SALEM STATE UNIVERSITYHigher Education

Finding number: 2025-001 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster AL #: 84.063 and 84.268 Award year: 2025 Criteria The Code of Federal Regulations, consisting of 2 CFR 200.303, 34 CFR 685.309, and 34 CFR 690.83(b)(2), requires that enrollment status changes for students be reported to NSLDS within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. Additionally, schools are required to certify enrollment at a minimum of every 60 days or every other month. Condition During our testing of NSLDS Enrollment Reporting for Salem State University, we noted 1 of the 40 students tested had a status change received by NSLDS outside of the 60-day reporting time frame. Cause The University’s Registrar was not made aware of the student’s status change in a timely manner by the student’s academic advisor. As a result, the student’s change in status was delayed in reporting to NSLDS. The University’s policies and procedures were not properly followed to ensure that student status changes were timely reported to NSLDS. Effect The NSLDS system is not updated with the student information which can cause over-awarding should the student transfer to another institution and the student may not properly enter the repayment period. Questioned Costs N/A 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, had a change in status reported outside of the 60-day reporting time frame. Identification as a Repeat Finding, if applicable N/A Recommendation The University should review their reporting procedures to ensure that students’ statuses are timely reported to NSLDS as required by Federal regulations. View of Responsible Officials The University agrees with the finding. This issue was the result of human error, as established procedures were not followed in which a student withdrawal was not forwarded to the Registrar’s Office, preventing timely reporting to NSLDS. The student’s official withdrawal request was not transmitted by the office responsible for approving student leaves and withdrawals to the Registrar’s Office for processing, resulting in the absence of the required enrollment update in the student information system.

Finding number: 2024-001 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster AL #: 84.063 and 84.268 Award year: 2024 Criteria According to 34 CFR 668.22(e): When a recipient of title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of title IV grant or loan assistance that the student earned as of the student's withdrawal date equal to the percentage of the payment period or period of enrollment that the student completed as of the student's withdrawal date, if this date occurs on or before - (A) Completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours; or (B) Sixty percent of the clock hours scheduled to be completed for the payment period or period of enrollment for a program that is measured in clock hours. Condition Federal regulations state that 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 2 students, out of a sample of 40, where the Return of Title IV calculation was calculated incorrectly. SALEM STATE UNIVERSITY (an Agency of the Commonwealth of Massachusetts) Schedule of Findings and Questioned Costs Year Ended June 30, 2024 Cause The University has policies and procedures in place to perform this calculation for all students who withdraw. However, in the above instances when completing the R2T4 calculation, the University made calculation errors with one student having the incorrect number of earned days in the semester and the second student having the incorrect amount of disbursed aid used in their R2T4 calculation. Effect The University 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 $192 Perspective Our sample was not, and was not intended to be, statistically valid. Of the 40 students selected for testing, 2 students, or 5% of our sample, had returns of Title IV funds that were miscalculated. Identification as a Repeat Finding, if applicable Not applicable Recommendation The University 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 University agrees with the finding. All questioned costs were returned by the University in October 2024.

Finding number: 2021-001

Finding number: 2020-001 Federal agency: U.S. Department of Education Program: Federal Work-Study Program CFDA #: 84.033 Award year: 2020 Criteria According to 34 CFR 675.19(a): The institution must establish and maintain program and fiscal records that include a certification by the student's supervisor, an official of the institution, or off-campus agency, that each student has worked and earned the amount being paid. The certification must include or be supported by, for the students paid on an hourly basis, a time record showing the hours each student worked in clock time sequence, or the total hours worked per day. The 2019-2020 Federal Student Aid Handbook (Vol. 6, Pg. 46) states: In general, students are not permitted to work in Federal Work-Study positions during scheduled class times. Exceptions are permitted if the individual class is cancelled, if the instructor has excused the student from attending for a particular day, and if the student is receiving credit for employment in an internship, externship, or community work-study experience. Any such exemptions must be documented. Condition Federal regulations require an institution to monitor and ensure that a work-study student is not working during his/her designated class time. Out of a sample of seven students, we noted one student who worked during class time. Cause Our procedures disclosed that, although the University has policies and procedures to ensure students were not working during class time, there was an occurrence in which the University failed to identify an instance where a student's work schedule conflicted with their class schedule. Effect A student's reported time sheet conflicted with their class schedule. As a result of this scheduling conflict, the student either did not attend class or was not present during the documented time period for which they were paid Federal Work-Study wages. Questioned Costs Not applicable Perspective Our sample was not, and was not intended to be, statistically valid. Of seven students selected for testing, one student, or approximately 14% of our sample, was determined to have worked during class time. Identification as a Repeat Finding, if applicable N/A Recommendation We recommend that management of the University review, and if necessary, update the policies and procedures to ensure all Federal Work-Study supervisors are monitoring students' work time to ensure that it does not conflict with their class schedules. These policies should also be revisited and reinforced with those in charge of monitoring the students' Federal Work-Study time. View of Responsible Officials The University agrees with the finding. The University has reviewed and revisited its policies and procedures related to this finding.

