LOS ANGELES ORT TECHNICAL INSTITUTE

FINDING: 2020-001 SAS RECONCILIATIONS Federal Agency / Federal Program: U.S. Department of Education / Student Financial Assistance Subject: Special Tests and Provisions CFDA Number: Federal Direct Loan Program - 84.268 Questioned Costs: N/A Type of Finding: Material Weakness in Compliance and Internal Control Perspective Information: Repeat finding: Yes (2019-001) Systemic finding: Yes Criteria Each month, the COD provides institutions with a School Account Statement (SAS) data file which consists of a Cash Summary, Cash Detail, and (optional at the request of the school) Loan Detail records. The school is required to reconcile these files to the institution's financial records. Condition The School did not provide the monthly reconciliations. Cause The School had relied on a staff member who failed to provide the reconciliations even though it appeared they were performed. The employee had subsequently resigned and as such the School was unable to locate any reconciliations. Effect The school was unable to demonstrate that the records were reconciled and as such lacked the ability to show the School?s financial records matched the actual disbursement records submitted to COD. Recommendation The school needs to reconstruct its files and perform the necessary reconciliations to ensure all records reconcile. Views of Responsible Officials See attached Corrective Action Plan as prepared by Management

FINDING: 2020-002 ENROLLMENT REPORTING Federal Agency / Federal Program: U.S. Department of Education / Student Financial Assistance Subject: Special Tests and Provisions CFDA Number: Federal Direct Loan Program - 84.268 Federal Pell Grant Program ? 84.063 Questioned Costs: N/A Type of Finding: Material Weakness in Compliance and Internal Control Perspective Information: Repeat finding: Yes (2019-002) Systemic finding: Yes Criteria A school must report changes in the students? enrollment status to NSLDS within 60 days Condition The School did not provide adequate documentation demonstrating the change in statuses for 20 graduates, dropped and LOA students tested were done correctly. Cause The School had relied on a staff member to provide the documentation. The employee had subsequently resigned and as such, the School was unable to locate the proper documentation. Effect The school was unable to demonstrate that the changes in student statuses were updated accurately. Recommendation The school must hire and or train other staff that is able to perform the enrollment reporting accurately and timely. Views of Responsible Officials See attached Corrective Action Plan as prepared by Management.

FINDING: 2020-003 COD Reporting Federal Agency / Federal Program: U.S. Department of Education / Student Financial Assistance Subject: Reporting CFDA Number: Federal Direct Loan Program - 84.268 Federal Pell Grant Program ? 84.063 Questioned Costs: N/A Type of Finding: Material weakness in Compliance and Internal Control Perspective Information: Repeat finding: Yes (2019-03) Systemic finding: Yes Criteria A school must match the COD Disbursement dates with the students? ledger cards. Condition The School did not provide adequate documentation demonstrating the COD Disbursement dates matched the student ledger cards for 22 students. Cause The School had relied on a staff member to provide the documentation. The employee had subsequently resigned and as such, the School was unable to locate the proper documentation. Effect The school was unable to demonstrate that the COD Disbursement dates matched the student ledger cards. Recommendation The school must hire and or train other staff that is able to demonstrate that the COD Disbursement dates matched the student ledger cards. Views of Responsible Officials See attached Corrective Action Plan as prepared by Management.

FINDING: 2020-004 The Gramm-Leach-Bliley Act Federal Agency / Federal Program: U.S. Department of Education / Student Financial Assistance Subject: Special Tests and Provisions CFDA Number: Various Questioned Costs: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Perspective Information: Repeat finding: Yes (2019-004) Systemic finding: Yes Criteria The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314). Under an institution's Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. (16 CFR 314.3; HEA 483(a)(3)(E) and HEA 485B(d)(2)). The Institution must designate an individual to coordinate the information security program, perform a risk assessment that addresses the three areas noted in 16 CFR 314.4 (b) and document safeguards for identified risks. Condition The School did not provide necessary documentation demonstrating the School has designated and individual to coordinate the information security. The School did not provide a risk assessment of the three areas noted in 16 CFR 314.4 (b) and safeguards for those identified risks. Cause The School had relied on a staff member who failed to document the necessary information. Although the School treats student personal information seriously, they did not perform necessary tasks as required by the Gramm-Leach-Bliley Act. Effect The student personal information could be vulnerable. Recommendation The school should designate an individual to perform the risk assessment for the three areas required by the Gramm-Leach-Bliley Act and ensure that there are documented safeguards for identified risks. Views of Responsible Officials See attached Corrective Action Plan as prepared by Management.

