UNIVERSITY OF DETROIT MERCY

Assistance Listing Number, Federal Agency, and Program Name - U.S. Department of Education, Student Financial Assistance Cluster - ALN 84.268, Federal Direct Student Loans; ALN 84.063, Federal Pell Grant Program; ALN 84.007, Federal Supplemental Education Opportunity Grants Federal Award Identification Number and Year - P268K241658; P063P231658; P007A232092 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - If a recipient of Title IV grant or loan funds withdraws from a school after beginning attendance but before he or she has attended 60 percent of the scheduled length of the semester, the school must perform a return of Title IV funds (R2T4) calculation. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned. A school must return unearned funds for which it is responsible no later than 45 days from the determination of a student's withdrawal (30 days if never attended) (34 CFR 668.22(j)(1)). Condition - The University did not return funds within the 45 day time period for a certain student. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Of the nine students tested, there was one student who had an R2T4 calculation, and funds were not returned within the 45-day time period. Cause and Effect - The University did not have a control in place to ensure that all R2T4 returns were processed in the required 45-day window (or 30 days if never attended); as a result, the refund was returned late. Recommendation - The University should implement controls to ensure that student R2T4 returns are made within the 45-day window (or 30 days if never attended). Views of Responsible Officials and Corrective Action Plan - This was an isolated incident and corrected immediately. The University has taken additional steps to ensure full compliance in the future and considers the corrective action plan fully implemented.

Assistance Listing Number, Federal Agency, and Program Name - U S. Department of Education, Student Financial Assistance Cluster - ALN 84.268, Federal Direct Student Loans; ALN 84.063, Federal Pell Grant Program; ALN 84.007, Federal Supplemental Educational Opportunity Grants Federal Award Identification Number and Year - P268K201658, P063P191658 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Changes in a student's status are required to be reported accurately to the National Student Loan Data System (NSLDS) or the guarantee agency (Pell, 34 CFR Section 690.83(b)(2); Direct Loan, 34 CFR Section 685.309). Condition - The University did not accurately report the effective date of students' status changes to the NSLDS. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Of the 40 students selected for enrollment reporting testing, the effective date of the status change for 12 students was not accurately reported. Cause and Effect - The University prepares enrollment reporting based on known student status changes. The University did not report the correct effective date for 12 students, resulting in a violation of accurate reporting requirements within the NSLDS. The University did not have a control in place to verify that the correct effective date was reported to NSLDS in the required time frame. Recommendation - The University should implement controls to ensure that the accurate effective date is reported to the NSLDS. Views of Responsible Officials and Corrective Action Plan - The cause of the error has been found to be a software issue and the University is actively working with the vendor to determine the ultimate solution. The University has implemented additional controls to ensure that the accurate effective date is reported to the NSLDS in a timely manner.

Assistance Listing Number, Federal Agency, and Program Name - U.S. Department of Education, Student Financial Assistance Cluster - ALN 84.268, Federal Direct Student Loans; ALN 84.063, Federal Pell Grant Program; ALN 84.007, Federal Supplemental Educational Opportunity Grants Federal Award Identification Number and Year - P268K201658, P063P191658 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Changes in a student's status are required to be reported to the National Student Loan Data System (NSLDS) or the guarantee agency within 30 days of the University's determination of a change or included in a student status confirmation report sent to the NSLDS within 60 days of the University's determination of the status change (Pell, 34 CFR Section 690.83(b)(2); Direct Loan, 34 CFR Section 685.309). Condition - The University did not accurately report a student status change to the NSLDS in a timely manner. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Of the 40 students selected for enrollment reporting testing, the status change for 1 student was not accurately reported as withdrawn within the required 60 day period. Cause and Effect - The University prepares enrollment reporting based on known student status changes. The University did not report the status of 1 student at the program level, resulting in a violation of timely reporting requirements within the NSLDS. The University did not have a control in place to verify that the correct status change was reported to NSLDS in the required time frame. Recommendation - The University should implement controls to ensure that the accurate student status is reported to the NSLDS timely. Views of Responsible Officials and Corrective Action Plan - The cause of the error has been found and the University has implemented additional controls to ensure that student graduation status is reported in a timely manner.

