SOLANO COMMUNITY COLLEGE DISTRICT

Criteria: According to 34 CFR Section 668.173 (b) and 2 CFR 200.303, the institutional portion of unearned aid must be returned to the appropriate Title IV, HEA program or Federal Family Education Loan (“FFEL”) lender no later than 45 days after the date of the institution’s determination that the student withdrew. Furthermore, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student’s withdrawal date. The Compliance Supplement issued by the Office of Management and Budget requires auditors to review the return of Title IV funds determinations/calculations for conformity with Title IV requirements. Furthermore, according to 34 CFR 668.22, all grant funds relating to post-withdrawal disbursements that are not disbursed to the student’s account, must be disbursed to the student no later than 180 days after the date of the institution’s determination that the student withdrew. Condition: The institutional portion of unearned aid was not returned to the Department of Education within 45 days. This was noted for 11 out of 40 samples tested, which is a statistically valid sample. Questioned Costs: None. Context: The District disbursed $12,283,383 in Title IV awards during fiscal year 2023-24. The value of the sample tested was $6,689, and the portion of the unearned aid not returned timely was $3,683. Cause: The Districts’ internal controls did not ensure compliance with the applicable Title IV regulations. Effect: The cause identified resulted in noncompliance with Title IV regulations. Repeat Finding: Yes, see Finding 2023-002. Recommendation: We recommend that the District improve the existing procedures and controls to ensure compliance with the aforementioned criteria. Views of responsible officials: Management concurs with the finding.

Criteria: In accordance with 34 CFR 685.309(b), 2 CFR 200.303 and the National Student Loan Data System (NSLDS) Enrollment Reporting Guide published by the Department of Education, schools must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. In addition, schools must report enrollment status changes within 30 days of becoming aware of the status change or in its next scheduled enrollment submission if the scheduled submission is within 60 days. Condition: During our testing of 40 students, which is a statistically valid sample, we noted one instance of change in status not reported timely during the Fall 2023 semester. Questioned Costs: None. Context: One exception was noted out of the 40 students tested, which is a statistically valid sample. Cause: The District revised its enrollment reporting controls after the June 30, 2023 audit and implemented those controls during the Fall 2023 semester. However, prior to this implementation the internal controls that were in place did not identify the errors for compliance with the criteria mentioned above. Effect: Inaccurate information is reflected on the NSLDS database. A student’s enrollment data protects the rights of borrowers by ensuring that loan interest subsidies are based on accurate enrollment data, ensures loan repayment dates are accurately based on the last data of attendance, allows in-school deferments to be automatically granted using NSLDS enrollment data, and provides vast amounts of critical data about the effectiveness of Title IV aid programs, including completion data. Repeat Finding: Yes, see Finding 2023-003. Recommendation: We recognize the District made corrective action after the June 30, 2023 audit and implemented those controls during the Fall 2023 semester. We recommend the District continue to follow those controls put in place to ensure compliance with the aforementioned criteria. Views of responsible officials: Management concurs with the finding.

Criteria: The Code of Federal Regulations, 34 CFR 668.164 states that an institution must return to the Department of Education, any Title IV funds that it attempts to disburse directly to a student or parent that are not received by the student or parent. If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Department of Education before the end of this 45-day period. If a check is sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Department of Education no later than 240 days after the date it first issued the check. In addition, 2 CFR 200.303, nonfederal 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. Condition: Our audit identified checks were being cancelled within the 240-day timeframe, however the District was not able to provide support that the Department of Education’s Common Origination and Disbursement (COD) website was being updated within the allowable timeframe. Questioned Costs: $66,864 Context: The District disbursed $12,283,383 in Title IV awards during fiscal year 2023-24. There were a total of 75 checks outside the 240-day timeframe, totaling $66,864. Cause: The District's existing procedures do not provide sufficient documentation to support compliance with Title IV regulations Effect: The District was unable to establish compliance with the Title IV regulation. Repeat Finding: Yes, see Finding 2023-004. Recommendation: We recommend the District re-evaluate their procedures for processing and documenting outstanding Title IV funds to the Department of Education. Views of responsible officials: Management concurs with the finding.

Criteria: In accordance with 2 CFR 200.303, the District must establish and maintain effective internal controls over federal awards that provide reasonable assurance that the District is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, the Code of Federal Regulations, 34 CFR 668.164 states that a school must provide to the Department of Education an up-to-date URL for the contract publication in a centralized database accessible to the public. Condition: During our testing, we noted the District did not provide an up-to-date URL to the Department of Education. Questioned Costs: None. Context: The District did not provide an up-to-date URL to the Department of Education within the current fiscal year. Cause: The District's existing procedures do not provide sufficient documentation to support compliance with Title IV regulations. Effect: The District was unable to establish compliance with the Title IV regulation. Repeat Finding: No. Recommendation: We recommend the District re-evaluate their procedures for providing up-to-date URL information to the Department of Education. Views of responsible officials: Management concurs with the finding.

Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 690.62 states the Pell grant for an academic year is based upon the payment and disbursement schedules published by the Secretary for each award year. The payment schedules take into account the cost of attendance, the student’s Estimated Family Contribution (EFC) and the enrollment status of the student. In addition, 2 CFR 200.303, nonfederal 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. Condition: The District awarded an incorrect Pell award amount for this student one out of the 40 students tested, which is a statistically valid sample. Questioned costs: $2,185 Context: The District awarded $10,538,170 in Pell Grant during the year. Cause: The overpayment of Pell Grant was due to the District not using information updated by the student for EFC. Effect: One student was over-awarded Pell Grant funds. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implements a process that will ensure all Title IV funds are awarded at proper amounts. Views of responsible officials: Management concurs with the finding.

2023-001: Student Eligibility and Awarding Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.268 – Federal Direct Student Loans Federal Award Identification Number and Year: P268K231182- 2023 Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: The Code of Federal Regulations, 34 CFR 685.203(a) outline the maximum subsidized loan amounts for students based on their dependency status, year of education, and other factors. In addition, 2 CFR 200.303, nonfederal 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. Condition: During our testing, we noted 1 instance out of 40 students tested at the College where the Subsidized Stafford Loan awarded to the student was less than the maximum amount they were eligible for. An Unsubsidized Stafford Loan was then issued before the maximum subsidized loan amount was awarded. Questioned Costs: For the instance identified, the student was under awarded $1,000. Context: The District awarded $1,167,562 in Direct Loans during the year. Cause: Typographical error based on the department staff member using the values on the student’s loan request form. Effect: For the instance identified, the student was under awarded the unsubsidized portion of the Stafford Loan. Repeat Finding: This was not a finding in the prior year. Recommendation: We recommend the District to evaluate its procedures related to the manual input of information from the student loan request. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

2023-002: Return of Title IV Funds Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: According to 34 CFR Section 668.173 (b) and 2 CFR 200.303, the institutional portion of unearned aid must be returned to the appropriate Title IV, HEA program or Federal Family Education Loan (“FFEL”) lender no later than 45 days after the date of the institution’s determination that the student withdrew. Furthermore, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student’s withdrawal date. The Compliance Supplement issued by the Office of Management and Budget requires auditors to review the return of Title IV funds determinations/calculations for conformity with Title IV requirements. Furthermore, according to 34 CFR 668.22, all grant funds relating to postwithdrawal disbursements that are not disbursed to the student’s account, must be disbursed to the student no later than 180 days after the date of the institution’s determination that the student withdrew. Condition: The institutional portion of unearned aid was not returned to the Department of Education within 45 days. This was noted for 1 out of 40 samples tested, which is a statistically valid sample. Questioned Costs: None. Context: The District disbursed $9,065,178 in Title IV awards during fiscal year 2022-23. The value of the sample tested was $4,811, and the portion of the unearned aid not returned timely was $353. Cause: The Districts’ internal controls did not ensure compliance with the applicable Title IV regulations. Effect: The cause identified resulted in noncompliance with Title IV regulations. Repeat Finding: This was not a finding in the prior year. Recommendation: We recommend that the District improve the existing procedures and controls to ensure compliance with the aforementioned criteria. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

2023-003: NSLDS Enrollment Reporting Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: In accordance with 34 CFR 685.309(b), 2 CFR 200.303 and the National Student Loan Data System (NSLDS) Enrollment Reporting Guide published by the Department of Education, schools must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. In addition, schools must report enrollment status changes within 30 days of becoming aware of the status change or in its next scheduled enrollment submission if the scheduled submission is within 60 days. Condition: During our testing of 40 students, which is a statistically valid sample, we noted two instances of change in status not reported correctly. Questioned Costs: None. Context: Two exceptions were noted out of the 40 students tested, which is a statistically valid sample. Cause: The District’s internal controls did not identify the errors for compliance with the criteria mentioned above. Effect: Inaccurate information is reflected on the NSLDS database. A student’s enrollment data protects the rights of borrowers by ensuring that loan interest subsidies are based on accurate enrollment data, ensures loan repayment dates are accurately based on the last data of attendance, allows in-school deferments to be automatically granted using NSLDS enrollment data, and provides vast amounts of critical data about the effectiveness of Title IV aid programs, including completion data. Repeat Finding: This was not a finding in the prior year. Recommendation: We recommend that the District review its enrollment reporting procedures to ensure information is accurately reported to NSLDS as required by regulations. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

