The Shaw University, Inc.Higher Education

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition: Multiple instances were identified during the fiscal year where funds drawn were held in excess of the allowable time frame and/or allowable thresholds. Cause: Insufficient internal controls and administrative oversight with respect to cash management compliance requirements. Effect or Potential Effect: The University is not properly following policies and procedures in place to ensure that compliance is maintained with cash management requirements. Questioned Costs: None. Context: All draws of federal funds were compared to cumulative disbursements to test for compliance with cash management requirements. Instances of cash held in excess of the allowable time frame and/or allowable thresholds were identified. Identification of Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-004 in the prior year schedule of findings and questioned costs. Recommendation¬¬: We recommend that the University enhance its internal controls, policies, and procedures to ensure that draw down requests do not exceed the amount immediately needed to disburse to students and that excess cash balances are eliminated timely. Views of Responsible Officials: The University concurs with the findings. Shaw University acknowledges that this finding is a repeat condition related to excess cash balances for Pell Grant, Direct Loan, and FSEOG funds not being eliminated within the required seven business days. Management has determined that prior corrective actions were not sufficiently formalized or consistently executed, particularly with respect to reconciliation and monitoring controls. Since that time, the University has strengthened its internal controls over Title IV cash management. A formal monthly reconciliation between G5 drawdowns and the general ledger has been implemented to ensure excess cash balances are identified and resolved timely. In addition, procedures have been revised to limit drawdowns to actual or immediate disbursement needs, and monitoring controls have been established to ensure compliance with the seven-business-day requirement. Management will continue to monitor these processes to ensure ongoing compliance with federal cash management regulations.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): E. Eligibility – Calculation of Benefits – Student Financial Assistance (SFA) awards must be coordinated among the various programs and with other federal and nonfederal aid (need and non-need based aid) to ensure that total aid is not awarded in excess of the student’s financial need or cost of attendance (34 CFR 668.42, FWS, and FSEOG, 34 CFR 673.5 and 673.6; Direct Loan, 34 CFR 685.301). E. Eligibility – Federal Direct Student Loans (“Direct Loans”) (Assistance Listing 84.268) - Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student's grade level and (for Direct Unsubsidized Loans) dependency status (34 CFR 685.203). The annual loan limit is the maximum amount that a student may receive for an academic year. For undergraduate students there is a combined annual loan limit for Direct Subsidized Loans and Direct Unsubsidized Loans, of which not more than a specified amount may be comprised of Direct Subsidized Loans (annual subsidized maximum). Under 34 CFR 685.203(d) and (e) the aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans (a borrower's maximum allowable outstanding loan debt, excluding capitalized interest, but including amounts borrowed under the Federal Family Education Loan Program prior to 2010) are $31,000 for dependent undergraduate students (except for dependent students whose parents are unable to borrow Direct PLUS Loans), not more than $23,000 of which may be subsidized Condition: For a certain student tested, the University awarded aid in excess of the student’s financial need. In addition, for a certain student, the University awarded aid in excess of award limits. Cause: Insufficient administrative oversight and internal controls with respect to Title IV award eligibility. Effect or Potential Effect: The University is not in compliance with aid awarding criteria under the eligibility requirements. Failure award and disburse aid in accordance with the required guidelines could result in improper disbursements of Title IV aid. Questioned Costs: Known questioned costs: $3,663; total questioned costs: indeterminable. Questioned costs of $3,663 were identified as a result of over-awards disbursed to students in the selected sample; however, sufficient information was not available to determine whether questioned costs may have resulted from similar issues in the untested population. Context: We noted the following exceptions during our testing: • For 1 of 25 students selected for testing, the University disbursed financial aid in excess of the student’s financial need. • For 1 of 25 students selected for testing, the University disbursed Direct Loans in excess of the established maximums. Identification of Repeat Finding: No similar findings noted in the prior year. Recommendation¬¬: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that Title IV aid is properly calculated, awarded, and disbursed. Views of Responsible Officials: The University concurs with the finding and will provide professional justification for the students identified in the audit testing; however, to strengthen internal controls and prevent potential over awards, the Financial Aid Office will enhance cross departmental communication through routine reconciliation meetings and real time reporting of enrollment, housing, scholarship, and waiver changes, implement a double review process in which an assigned counselor and secondary counselor verify aid packages against COA and financial need before disbursement, and provide annual staff training on need analysis, COA construction, Title IV over award regulations (34 CFR 673.5), and proper use of SIS tools to identify conflicts, ensuring stronger compliance and proactive prevention of award discrepancies.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting - Fiscal Operations Report and Application to Participate (“FISAP”) - An institution is required to submit the FISAP annually by October 1, following the end of the award year, and to accurately complete all required key line items containing critical information (34 CFR 668.24(e)(1)(i)). The deadline for submitting data corrections was December 15, 2025. Condition: Key line items as identified in the compliance supplement were not accurately reported on the 2024-2025 FISAP. Cause: Insufficient internal controls and lack of sufficient administrative oversight resulted in data errors reported in the FISAP. Effect or Potential Effect¬: The University is not in compliance with special reporting requirements. Questioned Costs: None. Context: The University submitted the annual FISAP for the 2024-2025 reporting year by the required deadline; however, errors included in the submission were not corrected by the required deadline. As of the date of our Single Audit report, these errors remain uncorrected. Identification of Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-006 in the prior year schedule of findings and questioned costs. Recommendation¬¬: We recommend the University enhance its internal controls, policies, and procedures to ensure that the FISAP is completed accurately prior to submission and that adequate supporting schedules are retained to substantiate the reported amounts. Views of Responsible Officials: The University concurs with the findings. Shaw University acknowledges the findings regarding variances between institutional records and the amounts reported on the FISAP, as well as the delay in submitting corrections by the required deadline. The variances were due to insufficient reconciliation between the University’s records and the FISAP prior to submission. In addition, controls were not adequate to ensure that identified discrepancies were corrected within the required timeframe. The University has since completed a full reconciliation of the FISAP, and further corrections will be made. To prevent recurrence, the University has implemented procedures requiring a formal reconciliation of supporting records to the FISAP prior to submission, along with enhanced review and approval controls to ensure accuracy and timely reporting. Management will continue to monitor this process to ensure ongoing compliance.