FINDING: 2019-001 SAS RECONCILATIONS Federal Agency / Federal Program: U.S. Department of Education / Student Financial Aid Subject: Special Tests and Provisions CFDA Number: Federal Direct Loan Program - 84.268 Questioned Costs: N/A Type of Finding: Material Weakness in Compliance and Internal Control Perspective Information: Repeat finding: No Systemic finding: Yes Criteria Each month, the COD provides institutions with a School Account Statement (SAS) data file which consists of a Cash Summary, Cash Detail, and (optional at the request of the school) Loan Detail records. The school is required to reconcile these files to the institution's financial records. Condition The School did not provide the monthly reconciliations. Cause The School had relied on a staff member who failed to provide the reconciliations even though it appeared they were performed. The employee had subsequently resigned and as such the School was unable to locate any reconciliations. Effect The school was unable to demonstrate that the records were reconciled and as such lacked the ability to show the School?s financial records matched the actual disbursement records submitted to COD. Recommendation The school needs to reconstruct its files and perform the necessary reconciliations to ensure all records reconcile. Views of Responsible Officials The School has indicated to us that it will hire a professional to reconcile all accounts to federal reports and the School?s records. See School?s correction action plan attached.

FINDING: 2019-002 ENROLLMENT REPROTING Federal Agency / Federal Program: U.S. Department of Education / Student Financial Aid Subject: Special Tests and Provisions CFDA Number: Federal Direct Loan Program - 84.268 Federal Pell Grant Program ? 84.063 Questioned Costs: N/A Type of Finding: Material Weakness in Compliance and Internal Control Perspective Information: Repeat finding: Yes (2018:003) Systemic finding: Yes Criteria A school must report changes in the students? enrollment status to NSLDS within 60 days Condition The School did not provide access or documentation demonstrating the change in statuses for the 58 graduates, dropped and LOA students tested. Cause The School had relied on a staff member to provide the documentation. The employee had subsequently resigned and as such, the School was unable to locate the proper documentation. Effect The school was unable to demonstrate that the changes in student statuses were updated accurately and timely. Recommendation The school must hire and or train other staff that is able to perform the enrollment reporting accurately and timely. Views of Responsible Officials The School has indicated to us that it will train and or hire a professional to perform the enrollment reporting accurately and timely. See School?s correction action plan attached.

FINDING: 2019-003 Federal Agency / Federal Program: U.S. Department of Education / Student Financial Aid Subject: Reporting CFDA Number: Federal Direct Loan Program - 84.268 Federal Pell Grant Program ? 84.063 Questioned Costs: N/A Type of Finding: Material weakness in Compliance and Internal Control Perspective Information: Repeat finding: Yes (2018:002) Systemic finding: Yes Criteria A school must match the COD Disbursement dates with the students? ledger cards Condition The School did not provide access or documentation demonstrating the COD Disbursement dates matched the student ledger cards Cause The School had relied on a staff member to provide the documentation. The employee had subsequently resigned and as such, the School was unable to locate the proper documentation. Effect The school was unable to demonstrate that the COD Disbursement dates matched the student ledger cards Recommendation The school must hire and or train other staff that is able to demonstrate that the COD Disbursement dates matched the student ledger cards Views of Responsible Officials The School has indicated to us that it will train and or hire a professional to demonstrate that the COD Disbursement dates matched the student ledger cards. See School?s correction action plan attached.

FINDING: 2019-004 The Gramm-Leach-Bliley Act Federal Agency / Federal Program: U.S. Department of Education / Student Financial Aid Subject: Special Tests and Provisions CFDA Number: Student Financial Aid Cluster Questioned Costs: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Other Matters Perspective Information: Repeat finding: No Systemic finding: Yes Criteria The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314). Under an institution's Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. (16 CFR 314.3; HEA 483(a)(3)(E) and HEA 485B(d)(2)). The Institution must designate an individual to coordinate the information security program, perform a risk assessment that addresses the three areas noted in 16 CFR 314.4 (b) and document safeguards for identified risks. Condition The School did not provide necessary documentation demonstrating the School has designated and individual to coordinate the information security. The School did not provide a risk assessment of the three areas noted in 16 CFR 314.4 (b) and safeguards for those identified risks. Cause The School had relied on a staff member who failed to document the necessary information. Although the School treats student personal information seriously, they did not perform necessary tasks as required by the Gramm-Leach-Bliley Act. Effect The student personal information could be vulnerable. Recommendation The school should designate an individual to perform the risk assessment for the three areas required by the Gramm- Leach-Bliley Act and ensure that there are documented safeguards for identified risks. Views of Responsible Officials The School has indicated to us that it will designate an individual to perform the risk assessment for the three areas required by the Gramm-Leach-Bliley Act and ensure that there are documented safeguards for identified risks.

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