VALLEY FORGE MILITARY ACADEMY FOUNDATION

Finding 2020-001: Gramm-Leach Bliley Act CFDA No.: 84.007, 84.033, 84.063, 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P007A195254, P033A195254, P063P195276, P268K205276 Pass Through Entity: Not Applicable Repeat Finding: 2019-001 Criteria: In accordance with Title IV regulations, an Institution must protect student financial aid information by designating an individual to coordinate the information security program, perform a risk assessment that addresses (1) employee training and management; (2) information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) detecting, preventing and responding to attacks, intrusions, or other systems failures, and document safeguards for identified risks. [16 CFR 314.1 (b)] Condition: The Foundation has not designated an individual responsible for coordinating an information security program, nor has the Foundation performed a risk assessments to address employee training and management related to information security as required by the Gramm-Leach Bliley Act ("GLBA"). Cause: The Foundation had several staffing changes in fiscal years 2018 and 2019, including the Director of Financial Aid. During the staffing transition time, the individual responsible for ensuring the Foundation was in compliance with GLBA standards was not specified and a risk assessment was not completed. Effect: Failure to comply with the requirements of GLBA standards puts the Foundation at risk of compromising consumer, and nonpublic personal information. Questioned Costs: There are no questioned costs associated with this finding. Context: Through discussions with management, specific procedures and processes surrounding the GLBA do not exist. The sample was not a statistically valid sample. Recommendation: The Foundation should designate an individual responsible for coordinating the information security program. Additionally, the Foundation should perform and document an annual risk assessment to determine the Foundation's specific risks relevant to protecting consumer nonpublic personal information. At a minimum, the Foundation should have at least one risk statement aligned or referenced to each of the three required areas noted in the GLBA law at 16 CFR 314.4 (b). Finally, the Foundation should identify and document at least one safeguard (i.e., control) for each of the risks identified and documented in the risk assessment. Each control should be aligned or referenced to the risk(s) to which the safeguard applies.

Finding 2020-002: Direct Loan Reconciliation CFDA No.: 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P268K205276 Pass Through Entity: Not Applicable Repeat Finding: 2019-009 Criteria: On a monthly basis, reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Secretary [34 CFR Section 685.300(b)(5)] Condition: The Foundation did not reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Department of Education for any months of fiscal year 2020. Cause: The Foundation had several staffing changes, including the Director of Financial Aid. During the staffing transition time, the individual responsible for the reconciliation previously had left the Foundation and the replacement was not aware of the reconciliation process and responsibility. It was also noted that the Foundation did not have full use of EdConnect nor was the software setup to received or load Student Account Statements (SAS) Reports. Effect: Direct loans are not being reconciled on a timely basis. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted for twelve of the twelve months of fiscal year 2020. The sample was not a statistically valid sample. Recommendation: We recommend that the Foundation assign the monthly reconciliation process to the appropriate individual to ensure the reconciliations are being completed on a regular basis. We recommend that the Foundation complete the reconciliation procedures for June 2020 for the 2019-2020 academic year to review the accuracy of the Foundation's institutional records to the Direct Loan disbursement records submitted to and accepted by the Secretary.

Finding 2020-003: Direct Loan Quality Assurance System CFDA No.: 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P268K205276 Pass Through Entity: Not Applicable Repeat Finding: 2019-010 Criteria: In the program participation agreement, the institution must agree to provide for the implementation of a quality assurance system, as established by the Secretary and developed in consultation with the school, to ensure that the school is complying with program requirements and meeting program objectives and agree to provide that the school will not charge any fees of any kind to student or parent borrowers for origination activities or the provision of any information necessary for a student or parent to receive a loan under part D of the Act or any benefits associated with such a loan [34 CFR 685.300(b)] Condition: The Foundation does not have a Direct Loan Quality Assurance Policy documented and in place. Cause: The Foundation had several staffing changes, including the Director of Financial Aid. Therefore, no one was aware of the requirements nor took responsibility to document such a policy. Effect: Documentation of a direct loan program quality assurance system was not provided by the Foundation. There is no indication that the Foundation charged fees of any kind to student or parent borrowers for origination activities related to awarding of direct loans. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted related to documentation of Foundation policies and procedures. This is not a sampled testing population. Recommendation: We recommend that the Foundation document and implement a direct loan program quality assurance system policy.

