Mercer County Community CollegeNon-Profit

Information on the Federal Program U.S. Department of Education - Student Financial Aid Cluster (Federal Award Year 7/1/20 to 6/30/21): Federal Direct Student Loans: (Assistance Listing Number 84.268) (Federal Grant Number P268K210476) (FAIN ? not applicable) Federal Supplemental Educational Opportunities Grants: (Assistance Listing Number 84.007) (Federal Grant Number P007A202582) (FAIN ? not applicable) Federal Pell Grant Program: (Assistance Listing Number 84.063) (Federal Grant Number P063P200476) (FAIN ? not applicable) Criteria or Specific Requirement 34 CFR section 668.173(b) ? Timing of Return of Title IV Funds: Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED or the appropriate FFEL lender as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. 34 CFR sections 668.22(a)(1) through (a)(5): 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 aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in this section and no additional disbursements may be made to the student for the payment period or period of enrollment. If the amount the student earned is greater than the amount disbursed, the difference between the amounts must be treated as a post-withdrawal disbursement. Section 3508 of the CARES Act: Section 3508 of the CARES Act waives Return of Title IV Funds (R2T4) requirements for students whose withdrawals were related to the novel coronavirus disease (COVID-19). These waivers apply to payment periods that include March 13, 2020, through the last date of the COVID-19 national emergency. The CARES Act requires schools to report to ED information specific to each student for whom it was not required to return Title IV funds under the waiver exception. The law also requires schools to report to ED the total amount of Title IV grant or loan assistance that was not returned as a result of the CARES Act provisions. Condition A. For 4 sampled students who officially withdrew during the payment period in which they began attendance, the College did not perform the Return of Title IV Funds Calculations (?return calculation?) in a timely manner and funds were not returned to the Federal Department of Education (?DOE?) within the required 45 days. B. For 1 sampled student who unofficially withdrew from the 2020 Fall Reporting Term payment period, the College did not properly perform the Return of Title IV Funds Calculation (?return calculation?) and improper post-withdrawal disbursement in the amount of $525 Pell award was made to the student. C. The College did not comply with Section 3508 of the CARES Act in reporting information specific to each student for whom it was not required to return Title IV funds under the waiver exception the total amount of Title IV grant or loan assistance that was not returned as a result of the CARES Act provisions. For 12 sampled students to whom the College determined such waiver applied, the Coronavirus Indicator checkbox in the COD System was completed in March 2022. No other supporting document was provided by the College to evidence that all reporting was completed. In addition, it did not appear that the College retained documentation indicating that these students? withdrawals were related to COVID-19. Questioned Costs A. There are no questioned costs related to this item. B. The known amount is $524.50 and represents improper post-withdrawal disbursement of Pell award. The likely amount is unknown. C. There were no questioned costs related to the 12 sampled student after the COVID Indicator was checked in COD System in March 2022; however, likely questioned costs is unknown. Context In our sample of 40 students who were awarded federal student financial aid, 9 students were required to have a return calculation performed and we noted 1 error as related to Condition A and 2 errors as related to Condition C. We expanded our sample to include another 40 items, therefore, total R2T4 sample size was 49. We noted 1 error as related to Condition B in the expanded sample, and additional 3 errors and 10 errors as related to Conditions A and C, respectively. There were a total of 629 R2T4 calculations performed for the award year. Out of the 49 samples, 39 students received Pell awards and 9 students received Direct Loans. Pell and Direct Loan disbursed for the sample were $96,455 and $31,815, respectively. The population of R2T4 calculations included 583 Pell students and 75 Direct Loan students. Pell and Direct Loan disbursed for the population were $1,422,091 and $195,402, respectively. The sample was not intended to be, and was not, a statically valid sample. Effect or Potential Effect Noncompliance with the Return of Title IV requirements. Cause Turnover in the College?s Financial Aid Department during the award year. Recommendation That the College establish procedures to timely and correctly perform all Return of Title IV calculations and ensure all required reporting was completed. View of Responsible Officials and Planned Corrective Action The responsible officials and College agree with the finding and will address the matter as part of their corrective action plan.

