Johnson C. Smith UniversityHigher Education

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): E. Eligibility – Eligibility for Individuals – In the process of applying for federal financial aid, an Institutional Student Information Record (“ISIR”) is sent electronically to the institution. The institution uses the ISIR to help determine student eligibility, award amounts, and disbursements. The ISIR may contain codes that relate to student eligibility requirements. Such codes must be resolved by the institution. In addition, federal financial aid must be coordinated among the various programs with other federal and nonfederal aid (need and non-need based aid) to ensure that total aid is not awarded in excess of the student’s financial need or cost of attendance (“COA”). The determination of need-based Student Financial Assistance (“SFA”) award amounts is based on financial need. Financial need is defined as the student’s COA minus the Student Aid Index (“SAI”). E. Eligibility – Campus-Based Programs (FSEOG) (Assistance Listing 84.007) – The Federal Supplemental Educational Opportunity Grant (FSEOG) program provides grants to eligible undergraduate students. Priority is given to students who have not previously earned a bachelor’s or first professional degree. Priority is given to Federal Pell Grant recipients who have the lowest SAIs (34 CFR 676.10). E. Eligibility – Federal Direct Student Loans (“Direct Loans”) (Assistance Listing 84.268) - Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. For undergraduate students there is a combined annual loan limit for Direct Subsidized Loans and Direct Unsubsidized Loans, of which not more than a specified amount may be comprised of Direct Subsidized Loans (annual subsidized maximum). Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan Program prior to 2010) are $31,000 for dependent undergraduate students (except for dependent students whose parents are unable to borrow Direct PLUS Loans), not more than $23,000 of which may be subsidized. Condition: For certain students tested, the University improperly calculated the student’s COA. The University also failed to resolve ISIR comments codes prior to disbursing Title IV aid. In addition, for certain students, the University awarded aid in excess of award limits. Finally, we noted that priority was not given to Pell recipients with the lowest SAI when disbursing FSEOG awards. Cause: Insufficient administrative oversight and internal controls with respect to Title IV award eligibility. Effect or Potential Effect: The University is not in compliance with aid awarding criteria under the eligibility requirements. Failure to properly calculate COA, resolve ISIR codes, properly award and disburse aid, and prioritize the correct students for FSEOG awards in accordance with the required guidelines could result in improper disbursements of Title IV aid. Questioned Costs: Known questioned costs: $3,500; total questioned costs: indeterminable. Questioned costs of $3,500 were identified as a result of over-awards disbursed to students in the selected sample; however, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 6 of 40 students selected for testing, the University failed to properly calculate the COA. • For 1 of 40 students selected for testing, the University disbursed Direct Loans in excess of the established maximums. • For 2 of 40 students selected for testing, the University did not properly resolve all ISIR comment codes prior to disbursing Title IV aid for the award year. • We examined the University’s awards disbursement detail noting that all Pell recipients did not receive FSEOG awards. In addition, we identified 3 FSEOG recipients who had a greater SAI than students who did not receive FSEOG. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-001 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that the COA is properly calculated, ISIR comment codes are resolved, Title IV aid is properly calculated, awarded, and disbursed, and priority is given to Pell recipients with the lowest SAI when disbursing FSEOG awards, consistent with federal regulations. Views of Responsible Officials: The University acknowledges that it did not consistently apply federal eligibility and awarding requirements during the 2024–2025 award year. Specifically, students with the highest financial need, as determined by the lowest Student Aid Index (SAI), were not systematically prioritized for Federal Supplemental Educational Opportunity Grant (FSEOG) awards, and eligibility documentation and ISIR comment codes were not consistently reviewed and fully resolved prior to awarding and disbursing Title IV aid. As a result, limited instances occurred in which aggregate Direct Loan limits were exceeded and discrepancies existed between cost of attendance values maintained in PowerFAIDS and those reported to the Common Origination and Disbursement (COD) system. The University determined that these deficiencies were primarily attributable to gaps in internal controls, including the absence of structured, periodic quality assurance reviews, staffing transitions within the Office of Financial Aid, and insufficient training and supervisory oversight to ensure consistent compliance with federal requirements.

Federal Program Information: Federal Pell Grant Program (ALN: 84.063) and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting – Financial Reporting – Federal regulations require the University to submit origination and disbursement records for students to the Common Origination and Disbursement System (“COD”). Items considered key in student origination records, if applicable, are: award amount, enrollment date, verification status code (when the applicate is selected for verification), transaction number, cost of attendance, and the “Academic Start Date” and “Academic End Date”. Institutions must also submit disbursement records to the COD for students no earlier than 7 calendar days prior to the disbursement date, and no later than 15 calendar days after the institution makes a disbursement. Key items to test on disbursement records are disbursement date and amount. Condition: For certain disbursements identified through our testing, errors were identified in key items reported to the COD in student origination and disbursement records. Additionally, the University failed to report disbursement records for certain students within the required timeframe. Cause: Insufficient administrative oversight and internal controls with respect to accurate reporting of federal award information. Effect or Potential Effect: The University was not in compliance with COD reporting requirements. Questioned Costs: Known questioned costs: none; total questioned costs: indeterminable. While no known questioned costs resulted from the COA differences identified through the sampled items, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 23 of 40 students selected for origination record testing, the student’s cost of attendance was inaccurately reported within the COD. • For 19 of 40 students selected for disbursement record testing, the disbursement date reported to the COD did not match the actual date on which related funds were credited to the student's account. • For 4 of 40 students selected for disbursement record testing, the University did not submit required disbursement information within the required timeframe. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-002 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure origination and disbursement records are reported accurately and timely to the COD for Direct Loan and Pell Grant recipients, in accordance with federal regulations. Views of Responsible Officials: The University acknowledges that it did not consistently ensure the accuracy and timeliness of data reported to the Common Origination and Disbursement (COD) system during the 2024–2025 award year. Specifically, cost of attendance values reported to COD did not always align with the cost of attendance used for awarding aid, disbursement dates reported to COD did not consistently reflect the actual dates funds were credited to student accounts, and certain disbursement records were not transmitted within required post-disbursement reporting timeframes. As a result, the University experienced instances of inaccurate and untimely COD reporting, increasing institutional compliance risk, and limiting the University’s ability to demonstrate adherence to federal reporting requirements during audit testing. The University determined that these deficiencies were primarily attributable to weaknesses in internal controls governing origination and disbursement reporting, including reliance on legacy PowerFAIDS workflows without sufficient reconciliation, validation, or supervisory review prior to COD submission. Contributing factors also included the absence of a standardized disbursement and reporting calendar and insufficient monitoring of system transmission errors and exceptions.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Test and Provisions – Disbursements To or On Behalf of Students - Notification of Disbursement – Prior to making a disbursement, the school must notify students of the amount and type of Title IV funds they are expected to receive, and how and when those disbursements will be made (often referred to as an award letter or college financing plan) (34 CFR 668.165(a)(1)). Condition: Certain students were not notified of the amount and type of Title IV funds they were expected to receive prior to the University disbursing Title IV funds to the student. Cause: Insufficient administrative oversight and internal controls with respect to award notifications. Effect or Potential Effect: The University was not in compliance with award notification requirements. Questioned Costs: None. Context: For 1 of 25 students tested, an award notification was not sent to the student prior to the student receiving their first disbursement of Title IV funds. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its internal controls and policies and procedures over Title IV award notifications to ensure such notifications are sent to students prior to the University disbursing aid. Views of Responsible Officials: Johnson C. Smith University acknowledges that, for one student tested, an award notification was not issued prior to the initial disbursement of Title IV funds, as required by federal regulations. Although an award notification was subsequently generated, all Title IV aid for this student had already been disbursed prior to issuance of the notification. The University determined that this exception resulted from insufficient internal controls governing the award notification process within PowerFAIDS, including the absence of a reliable audit trail to document the timing and issuance of award notifications relative to disbursement activity. Contributing factors included reliance on manual processes and limited system-enforced sequencing controls, which reduced the University’s ability to consistently verify that required notifications were issued prior to disbursement.

