Martin UniversityHigher Education

2024 – 001: Financial Statement Preparation Type of Finding: • Material Weakness in Internal Control over Financial Reporting Condition: The board and management share the ultimate responsibility for the University's internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Criteria or specific requirement: In an ideal control setting, the University would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAPP. Context: While performing audit procedures, it was noted that due to staffing turnover and changes, the board and management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP, including retaining supporting documentation and reconciliations. Effect: It is possible that a misstatement of the University's financial statements could occur and not be prevented or detected by the University's internal control. Cause: Due to change in management and turnover in office, the University’s controls were not able to detect the adjustments made as part of the audit. The University does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete, accurate, and supported by the University’s records. Repeat finding: Yes – 2023-001. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be thoroughly reviewed by members of the board and management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

2024 – 002: Segregation of Duties and Control Documentation Type of Finding: • Material Weakness in Internal Control over Financial Reporting Condition: The University does not have appropriate segregation of duties and review control procedures in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained; therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the University’s internal controls. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP. Context: While performing audit procedures, it was noted that due to staffing turnover, staffing changes, and operational challenges, management does not have appropriate segregation of duties control and review procedures in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP Effect: The lack of controls and review procedures in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: While performing audit procedures, it was noted that due to staffing turnover, staffing changes, and operational challenges, management does not have appropriate segregation of duties and review procedures in place. Repeat Finding: Yes – 2023-002. Recommendation: The University should evaluate their financial reporting processes and controls, including the segregation of duties among its internal staff (including number of internal staff), to determine whether additional processes and controls over the financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

2024-003: Eligibility – Satisfactory Academic Progress Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801 (July 1, 2021 - August 31, 2027), P063P213807 (March 23, 2021 - August 31, 2027), P268K223807 (January 1, 2021 - July 31, 2043) Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance: The Code of Federal Regulations,34 CFRs 668.16, 668.32(f), 668.34, 690.75, 675.9, 676.9, 685.200, 686.11, 20 USC 1070h; 42 CFR57.306; 42 USC 293a(d)(2)) states that students must maintain good standing, or satisfactory academic .progress Condition: 2 students of the 22 students selected for eligibility did not maintain academic satisfactory progress and were on probation but did not receive notifications. Questioned Costs: None. Context: During our audit procedures, it was noted that the University, it was noted that 2 of the 22 students selected for testing did not maintain satisfactory academic progress and probation notices were not completed. Cause: Employee turnover during the 23-24 academic year caused this process to not be completed for all students. Effect: The University is not in compliance with the qualitative aspects of its statisfactory academic progress policy. Repeat Finding: No Recommendation: We recommend that the University review its satisfactory academic progress policy to ensure that all notifications are completed as required. Views of Responsible Officials: There is no disagreement with the audit finding.

2024-004: Special Tests and Provision – Outstanding Checks over 240 Days Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801 (July 1, 2021 - August 31, 2027), P063P213807 (March 23, 2021 - August 31, 2027), P268K223807 (January 1, 2021 - July 31, 2043) Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- 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: Student checks related to student refunds of Title IV federal financial aid was outstanding more than 240 days as of June 30, 2024. Questioned Costs: $44,315. Context: During our audit procedures, it was noted that the University had 84 Title IV outstanding checks at June 30, 2024 that aged over 240 days. The outstanding checks have not been canceled or the funds returned to the Secretary. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures related to Title IV outstanding checks. 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: Yes – 2023-004. 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. Views of Responsible Officials: There is no disagreement with the audit finding.

2024-005: Reporting – Common Origination and Disbursement (COD) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801 (July 1, 2021 - August 31, 2027), P063P213807 (March 23, 2021 - August 31, 2027), P268K223807 (January 1, 2021 - July 31, 2043) Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- From the 2022-23 FSA Handbook: to be in compliance with reporting disbursements and disbursement adjustments within 15 days. The date funds are credited to a student’s account in the institution’s general ledger or any subledger of the general ledger or paid to a student directly is the disbursement date the financial aid office reports to COD. The Common Origination and Disbursement (COD) additional requirements are: (1) Schools must use the COD system to request and receive federal student aid funds, including Direct Loans, Pell Grants, and Campus-Based aid programs. Schools must ensure that all disbursements of federal student aid are made through the COD system. (2) Schools must reconcile their records with the COD system to ensure that all disbursements are accurately reported and recorded. (3) Schools must comply with COD reporting requirements, including reporting disbursements, adjustments, and cancellations in a timely and accurate manner. Condition: During audit procedures, we noted the following items were incorrectly reported to the COD: Fall 2023 • For 4 of 16 student disbursements tested, the PELL disbursement date did not match between COD and the student ledgers. • For 4 of 16 student disbursements tested, the PELL applied dates did not fall within the 15 day requirement from the disbursement date. • For 2 of 16 student disbursements tested, the PELL disbursement amount did not match between COD and the student ledgers. • For 1 of 15 student disbursements tested, the Subsidized Direct Loan applied date did not fall within the 15 day requirement from the disbursement date. • For 2 of 8 student disbursements tested, the Unsubsidized Direct Loan applied dates did not fall within the 15 day requirement from the disbursement date. Spring 2024 • For 3 of 16 student disbursements tested, the PELL disbursement dates did not match between COD and the student ledgers. • For 3 of 16 student disbursements tested, the PELL applied dates did not fall within the 15 day requirement from the disbursement date. • For 1 of 16 student disbursements tested, the PELL disbursement amount did not match between COD and the student ledgers. • For 3 of 15 student disbursements tested, the Subsidized Direct Loan applied dates did not fall within the 15 day requirement from the disbursement date. • For 1 of 8 student disbursements tested, the Unsubsidized Direct Loan applied date did not fall within the 15 day requirement from the disbursement date. Summer 2024 • For 1 of 16 student disbursements tested, the PELL disbursement date did not match between COD and the student ledgers. • For 1 of 16 student disbursements tested, the PELL applied dates did not fall within the 15 day requirement from the disbursement date. • For 1 of 16 student disbursements tested, the PELL disbursement amount did not match between COD and the student ledgers. • For 2 of 15 student disbursements tested, the Subsidized Direct Loan applied dates did not fall within the 15 day requirement from the disbursement date. • For 3 of 8 student disbursements tested, the Unsubsidized Direct Loan applied dates did not fall within the 15 day requirement from the disbursement date. • For 1 of 1 student disbursements tested, the Parent Plus Direct Loan applied date did not fall within the 15 day requirement from the disbursement date. Questioned Costs: None. Context: During audit procedures, we noted the following items: Fall 2023 • For 4 of 16 student disbursements tested, the PELL disbursement date per the student ledger compared to COD was as follows: a. 9/1/23 per student ledger and 4/5/24 per COD. b. 9/22/23 per student ledger and 2/15/24 per COD c. 11/10/23 per student ledger and 2/2/24 per COD d. 11/16/23 per student ledger and 6/21/24 per COD • For 4 of 16 student disbursements tested, the PELL applied date per the student ledger compared to COD was as follows: a. 9/1/23 per student ledger and 4/18/24 per COD. b. 9/22/23 per student ledger and 7/8/24 per COD c. 11/10/23 per student ledger and 2/12/24 per COD d. 11/16/23 per student ledger and 7/9/24 per COD • For 2 of 16 student disbursements tested, the PELL disbursement amount per the student ledger compared to COD was as follows: a. $925 per student ledger and $1,848 per COD b. $924 per student ledger and $1,849 per COD • For 1 of 15 student disbursements tested, the Subsidized Direct Loan applied date per the student ledger compared to COD was as follows: a. 11/10/23 per student ledger and 12/12/23 per COD • For 2 of 8 student disbursements tested, the Unsubsidized Direct Loan applied date per the student ledger compared to COD was as follows: a. 9/15/23 per student ledger and 10/2/23 per COD b. 11/10/23 per student ledger and 12/12/23 per COD Spring 2024 • For 3 of 16 student disbursements tested, the PELL disbursement date per the student ledger compared to COD was as follows: a. 2/2/24 per student ledger and 6/21/24 per COD for all 3 students • For 3 of 16 student disbursements tested, the PELL applied date per the student ledger compared to COD was as follows: a. 2/2/24 per student ledger and 11/15/24 per COD for 2 students b. 2/2/24 per student ledger and 7/9/24 per COD for 1 student • For 1 of 16 student disbursements tested, the PELL disbursement amount per the student ledger compared to COD was as follows: a. $1,849 per student ledger and $2,773 per COD • For 3 of 15 student disbursements tested, the Subsidized Direct Loan applied date per the student ledger compared to COD was as follows: a. 3/1/24 per student ledger and 4/17/24 per COD for all 3 students • For 1 of 8 student disbursements tested, the Unsubsidized Direct Loan applied date per the student ledger compared to COD was as follows: a. 3/1/24 per student ledger and 4/17/24 per COD Summer 2024 • For 1 of 16 student disbursements tested, the PELL disbursement date per the student ledger compared to COD was as follows: a. 6/21/24 per student ledger and 7/3/24 per COD • For 1 of 16 student disbursements tested, the PELL applied date per the student ledger compared to COD was as follows: a. 6/21/24 per student ledger and 7/23/24 per COD • For 1 of 16 student disbursements tested, the PELL disbursement amount per the student ledger compared to COD was as follows: a. $372 per student ledger and $1 per COD • For 2 of 15 student disbursements tested, the Subsidized Direct Loan applied date per the student ledger compared to COD was as follows: a. 6/21/24 per student ledger and 7/9/24 per COD b. 7/3/24per student ledger and 7/23/24 per COD • For 3 of 8 student disbursements tested, the Unsubsidized Direct Loan applied date per the student ledger compared to COD was as follows: a. 6/21/24 per student ledger and 7/9/24 per COD for 2 students b. 7/3/24 per student ledger and 1/31/25 per COD for 1 student • For 1 of 1 student disbursements tested, the Parent Plus Direct Loan applied date per the student ledger compared to COD was as follows: a. 8/21/24 per student ledger and 1/31/25 per COD Cause: Employee turnover during the academic year caused this process to not be completed accurately. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: Yes – 2023-006. Recommendation: We recommend that the entity strengthen its internal controls to ensure that all disbursement dates are reported to COD accurately and timely. Views of Responsible Officials: There is no disagreement with the audit finding.

