WESLEY COLLEGE INC.

2020 ? 010 Student Financial Aid Cluster ? Special Tests and Provisions ? Student Verification Procedures Federal agency: Department of Education Federal program title: Student Financial Aid Cluster ? Federal Pell Grant Program, Federal Direct Student Loans Federal Assistance Listing Numbers: 84.063 and 84.268 Award Period: 2019-2020 Type of Finding: Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria or specific requirement: An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information. Condition: The College did not appropriately document the results of the verification process. Questioned costs: Known and likely questioned costs below reporting threshold. Context: For 1 out of 17 students selected for verification process, the documentation on the verification information contained an error related to the income taxes paid amount that resulted in understatement of the Pell grant award the student received. Cause: This was a human error in documenting the verification process information. Effect: An internal control over the verification process failed to operate effectively and as a result there was an understatement of a Pell grant award a student received. Repeat Finding: Not a repeat finding Recommendation: The College should enhance its control over the verification process to incorporate a review of the verification process complete by the department employees. Views of responsible officials: See corrective action plan.

2020 ? 010 Student Financial Aid Cluster ? Special Tests and Provisions ? Student Verification Procedures Recommendation: The College should enhance its control over the verification process to incorporate a review of the verification process complete by the department employees. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Prior to 5/1/2022, all student verification procedures will be reviewed for accuracy and completeness. Dennis E. Stark, Vice President for Finance and Administration/CFO Expected Completion Date: 4/29/2022

2020 ? 011 COVID ? 19, Higher Education Emergency Relief Fund ? Activities Allowed and Unallowed Federal agency: Department of Education Federal program title: COVID ? 19, Higher Education Emergency Relief Fund Student Aid Portion and Institutional Portion CFDA Number: 84.425E, 84.425F, Award Period: 2019-2020 Type of Finding: Significant Deficiency in Internal Controls Over Compliance Criteria or specific requirement: The nonfederal entity must: Establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2 CFR ? 200.303). Condition: The College did not provide evidence of review and approval of student and institutional portions of the disbursements made. Questioned costs: There are no questioned costs related to this finding. Context: Although inquiry with two different employees resulted in the verbal affirmation of review and approval taking place, the College did not provide a tangible evidence of review and approval of student and institutional portions of the disbursements and refunds made to students. Cause: The College?s inability to provide evidence of review and approval of student and institutional portions of the disbursements and refunds made to students resulted from the significant turnover in the College?s management personnel responsible for following the established process. Effect: The internal controls over review and approval of the disbursements and refunds to students did not operate effectively during the period under audit. Repeat Finding: Not a repeat finding. Recommendation: The College should implement a control to establish appropriate review and approval process of the disbursements and refunds made to students and document such reviews were performed. Views of responsible officials: See corrective action plan.

2020 ? 011 COVID ? 19, Higher Education Emergency Relief Fund ? Activities Allowed and Unallowed Recommendation: The College should implement a control to establish appropriate review and approval process of the disbursements and refunds made to students and document such reviews were performed. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: All disbursements of HEERF funds will be reviewed for consistency with regulations. Dennis E. Stark, Vice President for Finance and Administration/CFO Expected Completion Date: 4/29/2022

2020 ? 013 Student Financial Aid Cluster ? Other Procedures ? Outstanding Refund Checks Federal agency: Department of Education Federal program title: Student Financial Aid Cluster - Federal Supplemental Educational Opportunity Program, Federal Work-study Program, Federal Pell Grant Program and Federal Direct Student Loans Federal Assistance Listing Numbers: 84.007, 84.033, 84.268 and 84.063 Award Period: 2019-2020 Type of Finding: Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(l), requires the College to return to the Department of Education any Title funds, that were unsuccessfully disbursed to the student or parent. Condition: The College did not void/return outstanding student refund balance checks within the 240 day time frame. Questioned costs: $1,054 (all outstanding checks over 240 days) Context: Four out of seven outstanding student refund checks as of June 30, 2020 were noted to have been outstanding for greater than 240 days. Of these four checks, four were noted as not being voided or refunded to the Department of Education in a timely manner. Cause: Absence of the review of outstanding check listing for issued financial aid disbursements. Effect: As the result of not voiding issued student refund checks outstanding for over 240 days, the College is not in compliance with the corresponding requirement of the Department of Education. Repeat Finding: This is a repeat finding of previously reported finding 2019-006. Recommendation: The College should implement a control to establish an ongoing reconciliation of the outstanding refund check listing. Views of responsible officials: See corrective action plan.