Federal Program Information: Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Return of Title IV Funds: The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent of (1) the calendar days in the payment period or period of enrollment for a program measured in credit hours, or (2) the clock hours scheduled to be completed for the payment period or period of enrollment for a program measured in clock hours (34 CFR 668.22(e)(2)). Otherwise, the percentage earned by the student is equal to the percentage (60 percent or less) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The percentage of Title IV grant or loan assistance that has not been earned by the student is the complement of one of these calculations. Standard term-based institutions must always use the payment period as the basis for the determination. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds must be distributed in the prescribed order (34 CFR 668.22(i)). Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Condition: For certain students that withdrew during the year, the University did not appropriately prepare the withdrawal calculation and certain unearned Title IV funds were not returned to the ED within the required timeframe. Cause: Insufficient internal controls and lack of administrative oversight over the return of Title IV funds. Effect or Potential Effect¬: The University is not in compliance with the required federal guidelines over the return of Title IV funds. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 2 of 2 sampled students, the University did not appropriately prepare the withdrawal calculation and certain unearned Title IV funds were not returned to the ED within the required timeframe. Identification of Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-007 in the prior year schedule of findings and questioned costs. Recommendation¬¬: We recommend that the University enhance its internal controls, policies, and procedures to ensure that return of funds calculations are accurately prepared and returned timely. Views of Responsible Officials: The University concurs with the finding and acknowledges the difference between the auditor’s calculations and what was determined as the variance of R2T4. To ensure full compliance with federal Return to Title IV (R2T4) requirements and to strengthen institutional oversight, Shaw University will implement enhanced processes designed to improve accuracy, documentation, and accountability. Each R2T4 calculation will undergo a dual review process in which one Financial Aid team member completes the calculation and a second independently verifies it before any returns are processed. The University will also maintain comprehensive documentation and audit trail for all R2T4 files, including withdrawal documentation, calculation worksheets, COD records, disbursement summaries, and proof of timely returns, stored systematically to support audit readiness and internal review. To reinforce oversight, management will reconcile internal Financial Aid records with the Business Office and COD on a scheduled basis, conduct monthly or biweekly reconciliations for Pell Grants, Direct Loans, and campus-based funds, and review open balances and disbursement records before posting or adjusting aid. Financial Aid staff will continue to receive annual and periodic training on R2T4 regulations, updated federal guidance, and internal process revisions to ensure consistent application of rules. Additionally, management will conduct periodic internal audits of R2T4 files to identify potential issues proactively and respond with timely corrective measures. These strengthened procedures will ensure that future R2T4 calculations are accurate, fully documented, and completed within federally required timeframes, thereby maintaining strong compliance, reinforcing internal controls, and meeting all expectations for federal oversight.

Federal Program Information: Federal Pell Grant Program (ALN: 84.063) and Federal Direct Student Loans (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions - Enrollment Reporting: The University is required to update students’ statuses on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the University becomes aware of the change in enrollment status. There are two categories of enrollment information: “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Institutions are responsible for accurately reporting the significant data elements under the Campus-Level Record and Program-Level Record that ED considers high risk. Additionally, institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. As with any school/servicer arrangement for the administration of the Title IV programs, if the school uses a third party to meet the NSLDS enrollment reporting requirements, it is the school that must ensure that enrollment information is submitted timely, accurately, and completely. Condition: The University did not accurately report certain significant data elements to the NSLDS website for certain students who graduated, withdrew, or had an increase/decrease in attendance level during the year. Cause: Insufficient administrative oversight and internal controls with respect to enrollment reporting compliance requirements. Effect or Potential Effect: The University is not in compliance with enrollment reporting compliance requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs: None. Context: We noted the following exceptions during our testing: • For 9 of 40 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Campus-Level Record. • For 13 of 40 students sampled whose status changed during the year, the University failed to submit the Campus-Level Record within the required timeframe. • For 5 of 40 students sampled whose status changed during the year, the University failed to accurately report all significant data elements under the Program-Level Record in a timely notification to the NSLDS website. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2024-008 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that all status changes are submitted accurately to the NSLDS website within the required timeframe. Views of Responsible Officials: The University concurs with this finding. Shaw University acknowledges the finding regarding variances between institutional records and the status reported in NSLDS. For students 1-3 listed for campus enrollment details, the students withdrew then subsequently re-enrolled. The University, to date has had static to confer degrees which do not coincide with the required timeframe of NSLDS reporting. The University will change degree conferral dates to better coincide with timely NSLDS reporting. Management will continue to monitor this process to ensure ongoing compliance.

Identification of Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.007, 84.033, 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition – During our cash management testing, we noted multiple instances during the fiscal year where funds drawn were held in excess of the allowable time frame and/or allowable thresholds. Cause – Insufficient internal controls and administrative oversight with respect to cash management compliance requirements. Effect or Potential Effect¬ – The University is not properly following policies and procedures in place to ensure that compliance is maintained with cash management requirements and the timely return of funds. Questioned Costs – None. Context – We examined all draws of federal funds and identified multiple instances of cash held in excess of the allowable time frame and/or allowable thresholds as noted in the condition. Identification of Repeat Finding – This is a repeat finding from prior year. This was reported as Finding 2023-004 in the prior year schedule of findings and questioned costs. Recommendation¬¬ – We recommend that the University enhance its internal controls, policies, and procedures to ensure that excess cash balances are eliminated timely. Views of Responsible Officials – The University concurs with the finding. We have made necessary changes in personnel to mitigate the risk of these actions repeating. We have implemented new controls over cash management and implemented additional internal controls. The University will make disbursements as soon as they are available, but no later than the three (3) business days following receipt of funds. University policies and procedures will be followed closely to ensure there is no excess cash. All funds will be returned in a timely manner.

Identification of Federal Program(s) – Federal Supplemental Educational Opportunity Grants (ALN 84.007) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) – The Federal Supplemental Educational Opportunity Grant (“FSEOG”) program provides grants to eligible undergraduate students. Priority is given to Federal Pell Grant recipients who have the lowest expected family contributions (34 CFR 676.10). Condition – During our eligibility testing, we noted that priority was not given to Pell recipients when disbursing FSEOG awards. Cause – Insufficient internal controls and administrative oversight with respect to giving priority to Pell recipients when disbursing FSEOG Awards. Effect or Potential Effect¬ – The University did not give priority to Federal Pell Grant (“Pell”) recipients with the lowest expected family contributions when disbursing FSEOG awards. Questioned Costs – Below reporting threshold. Context – We examined the University’s awards disbursement detail noting that all Pell recipients did not receive FSEOG awards. In addition, we identified 5 FSEOG recipients who were not Pell recipients. Identification of Repeat Finding – No similar findings noted in the prior year. Recommendation¬¬ – We recommend that the University enhance its internal controls, policies, and procedures to ensure priority is given to Pell recipients when disbursing FSEOG awards. Views of Responsible Officials – The University concurs with the finding. In selecting among eligible students for FSEOG in each award year, the office of Financial Aid will select first those students with the lowest expected family contribution and the highest need who also received Federal Pell Grants in that year. Management will implement and document an internal audit review. A monthly reconciliation will be completed to ensure Pell recipients are awarded FSEOG, based on the guidance provided by the Federal handbook

