Pace University

Research and Development Cluster – various ALNs Statistically valid sample: No, and it was not intended to be. Repeat finding: Not a repeat finding. Compliance Requirement – Equipment and Real Property Management – Material Weakness and Material Noncompliance Criteria Non federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that: (a) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). (b) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years (2 CFR section 200.313(d)(2)). (c) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated (2 CFR section 200.313(d)(3)). Condition and Context There were several matters noted. First, there was no evidence that the University conducted a physical inventory of its federal equipment in the past two years. The value of equipment related to the Research and Development Cluster is $1,141,319 at June 30, 2025. Second, we selected seven pieces of equipment out of thirty one pieces of equipment that existed at June 30, 2025. While the property records included all the required elements, three of the pieces were not properly tagged. Cause Management was not aware of the two-year physical inventory compliance requirement over federally purchased equipment. Management incorrectly noted that the requirement was once every three years, resulting in non-compliance. Effect The equipment purchased with federal funds may not be properly safeguarded. Questioned Costs There were no questioned costs related to this finding. Recommendation We recommend that the University strengthen its policies and procedures over equipment, including adding procedures to perform the physical inventory at least once every two years, timely tagging equipment upon the purchase of equipment with federal funds, and properly reviewing and reconciling equipment records with the results of the inventory. Views of Responsible Official Management agrees with the recommendation. Management is currently in the process of conducting a full physical inventory of equipment purchased using federal funds that have a net book value greater than zero in accordance with 2 CFR sections 200.313(c) through (e). The inventory process will be reviewed by management to ensure timely, accurate completion. Going forward, the University will tag all new assets acquired using federal funds. In addition, a revised policy has been established relating to an annual physical inventory of federally purchased equipment to facilitate compliance and increase related inventory controls. The revised policy includes, among other details, standard requirements for inventory tagging and related monitoring.

2022-001 Noncompliance: Special Tests and Provisions ? Disbursements to or on Behalf of Students Federal Program: Student Financial Assistance Cluster: Federal Direct Loan Program (ALN 84.268) Federal Agency: U.S. Department of Education Federal Award Year: July 1, 2021 to June 30, 2022 Statistically Valid Sample: No, and it was not intended to be Criteria: The institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student?s right, or parent?s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The notification requirement for loan funds applies only if the funds are disbursed by EFT payment or master check (34 CFR 668.165). Institutions that implement an affirmative confirmation process (as described in 34 CFR 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student?s account at the institution with Direct Loan or TEACH Grants. Institutions that do not implement an affirmative confirmation process must notify a student no earlier than 30 days before, but no later than seven days after, crediting the student?s account and must give the student 30 days (instead of 14) to cancel all or part of the loan. Condition and Context: We tested a sample of 40 disbursements to students who received funds from the Federal Direct Loan Program in fiscal year 2022. For three samples selected, the University did not notify the student or parent as required by 34 CFR 668.165. The notifications for these three samples were sent within 11-18 days after the required 30-day timeframe. Cause and Effect/Potential Effect The notification in accordance with 34 CFR 668.165 provided the borrower with the date and amount of the disbursement, the borrower?s right to cancel the loan, and date by which the borrower must notify the University if they want to cancel the loan. As a result of competing priorities during the Fall 2021 semester, the established process of internal controls was not followed, resulting in the delayed notice to students. The University became aware of the issue during December 2021 and corrected the matter before the Spring 2022 semester. Questioned Costs There are no known questioned costs related to this finding. Repeat Finding No. Recommendation We recommend that management review its current policies and procedures to notify students and parents regarding loan disbursement to ensure timely notification of disbursements in accordance with the compliance requirement. Views of Responsible Officials The Financial Aid directors have been on a path to automate a number of processes, including the Notification of Federal Loan Disbursement. To assist in streamlining our processes and improving the overall student experience, the University has engaged the services of an outside consultant, CampusWorks, on a two-year contract, which commenced on October 18, 2022, to work with relevant Pace personnel on Enterprise Systems modernization. Although this delay in notification is for an isolated time period, the Notification of Disbursement process has been automated as of February 23, 2023, and notifications will be released systematically on a regular schedule, in line with federal guidelines.

2019-001 ? Enrollment Reporting ? Significant Deficency Federal Program: Student Financial Assistance Cluster Grant CFDA numbers: Federal Pell Grant Program (84.063) and Federal Direct Loan Program (84.268) Federal Agency: U.S. Department of Education Federal Award Year: July 1, 2018 to June 30, 2019 Criteria: With respect to Pell and Direct Loan Programs, 34 CFR Section 685.309 specifies that an institution is responsible for notifying the lender or guaranty agency of changes in a student?s enrollment status. Unless that school expects to complete its next enrollment reporting roster within 60 days, the school must notify the lender or guaranty agency within 30 days, if it discovers that a student who received a grant or a loan under Title IV of the Act either did not enroll or ceased to be enrolled on at least a half-time basis. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. In addition, 2 CFR 200.303 requires non-Federal entities to, among other things, 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. Effective internal controls should include establishing procedures to ensure student enrollment status changes are accurately and timely reported to NSLDS. Condition and Context The University submits student status information to the National Student Clearinghouse (NSC) for submission to the National Student Loan Data System (NSLDS). Out of a sample of forty students, we noted seven students whose status changes were not received by NSLDS within the required time frame. The reporting ranged from 24 to 218 days late, including 2 instances where status changes were reported to NSLDS during our fieldwork in February 2020. The sample was not intended to be, and was not, a statistically valid sample. Cause and Effect: The University?s policies and procedures to ensure compliance with the above requirement did not include certain internal controls that were designed properly and operating effectively to ensure that the student status change information was reported accurately to the NSLDS and within the required timeframe. Questioned Costs: Questioned costs related to this finding, if any, are unable to be determined. Repeat Finding: No Recommendation: We recommend that the University review and strengthen its internal controls and procedures for reporting student status changes to ensure that student status changes are reported to NSLDS within the required timeframe.

2019-002 ? Inventory ? Significant Deficiency Federal Program: Research and Development Cluster Federal Agencies (Grant CFDA numbers)" National Institutes of Health (93.173 and 93.859), National Science Foundation (47.049, 47.074, and 47.076) Federal Award Year: Various Criteria: 2 CFR section 200.313(d)(2), states that a physical inventory of property acquired in whole or in part under a Federal award, must be taken and the results reconciled with the property records at least once every 2 years. In addition, 2 CFR 200.303 requires non-Federal entities to, among other things, 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. Effective internal controls should include establishing procedures to ensure that a physical inventory of property be taken and the results reconciled with the property records at least once every 2 years. Condition, Context, Cause and Effect: We noted, that for only the CFDA numbers indicated above, the University has property acquired under Federal awards and, while management maintains a listing of these 19 fixed assets (with an original cost and net book value of $669,691 and $247,268, respectively), the required 2 year physical inventory count of the property did not occur. The internal control relating to the physical inventory count was not operating effectively. This was the result of a misunderstanding by the grants manager, whereby the last physical inventory count of these assets was performed in June 2017. Accordingly, the University did not comply with 2 CFR section 200.313(d)(2). Management conducted the physical inventory in December 2019 and January 2020, and the listing was reconciled to the University?s property records. Questioned Costs: There were no questioned costs noted. Repeat Finding: No Recommendation: We recommend that University management follows the University policy whereby the physical inventory count is performed and the results reconciled with the property records of the University at least every 2 years as required by 2 CFR section 200.313(d)(2).