Federal Program Information: Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Test and Provisions – Disbursements To or On Behalf of Students – Loan Disbursement Notification - Federal regulations (34 CFR section 668.165 (a)(6)(i)) require that the institution notify the student, or parent, in writing of (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 or the TEACH Grant payments returned to the ED; 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, TEACH Grant, or TEACH Grant disbursement. Institutions that implement an affirmative confirmation process (as described in 34 CFR section 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution with Direct Loan or TEACH Grants. Institutions that do not implement an affirmative confirmation process must notify a student no earlier than 30 days before, but no later than seven days after, crediting the student’s account and must give the student 30 days (instead of 14) to cancel all or part of the loan. Condition: Certain student and/or parent borrowers did not receive a loan disbursement notification within the required timeframe. Additionally, certain loan disbursement notifications made to student and/or parent borrowers did not contain all required information. Cause: Insufficient administrative oversight and internal controls with respect to loan disbursement notifications. Effect or Potential Effect: Students and/or parents were not properly notified of loan disbursements and/or their right to cancel/decline loan awards. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 13 of 40 disbursements tested, the University was unable to provide documentation supporting appropriate loan disbursement notifications were sent to the student and/or parent for the selected disbursement. • For 8 of 40 disbursements tested, the loan disbursement notification sent to the student and/or parent was not issued within the required timeframe. • For 27 of 40 disbursements tested, the loan disbursement notification sent to the student and/or parent did not include the date of the disbursement, as required. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-004 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its internal controls and policies and procedures over loan disbursement notifications to ensure such notifications are sent to student and/or parent borrowers within the required timeframe. Views of Responsible Officials: The University acknowledges deficiencies in its Direct Loan disbursement notification process during the 2024–2025 award year. Specifically, the University was unable to consistently document that required loan disbursement notifications were issued to students or parents, certain notifications were not sent within the required regulatory timeframes, and required notification elements—most notably the disbursement date—were omitted from a number of notifications. The University determined that these deficiencies resulted from weaknesses in internal controls governing the generation, content validation, timing, and documentation of loan disbursement notifications. The notification process relied on manual and partially automated workflows that were not consistently monitored to ensure compliance with federal requirements under 34 CFR §668.165(a)(6). In addition, oversight of the Parent PLUS notification process was insufficient, resulting in inconsistent practices and notifications that did not always include all required disbursement information within the notification itself. The absence of a standardized, system-generated audit trail documenting the issuance, timing, and content of loan disbursement notifications limited the University’s ability to demonstrate compliance during audit testing. As a repeat finding, these conditions revealed the need for strengthened automation, standardized notification templates, and enhanced supervisory review to ensure timely, accurate, and fully documented borrower notifications.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds must be distributed in the prescribed order (34 CFR 668.22(i)). Post-withdrawal disbursements of loan funds may be credited to the student’s account if currentyear outstanding charges exist on the student’s account, up to the amount of the current-year outstanding charges only after obtaining confirmation from the student, or parent in the case of a parent PLUS loan, that he or she still wishes to have some or all of the loan funds disbursed 34 CFR 668.22(a)(6)). Condition: For certain students that withdrew during the year, the University did not properly calculate the amounts to be returned to the ED. Additionally, funds due for return were not returned in the proper order. Finally, the University made a post-withdrawal disbursement of direct loans to certain students in excess of the amount of current-year outstanding charges and without obtaining the required authorization from the student or parent. Cause: Insufficient administrative oversight and internal controls with respect to return of Title IV funds calculations. Effect or Potential Effect: The University was not in compliance with the return of Title IV funds requirements. Questioned Costs: Known questioned costs: $17,226; total questioned costs: indeterminable. Known questioned costs of $17,226 were identified as a result of the described errors in withdrawal calculations; sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 4 of 4 sampled students, return of funds calculations were not completed timely and the amount of Title IV aid due for return or post-withdrawal disbursement was not properly calculated. • For 1 of 4 sampled students, a post-withdrawal disbursement of direct loan funds was made to the student without obtaining the required student authorization, and the amount disbursed was in excess of the eligible post withdrawal disbursement amount. • For 3 of 4 sampled students, Title IV funds due for return were not returned to the ED within the required time frame. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-007 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure that student withdrawal calculations are prepared accurately. Views of Responsible Officials: The University acknowledges deficiencies in the administration of Return of Title IV (R2T4) requirements during the 2024–2025 award year. Specifically, R2T4 calculations were not consistently completed within required timeframes, resulting in inaccurate determinations of earned and unearned Title IV aid, untimely returns of funds to the U.S. Department of Education, and an improper post-withdrawal disbursement of Direct Loan funds made without required student authorization and in excess of the eligible amount. As a result, the University experienced compliance failures related to accuracy, timeliness, and authorization requirements governing R2T4 processing and post-withdrawal disbursements. The University determined that these deficiencies were primarily attributable to weaknesses in internal controls governing the timely initiation, calculation, review, and completion of R2T4 determinations, as well as insufficient controls to prevent post-withdrawal disbursements from being processed without documented authorization. Contributing factors included gaps in coordination and information flow between offices responsible for withdrawal determination, enrollment status updates, and R2T4 processing. As a repeat finding, these conditions revealed the need for strengthened system-based controls, clearer delineation of responsibilities, and enhanced oversight.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Title IV Credit Balance Refunds: When Title IV funds are credited to a student account and they exceed the amount of tuition and fees, food and housing, and other authorized charges assessed the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if that was after the first day of class. As described in 34 CFR 668.164(c), institutions may credit (charge) a student’s ledger account with Title IV funds to pay for allowable charges associated with the payment period and prior year charges of not more than $200, in accordance with the timeframes described below. A prior year is any loan period or award year prior to the current loan period or award year, as applicable. An institution is permitted to hold credit balances if it obtains a voluntary authorization from the student. Regardless of any authorization obtained by the institution, the institution must pay any remaining loan balance by the end of the loan period and any other remaining Title IV funds by the end of the last payment period in the award year for which the funds were awarded. Condition: For certain students that had a credit balance on their account resulting from Title IV aid disbursements, the University did not refund the credit balance in the correct amount within the required timeframe. Cause: Insufficient administrative oversight and internal controls with respect to Title IV credit balance refunds. Effect or Potential Effect: The University was not in compliance with Title IV credit balance refunds requirements. Questioned Costs: Know questioned costs: $1,383; total questioned costs: indeterminable. Known questioned costs of $1,383 were identified as a result of the identified errors described in the Context below; sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 3 of 22 sampled Title IV credit balances, the University did not fully refund the credit balance resulting from Title IV aid disbursements within the required timeframe. • For 1 of 22 sampled Title IV credit balances, the amount of Title IV credit balance was not resolved by the end of the payment period. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure that credit balances on student accounts that are the result of Title IV aid disbursements are accurately refunded within the required timeframe. Views of Responsible Officials: The University acknowledges deficiencies in the Title IV Refund process. The deficiencies occurred as a result of process disruptions during the system transition to Ellucian Colleague. The University has strengthened its process and controls to ensure Title IV refunds are processed within 14 days.

Federal Program Information: Federal Pell Grant Program (ALN: 84.063) and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions - Enrollment Reporting: The University is required to update students’ statuses on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the University becomes aware of the change in enrollment status. There are two categories of enrollment information: “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Institutions are responsible for accurately reporting the significant data elements under the Campus-Level Record and Program-Level Record that ED considers high risk. Additionally, institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. As with any school/servicer arrangement for the administration of the Title IV programs, if the school uses a third party to meet the NSLDS enrollment reporting requirements, it is the school that must ensure that enrollment information is submitted timely, accurately, and completely. Condition: The University did not accurately report certain significant data elements to the NSLDS website for certain students who graduated, withdrew, or had an increase/decrease in attendance level during the year. Cause: Insufficient administrative oversight and internal controls with respect to enrollment reporting compliance requirements. Effect or Potential Effect: The University is not in compliance with enrollment reporting compliance requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 8 of 40 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Campus-Level Record in a timely notification to the NSLDS website. • For 10 of 40 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Program-Level Record in a timely notification to the NSLDS website. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-006 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that all status changes are submitted accurately to the NSLDS website within the required timeframe. Views of Responsible Officials: The University acknowledges deficiencies in the accuracy and timeliness of enrollment status reporting to the National Student Loan Data System (NSLDS) during the 2024–2025 award year. Specifically, required Campus-Level and Program-Level enrollment data elements were not consistently reported accurately or within required federal reporting timeframes for students whose enrollment status changed. As a result, the University was unable to consistently demonstrate compliance with federal enrollment reporting requirements, increasing institutional risk related to student loan repayment status, Title IV eligibility, and audit defensibility. The University determined that these deficiencies were primarily attributable to weaknesses in the Registrar’s enrollment reporting controls, including reliance on legacy system processes without sufficient reconciliation, validation, and quality assurance review prior to NSLDS submission. Contributing factors included the absence of a standardized reporting calendar, documented review procedures, and consistent supervisory oversight. As a repeat finding, these conditions underscore the need for strengthened Registrar-led governance, formalized enrollment reporting controls, and sustained monitoring to ensure accurate and timely Campus-Level and Program-Level reporting.

Federal Program Information: Connecting Minority Communities Pilot Program (“CMC”) (ALN: 11.028), Higher Education Institutional Aid (“Title III”) (ALN: 84.031B and 84.031E) and TRIO Cluster (“TRIO”) (ALN: 84.047A, 84.042A and 84.217A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): A. Activities Allowed or Unallowed/N. Special Tests and Provisions – Per 2 Code of Federal Regulation (“CFR”) Part 220, the method used for apportioning salaries must recognize the principle of after-the-fact confirmation or determination so that costs distributed represent actual costs, unless a mutually satisfactory alternative agreement is reached. Direct cost activities as well as facilities and administration (“F&A”) cost activities may be confirmed by responsible persons with suitable means of verification that the work was performed. Confirmation by the employee is not a requirement for either direct or F&A cost activities if other responsible persons make appropriate confirmations. For after-the-fact activity records: a) Activity reports will reflect the distribution of activity expended by employees covered by the system (compensation for incidental work as described in subsection a need not be included); (b) These reports will reflect an after-the-fact reporting of the percentage distribution of activity of employees. Charges may be made initially on the basis of estimates made before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated by activity records. Labor costs charged to federal awards must reasonably reflect the actual labor effort contributed by the employee to meet the objectives of the award and that adequate documentation must be maintained to support labor costs charged to sponsored agreements. For professorial and professional staff, effort certifications will be prepared each academic term, but no less frequently than every six months. For other employees, unless alternate arrangements are agreed to, the reports will be prepared no less frequently than monthly and will coincide with one or more pay periods. B. Allowable Costs and Cost Principles - In order for costs to be allowable under federal awards, they must be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity, be accorded consistent treatment, and be determined in accordance with generally accepted accounting principles. Condition: For certain payroll costs charged to federal awards, effort certifications were not reviewed timely during the fiscal year and/or the effort certified was not commensurate with the amount charged to the grant. Additionally, for certain payroll and non-payroll expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. Cause: Insufficient administrative oversight and internal controls with respect to the University’s administration of federal awards in accordance with certain compliance requirements. Effect or Potential Effect: The University was unable to support certain amounts charged to federal awards and effort certifications supporting certain payroll costs charged to federal awards were not completed timely and/or appropriately monitored during the year. Questioned Costs: Indeterminable. For certain expenditures sufficient documentation was not available to support the amount charged to the federal award or to determine the amount that should have been charged. Additionally, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 7 of 24 payroll Title III expenditures selected for testing, the time and effort report certified by the employee was not certified timely. • For 2 of 24 payroll Title III expenditures selected for testing, the amounts charged to the federal award were not commensurate with the level of effort certified by the employee. • For 1 of 12 non-payroll TRIO expenditures selected for testing, the sampled expenditure was improperly duplicated in the system and charged to the federal award twice. • For 1 of 12 non-payroll TRIO expenditures selected for testing, the sampled expenditure was for an unallowable cost. • For 21 of 28 payroll TRIO expenditures selected for testing, time and effort reports certified by the employee were not certified timely. • For 1 of 28 payroll TRIO expenditures selected for testing, the sampled expenditure was charged to the incorrect TRIO program. • For 3 of 5 payroll CMC expenditures selected for testing, the time and effort report certified by the employee was not certified timely. • For 1 of 5 payroll CMC expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-008 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that the University has appropriate and formal documentation to support federal expenditures as required, as well as appropriately monitoring time and effort reporting in a timely manner. Views of Responsible Officials: The University experienced turnover of key positions throughout campus, particularly in the Division of Finance, Government Sponsored Programs and various federally funds programs over the last few fiscal years. The changes in staffing lead to a loss of institutional knowledge, and interrupted policy and process enforcement campus wide. During the Fall of 2024 the University began work to enhance its internal controls, policies, and procedures to ensure the appropriate documentation to support expenditures was properly maintained, and to ensure that level of effort reporting appropriately documented and timely completed. While there were some improvements (i.e., level of effort reporting), issues were not fully remediated. At the beginning of the 2025, GSPAR transitioned time and effort reporting to a semester-based reporting cycle to aid in ensuring the accuracy and timely certification of time and effort reporting. These changes aided in increasing the accuracy and efficiency of certification. Although we noticed positive progress, we still have room to improve time and effort certification.

