NEW HAMPSHIRE INSTITUTE OF ART

Finding Number: 2019-002 Information on the Federal Program: Federal Agency: United States Department of Education (ED) Program Name: Student Financial Assistance Cluster CFDA: 84.268 - Federal Direct Student Loans (Direct Loan), and 84.063 - Federal Pell Grant Program (PELL) Federal Award Identification Number: N/A Federal Award Year: 2019 Specific Requirement: Under the ED PELL and Direct Loan programs, institutions must complete and return within 30 days the enrollment reporting roster file placed in their Student Aid Internet Gateway mailbox sent by ED via the National Student Loan Data System (NSLDS). Unless the institution expects to complete its next enrollment reporting within 60 days, the institution must notify NSLDS within 30 days if it discovers that a student who received a PELL Grant and/or a Direct Loan either did not enroll or ceased to be enrolled on at least a half-time basis (PELL, 34 CFR section 690.83(b)(2) and Direct Loans, 34 CFR section 685.309). The institution determines how often it receives the enrollment reports, but the minimum is twice a year. Once received, the institution must correct and submit any changes electronically. Condition Found: In our sample of 21 students selected who had status changes tested, 20 of the students had their status change reported outside of the required timeframe. Context: We selected 25 students, based on statistically based tables, out of a total of 89 with student status changes of withdrawn or leave absence that were required to be reported during the year and reviewed the enrollment report to determine if the change in status had been reported to the NSLDS within the required time period. Of the 25 students selected, four students were listed as having a status change however, had never enrolled at the Institute and therefore had no status change to report. The listing to be reported to the NSLDS is an enrollment document generated by the Registrar. Questioned Costs: None Cause and Effect: Prior to the acquisition of the Institute by the College, there was turnover in the personnel at the Institute. As a result of the turnover, consistent processing of reporting to the NSLDS was not performed. It is our understanding that subsequent to the College acquiring operations of the Institute, student status changes were updated accordingly to the NSLDS. Recommendation: We recommend the Institute design and implement a process to complete and return the enrollment reporting roster files within the timeline required by ED. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and the recommendation. See Corrective Action Plan attached.

Finding Number: 2019-003 Information on the Federal Program: Federal Agency: ED Program Name: Student Financial Assistance Cluster CFDA: 84.268 - Federal Direct Student Loans 84.063 - Federal Pell Grant Program 84.007 - Federal Supplemental Educational Opportunity Grants Federal Award Identification Number: N/A Federal Award Year: 2019 Specific Requirement: Under 34 CFR 668.166, institutions must disburse student financial aid funds to students within three business days of receipt. Condition Found: Four of the students did not receive student financial aid funds applied to their student accounts within three business days subsequent to the Institute drawing the funds from ED. Context: In our sample of 40 students selected, based on statistically based tables, this condition was discovered for four students. Questioned Costs: None Cause and Effect: Prior to the acquisition of the Institute by the College, there was turnover in personnel at the Institute. As a result of the turnover, there was a limited number of resources available to properly apply the student financial aid funds in the required timeframe. Recommendation: We recommend that the Institute design and implement a process to apply student financial aid funds to the student accounts within required timeframe set forth by ED. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and the recommendation. See Corrective Action Plan attached.

Finding Number: 2019-004 Information on the Federal Program: Federal Agency: ED Program Name: Student Financial Assistance Cluster Federal Award Identification Number: N/A Federal Award Year: 2019 Specific Requirement: Management is required to maintain internal controls over compliance with the requirements of the Student Financial Assistance Cluster to prevent errors or detect and correct errors on a timely basis. Condition Found /Context: During our audit, we noted that the Institute did not have sufficient staffing levels to perform certain internal controls over compliance with the Student Financial Assistance Cluster. As a result, the following deficiencies in internal controls over compliance were identified: ? Reconciliations of Direct Loans were not being performed in a timely manner. Subsequent to the Institute being acquired by the College, all previous unreconciled months of Direct Loans were performed identifying no issues. ? Errors in initial awarding of Direct Loans. Management identified the errors later in the year and made the necessary corrections to the student accounts. ? Initial awarding of Federal Work-Study funds was done using a flat amount of $500. Subsequent to awarding actual Federal Work-Study, funds earned and disbursed were updated however, consideration of whether the actual funds disbursed created an instance of a student being disbursed funds in excess of need. We tested five students who were disbursed Federal Work-Study funds and noted none of the students were disbursed student financial aid in excess of need. ? The 2017-2018 Data Collection Form was submitted more than 30 days after the audited financial statements were made available and more than nine months after the audited financial statements were made available. The date of the audit report was December 27, 2019 and the Data Collection Form was filed on April 3, 2019. Questioned Costs: None Cause and Effect: Prior to the acquisition of the Institute by the College, there was turnover in personnel at the Institute, which resulted in inconsistency or oversight in procedures to be performed. Recommendation: We recommend the Institute design and implement processes in the packaging, reconciling and reporting processes to mitigate the risks of noncompliance with the Student Financial Assistance Cluster. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and the recommendation. See Corrective Action Plan attached.

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