BOSTON ARCHITECTURAL COLLEGEHigher Education

U.S. Department of Education Assistance Listing Number 84.063 Pell Disbursement Process Condition - During the audit, it was identified that 3 out of 19 sampled students were not disbursed the correct PELL award. The sample was not statistically valid. Criteria - According to federal regulations, institutions are required to calculate and disburse PELL Grant award to eligible students based on their Expected Family Contribution (EFC) and enrollment status (i.e., number of credit hours registered). Cause - A system error resulted in the locking of student accounts, which prevented the automated update of disbursements when students' registration status changed. Effect - The College did not properly disburse PELL awards, resulting in either an under or over award to the affected students. Recommendation - We recommend that the College provide training for staff on identifying and resolving registration changes impacting PELL disbursements and enhance monitoring controls to ensure timely and accurate adjustments to students’ disbursements in compliance with federal requirements. Views of Responsible Officials - The College is dedicated to awarding and disbursing all federal awards timely and accurately. A system error resulted in the locking of Pell grant awards which prevented the automated updates of award amounts when students’ registered credits changed. The College has implemented training to all Financial Aid team who award students to not lock any federal aid awards with the system. When reviewing and disbursing there will also be a specific check for locked awards to prevent this going forward.

Condition - During the 2023 audit, it was noted that for one out of five students selected for testing, the student’s change in enrollment status was not uploaded within the required timeframe. Criteria - The federal government requires the College to report student enrollment changes to the National Student Loan Data System (NSLDS) within 60 days. Cause - Human error resulted in a lack of timely reporting of the students change in enrollment status to NSLDS. Effect - The College did not report students status changes to NSLDS within the required timeframe which could impact the students loan grace periods. Recommendation - The College should provide training to employees responsible for processing information for the NSLDS to ensure that they have adequate knowledge of the related rules and regulations. This training should include an explanation of the College’s date of determination, the importance of timely reporting, and the consequences of late reporting. Additionally, submission of additional rosters and a more formalized review and approval process will reduce the likelihood of such findings in the future. Views of Responsible Officials- The Boston Architectural College recognizes the importance of complying with all federal requirements. In this case out of the sample of 40 students one student was reported late to NSLDS. This late reporting was due to human error in processing the status change internally late and therefore missing the next automated upload to NSLDS. Training will be provided to new employees and periodically to ensure reporting is timely. Measures will be put in place to ensure all changes are processed timely, including updating the automatic reporting to capture all potential changes.

Condition - During the 2023 audit, it was noted that for one of forty students selected, the student’s disbursement information was not uploaded within the required timeframe. Criteria - The federal government requires the College to report student disbursement information to the U.S. Department of Education’s Common Origination and Disbursement (COD) website. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. Institutions may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner. Cause - Human error resulted in a lack of timely reporting of the students disbursement information to COD. Effect - The College did not report students status changes to COD within the required timeframe which could impact the Colleges draw down of PELL funds. Recommendation - The College should provide training to employees responsible for processing information for the COD to ensure that they have adequate knowledge of the related rules and regulations. This training should include the importance of timely reporting and the consequences of late reporting. Additionally, a more formalized review and approval process will reduce the likelihood of such findings in the future. Views of Responsible Officials- The one student found with a disbursement reported late to COD was the result of a correction which was posted past the deadline. This was the result of staff turnover in the Financial Aid Office and the use of temporary employees as we began the job search for permanent replacements. Training will be provided going forward to all new employees including, temporary employees.

Finding number: 2022-002 Federal agency: U.S. Department of Education Program: Student Financial Assistance Cluster Assistance Listing #’s 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 July 2021: 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 College 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 twenty, that were not reported to NSLDS within the required timeframe. Cause Human error mistakenly resulted in lack of reporting of three students. Effect The College did not report three students’ status changes to NSLDS within the required timeframe which could impact the students’ loan grace periods.   Questioned Costs N/A Perspective Our sample was not, and was not intended to be, statistically valid. Of twenty students selected for testing, three students, or 15% of our sample, had a status change that was not reported to NSLDS within the required timeframe. Recommendation The College should provide training to employees responsible for processing information for the NSLDS to ensure that they have adequate knowledge of the related rules and regulations. This training should include an explanation of the College’s date of determination, the importance of timely reporting, and the consequences of late reporting. Additionally, submission of additional rosters and a more formalized review and approval process will reduce the likelihood of such findings in the future. Identification as a Repeat Finding, if applicable See finding 2021-001 included in Management’s Summary Schedule of Prior Audit Findings. Views of Responsible Officials Management concurs with the auditor’s finding. Finding number: 2022-002 Federal agency: U.S. Department of Education Program: Student Financial Assistance Cluster Assistance Listing #’s 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 July 2021: 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 College 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 twenty, that were not reported to NSLDS within the required timeframe. Cause Human error mistakenly resulted in lack of reporting of three students. Effect The College did not report three students’ status changes to NSLDS within the required timeframe which could impact the students’ loan grace periods.   Questioned Costs N/A Perspective Our sample was not, and was not intended to be, statistically valid. Of twenty students selected for testing, three students, or 15% of our sample, had a status change that was not reported to NSLDS within the required timeframe. Recommendation The College should provide training to employees responsible for processing information for the NSLDS to ensure that they have adequate knowledge of the related rules and regulations. This training should include an explanation of the College’s date of determination, the importance of timely reporting, and the consequences of late reporting. Additionally, submission of additional rosters and a more formalized review and approval process will reduce the likelihood of such findings in the future. Identification as a Repeat Finding, if applicable See finding 2021-001 included in Management’s Summary Schedule of Prior Audit Findings. Views of Responsible Officials Management concurs with the auditor’s finding.

