HAZELDEN BETTY FORD FOUNDATIONNon-Profit

Federal Agency: U.S. Department of Education Federal Program Name: Student Financial Assistance Cluster Assistance Listing Number: 84.268 Federal Award Identification Number and Year: P268K255904 - 2025 Award Period: January 1, 2025 through December 31, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Federal Student Aid Handbook published by the Department of Education states that percentages are calculated to four decimal places and are rounded to three decimal places for the return of Title IV calculations. Condition: The Hazelden Betty Ford Graduate School (School) did not properly round to three decimal places for one of the student’s return to Title IV calculation in the 8 students tested. Questioned Costs: None reported – known and likely questioned costs are less than $25,000 Context: For one of 8 students tested, the return to Title IV calculation used was not rounding to the proper decimal point causing a $1 variance in the amount returned to the Department of Education. We tested 8 out of 30 total withdrawals during the year. Cause: The School's calculation was not set up correctly to round for winter and summer terms during 2025; however, it was resolved for fall 2025 and beyond. Effect: The School was not completing accurate return to Title IV calculations as defined by the regulations. Recommendation: We recommend the School review its policies and procedures relating to return of Title IV calculations to ensure the calculations are properly set up to round. Views of Responsible Officials: There is no disagreement with the audit finding.

Finding 2024-001: Significant Deficiency – Noncompliance with Special Tests and Provisions: Disbursements Federal Program - Student Financial Assistance Cluster Federal Agency - U.S. Department of Education Pass-Through Entity - Not Applicable Assistance Listing Number - 84.268 Federal Award Number - P268K255904 Federal Award Year - December 31, 2024 Criteria: Title IV regulations (34 CFR 685.301(b)(6)) require that the date of loan origination is the date a school creates the electronic loan origination record. Title IV regulations specifies that a school must submit disbursement records no later than 15 days after making the disbursement or becoming aware of the need to adjust a student's previously reported disbursement. Institutions submit Direct Loan origination records and disbursement records to the Common Origination and Disbursement (COD) system. The disbursement record reports the actual disbursement date and the amount of the disbursement. The US Department of Education processes origination and/or disbursement records and returns acknowledgments to the institution. Condition: For 3 of 25 students selected for testing, the disbursement dates did not agree between the student's institutional account and the data reported to COD. Each student had disbursements that were later partially or fully refunded. The sample was not a statistically valid sample. Cause: The Foundation failed to follow its procedures for reporting student disbursement dates correctly and/or within the required timeframe. Effect: The accuracy of Title IV student loan records depends heavily on the accuracy of the disbursement information reported by institutions. If an institution does not review, update, and verify disbursement dates, then the Title IV student loan records will be inaccurate. Questioned costs: $30,426 of Federal Direct Unsubsidized Loans. Recommendation: It is recommended that policies, procedures and effective controls are put in place to verify that the disbursement dates for federal funds are matching between the student account detail and the COD system. Management Response: The Foundation will ensure that policies, procedures and effective controls are in place to verify the matching of the disbursement dates for federal funds between the student account detail and the COD system.

Criteria: Title IV regulations (34 CFR 685.309(b)) require that upon receipt of an enrollment report from the Secretary, institutions must update all information included in the report and return the report to the Secretary: (i) in the manner and format prescribed by the Secretary; and (ii) within the timeframe prescribed by the Secretary. Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, an institution must notify the Secretary within 30 days after the date the institution discovers that: (i) a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or (ii) a student who is enrolled at the institution and who received a loan under Title IV of the Act has changed his or her permanent address. Condition: Current controls did not prevent inaccuracy of the student loan records. Cause: The Foundation failed to follow its procedures for reporting student status changes correctly and/or within the required timeframe. Effect: The accuracy of Title IV student loan records depends heavily on the accuracy of the enrollment information reported by institutions. If an institution does not review, update, and verify student enrollment statuses, effective dates of the enrollment status, and the anticipated completion dates, then the Title IV student loan records will be inaccurate. Questioned costs: Not applicable. Context: For two out of a sample of 25 students, the effective date reported to NSLDS for a status change student was not updated in a timely manner at the program level. The sample was not a statistically valid sample. Recommendation: It is recommended that policies, procedures and effective controls are put in place to verify that the correct program level effective dates and enrollment statuses are reported to the NSLDS within the required timeframes after the information has been submitted through the servicer (National Student Clearinghouse). This could include a review of withdrawal, change in status, or graduation dates compared to the effective dates and enrollment statuses reported to the NSLDS to make sure they are accurate. Management Response: The Foundation will ensure that policies and procedures are in place to both verify the correct program level effective dates and enrollment statuses are reported timely and are also reviewed by a second person to ensure the accuracy of the data as well as the timeliness of reporting the data. The initial reporting and the subsequent reviews will be documented with names of staff and dates of work/reviews.

