Bennett CollegeHigher Education

2022-002 Gramm-Leach-Bliley Act (?GLBA?) Compliance Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063, and 84.007 ? Student Financial Aid Cluster Federal Award Identification # 21-22 Financial Aid Year Condition: The College did not sufficiently comply with the requirements of GLBA. Criteria: 16 CFR 314.3, 16 CFR 314.4. Questioned Costs: $0. Context: The College has not designated an individual to oversee information security. The College has not documented its security risk assessment and safeguards. Cause: The College has not allocated sufficient resources to address all requirements of GLBA. Effect: The College has not adequately addressed the requirements of GLBA, which may lead to unintended exposure of student information to security risks. Identification as Repeat Finding, if Applicable: Repeat finding. Recommendation: We recommend that the College finalize putting appropriate safeguards in place to mitigate risks associated with GLBA. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See Corrective Action Plan.

Satisfactory Academic Progress Review (SAP) Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063 and 84.007-Student Financial Aid Cluster Federal Award Identification #: 20-21 Financial Aid Year Condition: The College did not monitor SAP after the Spring 2020 and Fall 2020 terms, resulting in Title IV aid potentially disbursed to ineligible students. The College?s policy is to monitor SAP after each term. Criteria: 34 CFR 668.34(c) Questioned Costs: Known $0, Likely $39,804 Context: There were 7 students who were on appeal or warning after the Spring 2020 term that were not reviewed for SAP after the fall 2020 term. Cause: Turnover in staffing. The College did not follow the institutional or federal SAP policy. Effect: Ineligible students awarded Title IV aid. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that the College review SAP after each term as required by their policy. We also recommend that the 7 students on warning or appeal after Spring 2020 term be reviewed to determine if students were ineligible for Title IV aid received in the Spring 2021 term. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Failure to Monitor Students With Federal Aid Who Unofficially Withdrew and Late Return of Title IV Funds (R2T4) Significant Deficiency ALN #: 84.268, 84.063 and 84.007-Student Financial Aid Cluster Federal Award Identification #: 20-21 Financial Aid Year Condition: The College did not monitor students with federal aid who unofficially withdrew and did not return unearned Title IV funds within 45 days for a student who officially withdrew during a term. Criteria: 34 CFR 668.22 Questioned Costs: $2,894 Context: Out of 4 students tested for unofficial withdraws, 1 student did not complete the term and should have had unearned Title IV funds returned, resulting in questioned costs of $2,894. These 4 students were reviewed as part of the audit process. We noted 6 other students with Title IV aid and no passing grades for the Fall 2020 and Spring 2021. These students have not yet been reviewed for potential return of Title IV funds. We also noted 1 other student who officially withdrew during the Spring 2021 term, had an R2T4 completed, but the $2,868 in Title IV funds were returned 10 days late. Cause: Turnover in staffing. After each term, the College did not complete a review on students with Title IV aid and no passing grades as required to determine if an R2T4 should have been completed due to nonattendance. Effect: Federal funds not earned by the student were not returned timely to the Department of Education. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend the College put procedures in place to timely review for potential unofficial withdrawals after each term for students with federal aid and no passing grades, returning any unearned aid within the required time frame. For unofficial withdrawals, the College can default to a 50% completion of the term for processing R2T4?s or determine a date of last attendance based on an academically related activity. We also recommend the College put procedures in place to ensure that any unearned funds are returned timely for students who officially withdraw during a term. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Gramm-Leach-Bliley Act (GLBA) Compliance Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063 and 84.007-Student Financial Aid Cluster Federal Award Identification #: 20-21 Financial Aid Year Condition: The College did not sufficiently comply with the requirements of GLBA. Criteria: 16 CFR 314.3, 16 CFR 314.4 Questioned Costs: $0 Context: The College has not designated an individual to oversee information security. The College has not documented its security risk assessment and safeguards. Cause: The College has not allocated sufficient resources to address all requirements of GLBA. Effect: The College has not adequately addressed the requirements of GLBA, which may lead to unintended exposure of student information to security risks. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend College allocate sufficient resources to address all requirements of GLBA. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Higher Education Stabilization Fund (HEERF) Reporting DEPARTMENT OF EDUCATION ALN #: 84.425E, 84.425F and 84.425J Federal Award Identification #: P425E203368, P425F203790, and P425J200113 Condition: HEERF reporting was not always done accurately or timely. 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 the quarter in which the funds were spent. Additionally, for each student grant disbursement made, the College is required to report quarterly to their website a summary of how the funds were allocated and disbursed. Questioned Costs: None Context: During the audit, it was noted that the College did not continue to update their website with the HEERF reporting requirements as listed in their grant agreements. The annual report for 2021 FY was not accurate as the HCBU portion expenditures were reported as institutional funds. The first quarterly report for HEERF I institutional and HCBU funds (quarter ended Sept. 30, 2020) was incorrect. Student grant reporting to their website was not completed for HEERF II. 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 reporting requirements of HEERF. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that the College complete the HEERF quarterly reporting until the HEERF funding is spent to ensure compliance is maintained. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Finding 2020-001 - U.S. Department of Education (USDE), Title IV Student Financial Aid Programs (significant deficiency): Information on the federal program - Federal Direct Student Loans, CFDA No. 84.268, June 30, 2020; Federal Pell Grant Program, CFDA No. 84.063, June 30, 2020; Federal Supplemental Educational Opportunity Grant, CFDA No. 84.007, June 30, 2020; Federal Work-Study Program, CFDA No. 84.003, June 30, 2020 Criteria - Federal regulations governing the Title IV programs . Condition - Numerous compliances were noted, as more fully described in the context below . Questioned Costs - As provided below Context - We observed the following condition in connection with our testing of the various U. S. Department of Education, Title IV, Student Financial Assistance Programs: 1. Nine (9) out of 60 students tested were missing either an official high school or college transcript. The missing elements were subsequently resolved. 