Vermont State CollegesHigher Education

Finding number: 2025-001 Federal agency: U.S. Department of Education Programs: Student Financial Assistance (SFA) Cluster Assistance Listing Number: 84.007, 84.033, 84.268, 84.063 Award year: 2025 Criteria The Code of Federal Regulations, consisting of 2 CFR 200.303, 16 CFR 314.3(a), and 16 CFR 314, requires that financial institutions, including institutions participating in Title IV programs, develop, implement, and maintain a comprehensive written information security program that includes administrative, technical, and physical safeguards appropriate to the sensitivity of the information being protected aligned with federal information security standards. Condition During our testing of the SFA Cluster, we requested the College’s Written Information Security Plan (WISP). The Colleges were unable to provide a formal, documented WISP. The Colleges' general IT policies and procedures provided did not fully meet WISP requirements. Cause The Colleges have not developed or formalized a standalone WISP. Effect Without a formalized WISP, the Colleges are at a heighted risk of inadequate safeguarding of sensitive data, inconsistent application of security practices and procedures, and an increased likelihood of unauthorized access, data loss or misuse. Questioned Costs N/A Perspective Due to its nature, this deficiency is systemic, affecting the entire SFA Cluster population and related programs. Identification as a Repeat Finding, if applicable N/A Recommendation The Colleges should develop, approve, and implement a Written Information Security Plan (WISP) aligned with 16 CFR Part 314 requirements and tailored to the systems and data associated with the SFA Cluster. View of Responsible Officials The Colleges agree with the finding. This issue was the result of information security policies that did not reflect actual current practices. Such current practices were updated over the last two years in response to industry standards, insurance requirements, and Gramm Leach Billey Act requirements, which are believed to meet the requirements of these regulations. However, because they were not documented formally in a comprehensive policy form, they could not be adequately provided during the audit. In early Fall 2025, the Colleges hired a new Chief Information Security Officer (CISO), who has begun overhauling the information security policies to reflect current practices. The CISO has also created a preliminary draft of a WISP that reflects the Colleges current policies and procedures. This WISP is expected to be completed and implemented during fiscal year 2026, pending board review and approval.

Criteria According to 34 CFR 668.59: (a) For the subsidized student financial assistance programs, if an applicant's FAFSA information changes as a result of verification, the applicant or the institution must submit to the Secretary any changes to – (1) A nondollar item; or (2) A single dollar item of $25 or more. (b) For the Federal Pell Grant Program, if an applicant's FAFSA information changes as a result of verification, an institution must – (1) Recalculate the applicant's Federal Pell Grant on the basis of the EFC on the corrected valid SAR or valid ISIR; and (2) (i) Disburse any additional funds under that award only if the institution receives a corrected valid SAR or valid ISIR for the applicant and only to the extent that additional funds are payable based on the recalculation; (ii) Comply with the procedures specified in §668.61 for an interim disbursement if, as a result of verification, the Federal Pell Grant award is reduced; or – (iii) Comply with the procedures specified in 34 CFR 690.79 for an overpayment that is not an interim disbursement if, as a result of verification, the Federal Pell Grant award is reduced. (c) For the subsidized student financial assistance programs, excluding the Federal Pell Grant Program, if an applicant's FAFSA information changes as a result of verification, the institution must – (1) Adjust the applicant's financial aid package on the basis of the EFC on the corrected valid SAR or valid ISIR; and (2) (i) Comply with the procedures specified in §668.61 for an interim disbursement if, as a result of verification, the financial aid package must be reduced; (ii) Comply with the procedures specified in 34 CFR 673.5(f) for a Federal Perkins loan or an FSEOG overpayment that is not the result of an interim disbursement if, as a result of verification, the financial aid package must be reduced; and (iii) Comply with the procedures specified in 34 CFR 685.303(e) for Direct Subsidized Loan excess loan proceeds that are not the result of an interim disbursement if, as a result of verification, the financial aid package must be reduced. Condition The financial aid award process includes consideration of financial and demographic data provided by the student applicant. To evaluate the reliability of this data, a participating institution is required by the Federal Government to select a sample from its student population and verify certain prescribed data. The selected students’ files should be revised to incorporate any changes in the supplied data. The College’s policy is to verify the information of those students identified by the Federal Government’s processor. During our testing, we noted 1 student, out of a sample of 40, that did not complete verification before aid was disbursed. Cause The Colleges failed to have the proper review procedures in place to ensure students flagged for verification complete verification before aid was disbursed. Effect The student’s EFC was calculated using incorrect data. Since the student’s EFC is used to calculate the financial aid award, an incorrect EFC can result in an improper award. Questioned Costs Not applicable. Identification as a Repeat Finding Not applicable. Recommendation The Colleges should continue to strengthen their controls surrounding verification. The Colleges should implement policies that require all student ISIR’s subject to verification be reviewed once the verification process is complete. The reviewer should be well-versed in the verification process and requirements. Once reviewed, all verified ISIR’s should be re-submitted to the Federal Government’s processor for recalculation of the applicant’s EFC prior to awarding aid. View of Responsible Officials The Colleges agrees with the finding.