Identification of Federal Program(s) – Student Financial Assistance Cluster (ALNs 84.007, 84.033, 84.063, 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) – Fiscal Operations Report and Application to Participate (“FISAP”) - An institution is required to submit the FISAP annually by October 1, following the end of the award year, and to accurately complete all required key line items containing critical information (34 CFR 668.24(e)(1)(i)). The deadline for submitting data corrections was December 13, 2024. Condition – Key line items as identified in the compliance supplement were not accurately reported on the 2023-2024 FISAP. Cause – Insufficient internal controls and lack of sufficient administrative oversight resulted in data errors reported in the FISAP. Effect or Potential Effect¬ – The University is not in compliance with special reporting requirements. Questioned Costs – None. Context – The University submitted the annual FISAP for the 2023-2024 reporting year by the required deadline; however, errors included in the submission were not corrected by the required deadline. As of the date of our Single Audit report, these errors remain uncorrected. Identification of Repeat Finding – No similar findings noted in the prior year. Recommendation¬¬ – We recommend the University enhance its internal controls, policies, and procedures to ensure that the FISAP is completed accurately prior to submission. Views of Responsible Officials – The University concurs with the finding. The University will make any necessary changes and corrections to ensure that the FISAP is submitted annually by October 1 following the end of the award year. This ensures that all data corrections are submitted on or before the deadline. The Financial aid Office will implement a process to enhance internal controls, policies and procedures, to ensure the FISAP is submitted accurately and timely

Identification of Federal Program(s) – Student Financial Assistance Cluster (ALNs 84.007, 84.033, 84.063, 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) – Return of Title IV Funds - The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. Returns of Title IV funds are required to be deposited or transferred into the student financial assistance account or electronic fund transfers initiated to the Department of Education (“ED”) as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR section 668.173(b)). If a student does not begin attendance in a payment period or period of enrollment, the institution must return all Title IV, HEA program funds that were credited to the student's account at the institution or disbursed directly to the student for that payment period or period of enrollment. The institution must return those funds for which it is responsible under to the respective Title IV, HEA program as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance (34 CFR section 668.21). If the total amount of Title IV grant or loan assistance, or both, that the student earned is greater than the total amount of Title IV grant or loan assistance, or both, that was disbursed to the student of on behalf of the student in the case of a PLUS loan, as of the date of the institution’s determination that the student withdrew, the difference between these amounts must be treated as a post-withdrawal disbursement. If outstanding charges exist on the student’s account, the institution may credit the student’s account up to the amount of outstanding charges with all or any portion of loan funds that make up the post-withdrawal disbursement in accordance with 34 CFR sections 668.164(d)(1), (d)(2), and (d)(3) only after obtaining confirmation from the student or parent in the case of a PLUS loan, that they still wish to have the loan funds disbursed to their account (34 CFR sections 668.22(a)(5) and (a)(6)(ii)(A)). Condition – Refund calculation for a certain student selected for testing was appropriately prepared however, the University did not return funds to the ED within the required time frame for certain students selected for testing. Cause – Insufficient internal controls and lack of administrative oversight over the return of Title IV funds. Effect or Potential Effect¬ – The University is not in compliance with the required federal guidelines over the return of Title IV funds. Questioned Costs – Below reporting threshold. Context – For 1 of 3 students selected for testing, Title IV funds required to be returned were not submitted to the ED within the required time frame. Identification of Repeat Finding – No similar findings noted in the prior year. Recommendation¬¬ – We recommend that the University enhance its internal controls, policies, and procedures to ensure that Title IV funds are returned within the required timeframe. Views of Responsible Officials – The University concurs with the finding and will monitor internal controls to ensure that the return of Title IV funds is processed in accordance with federal regulations, specifically within the required 45-day timeframe after determining a student has withdrawn from the University. The University will establish a quarterly audit and monitoring system to review all Title IV fund returns, ensuring compliance with federal guidelines.

Identification of Federal Program(s) – Student Financial Assistance Cluster (ALN’s 84.063, 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) – Enrollment Reporting – The University is required to update students’ statuses on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the University becomes aware of the change in enrollment status. There are two categories of enrollment information: “Campus Level” and “Program Level,” each with separate record types that need to be reported accurately. Institutions are responsible for accurately reporting the significant data elements under the Campus-Level Record and Program-Level Record that ED considers high risk. Additionally, institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. As with any school/servicer arrangement for the administration of the Title IV programs, if the school uses a third party to meet the NSLDS enrollment reporting requirements, it is the school that must ensure that enrollment information is submitted timely, accurately, and completely (34 CFR 685.309(b), 685.210(c), and 690.83(b)(2)). Condition – For certain students selected for testing who graduated or withdrew during the year, the University did not submit status change notification or failed to submit timely notification to the NSLDS website. Cause – Insufficient internal controls and administrative oversight with respect to enrollment reporting requirements. Effect or Potential Effect¬ – The University is not in compliance with enrollment reporting requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs – None. Context – The University did not accurately report Campus Level enrollment data elements to the NSLDS website for 1 of 25 Federal Pell Grant and Federal Direct Student Loan recipients selected for testing that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year. The University did not accurately report Program Level enrollment data elements to the NSLDS website for 6 of 25 Federal Pell Grant and Federal Direct Student Loan recipients selected for testing that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, our enrolled but never attended during the fiscal year. Identification of Repeat Finding – No similar findings noted in the prior year. Recommendation¬¬ – We recommend that the University enhance its internal controls, policies, and procedures over the applicable compliance requirements of the Enrollment Reporting to ensure that all Campus Level and Program Level data is reported accurately and status changes are submitted to the NSLDS website within the required timeframe. Views of Responsible Officials – The University concurs with the finding and will review and revise its procedures for the frequency of NSLDS reporting to ensure accurate and timely reporting of enrollment changes. The University will implement a monthly enrollment audit to ensure that any change in enrollment status is identified in a timely manner and reported to NSLDS

Program Information: Federal Direct Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions – Borrower Data Transmission and Reconciliation – Federal regulations require that the University submit Federal Direct Loan Program (“Direct Loan”) disbursement records for students to the Common Origination and Disbursement (“COD”) in an accurate and timely manner (no earlier than 7 days before and no later than 15 days after disbursement of funds). Condition: During our testing of student disbursement records, we noted the following exceptions: • For 1 of 40 students selected for Federal Direct Loan Program disbursement testing, the University did not report an accurate disbursement date within the COD system. Cause: Administrative oversight with respect to accurate and timely reporting of federal awards. Effect or Potential Effect: The University is not in compliance with COD reporting requirements. Questioned Costs: None. Context: We tested a sample of 40 students and found an exception as noted in the condition. This is a condition identified per review of the University’s compliance with specified requirements using a statistically valid sample. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2022-001 in the prior year schedule of findings and questioned costs.   Recommendation: We recommend that the University ensure that Direct Loan and Pell grant disbursement dates are entered into the COD website no earlier than 7 days before and no later than 15 days after disbursement as required by federal regulations. Views of Responsible Officials and Planned Corrective Actions: The University concurs with finding and will monitor internal controls to ensure that all student disbursement data occurs within 15 calendar days after payment or the University becomes aware of the need to make an adjustment. Internal controls will be maintained by reporting on a daily basis as disbursements are posted. It should be noted that 1 out of 40 students is below the 5% threshold of error set forth by the United States Department of Education.