Finding number: 2020-002 Federal agency: U.S. Department of Education Programs: Student Financial Assistance Cluster CFDA #: 84.063 Award year: 2020 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 University 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 2 students, out of a sample of 25, had unearned Title IV aid that was not returned to the Federal Government, within 45 days of the determined withdrawal date, by 130 days. The total amount to return was $4,681. Cause The University 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 primarily due to the University?s turnover to a new staff and transition to remote work. Effect The University did not return unearned Title IV funds within the required 45-day time frame. Questioned Costs None - Funds have been returned. Perspective Our sample was not, and was not intended to be, statistically valid. Of the 25 students selected for testing, 2 students, or 8% 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 See finding 2019-001 included in the summary schedule of prior year findings. Recommendation The University 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 University agrees with the finding and has returned the funds. The University has reviewed and revisited its policies and procedures related to this finding.

Criteria According to 34 C.F.R. Section 668.22(j)(1): An institution must return the amount of Title IV funds from which it is responsible as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew. Condition 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 academic institution is responsible for the calculation of the earned and unearned portion of Title IV assistance using a standard Return of Title IV Funds form (?R2T4?). In our testing sample of twenty-five students who were determined to have withdrawn from the University, we noted two students for whom funds were not returned within the required 45 days. Our audit disclosed that the funds were not returned until 35 and 40 days after the 45-day disbursement timeframe. The total amount to return was $6,011. Cause During the Spring 2019 semester the University discovered the academic calendar set-up within the software used to calculate the earned portion of federal aid for withdrawn students was using an incorrect number of days for spring break. The University corrected this error within its system and proceeded to review all previously completed R2T4 forms in order to return the correct aid within the 45-day limit. During this time the two students above were incorrectly marked as completed and the error was not realized by the school until the 45-day disbursement timeframe has passed. Effect The University did not complete the R2T4 Form or return the unearned portion of aid within the established time frame. Questioned Costs None - Funds have been returned. Perspective Our sample was not, and was not intended to be, statistically valid. Of twenty-five students selected for testing, aid for two students (8%) was not returned within the required 45 days. Identification as a Repeat Finding, if applicable See finding 2018-001 included in Management?s Summary Schedule of Prior Audit Findings. Recommendation The University should review their current procedures to ensure students who withdraw from the University have the appropriate Title IV aid returned within the established timeframe described above. Views of Responsible Officials and Implementation Dates The University agrees with this finding. The financial aid office is now using a two-step review to verify accuracy in all calendar functions. The first review is performed between financial aid and registrar during annual system set up and the second review is performed by R2T4 staff at the start of each term. The first review for 2019-20 academic year was completed upon discovery of the error noted in this finding and the second review task was performed prior to the start of the Fall 2019 term. These steps will be repeated prior to each term moving forward.

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 1 student, out of a sample of 10, that had unclaimed funds exceeding the federal day limit. Cause During the audit it was noted this student?s outstanding refund check had been omitted from the outstanding listing of outstanding Federal refund checks the University had been monitoring for aging. Effect The University did not return Title IV unclaimed funds to the Department of Education within the required 240-day time frame. Questioned Costs There was 1 outstanding check totaled $1,671, which pertained specifically to federal-sourced funds. Perspective Our sample was not, and was not intended to be, statistically valid. Of the 10 students selected for testing, 1 student, or 10% 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 Not applicable Recommendation The University 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. Views of Responsible Officials and Implementation Dates The University agrees with this finding and has returned these funds. The University has reviewed and revised its policies and procedures related to unclaimed funds.

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