Federal Program Information: Connecting Minority Communities Pilot Program (11.028) and Higher Education Institutional Aid (ALN: 84.031B and 84.031E) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): F. Equipment and Real Property Management - Equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every 2 years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Equipment property records should contain the following information about the equipment: description (including serial number or other identification number), source, who holds title, acquisition date and cost, percentage of Federal participation in the cost, location, condition, and any ultimate disposition data including, the date of disposal and sales price or method used to determine current fair market value. The Uniform Guidance further requires that equipment owned by the Federal Government shall be identified (tagged) to indicate Federal ownership. Condition: The University did not comply with the requirements of equipment and real property management. Cause: Insufficient administrative oversight and internal controls with respect to equipment and real property management. Effect or Potential Effect: The University did not comply with the requirements of equipment and real property management. Questioned Costs: None. Context: The University was unable to provide documentation supporting the completion of a physical inventory of equipment and real property purchased with federal funds during the most recent two fiscal years. Additionally, for 1 of 1 sampled items in the CMC program, the University was unable to provide documentation supporting the required tagging and appropriate maintenance of property records for federally funded equipment. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-010 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the equipment and real property management compliance requirements. Views of Responsible Officials: Government Sponsored Programs and Research (“GSPAR”) has implemented processes for recording and inventorying federal purchases during the Fall 2024. Early in 2025 we updated all inventory information to capture all necessary information. In addition, the grant onboarding process was revised to emphasize key federal regulations and emphasize the importance of compliance. The University will complete a physical inventory by June 30, 2026. While there was improvement the issues were not fully remediated by June 30, 2025.

Federal Program Information: Connecting Minority Communities Pilot Program (11.028) and TRIO Cluster (84.217A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting – Under the CMC grant program, grantees must submit semi-annual Federal Financial and performance reports for the periods ending March 31 and September 30 of each year. Reports are due within 30 days after the end of the reporting period. Certain key items contain critical information that should be included within the report and such information should be reconciled to the institution’s underlying records. Grantees under the TRIO program must submit an annual performance report to Department of Education each year of the project period. Certain key items contain critical information that should be included within the report and such information should be reconciled to the institution’s underlying records. Condition: The University was unable to provide documentation supporting certain other key items containing critical information included within semi-annual CMC reports and annual TRIO reports. Cause: Insufficient administrative oversight and internal controls over CMC program and TRIO program reporting requirements. Effect or Potential Effect: The University was not in compliance with the respective CMC program and TRIO program reporting requirements. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 1 of 2 reports selected for testing in the CMC program, certain key line items contained errors in the information reported. • For 1 of 1 reports selected for testing in the TRIO McNair program, certain key line items contained errors in the information reported. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-012 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures to ensure that required reports are prepared in accordance with federal regulations and that supporting documentation is appropriately retained as required. Views of Responsible Officials: The TRIO Programs (Upward Bound, Student Support Services and McNair) experienced changes in program personnel. This change led to a loss of institutional knowledge, interrupted policy and process enforcement. In many instances documentation wasn’t available due to the transition of key program personnel. During the transition for TRIO Programs, we encountered difficulty locating documentation for students who were awarded grant aid as well as official appointment and start dates. During the Spring of 2025 the University began work to enhance its internal controls, policies and procedures to ensure the appropriate documentation was properly maintained. While there was improvement across all TRIO programs, the issues were not fully remediated by June 30, 2025.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): E. Eligibility – Federal Pell Grant (“Pell”) (Assistance Listing 84.063) – Each year, based on the maximum Pell Grant established by Congress, the Department of Education (“ED”) provides to institutions Payment and Disbursement Schedules for determining Pell awards. The Payment Schedule provides the maximum scheduled award a student would receive for a full academic year as a full-time student based on their expected family contribution (“EFC”) and cost of attendance (“COA”). The Disbursement Schedules are used to determine annual awards for full-time, three-quarter time, half-time, and less-than-half-time students. The steps to determine Pell awards are as follows: (a) Determine the student’s enrollment status, (b) calculate the cost of attendance, (c) determine the annual award, (d) determine the payment period, (e) calculate the payment for the payment periods, and (f) disburse funds at prescribed times. E. Eligibility – Federal Direct Student Loans (“Direct Loans”) (Assistance Listing 84.268) - Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. For undergraduate students there is a combined annual loan limit for Direct Subsidized Loans and Direct Unsubsidized Loans, of which not more than a specified amount may be comprised of Direct Subsidized Loans (“annual subsidized maximum”). For independent undergraduate students (and for dependent undergraduate students whose parents are unable to obtain Direct PLUS Loans), the annual loan limits are (34 CFR 685.203(a) and (c): • $9,500 for independent first-year undergraduates, not more than $3,500 of which may be subsidized; • $10,500 for independent second-year undergraduates, not more than $4,500 of which may be subsidized; and • $12,500 for independent third-, fourth-, and fifth-year undergraduates, not more than $5,500 of which may be subsidized. E. Eligibility – Campus-Based Programs (Federal Work-Study “FWS”, Federal Supplemental Educational Opportunity Grant “FSEOG”) (Assistance Listing 84.033, Assistance Listing 84.007) - The maximum amount that can be awarded under the campus-based programs is equal to the student’s financial need (COA minus EFC) minus aid from other SFA programs and other resources. Condition: For certain students tested, the University improperly calculated the student’s Pell award. Additionally, for certain students, the University awarded and disbursed Direct Loans in an amount that was not commensurate with the student’s academic level. Cause: Insufficient administrative oversight and internal controls with respect to Title IV award eligibility. Effect or Potential Effect: The University is not in compliance with aid awarding criteria under the eligibility requirements. Failure to properly calculate eligible award amounts and properly award and disburse aid in accordance with the required guidelines could result in improper disbursements of Title IV aid. Questioned Costs: Known questioned costs: $2,995; total questioned costs: indeterminable. Context: We noted the following exceptions during our testing: • For 2 of 25 students selected for testing, the amount of Pell awarded and disbursed to the student exceeded the student’s eligible award. • For 1 of 25 students selected for testing, the University awarded and disbursed Direct Loans and FSEOG to the student in an amount that was not commensurate with the student’s academic level and/or need, resulting in an overaward of Direct Loans aid. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that Title IV aid is properly calculated, awarded, and disbursed consistent with federal regulations. Views of Responsible Officials: The University did not appropriately review eligibility documentation resulting in over awards. The error arose due to the manual processing of student loans by a single financial counselor without adequate checks, leading to non-compliance with specific fund restrictions related to the student’s year in school and dependency status. A significant contributing factor was the absence of structured, periodic quality assurance reviews. The University partnered with Financial Aid Services (“FAS”) in February 2025 to review the current systems and process, and devise appropriate systems, checks, and balances to address each deficiency in our financial aid processes and personnel. In addition, as part of the University’s transition of its ERP system from Jenzabar to Colleague, Financial Aid will transition from the use of PowerFaids to Ellucian Colleague for financial aid management, which was driven by the need for more robust, systematic controls that can accurately adjust and calculate Cost of Attendance (COA) on a per-student basis. This system change is expected to automate many of the processes that were previously prone to human error, ensuring compliance with regulatory requirements. The University’s Financial Aid counselors will continue to monitor students' credit hours and make necessary adjustments to aid awards, thereby maintaining compliance and addressing any discrepancies proactively. This plan reflects our commitment to upholding the highest standards of financial aid management and ensuring that our processes are transparent, compliant, and responsive to the needs of our students. The University will integrate automated processes in our financial aid packaging to reduce human error. The adoption of the Ellucian Colleague system by JCSU will allow for automatic enforcement of packaging and transmittal rules, tailored to specific funds. Additionally, we will utilize exception reports from Ellucian Colleague to identify and correct discrepancies in real-time. We will establish a routine monitoring system to regularly check the accuracy of financial aid awards against eligibility criteria.

