Loras CollegeHigher Education

Federal Awards Findings and Questioned Costs Finding 2025-001: Significant Deficiency - Incentive Compensation Program: Student Financial Assistance Cluster Assistance Listing Number (ALN): Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2025 Criteria: Regulations at 34 CFR 668.14(b)(22) specify that institutions participating in Title IV federal student aid programs are prohibited from providing any commission, bonus or other incentive payment to individuals or entities based directly or indirectly on their success in securing enrollments or financial aid. The fact that enrollment is a core responsibility does not exempt the institution. Condition/Context: One out of five employees selected for testing had a promotion letter that included a salary increase if performance metrics for enrollments were met, with goal numbers for year-over-year increases in applications, admissions, new transfer enrollment and graduate enrollment. This is not in compliance with applicable requirements regarding incentive compensation. The sample was not a statistically valid sample. Cause: The College noted that the language in the specific contract was an isolated incident and also noted there was not a process in place to ensure contracts were in compliance with the incentive compensation regulations. Effect: Violations of the ban on incentive compensation can lead to the College having to pay fines and penalties or potentially limit, suspend or terminate Title IV eligibility. Questioned Costs: Not applicable. Recommendation: The College should establish a policy where employee contracts and compensation are reviewed and approved to ensure compliance with applicable requirements regarding incentive compensation per the regulations at 34 CFR 668.14(b)(22). Management's Response: The College agrees with the finding. The College believes this was an isolated incident and verified with HR that there are no others and the President is well versed in allowable incentive compensation. The College has implemented a procedure whereby all new employee contracts are reviewed by the Treasurer before they are signed by the President and Human Resources.

Finding 2025-002: Significant Deficiency - Gramm-Leach-Bliley Act Security Policy Program: Student Financial Assistance Cluster Assistance Listing Number (ALN): Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2025 Criteria: The Gramm-Leach-Bliley Act (Pub. L. No. 106-102) (GLBA) requires institutions to explain their information-sharing practices to their customers and to safeguard sensitive data (16 CFR 314). In 2021, the Federal Trade Commission issued final regulations that altered the current required elements of an information security program and added several new elements. Under the regulations, institutions are required to develop, implement and maintain a comprehensive information security program that is written in one or more readily accessible parts. The written information security program for institutions must address all elements that apply. The elements for the information security programs set forth in this section 16 CFR 314.4 are high-level principles that set forth basic issues the programs must address, and do not prescribe how they will be addressed. Condition/Context: The College did not have updated procedures and processes in place specific to certain required GLBA elements. The GLBA policy review and updates are still in process. Cause: The College noted that several items required are in process or only partially completed. Effect: Failure to comply with the requirements of GLBA standards puts the College out of compliance with requirements and potentially at risk of compromising consumer, nonpublic personal information. Questioned Costs: Not applicable. Recommendation: It is recommended that the College update its written GLBA Security Policy to address all the required elements. At a minimum, the University should address each of the required minimum elements noted in the GLBA regulations (16 CFR 314.4). Management's Response: The College agrees with the finding and noted that updates to the information technology and GLBA policies is in process and expected to be completed in the fiscal year ending May 31, 2026.

Finding 2025-003: Disbursement Notifications Program: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number (ALN): 84.268 Federal Agency: U.S. Department of Education Federal Award Identification Number: P268K251441 Federal Award Year: June 30, 2025 Criteria: Title IV regulations (34 CFR 668.165 (a)) require that if a College credits a student ledger account with Direct Loan program funds the College must notify the student or parent of the anticipated date and amount of the disbursements, the student's or parent's right to cancel all or a portion of the loan and have the loan proceeds returned to the Secretary, and the procedures and time by which the student or parent must notify the College that he or she wishes to cancel the loan or loan disbursement. Condition/Context: For one student in the sample of 25 students tested, the College was unable to provide support that timely notification was provided to the student receiving Direct Loan funds. The communication should include the date and amount of disbursements and the right and process for how to cancel all or a part of the loans. The sample was not a statistically valid sample. Cause: The College noted the employee who sent the notification left the College and they were unable to locate a copy of the notification that was sent to the student. Effect: The students or parents may not have received the required regarding their Direct Loans, including the dates and amounts and process and timing for cancelling all or a portion of the loan. Questioned Costs: $2,672 in Federal Direct Student Loans ALN 84.268. Recommendation: The College should implement a policy/control to ensure that the required notifications are provided to Direct Loan students and documentation is retained. Management's Response: The College agrees with the finding. The College is implementing a process to ensure that notifications sent are immediately retained in the College’s cloud-based system. The Office of Financial Planning will conduct monthly reviews to ensure all required information has been included in the notifications. The monthly review completion will be noted in a shared document. This procedure will be implemented during the fiscal year ending May 31, 2026.

