Palmer College Foundation and Palmer College of Chiropractic - West

2025-001: Late Refunding of Credit Balance U.S. Department of Education Student Financial Assistance Cluster (Direct) Federal Direct Student Loans (84.268) Federal Award Year: 2025 Finding: The Foundation and College did not timely refund a student’s credit balance. Criteria: Per 34 CFR 668.164, when Title IV funds are credited to a student account and they exceed the amount of tuition, fees and other allowable charges assessed to the student, a credit balance is created. The institution must pay the resulting credit balance directly to the student or parent borrower within 14 days after (1) the first day of class of a payment period if the credit balance occurred on or before that day, or (2) the balance occurred if the credit balance occurred after the first day of class. Condition: During audit procedures performed, it was identified that one student did not receive a credit balance refund within the 14 day timeframe as required by federal guidelines. Cause: The criteria used to compile the report that the Foundation and College used to monitor credit balances had a flaw, which resulted in the omission of this student and the delayed refund. There were not sufficiently detailed reviews in place to identify delinquent refunds. Effect or potential effect: Noncompliance with federal regulations for credit balances could impact future funding. Questioned costs: None. Context: One of the forty students selected and tested was not refunded timely in accordance with federal guidelines. This delay only occurred for one trimester for the selected student. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: The Foundation and College should review the controls and procedures in place to verify that credit balances on student’s account are refunded within the 14 day timeframe. Views of responsible officials: Management agrees with this finding. See corrective action plan.

Finding: The public reporting of data over the Foundation and College?s disbursement of HEERF student funds was uploaded to the Foundation and College?s website on May 27th, which was seven days after the required reporting date of May 20th. Criteria: The Department of Education requires institutions that received the student portion of the HEERF award to publicly report certain information on their website no later than 30 days after the initial award. The Foundation and College?s award was dated April 20, 2020, therefore the first public report was due on May 20, 2020. Condition: The report required to be posted within 30 days was posted to the Foundation and College?s website seven days late. Cause: The Foundation and College misinterpreted the federal requirements and uploaded the first report based on the timing of when the student aid was first disbursed, not when the student aid was first awarded. Context: Only one report was required to be uploaded to the Foundation and College?s website during the year ended June 30, 2020. This report was uploaded seven days late, but was otherwise complete and accurate. Effect: This delayed the availability of required public information. Questioned costs: None Recommendation: The Foundation and College should have a process in place determine reporting deadlines in order to timely file reports. If additional information is needed to meet the reporting requirements, the Foundation and College should have procedures in place to seek clarification from the federal agency. Management?s response: Management agrees with this finding and has developed a corrective action plan.

Finding: All students who graduated from Palmer's West Campus at the conclusion of the winter 2019 quarter were not initially reported as graduated to the National Student Loan Data System and the correction was after the 60-day reporting requirement. Criteria: According to the NSLDS Enrollment Reporting Guide, a school must correctly report students who have completed a program with a ?G? for ?graduated?. Further, an accurate anticipated completion date aids in correct servicing of a student?s loans, avoiding unnecessary early conversion to repayment or too late conversion, causing technical defaults. If the student has withdrawn or graduated from an academic program, a "terminal enrollment status" of withdrawn or graduated, as appropriate, should be reported for that program, even if the student is still taking coursework applicable to other programs in which the student is enrolled. The correct classification between reporting as withdrawn or graduated is essential to preserving a student?s loan interest subsidy. Condition: All winter 2019 graduates from the West campus (19 students) were reported as withdrawn rather than graduated to NSLDS. The error was identified but it was corrected in the next month?s enrollment reporting, which was outside of the 60-day reporting requirement. Cause: The individual responsible for reviewing enrollment reporting had terminated and a replacement to perform the review was not in place at the time the data for winter 2019 graduates from the West Campus was uploaded. Context: One of the twenty-five students tested for reporting of enrollment changes was not reported as graduated to NSLDS. The students were not selected based on a statistical sample. Further investigation identified that this situation impacted all winter 2019 graduates (19 students) from the West Campus. Effect: This could affect the timing of when students are put into repayment. Questioned costs: None Recommendation: When turnover occurs with individuals that are part of the control process, management should have procedures in place to reassign those duties and procedures related to the internal control process. Management?s response: Management agrees with this finding and has developed a corrective action plan.