Assistance Listing Number, Federal Agency, and Program Name - U.S. Department of Education, Student Financial Assistance Cluster - ALN 84.268, Federal Direct Student Loans; ALD 84.063, Federal Pell Grant Program; ALD 84.007, Federal Supplemental Educational Opportunity Grants Federal Award Identification Number and Year - P268K201658 (2021), P063P191658 (2021), P007A192092 (2021) Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 34 CFR 668.22(g) requires a return of Title IV funds (R2T4) to the federal government in an amount equal to the unearned aid per the prescribed formula in 34 CFR 668.22(e)(4) Condition - The University did not return Title IV funds equal to the amount calculated per the formula in 34 CFR 668.22(e)(4). Questioned Costs - $650 Identification of How Questioned Costs Were Computed - N/A Context - Of the 19 R2T4 calculations selected for testing, the incorrect amount was returned to the U.S. Department of Education for three students. Cause and Effect - The R2T4 calculations and return of funds are performed manually due to the low volume of calculations required during the year. The calculations were performed correctly; however, the amount returned was different than the calculation as a result of manual errors in the return process. There was no control in place at the University to review the calculations and ensure the correct amounts were returned to the US Department of Education. As a result, incorrect amounts of Title IV funds were returned for law school students requiring a R2T4 calculation. Recommendation - The University should implement controls to ensure the correct amounts of Title IV funds are returned to the U.S. Department of Education and amounts returned agree to calculations performed. Views of Responsible Officials and Corrective Action Plan - The University will implement controls to ensure that the correct amounts of the Title IV funds are returned to the U.S. Department of Education and amounts returned agree to calculations performed.

Assistance Listing Number, Federal Agency, and Program Name - U.S. Department of Health and Human Services, Student Financial Aid Cluster - ALN 93.264, Nurse Faculty Loan Program Federal Award Identification Number and Year - E01HP28842 (2021) Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - 34 CFR 681.51 requires the University to verify student eligibility for the Nurse Faculty Loan program, including the student's citizenship and status of any prior loans. Condition - The University did not verify citizenship and loan status for students not receiving other forms of aid, besides the Nurse Faculty Loan Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - Of the 40 students selected for eligibility testing, 1 student received only a Nurse Faculty Loan and did not have verification of citizenship performed. Cause and Effect - Nurse Faculty Loans can be awarded by the Nursing department, independent of financial aid. The dean is aware of the compliance requirements and requests information from students applying for the loan; however, the Dean does not retain documentation of this procedure. As a result, Nurse Faculty Loans could be awarded to students who are not eligible. Recommendation - The University should implement controls so that all eligibility requirements for Nurse Faculty Loans are verified and documentation is retained. Views of Responsible Officials and Planned Corrective Actions - The University will implement controls so that all eligibility requirements for Nurse Faculty Loans are verified and documentation is retained. 12

Assistance Listing Number, Federal Agency, and Program Name - U.S. Department of Education, Student Financial Assistance Cluster - ALN 84.268, Federal Direct Student Loans Federal Award Identification Number and Year - P268K201658 (2021) Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - The University is required by 34 CFR 668.165(a) to notify students of the amount of funds that the student or his or her parent can expect to receive, how and when the funds would be disbursed, and the student or parent's right to refuse the loans. The University must make this notification no earlier than 30 days before and no later than 30 days after, crediting the student's account with direct loan funds. Condition - Of the 25 students selected for eligibility and disbursement testing, students did not receive a notification letter within the required time frame. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In addition to the six students in the testing sample, it was determined all students who were credited with Federal direct loans in January 2021 did not receive a notification letter. There were no other findings or noncompliance items noted within disbursement testing for Student Financial Aid. Cause and Effect - The financial aid packaging system did not properly identify students receiving direct loans in January 2021 as requiring a notification letter. This resulted in students credited with Federal Direct Loans in January 2021 to not be notified in writing of the criteria detailed above. Recommendation - The University should create a control whereby an appropriate individual reviews notifications to ensure they are completed within the 30-day required time frame, especially during time periods with a high volume of loan disbursements. Views of Responsible Officials and Planned Corrective Actions - The University will implement a control whereby an appropriate individual reviews notifications to ensure they are completed within the 30-day required time frame, especially during time periods with a high volume of loan disbursements.