Program Information: Federal Work-Study Program (“FWS”) (ALN: 84.033) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): A. Activities Allowed and Unallowed/L. Reporting - An institution may carry forward and expend in the next award year up to 10% of the sum of its initial and supplemental FWS allocations for the current award year (34 CFR 675.18(b)). Condition: During our testing of the University’s FWS expenditures, we noted that the University carried forward more than the allowable 10% of its FWS allocation into the subsequent award year and did not submit the reallocation form to the Department of Education prior to the submission of the University’s Fiscal Operations Report and Application to Participate (“FISAP”). Cause: Administrative oversight with respect to accurate administration and disbursement of FWS awards. Effect or Potential Effect: The University is not in compliance with FWS requirements. Questioned Costs: None. Context: We tested the University’s compliance with FWS carry forward requirements and identified that the University exceeded the allowable 10% FWS carry forward threshold without obtaining the appropriate approvals from the Department of Education. Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University enhance is policies and procedures related to the accurate administration and disbursement of FWS awards to ensure that the appropriate approval is obtained prior to the carry forward of amounts that exceed the allowable threshold.   Views of Responsible Officials and Planned Corrective Actions: The University concurs with this finding. The CARES Act allowed FWS funds to be transferred above the 10% threshold to SEOG. This program expired on May 11, 2023. The documentation for this program can be found on fsapartners.ed.gov, communication CB-22-13 and is dated August 1, 2022. The University did not complete the form in COD for this extended portion of the CARES Act. However, it was properly reported on the FISAP. This program has expired and the University will be at or below the 10% threshold going forward.

Federal Program Information: Federal Pell Grant Program (ALN: 84.063), Federal Direct Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions - Enrollment Reporting: The University is required to update students’ statuses on the National Student Loans Data System (“NSLDS”) website if they graduate, withdraw or have an increase/decrease in attendance level during the year within 60 days of the date the University becomes aware of the change in enrollment status. There are two categories of enrollment information: “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. Institutions are responsible for accurately reporting the significant data elements under the Campus-Level Record and Program-Level Record that ED considers high risk. Additionally, institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. As with any school/servicer arrangement for the administration of the Title IV programs, if the school uses a third party to meet the NSLDS enrollment reporting requirements, it is the school that must ensure that enrollment information is submitted timely, accurately, and completely. Per the Federal Student Aid Handbook, schools are required to certify enrollment for all students who are included on their roster file scheduled at least every two months, and within 15 days of the date that NSLDS sends a roster file to the school or its third-party servicer. Any errors identified and returned by NSLDS in an Error/Acknowledgement file should be corrected and resubmitted within 10 days. Condition: During our testing of student enrollment reporting, we noted the following exceptions: • For 3 of 25 students selected for testing, the University failed to submit the student’s graduated or withdrawn status to NSLDS within the required timeframe. • For 5 of 25 students selected for testing, the University did not accurately report the student’s enrollment status. • Multiple error records identified in Error/Acknowledgment files were not corrected within the required timeframe. Cause: Administrative oversight with respect to enrollment reporting compliance requirements. Effect or Potential Effect: The University is not in compliance with enrollment reporting compliance requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs: None. Context: We tested a sample of 25 students and found exceptions as noted in the condition. This is a condition identified per review of the University’s compliance with specified requirements using a statistically valid sample. Identification of Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University properly follow its policies and procedures over enrollment reporting to ensure that all status changes are submitted to the NSLDS website within the required timeframe and that error records are corrected and submitted timely, consistent with federal regulations. Views of Responsible Officials and Planned Corrective Actions: The University concurs with this finding. This action is completed through a third-party service (National Student Clearinghouse) which updates the NSLDS automatically. As student enrollment changes and awards are adjusted, the Director of Financial Aid updates the Registrar who makes adjustments in NSC and those adjustments are noted in NSLDS. The University Registrar will check behind NSC on a monthly basis to ensure that enrollment dates are correct and have been submitted to NSLDS in a timely manner.

Federal Program Information: Federal Direct Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management – Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution’s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student’s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the “ED”) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution’s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition: During our cash management testing, we noted multiple instances during the fiscal year where funds drawn were held in excess of the allowable time frame and/or allowable thresholds. Cause: Administrative oversight with respect to cash management compliance requirements. Effect or Potential Effect: The University is not properly following policies and procedures in place to ensure that compliance is maintained with cash management requirements and the timely return of funds. Questioned Costs: None. Context: We examined all draws of Federal Direct Loan Program funds and identified multiple instances of cash held in excess of the allowable time frame and/or allowable thresholds as noted in the condition. Identification as a Repeat Finding: No similar finding was identified during the prior year. Recommendation: We recommend that the University enhance its policies and procedures to ensure that excess cash balances are eliminated timely. Views of Responsible Officials and Planned Corrective Actions: The University concurs with the finding. The University will make disbursements as soon as they are available, but no later than the three (3) business days following receipt of funds. University policies and procedures will be followed closely to ensure there is no excess cash. All funds will be returned in a timely manner.

Program Information: Student Financial Assistance Cluster (ALN: Various) and Title III Strengthening Historically Black Colleges and Universities Program (ALN: 84.031B) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting - The Office of Management and Budget (“OMB”) requires recipients and subrecipients of federal funding to complete audits and submit the data collection form and financial statement reporting package to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor's reports, or nine months after the end of the audit period. Condition: The University did not submit the June 30, 2023 Single Audit reporting package to the Federal Audit Clearinghouse by the required deadline. Cause: Insufficient internal controls and lack of administrative oversight with respect to timely financial statement reporting and appropriate documentation retention that is needed to complete the University’s financial statement audit and Single Audit within the required timeframe. Effect or Potential Effect: The University is not in compliance with Single Audit reporting deadlines. Questioned Costs: None. Context: The University did not submit the June 30, 2023 Single Audit reporting package within the required timeframe. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its internal controls and procedures to ensure that financial statement reporting is completed timely and appropriate documentation retention is maintained in order to complete financial and compliance audits within the required timeframe. Views of Responsible Officials and Planned Corrective Actions: The University concurs with the finding. The University will enhance and strengthen internal controls and procedures. As the university tightens internal controls and procedures, financial statement reporting will be completed in a timely manner. Also, appropriate documentation retention will be maintained. This will result in compliance audits completed before the required deadline.

