THOMAS JEFFERSON UNIVERSITYNon-Profit

Finding 2024-001 Special Tests and Provisions – Student Financial Assistance Cluster (Significant Deficiency) Grantor(s): Department of Education Program: Student Financial Assistance Cluster Assistance Listing#: 93.364, 93.342, 93.342, 84.007, 84.033, 84.063, 84.038, 84.268 Title: Nursing Student Loans (NSL), Health Professions Student Loans, Including Primary Care Loans And Loans For Disadvantaged Students (HPSL/PCL/LDS), Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work-Study Program, Federal Pell Grant Program, Federal Perkins Loan Program, Federal Direct Student Loans Award Year: 7/2023 – 6/2024 Award #: N/A Pass-through Number: N/A Criteria 34 CFR 668.165 which requires the institution, in advance of disbursement, to provide a general notification to all students receiving Title IV program funds including (1) the anticipated date and amount of the disbursement; (2) the student's or parent's right to cancel all or a portion of that loan or loan disbursement; and (3) the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. (Disbursements to or on Behalf of Students) 34 CFR 668.56 which indicates the FAFSA information that an institution and an applicant are required to verify. (Verification) 34 CFR 668.21-22 which includes the requirements for determining the amount of Title IV funding to be returned to the Department of Education as well as the required order and timeframe for return of Title IV funds. (Return of Title IV Funds) 34 CFR 685.309 and 34 CFR 674.19 which states 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 school discovers that (1) a 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 (2) a student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address. Student status changes are required to be reported at both the “Campus Level” and “Program-Level” as each have separate record types. (Enrollment Reporting) Condition Based on our testing, we noted the following: • For 1 student of the 50 sampled to test Disbursements to or on Behalf of Students, we noted that the loan disbursement notification letter sent that would include, in writing (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; 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, was not sent. However, the student did sign a Master Promissory Note (MPN), in which the student promises to repay the loan they received. • For 4 students of the 31 sampled to test Verification, we noted that information was verified incorrectly between the submitted documentation and the student aid application. Additionally, in one instance the verification worksheet was not maintained. For 1 student of the 18 sampled to test Return of Title IV funds, the students funds were not returned within the 45-day window. For 1 student of the 18 sampled to test Return of Title IV funds, the Return of Title IV funds were calculated incorrectly. However, this student ultimately returned more than was required by the calculation. • For 20 students of the 25 sampled to test Enrollment Reporting, we noted that there were instances of noncompliance, including: o For 9 students, the student’s enrollment change to ‘Graduated’ was not reported to NSLDS. o For 5 students, enrollment status was not reported timely by the University and/or the Service Provider to NSLDS (within 60-day requirement). o For 3 students, the enrollment status should have been reported as Leave of Absence (LOA) to NSLDS but was instead reported as ‘Withdrawn." Additionally, the status was not reported timely by the University and/or the Service Provider to NSLDS. o For 1 student, the NSLDS Campus Level effective date did not agree to that of the student file and NSLDS Program Level. o For 1 student, the NSLDS Program Level effective date did not agree to that of the student file and NSLDS Campus Level. o For 1 student, the date of graduation per transcript did not agree to the date reported to NSLDS on the program and campus level. Cause The cause of this finding was due to insufficient resources and need for increased training of new staff members within the Student Financial Aid office and Registrar's office. Effect The University did not comply with the specific requirements from the Department of Education, and, in certain cases, the Department did not receive information timely and/or accurately. However, there was no impact on federal funds received, returned, or disbursed to students. Questioned Costs None. Recommendation Management should enhance their current controls in place to ensure new staff have the appropriate training and add additional resources, as available, to meet all compliance requirements. Management’s View and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included in this Report.

