SCHOOLCRAFT COLLEGE

Assistance Listing Number, Federal Agency, and Program Name - U.S. Department of Education - Assistance Listing Number 84.425E, COVID-19 - Higher Education Emergency Relief Fund (HEERF) - Student Aid Federal Award Identification Number and Year - P425E201734 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Based on the terms and conditions of the HEERF, grant institutions must receive affirmative written consent from students before using emergency financial aid grants to satisfy a student's outstanding account balance. This requirement is stipulated within the frequently asked questions document released by the granting agency, which is considered by the granting agency to be authoritative. Condition - The College did not obtain affirmative written consent from students before using emergency financial aid grants to satisfy a student's outstanding account balance in accordance with the terms and conditions of the award. Questioned Costs - None Identification of How Questioned Costs Were Computed - Not applicable Context - Of the 29 students selected for HEERF student grants testing, the College did not obtain affirmative written consent for 5 students who had grant funds applied to their outstanding account balances. Based on these identifications, management undertook a further analysis, which determined that emergency grant funds in the amount of $2,707,692 were used to satisfy a student's outstanding account balance for which affirmative written consent was not obtained. As discussed in further detail below, all grant funds related to the noncompliance were returned to the granting agency subsequent to year end. As a result, there are no expenditures reported on the schedule of expenditures of federal awards related to these emergency grant funds. Cause and Effect - There was no control process present to ensure that compliance with the requirements of the grant was met, specifically as it relates to allowable costs. As a result, unallowable costs were incurred under the grant, resulting in a noncompliance with laws and regulations. Following the identification of the noncompliance, subsequent to year end, the College informed the granting agency (the Department of Education) of the noncompliance, and the granting agency required the College to return the emergency student grant funds. Recommendation - The College should design and implement procedures to ensure that all grant compliance requirements are reviewed and adhered to. Views of Responsible Officials and Planned Corrective Actions - The grant funding applied incorrectly as a result of this finding has been returned to the Department of Education. The amount of the grant funding returned was $2,707,692. In response to this finding, the College?s current financial aid director, chief counsel, chief student enrollment officer, and chief financial officer developed remedial action to implement an appropriate application process to obtain affirmative consent from all students on future application of grant moneys to outstanding tuition balances. This new process was implemented as of August 17, 2022 and going forward. To ensure compliance, the student grant application now includes functionality that requires positive affirmative consent from all applying students before grant moneys are applied to an outstanding tuition balance. Now that the updated application is live on the College?s scholarship website, the College is currently accepting applications for the remainder of the award and only applying the funds to student accounts with the student?s affirmative consent. If students select either the tuition and fees or prior balances selections, funds will be applied to their outstanding tuition balances accordingly. If students do not affirmatively select either of these options, the funds will be distributed directly to the student as an emergency grant.

CFDA Number, Federal Agency, and Program Name - Student Financial Assistance Cluster, Department of Education - CFDA 84.063, Federal Pell Grant Program; CFDA 84.268, Federal Direct Student Loans; and CFDA 84.007, Federal Supplemental Educational Opportunity Grants Federal Award Identification Number and Year - P063P191652, P268K201652, P007A192073 2019 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - If a recipient of a 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 calculation. If the amount disbursed to the student is greater than the amount the student earned, the unearned funds must be returned. The amount of Title IV earned by the student is calculated by determining the percentage of Title IV grant or loan assistance earned by the student and applying this percentage to the total amount of Title IV grant or loan assistance that was disbursed to the student for the period of enrollment. The percentage of Title IV grant or loan assistance that has been earned by the student is equal to the percentage of the period of enrollment that the student completed as of the student's withdrawal date (34 CFR 668.22(e)). Condition - Of the 40 students selected for return to Title IV testing, the College used the incorrect number of days in the semester for the calculation of one student. The R2T4 calculation for this student was based on the student taking a 15 week course; however, this student was only enrolled in 12 week courses. This resulted in an incorrect amount of earned Title IV assistance being calculated for this student. The College manually updates R2T4 calculations for students who take classes that are less than 15 weeks long. For this student, a clerical error occurred during this manual process, which resulted in the College performing an incorrect calculation. Questioned Costs - $99 Identification of How Questioned Costs Were Computed - The known questioned costs represent the difference between the calculated Title IV funds to be returned based on the correct course length and the actual Title IV funds returned. Context - Of the 40 students selected for R2T4 testing, the College did not properly calculate the return of funds for one student. Cause and Effect - A control was lacking to ensure R2T4 calculations were using the correct number of days of the term in which a student was enrolled. As a result, one R2T4 calculation for a certain student was incorrectly calculated. Recommendation - The College should implement review procedures to verify that the information used in R2T4 calculations is accurate and that the system is appropriately calculating the required return of funds. Views of Responsible Officials and Corrective Action Plan - The College agrees with the finding identified in the sample noted above. The College is working on implementing additional review processes and procedures to ensure the inputs used in the R2T4 calculations are correct. The College will also implement a process to periodically sample and verify that the correct inputs are being used for a sample of R2T4 calculations performed throughout the year. A new R2T4 form has been created to assist with preventing future occurrences.

CFDA Number, Federal Agency, and Program Name - Student Financial Assistance Cluster, Department of Education - CFDA 84.268, Federal Direct Student Loans and CFDA 84.063, Federal Pell Grant Program. Federal Award Identification Number and Year - P268K181652 - 2019, P063P181652 - 2019. Pass-through Entity - N/A. 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 College's determination of a change or included in a student status confirmation report sent to NSLDS within 60 days of the College's determination of the status change (Pell, 34 CFR Section 690.83(b)(2); Direct Loan, 34 CFR Section 685.309). Condition - The student status changes for certain students who graduated from the College were not reported to the NSLDS within 60 days. Questioned Costs - None. Identification of How Questioned Costs Were Computed - N/A. Context - Of the 40 students selected for status change testing, the status change was not reported timely for six graduated students.Cause and Effect - A control was lacking to ensure proper timely reporting of graduated student statuses to the NSLDS. As a result, certain graduated students were not reported timely. Recommendation - The College should implement controls to ensure all graduated students are reported timely to the NSLDS. Views of Responsible Officials and Corrective Action Plan - The College agrees with the finding identified in the sample noted above. The College utilizes the National Student Clearinghouse (NSC) as an agent for timely, required enrollment and degree reporting. The Clearinghouse implemented a new process for uploading graduation statuses. This process resulted in college data not being appropriately updated in the NSLDS. The College's registrar?s office is working on implementing a process to identify and correct graduation status change update errors on a monthly basis. The corrective action plan will also provide for the College's registrar's office to periodically sample and verify student graduation statuses throughout the year on NSLDS to ensure the Clearinghouse reports are accurately reflected.

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