR section 685.303, if a student is enrolled in the first year of an undergraduate program of study and has not previously received a Direct Subsidized Loan, a Direct Unsubsidized Loan, a school may not disburse the proceeds of a Direct Loan until 30 days after the first day of the student's program of study unless the school has a cohort default rate, calculated under 34 CFR part 668 of less than 15% for each of the three most recent fiscal years for which data are available. Conditions and Context At Central Maine Community College (CMCC), one of eleven students selected for testing was a first year, first time Federal Direct Loan borrower that had their Federal Direct Loan disbursement held for 23 days. As CMCC's cohort default rate was above 15% for each of the last three years. As such, direct loan disbursements for first year, first time borrowers are required to be held for 30 days prior to disbursement. Questioned Costs None noted. Cause This appears to be caused by a misunderstanding of the disbursement requirements at CMCC. Effect Student did not have Direct Loan funds held for the required 30 days prior to disbursement.Recommendation We recommend a process be implemented to review all first year students to determine if Federal Direct Loan funds need to be held for 30 days prior to disbursement. Views of responsible Officials and Planned Corrective Action Management agrees with the finding. See attached for Planned Corrective Action.

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