2020 ? 013 Student Financial Aid Cluster ? Other Procedures ? Outstanding Refund Checks Recommendation: The College should implement a control to establish an ongoing reconciliation of the outstanding refund check listing. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Wesley College will arrange for Delaware State Univeristy to assume responsibility for outstanding refund checks as of 5/1/2022. Dennis E. Stark, Vice President for Finance and Administration (CFO) Expected Completion Date: 4/29/2022

2019-006

2020 ? 014 Student Financial Aid Cluster ? Other Procedures ? Student Status Changes Federal agency: Department of Education Federal program title: Student Financial Aid Cluster - Federal Direct Student Loans Federal Assistance Listing Numbers: 84.268 Award Period: 2019-2020 Type of Finding: Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.309 requires 1.) that enrollment status changes for students be reported to NSLDS within 30 days or within 60 days if the student with the status change will be reported on a scheduled transmission within 60 days of the change in status. 2.) that the status includes an accurate effective date. 3.) that the College makes necessary corrections and return the records within 10 days for any roster files that don?t pass the NSLDS enrollment reporting edits. 4.) the schools must have some arrangement to report students program enrollment effective date. Condition: During our testing: 1.) 35 of the 40 students tested were reported to NSLDS outside the 60 days. 2.) 13 of the 40 students tested were reported to NSLDS with an incorrect enrollment effective date. 3.) the College was not making necessary corrections of to the roster file within 10 days. 4.) thirteen of the 40 students tested were note reported correctly with the correct program enrollment date. The errors described above also include one student for whom the College was not able to provide NSLDS records. Questioned costs: There are no questioned costs related to this finding. Context: While the College has a processes and controls in place for timely correcting its roster file, such controls did not operate effectively on numerous occasions as detailed in this finding This not only caused them to not make the necessary corrections within 10 days but also caused students in our testing to be reported outside of 60 days, be reported with incorrect enrollment and program dates. Cause: While the College has a process and controls to follow up on NSLDS reporting errors, it did not fully adopt the process and controls. Effect: The NSLDS system is not updated with the student information timely and accurately which can cause over awarding of financial aid should a student transfer to another institution and the student may not properly enter the repayment period. Repeat Finding: Not a repeat finding. Recommendation: The College should enhance its procedures, controls, and review policies surrounding the NSLDS reporting to assist them with correcting their roster file. Views of responsible officials: See corrective action plan.

2020 ? 014 Student Financial Aid Cluster ? Other Procedures ? Student Status Changes Recommendation: The College should enhance its procedures, controls, and review policies surrounding the NSLDS reporting to assist them with correcting their roster file. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Wesley College will review all policies surrounding NSLDS reporting and correct the roster files as necessary. The final file wil be transferred to Delaware State University no later than 4/29/2022. Dennis E. Stark, Vice President for Fiance and Administratio/CFO Expected Completion Date: 4/29/2022

2020 ? 015 Student Financial Aid Cluster ? Special Tests and Provisions - Gramm-Leach Bliley Act (GLBA) Federal agency: Department of Education Federal program title: Student Financial Aid Cluster - Federal Supplemental Educational Opportunity Program, Federal Work-study Program, Federal Pell Grant Program and Federal Direct Student Loans Federal Assistance Listing Numbers: 84.007, 84.033, 84.268 and 84.063 Award Period: 2019-2020 Type of Finding: Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria or specific requirement: In accordance with Title IV regulations, a College is required to designate an individual to coordinate the information security program, perform a risk assessment that addresses (1) employee training and management; (2) information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) detecting, preventing and responding to attacks, intrusions, or other systems failures, and document safeguards for identified risks (CFR 314.1(b)). Condition: While the College has documented an individual responsible for coordinating the information security program and documented various safeguards in place; the College has not recently documented a risk assessment that shows identified risks and the related safeguards in place. Questioned costs: There are no questioned costs related to this finding. Context: In discussions with management, risk assessments are performed at the College; however, they were not documented. There is no evidence of performance of the risk assessment since fiscal year 2017. Written policies and procedure representing safeguards were documented in relation to identified risks. Cause: The College does have policies that address the risk assessment and related safeguards; however, the risk assessment was not documented. Effect: Failure to comply with the GLBA standards puts the University at risk of compromising student personal information. Repeat Finding: Not a repeat finding.