CFDA Number, Federal Agency, and Program Name - U.S. Department of Education, Student Financial Assistance Cluster CFDA 84.063, Federal Pell Grant Program; CFDA 84.268, Federal Direct Student Loans; and CFDA 84.007, Federal Supplemental Educational Opportunity GrantsFederal Award Identification Number and Year - P063P191658, P268K201658, P007A192092Pass through Entity - N/AFinding Type - Significant deficiencyRepeat Finding - NoCriteria - 34 CFR 668.22(j) requires institutions to 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 a student withdrew.Condition - Of the 12 students selected for testing, the University did not return Title IV funds within 45 days after the date of its determination that 1 student withdrew.Questioned Costs - NoneIdentification of How Questioned Costs Were Computed - N/AContext - Of the 12 return of Title IV funds calculations selected for testing, 1 student's funds were not returned within 45 days after the date of the University's determination.Cause and Effect - Periodically throughout the semester, the University reviews academic records for students who have withdrawn. Additionally, at the end of each semester, the University reviews academic records for students who have received all failing or incomplete grades to ascertain whether the students had ceased attendance during the semester. The University did not have a control in place to ensure returns for all withdrawn students were completed within the allotted period.Recommendation - The University should implement controls to ensure that all Title IV funds are returned within the allotted period.Views of Responsible Officials and Corrective Action Plan - The University agrees with the finding. The financial aid office is working in conjunction with the registrar's office to implement sufficient internal controls to identify student withdrawals and return Title IV funds in a timely manner.

CFDA Number, Federal Agency, and Program Name - Department of Education, Student Financial Assistance Cluster CFDA 84.268, Federal Direct Student Loans; CFDA 84.063, Federal Pell Grant ProgramFederal Award Identification Number and Year - P268K201658, P063P191658Pass through Entity - N/AFinding Type - Significant deficiencyRepeat Finding - NoCriteria - Changes in a student's status are required to be reported to the National Student Loan Data System (NSLDS) or the guarantee agency within 30 days of the University's determination of a change or included in a student status confirmation report sent to the NSLDS within 60 days of the University's determination of the status change (Pell, 34 CFR Section 690.83(b)(2); Direct Loan, 34 CFR Section 685.309).Condition - The University did not accurately report a student status change to the NSLDS in a timely manner.Questioned Costs - NoneIdentification of How Questioned Costs Were Computed - N/AContext - Of the 40 students selected for enrollment reporting testing, the status change for 1 student was not accurately reported as withdrawn within the required 60 day period.Cause and Effect - The University prepares enrollment reporting based on known student status changes. The University did incorrectly update the status of one student to less than part time after learning of the student?s full withdrawal. This resulted in a delay in accurately reporting the student?s status to the NSLDS as withdrawn. The University did not have a control in place to verify that the correct status change was reported to NSLDS in the required time frame.Recommendation - The University should implement controls to ensure that the accurate student status is reported to the NSLDS timely.Views of Responsible Officials and Planned Corrective Actions - The University agrees with the finding. Staff changes have been made in the registrar's office as a result of this error. The University will also implement additional manual reporting to the National Student Clearinghouse to ensure information for total withdrawals is reported timely.

CFDA Number, Federal Agency, and Program Name - Department of Education, Student Financial Assistance Cluster - CFDA 84.268, Federal Direct Student Loans; CFDA 84.063, Federal Pell Grant Program Federal Award Identification Number and Year - P268K191658, P063P181658 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - Changes in a student's status are required to be reported to the National Student Loan Data System (NSLDS) or the guarantee agency within 30 days of the University's determination of a change or included in a student status confirmation report sent to the NSLDS within 60 days of the University's determination of the status change (Pell, 34 CFR Section 690.83(b)(2); Direct Loan, 34 CFR Section 685.309). Condition - The University did not report student status changes to the NSLDS in a timely manner. Questioned Costs - None Identification of How Questioned Costs were Computed - N/A Context - Of the 40 students selected for enrollment reporting testing, the status change for 10 students was not reported within the required 60-day period. Cause and Effect - The status of 2 of the 10 students required the University to report graduation at program and campus level. They were not reported as graduated for all programs within the required 60-day period, which resulted in the student's statuses not being reported as graduated. The University did not have a control in place to ensure both program and campus level reporting was done correctly. A total of 8 of the 10 students were not submitted to the NSLDS as a result of initial submission to the National Student Clearinghouse (NSC). The University submits enrollment status changes to the NSC. The NSC then reports the student statuses to the NSLDS. A roster file was not processed timely within NSC, which resulted in a delayed submission to the NSLDS. The University did not have a control in place to verify that roster files are processed timely in NSC in order to ensure timely submission to the NSLDS. Recommendation - The University should implement controls to ensure students enrolled in multiple programs are reported timely for all programs. The University should also implement controls to ensure that roster files submitted to the NSC are processed timely.

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