2023-004: 240 Days Outstanding Check Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria: The Code of Federal Regulations, 34 CFR 668.164 states that an institution must return to the Department of Education, any Title IV funds that it attempts to disburse directly to a student or parent that are not received by the student or parent. If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Department of Education before the end of this 45-day period. If a check is sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Department of Education no later than 240 days after the date it first issued the check. In addition, 2 CFR 200.303, nonfederal 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. Condition: Our audit identified checks were being cancelled within the 240-day timeframe, however the District was not able to provide support that the Department of Education’s Common Origination and Disbursement (COD) website was being updated within the allowable timeframe. Questioned Costs: Unknown. Context: The District disbursed $9,065,178 in Title IV awards during fiscal year 2022-23. The District provided a population of 1,076 checks outside the 240-day timeframe, totaling $958,167. However, we were unable to obtain actual questioned costs, as the population provided by the District included cancelled and reissued checks, resulting in duplication with the population. Cause: The District's existing procedures do not provide sufficient documentation to support compliance with Title IV regulations Effect: The District was unable to establish compliance with the Title IV regulation. Repeat Finding: Yes, see Finding 2022-005. Recommendation: We recommend the District re-evaluate their procedures for processing and documenting outstanding Title IV funds to the Department of Education. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

2023-005: Gramm-Leach-Bliley Act Compliance Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2022 through June 30, 2023 Type of Finding: Material Weakness in Internal Control over Compliance and Other Matters Criteria: In accordance with 16 CFR 314.3(a) and 2 CFR 200.303, 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 seven elements for institutions with fewer than 5,000 customers. Condition: During our testing, we noted the District's information security policy is in draft form and does not include all of the required seven elements. Questioned Costs: None. Context: The District's information security policy does not contain all seven elements required by the Gramm-Leach-Bliley Act. Cause: The District's information security policy is still in draft form. Effect: The District's information security policy is not in compliance with the Gramm-Leach- Bliley Act. Repeat Finding: This was not a finding in the prior year. Recommendation: We recommend the District review and finalize its information security policy and ensure it contains all seven elements required for compliance with Gramm-Leach-Bliley. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

2023-006: Unallowable Costs Federal Agency: Department of Education Federal Program: COVID-19 Higher Education Emergency Relief Funds (HEERF)/Coronavirus Aid, Relief and Economic Security (CARES) Act – Institutional Portion Assistance Listing Number: 84.425F Federal Award Identification Number and Year: P425E205093 Award Period: July 1, 2022 to June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: The Uniform Guidance Cost Principles described in 2 CFR Part 200, Compensation, states that costs of compensation are allowable to the extent that they satisfy the specific requirements of the grant and that total compensation for individual employees is reasonable for the services rendered. Salaries and benefits are allowable for this grant as long as the job duties are a result of responding to the pandemic. In addition, 2 CFR 200.303, nonfederal 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. Condition: The District charged unallowable costs to the grant related to an employee whose job duties were not related to the pandemic. Questioned Costs: $3,341 Context: The District expended $1,951,384 in HEERF – Institutional Portion funds for direct costs during the fiscal year. The value of the sample tested was $22,736. Cause: The District charged payroll costs for an employee in error. Effect: Noncompliance with allowable cost principles. Repeat Finding: This was not a finding in the prior year. Recommendation: Implement procedures to ensure all grant expenditures are reviewed by fiscal management for additional review. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

U.S. Department of Education 2022-001: NSLDS Enrollment Reporting Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Federal Award Identification Number and Year: P007A210605- 2022; P033A210605- 2022; P063P211182- 2022; P268K221182- 2022 Award Period: July 1, 2021 through June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: In accordance with 34 CFR 685.309(b) and the National Student Loan Data System (NSLDS) Enrollment Reporting Guide published by the Department of Education, schools must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. In addition, schools must report enrollment status changes within 30 days of becoming aware of the status change or in its next scheduled enrollment submission if the scheduled submission is within 60 days. In addition, 2 CFR 200.303, nonfederal 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. Condition: During our testing of 40 students, which is a statistically valid sample, we noted 7 instances of late reporting of student status changes, 4 instances where the effective date of a student status change was improperly reported at the campus-level record, 10 instances where the effective date of a student status change was improperly reported at both the campus-level and program-level record, and 1 instance where student?s was not reported for Fall 2021 at both the campus-level and program-level records. Questioned costs: None. Context: Twenty-eight exceptions were noted out of the 40 students tested, which is a statistically valid sample. Cause: The District?s internal controls were not designed to detect the errors. Effect: Inaccurate information is reflected on the NSLDS database. A student?s enrollment data protects the rights of borrowers by ensuring that loan interest subsidies are based on accurate enrollment data, ensures loan repayment dates are accurately based on the last data of attendance, allows in-school deferments to be automatically granted using NSLDS enrollment data, and provides vast amounts of critical data about the effectiveness of Title IV aid programs, including completion data. Repeat Finding: Yes, see Finding 2021-005 Recommendation: We recommend the District review its report procedures to ensure that the enrollment and program information is accurately reported to NSLDS as required by regulations. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

