TRUSTEES OF THE COLLEGE OF THE HOLY CROSSHigher Education

Criteria In accordance with 2 CFR 200.313(c)(1), non-Federal entities must maintain accurate equipment records for all federally acquired equipment. At a minimum, the equipment records must include: • A description of the equipment • A serial number or other identification number • The source of funding for the equipment, including the Federal Award Identification Number (FAIN) • Who holds title • The acquisition date and cost • The location, use, and condition of the equipment • Any ultimate disposition data, including date of disposal and sales price, if applicable In accordance with 2 CFR 200.313(d)(2) requires entities to verify the existence, current utilization, and continued need for federally funded equipment through physical inventories conducted at least once every two years and to reconcile those results with the equipment records. In accordance with 2 CFR 200.303, it is emphasized that entities maintain complete and accurate equipment listings to demonstrate proper safeguarding, tracking, and continued use of equipment acquired under Federal awards Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found We noted that the College does not maintain a complete and accurate equipment listing for federally acquired equipment. Specifically, the equipment listing did not consistently or correctly include all required data elements outlined in 2 CFR 200.313(c). Data elements that were missing from the listing included serial number, the source of funding for the equipment, including the FAIN, and the location. The data element that was incorrectly maintained on the equipment listing was acquisition date and cost as one instance was identified where the cost of acquiring an item on the equipment listing did not agree to the College’s system of record. Additionally, we noted the College does not have a process in place to reconcile the results of the bi-annual inventory count to the property record listing in order to reflect any changes or discrepancies resulting from the count. Cause The condition resulted from the absence of formally documented policies and procedures governing the maintenance and periodic review of the federally acquired equipment listing and the requirement of reconciling the federally acquired equipment to the property record listing after conducting a bi-annual physical inventory count. Also, the College has not implemented controls to ensure that required equipment information is consistently recorded, updated, and reviewed in accordance with Federal regulations. Possible Asserted Effect Failure to maintain a complete and accurate equipment listing can result in federally acquired equipment not being properly tracked, safeguarded, or used in accordance with Federal award requirements. The lack of accurate equipment records increases the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Additionally, the inability to locate equipment, inaccurate equipment records and undetected loss or misuse of federally funded equipment. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College establish and implement formal policies and procedures to ensure that a complete and accurate equipment listing for federally acquired equipment is maintained in accordance with 2 CFR 200.303 and 313. This should include ensuring that all required data elements are recorded, that the listing is periodically reviewed and updated, and that results of physical inventories are reconciled to the equipment records to support compliance with Federal award requirements. Views of Responsible Officials The College acknowledges that the federally acquired equipment listing did not include all required data elements outlined in 2 CFR 200.313(c) and did not reconcile it against the bi-annual physical inventory completed. To mitigate the risk of incomplete equipment records for federally acquired equipment, the College is formalizing policies and procedures to ensure required data elements are recorded and maintained, implementing a periodic review process to update the equipment listing, and establishing a reconciliation process to compare bi-annual physical inventory results to the property records and promptly resolve any discrepancies. These corrective actions are being implemented in fiscal year 2026.