Criteria According to 34 CFR 685.309(b)(2): Unless the Colleges 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 – (i) A loan under title IV of the Act was made to or on behalf of a student who was enrolled or accepted for 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; or (ii) A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address. The Dear Colleague Letter GEN-12-6 issued by the U.S. Department of Education (“ED”) on March 30, 2012 states that in addition to student loan borrowers, Enrollment Reporting files will include two additional groups of students: Pell Grant and Perkins Loan recipients. According to 2 CFR Part 200, Appendix XI Compliance Supplement: Under the Pell Grant and loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway mailboxes sent by ED via the National Student Loan Data System (“NSLDS”). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and submit the changes electronically through the batch method or the NSLDS website. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition The Federal Government requires the Colleges to report student enrollment changes to the National Student Loan Data System (“NSLDS”) within 60 days. During our testing, we noted 1 student, out of a sample of 40, that were not reported to NSLDS. During our testing, we noted that three of the Colleges merged into one entity during year ending June 30, 2024. We observed the records and noted 18 students out of 3,789 students did not have their NSLDS status properly transferred to the new institution. Cause The Colleges did not have adequate procedures in place to ensure that status changes were properly reported to NSLDS. The College did not have procedures in place to ensure student statuses were properly transferred during the merger of three of the Colleges. Effect The Colleges did not report the student’s correct status change to NSLDS, which may impact the student’s loan grace periods and enrollment reporting statistics collected by the Department of Education. Questioned Costs Not applicable. Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 1 student, or 2.5% of our sample, were not reported to NSLDS. Of the 3,789 students merged into one institution, 18 students, or 0.5% of merged students, were not reported to NSLDS. Identification as a Repeat Finding, if applicable Not applicable. Recommendation The Colleges should provide training to employees responsible for processing information for the NSLDS and ensure that they have adequate knowledge in the related rules and regulations. This training should include an explanation of the status changes, the importance of reporting the correct status changes and the consequences of incorrect reporting. Additionally, the Colleges should implement reconciliation procedures between enrollment records and NSLDS to ensure that information is properly maintained. View of Responsible Officials The Colleges agrees with the finding.

Criteria According to 34 CFR 690.83(b) (1) An institution shall report to the Secretary any change for which a student qualifies including any related Payment Data changes by submitting to the Secretary the student’s Payment Data that discloses the basis and result of the change in award for each student. The institution shall submit the student’s Payment Data reporting to the Secretary by the reporting deadlines published by the Secretary in the Federal Register. (2) An institution shall submit, in accordance with the deadline dates established by the Secretary, through publication in the Federal Register, other reports and information the Secretary requires and shall comply with the procedures the Secretary finds necessary to ensure that the reports are correct. According to the Federal Register (Volume 83, Number 233): An institution must submit Pell Grant, Iraq and Afghanistan Service Grant, Direct Loan, and TEACH Grant disbursement records to COD, no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. In accordance with 34 CFR 668.164(a), title IV, Higher Education Act (“HEA”) program funds are disbursed on the date that the institution: (a) Credits those funds to a student’s account in the institution’s general ledger or any subledger of the general ledger; or (b) pays those funds to a student directly. Title IV, HEA program funds are disbursed even if an institution uses its own funds in advance of receiving program funds from the Department. Condition Federal regulations require the Colleges to report to the Federal Government’s Common Origination and Disbursement System (“COD”) Federal Pell Grant and Direct Loan disbursements made to students within 15 days of the funds being disbursed to the student. During our testing, we noted 3 students, out of a sample of 40, that were not reported within the required timeframe by 1 to 9 days. Cause The Colleges have policies and procedures in place to report the disbursement records to the Department of Education through the COD system within the required fifteen calendar days, however, in this case the procedures were not completed properly. Effect The Colleges did not report Pell Grant and Direct Loan disbursements to COD within the required time frame. Identification as a Repeat Finding, if applicable Not applicable Recommendation We recommend that management of the Colleges review, and if necessary, update the policies and procedures to ensure all Pell Grant and Direct Loan funds are reported within the required timeframe. View of Responsible Officials The Colleges agree with the finding. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 3 students, or 7.5% of our sample, were determined to be reported late to the COD by 1 to 9 days. Identification as a Repeat Finding, if applicable Not applicable Recommendation We recommend that management of the Colleges review, and if necessary, update the policies and procedures to ensure all Pell Grant and Direct Loan funds are reported within the required timeframe. View of Responsible Officials The Colleges agree with the finding.

