Rensselaer Polytechnic Institute

Section III – Federal Award Findings and Questioned Costs 2024-001 – Non-compliance with Eligibility and Disbursement Requirements for the Federal Pell Grant Program Grantor: Department of Education Program Name: Federal Pell Grant Program Award Year: 7/1/2023 – 6/30/2024 Award Number: P063P230300 Assistance Listing Number: 84.063 Criteria: Per 34 CFR 690.62(a), “the amount of a student’s Pell Grant for an academic year is based upon the payment and disbursement schedules published by the Secretary for each award year”. Per 34 CFR 690.63(b), “the Federal Pell Grant for a payment period, i.e. an academic term, for a student in a program using standard terms with at least 30 weeks of instructional time in two semesters or trimesters or in three quarters as described in paragraph (a)(1)(ii)(A) of this section, is calculated by – (1) Determining his or her enrollment status for the term; (2) Based upon that enrollment status, determining his or her annual award from the Payment Schedule for full-time students or the Disbursement Schedule for three-quarter-time, half-time, or less-than-half-time students; and (3) Dividing the amount described under paragraph (b)(2) of this section by – (i) Two at institutions using semesters or trimesters or three at institutions using quarters; or (ii) The number of terms over which the institution chooses to distribute the student’s annual award if – (A) An institution chooses to distribute all of the student’s annual award determined under paragraph (b)(2) of this section over more than two terms at institutions using semesters or trimesters or more than three quarters at institutions using quarters; and (B) The number of weeks of instructional time in the terms, including the additional term or terms, equals the weeks of instructional time in the program’s academic year.” Condition: Through testing a sample of 25 students who were awarded and disbursed federal financial aid in accordance with Eligibility and Disbursement compliance requirements as prescribed by the OMB Compliance Supplement, one student selected was awarded and disbursed aid from the Federal Pell Grant Program in excess of what was calculated based on the student’s half-time enrollment status per the Disbursement Schedule for the spring 2024 semester. Cause: The cause of this finding was due to human error when updating the student’s financial aid profile in the student information system, Banner. The student was initially enrolled as a full-time student, the student’s Federal Pell Grant was calculated using full time enrollment and entered into the financial aid package for the semester in Banner. The student dropped to half-time enrollment in the middle of the semester at which point the student’s aid under the Federal Pell Grant was also reduced to reflect the appropriate amount at half-time enrollment. However, towards the end of the semester, the student withdrew entirely prompting a return of Title IV calculation to determine if the student’s financial aid package required adjustment. Upon finalizing review of the Title IV calculation and the student’s updated leave status in the Banner system, the award amount for the Federal Pell Grant was never adjusted to reflect the student’s half-time status. As the awarded amount was never updated, once the student’s financial aid package was locked in the Banner system after the student’s withdrawal, the system automatically disbursed the additional amount of Federal Pell Grant funds to the student’s bursar account. Effect: The student was incorrectly awarded and disbursed aid under the Federal Pell Grant Program in excess of the amount eligible resulting in an overpayment of approximately $1,335. Questioned Costs: $1,335 overpayment of Federal Pell Grant Program Recommendation: We recommend the Institute provide additional training to individuals involved in the process to ensure changes made to financial aid packages are appropriate and in accordance with requirements. Additionally, we recommend the Institute enhance its existing controls regarding the reconciliation of student financial records to the Department of Education’s Common Origination and Disbursement system. Management’s Views and Corrective Action Plan: Management’s response is included in “Management’s Views and Corrective Action Plan” included on the report.

Grantor: Department of Homeland Security Pass-through Entity: New York State Office of Emergency Management Program Name: COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Award Year: 07/2022 - 06/2023 Award Number: PA-02-NY-4480-PW-00788 Assistance Listing Number: 97.036 Criteria: Per the Federal Emergency Management Agency’s (“FEMA”) Public Assistance Program, nonfederal entities must record expenditures on the Schedule of Expenditures of Federal Awards (“SEFA”) when (1) FEMA has approved the nonfederal entity’s project worksheet, and (2) the nonfederal entity has incurred the eligible expenditures. Condition: Through testing of the FEMA program in the 2023 Uniform Guidance audit, we noted $619,653 of funds from this program, that were obligated in fiscal 2022 and included in the 2023 SEFA that should have been included in the 2022 SEFA. On the 2022 SEFA, management did not record any reimbursement for awards approved by FEMA. Cause: The cause of this finding was due to incorrect understanding of the reporting requirements related to this program which are unlike other federal programs. Effect: FEMA funding of $619,653 was incorrectly excluded from the 2022 SEFA and included in the 2023 SEFA. This did not impact the prior year or current year major program determinations. Questioned Costs: None. Recommendation: Management should enhance controls in place to review reporting requirements related to the federal programs to ensure expenditures are recorded in the appropriate period’s SEFA. Management’s Views and Corrective Action Plan: Management’s response is included in “Management’s Views and Corrective Action Plan” included on the report.

