EIN: 362191252
UEI: CNKAAGJP7K95
Audited by: BORSCHNACK, PELLETIER & CO.
Oversight agency: 84 [Department of Education]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 25, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 25, 2026 (26 days from today).
What is a management decision? →FAC accepted this audit on March 26, 2025 — management decision was due September 26, 2025.
Finding 2024-001 Untimely Return of Title IV Funds/Federal Department:US Department of Education/CFDA Numbers: 84.268/Cluster Name: Student Financial Assistance Cluster/Programs:Federal Direct Student Loans/Awards Numbers:P268K231372, P268K241372/Questioned Cost: None/Program Expenditures: $17,886,002 Olivet Nazarene University (University) did not return Title IV funds to the Department of Education (Department) within 45 days after the date of the University’s determination that a student withdrew. During our testing of 25 students who withdrew from the University during the year, it was noted that two students’ (8%) Direct Unsubsidized loan funds were not timely returned to the Department. The University’s dates of determination the students withdrew were November 7, 2023 and November 13, 2023; however, the University did not return the students’ unearned Direct Unsubsidized loan funds to the Department until January 18, 2024 (21 and 27 days late). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 668.22(j)(1)) states an institution must return the amount of Title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that unearned Title IV funds are returned to the Department in a timely manner. University officials stated both untimely return of Title IV funds (R2T4’s) were due to conflicts, including the Christmas/New Year’s two week break. The committee meets every other Wednesday. Both R2T4’s were done on-time, but the review was delayed due to travel of two of the members. When the committee met, an error was found in the denominator, and were sent back for revision, and completed the next meeting. Because that occurred in January, the process was late. The University believes this was an isolated incident based on the timing of the campus shut-down. Failure to timely return unearned Title IV funds to the Department may jeopardize future Federal funding. (Finding Code No. 2024-001, 2023-002) RECOMMENDATION We recommend the University timely return to the Department the amount of title IV funds for which it is responsible after the University has determined a student has withdrawn. UNIVERSITY RESPONSE The University agrees with the finding and will implement a new process to review all R2T4’s weekly, instead of the current bi-weekly process. In addition, if any committee members are absent, the remaining members will review the R2T4’s on the scheduled dates.
Show full finding ▾Hide full finding ▴Finding 2024-001 Untimely Return of Title IV Funds/Federal Department:US Department of Education/CFDA Numbers: 84.268/Cluster Name: Student Financial Assistance Cluster/Programs:Federal Direct Student Loans/Awards Numbers:P268K231372, P268K241372/Questioned Cost: None/Program Expenditures: $17,886,002 Olivet Nazarene University (University) did not return Title IV funds to the Department of Education (Department) within 45 days after the date of the University’s determination that a student withdrew. During our testing of 25 students who withdrew from the University during the year, it was noted that two students’ (8%) Direct Unsubsidized loan funds were not timely returned to the Department. The University’s dates of determination the students withdrew were November 7, 2023 and November 13, 2023; however, the University did not return the students’ unearned Direct Unsubsidized loan funds to the Department until January 18, 2024 (21 and 27 days late). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 668.22(j)(1)) states an institution must return the amount of Title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that unearned Title IV funds are returned to the Department in a timely manner. University officials stated both untimely return of Title IV funds (R2T4’s) were due to conflicts, including the Christmas/New Year’s two week break. The committee meets every other Wednesday. Both R2T4’s were done on-time, but the review was delayed due to travel of two of the members. When the committee met, an error was found in the denominator, and were sent back for revision, and completed the next meeting. Because that occurred in January, the process was late. The University believes this was an isolated incident based on the timing of the campus shut-down. Failure to timely return unearned Title IV funds to the Department may jeopardize future Federal funding. (Finding Code No. 2024-001, 2023-002) RECOMMENDATION We recommend the University timely return to the Department the amount of title IV funds for which it is responsible after the University has determined a student has withdrawn. UNIVERSITY RESPONSE The University agrees with the finding and will implement a new process to review all R2T4’s weekly, instead of the current bi-weekly process. In addition, if any committee members are absent, the remaining members will review the R2T4’s on the scheduled dates.
The University understands the importance of timely R2T4 calculations. The committee review of all R2T4’s every other Wednesday did not properly catch the mistake in the two R2T4’s that were late. Even though the original calculations were done on-time, the committee did not meet before the campus closed for the two-week Christmas/New Year’s break, due to several of the members having been away from the campus while traveling. As a result, when the committee met in January, they found an error in the denominator calculation. It was returned to the processor to correct the dates and re-calculate, and when the committee met again both were corrected. However, this caused the process to stretch past the 45-day requirement. While this indicates that the committee reviews and corrects R2T4’s properly, this certainly caused these two to be late. The University will change the committee meetings to every Wednesday, instead of every other Wednesday. This will shorten the time that any changes/mistakes are recognized and corrected. In addition, if a member is unable to meet, the remaining members will still meet and review all withdrawals. The University believes this will prevent R2T4’s missing the appropriate deadlines established by regulation. This process will begin immediately, and will be the responsibility of the Executive Director of Student Financial Services, Tiffany McCann.
2023-002
FAC accepted this audit on March 20, 2024 — management decision was due September 20, 2024.
Finding 2023-001 Exit Counseling Federal Department: U.S. Department of Education Assistance Listing Numbers: 84.268 Cluster Name: Student Financial Assistance Cluster Programs: Federal Direct Student Loans Award Numbers: P268K221372, P268K231372 Questioned Cost: None Program Expenditures: $18,949,992 Olivet Nazarene University (University) did not timely notify students of the need to complete Direct Loan exit counseling. During our testing of 55 students who received loans during the year, it was noted that 19 students required Direct Loan exit counseling. For four students (21%) who ceased to be enrolled at least half-time at the University, exit counseling notifications were provided to the students at 161 days (131 days late) and at 181 days (151 days late). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 685.304(b)(3)) states if a student borrower withdraws from school without the school's prior knowledge or fails to complete the exit counseling as required, exit counseling must, within 30 days after the University learns that the student borrower has withdrawn from school or failed to complete the exit counseling as required, be provided either through interactive electronic means, by mailing written counseling materials to the student borrower at the student borrower's last known address, or by sending written counseling materials to an email address provided by the student borrower that is not an email address associated with the University sending the counseling materials. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that exit counseling is performed in a timely manner for all borrowers ceasing half-time attendance at the University. University officials stated that the late exit counseling resulted from a processing error which occurred in January 2023. This error caused several student names to be omitted from the inquiry detailing students not returning for the Spring 2023 term. The missing names were discovered by the University in late June 2023, at which point exit counseling notifications were processed. By failing to ensure exit counseling is timely completed, students are not informed of their rights and responsibilities under the loan agreement. (Finding Code No. 2023-001) Recommendation We recommend the University timely provide exit counseling notifications to all students who cease to be enrolled at least half-time. University Response The University agrees with the finding and has improved the VEERA reporting structure to accurately determine students who register for a term and then cancel their registration after the term has started. These reports should avoid a recurrence of the issue.