Finding 2020-004: Verification Policy CFDA No.: 84.063, 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P063P195276, P268K205276 Pass Through Entity: Not Applicable Criteria: An institution must establish and use written policies and procedures for verifying an applicant's Free Application for Federal Student Aid (FAFSA) information in accordance with the provisions of this subpart. [34 CFR 668.53] Condition: The Foundation did not have written policies and procedures for verifying an applicant's FAFSA information for the period of July 1, 2019 through June 30, 2020. Cause: There were no policies and procedures for verifying an applicant's FAFSA information for review in relation to the 2019-2020 period. Effect: The Foundation does not have written policies and procedures for verification as required by the Department of Education. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted related to documentation of Foundation policies and procedures. This is not a sampled testing population. Recommendation: We recommend that the Foundation implement written policies and procedures for verifying an applicant's FAFSA information.

Finding 2020-005: Monitoring of Satisfactory Academic Progress CFDA No.: 84.063, 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P063P195276, P268K205276 Pass Through Entity: Not Applicable Criteria: An institution must establish a reasonable satisfactory academic progress policy for determining whether an otherwise eligible student is making satisfactory academic progress in his or her educational program and may receive assistance under the title IV, HEA programs. [34 CFR 668.34] Condition: For one of twenty-one students tested, the student was not meeting the pace of completion, however there was no evidence that the student was notified of their failure to meet satisfactory academic progress, placed on academic probation, or removed from eligibility of federal student financial aid. Cause: The Foundation's process of identification of students not meeting satisfactory academic progress did include tracking of students not meeting the pace of completion. Effect: Students that are not meeting satisfactory academic progress could continue to receive financial student aid when no longer eligible under the Foundation's satisfactory academic progress policy. Questioned Costs: There are no questioned costs associated with this finding. The student was a first year attending and was evaluated for academic progress at the end of the 2019-2020 academic term. Context: Error noted for one of twenty-one students tested. The sample was not a statistically valid sample. Recommendation: The Foundation should ensure that all students receiving federal student financial aid are evaluated at the end of the academic period to ensure they are notified if they are not meeting one or any of the three components that the Foundation considers necessary to be meeting academic progress. Notification of failure to meet academic progress, as well as any Satisfactory Academic Progress Appeal Forms received from students, should be maintained in the student records.

Finding 2020-006: Student Records CFDA No.: 84.007, 84.033, 84.063, 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P268K205276, P063P195276, P007A195254, P033A195254 Pass Through Entity: Not Applicable Criteria: The records that an institution must maintain in order to comply with the provisions of this section include the amount, date, and basis of the institution's calculation of any refunds or overpayments due to or on behalf of the student, or the treatment of title IV, HEA program funds when a student withdraws. [34 CFR 668.24] Condition: The Foundation was not able to provide clear records of the change in student enrollment status and the date of determination of the student's change in status. Cause: For 39 students tested for changes in enrollment status, which included the 12 students tested for return of Title IV, the Foundation was not able to provide clear documentation of when the student status changed for withdrawn students and could not provide clear documentation for the date of determination for changes in status for withdrawn students or students that did not return from a prior semester. The Foundation does maintain records of attendance which were used in determination of change in status for enrollment reporting and return of Title IV after the fact. Effect: Lack of clear determination of the date the student status changed can lead to errors in the calculation of the return of Title IV and can lead to errors in the changes in enrollment status reported to the National Student Loan Data System (NSLDS). Lack of clear date of determination can lead to errors in the timeliness of the return of Title IV funds and errors in the timeliness of enrollment reporting to NSLDS. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted for thirty-nine of the students tested, which included the twelve students tested for return of Title IV, the Foundation was not able to provide clear documentation of when the student status changed for withdrawn students and could not provide clear documentation for the date of determination for changes in status for withdrawn students or students that did not return from a prior semester. The sample was not a statistically valid sample. Recommendation: We recommend that the Foundation maintain records and tracking of the effective dates of changes in student status and the date of determination of the change in student status that is shared and consistent between the Director of Student Financial Aid, the Registrar and the Bursar.

