Vermont Law and Graduate School, Inc. and Subsidiary

Information on the Federal Program: Federal Agency: United States Department of Educations Program Name: Student Financial Assistance Cluster CFDA: 84.268, 84.033, 84.038 Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2023 Specific Requirement: Changes in enrollment status for all students need to be submitted to the National Student Loan Data System (NSLDS) in a timely manner. Condition Found: The School was submitting certain enrollment statuses to the NSLDS with the appropriate change in enrollment status. However, there was a technology issue with the third-party administrator utilized by the School, which was inadvertently overwriting the change in enrollment status as submitted by the School. Questioned Costs: None. Cause and Effect: The School was not checking to verify the statuses as submitted by the third party administrator as being submitted correctly to the NSDLS appropriately. Recommendation: We recommend the School spot-check a sample of submissions throughout the year to ensure the enrollment statuses are appropriate and that they were not changed by the third party administrator. Repeat Finding: No. Views of a Responsible Official and Correction Action Plan: See Corrective Action Plan.

The Registrar’s office of Vermont Law and Graduate School (the School) will continue to run monthly enrollment reports and upload them into the Clearinghouse through their website. Any anomalies or glitches discovered by the Registrar’s Office will be discussed with the Information Technology department who will contact the software manufacturer (Jenzabar). If a patch is deemed necessary, it will be installed through an update by the Software Manufacturer and Information Technology. Responsible Parties: Maureen Moriarty – Registrar (802) 831-1235 Melissa Erickson – Director, Financial Aid (802) 831-1235 Estimated Completion Date: June 30, 2024

Information on the Federal Program: Federal Agency: United States Department of Educations Program Name: Student Financial Assistance Cluster CFDA: 84.268, 84.033, 84.038 Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2023 Specific Requirement: The School outsources the billings, collections and due diligence for the Federal Perkins Loan Program to a third party, University Accounting Services (UAS). UAS engages an independent accountant to perform a compliance examination of UAS’s compliance with those requirements. The School could not obtain an audit report for the servicer of its Perkins Loans program, University Accounting Services (UAS). Condition Found: The School could not obtain the compliance examination report due to the fact that the compliance examination was not completed timely. Questioned Costs: None. Cause and Effect: UAS’s compliance with the billings, collections and due diligence for the Federal Perkins Loan Program for the School could not be determined. Recommendation: We recommend management work with their UAS representative to obtain the UAS compliance examination report on a timely basis each year. If UAS is unable to provide the compliance examination report on a timely basis, we recommend management consider finding another vendor to assist with the billings, collections and due diligence for the Federal Perkins Loan Program. Repeat Finding: No. Views of a Responsible Official and Correction Action Plan:See Corrective Action Plan.

The School will work with its University Accounting Services (UAS) representative to obtain the UAS compliance examination report on a timely basis each year. If UAS is unable to provide the compliance examination report on a timely basis, the School will consider finding another vendor to assist with the billings, collections and due diligence for the Federal Perkins Loan Program. Responsible Parties: Nathaniel Hibler – Vice President of Finance (802) 831-1204 Emily Parker – General Ledger Accountant (802) 831-1271 Estimated Completion Date: June 30, 2024

Information on the Federal Program: Federal Agency: United States Department of Education Program Name: Student Financial Assistance Cluster CFDA: 84.038 Federal Perkins Loan Program Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2021 Specific Requirement: The billings, collections and due diligence functions of the Federal Perkins Loan Program are performed by University Accounting Service (UAS). UAS?s compliance requirements are examined by other independent accountants. The independent accountants identified instances of noncompliance related to following specific requirements: 1. Late submission of the annual compliance examination by UAS (34 CFR 668.23(4)) 2. Past due notices sent untimely (34 CFR 674.43) 3. Contact with borrower ? unable to provide grace period letters (34 CFR 674.42) 4. Contact with borrower ? grace period letters sent untimely (34 CFR 674.42) 5. Inaccurate enrollment status reporting (34 CFR 685.309) Condition Found: The independent accountants indicated that UAS did not comply with requirements regarding SFA programs as described in the schedule of findings and questioned costs included in the independent accountant?s examination report. The independent accountants considered the deficiencies described in schedule and questioned costs included in the independent accountant?s examination to be material weaknesses in internal control over compliance. Context: The Law School outsources the billings, collections and due diligence functions to UAS. The compliance report is provided by UAS on an annual basis to provide the results of the independent accountants examination of the applicable compliance requirements. Questioned Costs: None Cause and Effect: The examination report of the independent accountants cited several causes that resulted in the instances of noncompliance at UAS. The effect of the instances of noncompliance noted in the examination report of the independent accountants could result in certain instances of noncompliance that could affect the Federal Perkins Loan Program borrowers whose billing, collections and due diligence has been outsourced to UAS.

The Law School will contact their representative at UAS to discuss the findings and material weaknesses identified in the examination report of the independent accountants to determine the potential impact on the Law School and gain an understanding of UAS?s corrective action plans to resolve each instance of noncompliance and material weakness.