2024-006: Special Tests and Provisions – The Gramm-Leach-Bliley Act (GLBA) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801 (July 1, 2021 - August 31, 2027), P063P213807 (March 23, 2021 - August 31, 2027), P268K223807 (January 1, 2021 - July 31, 2043) Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- 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 university did not conduct a risk assessment that addresses (2) and (3) of the 3 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 experienced turnover in the department responsible for this process. Effect: The student personal information could be vulnerable. Repeat Finding: Yes – 2023-008. Recommendation: We recommend the University engage a third party or perform the risk assessment for the two areas required by the Gramm-Leach-Bliley Act that have not been completed and documented and ensure that there are documented safeguards for identified risks. Views of Responsible Officials: There is no disagreement with the audit finding.

2024-007: Special Tests and Provisions – Return of Title IV Funds Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801 (July 1, 2021 - August 31, 2027), P063P213807 (March 23, 2021 - August 31, 2027), P268K223807 (January 1, 2021 - July 31, 2043) Award Period: July 1, 2023 – June 30, 2024 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The financial aid personnel and the accounting department and the management accounting systems of each non-Federal entity must provide for, effective controls over, and accountability for all students the withdraws from the University [2 CFR §668.22]. Condition: The University does not have a process in place to ensure all required return to Title IV funding calculations are identified, completed, and reviewed in a timely manner. The return to Title IV funding calculation performed on students withdrawn from the University did not include a control process to review and approve the calculations for accuracy prior to changes being made to the student’s award. Questioned Costs: $1,849. Context: During our audit procedures, we noted that the 1 student withdrawl did not have a return to Title IV calculation completed timely as the student officially withdrew 8/29/23 and the calculation was not completed until 3/24/25. We also noted that the calculation that was preformed did not include documentation of the control process to review and approve the calculations prior to changes being made to the student’s award. Cause: The University must maintain adequate data and documentation, but due to change in management and turnover in office, there was a lack of conveying institutional knowledge and processes. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: No. Recommendation: We recommend the institution maintain proper documentation in accordance with federal grantor requirements and ensure that the documents are readily available for review upon request, including monitoring of students with triggering events that require a return to Title IV calculation to be completed, reviewed, and approved. Views of Responsible Officials: There is no disagreement with the audit finding.

2023 – 001: Financial Statement Preparation Type of Finding: • Material Weakness in Internal Control over Financial Reporting Condition: The board and management share the ultimate responsibility for the University's internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Criteria or specific requirement: In an ideal control setting, the University would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAPP. Context: While performing audit procedures, it was noted that due to staffing turnover and changes, the board and management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP, including retaining supporting documentation and reconciliations. Effect: It is possible that a misstatement of the University's financial statements could occur and not be prevented or detected by the University's internal control. Cause: Due to change in management and turnover in office, the University’s controls were not able to detect the adjustments made as part of the audit. The University does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete, accurate, and supported by the University’s records. Repeat finding: Yes – 2022-001. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be thoroughly reviewed by members of the board and management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

2023 – 002: Segregation of Duties and Control Documentation Type of Finding: • Material Weakness in Internal Control over Financial Reporting Condition: The University does not have appropriate segregation of duties and review control procedures in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained; therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the University’s internal controls. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP. Context: While performing audit procedures, it was noted that due to staffing turnover, staffing changes, and operational challenges, management does not have appropriate segregation of duties control and review procedures in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP Effect: The lack of controls and review procedures in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: While performing audit procedures, it was noted that due to staffing turnover, staffing changes, and operational challenges, management does not have appropriate segregation of duties and review procedures in place. Repeat Finding: Yes – 2022-002. Recommendation: The University should evaluate their financial reporting processes and controls, including the segregation of duties among its internal staff (including number of internal staff), to determine whether additional processes and controls over the financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

2023-003: Reporting – FISAP Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.24(e)(i) requires an institution to maintain records to support the data contained in the FISAP. Condition: The University submitted inaccurate data in its annual FISAP report. Questioned Costs: None. Context: Section A of the Fiscal Operations Report, Part VI shows 65 undergraduate unduplicated recipients, but the support shows 66. Cause: Due to change in management and turnover in office, in completing the data entry, there was no oversight to ensure reporting was accurate to the supporting University records. Effect: The information in the FISAP is utilized to assist in the awarding of future awards and incorrect data could negatively impact future awards. Repeat Finding: Yes – 2022-003 Recommendation: We recommend the applicable campus revise procedures to ensure that the record retention requirements are met and supporting documentation agrees to the FISAP, including a supervisory review by someone other than the preparer. Views of Responsible Officials: There is no disagreement with the audit finding.

