CAROLINA COLLEGE OF BIBLICAL STUDIES

Federal Agency: U.S. Department of Education; Office of Federal Student AidPass through Entity: Not applicableProgram Name: Federal Direct Student Loan ProgramAL# and Program Expenditure: 84.268 ($797,519)Award Number: P268K257533Federal Award Year: July 1, 2024 to June 30, 2025Questioned Costs: $-0-Condition Found: The incorrect withdrawal date was reported to the National Student Loan Database System (“NSLDS”) for four of the nine students selected for testing that received Federal Direct Student Loans.Criteria: NSLDS informs loan servicers of changes in a student’s enrollment status that indicate when the repayments or interest accrual begins and ends. The date a student enrolls, withdraws, graduates, or drops below half-time status should be reported accurately within sixty days of the enrollment status change to NSLDS. Cause: The Financial Aid Director used the date students informed the College they were not returning for the next semester as the withdrawal date instead of the last date of attendance for the next semester for one of the four students. NSLDS was not updated to include Spring 2025 enrollment status changes and a May graduation date for the one student associated with the finding. Finally, the incorrect withdraw date was used for the remaining two students. Possible Asserted Effect: The loan servicers were not aware of the correct deferral, repayment, and interest calculation dates. Repeat Finding: See Finding 2024-001 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Financial Aid Director should update the withdrawal dates in NSLDS. Procedures should be improved to ensure that the enrollment status change dates entered into NSLDS are accurate and are based on a student’s last date of attendance. Management Response: Management agrees with the auditors’ finding and their recommendation. The Financial Aid Director updated the enrollment status for the students in question in December 2025. Procedures will be improved to ensure that a student’s enrollment status is updated timely and with the correct date of the change.

Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program AL# and Program Expenditure: 84.268 ($797,519) Award Number: P268K257533 Federal Award Year: July 1, 2024 to June 30, 2025 Questioned Costs: $-0- Condition Found: A Federal Direct Loan exit interview was not completed by, nor were instructions sent to, students on how to complete an exit interview when the students graduated from the College or dropped below a halftime enrollment status. This was applicable for two of the nine students selected for testing that received Federal Direct Loan funds. Criteria: Federal Direct Loan recipients must receive exit interview counseling. If in-person counseling is not completed, the College may mail written counseling materials to a student’s last known address within thirty days of the date the student withdrew from the College or was attending less than half-time. Cause: Federal Direct Loan exit counseling was not provided when students graduated, withdrew from the College, or dropped below a halftime enrollment status. This was an oversight on the part of the financial aid office staff. Possible Asserted Effect: The students were not aware of their responsibilities related to the Federal Direct Loan program, including repayment options and when repayment on the loans begin. Repeat Finding: See Finding 2024-002 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Federal Direct Loan exit interview information should be sent to the students in question. Procedures should be improved to ensure that Federal Direct exit interviews are completed or information is sent to a student when a student ceases attendance at the College or drops below a halftime enrollment status. The exit interview should be sent within 30 days of the qualifying event. Management Response: Federal Direct Loan exit interview information was sent to one of the students in question in August 2025 and the second student in question in September 2025. Procedures will be improved to ensure Federal Direct Loan exit interviews are completed or information is sent to students when they cease enrollment at the College.

Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program AL# and Program Expenditure: 84.268 ($857,747) Award Number: P268K247533 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: $-0- Condition Found: The incorrect withdrawal date was reported to the National Student Loan Database System (“NSLDS”) for nine of the fourteen students selected for testing that received Federal Direct Student Loans. Criteria: NSLDS informs loan servicers of changes in a student’s enrollment status that indicate when the repayments or interest accrual begins and ends. The date a student enrolls, withdraws, graduates, or drops below half-time status should be reported accurately within sixty days of the enrollment status change to NSLDS. Cause:The Financial Aid Director used the date students informed the College they were not returning for the next semester as the withdrawal date instead of the last date of attendance for the next semester for seven of the nine students. Additionally, NSLDS was not updated to include Spring 2024 enrollment status changes for the two remaining students associated with the finding. Possible Asserted Effect: The loan servicers were not aware of the correct deferral, repayment, and interest calculation dates. Repeat Finding: There was not a similar finding in the previous year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Financial Aid Director should update the withdrawal dates in NSLDS. Procedures should b3 improved to ensure that the enrollment status change dates entered into NSLDS are accurate and are based off a student’s last date of attendance. Management Response: Management agrees with the auditors’ finding and their recommendation. The Financial Aid Director updated the enrollment status for the students in question in November 2024. Procedures will be improved to ensure that a student’s enrollment status is updated timely and with the correct date of the change.

Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program AL# and Program Expenditure:84.268 ($857,747) Award Number: P268K247533 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: $-0- Condition Found: A Federal Direct Loan exit interview was not completed by, nor were instructions sent to, students on how to complete an exit interview when the students graduated from the College or dropped below a halftime enrollment status. This was applicable for five of the fourteen students selected for testing that received Federal Direct Loan funds. Criteria: Federal Direct Loan recipients must receive exit interview counseling. If in-person counseling is not completed, the College may mail written counseling materials to a student’s last known address with thirty days of the date the student withdrew from the College or was attending less than half-time. Cause:Federal Direct Loan exit counseling was not provided when students withdrew from the College or dropped below a halftime enrollment status. This was an oversight on the part of the financial aid office staff. Possible Asserted Effect: The students were not aware of their responsibilities related to the Federal Direct Loan program, including repayment options and when repayment on the loans begin. Repeat Finding: There was not a similar finding in the previous year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Federal Direct Loan exit interview information should be sent to the students in question. Procedures should be improved to ensure that Federal Direct exit interviews are completed or information is sent to a student when a student ceases attendance at the College or drops below a halftime enrollment status. The exit interview should be sent within 30 days of the qualifying event. Management Response: Federal Direct Loan exit interview information was sent to the students in question in November 2024. Procedures will be improved to ensure Federal Direct Loan exit interviews are completed or information is sent to students when they cease enrollment at the College.

Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell GrantAL# and Program Expenditure: 84.268 ($857,747) 84.063 ($384,191)Award Number: P268K247533 P063P237533 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs:$-0- Condition Found: The College’s information security plan does not include the requirements mandated by the Gramm-Leach-Bliley Act. Criteria: The Gramm-Leach-Bliley Act was updated effective June 9, 2023. According to Electronic Announcement ID: General-23-09, for institutions that maintain student information on less than 5,000 consumers, the information security plan must include the following seven elements. Element 1: Designate a qualified individual responsible for overseeing, implementing, and enforcing the institution’s information and security program. Element 2: Provides for the information security program to be based on a risk assessment that identifies reasonably foreseeable internal and external risks to the security, confidentiality, and integrity of customer information that could result in the unauthorized disclosure, misuse, alteration, destruction, or other compromise of such information, and assess the sufficiency of any safeguards in place to control these risks. Element 3: Provides for the design and implementation of safeguards to control the risks the institution identifies through risk assessment. At the minimum, the written information security program must address the implementation of the minimum safeguards identified in 16 CFR 314.4(c) (1) through (8). Element 4: Provides for the institution to regularly test or otherwise monitor the effectiveness of the safeguards it has implemented. Element 5: Provides for the implementation of policies and procedures to ensure that personnel are able to enact the information security program. Element 6: Addresses how the institution will oversee its information service providers. Element 7: Provides for the evaluation an adjustment of its information security program in light of the results of the required testing and monitoring; any material changes to its operations or business arrangements; the results of required risk assessments; or any other circumstances that it knows or has reason to know may have a material impact on the information security programs. Cause: The College’s current information security review does not include the seven elements listed in the criteria. Possible Asserted Effect: The College’s information security report does not meet the requirements listed in the Gramm-Leach-Bliley Act. Repeat Finding: There was not a similar finding in the previous year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The College should update its information security policy to include the elements required by the Gramm-Leach-Bliley Act. The policy should be in writing. Management Response: The College will review its information security policy during FY 2025 and will make the required changes.

Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program and Federal Pell Grant Program AL# and Program Expenditure: 84.268 ($563,808) and 84.063 ($373,699) Award Number: P268K237533 and P063P227533 Federal Award Year: July 1, 2022 to June 30, 202 Questioned Costs: $-0- Condition Found: The Common Origination and Disbursement System (“COD”) disbursement date did not agree with the disbursement date on accounts for twelve of the twelve students receiving Federal Direct Loans and thirteen of the fourteen students receiving Federal Pell Grant funds in our sample. A total of nineteen students were affected by this finding. Criteria: The disbursement date to be reported to the COD is the date that the institution credits funds to a student’s account or pays funds to a student or parent directly. Cause: The staff misunderstood the regulations and believed they had three days to post the funds after the funds were received in the bank account. However, the posted disbursement date did not agree with disbursement date posted in COD. Possible Asserted Effect: The disbursement date in COD is the date interest begins accruing on the Federal Direct Loans. In order for the interest calculation to be accurate, the disbursement date in COD should be the date the students received the loan funds. Repeat Finding: See Finding 2022-003 for a similar finding in the prior year. While the findings were similar, the cause was different in each year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should correct the disbursement dates on the student accounts so that the dates agree with the COD disbursement dates. Management Response: The Vice President of Finance corrected the disbursement dates for the students in question in September 2023. Going forward, the Student Financial Aid Office and Business Office will coordinate the drawdown of funds, reporting to COD, and posting to student accounts. The personnel of the College understands that while on the cash advance method to disburse funds, they have three business days from the date the funds are received to post the funds to the student accounts. However, the disbursement date on the student account and in COD still must agree.

FINDING 2022-001 ? Material Adjustments Condition Found: During the course of the audit for the College, we proposed a journal entry to adjust deferred revenue and federal grant revenue. In 2021, the College received a federal grant that should not be recognized as revenue until allowable expenses have been made. During 2022, the College did incur the allowable expenses and therefore reduced the amount that had been recorded as deferred, however, the amount was not recorded as federal grant revenue. In addition, there were some expenses that should have been recorded as accounts payable at June 30, 2022 that were not recorded. Criteria: Based on professional standards, identification by an auditor of a material misstatement in the financial statement under audit that was not initially identified by the entity's internal control is an indicator of a material weakness or significant deficiency. Cause: This occurred because the College did not identify and make all necessary adjustments to the financial statements before the audit began. Possible Asserted Effect: Because the aforementioned adjustments would have materially misstated the statement of financial position and statement of activities, we believe that this matter is a material weakness in the controls and practices of the College. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the College develop and implement procedures to properly record transactions before the records are submitted for audit. This was an unusual item that does not happen every year. We also recommend that management contact us if they encounter any other unusual items in the future so that the accounting records can be reported properly before the audit begins. Management Response: The financial personnel of CCBS will continue, to the best of their ability, to ensure that year-end adjustments are entered appropriately and that financial statements maintain GAAP standards before being submitted for audit.

FINDING 2022-002 ? COD Disbursement Dates Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program AL# and Program Expenditure: 84.268 ($451,732) 84.063 ($279,693) Award Number: P268K227533 P063P217533 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The Common Origination and Disbursement System (?COD?) disbursement date did not agree with the disbursement date on accounts for five of the eight students receiving Federal Direct Loans and ten of the fourteen students receiving Federal Pell Grant funds in our sample. A total of twelve students were affected by this finding. Criteria: The disbursement date to be reported to the COD is the date that the institution credits funds to a student?s account or pays funds to a student or parent directly. Cause: For one disbursement cycle, the employee that posts funds to student accounts was out of the office when the funds were requested. The day the employee returned was the date used to the post to the student accounts. This did not agree with disbursement date posted in COD. Possible Asserted Effect: The disbursement date in COD is the date interest begins accruing on the Federal Direct Loans. In order for the interest calculation to be accurate, the disbursement date in COD should be the date the students received the loan funds. Repeat Finding: There was not a similar finding for the year ended June 30, 2021. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should correct the disbursement dates on the student accounts so that the dates agree with the COD disbursement dates. Management Response: The Vice President of Finance corrected the disbursement dates for the students in question in October 2022. Going forward, the Student Financial Aid Office and Business Office will coordinate the drawdown of funds, reporting to COD, and posting to student accounts.

