MANHATTAN CHRISTIAN COLLEGENon-Profit

COMPLIANCE WITH CALCULATION OF COMPOSITE SCORE IN REGARD TO FINANCIAL RESPONSIBILITY Criteria Per 34 CFR 668.171 and 34 CFR.668.172, the College is required to obtain a composite score of at least 1.5. Condition and Context The calculation of the College's composite score, which is based on information provided in the audited financial statements, was calculated to be less than 1.5. Cause The College experienced a large unrestricted net loss during the current fiscal year, which was the primary cause in the reduction of the composite score. Potential Effect The College may be placed on heightened financial oversight related to its administration over federal financial aid programs. Questioned Costs None. Recommendation We recommend that the College work with the Department of Education, which may include reducing expenses necessary to reflect unrestricted activities from reporting expenses in excess of revenue and any other necessary requirements made from the Department of Education. Views of Responsible Officials and Planned Corrective Action The College is working to increase enrollment and adjusting the budget accordingly with available resources to reflect a positive net income from unrestricted operations.

ELIGIBILITY - PELL GRANT PROGRAM 84.063 Criteria Per 34 CFR 668.16(4)(c)(1), the College must administer Title IV, HEA programs with adequate checks and balances in its system of internal control. Condition and Context Of our sample of 51 student files, one case was noted where a student was eligible for a Pell grant in the fall semester, but was not awarded and disbursed. Cause The student enrolled in additional classes after the first day classes began and was not identified when awarding and disbursing Pell grant money for the Spring semester. Potential Effect The absence of adequate reviews of student awards could lead to improper awards and disbursements of Federal Financial Aid. Questioned Costs Known questioned costs were $3,697 and likely questioned costs were $5,738. Recommendation We recommend that the College perform an additional review of student awards to ensure information agrees with all other areas within the institution. We also recommend that the College correct the award package for the student for the recalculated difference in the award. Views of Responsible Officials and Planned Corrective Action The College will make the necessary correction to the student's award. Key staff turnover may have lead to not identifying this student as eligible for federal financial aid in the Fall semester. Review procedures will be conducted for student awards and disbursements to ensure accuracy for the next fiscal year.

EXIT COUNSELING - FEDERAL DIRECT LOANS PROGRAM 84.268 Criteria Per 34 CFR 682.604(g), if a student borrower withdraws from school or fails to complete an exit counseling session, the College must provide exit counseling material to the student within 30 days after learning that the student is no longer at least a half time student. Condition and Context Of our sample of 51 student files, one case was noted where exit counseling information was not provided to the student within the required time frame. Cause A review of non-returning students did not identify this student as needing to be provided exit counseling materials. Potential Effect Students that are not provided with exit counseling materials may not be fully aware of their repayment responsibilities, which could result in additional defaults on the loan program. Questioned Costs None. Recommendation We recommend that the College departments conduct cross reviews of students that are no longer at least in half-time status to determine if exit counseling materials have been sent within the required time frame. Views of Responsible Officials and Planned Corrective Action The College will continue to adjust procedures as determined necessary to ensure that students are properly identified to provide them with exit counseling materials.

CRITERIA - PER 34 CFR 668.22(A)(1), 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 WITHDRAWL DATE AND RETURN THE PORTION OF UNUSED FUNDS TO THE DEPARTMENT OF EDUCATION WITHIN 45 DAYS OF THE DATE OF DETERMINATION. CONDITION AND CONTEXT - OF OUR SAMPLE OF 51 STUDENT FILES, NINE CASES WERE NOTED WHERE THE STUDENT'S ENROLLMENT STATUS DID NOT AGREE WITH NSLDS. THIS IS NOT A REPEAT FINDING. CAUSE - STAFFING CHANGES OCCURRED AT THE COLLEGE DURING THE YEAR WHICH AFFECTED THE OPPORTUNITY FOR ADEQUATE REVIEW OF STUDENT ENROLLMENT STATUS WITH NSLDS. POTENTIAL EFFECT - IMPROPER REPORTING OF STUDENT ENROLLMENT STATUS COULD AFFECT LOAN DEFERMENTS, GRACE PERIODS, AND THE REQUIREMENTS FOR PAYMENT OF PRINCIPAL AND INTEREST. RECOMMENDATION - WE RECOMMEND THAT THE COLLEGE PERFORM A REVIEW OF STUDENT ENROLLMENT STATUS TO ENSURE THAT COLLEGE RECORDS AGREE WITH NSLDS. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION - THE COLLEGE HAS PROVIDED TRAINING TO EMPLOYEES AND IMPLEMENTED REVIEW PROCEDURES TO ENSURE ACCURACY OF REPORTING STUDENT STATUS FOR THE NEXT FISCAL YEAR.

