ICOHS COLLEGE, INC.Non-Profit

Federal Agency: U.S. Department of Education Program: Student Financial Assistance Cluster (84.268 Direct Loans, 84.063 Federal Pell Grant Program) Compliance Requirement: Special Tests and Provisions – Enrollment Reporting Criteria: In accordance with 34 CFR §685.309(b) and the Department of Education’s Enrollment Reporting Guide, institutions must notify NSLDS of changes in student enrollment status within 30 days of the change, or ensure that the change is reported in the next scheduled roster file, but no later than 60 days after the date of determination. Condition: We tested a sample of 17 students for changes in enrollment during the audit period. Our testing revealed 16 instances where student enrollment changes were not updated within the required timeframe. The overall rate of error was 94%. Cause: The Institution uses a third-party provider, ECM, to update its enrollment information with NSLDS. The Institution enters enrollment updates into an interface spreadsheet, which is uploaded into ECM’s student system, SOLFIA. This data is then transferred from SOLFIA to the NSLDS enrollment system. In April 2024, ECM notified the Institution that it was updating SOLFIA to comply with new technical specifications issued by the U.S. Department of Education. These updates were not completed until September 2024, and technical issues with SOLFIA persisted thereafter. As a result, the Institution was unable to transmit timely enrollment updates to NSLDS. Due to the continuing issues with SOLFIA, the Institution began manually updating enrollment information with NSLDS in March 2025. Effect: Untimely or missing enrollment status reporting may lead to delays in borrowers’ loan servicing activities such as entering repayment, deferment, or grace periods, and could cause noncompliance with federal requirements. Inaccurate reporting may also increase the risk of loan defaults and interest accrual issues for students. Questioned Costs: Known questioned costs are not considered material; however, due to the compliance nature of the finding and the frequency of occurrence, the finding is deemed material for reporting purposes.Recommendation: We recommend that the Institution work closely with its third-party provider to ensure that system updates affecting enrollment reporting are implemented in a timely and controlled manner. The Institution should: • Establish contingency procedures, such as temporary manual reporting processes, to ensure compliance during periods of system outages or transitions; • Perform regular reconciliations between internal records, SOLFIA, and NSLDS to identify and correct delays or discrepancies; and • Strengthen communication protocols with its third-party provider to monitor and respond to system issues affecting Title IV compliance. Views of Responsible Officials: The institution agrees with the finding. A corrective action plan addressing the noted deficiencies has been submitted under separate cover.

Finding 2024-002 – Special Tests and Provisions - Return of Title IV Funds Federal Agency: U.S. Department of Education Program: Student Financial Assistance Cluster (84.268 Direct Loans, 84.063 Federal Pell Grant Program) Criteria: In accordance with 34 CFR §668.22(j), when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment, the institution must return any unearned Title IV funds to the Department of Education within 45 calendar days from the date the institution determined the student withdrew. Condition/Context: Our initial sample of students who withdrew from the Institution was 3, and from this sample, we encountered 1 student whose required return to Title IV was late. Due to the high error rate of 1 out of 3, we expanded our testing. From a population of 20 students who withdrew and had funds returned, we selected an additional 13 students to test for the timely return of funds. The sample was based on a 90% confidence level with a 10% margin of error. Of the 16 students who withdrew and required a return of Title IV funds, we noted that in 5 cases (31.25%), the institution did not return the funds to the Department of Education within the required 45-day timeframe. Cause: The institution utilizes a third-party service provider, ECM, to calculate Return to Title IV (R2T4) amounts and transmit the required returns to the Department of Education. The institution initiates this process by completing and submitting a “Return to Title IV Request Form” to ECM. Our testing indicated that the institution submitted these forms to ECM within the required timelines. However, ECM experienced delays in processing due to significant personnel turnover and system-related issues. In April 2024, ECM notified the institution that it was updating its SOLFIA platform to comply with new Department of Education technical specifications. These updates were not completed until September 2024, after which ECM continued to experience technical issues that further delayed processing. The institution has represented that these external challenges impacted its ability to meet the 45-day deadline for returning Title IV funds. Effect: The institution was not in compliance with federal regulations regarding the timely return of Title IV funds. Late refunds could result in potential liabilities, increased scrutiny, or sanctions by the Department of Education. Questioned Costs: Known questioned costs are not considered material; however, due to the compliance nature of the finding and the frequency of occurrence, the finding is deemed material for reporting purposes. Recommendation: We recommend that the institution formally document and strengthen oversight of third-party service providers responsible for Title IV compliance. This includes establishing performance expectations, monitoring protocols, and contingency plans to ensure continuity during periods of vendor transition or system outages. We further recommend that the institution assess whether additional internal controls or staffing can supplement or verify timely R2T4 processing, particularly during periods of known vendor instability. Views of Responsible Officials and Corrective Action Plan: The institution agrees with the finding. A corrective action plan addressing the noted deficiencies has been submitted under separate cover.