Program Information: Title III Strengthening Historically Black Colleges and Universities Program (“Title III”) (ALN: 84.031B) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): F. Equipment and Real Property Management - Equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every 2 years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment, and equipment shall be adequately maintained. Equipment property records should contain the following information about the equipment: description (including serial number or other identification number), source, who holds title, acquisition date and cost, percentage of Federal participation in the cost, location, condition, and any ultimate disposition data including, the date of disposal and sales price or method used to determine current fair market value. The Uniform Guidance further requires that equipment owned by the Federal Government shall be identified (tagged) to indicate Federal ownership. Condition: During our testing of Title III equipment, we noted the following exceptions: • The University was unable to provide documentation supporting the completion of a physical inventory of all equipment and real property purchased with federal funds during the most recent two fiscal years. Cause: Insufficient administrative oversight and internal controls with respect to equipment and real property management. Effect or Potential Effect: The University did not comply with the requirements of equipment and real property management. Questioned Costs: None. Context: The University was unable to provide documentation supporting the completion of a physical inventory of all equipment and real property purchased with federal funds during the most recent two fiscal years. Repeat Finding: No similar findings noted in the prior year.   Recommendation: We recommend that the University enhance its internal controls and procedures over the equipment and real property management compliance requirements. Views of Responsible Officials and Planned Corrective Actions: The University concurs with the finding. The University has internal controls to ensure all federally funded equipment is tagged and tracked in compliance with the most up to date Federal Regulation. Additionally, this equipment is physically inventoried regularly but there is not a documented process to track when and how that happens. Moving forward, the Office of Sponsored Programs will work with Finance and Administration to establish an internal process to document the completion of the required physical inventory for all equipment and real property purchased with federal funds.

Program Information: Federal Pell Grant Program (ALN: 84.063) and Federal Direct Loan Program (ALN: 84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions ? Borrower Data Transmission and Reconciliation ? Federal regulations require that the University submit Federal Direct Loan Program (?Direct Loan?) disbursement records for students to the Common Origination and Disbursement (?COD?) in an accurate and timely manner (no earlier than 7 days before and no later than 15 days after disbursement of funds). L. Reporting - Additionally, all schools receiving Federal Pell Grant Program (?Pell?) funds must submit Pell payment data to the through the COD System. Institutions must report student payment data within 15 calendar days after the school makes a payment or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. Condition: For certain students, the University did not submit disbursement information for Direct Loan and Pell GRANT awards through the COD system within the required timeframes. Additionally, while the University submitted certain disbursement information within the required timeframe, the disbursement date submitted was not accurate, as it did not reflect the actual date in which Direct Loan and/or Pell grant funds were credited to certain students? account. Cause: Administrative oversight with respect to accurate and timely reporting of federal awards. Effect or Potential Effect: The University is not in compliance with COD reporting requirements. Questioned Costs: None. Context: We noted the following exceptions: ? For 18 of 40 students selected for Direct Loan disbursement testing, the University did not report an accurate disbursement date within the COD system. ? For 5 of 40 students selected for Direct Loan disbursement testing, the University did not report accurate disbursement information to the COD within the required time frame. ? For 7 of 25 students selected for Pell grant disbursement testing, the University did not report an accurate disbursement date within the COD system. ? For 1 of 25 students selected for Pell grant disbursement testing, the University did not report accurate disbursement information to the COD within the required time frame. Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the University ensure that Direct Loan and Pell grant disbursement dates are entered into the COD website no earlier than 7 days before and no later than 15 days after disbursement as required by federal regulations.

Program Information: COVID-19 ? Education Stabilization Fund (?ESF?) (ALN: 84.425E, 84.425F and 84.425J) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting ? ESF Special Reporting ? Quarterly Public Reporting ? The University is required to publicly post certain information for the Student Aid Portion award on the University?s website in a conspicuous location. Institutions must post certain key line items identified by the ED as critical information directly to their website each calendar quarter, and reports must be updated no later than 10 days after the end of each calendar quarter. Condition: Certain key line items were not correctly reported in the University?s quarterly reports. Additionally, the University did not prepare quarterly reports using the appropriate reporting form, thus certain information could not be reconciled to underlying documentation. Cause: Administrative oversight with respect to ESF quarterly public reporting requirements. Effect or Potential Effect: The University is not in compliance with ESF reporting requirements. Questioned Costs: None. Context: For 2 of 2 quarters selected for testing, certain required key line items for the Student Aid Portion awards reported on the University?s website were not correctly reported. Additionally, the University did not prepare quarterly reports using the appropriate reporting form, thus certain information could not be reconciled to underlying documentation. Identification of Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend the University enhance its policies and procedures over ESF quarterly reporting to ensure that all required information is reported accurately and in accordance with federal regulations.

Program Information: Student Financial Assistance Cluster (CFDA#: Various) and North Carolina Need Based Scholarship Program Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Student Financial Assistance Cluster: N. Special Tests and Provisions ? Disbursements to or on Behalf of Students - Credit Balances - An institution is required to refund credit balances on student accounts within 14 days of the creation of the credit balance. If an institution attempts to refund the credit balance by check and the check is not cashed, the institution must return the funds to the Department of Education no later than 240 days after the date the school issued the check. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Credit Balances ? If, after the Approved Institution credits the Scholarship to a student?s account, the funds credited exceed the amount due to the Approved Institution by the student, the Approved Institution must pay the resulting credit balance to the student within fourteen (14) days of its receipt of funds or fourteen (14) days after the first day of class, whichever is later (NBS Rule .0306). Condition: Student Financial Assistance Cluster: Special Tests and Provisions ? Disbursements to or on Behalf of Students - Credit Balances - The University did not refund credit balances to certain students within the required timeframe. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Credit Balances ? The University did not refund credit balances to certain students within the required timeframe. Cause: Insufficient Administrative oversight with respect to disbursement of federal and state awards. Effect or Potential Effect:Credit balances created due to the disbursement of federal and state aid were not returned within 14 days as required. Questioned Costs: None. Context: We noted the following exceptions: Student Financial Assistance Cluster: Special Tests and Provisions ? Disbursements to or on Behalf of Students - Credit Balances: ? For 10 of 60 students selected for testing, the credit balance created by the disbursement of Title IV awards was not refunded to the student within the required 14 day timeframe. ? For 11 of 60 students selected for testing, the correct credit balance amount created by the disbursement of Title IV awards was not refunded to the student within the required 14 day timeframe. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Credit Balances: ? For 6 of 40 students selected for testing, the credit balance created by the disbursement of NC NBS awards was not refunded to the student within the required 14 day timeframe. ? For 1 of 40 students selected for testing, the correct credit balance created by the disbursement of NC NBS awards was not refunded to the student within the required 14 day timeframe. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2020-001 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its policies and procedures to ensure that credit balances are returned within the appropriate timeframe.