Criteria According to 34 CFR 668.34: (a) An institution must establish a reasonable satisfactory academic progress policy for determining whether an otherwise eligible student is making satisfactory academic progress in his or her educational program and may receive assistance under the title IV, HEA programs. (9) If the institution permits a student to appeal a determination by the institution that he or she is not making satisfactory academic progress, the policy describes – (i) How the student may reestablish his or her eligibility to receive assistance under the title IV, HEA programs; (ii) The basis on which a student may file an appeal: The death of a relative, an injury or illness of the student, or other special circumstances; and (iii) Information the student must submit regarding why the student failed to make satisfactory academic progress, and what has changed in the student's situation that will allow the student to demonstrate satisfactory academic progress at the next evaluation. Condition The Colleges’ satisfactory academic progress policy (“SAP”) allows for a student who fails to meet the minimum standard to be provided one semester of academic warning. If the student does not improve, as described in the Colleges’ SAP, the student will be dismissed from the Colleges unless the student successfully appeals the dismissal. Our testing revealed that four students failed to meet the minimum standards established by the Colleges’ SAP. Of these four students, one student did not receive notification that they were out of compliance of the Colleges’ SAP. Cause The Colleges failed to have the proper review procedures in place to ensure that all students who did not meet the minimum SAP standards received proper notification. Effect Students did not receive notification of their current academic standing and as such were unable to submit an appeal. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 1 student, or 2.5%, failed to meet the minimum standards established by the Colleges’ SAP. Identification as a Repeat Finding, if applicable Not applicable Recommendation The Colleges should continue to strengthen their controls surrounding notification to students who have failed to meet the minimum standards per the SAP. View of Responsible Officials The Colleges agree with the finding.

Criteria According to 34 CFR 668.22(c): Withdrawal date for a student who withdraws from an institution that is not required to take attendance. For purposes of this section, for a student who ceases attendance at an institution that is not required to take attendance, the student’s withdrawal date is – (i) The date, as determined by the institution, that the student began the withdrawal process prescribed by the institution; (ii) The date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw; (iii) If the student ceases attendance without providing official notification to the institution of his or her withdrawal in accordance with paragraph (c)(1)(i) or (c)(1)(ii) of this section, the mid-point of the payment period (or period of enrollment, if applicable). Condition When a recipient of Title IV funds withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution should determine the proper amount of Title IV funds to be refunded as of the recipient’s withdrawal date. Once a recipient’s withdrawal date is determined, an institution should complete a Return of Title IV (“R2T4”) calculation. The R2T4 is used to calculate the percentage of the payment period or period of enrollment completed, establish the amount of Title IV funds earned by the recipient, and determine the amount required to be returned to the Department of Education. During our testing, we noted 1 student, out of a sample of 40, where the Return of Title IV calculation was completed using incorrect withdrawal dates. Cause When completing the R2T4 calculation, the Colleges used the date the student’s withdrawal was processed by the Colleges instead of the actual date the student withdrew from the Colleges. Effect The Colleges calculated the student’s percentage of earned aid incorrectly which resulted in an incorrect amount of Title IV funds returned to the Department of Education. Questioned Costs Unknown Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 1 student, or 2.5% of our sample, used the incorrect withdrawal date when completing the Return of Title IV calculation. Identification as a Repeat Finding, if applicable Not applicable Recommendation The Colleges should implement a formal review process of the Return of Title IV calculations to ensure an accurate calculation is made. View of Responsible Officials The Colleges agree with the finding.