Information on the Federal Program U.S. Department of the Treasury ? Passed Through State of N.J. Office of the Secretary of Higher Education: Coronavirus Relief Fund: (Federal Award Year 7/1/20 to 6/30/21): Coronavirus Relief Fund (CRF) ? Round I: (Assistance Listing Number 21.019) (FAIN ? not applicable) Coronavirus Relief Fund (CRF) ? Round II: (Assistance Listing Number 21.019) (FAIN ? not applicable) U.S. Department of the Treasury ? Passed Through State of N.J. Department of Labor and Workforce Development: Coronavirus Relief Fund (Federal Award Year 7/1/20 to 6/30/21): Coronavirus Relief Fund (CRF) ? Workforce Training & Reskilling: (Assistance Listing Number 21.019) (FAIN ? not applicable) U.S. Department of Education ? Passed Through State of N.J. Office of the Secretary of Higher Education: Education Stabilization Fund: (Federal Award Year 7/1/20 to 6/30/21): Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Governor?s Emergency Education Relief (GEER) Fund (COVID-19): (Assistance Listing Number 84.425C) (FAIN ? not applicable) Higher Education Emergency Relief Fund (HEERF I): Student Aid Portion (COVID-19) (Assistance Listing Number 84.425E) (FAIN ? not applicable) Coronavirus Response and Relief Supplemental Appropriation Act (CRRSAA): Higher Education Emergency Relief Fund (HEERF II): Student Aid Portion (COVID-19) (Assistance Listing Number 84.425E) (FAIN ? not applicable) Higher Education Emergency Relief Fund (HEERF II): Institutional Portion (COVID-19) (Assistance Listing Number 84.425F) (FAIN ? not applicable) American Rescue Plan Act (ARP): Higher Education Emergency Relief Fund (HEERF III): Student Aid Portion (COVID-19) (Assistance Listing Number 84.425E) (FAIN ? not applicable) Higher Education Emergency Relief Fund (HEERF III): Institutional Portion (COVID-19) (Assistance Listing Number 84.425F) (FAIN ? not applicable) Criteria or Specific Requirement Federal CFR 2 200.303 states that a non-Federal entity must establish and maintain effective internal controls 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. College policy indicates that certain management personnel in the finance department are responsible for determining if an expense is allowable to a federal award and for submitting the required budget and expenditure reports to the state. As evidence of that determination, all grant expenditures and reports submitted to the state must be approved by management personnel in the finance department. Condition Several grant expenditures were deemed to be unallowable costs, per the grant compliance requirements and the amounts reported on the federal financial reports were not in agreement with the financial records at the College. Questioned Costs Coronavirus Relief Fund: The known amount is $3,637 and represents the salary of an employee charged to the grant who had retired in May 2020, prior to the reporting period. The likely amount is $42,612, based on projection of the error in the sample to the entire population. Education Stabilization Fund: Governor?s Emergency Education Relief (GEER) Fund (COVID-19): The known amount is $5,013 and represents the salary of two employees charged to the grant who had retired in May 2020, prior to the reporting period. The likely amount is $38,781 based on projection of the error in the sample to the entire population. An additional amount of questioned costs is $9,651 related to the difference between the budget reports and the supporting detail. Higher Education Emergency Relief Fund (HEERF III): Institutional Portion (COVID-19): The known amount is $56,847 and represents the amount of a voucher charged to the grant twice in error. The likely amount is $56,847 as a result of examination of 100% of the population. Context Coronavirus Relief Fund: 1 out of 27 employees selected for testing was charged to the grant for the period 7/1/20-9/30/20, however, the employee retired in May 2020. Education Stabilization Fund: Governor?s Emergency Education Relief (GEER) Fund (COVID-19): 2 out of 16 employees selected for testing were charged to the grant for the period 1/1/21-1/31/21, however, the employees retired in May 2020. Additionally, the salary expense allocated to the GEER grant per the general ledger ($157,263) does not agree to the salary per the budget reports ($125,747) or the detailed list of employees charged to the grant ($134,398). Education Stabilization Fund: Higher Education Emergency Relief Fund (HEERF III): Institutional Portion (COVID-19): 1 out of 7 expenditures selected for testing was charged to the grant twice. Education Stabilization Fund: Higher Education Emergency Relief Fund (HEERF I, II, and III): Institutional Portion (COVID-19): Quarterly Budget Expenditure Reports for quarters ending 9/30/20, 12/31/20, and 3/31/21 did not agree to supporting documentation provided by the College. Effect or Potential Effect The College did not comply with federal grant requirements and the risk that non-allowable expenses being charged to a federal grant is increased. Cause Unknown. Recommendation That the College maintain an effective system of internal controls over Federal programs as required by Federal CFR 2 200.303 to ensure that unallowable costs are not charged to the grants and the grant reports are in agreement with the financial records of the College. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.