Program Information: Student Financial Assistance Cluster (CFDA#: Various) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Special Tests and Provisions ? Enrollment Reporting - The University is required to update students? statuses on the NSLDS website if they graduate, withdraw or drop to less than half-time status during the fiscal year within 30 days of the date the University becomes aware of the change in enrollment status. Additionally, institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. As with any school/servicer arrangement for the administration of the Title IV programs, if the school uses a third party to meet the NSLDS enrollment reporting requirements it is the school that must ensure that enrollment information is submitted timely, accurately, and completely. Condition: For certain students selected for testing who graduated or withdrew during the year, the University did not submit status change notification or failed to submit timely notification to the NSLDS website. Cause: Lack of sufficient aAdministrative oversight with respect to enrollment reporting requirements. Effect or Potential Effect: The University is not in compliance with enrollment reporting requirements. Failure to promptly report accurate and timely changes in enrollment status may adversely impact the repayment status for student loan borrowers. Questioned Costs: None. Context: The University did not accurately report Program- level enrollment data elements to the NSLDS for 3 of 40 Pell and Direct Loan recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, our enrolled but never attended during the fiscal year. For 2 of 40 students sampled, the University did not submit a status change notification or failed to submit a timely notification to the NSLDS website. Repeat Finding: This is not a repeat finding from prior year. Recommendation: We recommend that the University enhance its policies and procedures over the applicable compliance requirements of the Enrollment Reporting to ensure that all Campus-level and Program-level data is reported accurately and status changes are submitted to the NSLDS website within the required timeframe.

Program Information: Student Financial Assistance Cluster (CFDA#: Various) and North Carolina Need Based Scholarship Program Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Student Financial Assistance Cluster: N. Special Tests and Provisions ? Disbursements to or on Behalf of Students - Credit Balances - An institution is required to refund credit balances on student accounts within 14 days of the creation of the credit balance. If an institution attempts to refund the credit balance by check and the check is not cashed, the institution must return the funds to the Department of Education no later than 240 days after the date the school issued the check. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Credit Balances ? If, after the Approved Institution credits the Scholarship to a student?s account, the funds credited exceed the amount due to the Approved Institution by the student, the Approved Institution must pay the resulting credit balance to the student within fourteen (14) days of its receipt of funds or fourteen (14) days after the first day of class, whichever is later (NBS Rule .0306). Condition: Student Financial Assistance Cluster: Special Tests and Provisions ? Disbursements to or on Behalf of Students - Credit Balances - The University did not refund credit balances to certain students within the required timeframe. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Credit Balances ? The University did not refund credit balances to certain students within the required timeframe. Cause: Insufficient administrative oversight with respect to disbursement of federal awards. Effect or Potential Effect: Credit balances created due to the disbursement of federal aid were not returned within 14 days as required. Questioned Costs: None. Context: We noted the following exceptions: Student Financial Assistance Cluster: Special Tests and Provisions ? Disbursements to or on Behalf of Students - Credit Balances ? For 4 of 60 students selected for testing, the credit balance created by the disbursement of Title IV awards was not refunded to the student within the required 14 day timeframe. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Credit Balances ? For 1 of 25 students selected for testing, the credit balance created by the disbursement of NC NBS awards was not refunded to the student within the required 14 day timeframe. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2019-005 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its policies and procedures to ensure that credit balances are returned within the appropriate timeframe.

Program Information: Student Financial Assistance Cluster (CFDA#: Various) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Special Tests and Provisions ? Return of Title IV Funds - The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. Returns of Title IV funds are required to be deposited or transferred into the student financial assistance account or electronic fund transfers initiated to the Department of Education (?ED?) as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR section 668.173(b)). If a student does not begin attendance in a payment period or period of enrollment, the institution must return all Title IV, HEA program funds that were credited to the student's account at the institution or disbursed directly to the student for that payment period or period of enrollment. The institution must return those funds for which it is responsible under to the respective Title IV, HEA program as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance (34 CFR section 668.21). If the total amount of Title IV grant or loan assistance, or both, that the student earned is greater than the total amount of Title IV grant or loan assistance, or both, that was disbursed to the student of on behalf of the student in the case of a PLUS loan, as of the date of the institution?s determination that the student withdrew, the difference between these amounts must be treated as a post-withdrawal disbursement. If outstanding charges exist on the student?s account, the institution may credit the student?s account up to the amount of outstanding charges with all or any portion of loan funds that make up the post-withdrawal disbursement in accordance with 34 CFR sections 668.164(d)(1), (d)(2), and (d)(3) only after obtaining confirmation from the student or parent in the case of a PLUS loan, that they still wish to have the loan funds disbursed to their account (34 CFR sections 668.22(a)(5) and (a)(6)(ii)(A)). Condition: The University improperly prepared the refund calculations for certain students selected for testing. Additionally, the University did not return funds to the ED within the required time frame for certain students selected for testing. Cause: Insufficient administrative oversight resulted in inaccurate withdrawal calculations being prepared and refunds not being returned within the required timeframe. Effect or Potential Effect: The University is not in compliance with the required federal guidelines over the return of Title IV funds Questioned Costs: Below reporting threshold. Context: For 3 of 17 students selected for testing, the University did not properly calculate the amount of Title IV aid to be returned to the ED. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2019-008 in the prior year schedule of findings and questioned costs Recommendation: We recommend that the University enhance its policies and procedures to ensure that withdrawal calculations are properly prepared and that refunds are returned within the required timeframe.

Program Information: Pell Grant Program (CFDA #84.063) and Federal Direct Student Loans (CFDA #84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Reporting ? Common Origination and Disbursement (?COD?) System ? All schools receiving Pell grants submit Pell payment data to the Department of Education through the COD System. Institutions must report student payment data no earlier than 7 days before and no later than 15 days after the institution makes a payment or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. N. Special Tests and Provisions ? Borrower Data Transmission and Reconciliation - Direct Loans - Federal regulations (34 CFR 690.83 and 685.301) require that the University submit disbursement records for students to the COD in an accurate and timely manner (no earlier than 7 days before and no later than 15 days after disbursement of funds). Additionally, all schools receiving Pell grants must submit Pell payment data to the through the COD System. Institutions must report student payment data within 15 calendar days after the school makes a payment, or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. Condition: For certain students identified through our testing, the University did not submit Federal Pell Grant and Federal Direct Student Loans data through the COD system within the required timeframes. Cause: Insufficient administrative oversight resulted in the untimely reporting of certain Federal Pell Grant Federal Direct Student Loans payment data. Effect or Potential Effect: The University is not in compliance with COD reporting requirements. Failure to submit and update COD records in a timely manner could result in improper awards of student funds. Questioned Costs: None. Context: We noted the following exceptions: For 1 of 25 students selected for Federal Pell Grant Program disbursement testing, the University did not report the disbursements to COD within the required time frame. For 4 of 60 students selected for Federal Direct Student Loans disbursement testing, the University did not report the disbursements to the COD within the required time frame. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2019-007 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University ensure that Federal Direct Student Loans disbursement dates are entered into the COD website no earlier than 7 days before and no later than 15 days after disbursement as required by federal regulations.

