ILLINOIS WESLEYAN UNIVERSITYHigher Education

2025 – 001: Material Prior Period Restatements – Correction of Errors Type of Finding: Material Weakness Criteria: Accounting Standards require that prior‑period financial statements be free from material misstatement and that errors be corrected through the restatement of beginning net assets when identified. Additionally, Government Auditing Standards (GAGAS) require auditors to report material weaknesses in internal control when deficiencies create a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected in a timely manner. Condition: During our audit of the financial statements for the fiscal year ended July 31, 2025, material errors in previously issued financial statements were identified that required restatement. The restatements affected beginning net assets and corrected misstatements related to grants receivable, grant revenue, net asset without donor restrictions and net assets without donor restrictions. The cumulative effect of these corrections was material to the financial statements. Effect: As a result of the errors, previously issued financial statements were materially misstated. The University was required to restate beginning net assets by $8,267,823 and adjust multiple financial statement line items for the affected funds and activities. Cause: Inadequate controls over financial reporting resulted in material misstatements that required restatement of prior‑year financial statements. Recommendation: We recommend that management strengthen internal controls over financial reporting. Views of Responsible Officials: There is no disagreement with the audit finding.

2025 – 002: Special Tests and Provision: Verification Reporting Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007 (Federal Supplemental Educational Opportunity Grants Program), 84.033 (Federal Work Study Program), 84.038 (Federal Perkins Loan Program), 84.063 (Federal Pell Grant Program), 84.268 (Federal Direct Student Loans Program), 93.364 (Nursing Student Loans) Federal Award Identification Number and Year: N/A; 2024-2025 Award Period: August 1, 2024 – July 31, 2025 Pass-Through Agency: N/A Pass-Through Numbers: N/A Criteria or Specific Requirement: Per 34 CFR 668.51–668.61, institutions must verify selected FAFSA information prior to disbursing Title IV aid. Required data elements must be reviewed and validated using acceptable documentation. Discrepancies must be corrected and resubmitted through CPS. Title IV funds may not be disbursed until verification is complete, unless permitted under de minimis tolerance rules. Other Matters. Condition: While performing audit procedures, it was noted that 1 student of our sample of five (5) required verification, but was not performed properly. Questioned Costs: None Context: 1 of 5 student files tested contained verification errors. Errors included improper documentation and incomplete review steps Cause: The condition occurred due to insufficient review controls over the verification process and inconsistent application of institutional verification procedures. Staff training and oversight related to federal verification requirements were not adequate. Effect: Failure to properly complete verification may result in incorrect eligibility determinations and improper disbursements of federal student aid. Repeat Finding: No Recommendation: We recommend that the Institution strengthen internal controls over verification, including implementing a secondary review of all verified files, enhancing staff training, and ensuring timely submission of all corrections. Views of Responsible Officials: There is no disagreement with the audit finding.