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/Context: The change in student status for 7 of 25 students tested was not reported to the National Student Loan Data System (NSLDS) timely when the students graduated at the end of the spring term. The change in status for 2 of 25 students tested was not reported to NSLDS at the campus level. The sample was not a statistically valid sample. Questioned Costs: Not applicable. Cause: The Registrar's data collection was not reviewed after submission to National Student Clearinghouse (NSC) by another responsible individual to ascertain the accuracy of graduated students being reported. The College received a response from NSC of no errors, therefore the graduated students in question were not reported in a timely manner. Effect: The accuracy of Title IV student loan records depends heavily on the accuracy of the enrollment information reported by schools. 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. Recommendation: It is recommended that the College review policies and procedures in place to resolve reporting issues with the third-party servicer in a timely manner or implement an alternative reporting method to facilitate compliance with Title IV regulations. Management’s Response: Management has reviewed policies and procedures for accurate reporting of enrollment status and changes to be in compliance with federal regulations. The College will designate a secondary responsible individual to conduct a review of the preparation of the digital file and review the digital file of student enrollment changes before it is submitted to the National Student Loan Clearinghouse. The Office of Financial Planning will conduct monthly review as a secondary review of enrollment reporting in the National Student Loan Data System (NSLDS).

Criteria: The College is required to submit ED Form 646-1, Fiscal Operations Report and Application to Participate (FISAP) (OMB No. 1845-0030) – This electronic report is submitted annually to receive funds for the campus-based programs. The institution uses the Fiscal Operations Report portion to report its expenditures in the previous award year and the Application to Participate portion to apply for the following year. By October 1, 2022, the institution should submit its FISAP that includes the Fiscal Operations Report for the award year 2021–2022 and the Application to Participate for the 2022–2023 award year (FWS, FSEOG 34 CFR 673.3; Fiscal Operations Report and Application to Participate Instructions). Condition/Context: For Part III, Fiscal Operations Report, line 5.3 reflected an amount lent of $481,714 and the underlying support reflects this amount as $200,550. Line 5.4 reflected an amount lent of $21,905,651, and the support reflects this amount as $481,714. The sample was not a statistically valid sample. Questioned Costs: Not applicable Cause: The College’s internal controls related to the preparation and review of the annual FISAP report was not effective to catch the errors in the reporting on a timely basis. Effect: The College reported incorrect information on the FISAP report to the Department of Education. Recommendation: It is recommended that the College review policies and procedures in place to ensure accurate reporting to comply with Title IV regulations. Management’s Response: Management has reviewed procedures and policy for accurate FISAP reporting to be in compliance with federal regulations. The College will conduct review by the Loras College alternative responsible official prior to final submission of the FISAP to be sure data inputs are accurate.