Federal Program Information: Student Financial Assistance Cluster (CFDA#: Various) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions ? Disbursements To or On Behalf of Students - Transfer Monitoring - If a student received financial aid while attending one or more other institutions schools are required to request financial aid history using the National Student Loans Data System (?NSLDS?) Student Transfer Monitoring Process. Under this process, a school informs NSLDS about its transfer students. NSLDS will ?monitor? those students on the school?s ?inform? list and ?alert? the school of any relevant financial aid history changes. A school must wait 7 days after it ?informs? NSLDS about a transfer student before disbursing Title IV aid to that student (34 CFR section 668.19). Condition: For certain students that transferred in to the University during the fiscal year, the University did not add the students to the NSLDS `alert? list and was unable to provide documentation supporting that the students? financial aid history was reviewed prior to disbursing Title IV aid. Cause: Insufficient internal controls and lack of administrative oversight regarding monitoring of transfer students. Effect or Potential Effect: The University is not in compliance with the required federal guidelines over transfer monitoring. Questioned Costs: None. Context: For 7 of 8 students selected for testing, the University did not appropriately add the students to the NSLDS `alert? list. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2018-007 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls to follow it policies and procedures in place to ensure that all transfer students are appropriately tracked/ monitored as required.

Federal Program Information: Federal Pell Grant Program (CFDA #84.063) and Federal Direct Student Loans (CFDA #84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management - Institutions are permitted to draw down Title IV funds prior to disbursing funds to eligible students and parents. The institution?s request must not exceed the amount immediately needed to disburse funds to students or parents. A disbursement of funds occurs on the date an institution credits a student?s account or pays a student or parent directly with either student financial aid funds or institutional funds. The institution must make the disbursements as soon as administratively feasible, but no later than 3 business days following the receipt of funds. Any amounts not disbursed by the end of the third business day are considered to be excess cash and generally are required to be promptly returned to the U.S. Department of Education (the ?ED?) (34 CFR section 668.166(a)(1)). Excess cash includes any funds received from the ED that are deposited or transferred to the institution?s Federal account as a result of an award adjustment, cancellation, or recovery. However, an excess cash balance tolerance is allowed if that balance: (1) is less than one percent of its prior-year drawdowns; and (2) is eliminated within the next 7 calendar days (34 CFR sections 668.166(a) and (b)). Condition: Certain instances during the year were identified in which Title IV funds drawn were held in excess of the allowable time frame and/or allowable thresholds. Cause: Insufficient internal controls and lack of administrative oversight regarding Cash Management compliance requirements. Effect or Potential Effect: The University is not properly following its policies and procedures in place to ensure that compliance is maintained with respect to the Cash Management. As a result, certain funds were overdrawn or held in excess of the allowable time frame and/or allowable thresholds. Questioned Costs: None. Context: Various instances of funds drawn and held in excess of the allowable time frame and/or thresholds were identified throughout the University?s fiscal year. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2018-002 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University comply with the Cash Management requirements associated with its Student Financial Assistance Program. We also recommend that the University implement internal controls to facilitate an account review on the third business date after a federal draw to determine whether amounts were disbursed or require a return to the Department of Education.

Federal Program Information: Student Financial Assistance Cluster (CFDA#: Various) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions ? Verification - An institution shall require an applicant selected for verification to submit acceptable documentation that will verify or update the following information used to determine the applicant's expected family contribution (?EFC?): adjusted gross income, U.S. income tax paid, aggregate number of family members in the household, number of family members in the household who are enrolled in as at least half-time students in postsecondary educational institutions if that number is greater than one and untaxed income subject to U.S. income tax reporting requirements in the base year which is included on the tax return form, excluding information contained on schedules appended to such forms. Untaxed income and benefits include: Social Security benefits if the institution has reason to believe that those benefits were received and were not reported or were not correctly reported; child support if the institution has reason to believe child support was received; U.S. income tax deductions for a payment made to an individual retirement account or Keough account; interest on tax-free bond; foreign income excluded from U.S. income taxation if the institution has reason to believe that foreign income was received; and all other untaxed income subject to U.S. income tax reporting requirements in the base year included on the tax return form, excluding information contained on schedules appended to such forms. (34 CFR section 668.56). For students whose applications were selected for verification, if the institution has reason to believe that information included in the application is inaccurate, the institution may not (1) disburse any Pell or campus-based aid, (2) employ the applicant in its FWS program, or (3) originate Federal Direct Student Loans (?Direct Loans?) (or process proceeds of previously originated loans) until the applicant verifies or corrects the information. If the institution does not have any reason to believe that the information is inaccurate, the institution may withhold payment of Pell or Campus-based aid, or may make one interim disbursement of Pell or Campus-based aid, employ or allow an employer to employ an eligible student under FWS for the first 60 consecutive days after the student?s enrollment and may originate the Direct Loan, but cannot process the proceeds. If the verification process is not complete within the time period specified, the institution shall return loan proceeds. In addition, the institution is liable for an interim disbursement if verification shows that a student received an overpayment or if the student fails to complete verification (34 CFR sections 668.58, 668.60(b)(3), and 668.61)) Condition: For certain students selected for verification, the information required to be verified either did not match the underlying supporting documentation (including certain tax information). Cause: Lack of sufficient administrative oversight in regard to verification procedures. Effect or Potential Effect: Federal awards were not disbursed in accordance with federal regulations and the University was not in compliance with verification compliance requirements. Questioned Costs: None. Context: We noted the following exceptions: For 4 of 25 students selected for testing, the University did not perform appropriate verification procedures. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2018-006 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University follow their established policies and procedures to ensure that the appropriate verification procedures are performed for all students who are selected for verification unless excluded by the federal regulations.

Federal Program Information: Federal Supplemental Educational Opportunity Grant (?FSEOG?) Program (CFDA #84.007) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): E. Eligibility ? In selecting among eligible students for FSEOG awards in each award year, an institution shall select those students with the lowest expected family contribution who will also receive Federal Pell Grants in that year (34 CFR section 676.10). Condition: The University did not give priority to Federal Pell Grant recipients when disbursing FSEOG funds. Cause: Lack of sufficient administrative oversight over the disbursement of FSEOG funds. Effect or Potential Effect: The University is not in compliance with Eligibility requirements. Questioned Costs: Below reporting threshold. Context: 4 students who were disbursed FSEOG funds during the year were given priority over Federal Pell Grant Program recipients. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2018-003 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its policies and procedures over the Student Financial Assistance Cluster program to ensure that disbursements of FSEOG funds are made to those students with the lowest expected family contribution who will also receive Federal Pell Grant Program funds in that year.

