Notre Dame CollegeNon-Profit

FINDING 2023-001 Program: Student Financial Assistance Cluster Criteria: In order for an institution to participate in any Title IV program, the institution must be financially responsible. One of the general standards for being considered financially responsible per 34 CFR section 668.171(b) is to obtain a composite score of at least 1.5. An institution that does not meet one or more of the general standards must comply with the alternative standards and requirements of financial responsibility under 34 CFR section 668.175. Condition: Notre Dame College's composite score based upon the audited financial statements as of June 30, 2023 was less than 1.5. Repeat Finding From Prior Year: No Sampling Statistically Valid: Not applicable Questioned Cost: None Context: The financial position and operating results as of and for the year ending June 30, 2023 resulted in a composite score less than 1.5. Effect: Notre Dame College did not meet the definition of being financially responsible for the year ending June 30, 2023 under the general standards and, in turn, must comply with the alternative standards. Cause: The College was impacted by a debt covenant failure resulting in negative working capital, as well as operating losses, declining enrollment, rising costs and significant debt obligations. As a result, at June 30, 2023, Notre Dame College's composite score was negatively impacted. Recommendation: On February 29, 2024, the College announced that in-person instruction will conclude at the end of the 2024 spring semester and agreements have been secured with nine partner colleges and universities to help current students in good standing continue their education through a Teach-Out program or as a transfer student. Management Response: Management agrees with the finding. Please refer to management's corrective action plan.

FINDING 2023-002 Program: Student Financial Assistance Cluster Criteria: 34 CFR 675.19(b)(3) requires colleges to submit a Fiscal Operations Report and Application to Participate ("FISAP") to the U.S. Department of Education annually and requires the information to be accurate and to be submitted timely. Condition: Portions of Notre Dame College's FISAP were not updated to reflect the current fiscal year activity of the Federal Perkins Loan Program portfolio and did not reconcile to the audited financial statements as of June 30, 2023. Repeat Finding From Prior Year: No Sampling Statistically Valid: Not applicable Questioned Cost: None Context: Portions of Notre Dame College's FISAP were not updated to reflect the current fiscal year activity of the Federal Perkins Loan Program portfolio and did not reconcile to the audited financial statements as of June 30, 2023. Effect: Due to inaccurate reporting on the Federal Perkins Loan Program portfolio, the College was not in compliance with 34 CFR 675.19(b)(3). Cause: Due to operational difficulties and personnel turnover, the College did not have the resources to maintain program and fiscal records for all operations that occurred after the June 30, 2022 FISAP was filed. Recommendation: Information related to the Federal Perkins Loan Program portfolio should be reconciled and a revised FISAP should be submitted using the "Change Request" process to accurately reflect records as of June 30, 2023. Management Response: Management agrees with the finding. Please refer to management's corrective action plan.

FINDING 2022-001 Program: COVID-19 CARES ACT: CFDA 84.425 HIGHER EDUCATION EMERGENCY RELIEF FUND Criteria: Under section 18004(a)(1) of the Coronavirus Aid, Relief and Economic Security ("CARES") Act, the Recipient retains discretion to determine the amount of each individual emergency financial aid grant consistent with all applicable laws including non-discrimination laws. Condition: Notre Dame College did not verify that individual emergency financial aid grants followed its stated policy. Repeat Finding from Prior Year: No Questioned Cost: None Context: The Institution failed to verify that the information obtained from an internal data reporting system was in compliance with its policy. Effect: Although Notre Dame College disbursed the entire Student Aid Portion of the HEERF award to the students, there were individual amounts distributed to students that did not comply with the Institution's policy. This resulted in an under-payment in the amount of $4,300 to seven students out of forty that were sampled. When the College reviewed the entire population, the overall result was an under-payment to the students in the amount of $107,148. Cause: Notre Dame College was unaware that the information pulled from an internal data reporting system was incorrect resulting in certain students being over or under awarded HEERF dollars. Recommendation: Verify that information being pulled from the internal data reporting system is correct. Management Response: Management acknowledges that there was an undetected error in the information obtained from the data reporting system; however, the funds were fully distributed, and management has no intention of taking any follow up actions with the students regarding a corrective payment. Management will defer to the DOE for further guidance on resolution.

Section III - Federal Award Findings and Questioned Costs FINDING 2021-001 Program: COVID-19 CARES ACT: CFDA 84.425 HIGHER EDUCATION EMERGENCY RELIEF FUND Criteria: Under section 18004(a)(1) of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, certain critical information regarding student and institutional HEERF awards and related disbursements must be conspicuously posted on the Institution's primary website within certain timeframes. Condition: Notre Dame College's public reporting disclosures for both the student and institutional HEERF II awards were not conspicuously posted on the website. Repeat Finding from Prior Year: No Question Cost: None Context: The Institution failed to conspicuously post certain critical information to the Institution's website for the HEERF II grants. Effect: Notre Dame College did not meet the requirement of conspicuously posting certain critical information to the Institution's website within the prescribed timeframe and must post the information on its website and put in place controls to ensure that future reporting is posted timely. Cause: Notre Dame College was unaware of the final reporting deadline for the year. Recommendation: Post the required disclosures conspicuously on the Institution's website to conform with requirements under section 18004(a)(1) of the CARES Act and put in place controls to ensure future reporting is completed timely. Management Response: Management has taken corrective action and has posted the required information on the Notre Dame College website.