Information on the Federal Program U.S. Department of Education ? Passed Through State of N.J. Office of the Secretary of Higher Education: Education Stabilization Fund: (Federal Award Year 7/1/20 to 6/30/21): Coronavirus Response and Relief Supplemental Appropriation Act (ARP): Higher Education Emergency Relief Fund (HEERF III): Student Aid Portion (COVID-19) (Assistance Listing Number 84.425E) (FAIN ? not applicable) Criteria or Specific Requirement A ? Activities Allowed or Unallowed, B ? Allowable Costs/Cost Principles The College set in place Standard Operating Procedures related to the distribution of funds to students for the Student Aid Portion of HEERF III. Condition The College awarded HEERF III Student Aid to one student who did not meet the eligibility requirements per the Standard Operating Procedures set in place by the College. Questioned Costs The known amount is $1,457 and represents the amount awarded to 1 student out of 40 who was not eligible to receive aid per the SOP. The likely amount is $113,988, based on projection of the error in the sample to the entire population. Context 1 out of 40 students selected for student aid testing did not meet the eligibility requirements per the client Standard Operating Procedures to receive student aid, however, they received $1,457 in HEERF III Student Aid. Effect or Potential Effect The College did not comply with the Standard Operating Procedures in place over the distribution of HEERF III Student Aid and the risk that non-allowable expenses being charged to a federal grant is increased. Cause Turnover in the College?s Financial Aid Department during the award year. Recommendation That the College comply with the Standard Operating Procedures in place over the distribution of HEERF III Student Aid. View of Responsible Officials and Planned Corrective Action The responsible officials agree with the finding and will address the matter as part of their corrective action plan.

Finding No. 2019-001 (Return of Title IV Funds) Information on the Federal Program U.S. Department of Education - Student Financial Aid Cluster (Federal Award Year 7/1/18 to 6/30/19): Federal Direct Student Loans: (CFDA 84.268) (Federal Grant Number P268K190476) (FAIN ? not applicable) Federal Supplemental Educational Opportunities Grants: (CFDA 84.007) (Federal Grant Number P007A182582) (FAIN ? not applicable) Federal Pell Grant Program: (CFDA 84.063) (Federal Grant Number P063P180476) (FAIN ? not applicable) Statistically Valid Sample The sample was not intended to be, and was not, a statically valid sample. Finding Type Significant Deficiency and Noncompliance Prior Year Finding 2018-001. Criteria 34 CFR section 668.173(b) ? Timing of Return of Title IV Funds: Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED or the appropriate FFEL lender as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew. 34 CFR sections 668.22(a)(1) through (a)(5): 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 aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in this section and no additional disbursements may be made to the student for the payment period or period of enrollment. If the amount the student earned is greater than the amount disbursed, the difference between the amounts must be treated as a post-withdrawal disbursement. 34 CFR section 668.22(c)(3): An institution that is not required to take attendance may use as the student?s withdrawal date a student?s last date of attendance at an academically-related activity provided that the institution documents that the activity is academically related and documents the student?s attendance at the activity. 34 CFR section 668.22(j)(2): For an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of (i) the payment period or period of enrollment, (ii) the academic year, or (3) the student?s educational program. Condition A. The College did not identify all students who ceased academic attendance in a payment period. As a result, a Return of Title IV Funds Calculation (?return calculation?) was not performed and funds were not returned to the Federal Department of Education (?DOE?) within the required 45 days. B. The College did not perform the Return of Title IV Funds Calculations (?return calculation?) in a timely manner for the Fall 2018 payment period and funds were not returned to the Federal Department of Education (?DOE?) within the required 45 days. Questioned Costs A. The known amount is $1,030 and represents what was not remitted to the Federal Department of Education. The likely amount is not known. B. There are no questioned costs related to this item. Context In our sample of 60 students who were awarded federal student financial aid, 6 students were required to have a return calculation performed and we noted 3 errors within this sample. We expanded our sample another 34 items, for a total sample of 40, and an additional 9 errors were noted. The errors noted with the return calculations sampled are as follows: A. 2 students ceased academic attendance in the payment period without providing notification to the institution; the College failed to determine the withdrawal date for these students; therefore, a return calculation was not done. 1 of the withdrawals was prior to 60% of the payment period, the calculation of which, if completed, would have resulted in funds being required to be returned to the Department. B. 9 calculations performed for the Fall 2018 payment period were not completed until February or March of 2019. The dates the returns were posted to student account to transmit back to the Department were more than 45 days from the dates of determination of student withdrawal. Effect Noncompliance with the Return of Title IV requirements. Cause Turnover in the College?s Financial Aid Department during the award year and the lack of written procedures related to the identification of students who ceased academic attendance. Recommendation That the College establish procedures to capture all student who cease academic attendance requiring a Return of Title IV Calculation to be performed in a timely manner. View of Responsible Official The responsible officials and College agree with the finding and will address the matter as part of their corrective action plan.