Federal Program Information: Federal Pell Grant Program (ALN: 84.063) and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting – Financial Reporting – Federal regulations require the University to submit origination and disbursement records for students to the Common Origination and Disbursement System (“COD”). Items considered key in student origination records, if applicable, are: award amount, enrollment date, verification status code (when the applicate is selected for verification), transaction number, cost of attendance, and the “Academic Start Date” and “Academic End Date”. Institutions must also submit disbursement records to the COD for students no earlier than 7 calendar days prior to the disbursement date, and no later than 15 calendar days after the institution makes a disbursement. Key items to test on disbursement records are disbursement date and amount. Condition: For certain students identified through our testing, errors were identified in key items reported to the COD in student origination and disbursement records. Additionally, the University failed to report disbursement records for certain students within the required timeframe. Cause: Insufficient administrative oversight and internal controls with respect to accurate reporting of federal award information. Effect or Potential Effect: The University was not in compliance with COD reporting requirements. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 14 of 25 students selected for origination record testing, the student’s cost of attendance was inaccurately reported within COD. • For 1 of 25 students selected for origination record testing, the “Academic End Date” was inaccurately reported within COD. • For 1 of 25 students selected for disbursement record testing, the University did not submit required disbursement information within the required timeframe. • For 7 of 25 students selected for disbursement record testing, the award disbursement date was inaccurately reported within COD. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure origination and disbursement records are reported accurately and timely to COD for Direct Loan and Pell Grant recipients, in accordance with federal regulations. Views of Responsible Officials: The inaccuracies stemmed from insufficient workflow integration among the Office of Financial Aid and the Registrar’ Office. A critical lack of scheduled checks failed to align submission or processing dates. Furthermore, technical issues between Jenzabar and PowerFAIDS systems contributed to erroneous COA budgets. The University partnered with Financial Aid Services (“FAS”) in February 2025 to review the current systems and process, and devise appropriate systems, checks, and balances to address each deficiency in our financial aid processes and personnel. In addition, as part of the University’s transition of its ERP system from Jenzabar to Colleague, Financial Aid will be transition from the use of PowerFaids to Ellucian Colleague for financial aid management. Resulting from the work of FAS, the University will institute a systematic monthly reconciliation process to ensure consistency across all systems (COD, PowerFAIDS, Jenzabar and Colleague). This includes matching COA and disbursement records to ensure accuracy. To optimize workflow, we will establish a comprehensive calendar of disbursement and reporting deadlines, with routine internal audits every 30 days, starting April 2025. This measure will enforce accountability and timeliness in reporting. We will enhance integration between financial systems (Jenzabar and PowerFAIDS) to prevent data mismatches and streamline the reporting process. In addition, we will leverage our partnership with FAS to conduct regular training sessions for staff across the Financial Aid, Registrar, and Finance Offices to ensure everyone is aware of compliance requirements and system functionalities. These training sessions will start May 2025.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Test and Provisions – Verification - An institution shall require an applicant selected for verification to submit acceptable documentation that will verify or update the following information used to determine the applicant's EFC: adjusted gross income, U.S. income tax paid, aggregate number of family members in the household, number of family members in the household who are enrolled in as at least half-time students in postsecondary educational institutions if that number is greater than one and untaxed income subject to U.S. income tax reporting requirements in the base year which is included on the tax return form, excluding information contained on schedules appended to such forms. Untaxed income and benefits include: Social Security benefits if the institution has reason to believe that those benefits were received and were not reported or were not correctly reported; child support if the institution has reason to believe child support was received; U.S. income tax deductions for a payment made to an individual retirement account or Keough account; interest on tax-free bond; foreign income excluded from U.S. income taxation if the institution has reason to believe that foreign income was received; and all other untaxed income subject to U.S. income tax reporting requirements in the base year included on the tax return form, excluding information contained on schedules appended to such forms. (34 CFR section 668.56). Condition: For certain students selected for verification, supporting documentation for the information required to be verified could not be provided by the University. Cause: Insufficient administrative oversight and internal controls with respect to verification procedures. Effect or Potential Effect: Federal awards were not disbursed in accordance with federal regulations, and the University was not in compliance with verification compliance requirements. Questioned Costs: Unknown. Context: For 1 of 15 students selected for verification testing, the University did not perform appropriate verification procedures. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that the appropriate verification procedures are performed for all students who are selected for verification unless excluded by the federal regulations. Views of Responsible Officials: The verification for one student was improperly conducted, leading to financial aid awards and disbursements based on unverified or incorrectly verified financial data, specifically regarding untaxed IRA distributions and pensions. The verification failure was due to an oversight by the aid administrator who incorrectly verified the untaxed IRA distribution and pension as zero, despite contradictory evidence or a lack of supporting documentation. The University partnered with Financial Aid Services (“FAS”) in February 2025 to review the current systems and process, and devise appropriate systems, checks, and balances to address each deficiency in our financial aid processes and personnel. Resulting from the work of FAS, the verification policies will be thoroughly reviewed, and revised, to ensure comprehensive coverage as mandated by federal regulations. The University will also establish a robust quality control system to regularly review verification practices and compliance, ensuring adherence to updated policies. We will update and maintain a verification checklist that includes all data elements required for verification. This checklist will be used in all verifications, with a secondary review and sign-off by another trained administrator to ensure accuracy and completeness. In addition, we will bolster training for all financial aid staff, utilizing resources from FAS and the National Association of Student Financial Aid Administrators (NASFAA) to deepen understanding and expertise in verification processes.

Federal Program Information: Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Test and Provisions – Disbursements To or On Behalf of Students – Loan Disbursement Notification - Federal regulations (34 CFR section 668.165 (a)(6)(i)) require that the institution notify the student, or parent, in writing of (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 or the TEACH Grant payments returned to the ED; 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, TEACH Grant, or TEACH Grant disbursement. Institutions that implement an affirmative confirmation process (as described in 34 CFR section 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution with Direct Loan or TEACH Grants. The Federal Student Aid Handbook further clarifies that in general, there are two types of notifications a school must provide: (1) a general notification to parent Direct PLUS borrowers and all students receiving Federal Student Aid (“FSA”) funds, and (2) a notice when FSA loan funds or TEACH Grant funds are credited to a student’s account. Condition: Certain student and parent borrowers did not receive a loan disbursement notification. Cause: Insufficient administrative oversight and internal controls with respect to loan disbursement notifications. Effect or Potential Effect: Students and/or parents were not properly notified of loan disbursements and/or their right to cancel/decline loan awards. Questioned Costs: None. Context: For 25 of 25 students selected for testing, although the University notified the students of the types of aid they could expect to receive for the academic year through award letters at the beginning of the academic year, and students are granted continuous access to view their awards through the University's student portal, the University was unable to provide documentation supporting appropriate loan disbursement notifications at the time of Direct Loan disbursement. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures over loan disbursement notifications to ensure such notifications are sent to student and/or parent borrowers within the required timeframe. Views of Responsible Officials: The University relied on third-party technology to notify students of their disbursements without monitoring if their process was being executed. The failure stemmed from inadequate oversight of the notification process, leading to non-compliance with federal requirements for the timely and accurate notification of loan disbursements. The University partnered with Financial Aid Services (“FAS”) in February 2025 to review the current systems and process, and devise appropriate systems, checks, and balances to address each deficiency in our financial aid processes and personnel. In addition, as part of the University’s transition of its ERP system from Jenzabar to Colleague, Financial Aid will be transition to Ellucian Colleague for financial aid management. University officials are committed to rectifying this deficiency through significant enhancements to our notification processes and technological infrastructure. The systematic integration of notification with the actual disbursement function via Ellucian Colleague represents a robust solution to ensure compliance. By handling this process internally, we ensure greater control, reliability, and compliance with federal regulations. Regular audits of the disbursement and notification process will be implemented to guarantee that our procedures remain in alignment with federal requirements and best practices. This proactive approach ensures that all loan disbursements are properly managed and communicated, safeguarding both our students' financial interests and the university's compliance status. The university has already begun to amend procedures to ensure that all loan disbursements are accompanied by timely and accurate notifications. The Office of Financial Aid will maintain detailed records showing compliance with these notifications. The integration of Ellucian Colleague will automate the notification process. This system ensures that notifications are sent immediately upon disbursement processing, using various modalities such as email, text messages, or direct updates to the student portal. We will enhance our enhance record-keeping through the utilization of Ellucian Colleague by logging all communications sent, ensuring that there is traceable evidence of compliance. This system integration addresses previous dependencies on third-party technologies and brings control of this crucial compliance aspect in-house.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Using a Servicer or Financial Institution to Deliver Title IV Credit Balances to a Card or Other Access Device - An institution may enter into an arrangement with a servicer or a financial institution to make a direct payment of FSA credit balances to students through electronic funds transfer to a bank account designated by a student or parent, to issue a check payment to the student or to use an access device such as a debit, demand, or smart card provided by the servicer or its financial partner. Regulations at 34 CFR 668.164(e) and (f) establish two different types of arrangements between schools and financial account providers: Tier One arrangements and Tier Two arrangements. The type of arrangement determines the provisions that are applicable to the school. A school must disclose conspicuously on its Web site the contract(s) establishing the Tier One or Tier Two arrangement, except for any portions that, if disclosed, would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities (34 CFR 668.164(e)(2)(vi) and 668.164(f)(4)(iii)). Schools with Tier One arrangements or Tier Two arrangements above the credit balance threshold must also disclose on their Web site: (a) the total consideration for the year, monetary and non-monetary, paid or received by the parties under the terms of the contract; (b) for any year in which the school's enrolled students open 30 or more financial accounts under the arrangement, (i) the number of students who had financial accounts under the contract at any time during the most recently completed award year, and (ii) the mean and median of the actual costs incurred by those account holders. This disclosure must be updated within 60 days after the end of each award year. A school must also provide to ED an up-to-date URL for the contract for publication in a centralized database accessible to the public. Unless the school has a Tier Two arrangement under the credit balance threshold, the URL must also include the contract data described in the paragraph above (34 CFR 668.164(e)(2)(viii); 668.164(f)(4)(iii)(B); 668.164(f)(4)(v)). Condition: Certain required disclosures were not appropriately made by the University for existing Tier One arrangements. Cause: Insufficient administrative oversight and internal controls with respect to disclosure requirements for Tier One arrangements with servicers that make direct payments of FSA credit balances to students. Effect or Potential Effect: The University was not in compliance with the disclosure requirements for Tier One arrangements with servicers that make direct payments of FSA credit balances to students. Questioned Costs: None. Context: The University did not disclose in a conspicuous location on its Web site the contract establishing the Tier One arrangement. Additionally, certain required disclosures regarding activity under the contract for the award year were not made or updated within 60 days after the end of the award year. Finally, the University did not provide an updated URL for its Tier One contract to the ED as required. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that all Tier One or Tier Two arrangements entered into are properly disclosed as required. Views of Responsible Officials: The University acknowledges shortcomings in our institutional processes for managing and communicating the details of Tier One and Tier Two financial arrangements. This has been due to a combination of factors, including outdated website management practices, a lack of clear guidelines on compliance responsibilities for web content, and insufficient inter-departmental communication regarding changes in federal regulations and their implications for our disclosure practices. The University is establishing a continuous feedback loop between Financial Aid, the Business Office, and University Communications and Marketing departments to ensure that our contractual disclosures are not only compliant but also clear and accessible to our stakeholders. Enhanced communication and collaboration across these departments are pivotal for maintaining ongoing compliance and ensuring that all disclosures are managed efficiently and transparently. This proactive approach is aimed at fostering a culture of compliance and transparency throughout the University. The University will improve the accessibility and visibility of contractual disclosures on its website to ensure compliance with federal requirements. The updated URLs will be provided to the Department of Education for publication of the contract in a centralized, accessible database. In addition, in partnership with Financial Aid Services (FAS), the University will conduct comprehensive interdepartmental training sessions by August 2025 for all relevant staff, emphasizing the critical nature of compliance with federal disclosure requirements.