Finding 2022-1: 85/15 Reporting (Voc. & Ed. Counseling for Service Members) Criteria: The 85/15 rule prohibits paying Department of Veterans Affairs (VA) benefits to students enrolling in a program when more than 85 percent of the students enrolled in that program are having any portion of their tuition, fees, or other charges paid for them by the Educational and Training Institution (ETI) or VA. The 85/15 calculations must be submitted using the Statement of Assurance of Compliance With 85 Percent Enrollment Ratios form no later than 30 calendar days after the start of the regular term (excluding summer terms). Condition: Our testing of the Institution's submission of the Statement of Assurance of Compliance With 85 Percent Enrollment Ratios form disclosed two instances where the form was submitted past the 30 calendar day deadline. Cause: The Institution offers programs on a five-week basis which do not line up with the quarter reporting requirement. Consequently, this has created some confusion in understanding the deadline requirements. Effect: Without updated 85/15 information, it is not possible for the VA to determine the institution?s eligibility to enroll VA-eligible students within the VA?s designated timetable. Recommendation: The Institution needs to ensure that it adheres to its policies and procedures and VA reporting compliance requirements. Questioned Costs None Views of Responsible Officials: Management is in concurrence with the finding.

Finding 2021-1: Activities Allowed or Unallowed (CFDA-84.425F) Criteria: Institutional Costs (Institutional Portion, (a)(2), and (a)(3) Funds) HEERF II, HEERF III, and HEERF I funds liquidated (spent) on or after December 27, 2020. Beginning December 27, 2020, any unused HEERF I Institutional Portion funds, new HEERF II Institutional Portion funds, HEERF III Institutional Portion Funds may be used to defray expenses associated with coronavirus including lost revenue. Generally, lost revenue refers to those revenues an institution of higher education (institution) otherwise expected but were reduced or eliminated as a result of the novel coronavirus 2019 (COVID-19) pandemic. As such, lost revenues can only be estimated. Condition: The Institution has claimed $29,363 in lost revenues on its 2021 annual report. In our review the Institution?s revenue for the year ended 2021 as compared to the year ended 2019 there is no evidence that the Institution had a reduction in revenues. Cause: The Institution, in calculating lost revenues, mistakenly included charitable contributions in the lost revenue calculation which was significantly down if you compare the 2019 year with the 2021 year. Charitable contributions are not allowed in determining lost revenues. Effect The Institution reported non-reimbursable expenses in the amount of $29,363. Recommendation: We recommend that the Institution correct its quarterly and annual reports to properly reflect lost revenues of zero. Even with the required adjustment of $29,363, the Institution drawdowns are less than the adjusted reimbursable amount and accordingly we are not recommending the return of funds. Questioned Costs $29,363 Views of Responsible Officials: Management is in concurrence with the finding.

Finding 2021-2: Reporting (CFDA-84.425F) Criteria: Institutional Portion Quarterly Public Reporting The Certification and Agreement directs each school applying for HEERF funds to comply with Section 15011(b)(2) of Division B of the CARES Act and submit quarterly reports, in a time and manner required by the Department of Education. The Department of Education has developed the Quarterly Budget and Expenditure Reporting form (OMB Control Number 1840-0849) that schools must use to satisfy the quarterly Institutional Portion reporting. This form includes a chart that the school must use to specify the amount of expended CARES Act funds for each funding category. Annual HEERF Reporting The Annual Report is due on May 6, 2022 and applies to the reporting period from January 1, 2021 through December 31, 2021. Both the quarterly and annual reports are to be submitted timely and accurately presented in accordance with the governing requirements. Condition: The Institution reported $20,964 in Student Aid Portion (84.425E) funding as part of its Institutional (84.425F) portion of expenses. In addition, because of the finding reported above (See Finding 2021-1) the Institution overreported lost revenues in the amount $29,363. Cause: The misreporting of Student Aid Portion of funds was nothing more than an oversite in the classification of funding sources. The overreporting of lost revenues is discussed in finding 2021-1. Effect Inaccurate reporting makes it difficult for the Department of Education to collect accurate data about the use of HEERF funds. Recommendation: We recommend that the Institution updates its quarterly and annual reports to properly reflect the required changes noted above. Questioned Costs None Views of Responsible Officials: Management is in concurrence with the finding.