2023-004: Special Tests and Provision – Outstanding Checks over 240 Days Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- 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: Student checks related to student refunds of Title IV federal financial aid was outstanding more than 240 days as of June 30, 2023. Questioned Costs: $44,315. Context: During our audit procedures, it was noted that the University had 84 Title IV outstanding checks at June 30, 2022 that aged over 240 days. The outstanding checks have not been canceled or the funds returned to the Secretary. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures related to Title IV outstanding checks. 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: Yes – 2022-004. 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. Views of Responsible Officials: There is no disagreement with the audit finding.

2023-005: Special Tests & Provisions – Enrollment Reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34CFR section 682.610 states that all schools participating (or approved to participate) in the Federal Student Aid programs must have an arrangement to report student enrollment data to the NSLDS through a Roster file. Rosters must be returned within 15 days and any subsequent error records must be returned within 10 days. Condition: The University is not reporting student information to the Clearinghouse. Students tested did not have their enrollment status properly reported to the Clearinghouse. Questioned Costs: None Context: During our audit procedures, it was noted that 7 of the 8 students' enrollment information per institution records was not reported correctly to NSLDS. Also, during our audit procedures, it was noted that 2 of the 8 students' enrollment status per institution records and NSLDS did not agree. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures to ensure accurate, timely, and complete enrollment reporting. Effect: National Student Loan Database System (NSLDS) 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: Yes – 2022-005. Recommendation: We recommend that the entity strengthen its internal controls to ensure that all enrollment records are reported correctly and within the required time frame. Views of Responsible Officials: There is no disagreement with the audit finding.

2023-006: Reporting – Common Origination and Disbursement (COD) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- From the 2022-23 FSA Handbook: to be in compliance with reporting disbursements and disbursement adjustments within 15 days. The date funds are credited to a student’s account in the institution’s general ledger or any subledger of the general ledger or paid to a student directly is the disbursement date the financial aid office reports to COD. The Common Origination and Disbursement (COD) additional requirements are: (1) Schools must use the COD system to request and receive federal student aid funds, including Direct Loans, Pell Grants, and Campus-Based aid programs. Schools must ensure that all disbursements of federal student aid are made through the COD system. (2) Schools must reconcile their records with the COD system to ensure that all disbursements are accurately reported and recorded. (3) Schools must comply with COD reporting requirements, including reporting disbursements, adjustments, and cancellations in a timely and accurate manner. Condition: During audit procedures, we noted the following items were incorrectly reported to the COD: Fall 2022 • For 1 of 10 students tested, the Unsubsidized Direct Loan disbursement dates did not match between COD and the student ledgers. • For 1 of 5 students tested, the Parent Plus Direct Loan applied dates did not fall within the 15 day requirement from the disbursement date Spring 2023 • For 2 of 10 students tested, the PELL applied dates did not fall within the 15 day requirement from the disbursement date. • For 2 of 12 students tested, the Subsidized Direct Loan applied dates did not fall within the 15 day requirement from the disbursement date. • For 1 of 10 students tested, the Unsubsidized Direct Loan applied dates did not fall within the 15 day requirement from the disbursement date. • For 2 of 5 students tested, the Parent Plus Direct Loan applied dates did not fall within the 15 day requirement from the disbursement date. Summer 2023 • For 5 of 10 students tested, the PELL disbursement dates did not match between COD and the student ledgers. • For 3 of 12 students tested, the Subsidized Direct Loan disbursement dates did not match between COD and the student ledgers. • For 2 of 10 students tested, the Unsubsidized Direct Loan disbursement dates did not match between COD and the student ledgers. • For 2 of 5 students tested, the Parent Plus Loan disbursement dates did not match between COD and the student ledgers. • For 1 of 10 students tested, the Unsubsidized Direct Loan applied dates did not fall within the 15 day requirement from the disbursement date. Questioned Costs: None. Context: During audit procedures, we noted the following items: Fall 2022 • The Unsubsidized Direct Loan disbursement date in COD for the student in question is 09/06/2022, but on the student ledgers the date is 09/21/2021. • The Parent Plus Direct Loan Fall 2022 applied date in COD for the student in question is 6/28/2023, and the disbursement date in COD is 12/5/2022, which is 141 business days. Spring 2023 • The Pell applied dates in COD for the students in question are 04/03/2023, and the disbursement dates in COD are 02/21/2023, which is 30 business days. • The Subsidized Direct Loan applied date in COD for one student in question is 03/10/2023, and the disbursement date in COD is 01/27/23, which is 30 business days. The Subsidized Direct Loan applied date in COD for the other student in question is 02/21/23, and the disbursement date in COD is 01/27/2023, which is 17 business days. • The Unsubsidized Direct Loan applied date in COD for the student in question is 08/18/2023, and the disbursement date in COD is 01/27/2023, which is 141 business days. • The Parent Plus Direct Loan applied date in COD is 05/08/2023 for the student in question, and the disbursement date in COD is 03/31/2023, which is 26 business days. Summer 2023 • The Pell disbursement dates in COD for the students in question are 06/16/2023, but on the student ledgers the dates are 06/20/2023. • The Subsidized Direct Loan dates in COD for the students in question are 06/16/2023, but on the student ledgers the dates are 06/20/2023. • The Unsubsidized Direct Loan disbursement dates in COD for the students in question is 09/06/2022, but on the student ledgers the date is 09/21/2021. • The Parent Plus Direct Loan disbursement dates in COD for the students in question are 06/16/2023, but on the student ledgers the dates are 06/20/2023. • The Unsubsidized Direct Loan applied date in COD for the student in question is 08/18/2023, and the disbursement date in COD is 06/20/2023, which is 43 business days. Cause: Employee turnover during the 2022-2023 academic year caused this process to not be completed accurately. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: Yes – 2022-007. Recommendation: We recommend that the entity strengthen its internal controls to ensure that all disbursement dates are reported to COD accurately and timely. Views of Responsible Officials: There is no disagreement with the audit finding.

2023-007: Eligibility – Pell Awarding Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.063 Award Number and Year: P063P213807(March 23, 2021 - August 31, 2027) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- 34 CFR 668.60(c), the institution shall adjust the student's award when an over award or under award is caused by the change in the expected family contribution. That adjustment must be made— (i) Within the same award year—if possible—to correct any overpayment or underpayment; or (ii) During the next award year to correct any overpayment that could not be adjusted during the year in which the student was overpaid. Condition: Students were disbursed Pell funds inaccurately. Questioned Costs: $1,722 Context: During our audit procedures, it was noted that one (1) of ten (10) students tested, the Pell amount disbursed was less than what the student was eligible to receive. Cause: The University experienced turnover in the department responsible for this process. The University does not have any records or notifications on file of the classes being adjusted resulting in a change in eligibility status. Effect: Students are not disbursed correct funds they are eligible to receive during the school year. Repeat Finding: Yes – 2022-008. Recommendation: We recommend the University implement policies to review all student award packages at the start of the academic year to ensure no over and under awards exist. Views of Responsible Officials: There is no disagreement with the audit finding.

2023-008: Special Tests and Provisions – The Gramm-Leach-Bliley Act (GLBA) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2022 – June 30, 2023 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- 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 university did not conduct a risk assessment that addresses (2) and (3) of the 3 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 experienced turnover in the department responsible for this process. Effect: The student personal information could be vulnerable. Repeat Finding: Yes – 2022-009. Recommendation: We recommend the University engage a third party or perform the risk assessment for the two areas required by the Gramm-Leach-Bliley Act that have not been completed and documented and ensure that there are documented safeguards for identified risks. Views of Responsible Officials: There is no disagreement with the audit finding.