2024 – 001: Special Tests and Provision: Enrollment Reporting Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007 (Federal Supplemental Educational Opportunity Grants Program), 84.033 (Federal Work Study Program), 84.038 (Federal Perkins Loan Program), 84.063 (Federal Pell Grant Program), 84.268 (Federal Direct Student Loans Program), 93.364 (Nursing Student Loans) Federal Award Identification Number and Year: N/A; 2023-2024 Award Period: August 1, 2023 – July 31, 2024 Pass-Through Agency: N/A Pass-Through Numbers: N/A Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.309 requires that enrollment status changes for students be reported to the 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. Regulations require the status include an accurate effective date. Condition: While performing audit procedures, it was noted that 22 students of our sample of forty (40) were reported to NSLDS 1 day early. The final grades for graduating students were due 5/01/24, and the University reported graduates on 4/30/2024. Questioned costs: None Context: A control system to prevent and detect errors in the reporting process was not created to ensure all required reporting compliance was filed timely. During the period of late reporting, the University was in the process of an information technology upgrade causing delays in access for reporting. Cause: The University’s processes and controls did not ensure that student status changes were properly and timely reported to NSLDS. The University had a change in the school year calendar that was not updated in the system before being reported to NSLDS. Effect: The NSLDS system is not updated with the student information which can cause over awarding should the student transfer to another institution and the students may not properly enter the repayment period. Repeat Finding: No Recommendation: We recommend the University review its reporting procedures to ensure that students’ statuses are accurately and timely reported to NSLDS as required by regulations. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007 (Federal Supplemental Educational Opportunity Grants Program), 84.033 (Federal Work Study Program), 84.038 (Federal Perkins Loan Program), 84.063 (Federal Pell Grant Program), 84.268 (Federal Direct Student Loans Program), 93.364 (Nursing Student Loans) Federal Award Identification Number and Year: N/A; 2023-2024 Award Period: August 1, 2023 – July 31, 2024 Pass-Through Agency: N/A Pass-Through Numbers: N/A Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned costs: None Context: During our testing of the University’s information technology, we noted the following items in the University’s written security program did not meet the following compliance requirements: • Identify the approval of the appropriate individual leading the information security program • The use of encryption controls in transit on the University's systems • The standards for evaluating, assessing or testing the security of externally developed applications that transmit sensitive information • The use of multi-factor authentication for individuals accessing sensitive information across systems • The processes to perform an annual penetration test and semi-annual vulnerability assessments Cause: The University has continued to make progress in updating the University’s written security program to become compliance with all requirements; however, due to capacity and demands on the information technology individuals, this is still a work in process. Effect: The student personal information could be vulnerable. Repeat Finding: No Recommendation: We recommend that the University designate an individual to oversee the information security function and work to update the University’s written security program to ensure compliance with all the standards. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 001: Special Tests and Provision: Enrollment Reporting Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007 (Federal Supplemental Educational Opportunity Grants Program), 84.033 (Federal Work Study Program), 84.038 (Federal Perkins Loan Program), 84.063 (Federal Pell Grant Program), 84.268 (Federal Direct Student Loans Program), 93.364 (Nursing Student Loans) Federal Award Identification Number and Year: N/A; 2022-2023 Award Period: August 1, 2022 – July 31, 2023 Pass-Through Agency: N/A Pass-Through Numbers: N/A Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.309 requires that enrollment status changes for students be reported to the 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. Regulations require the status include an accurate effective date. Condition: While performing audit procedures, it was noted that 1 student of our sample of twenty four (24) was reported to NSLDS outside of the 60 day requirement. The student graduated June 2, 2023 but was not reported until September 7, 2023. Questioned costs: None Context: A control system to prevent and detect errors in the reporting process was not created to ensure all required reporting compliance was filed timely. During the period of late reporting, the University was in the process of an information technology upgrade causing delays in access for reporting. Cause: The University’s processes and controls did not ensure that student status changes were properly and timely reported to NSLDS. Effect: The NSLDS system is not updated with the student information which can cause over awarding should the student transfer to another institution and the students may not properly enter the repayment period. Repeat Finding: No Recommendation: We recommend the University review its reporting procedures to ensure that students’ statuses are accurately and timely reported to NSLDS as required by regulations. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 002: Special Tests and Provisions: Gramm-Leach-Bliley Act Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007 (Federal Supplemental Educational Opportunity Grants Program), 84.033 (Federal Work Study Program), 84.038 (Federal Perkins Loan Program), 84.063 (Federal Pell Grant Program), 84.268 (Federal Direct Student Loans Program), 93.364 (Nursing Student Loans) Federal Award Identification Number and Year: N/A; 2022-2023 Award Period: August 1, 2022 – July 31, 2023 Pass-Through Agency: N/A Pass-Through Numbers: N/A Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as “financial institutions” and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Condition: Under an institution’s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned costs: None Context: During our testing of the University’s information technology, we noted the following items in the University’s written security program did not meet the following compliance requirements: • Identify the approval of the appropriate individual leading the information security program • The use of encryption controls in transit on the University's systems • The standards for evaluating, assessing or testing the security of externally developed applications that transmit sensitive information • The use of multi-factor authentication for individuals accessing sensitive information across systems • The processes to perform an annual penetration test and semi-annual vulnerability assessments Cause: The University has continued to make progress in updating the University’s written security program to become compliance with all requirements; however, due to capacity and demands on the information technology individuals, this is still a work in process. Effect: The student personal information could be vulnerable. Repeat Finding: No Recommendation: We recommend that the University designate an individual to oversee the information security function and work to update the University’s written security program to ensure compliance with all the standards. Views of responsible officials: There is no disagreement with the audit finding.

