The Methodist University, Inc.

Finding 2025-001 Federal Program Information: Federal Direct Student Loan Program (ALN#: 84.268), Federal Pell Grant Program (ALN#: 84.063) Criteria or Specific Requirement: N. Special Tests and Provisions – Campus Level Enrollment Reporting Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. 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. Condition: The University failed to report student enrollment for 1 out of 40 selections. Cause: Insufficient administrative oversight with respect to Campus Level enrollment reporting compliance requirements. Effect or Possible Effect: The University was not in compliance with the Campus Level enrollment reporting compliance requirements. Questioned Costs: None. Context: The University failed to report student enrollment for 1 out of 40 selections. Identification of Repeat Finding: There was a similar finding, 2024-002, identified during the prior year. Recommendation: We recommend the University enhance its procedures to ensure Campus Level enrollment reporting is submitted. Views of Responsible Officials: To prevent future occurrences of missing campus‑level student enrollment reporting, both the University Registrar and Assistant Registrar will participate in the upcoming NSClearinghouse Academy on Thursday, March 26. This session will provide a refresher on enrollment compliance reporting requirements and offer opportunities to connect with peers and Clearinghouse staff to discuss best practices. Additionally, I will begin collaborating with the MU Database Administrator, Mary Hupp, to compile and review all monthly enrollment reports prior to submission to the National Student Clearinghouse. As part of this strengthened workflow, we will implement a two‑person sign‑off to ensure that both the data extraction and the TXT file mapping are jointly reviewed and verified before transmission. This added step ensures a second review of both the database and the TXT file before transmission, strengthening accuracy, and reducing the likelihood of future omissions. Before the next reporting cycle, the Registrar’s Office will also review and update the current enrollment reporting process documentation in collaboration with Mary Hupp to ensure that all steps, and system validation points are clearly defined and consistently followed.

FINDING 2025-001 Name of Responsible Individual: Kasi Turner Corrective Action: To prevent future occurrences of missing campus‑level student enrollment reporting, both the University Registrar and Assistant Registrar will participate in the upcoming NSClearinghouse Academy on Thursday, March 26. This session will provide a refresher on enrollment compliance reporting requirements and offer opportunities to connect with peers and Clearinghouse staff to discuss best practices. Additionally, I will begin collaborating with the MU Database Administrator, Mary Hupp, to compile and review all monthly enrollment reports prior to submission to the National Student Clearinghouse. As part of this strengthened workflow, we will implement a two‑person sign‑off to ensure that both the data extraction and the TXT file mapping are jointly reviewed and verified before transmission. This added step ensures a second review of both the database and the TXT file before transmission, strengthening accuracy,and reducing the likelihood of future omissions. Before the next reporting cycle, the Registrar’s Office will also review and update the current enrollment reporting process documentation in collaboration with Mary Hupp to ensure that all steps, and system validation points are clearly defined and consistently followed. Anticipated Completion Date: April 15, 2026

2024-002

Finding 2025-002 Federal Program Information: Federal Direct Student Loan Program (ALN#: 84.268) Criteria or Specific Requirement: Special Tests and Provisions – Disbursements to or on Behalf of Students – Federal Student Aid (“FSA”) Credit Balances - Where disbursements created a credit balance in the student account and the student or parent did not provide an authorization for the institution to retain funds, the institution must provide the credit balance amount to the student within 14 days of the date the balance was created (34 CFR 668.164(h)). Condition: Instance was identified where the University did not return a credit balance within the required timeframe. Cause: Administrative oversight with respect to disbursement to or on behalf of students. Effect or Possible Effect: The University was not in compliance with disbursement to or on behalf of students. Questioned Costs: None. Context: For 1 of 40 students selected for testing, the University did not return a credit balance within the required 14 days. Identification of Repeat Finding: There was a similar finding, 2024-003, identified during the prior year. Recommendation: We recommend the University complete a timely review of credit balances in order to return all credit balances with respect to FSA credit balances within the required timeframe. Views of Responsible Officials: The current refund report used to monitor Title IV refunds has limitations that affected the completeness of data reviewed. Reports rely on manual batch postings, which can delay or omit certain transactions at the time of report generation. This created gaps in monitoring and potential human error. The institution is transitioning to a new system. The new program is expected to improve the accuracy and completeness of refund monitoring. System implementation and staff training are currently underway, with full adoption beginning with the 2026-2027 academic year.