2022 – 001: Financial Statement Preparation Type of Finding: • Material Weakness in Internal Control over Financial Reporting Condition: The board and management share the ultimate responsibility for the University's internal control system. While it is acceptable to outsource various accounting functions, the responsibility for internal control cannot be outsourced. Various significant audit adjustments were proposed and posted through the audit process. The adjustments were a necessary step in ensuring the financial statements were fairly stated in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). Criteria or specific requirement: In an ideal control setting, the University would have a comprehensive control procedure to ensure that the financial statements, including disclosures are complete and accurate. Such review procedures should be performed by an individual possessing a thorough understanding of applicable U.S. GAAP. Context: While performing audit procedures, it was noted that due to staffing turnover and changes, the board and management did not have appropriate procedures in place to provide reasonable assurance that financial statements are prepared in accordance with U.S. GAAP, including retaining supporting documentation and reconciliations. Effect: It is possible that a misstatement of the University's financial statements could occur and not be prevented or detected by the University's internal control. Cause: Due to change in management and turnover in office, the University’s controls were not able to detect the adjustments made as part of the audit. The University does not have a comprehensive review process to ensure that the financial statements, including disclosures, are complete, accurate, and supported by the University’s records. Repeat finding: Yes – 2021-001. Recommendation: We recommend that management review controls related to financial statement preparation review at the end of each period. Financial statement preparation should include a review of reconciliations and balances to ensure that financial statement line items are properly stated and classified. Internally prepared financial statements should also be thoroughly reviewed by members of the board and management outside the finance department on a periodic (monthly or quarterly). Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

2022 – 002: Segregation of Duties and Control Documentation Type of Finding: • Material Weakness in Internal Control over Financial Reporting Condition: The University does not have appropriate segregation of duties and review control procedures in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained; therefore, the potential exists that a material misstatement of the annual financial statements could occur and not be prevented, or detected and corrected, by the University’s internal controls. Criteria or specific requirement: Internal controls should be in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP. Context: While performing audit procedures, it was noted that due to staffing turnover, staffing changes, and operational challenges, management does not have appropriate segregation of duties control and review procedures in place to provide reasonable assurance that financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP Effect: The lack of controls and review procedures in place over the financial reporting function increases the risk of misstatements, fraud, or errors occurring and not being detected and corrected. Cause: While performing audit procedures, it was noted that due to staffing turnover, staffing changes, and operational challenges, management does not have appropriate segregation of duties and review procedures in place. Repeat Finding: No Recommendation: The University should evaluate their financial reporting processes and controls, including the segregation of duties among its internal staff (including number of internal staff), to determine whether additional processes and controls over the financial records of the University are complete, accurate, and retained to support the University’s financial statement prepared in accordance with U.S. GAAP. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding.

2022-003: Reporting – FISAP Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34 CFR 668.24(e)(i) requires an institution to maintain records to support the data contained in the FISAP. Condition: The University submitted inaccurate data in its annual FISAP report. Questioned Costs: None. Context: Section F Independent Taxable Income With Baccalaureate total per the FISAP is 5 but the support provide shows the total is 9. Graduate total per the FISAP is 25 but the support provide shows the total is 37. Cause: Due to change in management and turnover in office, in completing the data entry, there was no oversight to ensure reporting was accurate to the supporting University records. Effect: The information in the FISAP is utilized to assist in the awarding of future awards and incorrect data could negatively impact future awards. Repeat Finding: No Recommendation: We recommend the applicable campus revise procedures to ensure that the record retention requirements are met and supporting documentation agrees to the FISAP, including a supervisory review by someone other than the preparer. Views of Responsible Officials: There is no disagreement with the audit finding.

2022-004: Special Tests & Provision – Outstanding Checks over 240 Days Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- 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: Student checks related to student refunds of Title IV federal financial aid was outstanding more than 240 days as of June 30, 2022. Questioned Costs: $45,109. Context: During our audit procedures, it was noted that the University had 84 Title IV outstanding checks at June 30, 2022, that aged over 240 days. The outstanding checks have not been canceled or the funds returned to the Secretary. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures related to Title IV outstanding checks. 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: No 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. Views of Responsible Officials: There is no disagreement with the audit finding.

2022-005: Special Tests & Provisions – Enrollment Reporting Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The Code of Federal Regulations, 34CFR section 682.610 states that all schools participating (or approved to participate) in the Federal Student Aid programs must have an arrangement to report student enrollment data to the NSLDS through a Roster file. Rosters must be returned within 15 days and any subsequent error records must be returned within 10 days. Condition: The University’s June 2022 roster was not returned within 15 days of receipt. The University did not maintain reporting records for 13 of 38 students selected for testing. It was noted that 1 of the 38 students' enrollment status per institution records and NSLDS did not agree. Questioned Costs: None Context: While the University is reporting enrollment to the Clearinghouse each month, the June enrollment roster was not returned within the required 15-day period. While the University is reporting enrollment changes, it does not have adequate policies and procedure to ensure documentation for reporting is accurately reported and retained. Cause: Employee turnover in the finance area caused a lapse in the development and implementation of policies and procedures to ensure accurate, timely, and complete enrollment reporting. Effect: National Student Loan Database System (NSLDS) 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: Yes – 2021-003. Recommendation: We recommend that the entity strengthen its internal controls to ensure that all enrollment records are reported correctly and within the required time period. Views of Responsible Officials: There is no disagreement with the audit finding.

2022-006: Special Tests and Provisions – Return of Title IV Funding Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The financial aid personnel and the accounting department and the management accounting systems of each non-Federal entity must provide for, effective controls over, and accountability for all students the withdraws from the University [2 CFR §668.22]. Condition: The return to Title IV funding calculations performed on students withdrawn from the eligibility sample did not include a control process to review and approve the calculations for accuracy prior to changes being made to the student’s award. Questioned Costs: None. Context: During our audit procedures, the calculations that were preformed did not include documentation of the control process to review and approve the calculations prior to changes being made to the student’s award. Cause: The University must maintain adequate data and documentation, but due to change in management and turnover in office, there was a lack of conveying institutional knowledge and processes. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: Yes – 2021-004. Recommendation: We recommend the institution maintain proper documentation in accordance with federal grantor requirements and ensure that the documents are readily available for review upon request, including monitoring of students with triggering events that require a return to Title IV calculation to be completed, reviewed, and approved. Views of Responsible Officials: There is no disagreement with the audit finding.

2022-007: Reporting – Common Origination and Disbursement (COD) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- From the 2022-23 FSA Handbook: to be in compliance with reporting disbursements and disbursement adjustments within 15 days. The date funds are credited to a student’s account in the institution’s general ledger or any subledger of the general ledger or paid to a student directly is the disbursement date the financial aid office reports to COD. The Common Origination and Disbursement (COD) additional requirements are: (1) Schools must use the COD system to request and receive federal student aid funds, including Direct Loans, Pell Grants, and Campus-Based aid programs. Schools must ensure that all disbursements of federal student aid are made through the COD system. (2) Schools must reconcile their records with the COD system to ensure that all disbursements are accurately reported and recorded. (3) Schools must comply with COD reporting requirements, including reporting disbursements, adjustments, and cancellations in a timely and accurate manner. Condition: For one (1) of 33 students tested, the Fall 2022 disbursement dates in COD for Pell did not match the disbursement date on the student ledgers. Questioned Costs: None. Context: The Fall 2022 disbursement dates in COD for the student in question is October 29, 2021, but on the student ledger the date is December 15, 2021. Cause: Employee turnover during the 2021-2022 academic year caused this process to not be completed accurately. Effect: The University is not complying with federal requirements of reporting and information-sharing requirements established by the Department of Education. Repeat Finding: No Recommendation: We recommend that the entity strengthen its internal controls to ensure that all disbursement dates are reported to COD accurately and timely. Views of Responsible Officials: There is no disagreement with the audit finding.