Finding 2021-001 ? COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds Quarterly Reporting Federal Program ? COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds Federal Agency ? U.S. Department of Education Pass-Through Entity ? Not Applicable Assistance Listing Number ? 84.425E Federal Award Number ? P425E205063 Federal Award Year ? June 30, 2021, June 30, 2022 Criteria The U.S. Department of Education (the Department) has issued guidance for the Education Stabilization Funds (ESF) Higher Education Emergency Relief Funds (HEERF) for quarterly reporting for all sections (a)(1), (a)(2), (a)(3) and (a)(4) that requires that institutions submit a report for each quarter even if no funds have been drawn down or disbursed for that quarter. Condition The auditor noted from reviewing the Foundation?s website and discussions with personnel that the Foundation did not prepare or post on its website any of the (a)(1) student portion quarterly reports for 2021. Subsequently, the Foundation completed the student portion quarterly reports for 2021 and posted to the Foundation?s website, which the auditor reviewed. Questioned Costs Not applicable. Context All four required reports were not prepared. Cause The Foundation did not draw down funds or disburse funds to students and was not aware of the requirement to do the quarterly reporting even when there were no amounts to report. The Foundation noted that the guidance issued by the Department that was clear on this requirement became available in November 2021. Effect The Foundation was not in compliance with the HEERF student portion quarterly reporting requirements for 2021. Recommendation The Foundation should ensure it keeps up to date on the Department?s HEERF guidance and ensure that reporting is done accurately and timely. Management?s Response Management concurs with the finding and has completed the quarterly student portion reporting for 2021 and posted to the Foundation?s website.

Finding 2020-001: Significant Deficiency - Internal Controls over Compliance for Eligibility Federal Program - Federal Direct Student Loans Federal Agency - U.S. Department of Education Pass-Through Entity - Not Applicable CFDA Number - 84.268 Federal Award Number - P268K201689, P268K211689 Federal Award Year - June 30, 2020, June 30, 2021 Criteria Title IV regulations (34 CFR 668.16) requires recipients of federal awards to administer its federal programs with an adequate system of internal controls over applicable compliance requirements. Condition The Foundation used a servicer for awarding aid to students during the first half of 2020 and brought the awarding process in house for the second half of 2020. Once in house, two employees in the Foundation?s Financial Aid Office manually performed all of the required award calculations, reconciliations, and other procedures related to eligibility and other compliance requirements. The Foundation implemented manual controls, which included a review of the award calculations, reconciliations, and other procedures related to eligibility and other compliance requirements. During the audit, we were unable to see documentation that the required award calculations, reconciliations and other related compliance requirements, including change management and cost of attendance, had been reviewed. We found no compliance exceptions with the sample of students that were tested. The samples used were not a statistically valid sample but was determined using Chapter 21 - audit Sampling Considerations of Uniform Guidance Compliance Audits of the Government Auditing Standards and Single Audits Audit and Accounting Guide. Questioned Costs Not applicable. Context Not applicable. Cause Documentation was not retained or available to provide evidence that controls had been performed during the second half of 2020. Effect The potential exists that noncompliance could occur in determining eligibility and awards compliance and not be detected by the Foundation?s internal controls over compliance. Recommendation The Foundation should document reviews related to determining eligibility and awarding compliance requirements. Management?s Response The Foundation has put processes in place to document electronic reviews related to eligibility and awarding of financial aid.