Finding No. 2019-002 (Pell Grant Overaward) Information on the Federal Program U.S. Department of Education - Student Financial Aid Cluster (Federal Award Year 7/1/18 to 6/30/19): Federal Pell Grant Program: (CFDA 84.063) (Federal Grant Number P063P180476) (FAIN ? not applicable) Statistically Valid Sample The sample was not intended to be, and was not, a statically valid sample. Finding Type Significant Deficiency and Noncompliance Prior Year Finding 2018-002. Criteria 34 CFR section 690.80(b)(2)(ii) ? Recalculation of Federal Pell Grant Award If the student?s projected enrollment status changes during a payment period before the student begins attendance in all of his or her classes for that payment period, the institution shall recalculate the student?s enrollment status to reflect only those classes for which the student actually began attendance. Condition The College did not recalculate the Pell Grant Award for a student who never began attendance in one of their classes for that payment period. As a result, an overaward of the Pell Grant occurred. Questioned Costs There are no questioned costs related to this finding. Context 1 out of 60 Pell Grant recipients sampled never attended one or more of their classes, causing their enrollment status to be different than what the Pell Grant was originally based on. However, the College failed to capture the change and Pell Grant was disbursed to the student for $356 in excess of the correct amount. There were $8,876,925 Pell Grants awarded to over 2,700 recipients during the award year. Effect Change in enrollment status not captured by the College for a student who never begin attendance in one or all classes resulting in the College overawarding the Pell Grant. Cause The College did not follow policies and procedures in verifying enrollment status of which student financial aid was calculated based on. Recommendation That the College improve policies and procedures to ensure that all students? change in enrollment status are communicated to each Department and that recalculation of awards be performed prior to disbursement. View of Responsible Official The responsible officials and College agree with the finding and will address the matter as part of their corrective action plan.