2022-008: Eligibility – Pell Awarding Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.063 Award Number and Year: P063P213807(March 23, 2021 - August 31, 2027) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- 34 CFR 668.60(c), the institution shall adjust the student's award when an over award or under award is caused by the change in the expected family contribution. That adjustment must be made— (i) Within the same award year—if possible—to correct any overpayment or underpayment; or (ii) During the next award year to correct any overpayment that could not be adjusted during the year in which the student was overpaid. Condition: Students were disbursed Pell funds inaccurately. Questioned Costs: $4,317 Context: During our audit procedures, it was noted that four (4) of 33 students tested, the Pell amount disbursed was less than what the student was eligible. Cause: The University experienced turnover in the department responsible for this process. Effect: Students are not disbursed correct funds they are eligible to receive during the school year. Repeat Finding: No Recommendation: We recommend the University implement policies to review all student award packages at the start of the academic year to ensure no over and under awards exist. Views of Responsible Officials: There is no disagreement with the audit finding.

2022-009: Special Tests and Provisions – The Gramm-Leach-Bliley Act (GLBA) Federal Agency: Department of Education Federal Program Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Number and Year: P007A215801 (March 25, 2021 - August 31, 2027), P033A215801(July 1, 2021 - August 31, 2027), P063P213807(March 23, 2021 - August 31, 2027), P268K223807(January 1, 2021 - July 31, 2043) Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Material Weakness in Internal Control Over Compliance, Other Matters Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- 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 University did not conduct a risk assessment that addresses (2) and (3) of the 3 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 experienced turnover in the department responsible for this process and had a ransomware cyber-attack during the year ended June 30, 2022. Effect: The student personal information could be vulnerable. Repeat Finding: Yes – 2021-002. Recommendation: We recommend the University engage a third party or perform the risk assessment for the two areas required by the Gramm-Leach-Bliley Act that have not been completed and documented and ensure that there are documented safeguards for identified risks. Views of Responsible Officials: There is no disagreement with the audit finding.

2022-010: Internal Control and Compliance – Higher Education Emergency Relief Funds (HEERF) Federal Agency: Department of Education Federal Program Title: Education Stabilization Fund (ESF) Assistance Listing Number: 84.425E, 84.425F Award Number and Year: P425E201739 (May 1, 2020 – June 30, 2023), P425F200479 (May 1, 2020 – June 30, 2023), Award Period: July 1, 2021 – June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance Material Noncompliance (Modified Opinion) Criteria or Specific Requirement: Internal Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Compliance- The University must comply with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) – HEERF I for all applicable assistance listing numbers under 84.425E and 84.425F, which were continued under the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSAA) – HEERF II and American Rescue Plan (ARP) – HEERF III as to the use of the funds and required reporting. Condition: During the year 2022, the University continued to utilize the HEERF Student Aid Portion and the HEERF Institutional Portion. Collectively, the HEERF awards (or program) was a major federal program for the year ended June 30, 2022. The internal controls over the compliance and administration of the new program requires management of the University to comply with all direct and material compliance requirements outlined in the federal Compliance Supplement for 2022 for the HEERF program. While the University established a plan to distribute funds to students in accordance with the requirements and to cover qualified expenditures for the institution portion, it failed to properly maintain detailed records of the actual distributions to each student so that a reconciliation of the distributed funds could be reconciled to the subsidiary accounts in the general ledger. In addition, the University failed to properly maintain its documentation of the lost revenue calculation as required by the CARES Act and the expenditure detail for the institution portion. The University also failed to provide complete evidence of the quarterly and annual reporting as required under the CARES Act, CRRSAA, and ARP regulations. Questioned Costs: $518,388 Context: During the audit procedures, the University was unable to provide documentation for required compliance testing, specifically: • Activities Allowed and Unallowed – Institutional Portion • Allowable Costs – Institutional Portion • Cash Management – Student and Institutional Portion • Period of Performance Testing – Institutional Portion • Procurement Testing – Institutional Portion • Suspension and Debarment Testing – Institutional Portion • Reporting Testing Cause: The University experienced turnover in the department responsible for this process. Effect: The University is unable to adequately document its compliance with the requirements of the HEERF program administered. Reports submitted are not in compliance with the reporting and information-sharing requirements established by the Department of Education. Expenditures may be incorrectly charged to the program. Repeat Finding: Yes – 2021-005. Recommendation: We recommend the institutions strengthen their understanding of the compliance and reporting requirements established by grant programs and ensure supporting documentation is maintained to substantiate amounts reported, compliance with requirements is supported by University records, and ensure that federal expenditures are properly identified and classified. Views of Responsible Officials: There is no disagreement with the audit finding.

ENROLLMENT REPORTING PROCEDURES SHOULD BE STRENGTHENED STUDENT FINANCIAL AID CLUSTER PROGRAM CFDA # 84.268 (Questioned Costs - None) (Repeat) Condition: When the Registrar’s Office discovers that a student did not enroll or ceased to be enrolled on at least a half-time basis, the National Student Loan Data System (NSLDS) should be notified of the change in the student’s enrollment status within thirty days of the occurrence, unless the Institution expects to complete its next scheduled filing within sixty days. During our audit, we noted 8 (eight) instances in which student status changes were reported more than sixty (60) days after the occurrence. Context: A haphazard selection of ten (10) students was made from the list of student withdrawals and graduates during the year. Criteria: Federal regulations require the Institution to notify the NSLDS of a change in student status (i.e., withdrawn, graduated, enrolled less than half-time, etc.). Unless the Institution expects to complete its next filing within sixty days, the Institution must notify the NSLDS within thirty days if it discovers a student with an outstanding federal loan balance has ceased to be enrolled on at least a half-time basis. [34 CFR 685.309] Effect: The lender or guaranty agency is not receiving prompt notification of changes in borrower’s enrollment status. This results in delayed processing of loan repayment periods and leads to poor default management. Late or incorrect updates to the NSLDS may also cause students to receive loans for which they are not eligible, as half-time enrollment is a requirement for Federal Direct Loan (FDL) eligibility. Cause: Necessary withdrawal documentation is not consistently processed and forwarded to appropriate departments in a timely manner to ensure reports are accurately filed as scheduled. Overall, there is an inadequate process of verifying the enrollment status of students. Recommendation: The Institution should implement procedures to ensure compliance with federal regulations. The Registrar’s Office should obtain a complete understanding of the NSLDS reporting requirements. Improving the accuracy and timeliness of student status filings will aid in the transition of students to loan repayment status. Views of Responsible Officials and Planned Corrective Actions: The University submitted a corrective action plan that was acceptable by DOE. and implemented effective 9/1/2022.