Finding 2020-007: Enrollment Reporting - Reporting Errors CFDA No.: 84.063, 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P063P195276, P268K205276 Pass Through Entity: Not Applicable Repeat Finding: 2019-007 Criteria: Title IV regulations require that upon receipt of an enrollment report from the Secretary, institutions must update all information included in the report and return the report to the Secretary in the manner and format prescribed by the Secretary and within the timeframe prescribed by the Secretary. Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, an institution must notify the Secretary within 30 days after the date the institution discovers that: (i) a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has 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; or (ii) a student who is enrolled at the institution and who received a loan under Title IV of the Act has changed his or her permanent address. [34 CFR 685.309(b)] Condition: The changes in student status for eleven of eleven students tested were not reported to the NSLDS timely. Included in the error for not reporting timely, eight of the eleven students had different effective dates of the change in status reported in different roster submissions to the NSLDS. Cause: The Foundation's procedures for reporting all students were not designed appropriately in order to allow for timely or complete reporting to the NSLDS. 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 to Direct loan holders by ED. Enrollment Reporting in a timely and accurate manner is critical for effective management of the programs. Failure to report changes in the student enrollment status means the loan holders do not have the most accurate information in managing the loans held. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted for eleven of eleven students tested. The sample was not a statistically valid sample. Recommendation: The Foundation should revise its procedures to ensure complete enrollment information is sent to the NSLDS within the required timeframe.

Finding 2020-008: Error in Return of Title IV CFDA No.: 84.007, 84.063, 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P007A195254, P063P195276, P268K205276 Pass Through Entity: Not Applicable Repeat Finding: 2019-012 Criteria: 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 in accordance with Federal regulations and return the unearned portion of the grant or loan funds to the Title IV programs as soon as possible but no later than 45 days after the withdrawal date. [34 CFR 668.22] Condition: The Foundation had twelve students receiving federal student financial aid withdraw, of those students seven students withdrew before 60% complete and would require a return of Title IV funds. The following errors were noted in the population of seven students withdrawn before 60% complete: ? For two students a return of Title IV funds calculation was not completed and no refunds were applied to the student account. ? For one student a return of Title IV funds calculation was completed, however the refund was not completed timely. Following the return of Title IV the student received a post-withdrawal disbursement of SEOG that then resulted in the calculation being incorrect. ? For one student the Foundation return of Title IV funds calculation did not include adjustment for breaks in the term (Spring break from 2/23/2020-3/8/2020 - 15 days), which resulted in an over refund of student aid. This student's refund under the return of Title IV funds calculation completed was not timely. Cause: A return of Title IV calculation were not completed or were not completed accurately, based on the academic terms or based on total student awards. Return of Title IV calculations were not being completed timely and the related refunds were not being made within 45 days after the withdrawal date. Effect: The student accounts were not adjusted for the unearned portion of Title IV program funds timely or accurately. Questioned Costs: Questioned costs of $6,291 were noted during testing for students funds that were not refunded to the Department of Education. Questioned costs of $960 were noted during testing for students funds that were over-refunded to the Department of Education. Context: There were a total of twelve students who withdrew during fiscal year 2020 that received Title IV funds, seven of those students were before 60 percent completion of the semester and the remaining five were in after 60 percent complete and no refund was necessary. Of the seven students that withdrew before 60 percent completion of the semester, there were four students with errors in their calculations. The sample was not a statistically valid sample. Recommendation: We recommend that the Foundation personnel review the calculations generated by the software system. An individual within the department should be designated as responsible for completing R2T4 forms and returning funds timely. A manual review should be performed by someone other than the person who enters the information into the software in order to verify accuracy of the calculations.

Finding 2020-009: Common Origination Disbursement Reporting CFDA No.: 84.063, 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P0363P195276, P268K205276 Pass Through Entity: Not Applicable Criteria: The date funds are credited to a student's account in the institution's general ledger or any subledger of the general ledger, or paid to a student directly is the disbursement date the financial aid office reports to the COD System. This date is reported to the Direct Loan servicers and is the point at which interest begins to accrue on the loan funds [OMB No. 1845-0039]. Condition: For 2 out of 125 disbursements, the dates in the student account ledger and the COD system for the actual disbursement were not in agreement. Cause: Student ledgers were not updated to agree to the disbursement date from the initial origination date that had been entered on the student ledger. Effect: Differences in recorded disbursement date results in inconsistencies between Foundation and COD records, which means there could be confusion regarding the proper period at which interest begins to accrue on the loan funds. Questioned Costs: There are no questioned costs associated with this finding. Context: The sample was not a statistically valid sample but was determined using Chapter 21 - Audit Sampling Considerations of Uniform Guidance Compliance Audits of the Government Auditing Standards and Single Audits Audit and Accounting Guide. Recommendation: We recommend that the Foundation review and update each student ledger after every disbursement from COD. Additionally, we recommend that Pell and Direct Loan records are reconciled between COD and the student ledgers on a monthly basis, including comparison and correction of dates within the student ledger.