Grantor: U.S. Department of Education Program Name: Student Financial Assistance Cluster Award Names: Federal Pell Grant Program and Federal Direct Loan Program Award Year: 7/1/2021 - 6/30/2022 Award Number: Not applicable Assistance Listing Numbers: 84.063 and 84.268 Criteria: In accordance with 34 CFR 690.83(b)(2) and 685.309, institutions are required to report enrollment information under the Federal Pell Grant (?Pell?) and Federal Direct Loan (?Direct Loan?) programs through the National Student Loan Data System (?NSLDS?). The enrollment information, including Campus Level and Program Level data, must be reviewed, updated, and validated by the institution promptly. Furthermore, specific to the Direct Loan program, for a student that received a Direct Loan and was enrolled or accepted for enrollment at the institution, and the student had 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, the institution must report the change within 60 days from which the change was identified. Condition: We reviewed a sample of twenty-five students enrolled at Rensselaer who received either Pell and/or Direct Loans and had a change of enrollment status during the fiscal year. Of the twenty-five students tested, two students were reported to NSLDS with an inaccurate enrollment status. Both students were on a leave of absence effective during the spring semester, however, the change in enrollment status was not reported to NSLDS and both students were reported as full time during the spring semester. Questioned Costs: None Cause: Rensselaer utilizes the National Student Clearinghouse (?NSC?) to submit enrollment information to NSLDS. Rensselaer reported the status change for these two students to NSC, however, due to enrollment data errors, these changes were not submitted successfully. Due to staffing constraints in the Registrar?s Office, when the enrollment data errors were corrected and resubmitted to NSC, the students? status was reported inaccurately as full time. Effect: A student?s enrollment status determines eligibility for in-school status, deferment, and grace periods, as well as for the payment of interest subsidies all of which are impacted by inaccurate and late reporting. Recommendation: We recommend Rensselaer validate enrollment reporting parameters to ensure enrollment information pulled from Rensselaer?s student information system is submitted to NSC accurately and timely. We also recommend Rensselaer update its processes to effectively and timely record student status changes within its student information system and ensure all individuals involved in administering student status changes abide by Rensselaer?s policies and procedures. Management?s Response: Management?s Views and Corrective Action Plan is included at the end of this report after the summary schedule of prior audit findings and status.

Finding 2021-001 ? Cash Management Grantor: National Institutes of Health and National Science Foundation Program: Research and Development Cluster Assistance Listing #: 93.394 and 47.049 Title: Discovery and Applied Research for Technological Innovations to Improve Human Health and Mathematical and Physical Sciences Award Year: 07/01/2020 ? 06/30/2021 Award Number: 5R01CA237267-02 and DMS-1344962 Criteria In accordance with 2 CFR 200.305 (b)(3), reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per 2 CFR 200.208, or when the non-Federal entity requests payment by reimbursement. Per the OMB Compliance Supplement, the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition In testing compliance with the cash management compliance requirement in accordance with the OMB Compliance Supplement, specifically the reimbursement method, 25 individual expenditures were tested to compare the date Rensselaer paid the vendor to the date Rensselaer requested sponsor reimbursement. We noted 2 instances in which reimbursement was requested from the sponsor before Rensselaer paid the vendor, as shown in the chart below. See the Notes to the SEFA for chart. Cause Management?s current process when requesting reimbursement to sponsors is to ensure that the expenditures are incurred. Effect Rensselaer requested and received Federal reimbursement prior to paying vendors for the selected expenses. Questioned Costs None as reimbursement was requested for allowable costs. Recommendation Rensselaer should revisit existing internal control procedures to ensure expenditures are paid in compliance with Federal reimbursement requirements. Management?s Views and Corrective Action Plan Management?s views and corrective action plan is included at the end of this report.