PROCEDURES USED TO IDENTIFY STUDENTS FOR THE RETURN OF TITLE IV FUNDS SHOULD BE IMPROVED STUDENT FINANCIAL AID CLUSTER PROGRAM CFDA # 84.268 (Questioned Costs-Undetermined) (Repeat) Condition: When a recipient of Title IV grant or loan assistance withdraws from an institution of higher learning during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in the regulations. During our audit we noted that the University’s did not perform the R2T4 calculations in a timely manner as required by the Department of Education regulations. Context: Review of internal controls and related procedures in place for identifying students ceasing to attend or enroll and the procedures in place to identify when a student withdraws or fail to properly enroll. Policies in place to determine the timeliness of calculating the required return of federal funds as prescribed by the Department of Education. Criteria: Controls should be in place to ensure that when a student ceases to attend the University the proper procedures are followed. The financial aid personnel and the accounting department and the management accounting systems of each non-Federal entity must provide for, effective controls over, and accountability for all students the withdraws from the University [2 CFR §668.22]. Effect: Management may not be able to obtain complete and accurate information to determine when a student withdraws from the University and therefore, not properly calculate the R2T4 funds. Cause: Turnover in the student financial aid department and weaknesses in processes related to procedures determining official withdrawals, un-official withdrawals and students failing to return for the next semester. Recommendation: The policies and procedures in place to identify students withdrawing from the University should be reviewed and improved to ensure that when a student ceases to enroll or withdraws from the institution (officially or un-officially) the proper procedures are followed, as outlined in the federal regulations. Timely R2T4 calculations should be performed and appropriate grant or loan funds should be timely remitted back to the Department of Education. Views of Responsible Officials and Planned Corrective Actions: The University has implemented policy and procedures that require a review of all official and unofficial withdrawals to have R2T4 calculations on a real time basis to ensure compliance with the Department of Education guidelines on a consistent and regular basis. Internal audits of the process will also be implemented for continuous improvement.

INTERNAL CONTROL AND COMPLIANCE WITH THE HIGHER EDUCATION EMERGENCY RELIEF FUND AND PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND CFDA # 84.425E, 84.425F, 84.425L AND 84.425N (Questioned Costs-Undetermined) (Repeat) Condition: During the year 2021, the University was awarded Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of approximately $978,035 under the Higher Education Emergency Relief Fund Student Aid Portion, the Higher Education Emergency Relief Fund Institutional Portion and the Higher Education Emergency Relief Fund Minority Serving Institutions. Collectively, the HEERF awards (or program) which was a major federal program for the year ended June 30, 2021. The internal controls over the compliance and administration of the new program requires management of the University to comply with all direct and material compliance requirements outlined in the federal Compliance Supplement Addendum for 2021 for the HEERF program. While the University established a plan to distribute funds students in accordance with the CARES Act and to cover qualified expenditures for the Institution portion, it fail to properly maintain detailed records of the actual distributions to each student so that a reconciliation of the distributed funds could be reconciled to the subsidiary accounts in the general ledger. In addition the University fail to properly maintain its documentation of the loss revenue calculation as require by the CARES Act or the Institution’s portion. The University also fail to provide complete evidence of the quarterly and annual reporting as required by the Section 18004(a)(1) and 18004 ( c) of the CARES Act. Context: Review of the University’s controls and compliance requirements for activities allowed and unallowable and allowable costs/cost principles and the reporting requirements for quarterly reporting for the quarters ending September 30, 2021 December 31, 2021 and March 31, 2022 and June 30, 2022. We selected all students Martin University determined to be eligible for the HEERF student portion disbursement and only 51 were verified as actually receiving the disbursement. Criteria: The University must comply with the CARES Act Sections 18004(a)(1) Institutional Portion, (a)(2) and (a)(3) Quarterly Public Reporting for all applicable CFDAs under 84.425E, 84.425F, 84.425L and 84.425N. Effect: The University may not be able to adequately document its compliance with the requirements of the CARES Act for the HEERF program administered. Cause: The University did not established a system of internal control over compliance due to timing of the award and the impact the pandemic had on the training of management and staff. A complete understanding of the HEERF program requirements were not completely understood to properly complete the system of internal control and compliance documentation in a timely manner and in all material respects. Recommendation: The University must complete its internal control and compliance policies and procedures over the HEERF program and complete the accounting and reconciliation requirements as set forth by federal regulations of the HEERF program. Specifically, activities allowed and unallowable and allowable costs/costs principles. In addition to completing the quarterly reports as required by federal regulations. If the Department of Education has established the annual reporting portal, the University should also complete that reporting requirement in connection with the reconciliations of the annual report with the quarterly reports for 2020 and 2021. Views of Responsible Officials and Planned Corrective Actions: The University has implemented a policy that requires a complete review of the internal controls over the compliance of the HEERF programs and to make sure that all required areas of compliance supplement are achieved. The updated policy was provided to the Grants Risk Management Services Division of DOE on 12/14/2023.

Comment 2021-006 THE UNIVERSITY FAILED TO COMPLETE AND FILE ITS ANNUAL AUDIT AND COMPLETE ITS FILING WITH THE FEDERAL AUDIT CLEARING HOUSE FOR THE JUNE 30, 2021 YEAR END STUDENT FINANCIAL AID CLUSTER AND OTHER FEDERAL PROGRAMS CFDA # 84.007, 84.033, 84.063, 84.268, 84.425E, 84.425F, 84.425L, 84.425N and 84.287 (Questioned Costs - None) (Repeat) Condition: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements for Federal Awards (Uniform Guidance), Section 200.508 - Auditee responsibilities, requires the auditee (the University) arrange for the audit of the its financial statements to meet the requirements as set forth in Section 200.512, Report submission. Section 200.512 states that the audit must be completed and the data collection form filed with the Federal Audit Clearing House within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Certain extensions were granted due to the pandemic. The University is also required to submit its audit to the Department of Education FSA eZ-Audit System. The University failed to complete and submit its June 30, 2021 audit in a timely manner as required by federal regulations. Context: Review of the University’s reporting requirements under the Uniform Guidance and the Department of Education eZ- Audit System requirement. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements for Federal Awards (Uniform Guidance), Section 200.508 - Auditee responsibilities, requires the auditee (the University) arrange for the audit of the its financial statements to meet the requirements as set forth in Section 200.512, Report submission. FSA eZ-Audit System. Effect: The University is subject to general and specific sanctions as set forth in federal regulations. Cause: The University did not perform its independent due diligence with respect to the federal reporting requirements and filing its annual audit report as set forth by the Uniform Guidance. The University’s board of trustees and senior management relied entirely on the former CFO to fulfill the regulatory filing requirements. Recommendation: The University must established, through its board of Trustees, an independent committee thoroughly familiar with the federal and state reporting requirements promulgated by the Uniform Guidance, the Department of Education and the State of Indiana to ensure complete compliance with the various reporting mandates set forth by regulators. Views of Responsible Officials and Planned Corrective Actions: In 2022, the board of trustees expanded the duties of the Audit and Finance Committee to include annual traning on SFA federal and state financial reporting regulations and audit requirements. The University also will provide risk assessment training to all board members and the President's Cabinet focusing on covering common risk factors of institutions of higher education. The University hired a new CFO in November 2023 and completed its FY 2021 audit in December 2023. The Universith received an extension from the DOE to complete its FY 2022 audit by March 2024.