2. One (1) out of 60 students tested was missing a college transcript. The questioned costs are $5,323. 3. Two (2) out of 60 students tested received an improper disbursement after withdrawing from the College and late withdrawal calculations. The questioned costs are $23,314. The College subsequently returned $16,002. For two (2) students, the College did not provide essential documentation to determine the calculation. 4. One (1) out of 60 students tested had credit balances for which the refunds were not returned within the required 14 days. 5. One (1)out of 60 students tested did not have PLUS Loan denial letters but received additional unsubsidized loans during the year. The College subsequently returned $4,000 to unsubsidized direct loans. 6. One (1) out of 60 students tested did not have PLUS Loan Approval letter but received a PLUS loan during the year . The questioned costs are $6,250. 7. One (1) out of 60 students tested were not properly verified for student eligibility. The missing verification documentation was subsequently provided. 8. The College did not provide reconciliations for Federal student financial aid awards including Pell Grants, Direct Loans , SEOG or Work-Study and N.C. State student aid programs which suggest that the student financial aid and business offices did not reconcile on a monthly basis. Reconciliations covering the entire year were subsequently provided, with minor variances . 9. Thirteen (13) out of 60 students tested in the State of North Carolina Need Based Scholarship program showed inconsistencies in payments versus what was reported to the state. The questioned costs are $11,260 . Cause - Oversight by responsible employees of properly monitoring required elements. Effect - The College's participation in the Title IV programs could be subject to USDE sanctions as applicable. The same applie s to North Carolina grant funds . Repeat Finding - Yes. Auditor's Recommendation - The College should implement corrective actions to ensure that the above finding is resolved and does not recur in future periods. Moreover, internal controls over compliance with federal and state program regulations should be revisited to ensure adequate supervisory controls, quality assurance reviews of compliance steps , technical train ing of staff, and adequate procedu res are being followed for compliance purposes . ? Views of Responsible Officials - Items 1 and 2: Missing Official Transcripts - Prior to August 1, 2019, the Office of Admissions did not have any controls and/or processes in-place to ensure the receipt offinal official transcripts. However, since August 1, 2019 processes and controls have been put in place that includes a file audit checklist and quality audit before transferring files to the Office of the Registrar prior to the beginning of the respective semester. In addition, the Office of the Registrar also performs a quality check on the files once they are received and communicates any findings to the Office of Admissions for immediate resolution. ? ? Items 3 and 4: Improper Disbursement and Refunds Not Returned - The calculation and the actual Return of Title IV funds was a function previously conducted in the business office that the former Director of Admissions was In the process of bringing into the financial aid office. The unexpected departure of the Financial Aid Director , the transition for the Interim Director, and the staff turnover in the Office of Business and Finance resulted in these findings. The Bennett College's Office of Financial Aid has retained the services of, FA Solutions, a third-party servicer to assist with the financial aid processing and serve as the Acting Director of Financial Aid for the 2020-2021 award year. The Return of Title IV Funds process has now been automated into our PowerFaids System and is no longer dependent upon staff in the Office of Financial Aid and/or the Office of Business and Financial to manually calculate any necessary return offunds. In addition, FA Solutions will complete our return to Title IVs for our withdrawal students for academic year 20- 21 going forward. Additionally, they will manage several other processes which includes SAP, reconciliation, etc. FA Solutions is a resource and a guide to the institution for best practices , processes, and compliance questions. With this added resource the school is confident in an upward trajectory in the administration of Financial Aid. Items 5 - 7 - Bennett College has retained the services of FA Solutions, a third -party servicer to assist with the financial aid processing and serve as the Acting Director of Financial Aid for the 2020-2021 award year. In the Interim, the third-party servicer is a resource and a guide to the institutions for best practices , processes, and compliance questions. With this added resource the school is confident in an upward trajectory in the administration of Financial Aid. Item 8 - 9 - In August and early September, the Office of Financial Aid has completed the reconciliations for Federal and State student financial aid awards that include the formal reconciliation of the financial aid transactions between Jenzabar and PowerFaids, and, most , importantly with the actual funds within COD and the State of North Carolina for the fiscal year ended June 30, 2020. However, it is noted that a process must be put into place by the Office of Business and Finance to perform month -to-month reconciliations between Jenzabar and PowerFaids so that in turn the Office of Financial Aid can reconcile the funds with COD. The Office of Financial Aid has worked with FA Solutions to automate the reconciliation process and with the added process from the Office of Business and Finance the reconciliations will be in a timely and efficient manner. In addition to the above, it is also important to note that the College had several incidents that were unavoidable as we started the audit process. These include: ? Technology issues because power outages during major storms that prevented the uploading of documents as well as the loss of networking capabilities. ? The Vice President of Student Experience and Enrollment Management who was the lead in the Financial Aid Audit had a death in her immediate family (mother) resulting in a week of time away from the office. ? The Financial Aid Counselor who has program responsibility for the Work-study Program was involved in a hit and run accident and received multiple injuries which hindered his ability to work . ? Technology issues as a result of Bennett College 's migration to Office 365. And , finally, it is important to note again that Bennett College has retained the services of, FA Solutions, a third-party servicer to assist with the financial aid processing and serve as the Acting Director of Financial Aid for the 2020-2021 award year. In the interim, the third-party servicer is a resource and a guide to the Institutions for best practices , processes, and compliance questions. With this added resource the school is confident in an upward trajectory in the administration of Financial Aid.