Show full finding ▾Hide full finding ▴Finding 2023-001 Exit Counseling Federal Department: U.S. Department of Education Assistance Listing Numbers: 84.268 Cluster Name: Student Financial Assistance Cluster Programs: Federal Direct Student Loans Award Numbers: P268K221372, P268K231372 Questioned Cost: None Program Expenditures: $18,949,992 Olivet Nazarene University (University) did not timely notify students of the need to complete Direct Loan exit counseling. During our testing of 55 students who received loans during the year, it was noted that 19 students required Direct Loan exit counseling. For four students (21%) who ceased to be enrolled at least half-time at the University, exit counseling notifications were provided to the students at 161 days (131 days late) and at 181 days (151 days late). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 685.304(b)(3)) states if a student borrower withdraws from school without the school's prior knowledge or fails to complete the exit counseling as required, exit counseling must, within 30 days after the University learns that the student borrower has withdrawn from school or failed to complete the exit counseling as required, be provided either through interactive electronic means, by mailing written counseling materials to the student borrower at the student borrower's last known address, or by sending written counseling materials to an email address provided by the student borrower that is not an email address associated with the University sending the counseling materials. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that exit counseling is performed in a timely manner for all borrowers ceasing half-time attendance at the University. University officials stated that the late exit counseling resulted from a processing error which occurred in January 2023. This error caused several student names to be omitted from the inquiry detailing students not returning for the Spring 2023 term. The missing names were discovered by the University in late June 2023, at which point exit counseling notifications were processed. By failing to ensure exit counseling is timely completed, students are not informed of their rights and responsibilities under the loan agreement. (Finding Code No. 2023-001) Recommendation We recommend the University timely provide exit counseling notifications to all students who cease to be enrolled at least half-time. University Response The University agrees with the finding and has improved the VEERA reporting structure to accurately determine students who register for a term and then cancel their registration after the term has started. These reports should avoid a recurrence of the issue.
The University understands the importance of timely exit counseling. The reporting structure for the January, 2023 determination of students not returning from the holidays did not work properly, and the university has corrected the process. Those reports will be activated weekly and immediately after returning from any campus closure. Tiffany McCann, the Executive Director of Student Financial Services, will verify the Veera reporting structure is in compliance, which should eliminate the chance of a recurring finding.
Finding 2023-002 Untimely Return of Title IV Funds Federal Department: U.S. Department of Education Assistance Listing Numbers: 84.268 Cluster Name: Student Financial Assistance Cluster Programs: Federal Direct Student Loans Award Numbers: P268K221372, P268K231372 Questioned Cost: None Program Expenditures: $18,949,992 Olivet Nazarene University (University) did not return title IV funds to the Department of Education (Department) within 45 days after the date of the University’s determination that a student withdrew. During our testing of 25 students who withdrew from the University during the year, it was noted that one student’s (4%) Direct Unsubsidized Loan funds were not timely returned to the Department. The University’s date of determination that the student withdrew was December 4, 2022; however, the University did not return the student’s unearned Direct Unsubsidized loan funds to the Department until January 20, 2023 (2 days late). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 668.22(j)(1)) states an institution must return the amount of title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that unearned title IV funds are returned to the Department in a timely manner. University officials stated the timing of the withdrawal occurred as the campus was closing for two weeks for the Christmas and New Year’s holidays. The report for the student who stopped attending without notifying the office was activated upon returning in January, and by the time it was completed, the funds were returned two days late. The University believes this was an isolated incident and the staff have been instructed to complete all withdrawals before the campus closes in December. Failure to timely return unearned title IV funds to the Department may jeopardize future Federal funding. (Finding Code No. 2023-002) Recommendation We recommend the University timely return to the Department the amount of title IV funds for which it is responsible after the University has determined a student has withdrawn. University Response The University agrees with the finding and believes the training of staff should eliminate the chance of it occurring in the future.
Show full finding ▾Hide full finding ▴Finding 2023-002 Untimely Return of Title IV Funds Federal Department: U.S. Department of Education Assistance Listing Numbers: 84.268 Cluster Name: Student Financial Assistance Cluster Programs: Federal Direct Student Loans Award Numbers: P268K221372, P268K231372 Questioned Cost: None Program Expenditures: $18,949,992 Olivet Nazarene University (University) did not return title IV funds to the Department of Education (Department) within 45 days after the date of the University’s determination that a student withdrew. During our testing of 25 students who withdrew from the University during the year, it was noted that one student’s (4%) Direct Unsubsidized Loan funds were not timely returned to the Department. The University’s date of determination that the student withdrew was December 4, 2022; however, the University did not return the student’s unearned Direct Unsubsidized loan funds to the Department until January 20, 2023 (2 days late). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 668.22(j)(1)) states an institution must return the amount of title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that unearned title IV funds are returned to the Department in a timely manner. University officials stated the timing of the withdrawal occurred as the campus was closing for two weeks for the Christmas and New Year’s holidays. The report for the student who stopped attending without notifying the office was activated upon returning in January, and by the time it was completed, the funds were returned two days late. The University believes this was an isolated incident and the staff have been instructed to complete all withdrawals before the campus closes in December. Failure to timely return unearned title IV funds to the Department may jeopardize future Federal funding. (Finding Code No. 2023-002) Recommendation We recommend the University timely return to the Department the amount of title IV funds for which it is responsible after the University has determined a student has withdrawn. University Response The University agrees with the finding and believes the training of staff should eliminate the chance of it occurring in the future.
The University understands the importance of returning Title IV funds within the established federal timeframe guidelines. This incident occurred as a result of the student stopping attendance without going through the proper channels to notify the university of their intention to withdraw. The staff attempted to contact the student to clarify the reason for their absence but was not able to do so until after the holiday break. The staff have been instructed to make as many attempts as it takes to resolve the question of a student’s unofficial withdrawal within the required timeframes. Trisha O’Brien will ensure the process of communicating with the student is followed. This should reduce the chance of the finding in the future.
FAC accepted this audit on January 30, 2023 — management decision was due July 30, 2023.
Finding 2022-001 Errors in the Verification and Updating of Student Aid Applications Federal Department: U.S. Department of Education Assistance Listing Numbers: 84.038, 84.033, 84.007, 84.063, 84.268, 84.379 Cluster Name: Student Financial Assistance Cluster Programs: Federal Perkins Loan Program, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grants, Federal Pell Grant Program, Federal Direct Student Loans, Teacher Education Assistance for College and Higher Education Grants Award Numbers: P033A211250, P007A211250, P268K211372, P268K221372, P063P201372, P063P211372, P379T221372 Questioned Cost: None Program Expenditures: $26,737,116 Olivet Nazarene University?s (University) student verification procedures did not function as designed. We tested a sample of 60 students receiving student financial assistance and noted 8 of those students were selected by the U.S. Department of Education (ED) for verification. An additional 17 students (selected for verification by ED) were added to the testing sample, increasing the verification testing population to 25 students. For 1 of the 25 student verifications tested, the University did not accurately update verification data with the Central Processor. The sample was not intended to be, and was not, a statistically valid sample. We noted: ? For one student, the verification documents submitted by the student evidenced Education Credits of $798. The information sent to the Central Processor by the University reported Education Credits of $0, a difference of $798. This error resulted in the student not receiving $200 of Pell, for which the student was eligible. The Code of Federal Regulations (Code) (34 CFR 668.59(a)) requires for the subsidized student financial assistance programs, if an applicant?s FAFSA information changes as a result of verification, the applicant or the institution must submit to the Secretary any changes to a nondollar item or a single dollar item of $25 or more. The Code (34 CFR 668.59(b)) further requires the University to recalculate the applicant?s Federal Pell Grant on the basis of the corrected information and disburse additional funds based on the recalculation. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that student verifications are properly performed. University officials indicated that it was missed by the verification specialist, and not a matter of process. The specialist simply missed the line on the tax document listing the education credits. This caused the student to receive $200 less Pell funding than the student was eligible for. Failure to accurately verify student eligibility data increases the risk that students may be over or under awarded financial aid and may result in a loss of future Federal funding. (Finding Code No. 2022-001) Recommendation We recommend the University improve its procedures to ensure students that have been selected for verification are accurately verified in accordance with ED regulations. University Response The University agrees with the finding. The student should have received $200 in additional Pell Grant funds, so the school contacted the student and applied $200 in university funding to offset that loss. The verification specialist has been instructed about this important process.