Finding 2020-010: Submission Deadlines CFDA No.: 84.007, 84.033, 84.063, 84.268 Award Year: July 1, 2019 - June 30, 2020 Federal Agencies: U.S. Department of Education Federal Award No.: P007A195254, P033A195254, P063P195276, P268K205276 Pass Through Entity: Not Applicable Repeat Finding: 2019-013 Criteria: An institution's data collection form and reporting package (including the financial statements, schedule of expenditures of federal awards, summary of prior year audit findings, auditor's reports and corrective action plan) must be submitted within the earlier of 30 calendar days after receipt of the auditor's reports or nine months after the end of the audit period. An institution must submit annually to the Secretary of the Department of Education its compliance audit and its audited financial statements no later than six months after the last day of the institution's fiscal year. [2 CFR 200.512 and 34 CFR 668.23] As a result of flexibilities provided due to the COVID-19 pandemic, the institution was given an additional 6 months, until September 30, 2021, to provide the required audit submission. Condition: The Foundation did not submit its audited financial statements and compliance audits to the OMB through the Federal Audit Clearinghouse or the Secretary of the Department of Education through the eZ-Audit before the September 30, 2021 deadline. Cause: The Foundation had several staffing changes in fiscal years 2019 and 2020, including the Director of Financial Aid and changes within the Business Office that result in reports not being completed and submitted before the deadline. Effect: The Foundation did not submit the annual financial statement and compliance audits within the allowed timeframe. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted related to documentation of Foundation policies and procedures. This is not a sampled testing population. Recommendation: We recommend that key members of management are aware of the reporting and submission deadlines to ensure the annual financial statement and compliance audits are completed and submitted within the allowable timeline.

CFDA No.: 84.007, 84.033, 84.063, 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P007A185254, P033A185254, P063P185276, P268K195276 Pass Through Entity: Not Applicable Criteria: In accordance with Title IV regulations, an Institution must protect student financial aid information by designating an individual to coordinate the information security program, perform a risk assessment that addresses (1) employee training and management; (2) information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) detecting, preventing and responding to attacks, intrusions, or other systems failures, and document safeguards for identified risks. [16 CFR 314.1 (b)] Condition: The Foundation has not designated an individual responsible for coordinating an information security program, nor has the Foundation performed a risk assessments to address employee training and management related to information security as required by the Gramm-Leach Bliley Act ("GLBA"). Cause: The Foundation had several staffing changes in fiscal years 2018 and 2019, including the Director of Financial Aid. During the staffing transition time, the individual responsible for ensuring the Foundation was in compliance with GLBA standards was not specified and a risk assessment was not completed. Effect: Failure to comply with the requirements of GLBA standards puts the Foundation at risk of compromising consumer, nonpublic personal information. Questioned Costs: There are no questioned costs associated with this finding. Context: Through discussions with management, specific procedures and processes surrounding the GLBA do not exist. The sample was not a statistically valid. Recommendation: The Foundation should designate an individual responsible for coordinating the information security program. Additionally, the Foundation should perform and document an annual risk assessment to determine the Foundation's specific risks relevant to protecting consumer nonpublic personal information. At a minimum, the Foundation should have at least one risk statement aligned or referenced to each of the three required areas noted in the GLBA law at 16 CFR 314.4 (b). Finally, the Foundation should identify and document at least one safeguard (i.e., control) for each of the risks identified and documented in the risk assessment. Each control should be aligned or referenced to the risk(s) to which the safeguard applies.