Criteria Non-Federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in Federal assistance programs in accordance with 2 CFR Part 180, as adopted by Federal agencies. Additionally, 2 CFR 200.214 requires non-Federal entities to ensure that Federal awards are not made to parties listed as excluded in the System for Award Management (SAM). The Compliance Supplement further requires non-Federal entities to establish and maintain effective internal controls to provide reasonable assurance that vendors involved in covered transactions under Federal awards are properly screened and verified for eligibility prior to entering into such transactions. Condition The College did not have an updated suspension and debarment policy or established procedures in place to ensure that vendors utilized in federally funded R&D transactions were not suspended, debarred, or otherwise excluded from participation in Federal programs. Although management was able to locate a suspension and debarment policy, management indicated that the policy was outdated and not followed in practice. As a result, the College did not consistently perform or document verification internal control procedures to confirm vendor eligibility through SAM prior to entering into covered transactions under Federal awards during the audit period. There were no instances of noncompliance identified in our sample of 4. Cause The condition occurred because the College did not maintain effective internal controls or current procedures to ensure compliance with Federal suspension and debarment requirements. Specifically, although a policy existed, it was outdated and not implemented in practice. In addition, the College did not establish a formal process to routinely verify and document vendor eligibility for covered transactions under Federal awards. Possible Asserted Affect Failure to establish and maintain effective controls over suspension and debarment may cause the College to enter into transactions with vendors that are suspended, debarred, or otherwise excluded from participation in Federal programs. This condition may result in noncompliance with 2 CFR Part 180, 2 CFR 200.214, and the Procurement, Suspension and Debarment requirements of the OMB Compliance Supplement for the R&D Cluster, and limits the College’s ability to demonstrate compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College update and formally implement its suspension and debarment policy to ensure it is current, aligns with applicable Federal regulations, and is followed in practice. Specifically, the College should establish and document procedures to require verification of vendor eligibility through the System for Award Management (SAM) prior to entering into covered transactions under Federal awards. Additionally, the College should ensure that such verification procedures are performed consistently, documented appropriately, and retained to demonstrate compliance with 2 CFR Part 180, 2 CFR 200.214, and the Procurement, Suspension and Debarment requirements of the OMB Compliance Supplement for the R&D Cluster. Management should also consider periodic monitoring or review of these procedures to ensure ongoing compliance with Federal award requirements. Views of Responsible Officials The College concurs with this finding. To mitigate the risk of entering into covered transactions with suspended or debarred vendors, the College is updating and formalizing its suspension and debarment policy, establishing procedures to require and document SAM verification prior to covered transactions under Federal awards, and implementing periodic monitoring to ensure these procedures are performed consistently. These corrective actions are being implemented in fiscal year 2026.

Criteria Payroll costs charged to Federal awards must be allowable, allocable, and supported by records that accurately reflect the work performed, in accordance with 2 CFR 200.430(i). Non-Federal entities are required to establish and maintain effective internal controls to provide reasonable assurance that payroll charges comply with Federal requirements. Specific requirements for Research and Development involve ensuring payroll costs were reasonable and necessary for performance of the R&D effort identified in the applicable award. Condition The College’s documented control design requires review and approval of employee timesheets (hourly employees) or effort percentage reports (salaried employees) by the Principal Investigator (PI) or an immediate supervisor to evidence that time charged to R&D awards reflects actual work performed. However, this control was not operating effectively, as 18 out of the 40 samples selected lacked evidence of required review. Cause The condition occurred because the College’s designed control requiring PI or direct supervisor review of employee timesheets or effort percentage reports was not operating effectively in practice. While the control was intended to be performed through the Kronos timekeeping system, system and workflow limitations prevented consistent requirement of PI or supervisor approvals within the system during the audit period. Additionally, the College did not have compensating procedures in place to detect or remediate missing required approvals when Kronos approval evidence was not obtained. As a result, the control was not consistently operating for employees charging time to R&D awards. Possible Asserted Affect The lack of Principal Investigator (PI) or supervisor review of timesheets increases the risk that payroll costs charged to Federal Awards may not be supported or reflect actual work performed on the sponsored projects. This condition may result in noncompliance with 2 CFR 200.430(i) and limits the College’s ability to demonstrate that payroll expenditures charged to Federal awards were incurred for allowable activities and in accordance with the terms and conditions of the awards. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College ensure consistent documentation of PI or supervisor review of employee timesheets and/or effort percentage reports charged to Federal R&D awards by formalizing procedures and configuring the timekeeping system to require and retain evidence of approval. The College should also implement monitoring controls to identify missing approvals and ensure compliance with Federal award requirements. Views of Responsible Officials The identified conditions related to timesheets for hourly student employees. To mitigate the risk of missing approval documentation for payroll charged to Federal R&D awards, the College is formalizing procedures requiring PI or supervisor review of applicable timesheets, configuring the approval workflow in Workday to require and retain evidence of approval, and implementing periodic monitoring to identify and correct missing approvals. These corrective actions are being implemented in fiscal year 2026.