Criteria According to 34 CFR 668.22(j)(1): Timeframe for the return of title IV funds. An institution must return the amount of title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section. According to 34 CFR 668.173(b): Timely return of Title IV, HEA program funds. In accordance with procedures established by the Secretary or Federal Family Education Loan (“FFEL”) program lender, an institution returns unearned Title IV, HEA program funds timely if – (1) The institution deposits or transfers the funds into the bank account it maintains under 34 CFR Sections 668.163 no later than 45 days after the date it determines the student withdrew; (2) The institution initiates an electronic funds transfer no later than 45 days after the date it determines that the student withdrew; (3) The institution initiates an electronic transaction no later than 45 days after the date it determines that the student withdrew, that informs a FFEL lender to adjust the borrower’s loan account for the amount returned; or (4) The institution issues a check no later than 45 days after the date it determines that the student withdrew. An institution does not satisfy this requirement if – (i) The institution’s records show that the check was issued more than 45 days after the date the institution determined the student withdrew; or (ii) The date on the cancelled check shows that the bank used by the Secretary or FFEL Program lender endorsed that check more than 60 days after the date the institution determined that the student withdrew. Condition Federal regulations state that any unearned Title IV grant or loan assistance received by a student must be refunded to the Title IV programs upon a student’s withdrawal from the institution. The Colleges have 45 days from the date they determined the student withdrew to return any unearned portions of Title IV funds. During our testing, we noted 3 students, out of a sample of 40, had unearned Title IV aid that was not returned to the Federal Government, within 45 days of the determined withdrawal date, by 20 to 74 days. Cause The Colleges did not consistently follow the procedures in place to monitor student withdrawals related to Title IV funds that must be returned to the Department of Education within 45 days. Effect The Colleges did not return unearned Title IV funds within the required 45-day time frame. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 3 students, or 7.5% of our sample, had unearned Title IV funds that were not returned to the Department of Education within the 45-day required time frame. Identification as a Repeat Finding, if applicable Not applicable Recommendation The Colleges should strengthen their controls surrounding the review Return of Title IV calculations in a timely manner to ensure that all funds are returned to the Department of Education within the required time frame. View of Responsible Officials The Colleges agree with the finding.

Criteria According to 34 CFR 685.309(b)(2): Unless the Colleges 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 – (i) A loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for 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; or (ii) A student who is enrolled at the school and who received a loan under Title IV of the Act has changed his or her permanent address. The Dear Colleague Letter GEN-12-6 issued by the U.S. Department of Education (“ED”) on March 30, 2012 states that in addition to student loan borrowers, Enrollment Reporting files will include two additional groups of students: Pell Grant and Perkins Loan recipients. According to 2 CFR Part 200, Appendix XI Compliance Supplement updated June 2019: Under the Pell Grant and loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway mailboxes sent by ED via the National Student Loan Data System (“NSLDS”). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and submit the changes electronically through the batch method or the NSLDS website. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition The Federal Government requires the Colleges to report student enrollment changes to the National Student Loan Data System (“NSLDS”) within 60 days. During our testing, 5 out of 40 students were reported late to the NSLDS by 3 to 168 days. During our testing, 2 out of 40 students reported incorrect effective dates, and 1 out of 40 students had an incorrect status reported to the NSLDS. Cause The Colleges did not have the proper review procedures in place to ensure enrollment status changes were being reported to NSLDS timely and correctly. Effect The Colleges did not report the students' correct effective dates to NSLDS or were not reported within the required timeframe, which may impact the students’ loan grace periods. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 7 students, or 17.5% of our sample, did not report the correct effective dates to NSLDS or were not reported within the required timeframe. Identification as a Repeat Finding, if applicable See prior year finding 2022-001 Recommendation The Colleges should strengthen their controls surrounding the review of the NSLDS reporting process to ensure they are in compliance with federal regulations. View of Responsible Officials The Colleges agree with the finding.