Finding 2022-001 Reporting Grantor(s): Department of Education Program: Federal Perkins Loan Assistance Listing#: 84.038; Student Financial Aid Cluster Title: Federal Perkins Loans; Student Financial Aid Cluster Award Year: 7/2021 ? 6/2022 Award #: N/A Pass-through Number: N/A Criteria Per the 2022 OMB Compliance Supplement, an institution is required to maintain program and fiscal records for all transactions that occurred after the most recent Fiscal Operations Report and Application to Participate (FISAP) was filed. As part of its procedures, the program should ensure that overall cash-on-hand or excess cash amounts are reconciled. Condition Through testing the Student Financial Assistance cluster in the 2022 Uniform Guidance audit, we noted that there were two line-items on the FISAP that did not agree to supporting documentation with reportable differences larger than $25,000. Within the Federal Perkins Loan section, field item 1.1 ?Cash on hand and in depository as of 6/30/2022? was understated by $378,201, while field item 1.2 ?Cash on hand and in depository as of 10/31/2022? was overstated by $113,754. Cause The cause of this finding was due to insufficient review of the FISAP prior to submission. Effect The FISAP was submitted with two fields in the Federal Perkins Loan section that were misstated. Questioned Costs None. Recommendation Management should enhance the control in place to review each line item and ensure agreement to underlying support on the FISAP prior to submission. Management?s View and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included in this report.

Finding 2022-002 Special Tests and Provisions ? Disbursements to or on behalf of students Grantor(s): Department of Education Program: Student Financial Aid Cluster Assistance Listing#(s): Various Title: Student Financial Aid Cluster Award Year: 7/2021 ? 6/2022 Award #: N/A Pass-through number: N/A Criteria Per the 2022 OMB Compliance Supplement, where disbursements created a credit balance in the student account and the student or parent did not provide an authorization for the institution to retain funds, the institution is required to provide the credit balance to the student within 14 days of the date the balance was created. Condition Through testing disbursements to or on behalf of students enrolled at the East Falls campus, it was noted that 1 student of a sample of 25 had a credit balance that was not refunded within the required 14-day period. For this particular student, the credit balance was created on 10/18/2021 and refunded to the student on 11/15/2021, which is 28 days later. Cause The cause of the finding is due to a lapse in control operation to ensure that the student was refunded in a timely manner. Effect The student received their refund later than the deadline required by the regulations. Questioned Costs None. Recommendation Management should enhance the control in place to ensure that when credit balances are created in student accounts that funds are returned to the student within the 14-day window. Management should consider implementing controls to notify them when there is a credit balance, or consider automating the process for refunds. Management?s View and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included in this report.

Finding 2022-003 Enrollment Reporting Grantor(s): Department of Education Program: Student Financial Aid Cluster Assistance Listing#(s): Various Title: Student Financial Aid Cluster Award Year: 7/2021 ? 6/2022 Award #: N/A Pass-through Number: N/A Criteria Per the 2022 OMB Compliance Supplement, institutions are required to certify enrollment, including changes in students? enrollment status, at a minimum of every 60 days. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition Through testing a sample of 25 students for enrollment reporting of Pell and Direct Loans, we noted 3 students were reported to the NSLDS outside of the required 60-day window. Each of these 3 students were reported 66 days after their status change. Additionally, for 3 other students in our sample of 25, there was no evidence to support their ?graduated? status or date of the status change within the NSLDS. Cause The cause of the delay in reporting to the NSLDS for the first 3 students mentioned above is due to timing with graduation and resource constraints at the University. For the second 3 students, the cause was due to the fact that these students had multiple status changes in a small period of time. The students were ?full-time? until 12/31/2021 when they graduated the undergraduate program, then began the graduate program as full-time students in February 2022. The quick change in status was the cause of the NSLDS enrollment status not being supported for these students. Effect NSLDS was not updated timely for the first 3 students mentioned above. For the second 3 students, their enrollment status could potentially be inaccurate in the NSLDS system if their graduation was not processed. Questioned Costs None. Recommendation Management should enhance their resources within the office of the registrar to be able to accommodate status changes during the graduation period and ensure timely status change submission to the NSLDS. Management?s View and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included in this report.