2021-001 Allowable Institutional Costs Federal Agency: Department of Education Federal Program: Higher Education Emergency Relief Funds ALN 84.425F Award Period: July 1, 2020 to June 30, 2021 Type of Finding: - Significant Deficiency in Internal Control Over Compliance - Other Matters Criteria or Specific Requirement: For the Institutional Aid Portion (Assistance Listing 84.425E), disbursements made under the Institutional Aid Portion must be for COVID related expenditures. Condition: During our testing, we noted the University over allocated the amount of student refunds. The client did have additional expenditures that were allowable and they reallocated the funds to allowable expenses. Questioned Costs: None Context: During our testing, we noted the University over allocated $46,000 of student refunds as institutional costs which were reallocated once the over allocation was brought to their attention. Cause: There was not proper review and approval prior to disbursement. Effect: The University did not comply with (ED) regulations for allowable costs. Repeat Finding: No Recommendation: We recommend the University reevaluate their procedures surrounding allowable costs and costs being charged to the grant to ensure all are allowable costs. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding.

2021-002 Reporting Federal Agency: Department of Education Federal Program: Higher Education Emergency Relief Funds ALN 84.425E and 84.425F Award Period: July 1, 2020 to June 30, 2021 Type of Finding: - Significant Deficiency in Internal Control Over Compliance - Other Matters Criteria or Specific Requirement: Per Uniform Guidance 2 CFR 200.303, non-federal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations and program compliance requirements. The initial reporting for this grant requires the report to be submitted to the college or university?s website within 30 days of the signed Certification Agreement or 30 days after the electronic announcement dated May 6, whichever is later. Colleges and universities were then required to update their websites every 45 days after initial upload. This was changed to quarterly on August 31, 2020. In addition, an annual report is required. Condition: During our testing, we noted two of the student reports were not timely submitted. One of the institutional reports incorrectly included student funding. Questioned Costs: None Context: A control system to prevent and detect errors in the reporting process was not created at the time the reports were filed and the University did not have a process to track the reporting requirements. In addition, there was a general lack of guidance from ED on reporting requirements. Cause: The University did not have someone tracking the requirements to ensure that they posted the reporting timely and accurately. Effect: The University did not comply with ED regulations by reporting accurate. Repeat Finding: No Recommendation: We recommend the University review its reporting procedures to ensure all required steps are included as well as ensure timely reporting. The reports should be reviewed by someone other than the preparer of the report and this review should be documented. Views of Responsible Officials: There is no disagreement with the audit finding.

2021-003: Suspension and Debarment and Procurement Federal Agency: U.S. Department of Education Federal Program: Coronavirus Aid, Relief, and Economic Security Act Section 2 ? Institutional Portion CFDA Number: 84.425F Award Period: August 01, 2020 - July 31, 2021 Type of Finding: - Significant Deficiency in Internal Control over Compliance - Other Matters Criteria or Specific Requirement: Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a passthrough entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR section 180.215. They must also maintain documentation of the methodology of procurement as specified in CFR200.317\ through 200.326. These requirements include maintaining "documentation addressing cost and price analysis and vendor selections where applicable based on the method of procurement used." Condition: During our testing of five vendors paid over $25,000, it was noted there was no documentation to support the institution verified the vendors were not suspended or debarred at the time of purchase. The institution stated they completed the review but didn?t document the process. Per review of the suspension and debarment list at the time of fieldwork, we noted the vendors were not suspended or debarred. We also noted that the University did not have a procurement policy that was in compliance with federal regulations. Questioned Costs: None Context: During testing, it was noted there was no documentation to ensure the vendors were not suspended or debarred and the University did not have a sufficient procurement policy. In addition, there was no documentation of a second review to ensure the vendors were not suspended or debarred. Cause: The control system to prevent payment to a suspended and barred vendor was not in place, also no system to ensure the procurement policy included all required components was in place. Effect: The University could have paid a vendor who is suspended or barred at the time of payment or could have incorrectly procured equipment. Repeat Finding: No Recommendation: We recommend documenting the vendor was checked on the SAM.gov website prior to payment and documents methodology chosen for procurement. In addition, we also recommend a supervisor review the documentation prior to payment as a second review. The University needs to review their procurement policy to ensure it meets federal requirements. Views of Responsible Officials: Management agrees with finding.

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