Criteria According to 34 CFR 668.164(l): (1) Notwithstanding any State law (such as a law that allows funds to escheat to the State), an institution must return to the Secretary any title IV, Higher Education Act (“HEA”) program funds, except Federal Work Study (“FWS”) program funds, that it attempts to disburse directly to a student or parent that are not received by the student or parent. For FWS program funds, the institution is required to return only the Federal portion of the payroll disbursement. (2) If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Secretary before the end of this 45-day period. (3) If a check sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued the check. Condition Federal regulations require an institution to return unclaimed Title IV funds issued by check or EFT within 240 days. During our testing, we noted 3 students, out of a sample of 40, that had unclaimed funds exceeding the federal day limit by 27 to 224 days. Cause The Colleges did not have an effective procedures in place to monitor the outstanding check aging to ensure that the 240-day timeframe was met. Effect The Colleges did not return Title IV unclaimed funds to the Department of Education within the required 240-day time frame. Questioned Costs There were 3 outstanding checks totaling $4,729 which pertained specifically to federal-sourced funds. Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 3 students, or 7.5% of our sample, had unclaimed funds pertaining to federal sources that were not returned to the Department of Education within the 240-day required time frame. Recommendation The Colleges should examine its policies and procedures related to unclaimed funds including the process and time frame for identifying aged balances and the process for cancelling checks and returning funds to the Department of Education. View of Responsible Officials The Colleges agrees with the finding.

Finding number: 2022-001 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #: 84.007, 84.033, 84.038, 84.063, 84.268 Award year:2022 Criteria According to 34 CFR 685.309(b)(2): Unless [the institution] 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 ? (i) A loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for 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; or (ii) A student who is enrolled at the school and who received a loan under Title IV of the Act has changed his or her permanent address. The Dear Colleague Letter GEN-12-6 issued by the U.S. Department of Education (?ED?) on March 30, 2012 states that in addition to student loan borrowers, Enrollment Reporting files will include two additional groups of students: Pell Grant and Perkins Loan recipients. According to 2 CFR Part 200, Appendix XI Compliance Supplement updated June 2019: Under the Pell Grant and loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway mailboxes sent by ED via the National Student Loan Data System (?NSLDS?). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and submit the changes electronically through the batch method or the NSLDS website. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition The Federal Government requires the Colleges to report student enrollment changes to the National Student Loan Data System (?NSLDS?) within 60 days. During our inquiry with management, one of the Colleges failed to report enrollment status changes, inclusive of graduation status records to the National Student Loan Data System (?NSLDS?) from Summer 2021 through Spring 2022. Cause One of the Colleges did not have the proper review procedures in place to ensure enrollment status changes were being reported to NSLDS. Effect The Colleges did not report the students' correct effective dates to NSLDS or were not reported within the required timeframe, which may impact the students? loan grace periods. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Since no students were reported to the NSLDS in the fiscal year 2022, a sample was not necessary as all students would not have been reported in the required timeframe and their student status would not be accurate. Identification as a Repeat Finding, if applicable See finding 2021-001 included in the summary schedule of prior year findings. Recommendation We recommend that management review its control procedures for reporting student financial aid data to the NSLDS to ensure proper controls are in place to ensure that all information is reported correctly and done with the required timeframe. View of Responsible Officials The Colleges agree with the finding.

Finding number: 2021-001 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #: 84.007, 84.033, 84.038, 84.063, 84.268 Award year: 2021 Criteria According to 34 CFR 685.309(b)(2): Unless [the institution] 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 ? (i) A loan under title IV of the Act was made to or on behalf of a student who was enrolled or accepted for 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; or (ii) A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address. The Dear Colleague Letter GEN-12-6 issued by the U.S. Department of Education (?ED?) on March 30, 2012 states that in addition to student loan borrowers, Enrollment Reporting files will include two additional groups of students: Pell Grant and Perkins Loan recipients. According to 2 CFR Part 200, Appendix XI Compliance Supplement updated June 2019: Under the Pell Grant and loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway mailboxes sent by ED via the National Student Loan Data System (?NSLDS?). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and submit the changes electronically through the batch method or the NSLDS website. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition The Federal Government requires the Colleges to report student enrollment changes to the National Student Loan Data System (?NSLDS?) within 60 days. During our testing of twenty students with enrollment status changes who graduated or withdrew from the institution, we noted the following: 1. Three student's status change was never reported to NSLDS. 2. Three students' status changes were not reported to NSLDS within the 60-day required timeframe. Cause The Colleges were negatively impacted by COVID-19 and there were delays in response time from both the Colleges and National Student Clearinghouse. Effect The Colleges did not report the students' correct effective dates to NSLDS or were not reported within the required timeframe, which may impact the students? loan grace periods. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the twenty students selected for testing, six students, or 30% of our sample, had either incorrect effective dates reported to NSLDS or were not reported to NSLDS within the required timeframe. Identification as a Repeat Finding, if applicable See finding 2020-001 included in the summary schedule of prior year findings. Recommendation We recommend that management review its control procedures for reporting student financial aid data to the NSLDS to ensure proper controls are in place to ensure that all information is reported is correct and done with the required timeframe. View of Responsible Officials The Colleges agree with the finding.