U.S. Department of Education 2022-002: Student Eligibility and Awarding Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.268 ? Federal Direct Student Loans Federal Award Identification Number and Year: P268K221182- 2022 Award Period: July 1, 2021 through June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: The Code of Federal Regulations, 34 CFR 685.203(a) outline the maximum subsidized loan amounts for students based on their dependency status, year of education, and other factors. In addition, 2 CFR 200.303, nonfederal 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. Condition: During our testing, we noted 1 instance out of 40 students tested at the College where the Unsubsidized Stafford Loan awarded to the student was less than the maximum amount they were eligible for. Questioned Costs: For the instances identified, each student was under awarded $1,000. Context: The College awarded $751,965 in Direct Loans during the year. Cause: Typographical error based on the department staff member using the values on the student?s loan request form. Effect: For the instance identified, the student was under awarded the unsubsidized portion of the Stafford Loan. Repeat Finding: This was not a finding in the prior year. Recommendation: We recommend the College to evaluate its procedures related to the manual input of information from the student loan request. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

U.S. Department of Education 2022-003: Student Eligibility and Awarding Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.063 Federal Award Identification Number and Year: P063P211182- 2022 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 690.62 states the Pell grant for an academic year is based upon the payment and disbursement schedules published by the Secretary for each award year. The payment schedules take into account the cost of attendance, the student?s Estimated Family Contribution (EFC) and the enrollment status of the student. In addition, 2 CFR 200.303, nonfederal 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 Condition: The College awarded an incorrect Pell award amount for this student one out of the 40 students tested, which is a statistically valid sample. Questioned costs: $18,912 Context: The College awarded $6,756,956 in Pell Grant during the year. Cause: The overpayment of Pell Grant was due to the College not using information updating by the student for EFC. Effect: One student was over-awarded Pell Grant funds. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the College implements a process that will ensure all Title IV funds are awarded at proper amounts. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

U.S. Department of Education 2022-004: 240 Days Outstanding Check Federal Agency: Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Federal Award Identification Number and Year: P007A210605- 2022; P033A210605- 2022; P063P211182- 2022; P268K221182- 2022 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: The Code of Federal Regulations, 34 CFR 668.164 states that an institution must return to the Department of Education, any Title IV funds that it attempts to disburse directly to a student or parent that are not received by the student or parent. If an EFT to a student's or parent's financial account is rejected, or a check to a student or parent is returned, the institution may make additional attempts to disburse the funds, provided that those attempts are made not later than 45 days after the EFT was rejected or the check returned. In cases where the institution does not make another attempt, the funds must be returned to the Department of Education before the end of this 45-day period. If a check is sent to a student or parent is not returned to the institution but is not cashed, the institution must return the funds to the Department of Education no later than 240 days after the date it first issued the check. In addition, 2 CFR 200.303, nonfederal 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. Condition: Our audit identified 3 outstanding checks payable to students for Title IV awards that were not returned to the Department of Education within the 240 day prescribed timeframe. Questioned Costs: $2,265 Context and Cause: The District?s existing policies and procedures did not ensure compliance with the applicable criteria. Effect: The checks identified resulted in noncompliance with the Title IV regulation. Repeat Finding: This was not a finding in the prior year. Recommendation: We recommend the College to update its procedures and procedures for processing and monitoring refund checks to ensure compliance with the Title IV requirements. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