GSA_MIGRATION

Finding 2020-001 Indirect Costs Grantor(s): Department of Health and Human Services; Administration for Community Living Program: Research and Development Cluster CFDA#(s): 93.242; 93.433 Title: Mental Health Research Grants; ACL National Institute on Disability, Independent Living, and Rehabilitation Research Award Year: 7/2019 ? 6/2020 Criteria 2 CFR 200.414(b): Because of the diverse characteristics and accounting practices of nonprofit organizations, it is not possible to specify the types of cost which may be classified as indirect (F&A) cost in all situations. Identification with a Federal award rather than the nature of the goods and services involved is the determining factor in distinguishing direct from indirect (F&A) costs of Federal awards. However, typical examples of indirect (F&A) cost for many nonprofit organizations may include depreciation on buildings and equipment, the costs of operating and maintaining facilities, and general administration and general expenses, such as the salaries and expenses of executive officers, personnel administration, and accounting. Condition Of 25 grants tested for indirect cost procedures, two instances were noted in which the indirect cost rate per the supporting documentation did not match the indirect cost rate as prescribed within the applicable Notice of Award. Cause Indirect costs were charged to the grant prior to all eligible expenses being posted to the general ledger. Effect There was a lower rate of indirect costs charged to the selected grants than prescribed per the applicable grant agreements. Questioned Costs None. Recommendation Management should enhance the monitoring control in place for review of indirect costs being charged against the grant each month to ensure all applicable expenses have been posted to the general ledger before charging the grant. Management?s View and Corrective Action Plan Following these findings are management?s view and corrective action plan.

Finding 2020-002 Enrollment Reporting Grantor: Department of Education Program: Student Financial Assistance Cluster CFDA#: 84.268 Title: Federal Direct Student Loans Award Year: 7/2018 ? 6/2019 Criteria OMB No. 1845-0035; Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309 Schools are required to confirm and report to the National Student Loan Data System (NSLDS) the enrollment status of students who receive Federal student loans. Enrollment information is used to determine the borrower?s eligibility for in-school status, deferment, interest subsidy, and grace period. Enrollment changes, such as a change from full-time to half-time status, graduation, withdrawal, or an approved leave of absence, are changes that need to be reported. The enrollment information is merged into the NSLDS database and reported to guarantors, lenders, and servicers of student loans. 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. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition From the population of students receiving federal funds that had a change in their status during fiscal year 2019 for the East Falls and Center City campuses, 25 were selected for testing from each (50 total samples). During compliance testing to ensure students? change in status were properly and timely reported to the National Student Loan Data System (NSLDS), 17 exceptions (68%) and 23 exceptions (92%) were noted at the East Falls and Center City campuses, respectively. In such instances, the number of days between the student?s status change and the date the change was reported to NSLDS exceeded the allowable days. The average days late for the East Falls and Center City campuses were 189 and 124, respectively. Cause Management migrated financial aid systems for the East Falls campus from Colleague to Banner during the fiscal year. As part of the systems conversion, certain student status changes were missed as part of the normal process for enrollment reporting. For both Center City and East Falls campuses, current business processes did not have a process in place to identify and timely correct upload issues between NSC and NLSDS. As such, management?s current process does not ensure information transmitted to NSC is actually uploaded to NSLDS. Effect Lack of timely reporting of changes in student enrollment status result in late starting of grace periods for federal student loans, and late starting of repayment if the student has previously used up their loan grace period. Lack of timely reporting of changes in student enrollment could also impact the amount of aid a student is entitled to receive. Questioned Costs None. Recommendation Management should enhance the processes in place related to student status change reporting to the NSLDS through the National Student Clearinghouse (NSC) to ensure timely reporting. Management should work with the registrars and financial aid offices to outline a policy clarifying the accountability of the various units within the University and specify reporting deadlines. Management should implement a process to reconcile the enrollment status reports sent to NSC with the student data ultimately being transmitted to NSLDS. Management?s View and Corrective Action Plan Following these findings are management?s view and corrective action plan.

Finding 2019-01 Verification Grantor: Department of Education Program: Student Financial Assistance Cluster CFDA#: 84.268 Title: Federal Direct Student Loans Award Year: 7/2018 ? 6/2019 Criteria 24 CFR 668.56(b): For each applicant whose FAFSA information is selected for verification by the Secretary, the Secretary specifies the specific information that the applicant must verify. 24CFR 668.57: If an applicant is selected to verify any of the following information, an institution must obtain the specified documentation: (a) Adjusted Gross Income (AGI), income earned from work, or U.S. income tax paid. (1) Except as provided in paragraphs (a)(2), (a)(3), and (a)(4) of this section, an institution must require an applicant selected for verification of AGI, income earned from work or U.S. income tax paid to submit to it a copy of the income tax return or an Internal Revenue Service (IRS) form that lists tax account information of the applicant, his or her spouse, or his or her parents, as applicable for the specified year. Condition Of 25 selections tested for verification procedures at the East Falls location, two instances were noted in which both students? U.S. Income Taxes Paid and/or AGI per the ISIRs did not agree to the amounts included on the subsequently obtained tax returns. In both instances, management did not update the information prior to awarding and disbursing Federal Aid to the students. Cause Management calculated aid eligibility based off the ISIR data, which was submitted without the use of the data retrieval tool. Effect The calculation of the student?s eligibility for Federal Aid was determined with incorrect tax data. However, the misstatement of AGI and tax paid for the students would not have changed the amount of aid received. Questioned Costs None. Recommendation Management should enhance the monitoring control in place for review of verification procedures being completed timely. The enhanced control should include a second level of review to ensure that all students selected for verification procedures have been verified accurately and timely, as evidenced by reviewed signoff and date of review. This process should include monitoring controls over verification of students that do not use the IRS data retrieval tool.