FINDING 2025-002 Name of Responsible Individual: Mary Mercer, Director Student Financial Services Corrective Action: Issue: The current refund report used to monitor Title IV refunds has limitations that affected the completeness of data reviewed. Reports rely on manual batch postings, which can delay or omit certain transactions at the time of report generation. This created gaps in monitoring and potential human error. Action Step Responsible Party Timeline Transition to new system – Implement refund reporting to reduce manual errors and improve completeness. Student Financial Services & IT (if needed) Full adoption by Academic Year 2026–2027 Staff training – Provide comprehensive training to Student Financial Services staff on new system processes, reporting, and controls for Title-IV refunding. Ellucian Consultant & Student Financial Services When training session is scheduled through first report in 2026-2027 Interim verification controls – Conduct weekly reconciliation of batch postings and verifications that all Title IV refunds are captured until the new system is fully operational. Student Financial Services & Controller’s Office Immediate until system adoption Validation & reconciliation process – Establish a formal process within the new system to ensure all refunds are accurately captured and reported. Student Financial Services By first full report in 2026–2027

2024-003

Federal Program Information: Federal Direct Student Loan Program (ALN#: 84.268), Federal Pell Grant Program (ALN#: 84.063) Criteria or Specific Requirement: N. Special Tests and Provisions – Campus Level Enrollment Reporting Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the SFA Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309; Perkins 34 CFR 674.19(f)). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment. 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. Condition: The University failed to timely report student enrollment changes for 6 out of 25 selections. Cause: Insufficient internal control and administrative oversight with respect to Campus Level enrollment reporting compliance requirements. Effect or Possible Effect: The University was not in compliance with the Campus Level enrollment reporting compliance requirements. Questioned Costs: None. Context: For 6 out of 25 students selected for testing, the student enrollment status was not reported timely to NSLDS. Identification of Repeat Finding: There was a similar finding, 2023-002, identified during the prior year. Recommendation: We recommend the University enhance its procedures to ensure Campus Level enrollment reporting is submitted timely. Views of Responsible Officials: Methodist University will enroll in the National Student Clearinghouse G from DV Process, which will eliminate the need to transmit a Graduates Only file. The student enrollment record will be updated to a graduated (G) status based on the transmission of the Degree Verify file only (see process workflow graphic below). Additionally, we will review the G status records generated from the Degree Verify file to ensure that the status was accurately applied to each student's enrollment record. Any status not applied will be updated manually by an office team member. Our goal for enrollment in this program is 12/13/2024 in order to pilot for the fall 2024 degree conferral date. Lastly, we will update our end-of-term processing documents to remove the NSC Graduates Only file transmission and add the updated enrollment status review component once the Degree Verify file has been transmitted and processed by the NSC.

Name of Responsible Individual: Kasi Turner, Registrar Corrective Action: Methodist University will enroll in the National Student Clearinghouse G from DV Process, which will eliminate the need to transmit a Graduates Only file. The student enrollment record will be updated to a graduated (G) status based on the transmission of the Degree Verify file only (see process workflow graphic below). Additionally, we will review the G status records generated from the Degree Verify file to ensure that the status was accurately applied to each student's enrollment record. Any status not applied will be updated manually by an office team member. Our goal for enrollment in this program is 12/13/2024 in order to pilot for the fall 2024 degree conferral date. Lastly, we will update our end-of-term processing documents to remove the NSC Graduates Only file transmission and add the updated enrollment status review component once the Degree Verify file has been transmitted and processed by the NSC. Anticipated Completion Date: January 31, 2025