U.S. Department of Education 2022-005: Unallowable Costs Federal Agency: Department of Education Federal Program: COVID-19 Higher Education Emergency Relief Funds (HEERF)/Coronavirus Aid, Relief and Economic Security (CARES) Act ? Institutional Portion Assistance Listing Number: 84.425F Federal Award Identification Number and Year: P425F204159 - 2022 Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: The Uniform Guidance Cost Principles described in 2 CFR Part 200, Subpart E, apply to the HEERF subprogram. Institutions generally have broad uses of funds. Some items of cost in Subpart E of the Uniform Guidance require prior approval under 2 CFR section 200.407 by ED. However, in its HEERF II FAQs published on January 14, 2021, and HEERF III FAQs published on May 11, 2021, ED waived prior approval for certain items of cost (as described in questions 20 and 45, respectively). Specifically, the HEERF grant funds must not be used for construction or purchase of real property. In addition, 2 CFR 200.303, nonfederal 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. Condition: The District used grants fund for construction costs that were identified as delays, labor rate escalation and supply chain issues related to COVID-19. Questioned Costs: $614,352 Context: The District expended $5,888,620 in HEERF ? Institutional Portion funds for direct costs, lost revenue and bad debt write off during the fiscal year. Cause: Costs were identified on invoices and changes orders as COVID-19 related. The District had interpreted delayed costs related to COVID-19 as allowable. Effect: Noncompliance with allowable cost principles. Repeat Finding: This was not a finding in the prior year. Recommendation: Implement procedures to ensure all grant expenditures are reviewed by fiscal management for additional review. Views of responsible officials: Management concurs with the finding and plans to correct the finding.

Finding 2021 ? 002: Gramm-Leach-Bliley Act ? Student Information Security Federal agency: U.S. Department of Education Federal program title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Period: July 1, 2020 through June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: The Gramm-Leach-Bliley Act (Pub. L. No. 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 because they appear to be significantly engaged in wiring funds to consumers (16 CFR 313.3(k)(2)(vi)). Condition: Under an institution?s Program Participation Agreement with the ED and the Gramm-Leach-Bliley Act, institutions must protect student financial aid information, with particular attention to information provided to institutions by ED or otherwise obtained in support of the administration of the federal student financial aid programs. Questioned costs: None. Context: During our audit procedures, we noted that the District did not perform a risk assessment that addresses the three required areas noted in 16 CFR 314.4 (b) which are (Area 1) Employee training and management; (Area 2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (Area 3) Detecting, preventing, and responding to attacks, intrusions, or other systems failures. The District is also required to document safeguards for each identified risk from the risk assessment. Cause: The District did not perform an IT risk assessment as required by the Gramm-Leach-Bliley Act. Effect: Personal information could be vulnerable. Repeat Finding: No. Recommendation: We recommend that the District engage a third party to perform the risk assessment for the three required areas as required by the Gramm-Leach-Bliley Act and ensure that there are documented safeguards for identified risks. Views of responsible officials: There is no disagreement with the audit finding. Please refer to the attached corrective action plan.

Finding 2021 ? 003: Return of Title IV Funds Federal agency: U.S. Department of Education Federal program title: Student Financial Assistance Cluster Assistance Listing Number: 84.063, 84.268 Award Period: July 1, 2020 through June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: In accordance with 34 CFR 668.22 (j)(2), for an institution that is not required to take attendance, an institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the - (i) Payment period or period of enrollment, as appropriate, in accordance with paragraph (e)(5) of this section; (ii) Academic year in which the student withdrew; or (iii) Educational program from which the student withdrew. In addition, Title IV funds may be expended only towards the education of the students who can be proven to have been in attendance at the institution. In a distance education context, documenting that a student has logged into an online distance education platform or system is not sufficient, by itself, to demonstrate attendance by the student. To avoid returning all funds for a student that did not begin attendance, an institution must be able to document ?attendance at any class.? To qualify as a last date of attendance for Return of Title IV purposes, an institution must demonstrate that a student participated in class or was otherwise engaged in an academically related activity, such as by contributing to an online discussion or initiating contact with a faculty member to ask a course-related question. Condition: During our testing of R2T4 calculations, we noted that the College did not determine the withdrawal date within 30 days of the end of the period of enrollment for 9 out of the 40 students tested, which is a statistically valid sample. In addition, we noted 9 out of the 40 students tested, which is a statistically valid sample, who did not academically participate in the enrolled distance education courses prior to withdrawing from their respective term. Students are required to academically participate in the enrolled distance education courses in order to earn the Title IV aid. Questioned costs: None. Context: Nine exceptions were noted out of the 40 students tested, which is a statistically valid sample, as stated in the condition above. Cause: The College?s internal controls did not identify the errors for compliance with the criteria mentioned above. Effect: The College did not determine the withdrawal date within the required timeframe and did not verify academic participation resulting in noncompliance with the applicable title IV regulations. Repeat Finding: No. Recommendation: We recommend the College review the R2T4 requirements and implement procedures to ensure compliance with the applicable title IV regulations. Views of responsible officials: There is no disagreement with the audit finding. Please refer to the attached corrective action plan.