CFDA No.: 84.033 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P033A185254 Pass Through Entity: Not Applicable Criteria: An institution must use at least seven percent of the sum of its initial and supplemental FWS allocations for an award year to compensate students employed in community service activities unless waived by the Secretary of Education. In addition, an institution must employ at least one student in a position for math or literacy tutoring programs. [34 CFR 675.18 (g)(1)] Condition: The Foundation did not utilize at least seven percent of the sum of its FWS allocations for an award year to compensate students employed in community service activities and had not obtained a waiver from the community service requirement from the Secretary of Education for the 2018-2019 award year. Additionally, the Foundation did not meet the requirement of employing at least one student in a position for math or literacy tutoring programs. Cause: The Foundation was operating under the assumption that a waiver from the community service requirement has been obtained, however it was determined that the Foundation had not applied for a waiver of the earmarking requirements to the Secretary of Education. Effect: The Foundation did not use seven percent of the sum of its initial and supplemental FWS allocations for the 2018-2019 award year to compensate students employed in community service activities and did not employ at least one student in a position for math or literacy tutoring programs. Questioned Costs: There are no questioned costs associated with this finding. Context: The sample was not a statistically valid sample. Recommendation: The Foundation should designate an individual to determine whether a community service waiver is necessary and, if so, to ensure the waiver is apply for timely. If the Foundation does not received a waiver, the Chief Financial Officer should communicate to individuals that manage the federal work study students to ensure that at least seven percent of the sum of its initial and supplemental FWS allocations is utilized to compensate students employed in community service activities and that at least one student is employed in a math or literacy tutoring program.

CFDA No.: 84.007, 84.033, 84.063, 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P007A185254, P033A185254, P063P185276, P268K195276 Pass Through Entity: Not Applicable Criteria: An applicant who is selected for verification of the number of persons in his or her household (household size) or the number of those in the household who are attending postsecondary institutions (number in college) must update those items to be correct as of the date of verification, except when the update is due to a change in his or her marital status. [34 CFR 668.55(b)] Condition: As part of the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information, an institution is required to obtain acceptable documentation to verify the information required for the Verification Tracking Group to which the applicant is assigned and match information on the documentation to the student aid application. For one of thirteen students tested for verification, the number of members in their household reported on the student verification form did not match the final ISIR. Cause: ISIR was not properly updated based on the household information on the verification form. Effect: Due to the Foundation's lack of review and matching of information provided on the student's verification form, the Foundation could award the student the wrong amount of Pell award. When the ISIR was reviewed by the Director of Student Financial Aid it was determined that correction to the household size did not change the expected family contribution, therefore there was no change to the Pell award. Questioned Costs: There are no questioned costs associated with this finding. Context: The error was detected in one of thirteen students tested for verification. The sample was not a statistically valid sample. Recommendation: We recommend that the Foundation review that all the verification support is complete and final before updating student ISIR and clearing verification flags in the system.

Finding 2019-004: Verification - Documentation of Student Verification Procedures CFDA No.: 84.007, 84.033, 84.063, 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P007A185254, P033A185254, P063P185276, P268K195276 Pass Through Entity: Not Applicable Criteria: An institution must require an applicant whose FAFSA information is selected for verification by the Secretary, to verify the information specified by the Secretary pursuant to 34 CFR 668.56. [34 CFR 668.54(a)] Condition: As part of the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information, an institution is required to obtain acceptable documentation to verify the information required for the Verification Tracking Group to which the applicant is assigned and match information on the documentation to the student aid application. There was a lack of documentation or errors in the documentation on five of the thirteen students tested for verification. Cause: Due to turnover within the Financial Aid Department, it was noted that proper review of students' verification form was not completed, signed verification forms were misplaced and could not be located, and completion of verification could not be confirmed. Effect: The unsigned verification form could mean that information used for verification could be incomplete or inaccurate. In addition, due to lack of documentation for review, completion of verification could not be confirmed and calculation of final expected family contribution could not be evaluated. Questioned Costs: Students whose verification documentation was incomplete or could not be located were awarded $50,911 in Pell and Direct Loans. Context: Population and sample sizes for students selected for verification and verification testing: See Schedule of Findings and Questioned Costs for chart/table. The sample was not a statistically valid sample, but was determined using Chapter 11, Audit Sampling Considerations of Uniform Guidance Compliance Audits, of the 2018 AICPA Audit and Accounting Guide, Government Auditing Standards and Single Audits. Recommendation: We recommend that the Foundation review that all the verification support is complete and final before updating student ISIR and clearing verification flags in the system. We recommend that support for verification be maintained in the student files.

