Waldorf University

Condition: Eleven checks totaling $6,107 related to student refunds of Title IV federal financial aid were outstanding more than 240 days. Criteria: The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the U.S. Department of Education no later than 240 days after the date the check was issued. Cause: The University does not have adequate procedures in place to ensure that uncashed student refund checks are identified and returned to the U.S. Department of Education within the required 240-day timeframe Effect: The University was not in compliance with Department of Education requirements related to the timely return of Title IV funds associated with uncashed student refund checks outstanding for more than 240 days. Repeat Finding: Yes – 2024-002. Recommendation: We recommend the University strengthen its internal controls over the monitoring of outstanding student refund checks by implementing procedures to periodically review uncashed checks and ensure that any Title IV funds outstanding for more than 240 days are promptly returned to the U.S. Department of Education in accordance with federal requirements. View of Responsible Officials: Waldorf University was surprised by this finding. In response, several meetings were held, and a clear process was designed to mitigate issues related to uncashed checks. The University accepts the findings and believes the new software will aid in producing accurate reports. Waldorf University is also reorganizing its departmental structure to strengthen oversight and ensure a thorough review of financial reports and account records.

2024-002 – Special Tests: 240 Day Checks (Significant Deficiency) Criteria: The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Secretary no later than 240 days after the date it issued that check. Condition: During our testing, it was noted the University does not have a process in place to ensure timeliness and accuracy of checks refunded to ED after 240 days outstanding. Fourteen checks totaling $6,998 related to student refunds of Title IV federal financial aid were outstanding more than 240 days as of June 30, 2024. Cause: The University did not have a process in place to ensure all outstanding checks over 240 days was properly returned to the ED. Effect: The University is not in compliance with Department of Education requirements that all student refund checks that are outstanding for more than 240 days be returned to the Department. Repeat Finding from a Prior Year: Yes Recommendation: We recommend that the University review its procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education after 240 days. Management Response: The University now has a process in place to ensure checks are returned on a quarterly basis.

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster Federal Assistance Listing Number: Various Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number: N/A Award Period: July 1, 2022 – June 30, 2023 Type of Finding: 􀁸 Material Weakness in Internal Control Over Compliance 􀁸 Other Matters Criteria or specific requirement: Per the Uniform Guidance regulations, entities that expend more than $750,000 of federal funds must submit an audit within nine months of the entity’s year end. Condition: Due to turnover in the business office, the audit was submitted late. Questioned costs: None Context: Approximately halfway through the fiscal year, the University hired a new controller. Unfortunately, that controller did have the skills needed to be able to accurately assemble a complete set of financial statements. Two weeks before the deadline, the controller terminated employment with the University. At that time, it was determined that additional work needed to be completed to accurately present the financial statements and additional time was needed to ensure that the financial statements were accurate. Cause: Due to the limited resources of the business office and the lack of qualified candidates in the marketplace, the University was forced to accept a lessor qualified candidate whose employment was ultimately terminated. Effect: The Uniform Guidance reports were submitted late. Repeat finding: No Auditor’s recommendation: We recommend that the University immediately start the search process for a replacement controller and potentially look into outsourcing that position if necessary. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster Federal Assistance Listing Number: Various Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number: N/A Award Period: July 1, 2022 – June 30, 2023 Type of Finding: 􀁸 Significant Deficiency in Internal Control Over Compliance 􀁸 Other Matters Criteria or specific requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned costs: None Context: During our audit procedures, it was noted that the College did not prepare a formal risk assessment that addresses the three areas noted in 16 CFR 314.4 (b) which are (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other systems failures and document safeguards for identified risks. Cause: The University did not have processes in place to document the GLBA requirements. Effect: The student personal information could potentially be vulnerable. Repeat finding: No Recommendation: We recommend the College consider hiring a firm to review their documentation and ensure that there are documented safeguards for identified risks and the required documentation and practices are implemented. We also recommend reviewing the changes in the Gramm-Leach-Bliley Act regulations that were required to be implemented as of June 9, 2023. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster Federal Assistance Listing Number: Various Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number: N/A Award Period: July 1, 2022 – June 30, 2023 Type of Finding: 􀁸 Material Weakness in Internal Control Over Compliance 􀁸 Other Matters Criteria or specific requirement: Per the Uniform Guidance regulations, entities that expend more than $750,000 of federal funds must submit an audit within nine months of the entity’s year end. Condition: Due to turnover in the business office, the audit was submitted late. Questioned costs: None Context: Approximately halfway through the fiscal year, the University hired a new controller. Unfortunately, that controller did have the skills needed to be able to accurately assemble a complete set of financial statements. Two weeks before the deadline, the controller terminated employment with the University. At that time, it was determined that additional work needed to be completed to accurately present the financial statements and additional time was needed to ensure that the financial statements were accurate. Cause: Due to the limited resources of the business office and the lack of qualified candidates in the marketplace, the University was forced to accept a lessor qualified candidate whose employment was ultimately terminated. Effect: The Uniform Guidance reports were submitted late. Repeat finding: No Auditor’s recommendation: We recommend that the University immediately start the search process for a replacement controller and potentially look into outsourcing that position if necessary. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster Federal Assistance Listing Number: Various Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number: N/A Award Period: July 1, 2022 – June 30, 2023 Type of Finding: 􀁸 Significant Deficiency in Internal Control Over Compliance 􀁸 Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.309 requires that enrollment status changes for students be reported to NSLDS within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. Regulations require the status include an accurate effective date. In addition, regulations require that an institution make necessary corrections and return the records within 10 days for any roster files that don’t pass the NSLDS enrollment reporting edits. Condition: We noted, during our testing, that five out of 40 students tested enrollment status was not reported timely. We also noted that one of the 40 students tested did not have effective date in NSLDS agree to the institutions’ records. Questioned costs: None Context: During our testing, it was noted the University does not have a process in place to ensure timeliness and accuracy of enrollment reporting. Cause: The University’s processes and controls did not ensure that student status changes were properly and timely reported to NSLDS. Effect: The NSLDS system is not updated with the student information which can cause over awarding should the student transfer to another institution and the students may not properly enter the repayment period. Repeat finding: No Auditor’s recommendation: We recommend the University review its reporting procedures to ensure that students’ statuses are accurately and timely reported to NSLDS as required by regulations. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster Federal Assistance Listing Number: Various Federal Award Identification Number and Year: N/A Pass-Through Agency: N/A Pass-Through Number: N/A Award Period: July 1, 2022 – June 30, 2023 Type of Finding: 􀁸 Material Weakness in Internal Control Over Compliance 􀁸 Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.16 requires institutions that participate in the Title IV program to demonstrate administrative capability. Condition: During our testing of the controls over compliance, we noted the University did not maintain documentation that the controls are being completed. Questioned costs: None Context: During our testing, it was noted the University does not have a process in place to ensure proper documentation is maintained to document the controls placed over Title IV programs are being completed timely. Cause: The University did not have a process in place to document controls are being performed. Effect: The University is not in compliance with Department of Education requirements over administrative capability. Repeat finding: No Auditor’s recommendation: We recommend that the University implement procedures to document and maintain the documentation to support the controls over compliance are not only properly designed but are working. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.