Finding 2021 ? 004: Exit Counseling Federal agency: U.S. Department of Education Federal program title: Student Financial Assistance Cluster Assistance Listing Number: 84.268 Award Period: July 1, 2020 through June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: In accordance with 34 CFR 685.304 (b)(3), 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 school 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 school sending the counseling materials. Condition: During our audit procedures, we noted that the College did not notify students of the requirement to complete exit counseling within 30 days of the date the institution determined that the student withdrew for 1 out of the 40 students tested, which is a statistically valid sample. Questioned costs: None. Context: One exception was noted out of the 40 students tested, which is a statistically valid sample. Cause: The College?s internal controls did not identify the errors for compliance with the criteria mentioned above. Effect: Students are not receiving the proper loan counseling which may contribute to a higher default rate. Repeat Finding: No. Recommendation: We recommend the College review its policies and procedures around sending exit counseling information to students to ensure students are receiving proper counseling and that documentation of letters sent is maintained as required by regulations. Views of responsible officials: There is no disagreement with the audit finding. Please refer to the attached corrective action plan.

Finding 2021 ? 005: NSLDS Enrollment Reporting Federal agency: U.S. Department of Education Federal program title: Student Financial Assistance Cluster Assistance Listing Number: 84.007, 84.033, 84.063, 84.268 Award Period: July 1, 2020 through June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: In accordance with 34 CFR 685.309(b) and the National Student Loan Data System (NSLDS) Enrollment Reporting Guide published by the Department of Education, schools must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. In addition, schools must report enrollment status changes within 30 days of becoming aware of the status change or in its next scheduled enrollment submission if the scheduled submission is within 60 days. Condition: During our testing of 40 students, which is a statistically valid sample, we noted 7 instances of late reporting of student status changes, 7 instances of improper student status reporting at the campus-level and program-level, 11 instances where the effective date of a student status change was improperly reported at the campus-level record, 2 instances where the effective date of a student status change was improperly reported at both the campus-level and program-level record, and 1 instance where the program begin date was not properly reported to the NSLDS system. Questioned costs: None. Context: Twenty-eight exceptions were noted out of the 40 students tested, which is a statistically valid sample. Cause: The District?s internal controls did not identify the errors for compliance with the criteria mentioned above. Effect: Inaccurate information is reflected on the NSLDS database. A student?s enrollment data protects the rights of borrowers by ensuring that loan interest subsidies are based on accurate enrollment data, ensures loan repayment dates are accurately based on the last data of attendance, allows in-school deferments to be automatically granted using NSLDS enrollment data, and provides vast amounts of critical data about the effectiveness of Title IV aid programs, including completion data. Repeat Finding: No. Recommendation: We recommend the District review its reporting procedures to ensure that enrollment and program information is accurately reported to NSLDS as required by regulations. Views of responsible officials: There is no disagreement with the audit finding. Please refer to the attached corrective action plan.

Finding 2021 ? 006: Reporting Federal agency: U.S. Department of Education Federal program title: COVID-19 Higher Education Emergency Relief Fund Assistance Listing Number: 84.425E, 84.425F Award Period: July 1, 2020 through June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria: In accordance with the compliance supplement issued by the Executive Office of the President Office of Management and Budget in July 2021, there is a public reporting requirement on the Student Aid Portion and the Institutional Portion of HEERF. The CARES, CRRSAA, and ARP institutional quarterly portion reporting requirements involve publicly posting completed forms on the institution?s website. The forms must be conspicuously posted on the institution?s primary website on the same page the reports of the IHE?s activities as to the emergency financial aid grants to students (Student Aid Portion) are posted. A new, separate form must be posted covering aggregate amounts spent for HEERF I, HEERF II, and HEERF III funds each quarterly reporting period (September 30, December 31, March 31, June 30), concluding after an institution has expended and liquidated all (a)(1) Institutional Portion, (a)(2), and (a)(3) funds and checks the ?final report? box. IHEs must post this quarterly report form no later than 10 days after the end of each calendar quarter (October 10, January 10, April 10, July 10) apart from the first report, which was due October 30, 2020, and the report covering the first quarter of 2021, which is due July 10, 2021. In addition, the CARES, CRRSAA, and ARP student aid quarterly portion reporting requirements involve publicly posting completed forms on the institution?s website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be posted no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). The student quarterly reports must contain the required items noted in the Federal Register, Volume 85, No. 169 & Volume 86, No. 91 - Department of Education, Notice of Public Posting Requirement of Grant Information for Higher Education Emergency Relief Fund (HEERF) Grantees: 1. An acknowledgement that the institution signed and returned to the Department the Certification and Agreement and the assurance that the institution has used, or intends to use, no less than 50 percent of the funds received under Section 18004(a)(1) of the CARES Act to provide Emergency Financial Aid Grants to Students. 2. The total amount of funds that the institution will receive or has received from the Department pursuant to the institution's Certification and Agreement for Emergency Financial Aid Grants to Students. 3. The total amount of Emergency Financial Aid Grants distributed to students under Section 18004(a)(1) of the CARES Act as of the date of submission (i.e., as of the initial report and every calendar quarter thereafter). 4. The estimated total number of students at the institution eligible to participate in programs under Section 484 in Title IV of the Higher Education Act of 1965 and thus eligible to receive Emergency Financial Aid Grants to Students under Section 18004(a)(1) of the CARES Act. 5. The total number of students who have received an Emergency Financial Aid Grant to students under Section 18004(a)(1) of the CARES Act. 6. The method(s) used by the institution to determine which students receive Emergency Financial Aid Grants and how much they would receive under Section 18004(a)(1) of the CARES Act. 7. Any instructions, directions, or guidance provided by the institution to students concerning the Emergency Financial Aid Grants. Condition: During our audit procedures, we noted 2 institutional quarterly reports (January 1st ? March 31st, 2021 and April 1st ? June 30, 2021), which is a statistically valid sample, were not submitted within 10 days after the end of each calendar quarter. In addition, we noted 2 student aid quarterly reports (January 1st ? March 31st, 2021 and April 1st ? June 30, 2021), which is a statistically valid sample, were not posted to the College?s website. Questioned Costs: None. Context: Two institutional quarterly reports were not submitted within the required timeframe and two student aid quarterly reports were not posted to the College?s website. Cause: The College?s internal controls did not identify the errors for compliance with the criteria mentioned above. Effect: The case identified resulted in noncompliance with the HEERF reporting compliance requirements. Repeat Finding: No. Recommendation: We recommend the College review its reporting procedures and put a process in place to ensure compliance with the HEERF reporting requirements as required by regulations. Views of responsible officials: There is no disagreement with the audit finding. Please refer to the attached corrective action plan.