2021-002 ELIGIBITY - FEDERAL DIRECT STUDENT LOANS PROGRAM 84.268 Criteria Per Chapter 7 of the Federal Student Aid Handbook, financial need is determined based on Cost of Attendance, less Expected Family Contribution and other estimated financial aid. Condition and Context Of our sample of 51 student files, two cases were noted where the students' awards of subsidized and unsubsidized loans did not agree with the calculation between the cost of attendance and the students' expected family contribution and other financial aid received. Cause Students' financial aid packages were not reviewed and compared to other information regarding the students' financial aid eligibility. Potential Effect The students' awards contain incorrect allocations for subsidized and unsubsidized loans. Questioned Costs Known differences in subsidized and unsubsidized loans were $1,183 and likely questioned loan awards were $4,085. Recommendation We recommend that the College perform a review of student awards with a combination of subsidized and unsubsidized loans and make adjustments to students' loan awards where deemed necessary. We also recommend that the College correct the loan packages for such students identified and conduct the proper loan change process to between subsidized and un-subsidized loans. Views of Responsible Officials and Planned Corrective Action The College has made the recommend adjustments. The College will implement procedures that include a review of student awards to determine that aid was property provided and any necessary adjustments will be made, if identified.

2020-002 REPORTING ENROLLMENT CHANGE IN STUDENT STATUS - FEDERAL DIRECT STUDENT LOANS PROGRAM 84.268 Criteria Per 34 CFR 685.309 and further described in the NSLDS Enrollment Reporting Guide, enrollment information must be reported within 30 days whenever a student's enrollment status changes, unless and Enrollment Reporting Roster will be submitted within 60 days. Condition and Context Of our sample of 51 student files, two cases were noted where the students' enrollment status changes were not reported to NSLDS within the required time frame. Cause Staffing changes occurred at the College during the year which affected the opportunity for adequate review of student enrollment status. Potential Effect Improper reporting of student enrollment status could affect loan deferments, grace periods, and the requirements for payment of principal and interest. Questioned Costs None Recommendation We recommend that the College perform a review of student enrollment status to ensure that status changes are properly identified and reported at least every 60 days on the Enrollment Reporting Roster file with College receives from the Department of Education. Views of Responsible Officials and Planned Corrective Action The College has provided training to employees and implemented review procedures to ensure accuracy of reporting student status for the next fiscal year.

2020-003 COMPLANCE WITH CALCULATION OF COMPOSITE SCORE IN REGARD TO FINANCIAL RESPONSIBILITY Condition The calculation of the College's composite score, which is based on the information provided in the audited financial statements, was calculated to be less than 1.5. Criteria Per 34 CFR 668.171 and 34 CFR 668.172, the College is required to obtain a composite score of at least 1.5. Cause The College experienced a large loss during the current fiscal year, which was the primary cause in the reduction of the composite score. Effect The College is not in compliance with the requirements of the Department of Education for Institutional Responsibility regarding financial responsibility. Recommendation We recommend the College work with the Department of Education which may include reducing expenses necessary to reflect profit, obtaining a letter of credit if directed by the Department of Education, and any other necessary requirements made from the Department of Education. Views of Responsible Officials The College is working to increase enrollment and adjusting the budget accordingly with available resources to reflect a positive net income from operations.

2019-002 ELIGIBILITY - PELL GRANT PROGRAM 84.063 AND FEDERAL DIRECT STUDENT LOANS PROGRAM 84.268 Criteria Per 34 CFR 668.16(4)(c)(1), the institution must administer Title IV, HEA programs with adequate checks and balances in its system of internal control. Condition and Context Of our sample of 37 student files, three cases were noted where the students' eligibility for award differed from the amount disbursed by the institution. Cause Staffing changes occurred at the College during the year which affected the opportunity for adequate review of student award packages. Potential Effect The absence of adequate reviews of student awards could lead to improper disbursements of Federal Financial Aid. Questioned Costs Federal Pell Grant Program known questioned costs were $225 and likely questioned costs were $863. Federal Direct Student Loans Program known questioned costs were $1,530 and likely questioned costs were $7,215. Recommendation We recommend that the College perform an additional review of student awards to ensure information agrees with all other areas within the institution. We also recommend that the College correct the award packages for such students for the recalculated difference in the awards. Views of Responsible Officials and Planned Corrective Action The College has made corrections to the students' awards and disbursements. Additional review procedures will be implemented for student awards and disbursements to ensure accuracy for the next fiscal year.

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