2020 ? 015 Student Financial Aid Cluster ? Special Tests and Provisions - Gramm-Leach Bliley Act (GLBA) Recommendation: Formal IT risk assessment should be conducted on an annual basis and should include three required areas, in accordance with the Gramm-Leach-Bliley Act (GLBA), as follows: 1) Employee training and management 2) Information systems, including network and software design, as well as information processing, storage, transmission, and disposal 3) Detecting, preventing, and responding to attacks, intrusions, or other system failures. In addition, the College should implement a formal risk assessment tracking mechanism which includes management's responses to the risk assessment findings, who is responsible for mitigating the findings, and timelines of when the safeguards or controls are implemented. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Wesley College out-sourced its data processing work to Eluccian Corporation. In accordance with that contract, it was their responsibility to respond to requests for reports such as the annual one due in accordance with the Gramm-Leach Bliley Act. As a result of the acquisition of Wesley College by Delaware State University, the contract with Eluccian was not renewed as of July 1, 2021. We have been unable to ascertain whether the report mentioned above has been submitted. Alban Urbanas, Provost Expected Completion Date: Unknown

2019 ? 004 Student Financial Aid Cluster - Untimely Student Attendance Change Reporting ? Special Tests and Provisions Federal agency: Department of Education Federal program title: Student Financial Aid Cluster - Direct Loan Program and Pell Grant CFDA Number: 84.268, 84.063 Award Period: 2018-2019 Type of Finding: Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria or specific requirement: Upon changes to student attendance such as graduation, transfer, withdrawal, and other circumstances that result in student?s leave from the program of study, the College is required to report the change to NSLDS within 30 days of the official date of the event and 60 days from the latest roaster receipt. Condition: The College did not report change in student attendance changes within 30 days of the occurrence and 60 days of the enrollment roaster submission. Questioned costs: There are no questioned costs related to this finding. Context: For 3 out of 40 students evaluated for the compliance with the enrollment changes reporting, student?s status changes were not reported to NSLDS within 30 days of the occurrence and 60 days of the latest enrollment roaster file receipt. Our sample was not, and not intended to be, statistically valid. Cause: The College?s failure to report changes to student?s enrollment status within 30 days of the occurrence and 60 days of the latest enrollment roaster receipt resulted from the technology issues when the enrollment files were submitted by the College. Effect: The College was not in compliance with the 30-day student enrollment change reporting requirement and 60-day enrollment roaster receipt requirement. Repeat Finding: Not a repeat finding Recommendation: The College should implement a control to establish an ongoing monitoring process over the student enrollment changes reporting to ensure the technology supporting the submission of the files does not experience issues on the College?s side. Views of responsible officials: See corrective action plan.

2019 ? 004 Untimely Student Attendance Change Reporting ? Special Tests and Provisions Recommendation: The College should implement a control to establish an ongoing monitoring process over the student enrollment changes reporting to ensure the technology supporting the submission of the files does not experience issues on the College?s side. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Due to an upgrade to our Jenzabar system, something in the way that our NSC transmission report pulled the data from the system changed during the 2018-2019 academic year. We did not initially recognize that the report was pulling graduation dates for prior degrees that students had earned at Wesley College. Where there was no change to their status for their current program of study, the report was indicating that they had graduated. This error only occurred for students who had received a prior degree from Wesley ? a very small percentage. This issue with the transmission report has since been corrected. In addition, greater oversight and monitoring of the data is taking place (especially after an upgrade). To further ensure that changes of status are received by the NSLDS and lenders within the required 60-day period, Registrar staff now have access to make updates directly on the NSLDS website. This is particularly helpful when students take a medical withdrawal from the college. Very often, students are too ill to inform us of the withdrawal until weeks after the withdrawal actually began. This is another action that helps us to stay in compliance with our reporting obligations. Names of the contact persons responsible for corrective action: Patricia Seunarine, Registrar Erin Collier, Associate Registrar Planned completion date for corrective action plan: March 30, 2020

