Guilford College

Audit Period: June 30, 2025 The findings from the June 30, 2025 Schedule of Findings and Questioned Costs (the “Schedule”) are discussed below. The findings are numbered consistently with the number assigned in the Schedule. FINDINGS AND QUESTIONS COSTS – MAJOR FEDERAL AWARD PROGRAM AUDIT 2025-002 – U.S. Department of Education, SFA Cluster, Special Tests and Provisions - Return of Title IV Refunds (Significant Deficiency) Condition: From a population of 74 students that officially or unofficially withdrew during the term, we tested nine students and noted that four students required refund calculations. From the fall 2024 semester calculations we noted that the College did not deduct Thanksgiving break of nine days, November 23, 2024 through December 1, 2024, from the total days in the semester. Criteria: The total number of calendar days in a payment period or period of enrollment includes all days within the period that a student was scheduled to complete, except that scheduled breaks of at least five consecutive days are excluded from the total number of calendar days in a payment period or period of enrollment and the number of calendar days completed in that period (34 CFR Section 668.22(f)(2)(i)). Cause: Controls to ensure proper calculation of Title IV refunds did not function as related to the condition above. Effect: Calculations were incorrect for the three students tested that officially or unofficially withdrew during the fall 2024 term resulting in an incorrect amount of funds returned to the student and the Department of Education. Repeat Finding from a Prior Year: No Recommendation: We recommend the College implement procedures for accurate preparation and calculation of Title IV refunds. Management Response: The college is in agreement with the recommendation to implement procedures for accurate preparation and calculation of Title IV funds. If the Federal Audit Clearinghouse has questions regarding this plan, please call Danielle Pfaff, Controller, at 1-336-316-2140 or dpfaff@guilford.edu

2024-004 – U.S. Department of Education, SFA Cluster, Special Tests and Provisions - Return of Title IV Refunds (Significant Deficiency) Condition: Title IV refunds for the two students tested were calculated incorrectly. Criteria: When the 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 34 CFR 668.22. The institution must return the lesser of the total amount of unearned Title IV assistance or an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. Cause: Controls are not functioning properly. Effect: The amount returned was incorrect for the two students that required refund calculations. Context: From a population of 60 students that official or unofficially withdrew from a payment period, we tested nine and noted that two students required refund calculations. Repeat Finding from a Prior Year: No Recommendation: We recommend the College put procedures in place for accurate preparation and calculation of Title IV refunds. Management Response: We agree the institution must return the lesser of the total amount of unearned Title IV assistance or an amount equal to the total institutional charges incurred by the student for the payment period or period of enrollment multiplied by the percentage of Title IV grant or loan assistance that has not been earned by the student. This issue arose from a lack of leadership and staff training in the Financial Aid Office over the past several years. As a result, proper procedures for calculating and returning unearned Title IV assistance were not consistently. Currently, staff are undergoing comprehensive training in all areas of Title IV and Higher Education Act (HEA) regulations. In the 2024-2025 academic year, the institution hired a new director of financial aid, who has implemented a system to process withdrawals online through Common Origination and Disbursement (COD) and has been working to maintain necessary documentation for accurate refund calculations. Additionally, an updated policies and procedures manual is being finalized to ensure that all staff members have access to the necessary resources and guidelines for compliance. If the Federal Audit Clearinghouse has questions regarding this plan, please call Danielle Pfaff, Controller at 1-336-316-2140 or dpfaff@guilford.edu.

2023-004 Treatment of a student who fails to receive a passing grade in any class (Significant Deficiency), Department of Education, Student Financial Aid Cluster. Criteria: An institution must have a procedure for determining whether a Title IV aid recipient who began attendance during a period completed the period or should be treated as a withdrawal. If a student who began attendance and has not officially withdrawn fails to earn a passing grade in at least one course offered over an entire period, the school must assume, for Title IV purposes, that the student has unofficially withdrawn, unless the institution can document that the student completed the period. In the absence of evidence of a last day of attendance, a school must consider a student who failed to earn a passing grade in all classes to be an unofficial withdrawal. Condition: From a population of 35 students that received all failing grades in a term, we tested five students and noted that documentation of the last date of attendance could not be provided for any of the students tested. Action Taken: The Provost’s Office has drafted a memo to faculty explaining the requirement to enter the last day attended for any student receiving a failing grade.  The Registrar’s Office has added this requirement to their routine reminders to faculty about entering grades.  The Clerk of the Faculty has agreed to bring this change in policy to the faculty to add to the Faculty Handbook in section 3.1.10 Reading Day, Final Examinations, and Course Grades.  Plan for auditing effectiveness of corrective action: The Register’s Office is turning on the requirement in Bannerweb (student system) that any F or NC grade cannot be entered in the system without a last date of attendance. An audit report will be able to be generated on this data. Responsible Party: Provost, Registrar, and Faculty, under the supervision of the Provost is responsible for implementing this corrective action plan and ensuring compliance. Point of Contact: Maria Rosales, Provost, mrosales@guilford.edu, 336-316-2205 Expected date of correction: April 2024