2023-002

Federal Program Information: Federal Pell Grant Program (ALN 84.063), Federal Direct Student Loans (ALN 84.268) Criteria or Specific Requirement: N. Special Tests and Provisions – Enrollment Reporting – Institutions are required to report enrollment information under the Pell grant and the Direct and Federal Family Education Loan (FFEL) loan programs via the National Student Loan Data System (NSLDS) (OMB No. 1845-0035), although FFEL loans are no longer made or a part of the Student Financial Assistance Cluster, a student may have a FFEL loan from previous years that would require enrollment reporting for that student (Pell, 34 CFR 690.83(b)(2); FFEL, 34 CFR 682.610; Direct Loan, 34 CFR 685.309). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website which the financial aid administrator can access for the auditor. The data on the institution’s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. 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. The NSLDS Enrollment Reporting Guide provides the requirements and guidance for reporting enrollment details using the NSLDS Enrollment Reporting Process. Campus Level: Institutions are responsible for accurately reporting certain significant data elements under the Campus- Level Record that the U.S. Department of Education considers high risk, including enrollment status, which is the student’s enrollment status as of the reporting date; full-time (F), threequarter time (Q), half-time (H), less than half-time (L), leave of absence (A), graduated (G), withdrawn (W), deceased (D), never attended (X) and record not found (Z). Program Level: Institutions are responsible for accurately reporting certain significant data elements under the Program Level Record that the U.S. Department of Education considers high risk, including CIP Code – The Classification of Instructional Programs (CIP) is a set of codes that define fields of study. CIP Codes are maintained by ED's National Center for Education Statistics (NCES). They were most recently updated in 2020 and are usually updated every ten years. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer. Institutions must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway (SAIG) (OMB No. 1845-0002) mailboxes sent by ED via NSLDS. After the institution submits the Enrollment Reporting roster to NSLDS, NSLDS evaluates the Enrollment Reporting roster and provides the institution an Error/Acknowledgement file. If errors are identified, institutions have 10 days to correct the errors and resubmit to NSLDS. Condition: Campus Level: Certain students’ enrollment status changes were reported outside of the required timeframe. Additionally, error records were not corrected within the required timeframe. Cause: Administrative oversight. Effect or Potential Effect: The University was not in compliance with the enrollment reporting requirements. Questioned Costs: None. Context: For 1 of 25 campus level records tested, the University did not certify the students’ enrollment data within 60 days. Population of errors identified in Error/Acknowledgement files included 3 errors that repeated and were thus not corrected within the 10-day timeframe. Identification as a Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the University enhance its procedures over enrollment reporting to ensure students’ enrollment statuses are reported accurately and timely to NSLDS, and that all errors are corrected within the required timeframe. Views of Responsible Officials: We manually reported a student as withdrawn on 2/17/2023. The status change came in as an error on the 3/16/2023 submission (the following month) and we manually updated the status and status start date for the student again. However, it looks like the student’s status reverted to Three-Quarter time on the final transmission on 5/1/2023. We will commit to closer monitoring of withdrawals submitted manually by our office on subsequent enrollment transmissions through the Clearinghouse.

Contact Person: Kasi Turner, Registrar Corrective Action: We manually reported a student as withdrawn on 2/17/2023. The status change came in as an error on the 3/16/2023 submission (the following month) and we manually updated the status and status start date for the student again. However, it looks like the student’s status reverted to Three-Quarter time on the final transmission on 5/1/2023. We will commit to closer monitoring of withdrawals submitted manually by our office on subsequent enrollment transmissions through the Clearinghouse. Anticipated Completion Date: December 15, 2023

Federal Program Information: Student Financial Assistance Cluster (Various ALN?s) Criteria or Specific Requirement: N. Special Test and Provisions ? Disbursements To or On Behalf of Students ? Direct Loan ? 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 Loan 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 668.19). Condition: The University did not inform NSLDS of a certain transfer student. Cause: Administrative oversight. Effect or Potential Effect: The University did not follow the NSLDS Student Transfer Monitoring Process. Questioned Costs: None. Context: For 1 of 6 transfer students tested, the University did not add the student to its NSLDS Transfer Monitoring List as required. Identification as a Repeat Finding: There was no similar finding identified during the prior year. Recommendation: We recommend the University enhance its procedures over transfer monitoring to ensure that all mid-year transfer students are added to the NSLDS Transfer Monitoring List. Views of Responsible Officials: Going forward, this has been corrected using ?Tasks? in PowerFAIDS, which will identify mid-year transfer students, alerting the financial aid staff to enter the student into the ?NSLDS Mid-Year Transfer? section in PowerFAIDS and transmitting the file to NSLDS.