Finding 2021-3: Reporting (Student Financial Aid Cluster) Criteria: Code of Federal Regulations ? Title 34 Education: Part 685 ? William D. Ford Federal Direct Loan Program, Subpart C ? Requirements, Standards, and Payments for Direct Loan Program, ?685.309, Administrative and fiscal control and fund accounting requirements for schools participating in the Direct Loan Program, Sub-section (b) Enrollment reporting process, states that a school is required to respond to the Enrollment Reporting roster file within 15 days of the date the U.S. Department of Education (E.D.) sends the file. Condition: Our testing of the Institution's submission of student roster enrollment reporting to NSLDS disclosed one instance where the roster was not returned to NSLDS within the required 15-days of receiving the roster. Cause: The Institution utilizes a third-party servicer to assist them with the Enrollment Reporting function. During the COVID pandemic, the Institution?s personnel did not have access to the office and the single late roster was not returned within the required 15-day requirement. Effect: Without updated student status information, it is not possible for the Department of Education to determine a student's eligibility for deferment, grace periods, and repayment of interest subsidies. Recommendation: The Institution needs to ensure that it adheres to its policies and procedures and DOE reporting compliance requirements Questioned Costs None Views of Responsible Officials: Management is in concurrence with the finding.

Finding 2020-1 - Period of Performance Criteria: In the CARES Act certification and agreements, all schools were initially given one calendar year (12 months) from the date of award in their HEERF I Grant Award Notifications to complete the performance of their CARES Act HEERF I grant awards. Subsequently, the period of performance was modified to allow schools to incur pre-award costs consistent with 2 C.F.R. ? 200.458 and 34 C.F.R. ? 75.263 from March 13, 2020, the date of the declaration of the national emergency due to the coronavirus, to the date of their HEERF grant award for their (a)(1) Institutional Portion as long as those expenditures would have been allowable if incurred after the date of the HEERF grant award. Condition: As part of our audit procedures, we obtained a detailed list of all expenses supporting the Annual CARES Act Report and reviewed all transaction date. Our review revealed $38,455 in costs incurred before March 13, 2020, or outside of the performance period. Cause: Due to the COVID pandemic, the College concentrated its limited resources on restructuring its educational programs to accommodate distance learning and social distancing. Consequently, the College could not dedicate enough resources to comply with the HEERF Performance Period compliance requirements. Effect Although the Institution incorrectly reported $38,455 in expenses outside the performance period, the Institution did incur other previously unreported reimbursable expenses that more than offset the $38,455 in non-reimbursable costs. We considered this to be a material finding. Recommendation: We recommend the Institution designate an individual to obtain a greater understanding of the HEERF?s program requirements. In addition, we recommend that the Institution update its Annual CARES Act Report to reflect the final audited HEERF expenses. Questioned Costs None Views of Responsible Officials: Management is in concurrence with the finding.

Finding 2020-2 ? Activities Allowed or Unallowed Criteria: Pursuant the CARES Act 18004(a)(1) Institutional Portion, allowable expenditures must have been ?to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus, so long as such costs do not include payment to contractors for the provision of pre-enrollment recruitment activities; endowments; or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship.? Condition: We obtained a detailed list of all expenses supporting the Annual CARES Act Report as part of our audit procedures. We reviewed all transactions to determine if such costs met the criteria of ?to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus.? Our review disclosed $108,013 in expenses that did not meet the criteria. Cause: Due to the COVID pandemic, the College concentrated its limited resources on restructuring its educational programs to accommodate distance learning and social distancing. Consequently, the College could not dedicate enough resources to comply with the HEERF Activities Allowed or Unallowed compliance requirements. Effect Although the Institution incorrectly reported $108,013 in expenses that were unallowable activities, the Institution did incur other previously unreported reimbursable expenses that more than offset the $108,013 in non-reimbursable costs. We considered this to be a material finding. Recommendation: We recommend the Institution designate an individual to obtain a greater understanding of the HEERF?s program requirements. In addition, we recommend that the Institution update its Annual CARES Act Report to reflect the final audited HEERF expenses. Questioned Costs None Views of Responsible Officials: Management is in concurrence with the finding.