Finding 2021 ? 007: Procurement and Suspension and Debarment Federal agency: U.S. Department of Education Federal program title: COVID-19 Higher Education Emergency Relief Fund Assistance Listing Number: 84.425F Award Period: July 1, 2020 through June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Non-federal entities other than states, including those operating federal programs as subrecipients of states, must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. A non-federal entity must: 1. Meet the general procurement standards in 2 CFR section 200.318, which include oversight of contractors? performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. 2. Conduct all procurement transactions in a manner providing full and open competition, in accordance with 2 CFR section 200.319. 3. Use the micro-purchase and small purchase methods only for procurements that meet the applicable criteria under 2 CFR sections 200.320(a) (1) and (2). Under the micro-purchase method, the aggregate dollar amount does not exceed $10,000 ($2,000 in the case of acquisition for construction subject to the Wage Rate Requirements (Davis-Bacon Act)). Small purchase procedures are used for purchases that exceed the micro-purchase amount but do not exceed the simplified acquisition threshold ($250,000). Micro-purchases may be awarded without soliciting competitive quotations if the non-federal entity considers the price to be reasonable (2 CFR section 200.320(a)). If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources (2 CFR section 200.320(b)). 4. For acquisitions exceeding the simplified acquisition threshold, the non-federal entity must use one of the following procurement methods: the sealed bid method if the acquisition meets the criteria in 2 CFR section 200.320(b); the competitive proposals method under the conditions specified in 2 CFR section 200.320((b) (2); or the noncompetitive proposals method (i.e., solicit a proposal from only one source) but only when one or more of four circumstances are met, in accordance with 2 CFR section 200.320(c)). 5. Perform a cost or price analysis in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications (2 CFR section 200.323(a)). The cost plus a percentage of cost and percentage of construction cost methods of contracting must not be used (2 CFR section 200.323(b)). 6. Ensure that every purchase order or other contract includes applicable provisions required by 2 CFR section 200.326. These provisions are described in Appendix II to 2 CFR Part 200, ?Contract Provisions for Non-Federal Entity Contracts Under Federal Awards.? In addition, 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 certain other criteria as specified in 2 CFR section 180.220. All non-procurement transactions entered into by a pass-through 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. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration (GSA) and available at https://www.beta.sam.gov/ (click on Search Record, then click on Advanced Search-Exclusions) (Note: The OMB guidance at 2 CFR Part 180 and agency implementing regulations still refer to the SAM Exclusions as the Excluded Parties List System (EPLS)), (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition: During our audit procedures, we noted that the District?s purchasing policy was not updated to meet the required procurement and suspension and debarment standards contained in the Uniform Guidance. Context: We noted that the District did not follow the required procurement standards for 8 procurement transactions tested, which is a statistically valid sample. In addition, the District did not follow the required suspension and debarment standards for 5 procurement transactions tested, which is a statistically valid sample. Questioned Costs: None. Cause: The District?s purchasing policy was not updated to meet the required procurement and suspension and debarment standards contained in the Uniform Guidance. Effect: Non-compliance with federal regulations. Repeat Finding: No. Recommendation: We recommend the District update its purchasing policy and procedures to ensure compliance with the procurement and suspension and debarment standards as required by federal regulations. Views of responsible officials: There is no disagreement with the audit finding. Please refer to the attached corrective action plan.