Finding number: 2020-001 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #: 84.007, 84.033, 84.038, 84.063, 84.268 Award year: 2020 Criteria According to 34 CFR 685.309(b)(2): Unless [the institution] 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 ? (i) A loan under title IV of the Act was made to or on behalf of a student who was enrolled or accepted for 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; or (ii) A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address. The Dear Colleague Letter GEN-12-6 issued by the U.S. Department of Education (?ED?) on March 30, 2012 states that in addition to student loan borrowers, Enrollment Reporting files will include two additional groups of students: Pell Grant and Perkins Loan recipients. According to 2 CFR Part 200, Appendix XI Compliance Supplement updated June 2019: Under the Pell Grant and loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway mailboxes sent by ED via the National Student Loan Data System (?NSLDS?). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and submit the changes electronically through the batch method or the NSLDS website. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition The Federal Government requires the Colleges to report student enrollment changes to the National Student Loan Data System (?NSLDS?) within 60 days. During our testing of forty students with enrollment status changes who graduated or withdrew from the institution, we noted the following: 1. One student's status change was never reported to NSLDS. 2. Five students' status changes were reported with the incorrect effective date. 3. Seven students' status changes were not reported to NSLDS within the 60-day required timeframe. Cause The Colleges did not have adequate procedures in place to ensure that students with status changes had their effective date correctly reported to NSLDS and were reported in the required timeframe. Effect The Colleges did not report the students' correct effective dates to NSLDS or were not reported within the required timeframe, which may impact the students? loan grace periods. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the forty students selected for testing, eleven students, or 27.5% of our sample, had either incorrect effective dates reported to NSLDS or were not reported to NSLDS within the required timeframe. Identification as a Repeat Finding, if applicable See finding 2019-001 included in the summary schedule of prior year findings. Recommendation We recommend that management review its control procedures for reporting student financial aid data to the NSLDS to ensure proper controls are in place to ensure that all information is reported is correct and done with the required timeframe. View of Responsible Officials The Colleges agree with the finding.

Finding number: 2020-002 Programs: Student Financial Assistance Cluster CFDA #: 84.007, 84.033, 84.038, 84.063, 84.268 Award year: 2020 Criteria According to 34 CFR 690.83(b) (1) An institution shall report to the Secretary any change for which a student qualifies including any related Payment Data changes by submitting to the Secretary the student?s Payment Data that discloses the basis and result of the change in award for each student. The institution shall submit the student?s Payment data reporting any to the Secretary by the reporting deadlines published by the Secretary in the Federal Register. (2) An institution shall submit, in accordance with the deadline dates established by the Secretary, through publication in the Federal Register, other reports and information the Secretary requires and shall comply with the procedures the Secretary finds necessary to ensure that the reports are correct. According to the Federal Register (Volume 83, Number 233): An institution must submit Pell Grant, Iraq and Afghanistan Service Grant, Direct Loan, and TEACH Grant disbursement records to COD, no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. In accordance with 34 CFR 668.164(a), title IV, Higher Education Act (?HEA?) program funds are disbursed on the date that the institution: (a) Credits those funds to a student?s account in the institution?s general ledger or any subledger of the general ledger; or (b) pays those funds to a student directly. Title IV, HEA program funds are disbursed even if an institution uses its own funds in advance of receiving program funds from the Department. Condition Federal regulations require the Colleges to report to the Federal Government?s Common Origination and Disbursement System (?COD?) Federal Pell Grant and Direct Loan disbursements made to students within fifteen days of the funds being disbursed to the student. During our testing, we noted five students, out of a sample of forty, who were not reported within the required timeframe by a range of two to twenty-nine days. Cause The College did not have procedures in place to ensure these students were being reported within the required timeframe. Effect The Colleges did not report disbursements to the COD within the required time frame. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the forty students selected for testing, five students, or 12.5% of our sample, was determined to be reported late to the COD by a range of two to twenty-nine days. Identification as a Repeat Finding, if applicable 2019-002 Recommendation We recommend that management of the Colleges review, and if necessary, update the policies and procedures to ensure all Pell Grant funds and Direct Loans are reported within the required timeframe. View of Responsible Officials The Colleges agrees with the finding.