CFDA No.: 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P268K195276 Pass Through Entity: Not Applicable Criteria: For direct loans, an institution under reimbursement or cash-monitoring payment method must have obtained a legally enforceable promissory note and may request funds only for those that they have already disbursed funds to students (34 CFR 685.301 and 685.303). Condition: For one of twenty-one students tested for direct loan disbursements testing, the student's direct loan promissory note was not signed until after the student's subsidized and unsubsidized loans were disbursed. Cause: Student files were not accurately maintained due to turnover in the Financial Aid department. The student subsidized and unsubsidized loans were disbursed on September 28, 2018 and the promissory note was signed January 22, 2019. Effect: Without a signed promissory note, if the student defaults on the loan funds disbursed, they could refuse to re-pay the loans due to lack of written agreement. The student's promissory note was signed before any default event occurred, therefore the $2,750 of direct loans disbursed before a signed promissory note was received are not considered questioned costs. Questioned Costs: There are no questioned costs associated with this finding. Context: The error was detected in one of twenty-one students tested for direct loan disbursements testing. The sample was not a statistically valid sample. Recommendation: We recommend that the Foundation designate an employee to review all student documentation maintained to ensure completeness of support before disbursements are made.

CFDA No.: 84.063, 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P063P185276, P268K195276 Pass Through Entity: Not Applicable Criteria: For both Direct Loan and Pell Grant disbursements, institutions must report all loan disbursements and submit required records to COD within 15 days of disbursement (OMB No. 1845-0021). Condition: For eighteen of the forty Pell disbursements tested, the date reported to COD was more than 15 days before date of disbursement on the student sub-ledger. For twenty-eight of the forty Direct Loan disbursements tested, the date reported to COD was more than 15 days before date of disbursement on the student sub-ledger. Cause: Due to turnover in the Financial Aid department, COD reporting and student disbursements were not being tracked and monitored. Effect: COD records are not updated timely for disbursements of Pell and Direct Loan disbursements to students. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted for eighteen of the forty Pell disbursements tested and twenty-eight of the forty Direct Loan disbursements tested. The sample was not a statistically valid sample. Recommendation: We recommend that the Foundation designate an employee to review all student documentation maintained to ensure completeness of support before disbursements are made.

CFDA No.: 84.063, 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P268K195276 Pass Through Entity: Not Applicable Criteria: Title IV regulations require that upon receipt of an enrollment report from the Secretary, institutions must update all information included in the report and return the report to the Secretary in the manner and format prescribed by the Secretary and within the timeframe prescribed by the Secretary. Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, an institution must notify the Secretary within 30 days after the date the institution discovers that: (i) a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has 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; or (ii) a student who is enrolled at the institution and who received a loan under Title IV of the Act has changed his or her permanent address. [34 CFR 685.309(b)] Condition: The changes in student status for fifteen of sixteen students tested were not reported to the National Student Loan Data System ("NSLDS") timely or not reported. Eight of the students were not reported timely, however reported to the NSLDS prior to audit procedures, seven of the students were not reported as of the completion of audit procedures. Cause: The Foundation's procedures for reporting all students were not designed appropriately in order to allow for timely or complete reporting to the NSLDS. 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 to FFEL Program loan holders by ED. Enrollment Reporting in a timely and accurate manner is critical for effective management of the programs. Failure to report changes in the student enrollment status means the loan holders do not have the most accurate information in managing the loans held. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted for fifteen of sixteen students tested. The sample was not a statistically valid sample. Recommendation: The Foundation should revise its procedures to ensure complete enrollment information is sent to the NSLDS within the required timeframe.