Name of Responsible Individual: Bonnie Adamson Corrective Action: Going forward, this has been corrected using ?Tasks? in PowerFAIDS, which will identify mid-year transfer students, alerting the financial aid staff to enter the student into the ?NSLDS Mid-Year Transfer? section in PowerFAIDS and transmitting the file to NSLDS. Anticipated Completion Date: February 2023

Finding 2021-001: Enrollment Reporting U.S. Department of Education Student Financial Aid Cluster Identification of the federal program: U.S. Department of Education, Student Financial Aid Cluster Criteria or specific requirement: Federal regulation 34 CFR 685.309 states that the institution shall accurately report a chance in a student?s enrollment status directly to the lender or guarantee agency within 30 days if a student has graduated, withdrawn, or ceased to be enrolled (or failed to enroll) at least half-time and the school does not expect its next Roster File to NSLDS within 60 days. Condition: The University did not report students? status changes accurately and within the required timeframe. Cause: Administrative oversight in reporting status timely. Effect or potential effect: Changes in student?s enrollment were not reported timely and accurately. Known questioned costs: None. Context: Based on a sample of 40 students, 4 student?s or 10% of the students selected were not reported to the NSLDS within the required timeframe. Repeat finding: Yes Recommendation: The University should implement procedures to ensure that student status changes are reported in a timely manner. Views of responsible officials: The University agrees with the finding - refer to the University?s Corrective Action Plan.

Identifying Number: 2021-001 Finding: Federal regulation 34 CFR 685.309 states that the institution shall accurately report a chance in a student?s enrollment status directly to the lender or guarantee agency within 30 days if a student has graduated, withdrawn, or ceased to be enrolled (or failed to enroll) at least half-time and the school does not expect its next Roster File to NSLDS within 60 days. The University did not report students? status changes accurately and within the required timeframe for 4 students. Anticipated Completion Date: June 30, 2022 Contact Person: Dawn Ausborn, Vice President of Business Affairs Corrective Actions Taken or Planned: . Management agrees with the findings and understands the requirements and reporting timelines associated with student enrollment status changes. The students were enrolled in multiple degree programs and status changes were not reflected the same on all of them, which resulted in late reporting. For future reporting, we will run an internal report making sure that all degree programs show the same and correct enrollment status prior to submission to the National Student Clearinghouse and NSLDS.

2020-001

Finding 2021-002: Award Disbursement U.S. Department of Education Student Financial Aid Cluster Identification of the federal program: U.S. Department of Education, Student Financial Aid Cluster Criteria or specific requirement: Federal regulation 34 CFR 690.63 states that Federal Pell Grants should be awarded based upon the payment and disbursement schedules published by the Department of Education for each award year and includes formulas for calculating awards for payment period. Condition: The University did not disburse a student?s Pell award in a timely manner. Cause: The University?s controls were not operating effectively to identify that all students eligible for Pell awards received those awards. Effect or potential effect: Pell award was not disbursed in a timely manner. Known questioned costs: Actual questioned costs are an underpayment of $2,244. Context: During verification testing, it was noted that one student was flagged on their ISIR for Pell award eligibility and this student didn?t receive a Pell award. This award was subsequently disbursed to the student upon identification. Repeat finding: No Recommendation: The University should implement controls to ensure that all students eligible for Pell awards actually receive those awards. Views of responsible officials: The University agrees with the finding - refer to the University?s Corrective Action Plan.

Identifying Number: 2021-002 Finding: Federal regulation 34 CFR 690.63 states that Federal Pell Grants should be awarded based upon the payment and disbursement schedules published by the Department of Education for each award year and includes formulas for calculating awards for payment period. The University did not disburse a student?s Pell award in a timely manner. Anticipated Completion Date: June 30, 2022 Contact Person: Dawn Ausborn, Vice President of Business Affairs Corrective Actions Taken or Planned: . The Student initially completed the 20/21 FAFSA 6/9/20 (before the 20/21 AY). However, the student did not the information we needed to complete his file until 3/11/21 when the 20-21 AY was almost over. We normally pull the file when we receive the corrected ISIR and award the Pell at that time (if eligible). It appears the file was never brought back to be reviewed. It has been corrected and, in the future, the corrective measures will be regular queries for potential Pell eligible ISIRs to double check eligibility.