Show full finding ▾Hide full finding ▴Finding 2022-001 Errors in the Verification and Updating of Student Aid Applications Federal Department: U.S. Department of Education Assistance Listing Numbers: 84.038, 84.033, 84.007, 84.063, 84.268, 84.379 Cluster Name: Student Financial Assistance Cluster Programs: Federal Perkins Loan Program, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grants, Federal Pell Grant Program, Federal Direct Student Loans, Teacher Education Assistance for College and Higher Education Grants Award Numbers: P033A211250, P007A211250, P268K211372, P268K221372, P063P201372, P063P211372, P379T221372 Questioned Cost: None Program Expenditures: $26,737,116 Olivet Nazarene University?s (University) student verification procedures did not function as designed. We tested a sample of 60 students receiving student financial assistance and noted 8 of those students were selected by the U.S. Department of Education (ED) for verification. An additional 17 students (selected for verification by ED) were added to the testing sample, increasing the verification testing population to 25 students. For 1 of the 25 student verifications tested, the University did not accurately update verification data with the Central Processor. The sample was not intended to be, and was not, a statistically valid sample. We noted: ? For one student, the verification documents submitted by the student evidenced Education Credits of $798. The information sent to the Central Processor by the University reported Education Credits of $0, a difference of $798. This error resulted in the student not receiving $200 of Pell, for which the student was eligible. The Code of Federal Regulations (Code) (34 CFR 668.59(a)) requires for the subsidized student financial assistance programs, if an applicant?s FAFSA information changes as a result of verification, the applicant or the institution must submit to the Secretary any changes to a nondollar item or a single dollar item of $25 or more. The Code (34 CFR 668.59(b)) further requires the University to recalculate the applicant?s Federal Pell Grant on the basis of the corrected information and disburse additional funds based on the recalculation. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that student verifications are properly performed. University officials indicated that it was missed by the verification specialist, and not a matter of process. The specialist simply missed the line on the tax document listing the education credits. This caused the student to receive $200 less Pell funding than the student was eligible for. Failure to accurately verify student eligibility data increases the risk that students may be over or under awarded financial aid and may result in a loss of future Federal funding. (Finding Code No. 2022-001) Recommendation We recommend the University improve its procedures to ensure students that have been selected for verification are accurately verified in accordance with ED regulations. University Response The University agrees with the finding. The student should have received $200 in additional Pell Grant funds, so the school contacted the student and applied $200 in university funding to offset that loss. The verification specialist has been instructed about this important process.
The University understands the importance of accurate verification. It was missed by the verification specialist, and not a matter of process. The specialist simply missed the line on the tax document that listed the education credits. This caused the student to receive $200 less Pell funding than the eligibility. The student should have received $200 in additional Pell Grant funds, so the school contacted the student and applied $200 in university funding to offset that loss. On November 21st, Tim Schultz (verification specialist) was instructed about this important process. The Executive Director of Student Finance, Tiffany McCann, will help monitor those verification materials and process, which should reduce the chances of a repeat mistake and ensure compliance.
FAC accepted this audit on April 10, 2022 — management decision was due October 10, 2022.
Federal Department: U.S. Department of Education CFDA Numbers: 84.268 Cluster Name: Student Financial Assistance Cluster Program Name: (Federal Direct Student Loan) Award Numbers: P268K201372, P268K211372 Questioned Cost: None Program Expenditures: $23,400,262 Olivet Nazarene University (University) did not provide timely exit counseling for one student that left the University. During our testing of 60 students that received loans for the year, it was noted that 19 students were required to complete loan exit counseling. For one student (5%) who withdrew from the University, the exit counseling was provided to the student 73 days (43 days late) after withdrawal. The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 685.304(b)(3)) states if a student borrower withdraws from school without the school's prior knowledge or fails to complete the exit counseling as required, exit counseling must, within 30 days after the University learns that the student borrower has withdrawn from school or failed to complete the exit counseling as required, be provided either through interactive electronic means, by mailing written counseling materials to the student borrower at the student borrower's last known address, or by sending written counseling materials to an email address provided by the student borrower that is not an email address associated with the University sending the counseling materials. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that exit counseling is performed timely for all borrowers ceasing half-time attendance at the University. University officials stated that the late exit counseling resulted from a post-dated withdrawal processed by the student Mental Health Counseling staff as a result of problems the student was having. By post-dating it during finals week, the withdrawal form did not reach the Loan Specialist until after the Christmas break. The student did not return on January 11th so on the 10th day of class the exit counseling was processed late. By failing to ensure exit counseling is timely completed, students are not timely informed of their rights and responsibilities under the loan agreement. (Finding Code No. 2021-001, 2020-001) Recommendation We recommend that the University timely conduct exit counseling for all students who exit the University. University Response The University understands the importance of exit counseling, so the Loan Specialist is now included on every withdrawal the day it is processed. It was an isolated incident by the University staff.
Show full finding ▾Hide full finding ▴Federal Department: U.S. Department of Education CFDA Numbers: 84.268 Cluster Name: Student Financial Assistance Cluster Program Name: (Federal Direct Student Loan) Award Numbers: P268K201372, P268K211372 Questioned Cost: None Program Expenditures: $23,400,262 Olivet Nazarene University (University) did not provide timely exit counseling for one student that left the University. During our testing of 60 students that received loans for the year, it was noted that 19 students were required to complete loan exit counseling. For one student (5%) who withdrew from the University, the exit counseling was provided to the student 73 days (43 days late) after withdrawal. The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 685.304(b)(3)) states if a student borrower withdraws from school without the school's prior knowledge or fails to complete the exit counseling as required, exit counseling must, within 30 days after the University learns that the student borrower has withdrawn from school or failed to complete the exit counseling as required, be provided either through interactive electronic means, by mailing written counseling materials to the student borrower at the student borrower's last known address, or by sending written counseling materials to an email address provided by the student borrower that is not an email address associated with the University sending the counseling materials. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that exit counseling is performed timely for all borrowers ceasing half-time attendance at the University. University officials stated that the late exit counseling resulted from a post-dated withdrawal processed by the student Mental Health Counseling staff as a result of problems the student was having. By post-dating it during finals week, the withdrawal form did not reach the Loan Specialist until after the Christmas break. The student did not return on January 11th so on the 10th day of class the exit counseling was processed late. By failing to ensure exit counseling is timely completed, students are not timely informed of their rights and responsibilities under the loan agreement. (Finding Code No. 2021-001, 2020-001) Recommendation We recommend that the University timely conduct exit counseling for all students who exit the University. University Response The University understands the importance of exit counseling, so the Loan Specialist is now included on every withdrawal the day it is processed. It was an isolated incident by the University staff.
Finding 2021-001: Exit Counseling The University understands the importance exit counseling. The Loan Specialist is now included on every withdrawal the day it is processed. It was an isolated incident by the University staff, and this new step should correct the process to avoid this incident in the future.