Federal Program Information: Student Financial Assistance Cluster (CFDA#: Various) and North Carolina Need Based Scholarship Program Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions ? Disbursements to or on Behalf of Students - Credit Balances - An institution is required to refund credit balances on student accounts within 14 days of the creation of the credit balance. If an institution attempts to refund the credit balance by check and the check is not cashed, the institution must return the funds to the Department of Education no later than 240 days after the date the school issued the check. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Credit Balances ? If, after the Approved Institution credits the Scholarship to a student?s account, the funds credited exceed the amount due to the Approved Institution by the student, the Approved Institution must pay the resulting credit balance to the student within fourteen (14) days of its receipt of funds or fourteen (14) days after the first day of class, whichever is later (NBS Rule .0306). North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Timing of Disbursements to Students - The Approved Institution shall credit each student?s account within ten (10) days after the receipt of funds or within ten (10) days after the beginning date of the term for which the proceeds of the Scholarship were disbursed, whichever is later (NBS Rule .0306). Condition: Special Tests and Provisions ? Disbursements to or on Behalf of Students - Credit Balances - The University did not refund credit balances to certain students within the required timeframe. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Credit Balances ? The University did not refund credit balances to certain students within the required timeframe. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Timing of Disbursements to Students ? For certain students selected for testing, the University did not disburse North Carolina Need-Based Scholarship funds within the required time frame after receiving the Scholarship funds from the Authority. Cause: Insufficient internal controls and lack of sufficient administrative oversight with respect to disbursement of federal awards. Effect or Potential Effect: Credit balances created due to the disbursement of federal aid were not returned within 14 days as required. Questioned Costs: None. Context: We noted the following exceptions: Special Tests and Provisions ? Disbursements to or on Behalf of Students - Credit Balances ? For 4 of 60 students selected for testing, the credit balance created by the disbursement of Title IV awards was not refunded to the student within the required 14 day timeframe. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Credit Balances ? For 3 of 25 students selected for testing, the credit balance created by the disbursement of NC NBS awards was not refunded to the student within the required 14 day timeframe. North Carolina Need-Based Scholarship Program: Disbursement of Funds ? Timing of Disbursements to Students ? For 1 of 25 students selected for testing, the University did not disburse the student?s North Carolina Need-Based Scholarship funds within 10 days after receiving the funds form the Authority. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2018-008 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its policies and procedures to ensure that credit balances are returned within the appropriate timeframe.

Federal Program Information: Student Financial Assistance Cluster (CFDA#: Various) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): L. Special Reporting ? Fiscal Operations Report and Application to Participate (?FISAP?) - An institution is required to submit the FISAP annually by October 1, following the end of the award year, and to accurately complete all required key line items containing critical information. The deadline for submitting data corrections is December 15 of the year in which a school submits its FISAP. Condition: The University submitted the 2018-2019 FISAP with errors in the report and data corrections were not submitted by the required deadline. Cause: Insufficient internal controls and lack of sufficient administrative oversight resulted in data errors reported in the FISAP which were not subsequently corrected within the allowable time frame. Effect or Potential Effect: The University is not in compliance with special reporting requirements. Questioned Costs: None. Context: The University submitted the annual FISAP for the 2018-2019 reporting year by the required deadline; however, errors were included in the submission. As of the date of our Single Audit report, these errors remain uncorrected. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2018-005 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University enhance its procedures and internal controls to ensure that the FISAP is completed accurately prior to submission.

Federal Program Information: Federal Direct Student Loans (CFDA #84.268) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): N. Special Tests and Provisions ? Borrower Data Transmission and Reconciliation - Direct Loans - Federal regulations (34 CFR 690.83 and 685.301) require that the University submit disbursement records for students to the COD in an accurate and timely manner (no earlier than 7 days before and no later than 15 days after disbursement of funds). Additionally, all schools receiving Pell grants must submit Pell payment data to the through the COD System. Institutions must report student payment data within 15 calendar days after the school makes a payment, or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. Condition: For certain students identified through our testing, the University did not submit Federal Direct Student Loans data through the COD system within the required timeframes. Cause: Lack of sufficient administrative oversight resulted in the untimely reporting of certain Federal Direct Student Loans payment data. Effect or Potential Effect: The University is not in compliance with COD reporting requirements. Failure to submit and update COD records in a timely manner could result in improper awards of student funds. Questioned Costs: None. Context: For 4 of 60 students selected for Federal Direct Student Loans disbursement testing, the University did not report the disbursements to the COD within the required time frame. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2018-011 in the prior year schedule of findings and questioned costs. Recommendation: We recommend the University ensure that Federal Direct Student Loans disbursement dates are entered into the COD website no earlier than 7 days before and no later than 15 days after disbursement as required by federal regulations.

Federal Program Information: Student Financial Assistance Cluster (CFDA#: Various) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Special Tests and Provisions ? Return of Title IV Funds - The amount of earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student?s withdrawal date. Returns of Title IV funds are required to be deposited or transferred into the student financial assistance account or electronic fund transfers initiated to the Department of Education (?ED?) as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR section 668.173(b)). If a student does not begin attendance in a payment period or period of enrollment, the institution must return all Title IV, HEA program funds that were credited to the student's account at the institution or disbursed directly to the student for that payment period or period of enrollment. The institution must return those funds for which it is responsible under to the respective Title IV, HEA program as soon as possible, but no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance (34 CFR section 668.21). If the total amount of Title IV grant or loan assistance, or both, that the student earned is greater than the total amount of Title IV grant or loan assistance, or both, that was disbursed to the student of on behalf of the student in the case of a PLUS loan, as of the date of the institution?s determination that the student withdrew, the difference between these amounts must be treated as a post-withdrawal disbursement. If outstanding charges exist on the student?s account, the institution may credit the student?s account up to the amount of outstanding charges with all or any portion of loan funds that make up the post-withdrawal disbursement in accordance with 34 CFR sections 668.164(d)(1), (d)(2), and (d)(3) only after obtaining confirmation from the student or parent in the case of a PLUS loan, that they still wish to have the loan funds disbursed to their account (34 CFR sections 668.22(a)(5) and (a)(6)(ii)(A)). Condition: The University improperly prepared the refund calculations for certain students selected for testing. Additionally, the University did not return funds to the ED or the state of North Carolina, respectively, within the required time frame for certain students selected for testing. Cause: Insufficient internal controls and lack of administrative oversight resulted in inaccurate withdrawal calculations being prepared and refunds not being returned within the required timeframe. Effect or Potential Effect: The University is not in compliance with the required federal guidelines over the return of Title IV funds. Questioned Costs: Below reporting threshold. Context: For 5 of 18 students selected for testing, the University did not properly calculate the amount of Title IV aid to be returned to the ED. For 3 of 18 students? Title IV returns tested, funds required to be returned were not submitted to the ED within the required time frame. Repeat Finding: This is a repeat finding from prior year. This was reported as Finding 2018-009 in the prior year schedule of findings and questioned costs. Recommendation: We recommend that the University enhance its internal controls to ensure that withdrawal calculations are properly prepared and that refunds are returned within the required timeframe.

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