Federal Program Information: Federal Pell Grant Program (ALN: 84.063) and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions - Enrollment Reporting: The University is required to update students’ statuses on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the University becomes aware of the change in enrollment status. There are two categories of enrollment information: “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Institutions are responsible for accurately reporting the significant data elements under the Campus-Level Record and Program-Level Record that ED considers high risk. Additionally, institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. As with any school/servicer arrangement for the administration of the Title IV programs, if the school uses a third party to meet the NSLDS enrollment reporting requirements, it is the school that must ensure that enrollment information is submitted timely, accurately, and completely. Condition: The University did not accurately report certain significant data elements to the NSLDS website for certain students who graduated, withdrew, or had an increase/decrease in attendance level during the year. Cause: Insufficient administrative oversight and internal controls with respect to enrollment reporting compliance requirements. Effect or Potential Effect: The University is not in compliance with enrollment reporting compliance requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 7 of 25 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Campus-Level Record in a timely notification to the NSLDS website. • For 6 of 25 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Program-Level Record in a timely notification to the NSLDS website. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that all status changes are submitted accurately to the NSLDS website within the required timeframe. Views of Responsible Officials: A lack of systematic communication between the Registrar’s Office and the Office of Financial Aid, coupled with an absence of an established process flow or calendar to guide quality assurance activities, led to these discrepancies. The University understands that accurate reporting of student enrollment status is crucial for managing student eligibility for federal financial aid, including loans and grants; however, in these cases, there were several discrepancies. The University underwent a re-organization the resulted in the creation of a new division, Strategic Enrollment and Retention Management (“SERM”), effective February 2025. SERM aims to address the root causes of this finding by fostering enhanced synergy and communication between the Registrar’s Office and the Office of Financial Aid. This structural change aligns both departments under the governance of the Senior Vice President, ensuring cohesive and compliant operational practices. The alignment will facilitate a unified approach to meet federal reporting requirements more effectively and efficiently, thereby enhancing our administrative capability and compliance with critical federal requirements. This proactive governance restructuring is expected to significantly improve our process accuracy and compliance integrity, safeguarding our students' financial interests and maintaining our standing with federal financial aid programs. In addition, the University will establish audit and verification processes that involve conducting an exhaustive audit of current enrollment reporting processes in collaboration with Financial Aid Services (FAS) to identify and amend discrepancies. We will implement comprehensive, quarterly training for all staff involved in enrollment reporting starting August 2025 to ensure adherence to federal regulations. The Registrar’s Office will establish bi-weekly reporting schedules to the National Student Clearinghouse (NSC), including during summer terms, to ensure timely updates in NSLDS. There will also be regular review sessions to evaluate the effectiveness of the new reporting protocols and make necessary adjustments.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds must be distributed in the prescribed order (34 CFR 668.22(i)). Condition: For certain students that withdrew during the year, the University did not properly calculate the amounts to be returned to the ED. Additionally, funds due for return were not returned in the proper order. Cause: Insufficient administrative oversight and internal controls with respect to return of Title IV fund calculations. Effect or Potential Effect: The University was not in compliance with the return of Title IV funds requirements. Questioned Costs: None. Context: For 1 of 2 students selected for testing, the University did not properly calculate the amount of Title IV aid to be returned to the ED. The amount returned to the ED was greater than the amount owed based upon the students’ withdrawal calculation. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that student withdrawal calculations are prepared accurately. Views of Responsible Officials: We acknowledge the accuracy of this finding, such that one student’s required return of funds was identified as having been improperly calculated during the R2T4 calculation. The order in which the funds were reduced and returned to the Department was incorrect. Lack of clarity about the enrollment level and activity of the student during the term caused the miscalculated award amounts. A lack of system driven calculation and insufficient knowledge of the proper order of funds (and required student authorization of post-withdrawal disbursement) were also contributing factors that resulted in this finding. The University underwent a re-organization the resulted in the creation of a new division, Strategic Enrollment and Retention Management (“SERM”), effective February 2025. The recent organizational restructuring that placed the Registrar’s Office and the Office of Financial Aid under the new division of Strategic Enrollment and Retention Management is a strategic move to enhance the synchronization of essential data between these departments. This alignment is crucial for accurately determining withdrawal dates and understanding the academic calendar, which are essential components of the R2T4 calculation process. Enhanced inter-departmental communication facilitated by this structure will ensure more accurate and timely data sharing, essential for meeting compliance requirements. The ongoing support from FAS in setting up and optimizing Ellucian Colleague for our specific needs will significantly strengthen our capacity to meet and exceed compliance standards, thus preventing future occurrences of similar issues. Starting June 2025, the Financial Aid Office will engage with FSA Partners and utilize NASFAA study materials to conduct comprehensive training for staff responsible for R2T4 calculations. Continuous education will be emphasized to keep staff updated on regulatory changes and best practices. We will utilize the capabilities of Ellucian Colleague to automate R2T4 calculations. This system will be set up to require authorization for post-withdrawal disbursements and ensure that award reductions are calculated in the correct order. We will introduce a secondary review process for all R2T4 calculations, where a seasoned financial aid counselor will verify the accuracy of the initial calculation and authorization documentation. We will standardize the process for documenting the authorization of post-withdrawal disbursements. Develop a standard communication template within Ellucian Colleague that includes explicit requests for student or parent authorization, ensuring compliance with federal regulations.

Federal Program Information: Connecting Minority Communities Pilot Program (“CMC”) (ALN: 11.028), Higher Education Institutional Aid (“Title III”) (ALN: 84.031B and 84.031E) and TRIO Cluster (“TRIO”) (ALN: 84.047A, 84.042A and 84.217A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): A. Activities Allowed or Unallowed/N. Special Tests and Provisions – Per 2 Code of Federal Regulation (“CFR”) Part 220, the method used for apportioning salaries must recognize the principle of after-the-fact confirmation or determination so that costs distributed represent actual costs, unless a mutually satisfactory alternative agreement is reached. Direct cost activities as well as facilities and administration (“F&A”) cost activities may be confirmed by responsible persons with suitable means of verification that the work was performed. Confirmation by the employee is not a requirement for either direct or F&A cost activities if other responsible persons make appropriate confirmations. For after-the-fact activity records: a) Activity reports will reflect the distribution of activity expended by employees covered by the system (compensation for incidental work as described in subsection a need not be included); (b) These reports will reflect an after-the-fact reporting of the percentage distribution of activity of employees. Charges may be made initially on the basis of estimates made before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated by activity records. Labor costs charged to federal awards must reasonably reflect the actual labor effort contributed by the employee to meet the objectives of the award and that adequate documentation must be maintained to support labor costs charged to sponsored agreements. For professorial and professional staff, effort certifications will be prepared each academic term, but no less frequently than every six months. For other employees, unless alternate arrangements are agreed to, the reports will be prepared no less frequently than monthly and will coincide with one or more pay periods. B. Allowable Costs and Cost Principles - In order for costs to be allowable under federal awards, they must be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity, be accorded consistent treatment, and be determined in accordance with generally accepted accounting principles. Condition: For certain payroll costs charged to federal awards, effort certifications were not prepared and/or reviewed timely during the fiscal year. Additionally, for certain payroll and non-payroll expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. Cause: Insufficient administrative oversight and internal controls with respect to the University’s administration of federal awards in accordance with certain compliance requirements. Effect or Potential Effect: The University was unable to support certain amounts charged to federal awards and effort certifications supporting certain payroll costs charged to federal awards were not completed timely and/or appropriately monitored during the year. Questioned Costs: Indeterminable. Context: We noted the following exceptions during our testing: • For 1 of 22 non-payroll CMC expenditures selected for testing, the University was unable to provide documentation supporting that the expenditure was appropriately approved prior to the disbursement of funds. • For 1 of 22 non-payroll CMC expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. • For 3 of 22 non-payroll CMC expenditures selected for testing, the sampled expenditure was improperly duplicated in the system and charged to the federal award more than once. • For 3 of 3 payroll CMC expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. • For 3 of 3 payroll CMC expenditures selected for testing, time and effort reports certified by the employee were not certified timely. • For 2 of 3 payroll CMC expenditures selected for testing, the level of effort certified by the employee was not commensurate with amounts charged to the federal award. • For 1 of 15 payroll Title III expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. • For 1 of 15 payroll Title III expenditures selected for testing, the time and effort report certified by the employee was not certified timely. • For 4 of 15 payroll Title III expenditures selected for testing, the University was unable to support that the related employee was approved to work on the grant. • For 1 of 15 non-payroll TRIO expenditures selected for testing, the University was unable to provide documentation supporting that the expenditure was appropriately approved prior to the disbursement of funds. • For 2 of 15 non-payroll TRIO expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. • For 2 of 25 payroll TRIO expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. • For 24 of 25 payroll TRIO expenditures selected for testing, time and effort reports certified by the employee were not certified timely. • For 3 of 25 payroll TRIO expenditures selected for testing, the University was unable to support that the related employee was approved to work on the grant at the level of effort certified by the employee. • For 1 of 25 payroll TRIO expenditures selected for testing, time and effort certified by the employee did not support the amounts charged to the federal award. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2023-004 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that the University has appropriate and formal documentation to support federal expenditures as required, as well as appropriately monitoring time and effort reporting in a timely manner. Views of Responsible Officials: The University experienced turnover of key positions throughout campus, particularly in the Division of Finance, Government Sponsored Programs and various federally funds programs over the last few fiscal years. The changes in staffing lead to a loss of institutional knowledge, and interrupted policy and process enforcement campus wide. During the Spring of 2024 the University began work to enhance its internal controls, policies, and procedures to ensure the appropriate documentation to support expenditures was properly maintained, and to ensure that level of effort reporting appropriately documented and timely completed. While there were some improvements (i.e., level of effort reporting), issues were not fully remediated. The University is committed to ensuring compliance with all federal, institutional, and program regulations. The University continues to enhance its internal controls, policies, and procedures to ensure the appropriate documentation to support is maintained, and to ensure that level of effort is appropriately documented and reported. The level of effort reporting process has been modified to a consistent reporting for all campus awards. Level of Effort reports are done by academic term, and the reports are due within 30 days following the end of the term. The Office of Government Sponsored Programs (“GSPAR”) has implemented monitoring and tracking measures to all reports are captured and completed according to federal guidelines. A system of multiple reviews has been implemented to help in reducing errors in reporting and increase efficiency in timeliness of the reports. Additionally, GSPAR intend to work closely with the JCSU Human Resources department to ensure accurate and efficient Time and Effort reporting. In addition, the University mandated participation in compliance training for all faculty and staff; participants are required to submit an acknowledgement that they participated in the training and are aware of the compliance requirement. Specific to the TRIO programs, as the result of a re-organization in February 2025 the University created a new position: Assistant Vice President (AVP) for Student Affairs, TRIO, and Well-being. This role will oversee Time and Effort Reporting, Annual Performance Report submissions, and financial transactions, ensuring accuracy and adherence to all relevant policies, regulations, and procedures. Additionally, this position will support professional development initiatives to enhance grant management and compliance. The AVP will also support university efforts to conduct regular program reviews to ensure proper documentation supporting TRIO eligibility and adherence to program requirements. To improve program knowledge and standardize practices, TRIO personnel will continue engaging in professional development offered locally and nationally. Internally, the TRIO Leadership Team (TRIO Project Directors and SVP of Student Enrollment & Retention Management) established TRIO Professional Development Day, a two-day training designed specifically for JCSU TRIO staff. These sessions provide guidance on university policies, financial compliance, Time and Effort reporting, effective record-keeping, and data management. The event also includes a roundtable discussion to promote collaboration and shared learning across programs. In addition, the TRIO Leadership Team will continue to explore best practices from high-functioning TRIO programs. To enhance communication and strengthen internal controls, the TRIO Leadership Team implemented monthly TRIO Program meetings. These meetings, involving TRIO Project Directors and the Senior Vice President of Strategic Enrollment and Retention Management, facilitate discussions on compliance, streamline processes, and support policy development. Additionally, the TRIO Leadership Team established monthly interdepartmental meetings among TRIO programs, the Division of Government Sponsored Programs and Research, and the Division of Business and Finance to further ensure alignment with institutional and federal requirements. Human Resources will also participate in future meetings to review Time and Effort Reporting procedures. TRIO Project Directors maintain ongoing communication with the Department of Education Program Officer, seeking written guidance on allowable costs, staffing adjustments, and fund reallocations, when necessary. Continuous monitoring and evaluation will ensure the effectiveness of these corrective actions, allowing the university to identify areas for ongoing improvement and maintain full compliance with all regulatory requirements.