FINDING 2022-003 ? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program AL# and Program Expenditures: 84.268 ($451,732) Award Number: P268K227533 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: Two of the sixteen federal student financial aid recipients in our sample did not complete an exit interview or were not sent exit interview instructions. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans. Cause: The Financial Aid Director did not send exit interviews or exit interview instructions to students who withdrew from the College during the semester. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the College. Repeat Finding: See Finding 2021-005 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Exit interview instructions should be sent to the students in question. Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the College. We also recommend reviewing the student listing to determine if any other student should have completed an exit interview for the 2021-2022 award year. Management Response: An exit interview was sent to both of the students in question on August 9, 2022. Procedures will be improved to ensure that an exit interview is completed when a student withdraws from the College.

FINDING 2022-004 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program AL# and Program Expenditures: 84.268 ($451,732) 84.063 ($279,693) Award Number: P268K227533 P063P227533 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $4,227 Condition Found: The R2T4 was not calculated correctly for two of the sixteen students in the compliance testing sample. A separate sample was selected to test additional R2T4 calculations. The R2T4 was not calculated correctly for two of the three students in the R2T4 testing sample. Between the two samples, all of the R2T4s completed during the year were reviewed. Criteria: For a student who is administratively withdrawn due to excessive absences, the date the student withdrew would be the date the student exceeded the maximum number of absences. If a student enrolled in a module course does not begin one or more of the module courses, the Federal Pell Grant funds for that course must be returned to the Department of Education and excluded from the aid disbursed amount in the R2T4 calculation. Cause: The Financial Aid Director believed the Federal Pell Grant adjustment for a module not begun was automatically included in the R2T4 calculation. This part of the calculation is manual and not included in the R2T4 form. The Financial Aid Director received incorrect information regarding calculating the withdraw date for students who are administratively withdrawn for excessive absences. Possible Asserted Effect: The R2T4 calculations were not completed accurately. Between the four students, $3,381 of Federal Pell Grant Funds and $846 of Federal Direction Loan Funds were returned to the Department of Education on October 6, 2022. Repeat Finding: See finding 2021-006 for a similar finding related to R2T2 calculations in the prior year. While both years had R2T4 calculation issues, the causes of the errors were different. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The R2T4s that were not calculated correctly should be recalculated. A total of $3,381 of additional Federal Pell Grant Funds and $846 of Federal Direct Loan Funds should be returned to the Department of Education. Procedures should be improved to ensure that R2T4s are calculated correctly. Management Response: All of the R2T4s completed during the year were recalculated in October 2022. On October 6, 2022, $3,381 of Federal Pell Grant Funds and $846 of Federal Direct Loan Funds were returned to the Department of Education. Procedures will be improved to ensure that R2T4s are calculated correctly.

FINDING 2022-005 ? Pell Award Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Pell Grant Program AL# and Program Expenditures: 84.063 ($279,693) Award Number: P063P227533 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The amount of Pell grant awarded was calculated incorrectly for one of the fourteen students who received Pell in our sample. The student was awarded Pell grant funds as if the student was enrolled ? time when the student was enrolled full-time. Cause: The financial aid office was not informed that the student enrolled in an additional course. This increased the enrollment status from ? time to full-time. Criteria: Federal Pell Grant eligibility is determined by the student?s expected family contribution (?EFC?), cost of attendance, and enrollment status. Possible Asserted Effect: The student is eligible to receive an additional $318 of Pell grant funds. Repeat Finding: There was not a similar finding for the year ended June 30, 2021. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The College should award an additional $318 to the student in question. Communication between the offices should be improved so that the financial aid office is made aware of enrollment status changes timely. Management Response: An additional $318 of Federal Pell Grant funds was awarded to the student in question in August 2022. Communication between the offices will be improved to ensure that the financial aid office is made aware of enrollment status changes timely.

FINDING 2022-006 ? NSLDS Reporting Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program AL# and Program Expenditures: 84.268 ($451,732) Award Number: P268K227533 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The incorrect enrollment status was reported to the National Student Loan Database System (?NSLDS?) for two of the sixteen students selected for testing. Criteria: NSLDS informs loan servicers of changes in a student?s enrollment status that indicate when the repayments or interest accrual begins and ends. The date a student enrolls, withdraws, graduates, or drops below half-time status should be reported accurately. Cause: One student was reported as withdrawn instead of ? time because the integration between the Department of Education software and College?s software, Populi, did not identify the student as enrolled and receiving federal aid when the student was attending the College. The second student was reported as graduated in NSLDS when the student was enrolled full-time. The student completed the AAA program, but had continued attending the College working towards a bachelor?s degree. Possible Asserted Effect: The loan servicers were not aware of the correct deferral, repayment, and interest calculation dates. Repeat Finding: There was not a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should update the enrollment status for the two students in question. Procedures should be improved to ensure that a student?s enrollment status is accurately and timely reported to NSLDS. Management Response: The Student Financial Aid Director corrected the enrollment status for the students in question in August 2022. Procedures are being improved to ensure that the student enrollment statuses are reported to NSDLS accurately and timely.