Finding number: 2020-003 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #: 84.007, 84.033, 84.038, 84.063, 84.268 Award year: 2020 Criteria According to 34 CFR 668.22(e)(4): Total amount of unearned title IV assistance to be returned. The unearned amount of title IV assistance to be returned is calculated by subtracting the amount of title IV assistance earned by the student as calculated under paragraph (e)(1) of this section from the amount of title IV aid that was disbursed to the student as of the date of the institution's determination that the student withdrew. Condition The Financial Aid Office is responsible for completing the Return of Title IV calculation to determine how much Title IV aid the student earned and how much must be returned to the Department of Education. Once the Return of Title IV calculation is completed, the Colleges are responsible for adjusting the student?s billing statement and returning unearned Title IV funds through the U.S. Department of Education?s Grant Management System (?G5?). The Colleges have 45 days from the date they determined the student withdrew to return any unearned portions of Title IV funds. During our testing, we noted four students, out of a sample of forty, where the Return to Title IV (?R2T4?) form was not calculated correctly. Cause The Colleges did not have procedures in place to ensure the correct amount was calculated on the R2T4 form. Effect The Colleges did not return the correct amount of Title IV funds to the Department of Education. Questioned Costs $1,278 Perspective Our sample was not, and was not intended to be, statistically valid. Of the forty students selected for testing, four students, or 10% of our sample, had the incorrect amount of Title IV funds returned. Identification as a Repeat Finding, if applicable 2019-003 Recommendation The Colleges should review their current policies and procedures to ensure the R2T4 form is calculated correctly. View of Responsible Officials The Colleges agree with the finding.

Finding number: 2020-004 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #: 84.007, 84.033, 84.038, 84.063, 84.268 Award year: 2020 Criteria According to 34 CFR 668.164(l): (1) Notwithstanding any State law (such as a law that allows funds to escheat to the State), an institution must return to the Secretary any title IV, Higher Education Act (?HEA?) program funds, except Federal Work Study (?FWS?) program funds, that it attempts to disburse directly to a student or parent that are not received by the student or parent. For FWS program funds, the institution is required to return only the Federal portion of the payroll disbursement. (2) If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Secretary before the end of this 45-day period. (3) If a check sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued the check. Condition Federal regulations require an institution to return unclaimed Title IV funds issued by check or EFT within 240 days. During our testing, we noted two students, out of a sample of forty, that had unclaimed funds exceeding the federal day limit by 130 and 25 days. Cause The Colleges did not monitor the outstanding check aging to ensure that the 240-day timeframe was met. Effect The Colleges did not return Title IV unclaimed funds to the Department of Education within the required 240-day time frame. Questioned Costs There were two outstanding checks that totaled $4,832, which pertained specifically to federal-sourced funds. Perspective Our sample was not, and was not intended to be, statistically valid. Of the forty students selected for testing, two students, or 5% of our sample, had unclaimed funds pertaining to federal sources that were not returned to the Department of Education within the 240-day required time frame. Identification as a Repeat Finding, if applicable N/A Recommendation The Colleges should examine its policies and procedures related to unclaimed funds including the process and time frame for identifying aged balances and the process for cancelling checks and returning funds to the Department of Education. View of Responsible Officials The Colleges agree with the finding.

Finding number: 2019-001 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #: 84.007, 84.033, 84.038, 84.063, 84.268 Award year: 2019 Criteria According to 34 CFR 685.309(b)(2): Unless [the institution] 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 ? (i) A loan under title IV of the Act was made to or on behalf of a student who was enrolled or accepted for 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; or (ii) A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address. The Dear Colleague Letter GEN-12-6 issued by the U.S. Department of Education (?ED?) on March 30, 2012 states that in addition to student loan borrowers, Enrollment Reporting files will include two additional groups of students: Pell Grant and Perkins Loan recipients. According to 2 CFR Part 200, Appendix XI Compliance Supplement updated June 2019: Under the Pell Grant and loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway mailboxes sent by ED via the National Student Loan Data System (?NSLDS?). The institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days. Once received, the institution must update for changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and submit the changes electronically through the batch method or the NSLDS website. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition The Federal Government requires the Colleges to report student enrollment changes to the National Student Loan Data System (?NSLDS?) within 60 days. During our testing, we noted three students, out of a sample of forty, that had incorrect effective dates reported to NSLDS. Cause The Colleges did not have adequate procedures in place to ensure that students with status changes had their effective date correctly reported to NSLDS. Effect The Colleges did not report the students correct effective dates to NSLDS, which may impact the students? loan grace periods. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the forty students selected for testing, three students, or 8% of our sample, had incorrect effective dates reported to NSLDS. Identification as a Repeat Finding, if applicable See finding 2018-001 included in the summary schedule of prior year findings. Recommendation We recommend that management review its control procedures for reporting student financial aid data to the NSLDS to ensure proper controls are in place to ensure that all information is reported in a timely manner View of Responsible Officials The Colleges agrees with the finding.