The Federal Government requires the College to report student enrollment changes to the National Student Loan Data System (?NSLDS?) within 60 days. During our testing, we noted one student, out of a sample of 40, was not reported to NSLDS within the required timeframe and another student out of the same sample with an incorrect reported effective date of withdrawal.

The Federal Government requires that whenever Title IV aid is disbursed on a student?s account, the account must be reviewed to determine if the disbursement caused a credit balance. If the credit balance was caused by Title IV funds, the College must refund the balance directly to the student within 14 days of the disbursement of funds. During our testing, we noted 5 students, out of a sample of 40, that were not refunded credit balances within the required timeframe.

Finding number: 2019-001 Federal agency: U.S. Department of Education Programs: Federal Pell Grant Program CFDA #: 84.063 Award year: 2019 Criteria According to the Federal Register; Volume 83, No. 223: The earliest submission date for actual disbursement information is March 25, 2018, no earlier than: (a) 7 calendar days prior to the disbursement date under the advance payment method or Heighten Cash Monitoring Payment Method 1 (HCM1). (b) The disbursement date under the reimbursement or the Heightened Cash Monitoring Payment Method 2 (HCM2). Condition Federal regulations require the College to disburse to students Federal Pell Grant disbursements reported to the Federal Government?s Common Origination and Disbursement System (?COD?) within 7 days of the funds being reported to the COD. During our testing, we noted 20 student(s), out of a sample of 21, were not reported within the required timeframe with a range of 5 to 12 days late. Cause The College has policies and procedures in place to disburse the funds to the students through the system within the required seven calendar days, however, in this case the procedures were not completed properly. Effect The College did not disburse Pell Grant disbursements to students within the required timeframe. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of the 21 students selected for testing, 20 students, or 95% of our sample, was determined to be reported late to the COD by 5 to 12 days. Identification as a Repeat Finding, if applicable Not applicable Recommendation We recommend that management of the College 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 College agrees with the finding. The College has implemented the voluntary reimbursement method to reduce the risk of this occurring again.

Finding number: 2019-002 Federal agency: U.S. Department of Education Programs: Federal Pell Grants & Federal Direct Student Loans CFDA #: 84.063, 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 College is 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 College has 45 days from the date they determined the student withdrew to return any unearned portions of Title IV funds. During our testing, we noted 1 student, out of a sample of 4, where the aid returned was different than the amount correctly calculated on the Return to Title IV (?R2T4?) form. Cause The College did not ensure that the regulations were met regarding refunding Title IV funds when calculating the amount of aid to be returned. Effect The College did not return the correct amount of Title IV funds to the Department of Education. Questioned Costs $3,860 Perspective Our sample was not, and was not intended to be, statistically valid. Of the 4 students selected for testing, 1 student, or 25% of our sample, had the incorrect amount of Title IV funds returned. Identification as a Repeat Finding, if applicable Not applicable Recommendation The College 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 College agrees with the finding.

Finding number: 2019-003 Federal agency: U.S. Department of Education Program: Federal Direct Student Loans & Federal Pell Grants CFDA #: 84.268, 84.063 Award year: 2019 Criteria According to 34 CFR Section 685.309(b)(2): A school shall, unless it expects to submit its next student status confirmation report to the Secretary within the next sixty days, notify the Secretary within thirty days if it discovers that a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has been made to or on behalf of a student who: i. Enrolled at that school but has ceased to be enrolled on at least a half-time basis; ii. Has been accepted for enrollment at that school but failed to enroll on at least a half-time basis for the period for which the loan was intended; or iii. Has changed his or her permanent address. Condition Of the forty (40) students with enrollment changes selected for test-work, we noted one (1) student whose change in enrollment status was inaccurately transmitted to The National Student Loan Data System ("NSLDS"). The reporting to NSLDS for this student was originally reported as withdrawn within sixty days from the date the College became aware of their enrollment change. However, the student was never subsequently reported to NSLDS as graduated within the sixty-day timeframe. Cause It is the responsibility of the Registrar to submit the enrollment status changes to National Student Clearinghouse ("NSC") and to ensure that controls are in place to submit accurate and timely updates although the College has policies and procedures for transmitting information to the NSC to ensure reporting of all students is done in the correct manner; the Registrar's office did not accurately report the student's enrollment status change. Effect Student enrollment status changes were not reported accurately. 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 roughly 2.5% of our sample, was not reported to NSLDS accurately within the required time frame. Identification as a Repeat Finding, if applicable See finding 2018-001 included in the summary schedule of prior year findings. Recommendation We recommend that the College review its procedures to ensure that all student enrollment changes are reported to NSLDS within the required time frame. Views of Responsible Officials The College agrees with the finding.

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