Finding 2022-002: Significant Deficiency - Return of Title IV Funds Program: Student Financial Assistance Cluster Assistance Listing Number: 84.063 Federal Agency: U.S. Department of Education Federal Award Identification Number: P063P211441 Federal Award Year: June 30, 2022 Repeat Finding: 2021-001 Criteria: 34 CFR 668.22 requires that when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with Federal regulations and return the unearned portion of the grant or loan funds to the Title IV programs as soon as possible but no later than 45 days after the withdrawal date. Condition/Context: The auditors noted that refunds were calculated incorrectly for three of five students selected for testing. Testing was performed for follow-up on the prior audit finding. ? For the first student, the original R2T4 calculation was completed incorrectly and 100% of the funds were returned. The College later revised the calculation to incorrectly include FSEOG funds that could have been disbursed that were awarded to the student months after the withdrawal and then disbursed to the student only the percentage of those funds that was calculated as earned. The result was $302 too much Pell Grant funds returned. ? For the second student, the original R2T4 calculation resulted in 100% of the funds being returned since the student did not attend. The College later revised the calculation and counted some days as being attended and aid earned although the aid was not disbursed to the student. ? For the third student, the original R2T4 calculation was completed incorrectly and included Pell Grant funds although the student had dropped below 1/2 time before withdrawing. The College later revised the calculation to incorrectly use a different withdrawal date and include FSEOG funds that could have been disbursed that were awarded to the student after the withdrawal and then disbursed to the student only the percentage of those funds that was calculated as earned. The result was $349 less Pell Grant funds than should have been returned. The sample was not a statistically valid sample. Questioned Costs: A total of $47 in Pell Grant funds (84.063). Cause: The College?s controls in place to accurately review and approve R2T4 calculations did not operate as designed. Effect: The College returned incorrect amounts the US Department of Education. Recommendation: The College should review its procedures to ensure that refunds are calculated correctly and timely and any returns are made within the required timeframe. Management?s Response: Management has reviewed internal processes and procedures to ensure that all refunds are calculated correctly and sent back or provided to the student as a post withdrawal disbursement when appropriate and within the required timeframe as stated in the federal student aid handbook. Procedures are clarified to include a student withdrawal date based on formal withdrawal by the student and despite the Loras policy to refund all charges back to the student if they fully withdraw in the first week of classes, a return of Title IV funds will be calculated to be certain the student receives any federal aid that has been earned. If a student withdraws before the 60% point of the semester, the last date of attendance as reported by faculty will be used to calculate the return of funds. All refund calculations will be completed using the Common Origination and Disbursement R2T4 calculator along with the Colleague R2T4 calculation and will then receive a final review by the Director of Student Accounts to ensure the correct type and amount of aid earned by the student and the correct type and amount of all federal funds is sent back in the timeframe outlined by the regulations.

Finding 2022-003: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds Reporting Program: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds Assistance Listing Number: 84.425E & F Federal Agency: U.S. Department of Education Federal Award Identification Number: P425E200665 & P425F201753 Federal Award Year: June 30, 2022 Repeat Finding: 2021-003 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 specifies the information to be reported and also that the deadline to submit all quarterly reports, student and institutional, is within 10 days of the end of the calendar quarter. Condition/Context: For the Institutional portion June 30, 2021 report selected for testing, the auditor noted that the report did not agree to the underlying support, specifically the categories of replacing lost revenue from auxiliary sources and other uses. Additionally, the June 30, 2021 report was posted to the College's website after the deadline of 10 days after calendar quarter end. Subsequently, the College corrected the June 30, 2021 institutional quarterly report and posted it to the College?s website and the auditor reviewed. For the student portion June 30, 2021, August 31, 2021 and March 31, 2022 quarterly reports selected for testing the College did not include two required items ? 1) the number of students eligible to receive emergency financial aid grants and 2) the total number of students who received the emergency financial aid grants. Additionally, the College posted the March 31, 2022 report two days after the reporting deadline. Subsequently, the College corrected the June 30, 2021, August 31, 2021 and March 31, 2022 student quarterly reports to add the required items and posted them to the College?s website and the auditor reviewed. Questioned Costs: Not applicable. Cause: The College?s internal controls related to the preparation and review of the quarterly reports were not effective in catching the errors in the reporting or ensuring that reporting was completed timely. Effect: The quarterly reports included incorrect and missing information and were posted to the College?s website late. Recommendation: We recommend the College review its internal controls over the preparation and review of the quarterly reports. The College should have supporting documents available for the preparer and reviewer of the quarterly and annual reports to ensure that reporting is done accurately and timely. Management?s Response: Management has reviewed internal controls related to quarterly reporting for both institutional and student funds. Requirements have been reviewed by personnel responsible for the preparation of quarterly reports as well as personnel responsible for review of the reports. Management has assigned personnel separate from those responsible for preparation of the quarterly reports to review supporting documents and verify the accuracy of the reporting. Procedures have been put into place to ensure timely reporting. In addition, all reports posted have been revised to include all requirements and report accurate information.