2020-001
Federal Department: U.S. Department of Education CFDA Number: 84.038, 84.033, 84.007, 84.063, 84.268, 84.379 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Perkins Loan Program ? Federal Capital Contributions, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grants, Federal Pell Grant Program, Federal Direct Student Loans, Teacher Education Assistance for College and Higher Education Grants Award Numbers: P033A201250, P007A201250, P268K201372, P268K211372, P063P191372, P063P201372,P379T201372, P379T211372 Questioned Cost: None Award Expenditures: $31,137,924 Olivet Nazarene University?s (University) Federal Perkins loan cohort default rate is in excess of the threshold for administrative capability stipulated by the U.S. Department of Education. The Federal Perkins Loan cohort default rate as of June 30, 2021 (for borrowers who entered repayment during Fiscal Year 2020) was 16.54%, which exceeded the 15% threshold. The University chose to continue servicing their Perkins Loan portfolio after Federal Perkins Loan Program loan originations were discontinued in Fiscal Year 2018. The Code of Federal Regulations (Code) (34 CFR 668.16) states ?to begin and to continue to participate in any Title IV, HEA program, an institution shall demonstrate to the Secretary that the institution is capable of adequately administering that program under each of the standards established in this section. The Secretary considers an institution to have that administrative capability if the institution ? ... (m)(1) Has a cohort default rate - (iii) As defined in 34 CFR 674.5, on loans made under the Federal Perkins Loan Program to students for attendance at the institution that does not exceed 15 percent.? The U.S. Department of Education?s Dear Colleague Letter (DCL ID: GEN-17-10) states institutions that choose to continue to service their outstanding Perkins Loan portfolios must continue to service these loans in accordance with the Federal Perkins Loan Program regulations in 34 CFR 674. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure the University maintains a Federal Perkins Loan cohort default rate of less than 15%. University officials indicated economic conditions resulting from the pandemic continue to present challenges for University students; also, the University has begun the process of assigning the defaulted Perkins Loans back to the Department of Education. The staff have also started the process of researching the option to liquidate the Perkins portfolio and realizes the importance of assigning those loans. Failure to maintain a Federal Perkins Loan cohort default rate below 15% resulted in noncompliance with the Code, the Uniform Guidance, and the U.S. Department of Education?s directive. (Finding Code No. 2021-002) Recommendation We recommend the University improve its efforts and procedures to ensure its cohort default rate is not in excess of the threshold for administrative capabilities stipulated by the U.S. Department of Education. University Response The University agrees with the finding and understands the importance of keeping the cohort default rate to a minimal level. For the two years prior to 2021, the University?s Perkins cohort default rate was lower than 15% (14.08% for 2020 and 11.32% for 2019). However, prior to the finding, the University staff had begun researching the Perkins liquidation process and assign loans back to the Department of Education. They are in the beginning phases of that process. The University will comply with the request to assign the defaulted loans back to the Department of Education.
Show full finding ▾Hide full finding ▴Federal Department: U.S. Department of Education CFDA Number: 84.038, 84.033, 84.007, 84.063, 84.268, 84.379 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Perkins Loan Program ? Federal Capital Contributions, Federal Work-Study Program, Federal Supplemental Educational Opportunity Grants, Federal Pell Grant Program, Federal Direct Student Loans, Teacher Education Assistance for College and Higher Education Grants Award Numbers: P033A201250, P007A201250, P268K201372, P268K211372, P063P191372, P063P201372,P379T201372, P379T211372 Questioned Cost: None Award Expenditures: $31,137,924 Olivet Nazarene University?s (University) Federal Perkins loan cohort default rate is in excess of the threshold for administrative capability stipulated by the U.S. Department of Education. The Federal Perkins Loan cohort default rate as of June 30, 2021 (for borrowers who entered repayment during Fiscal Year 2020) was 16.54%, which exceeded the 15% threshold. The University chose to continue servicing their Perkins Loan portfolio after Federal Perkins Loan Program loan originations were discontinued in Fiscal Year 2018. The Code of Federal Regulations (Code) (34 CFR 668.16) states ?to begin and to continue to participate in any Title IV, HEA program, an institution shall demonstrate to the Secretary that the institution is capable of adequately administering that program under each of the standards established in this section. The Secretary considers an institution to have that administrative capability if the institution ? ... (m)(1) Has a cohort default rate - (iii) As defined in 34 CFR 674.5, on loans made under the Federal Perkins Loan Program to students for attendance at the institution that does not exceed 15 percent.? The U.S. Department of Education?s Dear Colleague Letter (DCL ID: GEN-17-10) states institutions that choose to continue to service their outstanding Perkins Loan portfolios must continue to service these loans in accordance with the Federal Perkins Loan Program regulations in 34 CFR 674. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure the University maintains a Federal Perkins Loan cohort default rate of less than 15%. University officials indicated economic conditions resulting from the pandemic continue to present challenges for University students; also, the University has begun the process of assigning the defaulted Perkins Loans back to the Department of Education. The staff have also started the process of researching the option to liquidate the Perkins portfolio and realizes the importance of assigning those loans. Failure to maintain a Federal Perkins Loan cohort default rate below 15% resulted in noncompliance with the Code, the Uniform Guidance, and the U.S. Department of Education?s directive. (Finding Code No. 2021-002) Recommendation We recommend the University improve its efforts and procedures to ensure its cohort default rate is not in excess of the threshold for administrative capabilities stipulated by the U.S. Department of Education. University Response The University agrees with the finding and understands the importance of keeping the cohort default rate to a minimal level. For the two years prior to 2021, the University?s Perkins cohort default rate was lower than 15% (14.08% for 2020 and 11.32% for 2019). However, prior to the finding, the University staff had begun researching the Perkins liquidation process and assign loans back to the Department of Education. They are in the beginning phases of that process. The University will comply with the request to assign the defaulted loans back to the Department of Education.
Finding 2021-002: Federal Perkins Loan Cohort Default Rate Too High The University agrees with the finding and understands the importance of keeping the cohort default rate to a minimal level. For the two years prior to 2021, the University?s Perkins cohort default rate was lower than 15% (14.08% for 2020 and 11.32% for 2019). However, prior to the finding, the University staff had begun researching the Perkins liquidation process and assign loans back to the Department of Education. They are in the beginning phases of that process. The University will comply with the request to assign the defaulted loans back to the Department of Education.
Federal Department: U.S. Department of Education CFDA Number: 84.268 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Direct Student Loans Award Numbers: P268K201372, P268K211372 Questioned Cost: None Award Expenditures: $23,400,262 Olivet Nazarene University (University) did not timely report student enrollment status to the Department of Education (ED) for students who withdrew. During our testing of 25 students who were Title IV recipients in Fiscal Year 2021, we noted two students (8%) for whom enrollment status changes were reported late. The students? enrollment status changes were reported to ED 63 and 64 days (3 and 4 days late) after the enrollment status changed. The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 685.309(b)(2)(i)) states the University must notify ED within 60 days after the date that the University discovers that a loan that was made to or on behalf of a student who enrolled at the University, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period in which the loan was intended. University officials stated that in both instances, the student was withdrawn after the term had ended. The University Medical staff processed a withdrawal form with the withdrawal date post-dated to the day the staff informed the student they may withdraw. Because both students had already been reported as enrolled full-time on the term?s final submission, the next reporting submission was the 1st of term for spring. One student returned and was reported as enrolled full-time on the 1st report of the spring term and one did not return. By failing to timely submit status changes, ED is unaware whether a student?s loan should be moved into repayment status or if it is eligible for a deferment. (Finding Code No. 2021-003) Recommendation We recommend that the University timely submit student status changes to ED. University Response The University understands the importance of reporting accurate enrollment verification. It was an isolated incident by the University staff.
Show full finding ▾Hide full finding ▴Federal Department: U.S. Department of Education CFDA Number: 84.268 Cluster Name: Student Financial Assistance Cluster Program Name: Federal Direct Student Loans Award Numbers: P268K201372, P268K211372 Questioned Cost: None Award Expenditures: $23,400,262 Olivet Nazarene University (University) did not timely report student enrollment status to the Department of Education (ED) for students who withdrew. During our testing of 25 students who were Title IV recipients in Fiscal Year 2021, we noted two students (8%) for whom enrollment status changes were reported late. The students? enrollment status changes were reported to ED 63 and 64 days (3 and 4 days late) after the enrollment status changed. The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 685.309(b)(2)(i)) states the University must notify ED within 60 days after the date that the University discovers that a loan that was made to or on behalf of a student who enrolled at the University, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period in which the loan was intended. University officials stated that in both instances, the student was withdrawn after the term had ended. The University Medical staff processed a withdrawal form with the withdrawal date post-dated to the day the staff informed the student they may withdraw. Because both students had already been reported as enrolled full-time on the term?s final submission, the next reporting submission was the 1st of term for spring. One student returned and was reported as enrolled full-time on the 1st report of the spring term and one did not return. By failing to timely submit status changes, ED is unaware whether a student?s loan should be moved into repayment status or if it is eligible for a deferment. (Finding Code No. 2021-003) Recommendation We recommend that the University timely submit student status changes to ED. University Response The University understands the importance of reporting accurate enrollment verification. It was an isolated incident by the University staff.
Finding 2021-003: Untimely Reporting of Student Enrollment Status The University understands the importance of reporting accurate enrollment verification. In both instances, the student was withdrawn after the term had ended. The loan specialist is now included on every withdrawal in real time to ensure compliance. It was an isolated incident by the University staff.
Federal Department: U.S. Department of Education CFDA Number: 84.425F Program Name: COVID 19 ? Education Stabilization Fund Award Number: P425F201793 Questioned Cost: None Award Expenditures: $1,500,000 Olivet Nazarene University (University) did not timely complete the Quarterly Budget and Expenditure Reporting form for Higher Education Emergency Relief Funds (HEERF) developed by the Department of Education. During our testing of 2 quarterly reports of the HEERF Quarterly Budget and Expenditure Report, we noted that both reports were posted to the University website 87 days late. The instructions for the Quarterly Budget and Expenditure Form require the form to be posted on the University website no later than 10 days after the end of each quarter. However, the University had until the due date of the second calendar quarter to post any reports for the period ending March 31, 2021. University officials stated the institutional HEERF information of funds received and spent were reported on the University?s website in the previously required format for each quarter. University staff were not aware of the Quarterly Budget and Expenditure Form until a future period. University staff subsequently posted all prior quarters using the provided template. By failing to timely post the required reports, the University is not following ED guidelines and the public is not being made aware of University COVID spending. (Finding Code No. 2021-004) Recommendation We recommend that the University timely post their Quarterly Budget and Expenditure Reports related to HEERF. University Response The University agrees with the importance of providing accurate & timely information to the public regarding University COVID spending. We follow the formats provided by ED and did so prior to the finding as soon as University staff learned of the prescribed manner. At that point, the Quarterly Expenditure & Budget Report was made available on the website. University staff has reviewed subsequent HEERF reporting requirements to ensure future compliance.
Show full finding ▾Hide full finding ▴Federal Department: U.S. Department of Education CFDA Number: 84.425F Program Name: COVID 19 ? Education Stabilization Fund Award Number: P425F201793 Questioned Cost: None Award Expenditures: $1,500,000 Olivet Nazarene University (University) did not timely complete the Quarterly Budget and Expenditure Reporting form for Higher Education Emergency Relief Funds (HEERF) developed by the Department of Education. During our testing of 2 quarterly reports of the HEERF Quarterly Budget and Expenditure Report, we noted that both reports were posted to the University website 87 days late. The instructions for the Quarterly Budget and Expenditure Form require the form to be posted on the University website no later than 10 days after the end of each quarter. However, the University had until the due date of the second calendar quarter to post any reports for the period ending March 31, 2021. University officials stated the institutional HEERF information of funds received and spent were reported on the University?s website in the previously required format for each quarter. University staff were not aware of the Quarterly Budget and Expenditure Form until a future period. University staff subsequently posted all prior quarters using the provided template. By failing to timely post the required reports, the University is not following ED guidelines and the public is not being made aware of University COVID spending. (Finding Code No. 2021-004) Recommendation We recommend that the University timely post their Quarterly Budget and Expenditure Reports related to HEERF. University Response The University agrees with the importance of providing accurate & timely information to the public regarding University COVID spending. We follow the formats provided by ED and did so prior to the finding as soon as University staff learned of the prescribed manner. At that point, the Quarterly Expenditure & Budget Report was made available on the website. University staff has reviewed subsequent HEERF reporting requirements to ensure future compliance.
Finding 2021-004: Late Reporting The University agrees with the importance of providing accurate & timely information to the public regarding University COVID spending. We follow the formats provided by ED and did so prior to the finding as soon as University staff learned of the prescribed manner. At that point, the Quarterly Expenditure & Budget Report was made available on the website. University staff has reviewed subsequent HEERF reporting requirements to ensure future compliance.
FAC accepted this audit on March 24, 2021 — management decision was due September 24, 2021.
Federal Department: U.S. Department of Education CFDA Numbers: 84.268 Program Name: Student Financial Assistance Cluster (Federal Direct Student Loan) Award Numbers: P268K191372, P268K201372 Questioned Cost: None Program Expenditures: $27,706,128 Olivet Nazarene University (University) did not provide exit counseling for one student that ceased half-time enrollment. During our testing of 60 students who received aid during the year, we identified 56 students who received Federal Direct Student Loan funding and noted 21 of those students were required to complete exit counseling. For one (5%) student who ceased half-time enrollment there was no evidence that exit counseling procedures were performed. The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 685.304(b)) states that a school must ensure exit counseling is conducted with each loan borrower shortly before the student borrower ceases at least half-time study at the University. If the student withdraws from the school without the school?s prior knowledge, the school must provide the exit counseling materials to the student within 30 days after the school learns that the borrower has withdrawn. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that exit counseling is performed for all borrowers ceasing half-time enrollment at the University. University officials indicated that the condition was related to the re-enrollment of a student who had previously withdrawn. The student returned months later to the program, and after the student withdrew again the staff member saw the original exit and mistakenly thought it was the currently required exit. The staff has been reminded how important it is to have the exit materials processed every time a student ceases at least half-time enrollment. The University believes this was a single mistake and not caused by a faulty process and procedure. By failing to perform exit counseling, students are not informed of their rights and responsibilities under the loan agreement. (Finding Code No. 2020-001) Recommendation We recommend that the University conduct exit counseling for all students who received student loans and ceased at least half-time enrollment at the University. University Response The University understands the importance of providing the exiting student with the proper materials to understand the debt and process for student loan repayment. The University believes this was an isolated incident, and that the policy and procedures in place are sufficient to ensure that it does not happen again. The Director met with the processing staff to reiterate the importance of exiting a student who has ceased half-time enrollment.
Show full finding ▾Hide full finding ▴Federal Department: U.S. Department of Education CFDA Numbers: 84.268 Program Name: Student Financial Assistance Cluster (Federal Direct Student Loan) Award Numbers: P268K191372, P268K201372 Questioned Cost: None Program Expenditures: $27,706,128 Olivet Nazarene University (University) did not provide exit counseling for one student that ceased half-time enrollment. During our testing of 60 students who received aid during the year, we identified 56 students who received Federal Direct Student Loan funding and noted 21 of those students were required to complete exit counseling. For one (5%) student who ceased half-time enrollment there was no evidence that exit counseling procedures were performed. The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 685.304(b)) states that a school must ensure exit counseling is conducted with each loan borrower shortly before the student borrower ceases at least half-time study at the University. If the student withdraws from the school without the school?s prior knowledge, the school must provide the exit counseling materials to the student within 30 days after the school learns that the borrower has withdrawn. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that exit counseling is performed for all borrowers ceasing half-time enrollment at the University. University officials indicated that the condition was related to the re-enrollment of a student who had previously withdrawn. The student returned months later to the program, and after the student withdrew again the staff member saw the original exit and mistakenly thought it was the currently required exit. The staff has been reminded how important it is to have the exit materials processed every time a student ceases at least half-time enrollment. The University believes this was a single mistake and not caused by a faulty process and procedure. By failing to perform exit counseling, students are not informed of their rights and responsibilities under the loan agreement. (Finding Code No. 2020-001) Recommendation We recommend that the University conduct exit counseling for all students who received student loans and ceased at least half-time enrollment at the University. University Response The University understands the importance of providing the exiting student with the proper materials to understand the debt and process for student loan repayment. The University believes this was an isolated incident, and that the policy and procedures in place are sufficient to ensure that it does not happen again. The Director met with the processing staff to reiterate the importance of exiting a student who has ceased half-time enrollment.
Finding 2020-001: Exit Counseling The University understands the importance exit counseling. The missed exit counseling resulted from the re-entry of a withdrawn and exited student. The student withdrew again, and the staff mistakenly assumed the exit was complete. It was an isolated incident by the University staff. The Director met with the staff to discuss the importance of consistent exit counseling for students. The University believes the error was an isolated incident and not the result of policy errors, and believes the error will not occur again. The University has a system in place to help ensure compliance. Responsible University Personnel: Mr. Greg Bruner, Director of Undergraduate Revenue, Student Financial Services Completion Date: March 22, 2021
Federal Department: U.S. Department of Education CFDA Number: 84.038 Program Name: Student Financial Assistance Cluster (Federal Perkins Loan Program) Questioned Cost: None Award Expenditures: $2,735,270 Olivet Nazarene University (University) failed to accurately report separation dates for Federal Perkins Loan borrowers. We tested 25 Federal Perkins Loan recipients who had ceased half-time attendance at the University and were due to enter repayment during the fiscal year. The University reported inaccurate separation dates for 5 (20%) borrowers. Due to these errors, 4 students entered repayment late (from 77 days late to 589 days late) and 1 student entered repayment early (69 days early). The Code of Federal Regulations (34 CFR 674.31(b)(2)) states ?The repayment period ? for Federal Perkins Loans, begins 9 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later.? The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that the University converts Federal Perkins Loan borrowers who cease to be at least a half-time regular student to repayment in a timely manner. University officials indicated that the condition was due to mistakes by the university staff responsible for reporting students who have ceased enrollment. In several of the cases the student did not graduate when initially expected and was required to return the following semester to complete the coursework for graduation. The staff reported the student as no longer enrolled and missed the fact that the student did not complete as planned, but returned to finish. Of the five students with errors, three were missed graduation dates, one was a missed withdrawn student, and one student in an approved study abroad was not recognized as enrolling for that term. Failure to accurately report separation dates for Federal Perkins Loan borrowers either delays the collection of Federal Perkins Loans from borrowers or prevents students from being allowed the full repayment period to which they are entitled, could compromise the collectability of the loans, and could result in the loss of future Federal funding. (Finding Code No. 2020-002, 2019-002). Recommendation We recommend the University improve its procedures to ensure the accurate reporting of separation dates for Perkins Loan borrowers who have ceased half-time enrollment at the University. University Response The University agrees with the finding, and understands the importance of reporting accurate Perkins data to both the servicer as well as the Department. The University staff has compiled the list of 994 Perkins borrowers from the past ten years to verify that the data is correct. The University believes these were isolated incidents and not a systemic problem with the policy and procedure system. The Director has met with the staff handling the Perkins exit information to ensure proper processing.
Show full finding ▾Hide full finding ▴Federal Department: U.S. Department of Education CFDA Number: 84.038 Program Name: Student Financial Assistance Cluster (Federal Perkins Loan Program) Questioned Cost: None Award Expenditures: $2,735,270 Olivet Nazarene University (University) failed to accurately report separation dates for Federal Perkins Loan borrowers. We tested 25 Federal Perkins Loan recipients who had ceased half-time attendance at the University and were due to enter repayment during the fiscal year. The University reported inaccurate separation dates for 5 (20%) borrowers. Due to these errors, 4 students entered repayment late (from 77 days late to 589 days late) and 1 student entered repayment early (69 days early). The Code of Federal Regulations (34 CFR 674.31(b)(2)) states ?The repayment period ? for Federal Perkins Loans, begins 9 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later.? The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that the University converts Federal Perkins Loan borrowers who cease to be at least a half-time regular student to repayment in a timely manner. University officials indicated that the condition was due to mistakes by the university staff responsible for reporting students who have ceased enrollment. In several of the cases the student did not graduate when initially expected and was required to return the following semester to complete the coursework for graduation. The staff reported the student as no longer enrolled and missed the fact that the student did not complete as planned, but returned to finish. Of the five students with errors, three were missed graduation dates, one was a missed withdrawn student, and one student in an approved study abroad was not recognized as enrolling for that term. Failure to accurately report separation dates for Federal Perkins Loan borrowers either delays the collection of Federal Perkins Loans from borrowers or prevents students from being allowed the full repayment period to which they are entitled, could compromise the collectability of the loans, and could result in the loss of future Federal funding. (Finding Code No. 2020-002, 2019-002). Recommendation We recommend the University improve its procedures to ensure the accurate reporting of separation dates for Perkins Loan borrowers who have ceased half-time enrollment at the University. University Response The University agrees with the finding, and understands the importance of reporting accurate Perkins data to both the servicer as well as the Department. The University staff has compiled the list of 994 Perkins borrowers from the past ten years to verify that the data is correct. The University believes these were isolated incidents and not a systemic problem with the policy and procedure system. The Director has met with the staff handling the Perkins exit information to ensure proper processing.
Finding 2020-002: Federal Perkins Loan Conversion to Repayment The University understands the importance of accurate dates in the loan repayment process, as well as the responsibility of the school in providing accurate exit data to third party loan servicers. In several of the student findings, the staff missed the re-enrollment of students who were unable to graduate at the original date but returned to complete the graduation requirement subsequently. The staff missed the new enrollment and did not report the proper dates to the servicer. In one of the student files it was discovered that the student was on an approved study abroad program to complete the degree, and the staff missed the enrollment, reporting the student as having completed earlier than it should have done so. The staff responsible for entering the data to the loan servicer has been instructed to confirm every file for the proper last date of attendance. The staff have been instructed to verify that field on every file. The Director met with the staff and compiled a list of 994 Perkins borrowers of the past ten years and provided that list to the staff responsible for the data entry. This includes the staff member looking at all 994 students in the servicer system to verify the data is correct. The University believes the errors were isolated incidents during processing and not the result of policy errors, and believes the error will not occur again. Responsible University Personnel: Mr. Greg Bruner, Director of Undergraduate Revenue, Student Financial Services Completion Date: March 24, 2021
2019-002
FAC accepted this audit on March 10, 2020 — management decision was due September 10, 2020.
Finding 2019-001 Errors in Completing the Return of Title IV Funds Refund Calculation Federal Department: U.S. Department of Education CFDA Numbers: 84.007, 84.033, 84.038, 84.063, 84.268, 84.379 Program Name: Student Financial Assistance Cluster Questioned Cost: None Program Expenditures: $40,331,044 Olivet Nazarene University (University) did not properly calculate the percentage of the period of enrollment attended by the student, resulting in an incorrect amount of Title IV Funds being remitted to the Department of Education (ED) for withdrawn students. Our testing of 40 students who withdrew from the University revealed one student (3%) in which the University incorrectly calculated the period of enrollment completed by the student. The University calculated the percentage of completion to be 56.3%; however, the student?s actual percentage of completion was 68.6%. By using the incorrect completion percentage, the University refunded $2,686 to ED as opposed to $0 ($2,686 excess funds returned). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations states: ? (34 CFR 668.22 (f)(1)(i)) ? the percentage of the period of enrollment completed is calculated by dividing the total number of calendar days in the period of enrollment into the number of calendar days completed in the period ? (34 CFR 668.22 (e)(2)(ii)(A)) - ?the percentage of Title IV grant or loan assistance that has been earned by the student is 100 percent, if the student?s withdrawal date occurs after completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours.? The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure proper calculations of the period of enrollment completed by students are used in calculating Return of Title IV Funds. University officials stated the calculation included incorrect term dates by using the traditional calendar for a non-traditional cohort student, resulting in the wrong number of days in both the numerator and denominator. It was an isolated mistake by the University staff calculating the R2T4. Failure to complete accurate refund calculations may jeopardize future Federal funding. (Finding Code No. 2019-001, 2018-002). Recommendation We recommend the University improve its procedures to ensure that all Title IV refund calculations are prepared in accordance with ED?s regulations. Finding 2019-001 Errors in Completing the Return of Title IV Funds Refund Calculation (continued) University Response The University agrees with the finding. Once the error was recognized, the Director met with the staff to discuss the importance of consistent accurate information regarding student withdrawal dates and calculations. The University believes the error was an isolated incident and not the result of policy errors, and believes the error will not occur again. The Ellucian Colleague software now pulls the data automatically from the term data for each student.
Show full finding ▾Hide full finding ▴Finding 2019-001 Errors in Completing the Return of Title IV Funds Refund Calculation Federal Department: U.S. Department of Education CFDA Numbers: 84.007, 84.033, 84.038, 84.063, 84.268, 84.379 Program Name: Student Financial Assistance Cluster Questioned Cost: None Program Expenditures: $40,331,044 Olivet Nazarene University (University) did not properly calculate the percentage of the period of enrollment attended by the student, resulting in an incorrect amount of Title IV Funds being remitted to the Department of Education (ED) for withdrawn students. Our testing of 40 students who withdrew from the University revealed one student (3%) in which the University incorrectly calculated the period of enrollment completed by the student. The University calculated the percentage of completion to be 56.3%; however, the student?s actual percentage of completion was 68.6%. By using the incorrect completion percentage, the University refunded $2,686 to ED as opposed to $0 ($2,686 excess funds returned). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations states: ? (34 CFR 668.22 (f)(1)(i)) ? the percentage of the period of enrollment completed is calculated by dividing the total number of calendar days in the period of enrollment into the number of calendar days completed in the period ? (34 CFR 668.22 (e)(2)(ii)(A)) - ?the percentage of Title IV grant or loan assistance that has been earned by the student is 100 percent, if the student?s withdrawal date occurs after completion of 60 percent of the payment period or period of enrollment for a program that is measured in credit hours.? The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure proper calculations of the period of enrollment completed by students are used in calculating Return of Title IV Funds. University officials stated the calculation included incorrect term dates by using the traditional calendar for a non-traditional cohort student, resulting in the wrong number of days in both the numerator and denominator. It was an isolated mistake by the University staff calculating the R2T4. Failure to complete accurate refund calculations may jeopardize future Federal funding. (Finding Code No. 2019-001, 2018-002). Recommendation We recommend the University improve its procedures to ensure that all Title IV refund calculations are prepared in accordance with ED?s regulations. Finding 2019-001 Errors in Completing the Return of Title IV Funds Refund Calculation (continued) University Response The University agrees with the finding. Once the error was recognized, the Director met with the staff to discuss the importance of consistent accurate information regarding student withdrawal dates and calculations. The University believes the error was an isolated incident and not the result of policy errors, and believes the error will not occur again. The Ellucian Colleague software now pulls the data automatically from the term data for each student.
Finding 2019-001: Errors in completing the Return of Title IV Refund Calculation The University understands the importance of the R2T4 calculation and the timely return of funds. The R2T4 calculation included incorrect term dates by using the traditional calendar for a non-traditional cohort student. As a result, the wrong number of days were used in the both the numerator and the denominator. It was an isolated mistake by the university staff calculating the R2T4. The Director met with the staff to discuss the importance of consistent accurate information regarding student withdrawal dates and calculations. The University believes the error was an isolated incident and not the result of policy errors, and believes the error will not occur again. The Ellucian Colleague software now pulls the data automatically, so the term calculation will pull the correct dates from the system.
2018-002
Finding 2019-002 Federal Perkins Loan Conversion to Repayment Federal Department: U.S. Department of Education CFDA Number: 84.038 Program Name: Student Financial Assistance Cluster (Federal Perkins Loan Program) Questioned Cost: None Award Expenditures: $3,322,474 (as reported on Schedule of Expenditures and Federal Awards) Olivet Nazarene University (University) failed to accurately report separation dates for Federal Perkins Loan borrowers. We tested 25 Federal Perkins Loan recipients who had ceased half-time attendance at the University and were due to enter repayment during the fiscal year. The University reported inaccurate separation dates for 7 (28%) borrowers. Due to these errors, 5 students entered repayment late (from 34 days late to 119 days late) and 2 students entered repayment early (70 and 71 days early). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 674.31(b)(2)) states ?The repayment period ? for Federal Perkins Loans, begins 9 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later.? The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that the University converts Federal Perkins Loan borrowers who cease to be at least a half-time regular student to repayment in a timely manner. University officials stated that the condition was due to using incorrect dates for students no longer enrolled. Failure to accurately report separation dates for Federal Perkins Loan borrowers either delays the collection of Federal Perkins Loans from borrowers or prevents students from being allowed the full repayment period to which they are entitled, could compromise the collectability of the loans, and could result in the loss of future Federal funding. (Finding Code No. 2019-002). Recommendation We recommend the University improve its procedures for accurately reporting separation dates for Perkins Loan borrowers who have ceased half-time attendance at the University. Finding 2019-002 Federal Perkins Loan Conversion to Repayment (continued) University Response The University agrees with the finding. The staff have been instructed to verify the separation date field on every file. The file should always reflect the last date the student attended. The Director also met with the staff to discuss the importance of accurate information regarding student attendance dates in the servicer system. The University has contacted the servicer to assure accurate data. The University believes the error was an isolated incident during conversion and not the result of policy errors, and believes the error will not occur again.
Show full finding ▾Hide full finding ▴Finding 2019-002 Federal Perkins Loan Conversion to Repayment Federal Department: U.S. Department of Education CFDA Number: 84.038 Program Name: Student Financial Assistance Cluster (Federal Perkins Loan Program) Questioned Cost: None Award Expenditures: $3,322,474 (as reported on Schedule of Expenditures and Federal Awards) Olivet Nazarene University (University) failed to accurately report separation dates for Federal Perkins Loan borrowers. We tested 25 Federal Perkins Loan recipients who had ceased half-time attendance at the University and were due to enter repayment during the fiscal year. The University reported inaccurate separation dates for 7 (28%) borrowers. Due to these errors, 5 students entered repayment late (from 34 days late to 119 days late) and 2 students entered repayment early (70 and 71 days early). The sample was not intended to be, and was not, a statistically valid sample. The Code of Federal Regulations (34 CFR 674.31(b)(2)) states ?The repayment period ? for Federal Perkins Loans, begins 9 months after the borrower ceases to be at least a half-time regular student at an institution of higher education or a comparable institution outside the U.S. approved for this purpose by the Secretary, and normally ends 10 years later.? The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that the University converts Federal Perkins Loan borrowers who cease to be at least a half-time regular student to repayment in a timely manner. University officials stated that the condition was due to using incorrect dates for students no longer enrolled. Failure to accurately report separation dates for Federal Perkins Loan borrowers either delays the collection of Federal Perkins Loans from borrowers or prevents students from being allowed the full repayment period to which they are entitled, could compromise the collectability of the loans, and could result in the loss of future Federal funding. (Finding Code No. 2019-002). Recommendation We recommend the University improve its procedures for accurately reporting separation dates for Perkins Loan borrowers who have ceased half-time attendance at the University. Finding 2019-002 Federal Perkins Loan Conversion to Repayment (continued) University Response The University agrees with the finding. The staff have been instructed to verify the separation date field on every file. The file should always reflect the last date the student attended. The Director also met with the staff to discuss the importance of accurate information regarding student attendance dates in the servicer system. The University has contacted the servicer to assure accurate data. The University believes the error was an isolated incident during conversion and not the result of policy errors, and believes the error will not occur again.
Finding 2019-002: Federal Perkins Loan Conversion to Repayment The University understands the importance of the accurate dates in the loan repayment process, as well as the responsibility of the school in the compliance of third party loan servicers. In several student files, the current servicer, UNISA, apparently had a secondary field that populated when a student file was submitted for servicing when a student is no longer enrolled. The staff did not know the new field existed, and it defaulted to the date submitted, instead of the last date of attendance (LDA). That is incorrect. The file should always reflect the last date the student attended. The staff have been instructed to verify that field on every file. The Director met with the staff to discuss the importance of accurate information regarding student attendance dates in the servicer system. The University has contacted UNISA to assure accurate data. The University believes the error was an isolated incident during conversion and not the result of policy errors, and believes the error will not occur again.
Finding 2019-003 Inadequate Cash Management Procedures Federal Department: U.S. Department of Education CFDA Number: 84.033 Program Name: Student Financial Assistance Cluster (Federal Work Study Program) Questioned Cost: None Award Expenditures: $469,443 Olivet Nazarene University (University) did not have adequate procedures to ensure that University funds were expended prior to being reimbursed by the Federal agency. The University operates all its federally funded student financial assistance programs on a reimbursement basis. When testing the University?s Federal work study reconciliations, we noted federal funds had been drawn down in excess of the amount of cumulative expenditures for the year. The funds drawn down in excess of expenditures totaled $21,825. Of this excess, $8,930.07 was drawn prior to June 30, 2019, while $12,894.93 was booked as a receivable for fiscal year 2019 and drawn on July 15, 2019. These excess funds were not returned to the Department of Education until November 9, 2019. The Code of Federal Regulations (34 CFR 668.166) states the Secretary considers excess cash to be any amount of Title IV funds that an institution does not disburse to students by the end of the third business day following the date the institution received those funds from the Secretary. Excess cash should be returned immediately to the Secretary. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure the University requests reimbursements only after having incurred allowable expenses. University officials stated that the condition was due to misinterpreting a spreadsheet that was tracking the transfers of the administrative allowance. This error resulted in said allowance being drawn twice. Failure to ensure Federal funds reimbursement requests are based upon allowable expenses already incurred may result in the University owing interest to the federal awarding agencies and could result in the loss of future Federal funding. (Finding Code No. 2019-003). Recommendation We recommend the University improve its draw down procedures and ensure all reimbursement requests are based on cumulative program expenditures already incurred. University Response The University agrees with the finding. Once the error was recognized, University officials responded by returning the excess cash right away. The way transfers are calculated for administrative cost allowance and their relation to FISAP reporting has been addressed by University officials to mitigate the chance of a misinterpretation happening again.
Show full finding ▾Hide full finding ▴Finding 2019-003 Inadequate Cash Management Procedures Federal Department: U.S. Department of Education CFDA Number: 84.033 Program Name: Student Financial Assistance Cluster (Federal Work Study Program) Questioned Cost: None Award Expenditures: $469,443 Olivet Nazarene University (University) did not have adequate procedures to ensure that University funds were expended prior to being reimbursed by the Federal agency. The University operates all its federally funded student financial assistance programs on a reimbursement basis. When testing the University?s Federal work study reconciliations, we noted federal funds had been drawn down in excess of the amount of cumulative expenditures for the year. The funds drawn down in excess of expenditures totaled $21,825. Of this excess, $8,930.07 was drawn prior to June 30, 2019, while $12,894.93 was booked as a receivable for fiscal year 2019 and drawn on July 15, 2019. These excess funds were not returned to the Department of Education until November 9, 2019. The Code of Federal Regulations (34 CFR 668.166) states the Secretary considers excess cash to be any amount of Title IV funds that an institution does not disburse to students by the end of the third business day following the date the institution received those funds from the Secretary. Excess cash should be returned immediately to the Secretary. The Uniform Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Effective internal controls should include procedures to ensure the University requests reimbursements only after having incurred allowable expenses. University officials stated that the condition was due to misinterpreting a spreadsheet that was tracking the transfers of the administrative allowance. This error resulted in said allowance being drawn twice. Failure to ensure Federal funds reimbursement requests are based upon allowable expenses already incurred may result in the University owing interest to the federal awarding agencies and could result in the loss of future Federal funding. (Finding Code No. 2019-003). Recommendation We recommend the University improve its draw down procedures and ensure all reimbursement requests are based on cumulative program expenditures already incurred. University Response The University agrees with the finding. Once the error was recognized, University officials responded by returning the excess cash right away. The way transfers are calculated for administrative cost allowance and their relation to FISAP reporting has been addressed by University officials to mitigate the chance of a misinterpretation happening again.
Finding 2019-003: Inadequate Cash Management Procedures University officials believe this error was an isolated incident, and they have taken preventative measures to keep it from happening again, including a tracking mechanism (spreadsheet) for federal fund draws. The misinterpretation was identified and corrected. In addition, University officials have reviewed the ?Program Funds Transfer Guide? on the IFAP website. The method for calculating administrative cost allowance transfers, and their relation to FISAP reporting, has been addressed by University officials to mitigate the chance of a misinterpretation or further reconciliation issue within the spreadsheet.
FAC accepted this audit on January 17, 2019 — management decision was due July 17, 2019.
GSA_MIGRATION
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GSA_MIGRATION
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GSA_MIGRATION
FAC accepted this audit on March 19, 2018 — management decision was due September 19, 2018.
GSA_MIGRATION
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GSA_MIGRATION
2016-001
GSA_MIGRATION
Show full finding ▾Hide full finding ▴FAC accepted this audit on February 10, 2017 — management decision was due August 10, 2017.
GSA_MIGRATION
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GSA_MIGRATION
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