FINDING 2022-007 ? Drug Free Workplace Policy and Drug and Alcohol Abuse Prevention Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Pell Grant Program Federal Direct Loan Program AL# and Program Expenditure: 84.268 ($451,732) 84.063 ($279,693) Award Number: P268K227533 P063P217533 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The Drug Free Workplace Policy and other drug and alcohol abuse prevention material does not include all of the required documentation. Criteria: The College?s published policy must include the following: o information on preventing drug and alcohol abuse; o standards of conduct that clearly prohibit, at a minimum, the unlawful possession, use, or distribution of drugs and alcohol by students and employees on the school's property or as part of the school's activities; o a description of the sanctions under local, state, and federal law for unlawful possession, use, or distribution of illicit drugs and alcohol; o a description of any drug and alcohol counseling, treatment, or rehabilitation programs available to students and employees; o a description of the health risks associated with the use of illicit drugs and alcohol; and o a clear statement that the school will impose sanctions on students and employees for violations of the standards of conduct (consistent with local, state, and federal law) and a description of these sanctions, up to and including expulsion, termination of employment, and referral for prosecution. Cause: The College administration has not revised the policy to comply with the SFA regulations. Possible Asserted Effect: The policy did not contain all of the required documentation listed above. Staff and students were unaware of the College?s full policy and drug prevention efforts. Repeat Finding: See Finding 2021-008 for a similar finding in the prior year. Recommendation: The College administration should rewrite the Drug Free Workplace Policy and drug and alcohol abuse prevention information to include the information listed above. In addition, the drug free workplace policy and drug and alcohol abuse prevention information should be distributed annually to students. This information should also be included in the Annual Security Report. Management Response: Management will update the drug free workplace policy and drug and alcohol abuse prevention information in the 2023 fiscal year. The information will be distributed to the staff and students.

FINDING 2022-008 ? Biennial Review of the Drug and Alcohol Abuse Prevention Program and Policies Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Pell Grant Program Federal Direct Loan Program AL# and Program Expenditure: 84.268 ($451,732) 84.063 ($279,693) Award Number: P268K227533 P063P217533 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The College administration did not complete the biennial review of their Drug Free Workplace Policy and drug free prevention process. Criteria: The biennial review should include the following: ? the number of drug and alcohol-related violations and fatalities that occur on a College?s campus or as a part of any of the College?s activities that are reported to campus officials; and ? the number and type of sanctions that are imposed by the school as a result of drug and alcohol-related violations and fatalities on the College?s campus or as part of any of the College?s activities. Cause: The College administration did not complete the biennial review because they were not aware of the requirement and the College?s policies did not contain all of the required elements which would allow the College to complete the biennial review. Possible Asserted Effect: The College administration cannot determine or document the effectiveness of their policies. The College cannot determine if improvements to policies should be made. Repeat Finding: See Finding 2021-009 for a similar finding the prior year. Recommendation: The College Administration should complete and document biennial review of the drug free workplace and drug prevention policies. The policies are going to have to be updated and the necessary information tracked before this can completed. Management Response: Management will complete the biennial review after the drug free workplace and drug and alcohol abuse prevention polices have been updated and the required data has been tracked.