Guilford College (GC) Corrective Action Plan May 31, 2022 Audit 22-001 Limitations of the College?s Software to Provide a Trial Balance ? Material Weakness Auditor?s Findings and Recommendation Condition: During the planning of the audit and throughout the audit process, it was difficult for Management to obtain complete and accurate information in order to provide a trial balance that could be audited. Although the transactions for the year were present in the system, the reports to extract the data proved to be very challenging. Management was ultimately able to provide a working trial balance. Criteria: Adequate internal control over the financial reporting process. Cause: Turnover in staffing and issues with the College?s current software program. Effect: Delays in completing the audit due to multiple reports provided by Management. Recommendation: We recommend replacing the College?s current software and we understand that this decision has been made. The College is moving forward with a new software. View of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See Corrective Action Plan. Management?s Response Guilford College disagrees with the finding that this a material weakness. 1. During the pre-audit conferences on April 20th and June 7th the timetable for the delivery of the audit report was established. It was identified in the pre-audit meeting that the entire accounting team was new and had not been through the audit process at Guilford and required additional support and collaboration from the auditors. It was known that the access reports were non-functioning and a system generated report was to be delivered by ledger account via Banner or the Argos reporting tool. The auditors were provided early in the audit process (July 7th) from the system a working trial balance. The auditors struggled to translate the format change into their system, although the report provided the required information by ledger account. The Guilford accounting team had to take extra time to develop a report to map the data from the system that was basically an ordering and grouping format change to prior reports submitted. Also, the accounting team had to continue to ask for clarification on requests, work papers or examples of requested data which created frustration and delays. The majority of the audit list items, reports, and supporting documentation were provided electronically in July to facilitate and allow for a more efficient audit process to meet the established timeline. -48- John Wilkinson, MBA CFO / Vice President A&F Phone: 336-316-2422 Fax: 336-316-2956 jwilkinson@guilford.edu The audit team delayed auditing key items that data was provided to them electronically in July, delayed addressing the general ledger issue and were frustrated when it was addressed, late in the audit process and close to the delivery deadline. These issues should have been identified and resolved in July or at the front end of the audit process. This indicates a lack of planning and managing of the delivery schedule which is the basis for the material weakness comment. If the audit had been planned and supervised properly, this material weakness comment would not have been made. This is supported by a delivery of the audit report late Thursday evening before the required delivery date, Friday the next day. 2. A material weakness is present when there is a reasonable possibility that a material misstatement of the financial statements can occur and not be prevented or detected in a timely basis. The Guilford accounting staff understood the extraction of data was different this year and has successfully and accurately provided management and the board finance council with monthly financial data during the audit year. The auditors did not early in the audit process gain a full understanding of the new process of extracting data. The auditors waited until time pressure for audit delivery were significant before gaining an understanding of the new process. The auditor?s mismanagement of the audit process created the impression of a material weakness. The CFO and Controller have taken the following steps to remediate the findings: Complete list of all year-end journals, closing entries, calculations, reports and deliverables. Argos report Trial Balance As part of the Workday system conversion and implementation, the Chart of Accounts is being updated and streamlined to support financial reporting by fund, organization, ledger account, and program. This update to the backbone of the financial structure will provide accurate, timely and core financial reporting for the college and end users. Reporting Needs and Requirements are being identified and if canned system reports do not meet needs, then custom reports will be developed as part of the implementation deliverables. 22-002 Cash Accounts Not Reconciled ? Significant Deficiency Auditor?s Findings and Recommendation Condition: During our audit, we noted that several cash accounts had not been reconciled. Monthly bank account reconciliations are the primary internal control procedure relating to the College's cash accounts. During May 31, 2022, bank account reconciliations were prepared; however, the accounts were not completely reconciled. -49- John Wilkinson, MBA CFO / Vice President A&F Phone: 336-316-2422 Fax: 336-316-2956 jwilkinson@guilford.edu As May 31, 2022, there was an unreconciled amount of $177,466 in various cash accounts. Criteria: Adequate internal control over the financial reporting process. Cause: Turnover in staffing and issues with the College?s current software program. Effect: Although this amount may appear not to be material to the overall financial position of the College, it may obscure significant but offsetting items (such as bank errors or improperly recorded transactions) that would be a cause for investigation if the items were apparent. Unreconciled amounts should be investigated and not be allowed to carry over from month to month. Recommendation: We recommend replacing the College?s current software and we understand that this decision has been made and the College is moving forward with a new software and the cash accounts are being reconciled. View of Responsible Officials and Planned Corrective Action: GC Management?s Response: Guilford College disagrees with the finding that this is a significant deficiency. 1. The $177,466 bank accounts unreconciled amounts are immaterial to the financial statements. Any comment related to the bank account should be made as an observation to management (management letter) and should not be considered a significant deficiency. 2. A comment to the Board is unnecessary. This is a management issue and not a significant deficiency since the issue was known by the Controller?s office, but was considered a lower priority matter. A detailed list of the unreconciled items was completed and under investigation to reconcile, however due to limited staff, manual systems, and higher priorities they were noted as unreconciled. The cause explanation indicates this is clearly a workload matter given the limited accounting staff available and manual system processes. The moving forward and not finding the reconciling differences is a time management matter. Comment should be to management and indicate the accounting staff and improved manual processes should be addressed to manage the work necessary to prepare monthly bank reconciliations. The Controller has taken the following steps to remediate the findings: - Improve the monthly reconciliation policies and procedures to ensure reconciliations are completed accurately and timely. - Established a checklist of all bank accounts for reconciliation with an owner and established due dates. -50- John Wilkinson, MBA CFO / Vice President A&F Phone: 336-316-2422 Fax: 336-316-2956 jwilkinson@guilford.edu - Bank reconciliation workload is re-distributed among accounting team - A standard reconciliation form with preparer and a supervisory review and approval process. - Improved communications and procedures with Controller?s Office and Student Accounts on bank deposits, ACH, and cash transactions. - Update all incoming web receipts for gift processing from the operating account to the advancement account. To be completed by January 1, 2023. - The Sr. Accountant and the Workday Team are in the process to design a system to fully automate the cash receipt and reconciliation process in the ERP. Document the key controls in the automated system which will remediate the findings identified. Additionally, reoccurring reconciling items should be clearly identified to ensure system is designed to recognize them and minimize these types of items. - The Controller will update the cash management and reconciliations standards or policies and key controls that ensure policies are in place and effective based on new workflows and processes. Corrective Action Plan for Federal Funds 22-003 Higher Education Stabilization Fund (HEERF) Reporting Auditor?s Findings and Recommendation Condition: HEERF reporting was not always done accurately or timely. During the audit it was noted that College did not continue to update their website with the HEERF reporting requirements as listed in their grant agreements. The first and second quarterly reports for institutional funds (quarters ended September 30, 2021 and December 31, 2021) was not completed for HEERF II. Criteria: 2 CFR 200.329, 86 FR 26213 the College was required to post the Institutional Quarterly Report to their website within 10 days of the end of quarter in which the funds were spent. Cause: Turnover in staffing. There were multiple rounds of HEERF funding released, each with different requirements, which led to a gap in understanding of the requirements of the HEERF reporting. Effect: The College was not in compliance with the r