CFDA No.: 84.007, 84.033 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P007A185254, P033A185254 Pass Through Entity: Not Applicable Criteria: For administration of the Federal Work Study ("FWS") and Federal Supplemental Educational Opportunity Grant ("FSEOG") Programs, each year an institution shall submit a Fiscal Operations Report ("FISAP") plus other information the Secretary requires. The institution shall insure that the information reported is accurate and shall submit it on the form and at the time specified by the Secretary. [34 CFR 675.19(b)(3) and 34 CFR 676.19(b)(3)] Condition: The amounts of total FWS and FSEOG disbursements to students, as well as Federal and institutional shares of funding, reported in the July 1, 2018 through June 30, 2019 FISAP did not agree to the underlying records of the Foundation. Cause: In reporting of FWS disbursements, the total amount of disbursements to students incorrectly included wages paid to three FWS students who were working at a summer camp program in Summer 2018. Though their FWS wages earned during the academic year were correct to be reported as FWS disbursements, the wages earned as camp counselors were not eligible and should not have been included in the FISAP FWS disbursements. Due to turnover in the Student Financial Aid Department at the Foundation, the cause of the difference in reporting of FSEOG disbursements could not be determined. The Foundation did not have appropriate internal control to ensure that information included on the FISAP was accurate. Effect: Certain balances related to the Foundation's federal programs are not being accurately represented to the Department of Education. Questioned Costs: Foundation records of FWS funding supported total disbursements to students of $51,155 and the FISAP reported total FWS disbursements to students of $57,612, therefore over reporting disbursements to students of $6,157. Foundation records of FSEOG funding supported total disbursements to students of $57,411 and the FISAP reported total FSEOG disbursements to students of $62,709, therefore over reporting disbursements to students of $5,298. Context: The sample was not a statistically valid sample. Recommendation: The Foundation should review and revise its procedures for the FISAP preparation and review to ensure accurate information is reported on the FISAP in a timely manner.

CFDA No.: 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P268K195276 Pass Through Entity: Not Applicable Repeat Finding: 2018-001 Criteria: On a monthly basis, reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Secretary [34 CFR Section 685.300(b)(5)] Condition: The Foundation did not reconcile institutional records with Direct Loan funds received from the Secretary and Direct Loan disbursement records submitted to and accepted by the Secretary for any months of fiscal year 2019. Cause: The Foundation had several staffing changes in fiscal years 2018 and 2019, including the Director of Financial Aid. During the staffing transition time, the individual responsible for the reconciliation previously had left the Foundation and the replacement was not aware of the reconciliation process and responsibility. It was also noted that the Foundation did not have full use of EdConnect nor was the software setup to received or load SAS Reports. Effect: Direct loans are not being reconciled on a timely basis. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted for twelve of the twelve months of fiscal year 2019. The sample was not a statistically valid sample. Recommendation: We recommend that the Foundation assign the monthly reconciliation process to the appropriate individual to ensure the reconciliations are being completed on a regular basis. We recommend that the Foundation complete the reconciliation procedures for June 2019 for the 2018-2019 academic year to review the accuracy of the Foundation's institutional records to the Direct Loan disbursement records submitted to and accepted by the Secretary.

CFDA No.: 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P268K195276 Pass Through Entity: Not Applicable Criteria: In the program participation agreement, the school must agree to provide for the implementation of a quality assurance system, as established by the Secretary and developed in consultation with the school, to ensure that the school is complying with program requirements and meeting program objectives and agree to provide that the school will not charge any fees of any kind to student or parent borrowers for origination activities or the provision of any information necessary for a student or parent to receive a loan under part D of the Act or any benefits associated with such a loan [34 CFR 685.300(b)] Condition: The Foundation does not have a Direct Loan Quality Assurance Policy documented and in place. Cause: The Foundation had several staffing changes in fiscal years 2018 and 2019, including the Director of Financial Aid. Therefore, no one was aware of the requirements and took responsibility to document such a policy. Effect: Documentation of a direct loan program quality assurance system could not be provided by the Foundation. There is no indication that the Foundation charged fees of any kind to student or parent borrowers for origination activities related to awarding of direct loans. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted related to documentation of Foundation policies and procedures. This is not a sampled testing population. Recommendation: We recommend that the Foundation document and implement a direct loan program quality assurance system policy.