Federal Program Information: TRIO Cluster (ALN: 84.042A and 84.047A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): E. Eligibility – Under the Upward Bound (“UB”) program, the University may award stipends of up to $40 per month from September to May of the academic year and $60 for each of the summer months (June, July, and August) to eligible participants. Per 34 CFR 646.30(i), Student Support Services (“SSS”) grant aid may be provided to students who have completed their first two years of postsecondary education and who are receiving Federal Pell Grants under subpart 1 of part A of title IV of the Act if the institution demonstrates to the satisfaction of the Secretary that: • These students are at high risk of dropping out; and • It will first meet the needs of all its eligible first- and second-year students for services under this paragraph. Condition: The University was unable to provide documentation supporting certain students’ eligibility to participate in the TRIO program or the amounts awarded for certain stipends. Cause: Insufficient administrative oversight and internal controls over TRIO program eligibility requirements. Effect or Potential Effect: The University was not in compliance with TRIO program eligibility requirements. Questioned Costs: Known questioned costs: $979; total questioned costs: indeterminable. Context: We noted the following exceptions during our testing: • For 4 of 29 students selected for testing, stipend amounts under the UB program were disbursed to students in excess of the allowed monthly maximum for the academic year. • For 1 of 6 students selected for testing, the University was not able to demonstrate that the criteria for awarding SSS TRIO grant aid to a student who had previously completed their first two years of postsecondary education was appropriately satisfied. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2023-007 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures to ensure that documentation supporting TRIO program eligibility is appropriately retained as required. Views of Responsible Officials: The Student Support Services program experienced changes in program personnel. This change led to a loss of institutional knowledge, interrupted policy and process enforcement. In many instances documentation wasn’t available due to the transition of key program personnel. During the transition for Student Support Service, we encountered difficulty locating explicit documentation for students who were awarded Grant Aid outside of first- or second-year classification. Section 3518(a) of the CARES Act granted the Department authority to “modify the required and allowable uses of funds” for certain programs authorized by the Higher Education Act of 1965, which included TRIO programs. The flexible extension remained in effect until September 30, 2024. Upward Bound requested a flexibility extension under the CARES Act. Due to a delayed response to the request, the extension request was re-sent for verification. Once received, UB was advised that the Department was no longer accepting new requests. As a result, stipends were processed before receiving the final response. During the Spring of 2024 the University began work to enhance its internal controls, policies and procedures to ensure the appropriate documentation was properly maintained. While there was improvement across all TRIO programs, the issues were not fully remediated by June 30, 2024. The University is committed to ensuring compliance with all federal, institutional, and program regulations. The University continues to enhance its internal controls, policies and procedures to ensure the appropriate documentation to support is maintained. Both the Student Support Services and Upward Bound programs are committed to implementing continuous monitoring of program records to ensure compliance with federal, institutional, and program requirements. The TRIO-SSS program has implemented an online Grant Aid application process for all participants who are eligible for aid; which requires submission of demographic information and a need for support statement. With the expiration of exceptions allowed under the CARES Act, all TRIO programs have converted back to distributing stipends in accordance with current federal regulations. Each program will monitor their respective distributions for accuracy and program compliance. Supporting documentation of statutory and regulatory requirements will be retained in the Policy and Procedures manuals.

Federal Program Information: Connecting Minority Communities Pilot Program (11.028) and Higher Education Institutional Aid (ALN: 84.031B and 84.031E) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): F. Equipment and Real Property Management - Equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every 2 years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Equipment property records should contain the following information about the equipment: description (including serial number or other identification number), source, who holds title, acquisition date and cost, percentage of Federal participation in the cost, location, condition, and any ultimate disposition data including, the date of disposal and sales price or method used to determine current fair market value. The Uniform Guidance further requires that equipment owned by the Federal Government shall be identified (tagged) to indicate Federal ownership. Condition: The University did not comply with the requirements of equipment and real property management. Cause: Insufficient administrative oversight and internal controls with respect to equipment and real property management. Effect or Potential Effect: The University did not comply with the requirements of equipment and real property management. Questioned Costs: None. Context: The University was unable to provide documentation supporting the completion of a physical inventory of equipment and real property purchased with federal funds during the most recent two fiscal years. Additionally, for 2 of 2 sampled items in the CMC program, the University was unable to provide documentation supporting the required tagging and appropriate maintenance of property records for federally funded equipment. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2023-006 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the equipment and real property management compliance requirements. Views of Responsible Officials: Government Sponsored Programs and Research (“GSPAR”) implemented a process for recording and inventorying federal purchases during the Spring of 2024, however, the information did not capture all the required information. While there was improvement the issues were not fully remediated by June 30, 2024. GSPAR will update its inventory tracking process to capture required information. In addition, the grant onboarding process will be revised to emphasize key federal regulations and emphasize the importance of compliance. GSPAR will improve its internal controls, policies, and procedures to mandate a physical inventory count at a minimum of once every two years. This ensures accurate tracking and accountability of assets. Additionally, we plan to revise our current inventory form to incorporate all data points required by our governing governmental agency. GSPAR will review and rectify existing records for equipment acquisitions made within the past two years.

Federal Program Information: Higher Education Institutional Aid (ALN: 84.031B and 84.031E) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): I. Procurement and Suspension and Debarment – The Uniform Guidance requires recipients of federal awards to have adequate procedures and controls in place to ensure that the procurement transactions are properly documented in the entity’s files, provide full and open competition supported by a cost or price analysis, provide a vendor debarment or suspension certification, provide for retention of files, and that supporting documentation corroborates compliance with these requirements. All procurement transactions are required to be conducted in a manner to provide, to the maximum extent practical, open and free competition. Additionally, procurement records and files for purchases in excess of the small purchase threshold ($25,000) shall include a) a basis for contractor selection, b) justification for the lack of competition when competitive bids or offers are not obtained, and c) a basis for award cost or price. Organizations are also required to be alert to any organizational conflicts of interest (2 CFR 215.40 – 215.48). Condition: The University was unable to provide documentation supporting an appropriate competitive bidding process, sole source justification and/or appropriate review of the federal suspension and debarment database prior to the disbursement of funds. Cause: Insufficient administrative oversight and internal controls over procurement compliance requirements. Effect or Potential Effect: The University was not in compliance with procurement compliance requirements. Questioned Costs: None. Context: For 8 of 8 procurement transactions tested, the University was unable to provide documentation supporting an appropriate competitive bidding process, sole source justification and/or appropriate review of the federal suspension and debarment database prior to the disbursement of funds. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2023-005 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures to ensure that its personnel, especially those responsible for making procurement decisions, are aware of and comply with all federal purchasing rules and regulations. Views of Responsible Officials: The University eliminated the position of Procurement Manager several years back, which decentralized the responsibility for procurement. The change led to a loss of institutional knowledge, and interrupted policy and process enforcement campus wide. During 2024 GSPAR revised the grant onboarding process to emphasize key federal regulations and emphasize the importance of compliance. Reminders were provided during GSPAR’s semi-annual grant compliance workshops, as well as campus faculty and staff compliance training. While there was improvement the issues were not fully remediated by June 30, 2024. During July 2024 the University deployed a sole source justification form for technology purchases. The form will be revised to cover all applicable federal purchases and will require the signature of the principal investigators as well as a representative from GSPAR. The approved form will be added to the purchases record in Colleague. In addition, the University has modified its new vendor process to require the vendor complete a Disbarment and Suspension Certificate Form, which provides the vendor’s name as well as the principles. Before the vendor is created, a search will be done on the federal website to confirm the vendors status. A screenshot of the results will be saved as part of the vendor record. The University’s implemented Colleague effective July 2024, which allows the complete purchasing records to be attached to the requisition. Training was provided to the campus to ensure compliance with the new purchasing requirements.