CONTROLS OVER FINANCIAL STATEMENT PREPARATION AND RECONCILIATION PROCEDURES SHOULD BE IMPROVED HIGHER EDUCATION EMERGENCY RELIEF FUND STUDENT FINANCIAL AID CLUSTER PROGRAM (Questioned Costs-Undetermined) Condition: Management is responsible for the preparation and fair presentation of its financial statements in accordance with generally accepted accounting principles (GAAP) and the schedule of expenditures of federal awards (SEFA). However, we provided assistance to management in the preparation of the financial statements, SEFA, and related disclosures of the University. Effective for the year ended June 30, 2019, the University was charged with the responsibility of implementing FASB ASU No. 2016-14 - Presentation of Financial Statements of Not-For-Profit Entities. The objective of the FASB is to improve the current net asset classification requirements and the information presented in financial statements and notes about a not-for-profit entity’s liquidity, financial performance, and cash flows . FASB ASU No. 2018-08 , Not-for-Profit Entities (Topic 958): Clarifying the Scope and Accounting Guidance for Contributions Received and Contributions Made and FASB ASU 2016-18 (Topic 230) Statement of Cash Flows, were also required to be implemented beginning 2019. While management demonstrated efforts to comply with the new standards and in its accounting processes, there was still a need for significant adjustments proposed and enhanced disclosures during the audit process to properly state various assets, liabilities, revenue and expense accounts and to the related disclosures. We also noted that there were significant weaknesses in the internal control over reconciliation procedures in the area of student accounts receivables, posting of various transactions to student accounts, bad debt, financial aid, recording HEERF funds and disbursing HEERF funds (student portion) to eligible students. The general ledger and subsidiary accounts were not reconciled between systems (CAM vs Microsoft Dynamics vs EDExpress) During the year, the University received new funding from the Coronavirus Aid Relief and Economic Security Act (CARES Act) authorized under the Higher Education and Emergency Relief Fund. We noticed that funding drawn under these grants could not be traced in their entirety to cost centers where disbursements were made for relevant expenditures. The HEERF annual reporting requirement was not complete and accurately reported nor available during the audit. Context: Review of the internal controls related to financial statement preparation in accordance with Government Auditing Standards. Criteria: Controls should be in place to ensure that financial statements are prepared in accordance with GAAP. The auditee must prepare financial statements that reflects its financial positions, results of operations or changes in net assets, and where appropriate, cash flows for the fiscal year ended. [2 CFR §200.510(a)]. The financial management system of each non-Federal entity must provide for, comparison of expenditures with budget amounts for each Federal award. [2 CFR §200.302(b)(5)]. Effect: Management may not be able to obtain complete and accurate financial statements on an interim or fiscal year basis to be used for internal or external reporting purposes on a timely basis. Lack of effective budgeting can lead to budget overruns or inefficient use of grant funds. Cause: Continual change in accounting function in recent years and turn-over in various departments Recommendation: The degree to which assistance in the preparation of the financial statements and the related disclosures by independent auditor is a control deficiency is determined by the knowledge and expertise of those in the University who are charged with the responsibility of financial reporting. As a result, it is our recommendation that key personnel that have a role in the financial reporting process continue to review the functionality of their financial accounting system to see if grant reporting capabilities can be enhanced. We also recommend that the accounting department and the financial aid department enhance its procedures to improve communications and reconciliation procedures in order to complete the required reconciliation procedure when federal funds are drawn and recorded in the various accounting modules. Views of Responsible Officials and Planned Corrective Actions: The University engaged an external consultant in June 2023, hired a new staff accountant in September 2023 and a CFO in November 2023. The University has begun to restructure all accounting and reconciliation functions, including implementation of new accounting software. The University is implementing financial internal controls to improve the financial statements preparation and preparation of the schedule of expenditures and federal awards.

Comment 2020-003 ENROLLMENT REPORTING PROCEDURES SHOULD BE STRENGTHENED STUDENT FINANCIAL AID CLUSTER PROGRAM CFDA # 84.268 Condition: When the Registrar?s Office discovers that a student did not enroll or ceased to be enrolled on at least a half-time basis, the National Student Loan Data System (NSLDS) should be notified of the change in the student?s enrollment status within thirty days of the occurrence, unless the Institution expects to complete its next scheduled filing within sixty days. During our audit, we noted 8 (eight) instances in which student status changes were reported more than sixty (60) days after the occurrence. Context: A haphazard selection of ten (10) students was made from the list of student withdrawals and graduates during the year. Criteria: Federal regulations require the Institution to notify the NSLDS of a change in student status (i.e., withdrawn, graduated, enrolled less than half-time, etc.). Unless the Institution expects to complete its next filing within sixty days, the Institution must notify the NSLDS within thirty days if it discovers a student with an outstanding federal loan balance has ceased to be enrolled on at least a half-time basis. [34 CFR 685.309] Effect: The lender or guaranty agency is not receiving prompt notification of changes in borrower?s enrollment status. This results in delayed processing of loan repayment periods and leads to poor default management. Late or incorrect updates to the NSLDS may also cause students to receive loans for which they are not eligible, as half-time enrollment is a requirement for Federal Direct Loan (FDL) eligibility. Cause: Necessary withdrawal documentation is not consistently processed and forwarded to appropriate departments in a timely manner to ensure reports are accurately filed as scheduled. Overall, there is an inadequate process of verifying the enrollment status of students. Recommendation: The Institution should implement procedures to ensure compliance with federal regulations. The Registrar?s Office should obtain a complete understanding of the NSLDS reporting requirements. Improving the accuracy and timeliness of student status filings will aid in the transition of students to loan repayment status.

PROCEDURES USED TO IDENTIFY STUDENTS FOR THE RETURN OF TITLE IV FUNDS SHOULD BE IMPROVED Condition: When a recipient of Title IV grant or loan assistance withdraws from an institution of higher learning during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in the regulations. During our audit we noted that the University?s did not perform the R2T4 calculations in a timely manner as required by the Department of Education regulations. Context: Review of internal controls and related procedures in place for identifying students ceasing to attend or enroll and the procedures in place to identify when a student withdraws or fail to properly enroll. Policies in place to determine the timeliness of calculating the required return of federal funds as prescribed by the Department of Education. Criteria: Controls should be in place to ensure that when a student ceases to attend the University the proper procedures are followed. The financial aid personnel and the accounting department and the management accounting systems of each non-Federal entity must provide for, effective controls over, and accountability for all students the withdraws from the University [2 CFR ?668.22]. Effect: Management may not be able to obtain complete and accurate information to determine when a student withdraws from the University and therefore, not properly calculate the R2T4 funds. Cause: Turnover in the student financial aid department and weaknesses in processes related to procedures determining official withdrawals, un-official withdrawals and students failing to return for the next semester. Recommendation: The policies and procedures in place to identify students withdrawing from the University should be reviewed and improved to ensure that when a student ceases to enroll or withdraws from the institution (officially or un-officially) the proper procedures are followed, as outlined in the federal regulations. Timely R2T4 calculations should be performed and appropriate grant or loan funds should be timely remitted back to the Department of Education.