Finding 2019-02 Enrollment Reporting Grantor: Department of Education Program: Student Financial Assistance Cluster CFDA#: 84.268 Title: Federal Direct Student Loans Award Year: 7/2018 ? 6/2019 Criteria OMB No. 1845-0035; Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309 Schools are required to confirm and report to the National Student Loan Data System (NSLDS) the enrollment status of students who receive Federal student loans. Enrollment information is used to determine the borrower?s eligibility for in-school status, deferment, interest subsidy, and grace period. Enrollment changes, such as a change from full-time to half-time status, graduation, withdrawal, or an approved leave of absence, are changes that need to be reported. The enrollment information is merged into the NSLDS database and reported to guarantors, lenders, and servicers of student loans. 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. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Condition From the population of students receiving federal funds that had a change in their status during the current fiscal year for the East Falls and Center City campuses, 25 were selected for testing from each (50 total samples). During compliance testing to ensure students? change in status were properly and timely reported to the National Student Loan Data System (NSLDS), 17 exceptions (68%) and 23 exceptions (92%) were noted at the East Falls and Center City campuses, respectively. In such instances, the number of days between the student?s status change and the date the change was reported to NSLDS exceeded the allowable days. The average days late for the East Falls and Center City campuses were 189 and 124, respectively. Cause Management migrated financial aid systems for the East Falls campus from Colleague to Banner during the fiscal year. As part of the systems conversion, certain student status changes were missed as part of the normal process for enrollment reporting. For both Center City and East Falls campuses, current business processes did not have a process in place to identify and timely correct upload issues between NSC and NLSDS. As such, management?s current process does not ensure information transmitted to NSC is actually uploaded to NSLDS. Effect Lack of timely reporting of changes in student enrollment status result in late starting of grace periods for federal student loans, and late starting of repayment if the student has previously used up their loan grace period. Lack of timely reporting of changes in student enrollment could also impact the amount of aid a student is entitled to receive. Questioned Costs None. Recommendation Management should enhance the processes in place related to student status change reporting to the NSLDS through the National Student Clearinghouse (NSC) to ensure timely reporting. Management should work with the registrars and financial aid offices to outline a policy clarifying the accountability of the various units within the University and specify reporting deadlines. Management should implement a process to reconcile the enrollment status reports sent to NSC with the student data ultimately being transmitted to NSLDS.

Finding 2019-03 Return of Title IV Funds Grantor: Department of Education Program: Student Financial Assistance Cluster CFDA#: 84.268 Title: Federal Direct Student Loans Award Year: 7/2018 ? 6/2019 Criteria 34 CFR 668.21(b): The institution must return those funds for which it is responsible under paragraph (a) of this section to the respective title IV, HEA program as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance. Condition Of 10 selections tested for return of Title IV funds at the East Falls location, one instance was noted where the University did not return the proper amount of funding within 30 days of becoming aware that the student did not attend classes for the semester. The University initially calculated and returned funds based on 1 day of attendance and later corrected the calculation to 0 days. Cause Management calculated the refund based on 1 day of attendance rather than zero. Effect The amount of the refund was initially $50 less than it should have been. This was corrected and the full refund was issued at the end of the semester. Questioned Costs None. Recommendation Management should enhance the control in place for review return of Title IV fund calculations. The enhanced control should include a second level of review to ensure that all inputs to the calculation have been verified, as evidenced by reviewed signoff and date of review. Management?s View and Corrective Action Plan Following these findings are management?s view and corrective action plan.

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