CFDA No.: 84.007, 84.033 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P007A185254, P033A185254 Pass Through Entity: Not Applicable Criteria: The Federal share of awards may not exceed 75 percent of the total FSEOG awards made by an institution, unless a higher amount (up to 100 percent) has been authorized by the Department of Education [34 CFR 676.21]. The Federal share of the FWS compensation paid to a student may exceed 75 percent, but may not exceed 90 percent, if the student is employed at a private nonprofit organization or a Federal, State, or local public agency and the number of students compensated under paragraph by such entities is not more than 10 percent of the total number of students paid under the FWS Program at the institution [34 CFR 675.26]. Condition: It was determined that the Federal share of FSEOG awarded was 82 percent, which is in excess of the 75 percent limit. It was determined that the Federal share of FWS awarded was 84 percent, which is in excess of the 75 percent limit, as the Foundation does not employee any of its FWS participants at outside institutions. Cause: Error in monitoring and reconciling the matching requirements of FSEOG and FWS awards. Effect: Errors in the determination of the matching amounts resulting in funds in excess of the Federal portions of FSEOG and FWS being drawn from the Department of Education through the G5 system. Questioned Costs: Based on the FSEOG awards to students for the 2018-2019 award year, the Foundation should have drawn $41,558 for the Federal share of funds, however $47,032 was drawn, therefore the Foundation drew $5,474 in excess funding. Based on the FWS disbursements to students for the 2018-2019 award year, the Foundation should have drawn $38,366 for the Federal share of funds, however $43,209 was drawn, therefore the Foundation drew $4,843 in excess funding. Context: These instances appear isolated to the requirement for matching and the consequences of overdrawn funds is known. This is not a sampled testing population. Recommendation: We recommend that the Foundation refund the excess FSEOG and FWS funds drawn and ensure that final student awards are reviewed by the student financial aid director and the controller to confirm the final drawn Federal portion of the awards is not in excess of 75 percent.

CFDA No.: 84.007, 84.063, 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P007A185254, P033A185254, P063P185276, P268K195276 Pass Through Entity: Not Applicable Repeat Finding: 2018-002 Criteria: 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 in accordance with Federal regulations and return the unearned portion of the grant or loan funds to the Title IV programs as soon as possible but no later than 45 days after the withdrawal date. [34 CFR 668.22] Condition: For one of the 28 students that withdrew from the Foundation, the amount of the Title IV refund was calculated incorrectly and refund not returned within 45 days the date of determination. Cause: A return of Title IV calculation was not completed for this student and no Title IV funds were returned to the Department of Education for the unearned portion of program funds. Effect: The student accounts were not adjusted for the unearned portion of Title IV program funds. Questioned Costs: Questioned costs of $4,407 were noted during testing. Context: There were a total of 28 students who withdrew during fiscal year 2019 that received Title IV funds, 10 of those students were before 60 percent completion of the semester and the remaining 18 were in after 60 percent complete and no refund was necessary. Of the 10 students that withdrew before 60 percent completion of the semester, there was one error identified for the student whose return of Title IV calculation was not complete, resulting in $4,407 of Title IV funds not being returned ($109 of Pell and $4,289 of Direct Loans). The sample was not a statistically valid sample. Recommendation: We recommend that the Foundation personnel review the calculations generated by the software system. An individual within the department should be designated as responsible for completing R2T4 forms and returning funds timely. A manual review should be performed by someone other than the person who enters the information into the software in order to verify accuracy of the calculations.

CFDA No.: 84.007, 84.033, 84.063, 84.268 Award Year: July 1, 2018 - June 30, 2019 Federal Agencies: U.S. Department of Education Federal Award No.: P007A185254, P033A185254, P063P185276, P268K195276 Pass Through Entity: Not Applicable Criteria: An institution's data collection form and reporting package (including the financial statements, schedule of expenditures of federal awards, summary of prior year audit findings, auditor's reports and corrective action plan) must be submitted within the earlier of 30 calendar days after receipt of the auditor's reports or nine months after the end of the audit period. An institution must submit annually to the Secretary of the Department of Education its compliance audit and its audited financial statements no later than six months after the last day of the institution's fiscal year. [2 CFR 200.512 and 34 CFR 668.23] As a result of flexibilities provided due to the COVID-19 pandemic, the institution was given an additional 6 months, until September 30, 2020, to provide the required audit submission. Condition: The Foundation did not submit its audited financial statements and compliance audits to the OMB through the Federal Audit Clearinghouse or the Secretary of the Department of Education through the eZ-Audit before the September 30, 2020 deadline. Cause: The Foundation had several staffing changes in fiscal years 2018 and 2019, including the Director of Financial Aid and changes within the Business Office that result in reports not being completed and submitted before the deadline. Effect: The Foundation did not submit the annual financial statement and compliance audits within the allowed timeframe. Questioned Costs: There are no questioned costs associated with this finding. Context: Error noted related to documentation of Foundation policies and procedures. This is not a sampled testing population. Recommendation: We recommend that key members of management are aware of the reporting and submission deadlines to ensure the annual financial statement and compliance audits are completed and submitted within the allowable timeline.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION