VANDERCOOK COLLEGE OF MUSIC

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster ALN Numbers: 84.268, 84.063, 84.379 Award Period: August 1, 2024 through July 31, 2025 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Department of Education requires the Institute to report the disbursement dates and amounts to the Common Origination and Disbursement (COD) system within 15 days of disbursing Pell (34 CFR 690.83(b)(2) and Direct Loan (34 CFR 685.309) funds to a student. Condition: During our testing, we noted that the College's internal controls over COD reporting were not operating effectively. For 17 out of 32 disbursements, CLA noted that the COD disbursement date did not match the date the student was disbursed per their student account detail. For 15 out of 32 disbursements, CLA noted that the COD disbursement date was before the disbursement date per each student's account detail. For 5 out of 32 disbursements, the applied date was not reported timely and was outside of the allowed 15-day period after disbursing the student's award. Questioned Costs: None Context: During our testing, we noted the College did not have proper procedures in place to verify the dates sent to COD are timely and accurate. Cause: The College does not have a process in place to accurate report Unsubsidized Loan disbursements to COD. Effect: Students interest accrues based on disbursement date reported to COD, thus interest calculation could be skewed due to the discrepancy in disbursement dates reported. Repeat Finding: No Recommendation: We recommend the College evaluate its procedures and policies around reporting to COD to ensure that student information is reported accurately. Views of Responsible Officials: There is no disagreement with the audit finding.

Federal Agency: Department of Education Federal Program Title: Student Financial Assistance Cluster ALN Numbers: 84.063, 84.007, 84.033, 84.268, 84.379 Award Period: August 1, 2024 through July 31, 2025 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Gramm-Leach-Bliley Act (GLBA) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). Institutions are required to develop, implement, and maintain a comprehensive information security program that is written in one or more readily accessible parts. The regulations require the written information security program to include nine elements for institutions with 5,000 or more customers, (16 CFR 314.3(a)). The written information security program (WISP) for institutions with fewer than 5,000 customers must address seven elements (16 CFR 314.3(a) and 16 CFR 314.6). The elements that an institution must address in its written information security program are at 16 CFR 314.4. At a minimum, the institution’s written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c)(1) through (8) including: Assess apps developed by the institution. In addition, the written security program provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented (16 CFR 314.4(d)). Condition: During our testing, we noted the College did not have a formal Written Information Security Program (WISP) in place during the period under audit. Questioned Costs: None Context: These new GLBA requirements were applicable beginning on June 9, 2023 and the College did not have a formal WISP in place. Cause: There was not a formal process in place to review against all the new GLBA requirements to ensure compliance. Effect: Student personal information could be vulnerable. Repeat Finding: No Recommendation: We recommend that the University review the updated GLBA requirements and ensure their WISP includes all required elements. Views of Responsible Officials: There is no disagreement with the audit finding.

2020-003 ? Enrollment Status Reporting Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Numbers: 84.268 - Federal Direct Student Loans 84.063 - Federal Pell Grant Program Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: The Code of Federal Regulations 34 CFR 682.610 states that institutions must report accurately the enrollment status of all students regardless if they receive aid from the institution. This includes the enrollment effective date and related enrollment status, which must be reported for both the Campus-Level and the Program-Level. Enrollment status changes for students must be reported to National Student Loan Data System (NSLDS) within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. In addition, at a minimum, schools are required to certify enrollment every 60 days. Condition: During our testing of students with enrollment status changes, we noted the College did not have adequate internal controls designed to ensure enrollment status changes are reported accurately and timely to NSLDS as required by regulations. Questioned Costs: None Context: During our testing of students with enrollment status changes, we noted three total errors out of six students tested. For three of the students tested, the enrollment effective date did not match the enrollment effective date per the College?s records and one of the three was also reported late. Cause: Miscommunication between the Registrar?s Office and the Financial Aid department regarding three students. Effect: The College did not comply with Department of Education regulations for reporting student enrollment status changes accurately and timely. Recommendation: We recommend that the College review its procedures to ensure enrollment status changes are reported accurately and timely to NSLDS as required by regulations. Management?s Response: There will be a new process put in place to update enrollment monthly versus bi-monthly to ensure timely reporting. The process will require monthly updates from the Registrar?s Office and confirmation of student status by the Undergraduate and Graduate Deans prior to enrollment submission to NSLDS.

2020-004 ? Awarding of Pell Grants Federal Agency: U.S. Department of Education Federal Program Title: Student Financial Assistance Cluster Assistance Listing Numbers: 84.063 - Federal Pell Grant Program Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: The Code of Federal Regulations, 34 CFR 690.62 states a student's Pell grant for an academic year is based upon the payment and disbursement schedules published by the Secretary for each award year. The schedules take into account cost of attendance, EFC, and the enrollment status of the student. Condition: During our testing of student aid eligibility, we noted the College did not have adequate internal controls designed to ensure Pell grants are awarded in accordance with regulations. Questioned Costs: $775 Context: During our testing of student aid eligibility, we noted one student who was underawarded Pell grant funds out of eight students tested. Cause: One student was incorrectly awarded due to a data entry error. Effect: The College did not comply with Department of Education regulations for awarding Pell grants accurately. Recommendation: We recommend that the College review its procedures to ensure Pell grants are awarded in accordance with regulations. Management?s Response: The Pell awarding process will go through three check points between the SFA Director and the Financial Aid Assistant to ensure proper awarding prior to disbursement. The SFA Director will also work with IT to automate the Pell awarding process to avoid data entry errors.

GSA_MIGRATION