A-133 CORRECTIVE ACTION PLAN 08-Aug-2019 Audit Firm: DMJ & Co., PLLC Audit Period: June 1, 2018 ? May 31, 2019 OPEID: 002931 2019-001: Omission of Exit Counseling Notification A. Comments on Findings and Recommendations Guilford College was notified of three students who had loans disbursed for the 18-19 academic year that did not receive notification of the Direct Loan Exit Counseling requirement. Currently, Guilford College utilizes a report generated from the registrar?s office to identify students to receive an exit interview notification. This method depends on the accuracy of a report generated from our registrar?s office that leaves the possibility of students being omitted that fail to register for the subsequent semester or drop below half-time status. Guilford agrees that it must ensure all students that withdraw, fall below half-time status, or graduate must be sent exit counseling notification within the designated timeframe. B. Actions Taken & Planned The College has sent the three students exit counseling notification. We also plan to fully utilize the RRREXIT functionality in our Banner system. This will identify low enrollment, no enrollment, and students that graduated that had loans disbursed during their enrollment at Guilford. We will be able to use specific population selections to control the output of students that we need to identify. We will run this process biweekly throughout the academic year to catch each category of student and ensure that each student who requires exit counseling is notified. This will ensure we maintain compliance.

GSA_MIGRATION

2017-002

GSA_MIGRATION

2016-001

GSA_MIGRATION

2016-002

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GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

2015-001