INTERNAL CONTROL AND COMPLIANCE WITH THE HIGHER EDUCATION EMERGENCY RELIEF FUND AND PROCEDURES SHOULD BE IMPROVED STUDENT FINANCIAL AID PROGRAM CFDA # 84.425E, 84.425F AND 84.425L Condition: During the year 2020, the University was awarded Coronavirus Aid, Relief, and Economic Security Act (CARES Act) of approximately $420,920 under the Higher Education Emergency Relief Fund Student Aid Portion, the Higher Education Emergency Relief Fund Institutional Portion and the Higher Education Emergency Relief Fund Minority Serving Institutions. Collectively, the HEERF awards (or program) which was a major federal program for the year ended June 30, 2020. The internal controls over the compliance and administration of the new program requires management of the University to comply with all direct and material compliance requirements outlined in the federal Compliance Supplement Addendum for 2020 for the HEERF program . While the University established a plan to distribute funds to students in accordance with the CARES Act and to cover qualified expenditures for the Institution portion, it fail to properly maintain detailed records of the actual distributions to each student so that a reconciliation of the distributed funds could be reconciled to the subsidiary accounts in the general ledger. In addition the University fail to properly maintain its documentation of the loss revenue calculation as require by the CARES Act or the Institution?s portion. The University also fail to provide complete evidence of the quarterly and annual reporting as required by the Section 18004(a)(1) and 18004 ( c) of the CARES Act. Context: Review of the University?s controls and compliance requirements for activities allowed and unallowable and allowable costs/cost principles and the reporting requirements for quarterly reporting for the quarters ending September 30, 2021 December 31, 2021 and March 31, 2022 and June 30, 2022. Criteria: The University must comply with the CARES Act Sections 18004(a)(1) Institutional Portion, (a)(2) and (a)(3) Quarterly Public Reporting for all applicable CFDAs under 84.425E, 84.425F and 84.425L. Effect: The University may not be able to adequately document its compliance with the requirements of the CARES Act for the HEERF program administered. Cause: The University did not established a system of internal control over compliance due to timing of the award and the impact the pandemic had on the training of management and staff. A complete understanding of the HEERF program requirements were not completely understood to properly complete the system of internal control and compliance documentation in a timely manner and in all material respects. Recommendation: The University must complete its internal control and compliance policies and procedures over the HEERF program and complete the accounting and reconciliation requirements as set forth by federal regulations of the HEERF program. Specifically, activities allowed and unallowable and allowable costs/costs principles. In addition to completing the quarterly reports as required by federal regulations. If the Department of Education has established the annual reporting portal, the University should also complete that reporting requirement in connection with the reconciliations of the annual report with the quarterly reports for 2020 and 2021.

Comment 2020-006 THE UNIVERSITY FAILED TO COMPLETE AND FILE ITS ANNUAL AUDIT AND COMPLETE ITS FILING WITH THE FEDERAL AUDIT CLEARING HOUSE FOR THE JUNE 30, 2020 YEAR END STUDENT FINANCIAL AID CLUSTER AND OTHER FEDERAL PROGRAMS CFDA # 84.007, 84.033, 84.063, 84.268, 84.425E, 84.425F and 84.425L and 84.287 Condition: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements for Federal Awards (Uniform Guidance), Section 200.508 - Auditee responsibilities, requires the auditee (the University) arrange for the audit of the its financial statements to meet the requirements as set forth in Section 200.512, Report submission. Section 200.512 states that the audit must be completed and the data collection form filed with the Federal Audit Clearing House within the earlier of 30 calendar days after receipt of the auditor?s report or nine months after the end of the audit period. Certain extensions were granted due to the pandemic. The University is also required to submit its audit to the Department of Education FSA eZ-Audit System. The University failed to complete and submit its June 30, 2020 audit in a timely manner as required by federal regulations. Context: Review of the University?s reporting requirements under the Uniform Guidance and the Department of Education eZAudit System requirement. Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements for Federal Awards (Uniform Guidance), Section 200.508 - Auditee responsibilities, requires the auditee (the University) arrange for the audit of the its financial statements to meet the requirements as set forth in Section 200.512, Report submission. FSA eZ-Audit System. Effect: The University is subject to general and specific sanctions as set forth in federal regulations. Cause: The University did not perform its independent due diligence with respect to the federal reporting requirements and filing its annual audit report as set forth by the Uniform Guidance. The University?s board of trustees and senior management relied entirely on the former CFO to fulfill the regulatory filing requirements, Recommendation: The University must established, through its board of Trustees, an independent committee thoroughly familiar with the federal and state reporting requirements promulgated by the Uniform Guidance, the Department of Education and the State of Indiana to ensure complete compliance with the various reporting mandates set forth by regulators.

Comment 19-002 ENROLLMENT REPORTING PROCEDURES SHOULD BE STRENGTHENED STUDENT FINANCIAL AID CLUSTER PROGRAM CFDA # 84.268 Condition: When the Registrar?s Office discovers that a student did not enroll or ceased to be enrolled on at least a half-time basis, the National Student Loan Data System (NSLDS) should be notified of the change in the student?s enrollment status within thirty days of the occurrence, unless the Institution expects to complete its next scheduled filing within sixty days. During our audit, we noted four (5) instances in which student status changes were reported more than sixty (60) days after the occurrence. Context: A haphazard selection of ten (10) students was made from the list of student withdrawals and graduates during the year. Criteria: Federal regulations require the Institution to notify the NSLDS of a change in student status (i.e., withdrawn, graduated, enrolled less than half-time, etc.). Unless the Institution expects to complete its next filing within sixty days, the Institution must notify the NSLDS within thirty days if it discovers a student with an outstanding federal loan balance has ceased to be enrolled on at least a half-time basis. [34 CFR 685.309] Effect:: The lender or guaranty agency is not receiving prompt notification of changes in borrower?s enrollment status. This results in delayed processing of loan repayment periods and leads to poor default management. Late or incorrect updates to the NSLDS may also cause students to receive loans for which they are not eligible, as half-time enrollment is a requirement for Federal Direct Loan (FDL) eligibility. Cause: Necessary withdrawal documentation is not consistently processed and forwarded to appropriate departments in a timely manner to ensure reports are accurately filed as scheduled. Overall, there is an inadequate process of verifying the enrollment status of students. Recommendation: The Institution should implement procedures to ensure compliance with federal regulations. The Registrar?s Office should obtain a complete understanding of the NSLDS reporting requirements. Improving the accuracy and timeliness of student status filings will aid in the transition of students to loan repayment status. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the auditors and has initiated the necessary corrective action plan to mitigate the deficiency from occurring again. The plan is to implement new procedures to ensure the reporting to the NSLDS is done a timely basis. The vice president of academic affairs with be responsible for the corrective action and be implemented by fall of 2020.

Comment 19-003 PROCEDURES USED TO IDENTIFY STUDENTS FOR THE OF TITLE IV FUNDS SHOULD BE IMPROVED STUDENT FINANCIAL AID CLUSTER PROGRAM CFDA # 84.268 Condition: When a recipient of Title IV grant or loan assistance withdraws from an institution of higher learning during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student?s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in the regulations. During our audit we were not provided the University?s determination of such students or the R2T4 calculations as required by the Department of Education regulations. Context: Review of internal controls and related procedures in place for identifying students ceasing to attend or enroll and the procedures in place to identify when a student withdraws or fail to properly enroll. Policies in place to determine the timeliness of calculating the required return of federal funds as prescribed by the Department of Education. Criteria: Controls should be in place to ensure that when a student ceases to attend the University the proper procedures are followed. The financial aid personnel and the accounting department and the management accounting systems of each non-Federal entity must provide for, effective controls over, and accountability for all students the withdraws from the University [2 CFR ?668.22]. Effect: Management may not be able to obtain complete and accurate information to determine when a student withdraws from the University and therefore, not properly calculate the R2T4 funds. Cause: Turnover in the student financial aid department and weaknesses in processes related to procedures determining official withdrawals, un-official withdrawals and students failing to return or those Recommendation: The policies and procedures in place to identify students withdrawing from the University should be reviewed and improved to ensure that when a student ceases to enroll or withdraws from the institution (officially or un-officially) the proper procedures are followed, as outlined in the federal regulations. Timely R2T4 calculations should be performed and appropriate grant or loan funds should be timely remitted back to the Department of Education.

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