Finding No. 2019-003 (Enrollment Reporting) Information on the Federal Program U.S. Department of Education - Student Financial Aid Cluster (Federal Award Year 7/1/18 to 6/30/19): Federal Direct Student Loans: (CFDA 84.268) (Federal Grant Number P268K190476) (FAIN ? not applicable) Federal Pell Grant Program: (CFDA 84.063) (Federal Grant Number P063P180476) (FAIN ? not applicable) Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Finding Type Significant Deficiency and Noncompliance Prior Year Finding Not Applicable Criteria Under the Pell grant and ED loan programs, institutions must complete and return within 15 days the Enrollment Reporting roster file [formerly the Student Status Confirmation Report (SSCR)] placed in their Student Aid Internet Gateway (SAIG) (OMB No. 1845-0002) mailboxes sent by ED via the National Student Loan Data System (NSLDS) (OMB No. 1845-0035). 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 (FPL, 34 CFR section 674.19; Pell, 34 CFR section 690.83(b)(2); FFEL, 34 CFR section 682.610; Direct Loan, 34 CFR section 685.309). Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. NSLDS will send a Late Enrollment Reporting notification e-mail if no updates are received by batch or online within 22 days after the date the roster was sent to the school. The Enrollment Reporting Summary Report (SCHER1) on the NSLDS website can be created at the request of the institution. It shows the dates the roster files were sent and returned, the number of errors, date and number of online updates, and the number of late enrollment reporting notifications sent for overdue Enrollment Reporting rosters. A student?s enrollment status determines eligibility for in-school status, deferment, and grace periods, as well as for the payment of interest subsidies to FFEL Program loan holders by ED. Enrollment Reporting in a timely and accurate manner is critical for effective management of the programs. Enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster will be submitted within 60 days. These changes include reductions or increases in attendance levels, withdrawals, graduations, or approved leaves-of-absence. ED issued a Dear Colleague Letter March 30, 2012 (GEN-12-06) that included enhancements to NSLDS Enrollment Reporting Process and reminders to institutions regarding their responsibilities for NSLDS Enrollment Reporting which are available at http://www.ifap.ed.gov/dpcletters/GEN1206.html. ED also issued a Dear Colleague Letter, dated April 14, 2014 (GEN-14-07), explaining changes to NSLDS Enrollment Reporting Process, which include changes to reporting of additional data, reporting at the academic program level, and more frequent reporting. GEN 14-07 is available at http://www.ifap.ed.gov/dpcletters/GEN1407.html. Condition The College reported graduated students as withdrawn to the NSLDS. Questioned Costs There are no questioned costs related to this finding. Context 8 out of 60 students sampled who received a Direct Loan and / or Pell Grant graduated, however, the students' graduated status was reported as withdrawn to the NSLDS. Effect Student status changes not properly reported to NSLDS could impact the timeliness of a student being put into repayment status. Cause The College did not ensure that students who graduated were properly reported as such to the NSLDS. Recommendation That the College improve policies and procedures to ensure that all students? status changes are accurately reported to the NSLDS. View of Responsible Official and Planned Corrective Action The responsible officials and College agree with the finding and will address the matter as part of their corrective action plan.

Finding No. 2019-004 (TRIO Cluster) Information on the Federal Program U.S. Department of Education - TRIO Cluster (Federal Award Year 7/1/18 to 6/30/19): Talent Search: (CFDA 84.044) (Federal Grant Number P044A160103) (FAIN ? not applicable) Upward Bound: (CFDA 84.047) (Federal Grant Number P047A170099) (FAIN ? not applicable) Statistically Valid Sample The sample was not intended to be, and was not, a statically valid sample. Finding Type Significant Deficiency and Noncompliance Prior Year Finding Not Applicable Criteria 2 CFR section 200.403(a)(c)(g) Factors Affecting Allowability of Costs Costs must meet the following general criteria in order to be allowable under federal awards: be necessary and reasonable for the performance of the federal award and be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-federal entity. Costs must be adequately documented. 2 CFR section 200.404(a)(b) Reasonable Costs A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. In determining reasonableness of a given cost, consideration must be given to whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-federal entity or the proper and efficient performance of the federal award. Consideration must also be given to the restrains or requirements imposed by such factors as: sound business practice; arm?s-length bargaining; federal, state, local, tribal, and other laws and regulations; and terms and conditions of the federal awards. Condition The College incurred costs that do not meet the general criteria in order to be allowable under federal awards; the costs were not reasonable and were not of sound business practice. Questioned Costs There are no questioned costs related to this finding. Context 1 out of 40 expenditures sampled was for a prepaid card of an amount greater than supplies actually purchased in the fiscal year. Issuing a prepaid card for a federal award creates an opportunity for certain costs to bypass normal control procedures. 1 out of 40 expenditures sampled was for employee reimbursement of training costs. While the training was ordinary and necessary, the related travel was not considered necessary or efficient performance of the federal award. Effect Costs not meeting the general criteria to be consider allowable were incurred for the performance of the federal award. Cause The College did not follow policies and procedures in verifying all costs incurred for the performance of the federal award were allowable and reasonable. Recommendation That the College improve policies and procedures to ensure that all costs incurred for the performance of the federal award were allowable and reasonable. View of Responsible Official The responsible officials and College agree with the finding and will address the matter as part of their corrective action plan.

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