Criteria According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via National Student Loan Data System (NSLDS) within 15 days of receipt. An institution determines how often it receives the Enrollment Reporting roster file with the default set at a minimum of every 60 days to ensure attendance changes for students are reported within 60 days of the change. An institution must notify the Secretary of Education if it discovers that 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. Further, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition Found During our audit we found one (1) of forty (40) students selected for testing whose change in enrollment status was not timely transmitted to NSLDS. KPMG notes that for this exception, the College reported the status change 144 days after they became aware of the status change. In addition, we identified two (2) of forty (40) students selected whose enrollment status was incorrectly reported. In all instances, the College reported the student as withdrawn, however, the student had graduated from the College. Possible Asserted Effect Inaccurate and delayed submission of student enrollment status information affects the determinations that lenders and servicers of student loans make related to in-school status, deferments, grace periods, and repayment schedules, as well as the federal government's payment of interest subsidies. Questioned Costs No questioned costs identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This was not a finding in the prior year. Recommendation We recommend that the College review its processes to ensure that all enrollment changes are reported as intended within the required 60-day time frame. The College should work with NSC as needed to ensure proper protocols of transmission to NSLDS occur. Additionally, a review of the submitted enrollment changes to the NSLDS should be performed to ensure current student status is properly reflected. View of College Officials The identified conditions relate to students who graduated off-cycle. To mitigate the risk of future status change reporting issues, the College is implementing an additional monthly review process that will generate a report of students who have separated from the College. This report will be reconciled with student status changes transmitted by the National Student Clearinghouse (NSC) to the National Student Loan Database System (NSLDS), and any necessary corrections will be made immediately. These corrective actions are being implemented in Spring 2025.

Criteria Prior to making a disbursement, the school must notify students of the amount and type of Title IV funds they are expected to receive, and how and when those disbursements will be made (often referred to as an award letter or college financing plan) (34 CFR 668.165(a)(1)). Additionally, Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition During our testwork over disbursements, we identified three (3) instances within our sample of forty (40) disbursements where the federal aid disbursement was credited to the student’s account prior to the College providing the award notification to the student. Each of the exceptions involved off-cycle Direct Loan Program disbursements with notification occurring within a period of two days after the federal aid disbursement was credited to the student’s account. Cause The condition resulted from a delay in the processing of the daily award notification process for certain off-cycle Direct Loan disbursements. Possible Asserted Effect Delayed notification could result in errors in determining a student’s ability to cancel all or a portion of the Direct Loan funds awarded. Additionally, failure to provide the required information in a timely manner in accordance with federal requirements and implement sufficient internal controls to ensure the program is operating effectively resulted in the College’s program being noncompliant with Federal statues, regulations and the terms and conditions of the awards. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the College review and enhance its process related to award notifications to ensure that the notifications are received by students prior to the College disbursing the federal aid to the student’s account. Views of Responsible Officials The College acknowledges that the noted three off-cycle disbursements did not meet the notification requirement. The College has evaluated its current procedures for releasing its financial aid notifications and identified system improvements that will result in notifications being sent prior to the disbursements being processed to ensure all requirements for this program are met. These process and system updates will be implemented before the end of fiscal year 2024.

Criteria According to Federal Register/Vol 94, No. 212, under the Federal Direct loan program, institutions must submit Direct Loan disbursement records to Common Origination and Disbursement (COD), no later than 15 days after making the disbursement or becoming aware of the need to adjust a previously reported disbursement. Further, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with the guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition Found During our audit we found two (2) of forty (40) students selected for testing whose COD disbursements record was not updated within the required 15 days after the Direct Loan disbursement. Cause Management?s process for reviewing the timeliness of the information submitted for the Direct Loan disbursement records did not operate effectively to identify all errors. Possible Asserted Effect The effect of the condition found is that the College may not be reporting Direct Loan disbursements to COD timely. Questioned Costs No questioned costs identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding This was not a finding in the prior year. Recommendation We recommend that the College review its processes to ensure that all Direct Loan disbursements are reported as intended within the required 15-day time frame. View of College Officials The Financial Aid Office at the College of the Holy Cross will evaluate its current policies and procedures for disbursing and reconciling all funds under the Federal Direct Loan Program. This evaluation includes but is not limited to increasing the frequency of reconciling student records and refining of exception reports to ensure that all requirements for this program are met.

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