Finding number: 2019-002 Federal agency: U.S. Department of Education Programs: Federal Pell Grants CFDA #: 84.063 Award year: 2019 Criteria According to 34 CFR 690.83(b) (1) An institution shall report to the Secretary any change for which a student qualifies including any related Payment Data changes by submitting to the Secretary the student?s Payment Data that discloses the basis and result of the change in award for each student. The institution shall submit the student?s Payment Data reporting any to the Secretary by the reporting deadlines published by the Secretary in the Federal Register. (2) An institution shall submit, in accordance with the deadline dates established by the Secretary, through publication in the Federal Register, other reports and information the Secretary requires and shall comply with the procedures the Secretary finds necessary to ensure that the reports are correct. According to the Federal Register (Volume 83, Number 233): An institution must submit Pell Grant, Iraq and Afghanistan Service Grant, Direct Loan, and TEACH Grant disbursement records to COD, no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. In accordance with 34 CFR 668.164(a), title IV, Higher Education Act (?HEA?) program funds are disbursed on the date that the institution: (a) Credits those funds to a student?s account in the institution?s general ledger or any subledger of the general ledger; or (b) pays those funds to a student directly. Title IV, HEA program funds are disbursed even if an institution uses its own funds in advance of receiving program funds from the Department. Condition Federal regulations require the Colleges to report to the Federal Government?s Common Origination and Disbursement System (?COD?) Federal Pell Grant disbursements made to students within fifteen days of the funds being disbursed to the student. During our testing, we noted seven students, out of a sample of forty, were not reported within the required timeframe by a range of four to fifty-seven days. Cause The Colleges were relying on a report from their reporting software to identify if the disbursement were reported to COD correctly and in a timely manner. The outputs of this report that the Colleges were relying on in order to ensure disbursements were reported correctly and in a timely manner was delivering incorrect information. As a result, these students not being reported within the required timeframe. Effect The Colleges did not report Pell Grant disbursements to COD within the required time frame. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the forty students selected for testing, seven students, or 18% of our sample, was determined to be reported late to the COD by a range of four to fifty-seven days. Identification as a Repeat Finding, if applicable N/A Recommendation We recommend that management of the Colleges review, and if necessary, update the policies and procedures to ensure all Pell Grant funds are reported within the required timeframe. View of Responsible Officials The Colleges agrees with the finding.

Finding number: 2019-003 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #: 84.268 Award year: 2019 Criteria According to 34 CFR 668.22(e)(4): Total amount of unearned title IV assistance to be returned. The unearned amount of title IV assistance to be returned is calculated by subtracting the amount of title IV assistance earned by the student as calculated under paragraph (e)(1) of this section from the amount of title IV aid that was disbursed to the student as of the date of the institution's determination that the student withdrew. Condition The Financial Aid Office is responsible for completing the Return of Title IV calculation to determine how much Title IV aid the student earned and how much must be returned to the Department of Education. Once the Return of Title IV calculation is completed, the Colleges are responsible for adjusting the student?s billing statement and returning unearned Title IV funds through the U.S. Department of Education?s Grant Management System (?G5?). The Colleges have 45 days from the date they determined the student withdrew to return any unearned portions of Title IV funds. During our testing, we noted one student, out of a sample of forty, where the aid returned was different than the amount correctly calculated on the Return to Title IV (?R2T4?) form. Cause The Colleges did not have procedures in place to ensure the refunded amount calculated per the R2T4 matched the actual aid returned. Effect The Colleges did not return the correct amount of Title IV funds to the Department of Education. Questioned Costs $193 Perspective Our sample was not, and was not intended to be, statistically valid. Of the forty students selected for testing, one student, or 3% of our sample, had the incorrect amount of Title IV funds returned. Identification as a Repeat Finding, if applicable N/A Recommendation The Colleges should review their current policies and procedures to ensure the amount of federal aid returned agrees with the amount calculated on the R2T4 form. View of Responsible Officials The Colleges agrees with the finding.

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