Finding 2020-001: Enrollment Reporting Identification of the federal program: U.S. Department of Education, Student Financial Aid Cluster Criteria or specific requirement: Federal regulation 34 CFR 685.309 state that the institution shall accurately report a change in a student?s enrollment status directly to the lender or guarantee agency within 30 days if a student has graduated, withdrawn, or ceased to be enrolled (or failed to enroll) at least half-time and the school does not expect to submit its next Roster File to NSLDS within 60 days. Condition: The College did not report students? status changes accurately and within the required timeframe. Known questioned costs: None. Context: Based on a sample of 47 students, 1 student?s status change was reported with the incorrect withdrawal date and 18 students? status changes were not reported within the required timeframe. It was also determined that all students, who graduated in Spring 2020, did not have their student status changes reported within the required timeframe. Effect: Changes in student?s enrollment were not reported timely and accurately. Cause: The College did not have procedures in place to report all students? status changes in a timely and accurate manner. Recommendation: The College should implement procedures to ensure that student status changes are reported in a timely and accurate manner for students who receive federal loans. Views of responsible officials: Refer to the College?s Corrective Action Plan.

Identifying Number: 2020-001 Finding: Federal regulation 34 CFR 685.309 state that the institution shall accurately report a change in a student?s enrollment status directly to the lender or guarantee agency within 30 days if a student has graduated, withdrawn, or ceased to be enrolled (or failed to enroll) at least half-time and the school does not expect to submit its next Roster File to NSLDS within 60 days. Based on a sample of 47 students, 1 student?s status change was reported with the incorrect withdrawal date and 18 students? status changes were not reported within the required timeframe. It was also determined that all students, who graduated in Spring 2020, did not have their student status changes reported within the required timeframe. Corrective Actions Taken or Planned: Management agrees with the findings and understands the requirements and reporting timelines associated with student enrollment status changes. The incident involving one student was an oversight in which the Registrar?s Office mistakenly entered an incorrect date. However, to address the potential for inconsistent reporting dates amongst the various campus offices in the future, the current withdrawal worksheet completed by the Office of Student Accounts that is shared with both the Registrar and Financial Aid offices will be updated to include an additional field that specifically indicates a student?s withdrawal date, as determined by the Office of Student Accounts. This process will be used to ensure the dates reported by the various campus offices are consistent. Furthermore, we will compare the withdraw dates in the submission file to the registration record prior to submitting the report to NSLDS through the National Student Clearinghouse. Per the University?s policy and procedures, students who graduate are reported to the NSLDS within one week of graduation. Due to extenuating circumstances encountered this year with COVID-19 and the necessity to transition to a remote working environment, the Registrar?s Office did not realize the graduating students were not included in the final submission report for the Spring 2020. We will create a checklist to make sure that all students as required are included in future submissions. Anticipated Completion Date: Immediately University Official Responsible for Corrective Action: University Registrar

Finding 2020-002: Gramm-Leach-Bliley Act Identification of the federal program: U.S. Department of Education, Student Financial Aid Cluster Criteria or specific requirement: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as ?financial institutions? and subject to the Gramm-Leach-Bliley Act (16 CFR313.3(k)(2)(vi). Under an institution?s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. Condition: The University does not have a policy in place documenting specific risks identified in relation to the Gramm-Leach-Bliley Act, or safeguards to address identified risks. Known questioned costs: None. Context: The University does not have sufficient documentation to evidence compliance with these requirements. Effect: The University is not in compliance with the requirement to follow the Gramm-Leach-Bliley Act. Cause: Lack of understanding of formal documentation required for (i) risks identified and (ii) safeguards to such risks. Recommendation: The University should implement a policy to ensure it follows the Gramm-Leach-Bliley Act requirements. Views of responsible officials: Refer to the University?s Corrective Action Plan.

Identifying Number: 2020-002 Finding: The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as ?financial institutions? and subject to the Gramm-Leach-Bliley Act (16 CFR313.3(k)(2)(vi). Under an institution?s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. The University does not have a policy in place documenting specific risks identified in relation to the Gramm-Leach-Bliley Act, or safeguards to address identified risk. Corrective Actions Taken or Planned: Management agrees with the findings and understands the requirements to perform and document specific risk assessments in relation to the Gramm-Leach-Bliley Act. Management plans to address this by: 1. Identify and assign an Information Security Program Coordinator to implement and maintain an Information Security Program. 2. Create and implement an Institutional Information Security Program for highly critical and private financial and related information, inclusive of customer (student) financial information (covered data). Anticipated Completion Date: start on immediately and completed no later than 6/30/2021 University Official Responsible for Corrective Action: University CFO and CIO