2019 ? 005 Student Financial Aid Cluster - Federal Perkins Loan Liquidation ? Special Tests and Provisions Federal agency: Department of Education Federal program title: Student Financial Aid Cluster - Federal Perkins Loan Program CFDA Number: 84.038 ? Closed Program Award Period: 2018-2019 Type of Finding: Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria or specific requirement: Based on the liquidation procedures, the College was required to compare the maintain a listing of and the supporting documentation for all the loans issued by this program that had outstanding balances as of the end of the fiscal year that will agree with the latest filed FISAP (34 CFR section 674.19(d)). Condition: The College did not maintain a listing of and the supporting documentation for all the loans issued by this program that had outstanding balances as of the end of the fiscal year that will agree with the latest filed FISAP. The College has a listing going back to 2017 but not beyond. Questioned costs: There are no questioned costs related to this finding. Context: The total of the number of loans as well as the number of loans and outstanding balances assigned to the Department of Education as part of the program liquidation does not tie and agree to the latest FISAP that has cumulative information. Cause: The College?s inability to provide the requested listing and supporting documentation resulted from the change in the loan service providers and loss of some of the supporting documentation. Effect: The College did not have supporting documentation for some cumulative information related to the program close out. Repeat Finding: Not a repeat finding Recommendation: The College should implement a control to establish an ongoing monitoring process over the loans issued to students under any similar program in the future. Views of responsible officials: See corrective action plan.

2019 ? 005 Federal Perkins Loan Liquidation ? Special Tests and Provisions Recommendation: The College should implement a control to establish an ongoing monitoring process over the loans issued to students under any similar program in the future. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The college will implement monitoring controls over any future loans under any similar programs. Name(s) of the contact person(s) responsible for corrective action: Sasha Lee, Controller Planned completion date for corrective action plan: When applicable

2019 ? 006 Student Financial Aid Cluster ? Other Procedures ? Outstanding Refund Checks Federal agency: Department of Education Federal program title: Student Financial Aid Cluster - Outstanding Student Refund Checks CFDA Number: 84.007, 84.033, 84.268 and 84.063 Award Period: 2018-2019 Type of Finding: Significant Deficiency in Internal Controls Over Compliance and Other Matter Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(l), requires the College to return to the Department of Education any Title funds, that were unsuccessfully disbursed to the student or parent. Condition: The College did not void/return outstanding student refund balance checks within the 240 day time frame. Questioned costs: $1,231 (all outstanding checks over 240 days) Context: 9 out of 9 outstanding student refund checks as of June 30, 2019 were noted to have been outstanding for greater than 240 days. Of these 9 checks, 9 were noted as not being voided or refunded to the Department of Education in a timely manner. Cause: Absence of the review of outstanding check listing for issued financial aid disbursements. Effect: As the result of not voiding issued student refund checks outstanding for over 240 days, the College is not in compliance with the corresponding requirement of the Department of Education. Repeat Finding: Not a repeat finding Recommendation: The College should implement a control to establish an ongoing reconciliation of the outstanding refund check listing. Views of responsible officials: See corrective action plan.

2019 ? 006 Student Financial Aid Cluster ? Other Procedures ? Outstanding Refund Checks Recommendation: The College should implement a control to establish an ongoing reconciliation of the outstanding refund check listing. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The College has implemented the review of all outstanding check listing for issued financial aid disbursements. This reconciliation will be reviewed on a monthly basis to ensure compliance with the DOE. Name(s) of the contact person(s) responsible for corrective action: Sasha Lee, Controller Planned completion date for corrective action plan: This plan has already been implemented. No further issues should surround this matter.

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