Federal Program Information: Connecting Minority Communities Pilot Program (11.028) and TRIO Cluster (84.042A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting – Under the CMC grant program, grantees must submit semi-annual Federal Financial and performance reports for the periods ending March 31 and September 30 of each year. Reports are due within 30 days after the end of the reporting period. Certain key items contain critical information that should be included within the report and such information should be reconciled to the institution’s underlying records. Grantees under the TRIO program must submit an annual performance report to Department of Education each year of the project period. Certain key items contain critical information that should be included within the report and such information should be reconciled to the institution’s underlying records. Condition: The University was unable to provide documentation supporting certain other key items containing critical information included within semi-annual CMC reports and annual TRIO reports. Cause: Insufficient administrative oversight and internal controls over CMC program and TRIO program reporting requirements. Effect or Potential Effect: The University was not in compliance with the respective CMC program and TRIO program reporting requirements. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 2 of 2 reports selected for testing in the CMC program, the University was unable to provide documentation supporting certain key line items and certain other information included within the reports. • For 1 of 1 reports selected for testing in the TRIO SSS program, the University was unable to provide documentation supporting certain key line items included within the report. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2023-008 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures to ensure that required reports are prepared in accordance with federal regulations and that supporting documentation is appropriately retained as required. Views of Responsible Officials: The University experienced changes with the Student Support Services program personnel. This change led to a loss of institutional knowledge, interrupted policy and process enforcement. In many instances documentation and reporting methods weren’t available due to the transition of key program personnel. Information that appears to be inaccurate serves as a combination of the inability to make revisions for previously reported students and human error. The CMC principal investigator for CMC was a first-time awardee, who was not fully acclimated to the grant reporting process prior to submitting the report. The Student Support Services program is committed to implementing continuous monitoring of program records to ensure compliance with federal, institutional, and program requirements. The program will review the existing program operating procedures and processes to align with requirements. Program personnel will engage in professional development opportunities and training to improve grant management. Currently, financial reporting is reviewed by individuals in both the Business Office and GSPAR. GSPAR will enhance its internal controls, policies, and procedures to ensure that all reporting is submitted with accurate information. GSPAR intends to create a centralized location to track and store all supporting documentation for easy access and review. GSPAR also intends to require that all financial information required by government agencies be reviewed by officials in both the Business and GSPAR Offices. In addition, GSPAR will implement a process for continuous monitoring of program records to ensure compliance with federal, Institutional and program requirements. The program staff will also engage in professional development opportunities to improve grant management and regulatory compliance.

Federal Program Information: Higher Education Institutional Aid: Strengthening Historically Black Colleges and Universities Program (“Title III”) (ALN: 84.031B and 84.031E) and TRIO Cluster (“TRIO”) (ALN: 84.047A, 84.042A and 84.217A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): A. Activities Allowed or Unallowed/N. Special Tests and Provisions – Per 2 Code of Federal Regulation (“CFR”) Part 220, the method used for apportioning salaries must recognize the principle of after-the-fact confirmation or determination so that costs distributed represent actual costs, unless a mutually satisfactory alternative agreement is reached. Direct cost activities as well as facilities and administration (“F&A”) cost activities may be confirmed by responsible persons with suitable means of verification that the work was performed. Confirmation by the employee is not a requirement for either direct or F&A cost activities if other responsible persons make appropriate confirmations. For after-the-fact activity records: a) Activity reports will reflect the distribution of activity expended by employees covered by the system (compensation for incidental work as described in subsection a need not be included); (b) These reports will reflect an after-the-fact reporting of the percentage distribution of activity of employees. Charges may be made initially on the basis of estimates made before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated by activity records. Labor costs charged to federal awards must reasonably reflect the actual labor effort contributed by the employee to meet the objectives of the award and that adequate documentation must be maintained to support labor costs charged to sponsored agreements. For professorial and professional staff, effort certifications will be prepared each academic term, but no less frequently than every six months. For other employees, unless alternate arrangements are agreed to, the reports will be prepared no less frequently than monthly and will coincide with one or more pay periods. B. Allowable Costs and Cost Principles - In order for costs to be allowable under federal awards, they must be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity, be accorded consistent treatment, and be determined in accordance with generally accepted accounting principles. G. Level of Effort - Level of effort includes requirements for (a) a specified level of service to be provided from period to period and (b) a specified level of expenditures from nonfederal or federal sources for specified activities to be maintained from period to period. Only allowable categories of expenditures or other effort indicators (e.g., hours, number of people served) should be included in the computation and expenditures categories should be consistent from year to year. Condition: For certain payroll costs charged to federal awards, effort certifications were not prepared and/or reviewed timely during the fiscal year. Additionally, for certain payroll and non-payroll expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. Cause: Insufficient administrative oversight and internal controls with respect to the University’s administration of federal awards in accordance with certain compliance requirements. Effect or Potential Effect: The University was unable to support certain amounts charged to federal awards and effort certifications supporting certain payroll costs charged to federal awards were not completed timely and/or appropriately monitored during the year. Questioned Costs: Below reporting threshold. Context: We noted the following exceptions during our testing: • For 4 of 15 non-payroll Title III expenditures selected for testing, the University was unable to provide documentation supporting that the expenditure was appropriately approved prior to the disbursement of funds. • For 1 of 15 non-payroll Title III expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. • For 2 of 10 payroll Title III expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. • For 5 of 8 Title III employees selected for testing, time and effort reports certified by the employee could not be provided and/or did not support the amount charged to the federal award. • For 2 of 12 months selected for testing, the University did not obtain a level of effort certification for the Title III program director. • For 1 of 10 non-payroll TRIO expenditures selected for testing, the University was unable to provide documentation supporting that the expenditure was appropriately approved prior to the disbursement of funds. • For 1 of 15 payroll TRIO expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award. • For 10 of 10 TRIO Program employees selected for testing, time and effort reports certified by the employee could not be provided and/or did not support the amount charged to the federal award. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure that the University has appropriate and formal documentation to support federal expenditures as required, as well as appropriately monitoring time of effort reporting in a timely manner. Views of Responsible Officials: The University experienced turnover of key positions throughout campus, particularly in the Division of Finance, Government Sponsored Programs and various federally funds programs. The changes in staffing lead to a loss of institutional knowledge, and interrupted policy and process enforcement campus wide. The Office of Government Sponsored Programs (“GSPAR”) will enhance its internal controls, policies and procedures to ensure the appropriate documentation to support is maintained, and to ensure that level of effort is appropriately documented and reported. GSPAR will be working in conjunction with the Office of Human Resources, including Payroll, to ensure accuracy, or timely correction, of general ledger postings. In addition, the grant onboarding process will be revised to emphasize key federal regulations and emphasize the importance of compliance. Reminders will also be provided during GSPAR’s semi-annual grant compliance workshops.

Federal Program Information: Higher Education Institutional Aid: Strengthening Historically Black Colleges and Universities Program (ALN: 84.031B and 84.031E) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): I. Procurement and Suspension and Debarment – The Uniform Guidance requires recipients of federal awards to have adequate procedures and controls in place to ensure that the procurement transactions are properly documented in the entity’s files, provide full and open competition supported by a cost or price analysis, provide a vendor debarment or suspension certification, provide for retention of files, and that supporting documentation corroborates compliance with these requirements. All procurement transactions are required to be conducted in a manner to provide, to the maximum extent practical, open and free competition. Additionally, procurement records and files for purchases in excess of the small purchase threshold ($25,000) shall include a) a basis for contractor selection, b) justification for the lack of competition when competitive bids or offers are not obtained, and c) a basis for award cost or price. Organizations are also required to be alert to any organizational conflicts of interest (2 CFR 215.40 – 215.48). Condition: The University was unable to provide documentation supporting an appropriate competitive bidding process, sole source justification and/or appropriate review of the federal suspension and debarment database prior to the disbursement of funds. Cause: Insufficient administrative oversight and internal controls over procurement compliance requirements. Effect or Potential Effect: The University was not in compliance with procurement compliance requirements. Questioned Costs: None. Context: For 5 of 5 procurement transactions tested, the University was unable to provide documentation supporting an appropriate competitive bidding process, sole source justification and/or appropriate review of the federal suspension and debarment database prior to the disbursement of funds. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures to ensure that its personnel, especially those responsible for making procurement decisions, are aware of and comply with all federal purchasing rules and regulations. Views of Responsible Officials: The University eliminated the position of Procurement Manager several years back, which decentralized the responsibility for procurement. The change led to a loss of institutional knowledge, and interrupted policy and process enforcement campus wide. GSPAR will enhance its internal controls and implement formal policies and procedures to ensure that those responsible for procurement activities are aware of, and comply with, all federal purchasing rules and regulations. The GSPAR will ensure the appropriate documentation related to debarment, sole source justification and bidding process are received, or attached to the purchasing requisition, prior to approving purchases. In addition, the grant onboarding process will be revised to emphasize key federal regulations and emphasize the importance of compliance. Reminders will also be provided during GSPAR’s semi-annual grant compliance workshops.