Finding 2020-002 - Federal Cash Managem ent. Excess Federal Cash On Hand (significant defic iency): Information on the Federal Program - Coronavirus Aid, Relief, and Economic Security (CARES) Act Programs - Higher Education Emerging Relief Fund (HEERF), Section 18004(a)(1) and 18004 (a)(2), June 30, 2020 Criteria - Federal regulations governing the cash management of drawdown of funds. Condition - Excess Federal cash on hand. Question ed Costs - $525,578 excess cash on hand, net of amounts receivable from other USDE programs. Context - We observed that the College fully drew down the entire HEERF authorization upon receipt of the award notice. Cause - Failure to adhere to Federal cash management guidelines. Effect - The College's participation in these federal programs could be subject to agency sanctions as applicable. Repeat Finding - No. Auditor's Recommendation - The College may be required to return the excess funds drawn down. Views of Responsible Officials - Government guidance on the nature of qualifying expenditures for certain CARES Act allotments has been ambiguous, particularly in April and May when the College drew down these grants assuming the qualifying expenditures had already occurred. Given that the College did not apply for these CARES Act allotments with budgeted expected expenditures and the spirit of the CARES Act legislation was to put the funds into each higher education institution as soon as possible to provide student and institutional financial relief, the College drew down these awards after notification by the awarding federal agencies . At the date of this report , the HBCU allotment has been expended . Management will inquire as to the return of the unexpend ed HEERF allotment . Management views these CARES Act funds as unusual federal grants awarded during a time of national crisis. Future drawdowns will be conducted under the authorized federal agency reimbur sement pro- cess .

Finding 2019-001 ? U.S. Department of Education (USDE), Title IV Student Financial Aid Programs and North Carolina State Education Assistance Authority Need-Based Scholar-ship Program (significant deficiency): Information on the Federal Program: Federal Direct Student Loans, CFDA No. 84.268, June 30, 2019; Federal Pell Grant Program, CFDA No. 84.063, June 30, 2019; Federal Supplemental Educational Opportunity Grant, CFDA No. 84.007, June 30, 2019; Federal Work-Study Program, CFDA No. 84.003, June 30, 2019; Teacher Education Assistance for College and Higher Education CFDA No. 84.379; North Carolina Need-Based Scholarship Program, June 30, 2019 Criteria ? Federal regulations governing Title IV programs and State rules governing N.C. Need-Based Scholarship Program. Condition ? Numerous non-compliances were noted, as more fully described in the context below. Questioned Costs ? As provided below. Context ? We observed the following condition in connection with our testing of the various U. S. Department of Education, Title IV, Student Financial Assistance Programs and NCEAA Need-Based Scholarship Program: a) Seven (7) out of 60 files tested had missing official high school transcripts. The missing elements were subsequently resolved. b) Four (4) out of 60 financial aid files were tested after the auditor left the field, suggesting that record maintenance and retention practices are questionable. The files were subsequently mailed to the auditor and tested. c) Three (3) out of seven (7) students tested R2T4 funds were not returned within the required 45 days. All funds were subsequently returned. d) One (1) out of 60 files tested had one incomplete verification. The funds were subsequently returned. Cause ? Oversight by responsible employees of properly monitoring required elements. Effect ? The College?s participation in the Title IV programs and N.C. Need-Based Scholarship Program could be subject to USDE and NCEAA sanctions, as applicable. Repeat Finding ? Yes Auditor?s Recommendation ? The College should implement corrective actions to ensure that the above findings are resolved and does not recur in future periods. Views of Responsible Officials ? Management accepts the findings and internal control processes will be reviewed and monitored to ensure compliance. The review of control processes has recently begun.