Information on the Federal Program: Federal Agency: United States Department of Education Program Name: Student Financial Assistance Cluster CFDA: 84.033: Federal Work Study Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2021 Specific Requirement: Funds under the Federal Work Study program are to be paid to students based on wages earned when the work is performed. Condition Found: During our audit, we noted there were instances where documented support for actual time worked by select students was not properly reviewed. Context: Based on our sample, which was based on statistically-based tables, of nine students who were disbursed Federal Work Study funds, five students? timecards for the pay periods selected were not reviewed by a supervisor. Questioned Costs: None Cause and Effect: The Law School was understaffed in fiscal year 2021, and certain controls were missed.

Vermont Law School requires all supervisors to approve their subordinates? timesheets at the end of each pay period. Time sheets need to be completed and approved by 10 am on Monday of the payroll week. Reminders are sent out to the VLS community periodically. At times, supervisors have been unable to meet this deadline, resulting in noncompliance with VLSs timesheet process. To address noncompliance, VLS will implement a plan to follow up on unapproved timesheets at the end of each quarter. The payroll processor will run a report to determine timesheets that were not properly approved during the quarter. An e-mail seeking proper approval and a reminder of the process and deadline will be sent to all supervisors and offenders will be documented. The Financial Aid Office is creating a supervisor ?How To? detailing all requirements and instructions. The document will be sent to all current supervisors and will automatically be sent each time a new supervisor is on-boarded in Paylocity. It will also be sent at the beginning of each year to all known FWS supervisors.

Information on the Federal Program: Federal Agency: United States Department of Education (ED) Program Name: Student Financial Assistance Cluster CFDA: 84.268 - Federal Direct Student Loans Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2020 Specific Requirement: Required by 34 CFR 688.165, an institution must notify the student, or parent, in writing of (1) the date and amount of disbursement; (2) the student?s right, or parent?s right, to cancel all or a portion 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. When funds are disbursed by electronic fund transfer and an institution does not implement an affirmative confirmation process, an institution must notify a student no earlier than 30 days before, but no later than 7 days after, crediting the student?s account of their right to cancel all or part of the loan within 30 days. Condition Found: During our audit, we noted the Law School did not send any disbursement notification letters informing the student, or their parent, of their right to cancel all or a portion of their loan within the required timeframe. Context: Based on our sample, which was based on statistically-based samples, of 31 students who were disbursed Federal Direct Student Loans, none of the students or their parents did receive disbursement notification of their right to cancel all or a portion of their loan within the required timeframe. Through inquiry with the Law School, we determined no students or their parents during the academic year received notification. The Law School has transitioned to increased electronic communication, resulting in the notification of the student?s or parent?s right to cancel being excluded from the electronic notifications. Questioned Costs: None. Cause and Effect: We noted that through our sample outlined above, in addition to further inquiry, there was no documentation of sending notification letters to any students, or their parents, of their right to cancel direct loan disbursements. As a result, students may not have been aware of their right to cancel their loan or the procedures and time by which the loan may be canceled. Recommendation: We recommend the Law School implement a procedure to have disbursement notification letters sent to every student who received direct loan disbursement, within 7 days, to be in compliance with the OMB. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and the recommendation. See Corrective Action Plan on page 43.

PENDING

Information on the Federal Program: Federal Agency: United States Department of Education (ED) Program Name: Student Financial Assistance Cluster CFDA: 84.268 - Federal Direct Student Loans Federal Award Identification Number: N/A Federal Award Year: Year Ended June 30, 2020 Specific Requirement: Required by 34 CFR 688.34, 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 programs. At the end of one payment period on financial aid probation, the student must meet the institution?s satisfactory academic progress standards or meet the requirements of the academic plan developed by the institution and the student to qualify for further Title IV funds. Condition Found: During our audit, we noted 21 students who were not notified they were on academic probation or suspension and subsequently not documented as such by the Law School. Within those 21 students, two students were improperly disbursed aid who failed to meet the Law School?s satisfactory academic progress standards after not meeting the standards two terms in a row. The students should have first been put on academic probation and then on suspension with the opportunity to appeal, neither were done. Context: In our sample of 40 students, based on statistically based tables, we noted one student was not sent an academic probation letter. Through further inquiry and testing, we noted that an additional 20 students did not receive probation or suspension letters when they failed to meet the Law School?s satisfactory academic progress standards. Also within the entire population identified, two students were disbursed federal aid when they should have had their aid suspended. Questioned Costs: $22,930 awarded and disbursed in total to two ineligible students. Cause and Effect: The current process for reviewing student?s status of complying with the Law School?s satisfactory academic progress policy includes a review of the system generated report that identifies which students failed to meet the academic policy. Two members of the Student Financial Services department review the outputs and manually determine which students need to be updated in the Law School?s student financial aid PowerFaids system. As a result of the manual process, 21 students were not sent warning or suspension letters notifying them they were not complying with the Law School?s satisfactory academic progress policy. In addition, two students that were identified as missed above were improperly awarded and disbursed Title IV funds. Recommendation: We recommend that the Law School enhance their quality control review of the system-generated satisfactory academic progress report to verify all students are properly included and the students? academic status change are updated in PowerFaids properly. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and the recommendation. See Corrective Action Plan on page 43.

PENDING