Federal Program Information: Higher Education Institutional Aid: Strengthening Historically Black Colleges and Universities Program (ALN: 84.031B and 84.031E) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): F. Equipment and Real Property Management - Equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every 2 years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Equipment property records should contain the following information about the equipment: description (including serial number or other identification number), source, who holds title, acquisition date and cost, percentage of Federal participation in the cost, location, condition, and any ultimate disposition data including, the date of disposal and sales price or method used to determine current fair market value. The Uniform Guidance further requires that equipment owned by the Federal Government shall be identified (tagged) to indicate Federal ownership. Condition: The University did not comply with the requirements of equipment and real property management. Cause: Insufficient administrative oversight and internal controls with respect to equipment and real property management. Effect or Potential Effect: The University did not comply with the requirements of equipment and real property management. Questioned Costs: None. Context: The University was unable to provide documentation supporting the completion of a physical inventory of equipment and real property purchased with federal funds during the most recent two fiscal years. Additionally, for 1 of 2 sampled items, the University was unable to provide documentation supporting the required tagging and appropriate maintenance of property records for federally funded equipment. Identification as a Repeat Finding: No similar findings noted in the prior year.   Recommendation: We recommend that the University enhance its internal controls and procedures over the equipment and real property management compliance requirements. Views of Responsible Officials: The University eliminated the position of Procurement Manager several years back, which decentralized the responsibility for procurement. The change led to a loss of institutional knowledge, and interrupted policy and process enforcement campus wide. While Government Sponsored Programs and Research (“GSPAR”) has a process for recording and inventorying federal purchases, the information was not updated timely and did not provide required information. GSPAR will enhance update its inventory tracking process to capture required information. In addition, the grant onboarding process will be revised to emphasize key federal regulations and emphasize the importance of compliance. Reminders will also be provided during GSPAR’s semi-annual grant compliance workshops.

Federal Program Information: TRIO Cluster (“TRIO”) (ALN: 84.042A and 84.217A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): E. Eligibility – Under the McNair Post-Baccalaureate Achievement (“McNair”) program, the University may award stipends of up to $2,800 per year for students engaged in approved research internships. Per 34 CFR 646.30(i), Student Support Services (“SSS”) grant aid may be provided to students who have completed their first two years of postsecondary education and who are receiving Federal Pell Grants under subpart 1 of part A of title IV of the Act if the institution demonstrates to the satisfaction of the Secretary that: • These students are at high risk of dropping out; and • It will first meet the needs of all its eligible first- and second-year students for services under this paragraph. Additionally, eligible participants for the SSS Program must meet the following requirements: • Is a citizen or national of the United States or meets the residency requirements for federal student financial assistance; • Is enrolled at the grantee institution or accepted for enrollment in the next academic term at that institution; • Has a need for academic support as determined by the grantee in order to pursue successfully a postsecondary educational program; and • Is a low-income individual, a first-generation college student, or an individual with disabilities (34 CFR sections 646.3 and 646.7) Condition: The University was unable to provide documentation supporting certain students’ eligibility to participate in the TRIO program or the amounts awarded for certain stipends. Cause: Insufficient administrative oversight and internal controls over TRIO program eligibility requirements. Effect or Potential Effect: The University was not in compliance with TRIO program eligibility requirements. Questioned Costs: Below reporting threshold. Context: We noted the following exceptions during our testing: • For 3 of 16 student selected for testing, the University was unable to provide documentation supporting that approval was obtained from the U.S. Department of Education to increase the stipend amount awarded under the McNair program above the allowed annual maximum during the year before disbursements were made to the students. • For 1 of 4 students selected for testing, the University was not able to demonstrate that the criteria for awarding SSS TRIO grant aid to a student who had previously completed their first two years of postsecondary education was appropriately satisfied. • For 2 of 25 students selected for testing, the University was unable to provide documentation supporting the students’ eligibility for the TRIO program. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures to ensure that documentation supporting TRIO program eligibility is appropriately retained as required. Views of Responsible Officials: The University experienced significant staffing changes in the TRIO programs. The changes in staffing lead to a loss of institutional knowledge, and interrupted policy and process enforcement. In many instance the documentation wasn’t available due to the transition of key individuals. During the period of staff transition for the McNair program, original communication showing previous approval from the Program Officer was not accessible. While the Department of Education provided correspondence granting McNair projects permission to reallocate travel funding to increase stipends for participants, given the limitations on travel capabilities due to the COVID-19 pandemic, which was subsequently confirmed by the Program Officer, we encountered difficulty locating explicit documentation approving the specific stipend increase amount. Continuous monitoring of program records will be implemented to ensure compliance with federal, Institutional and program requirements. The programs will review existing program operating procedures manuals to identify needed updates to current policies and procedures to align with federal, institutional and program requirements. The program stall will also engage in professional development opportunities to improve grant management.

Federal Program Information: TRIO Cluster (“TRIO”) (84.047A, 84.042A and 84.217A) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting - Grantees must submit an annual performance report to Department of Education each year of the project period. Certain key items contain critical information that should be included within the report and such information should be reconciled to the institution’s underlying records. Condition: The University did not include certain key line items in its annual TRIO reports and was unable to provide documentation supporting certain other information included within the reports. Cause: Insufficient administrative oversight and internal controls over TRIO program reporting requirements. Effect or Potential Effect: The University was not in compliance with TRIO program reporting requirements. Questioned Costs: None. Context: During our audit procedures, we noted that the University did not include certain key line items within their annual TRIO reports and was unable to provide documentation supporting certain other information included within the reports. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its internal controls and implement formal policies and procedures to ensure that TRIO reports are prepared in accordance with federal regulations and that supporting documentation is appropriately retained as required.   Views of Responsible Officials: The University experienced significant staffing changes in the TRIO programs. The changes in staffing lead to a loss of institutional knowledge, and interrupted policy and process enforcement. In many instance the documentation wasn’t available due to the transition of key individuals. Continuous monitoring of program records will be implemented to ensure compliance with federal, Institutional and program requirements. The programs will review existing program operating procedures manuals to identify needed updates to current policies and procedures to align with federal, institutional and program requirements. The program stall will also engage in professional development opportunities to improve grant management.

Federal Program Information: Federal Perkins Loan program (“Perkins”) (84.038) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions - A school must ensure that all of its loans are properly accounted for and updated on the National Student Loan Data System (“NSLDS”). It is the school's responsibility to ensure that the required reporting to NSLDS, including Perkins Loan account detail, is completed timely and accurately. The school should request a Perkins Loan Reconciliation Report (REC005) from the NSLDS Professional Access website and reconcile its records against the report to ensure its outstanding portfolio has been accurately reported to NSLDS. The total amount of loans and number of borrowers on NSLDS should reconcile with the school’s records, its third-party servicer records, and what is reported on its Fiscal Operations Report and Application to Participate (“FISAP”). Condition: The University was unable to provide a record of the total amount of loans and number of borrowers that reconciled with the amounts reported per the most recent FISAP and the Perkins Intent and Closeout form. Cause: Insufficient administrative oversight over the Perkins program liquidation requirements. Effect or Potential Effect: The total amount of loans and number of borrowers reported per the most recent FISAP and the Perkins Intent and Closeout form did not reconcile as required. Questioned Costs: Below reporting threshold. Context: The University was unable to provide records supporting the total amount of loans and number of borrowers that were reported during the closeout process for its Perkins loan program and in the latest reported FISAP. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its policies and procedures to ensure that the amount of loans and number of borrowers in the Perkins program are properly reconciled and accurately reported, in accordance with federal regulations. Views of Responsible Officials: Due to limitation on the FISAP, once the number of borrowers and loan balances are entered they cannot be changes, as a result there were minor differences, approximately 5 students and less than $10,000, that had been carried forward for several years. The Department of Education program officer, as well as the University’s loan servicer ECSI, have communicated that some of the numbers may differ due to payments or cancellations made after the loans were recorded. The Department of Education has accepted the information as final. The University has completed the Perkins Loan program liquidation process. The re-assignment of eligible loans to the Department of Education has been completed. Those not eligible for re-assignment have been deemed uncollectible and written-off. Once the University’s audit has been submitted we anticipated receiving the final close out letter from the Department of Education, which will officially close the Perkins Loan program at the University.

Criteria: Quarterly Public Reporting for Student Aid Portion Condition: The University failed to complete required quarterly reports for ARP HEERF II student funding spent during the year. The University is responsible for completing quarterly reports for the HEERF Student Aid portion and for establishing internal controls to ensure that sure reports are submitted within federal requirements. Questioned Cost: N/A Context: Out of the three quarterly reports required to be submitted during the year, none were prepared nor submitted to the University?s website as required. All funds were expended by June 30, 2022. Effect: The University failed to communicate information regarding student funding distributions to the public as required. Cause: The University did not appropriately understand the reporting requirements for ARP HEERF II funding during the 2022 program year. Identification of repeat findings: Not a repeat finding. Recommendation: The University should ensure that an understanding of HEERF requirements is maintained such that reporting requirements are met when applicable. Views of responsible officials: See Corrective Action Plan

Criteria: Institutions are required to keep the original paper promissory notes or original paper Master Promissory Note and repayment schedule in a locked, fireproof container until the loans are satisfied or the original documents are needed to enforce the obligation, in which case certified copies of the documents must be retained. Condition: We requested to review twenty open/active and three closed/paid-in-full Perkins Loan promissory notes for a total of twenty-three students. The promissory notes were not located. Cause: Due to personnel turnover, the location of the Perkins Loan promissory notes could not be located. Effect: Certain loans were made to students not evidenced by a promissory note and not enforceable for repayment. Questioned costs: $21,903 Recommendation: We recommend the Institution return Perkins Loan funds of $21,903 to the Secretary for loans with outstanding principle. Identification of repeat findings: Not a repeat finding. Views of responsible officials: See Corrective Action Plan