Finding 2021-001: Significant Deficiency - Return of Title IV Funds Program: Student Financial Assistance Cluster Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2021 Criteria: 34 CFR 668.22 requires that when a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with Federal regulations and return the unearned portion of the grant or loan funds to the Title IV programs as soon as possible but no later than 45 days after the withdrawal date. Condition/Context: The auditors noted that refunds were calculated incorrectly for 4 of 5 students selected for testing. The auditors noted the scheduled break for the Fall 2020 term was incorrect, missing the weekend days, in the R2T4 calculations and impacted the denominator for 2 students in the sample. Additionally, the auditors noted the denominators used in the R2T4 calculations were incorrect for 2 students in the Spring 2021 term. One student was selected as a non-refund student that had earned all F grades for the Fall 2020 term and upon reviewing the last date of attendance (LDA) and support with the College they determined it should have been an earlier date based on an academic related activity and therefore performed a new R2T4 calculation that resulted in a refund that was then made. The return used an incorrect scheduled break for fall 2020 (is included in 2 students noted above). The sample was not a statistically valid sample. Questioned Costs: A total of $545 in Federal Direct Loans (84.268), $81 in Pell (84.063), and $10 in FSEOG (84.007). Cause: The College had misunderstood the requirement to include the weekend days surrounding breaks as applicable. Additionally, the College noted they had changed the dates of the Spring 2021 term due to COVID and that may have been a reason for the difference. The College's policy with faculty was not clear on what should be used to support the LDA when students earn F grades. Effect: The College returned incorrect amounts to the US Department of Education. Recommendation: The College should review its procedures for inputting break days and LDAs for students who earn F grades to ensure that refunds are calculated correctly and timely and any returns are made within the required timeframe. Management?s Response: Management has reviewed procedures and policy for returning Title IV funds and revised the approach to be in compliance with federal regulations. Refunds will be calculated utilizing the COD worksheet in order to comply with break days. The return of funds in colleague will be cross checked with the COD worksheet to be sure each is accurate.

Finding 2021-002: Significant Deficiency - Enrollment Reporting Program: Student Financial Assistance Cluster Assistance Listing Number: Various Federal Agency: U.S. Department of Education Federal Award Identification Number: Various Federal Award Year: June 30, 2021 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/Context: The change in student status for 3 of 25 students tested was not reported to the National Student Loan Data System (NSLDS) timely when the students withdrew after the end of the spring term and the College was aware the students would not be returing for the fall term. For 1 of 25 students tested the status reported to NSLDS for the program level detail was incorrect and showed withdrawn instead of graduated. For 1 of 25 student students tested the graduation status date reported to NSLDS was incorrect. The College subsequently corrected the 1 student?s status and 1 student?s status dates in NSLDS and the auditor reviewed the corrections. The sample was not a statistically valid sample. Questioned Costs: Not applicable. Cause: The College had misunderstood the requirement to continue reporting through the summer months the student?s enrollment status from the spring term even if the student is not enrolled unless they become aware that the student will not be returning in the fall. The incorrect status and incorrect graduation date issues are being investigated by the College with their 3rd party servicer National Student Clearinghouse (NSC) to determine the cause. Effect: The accuracy of Title IV student loan records depends heavily on the accuracy of the enrollment information reported by schools. 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. Recommendation: It is recommended that the College review policies and procedures in place to resolve reporting issues with the third-party servicer in a timely manner or implement an alternative reporting method to facilitate compliance with Title IV regulations. Management?s Response: Management has added an additional spring semester file with NSC as a standard submission file. After the extra spring term enrollment file has been processed by NSC, management will use the Colleague NSC enrollment process to submit the first non-standard summer enrollment file. Finally, the colleague NSC enrollment process will be used to submit the final non-standard summer enrollment file by August 15th as usual. This approach will correctly process students that are known to have withdrawn from the college during the non-standard summer term.

Program: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Funds Assistance Listing Number: 84.425F Federal Agency: U.S. Department of Education Federal Award Identification Number: P425F201753 Federal Award Year: June 30, 2021 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 only to report expenses for the quarter and that those expenses should have been drawn down from G5 and disbursed within the quarter. Institutions are also required to submit annual reporting. Condition/Context: The auditor noted from reviewing the College?s website and discussions with personnel that some of the College?s reporting did not agree to the underlying support and G5 draw down timing. Subsequently, the College corrected the 9/302020 and 3/31/2021 institutional quarterly reports and the 2020 annual report which the auditor reviewed. Questioned Costs: Not applicable. Cause: The College?s internal controls related to the preparation and review of the quarterly reports were not effective to catch the errors in the reporting on a timely basis. Effect: The potential exists that an error could occur in the reporting process that may not be detected in a timely manner by management. Recommendation: We recommend the College review its internal controls over the preparation and review of the quarterly reports. The College should have supporting documents available for the preparer and reviewer of the quarterly and annual reports to ensure that reporting is done accurately. Management?s Response: Management has assigned personnel separate from those responsible for preparation of the quarterly reports to review supporting documents and verify the accuracy of the reporting.