Finding 2021 ? 008: Allowable Costs/Cost Principles - Indirect Costs Federal agency: U.S. Department of Education Federal program title: COVID-19 Higher Education Emergency Relief Fund Assistance Listing Number: 84.425F Award Period: July 1, 2020 through June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: In accordance with the compliance supplement issued by the Executive Office of the President Office of Management and Budget in July 2021, reasonable direct administrative costs and indirect costs at an institution?s approved negotiated indirect cost rate may be charged against Assistance Listing 84.425F (the Institutional portion). This indirect cost rate will be the on-campus rate specified in an institution?s negotiated indirect cost rate agreement as stated in the HEERF II FAQ. All administrative costs must be reasonable and necessary and conform to Cost Principles described in 2 CFR Part 200 Subpart E of the Uniform Guidance. Condition: During our audit procedures, we noted that $94,210 of equipment purchased over $5,000 and rental costs of $11,955 were included in the indirect cost calculation when they should have been excluded from the base during the year ending June 30, 2021. In addition, the District claimed indirect costs of $60,833 during the year ending June 30, 2021 based on $198,155 of HEERF expenditures incurred during the year ending June 30, 2020, which is unallowable. Questioned costs: $93,426. Context: The District overclaimed indirect costs of $32,593 calculated based on $106,165 of unallowable direct costs applied to the base. In addition, the District claimed indirect costs of $60,833 during the year ending June 30, 2021 based on $198,155 of HEERF expenditures that were incurred during the year ending June 30, 2020. Cause: The District?s internal controls did not identify the errors for compliance with the criteria mentioned above. Effect: Non-compliance with federal regulations. Repeat Finding: No. Recommendation: We recommend the District review the institution?s approved negotiated indirect cost rate and implement procedures to ensure compliance with federal regulations. Views of responsible officials: There is no disagreement with the audit finding. Please refer to the attached corrective action plan.

Finding 2021 ? 009: Reporting Federal agency: U.S. Department of the Treasury Federal program title: COVID-19 Coronavirus Relief Fund ? COVID-19 Response Block Grant Assistance Listing Number: 21.019 Award Period: July 1, 2020 through June 30, 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: In accordance with the compliance supplement issued by the Executive Office of the President Office of Management and Budget in July 2021, there is a reporting requirement for prime recipients of the Coronavirus Relief Fund (CRF). Each prime recipient of the Fund shall provide a quarterly Financial Progress Report that contains COVID-19 related costs incurred during the covered period (the period beginning on March 1, 2020; and ending on December 31, 2021) to Treasury OIG. Each prime recipient shall report this quarterly information mentioned above into the GrantSolutions portal. The prime recipient?s quarterly Financial Progress Report submissions should be supported by the data in the prime recipient?s accounting system. Beginning September 21, 2020, prime recipients were required to submit via the GrantSolutions portal the first detailed quarterly Financial Progress Report, which cover the period March 1 through June 30, 2020 (with exception to the September 21 first quarter deadline and the October 13 second quarter reporting deadlines for those prime recipients using the GrantSolutions? upload feature, which was available December 1, 2020). Thereafter, quarterly reporting will be due no later than ten days after each calendar quarter. If the 10th calendar day falls on a weekend or a federal holiday, the due date will be the next working day. Reporting shall end with either the calendar quarter after the COVID-19 related costs and expenditures have been liquidated and paid or the calendar quarter ending September 30, 2022, whichever comes first. The prime recipient?s quarterly Financial Progress Report submission should be supported by the data in the prime recipient?s accounting system. Condition: During our audit procedures, we noted the 1 quarterly financial progress report due during the year was not submitted within the required timeframe as mentioned in the criteria above. Questioned costs: None. Context: One quarterly financial progress report was not submitted within the required timeframe. Cause: The College?s internal controls did not identify the errors for compliance with the criteria mentioned above. Effect: The case identified resulted in noncompliance with the CRF reporting compliance requirement. Repeat Finding: No. Recommendation: We recommend the College review its reporting procedures and put a process in place to ensure compliance with the CRF reporting requirement as required by regulations. Views of responsible officials: There is no disagreement with the audit finding. Please refer to the attached corrective action plan.

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