FINDING 2021-001 ? Material Adjustments Condition Found: During the course of the audit for the College, we proposed journal entries to adjust depreciation expense, beneficial interests, and property, plant and equipment. Criteria: Based on professional standards, identification by an auditor of a material misstatement in the financial statement under audit that was not initially identified by the entity's internal control is an indicator of a material weakness or significant deficiency. Cause: This occurred because the College did not identify and make all necessary adjustments to the financial statements before the audit began. Possible Asserted Effect: Because the aforementioned adjustments would have materially misstated the statement of financial position and statement of activities, we believe that this matter is a material weakness in the controls and practices of the College. Repeat Finding: There was not a similar finding in the prior year. Recommendation: We recommend that the College develop and implement procedures to properly record transactions before the records are submitted for audit. Management Response: Due to our current size, it is not cost effective or feasible to hire a CPA to prepare all adjustments prior to audit submission. However, the financial personnel of the College, to the best of their ability, will work to ensure that year-end adjustments are entered appropriately and that financials maintain GAAP standards before being submitted for audit.

FINDING 2021-002 ? Segregation of Duties Condition Found: Journal entries and monthly bank reconciliations are being prepared by the same person who has access to the accounting software and are not consistently approved and reviewed by another person. Criteria: For proper segregation of duties, the authorization, recordkeeping, and custody of related asset duties should be kept separate. Some duties may be combined if there are proper mitigating controls in place, such as those that would prevent and/or detect potential fraud, abuse, and errors. Cause: The College has a limited number of personnel involved in the accounting system making it difficult to segregate all accounting functions. Possible Asserted Effect: Failing to properly control and review the financial reporting process can lead to errors in the financial statements, and fraud or abuse by management, employees, and others involved. Repeat Finding: See Finding 2020-002 for a similar finding in the prior year. Recommendation: We recommend that the Board and management continue to review the current financial transaction processes, brainstorm potential mitigating controls, evaluate the cost/benefit of implementation of each one, work with others to implement the ones that will be put into place, and continue monitoring the effectiveness of such controls. Management Response: The financial personnel abide by financial policies and procedures that were approved by the Board. These instructions are clear on how various situations should be handled. The financial personnel will work with the President and others as necessary, to implement any other additional controls to mitigate any potential fraud, abuse, and errors.

FINDING 2021-003 ? Finance and Accounting Resources Condition Found: As noted in Finding 2021-001, we found instances where transactions or account balances were not recorded correctly. In addition, we were informed that employees in the accounting area did not have a strong accounting background. We also noted various instances, as documented in the Comments and Recommendations Letter to management that represent indicators of internal control deficiencies, which could lead to a failure to prevent, or detect and correct a material misstatement due to error or fraudulent activity. Criteria: AU-C Section 265 provides specific examples of control deficiencies related to competencies for financial reporting that are indicators of material weaknesses in internal control. Cause: The employees in the accounting area do not have a strong accounting background. Possible Asserted Effect: Errors could occur and not be detected without a strengthening of the internal controls. At times, the internal finance and accounting staff did not demonstrate proper accounting knowledge such as correctly accounting for transactions or showing the ability to prepare financial statements in accordance with GAAP. Repeat Finding: See Finding 2020-001 for a similar finding in the prior year. Recommendation: The accounting and finance department should continue to be evaluated for adequate staff and those staff be supervised with those with suitable skill, knowledge, or experience for their respective duties. We recommend that the Board assess the adequacy of the College?s finance and accounting resources, including the qualifications and experience of personnel overseeing or working in these areas. This could also be addressed by utilizing outside resources to assist the staff or by having current staff obtain more training especially in GAAP and specifically not-for-profit accounting. Management Response: The financial personnel will continue to strengthen knowledge, skills, and abilities through attending training conferences and forums throughout the year as it relates to running the financial department of a non-profit school of higher education.

FINDING 2021-004 ? Verification Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Pell Grant Program CFDA# and Program Expenditures: 84.063 ($331,937) Award Number: P063P207533 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: Unknown Condition Found: The verification process was not fully completed for three of the twenty-five students selected for testing. The household size and number in college was not verified for two of the students in question. The third student had conflicting information between the ISIR and tax return data that was not reconciled. Criteria: If a student is in the V1 verification group, the following items must be verified: adjusted gross income, U.S. income taxes paid, untaxed portions of IRA distributions, untaxed portions or pensions, IRA deductions and payments, tax exempt interest income, education credits, household size, the number in college, SNAP benefits, and child support paid. Cause: The Financial Aid Office did not have two of the students complete the College?s Number of Household Members and Number in College form. For the third student, the ISIR showed the student as married with two family members in college. However, the tax return for the same time period showed the student as single. Only the student?s income was included in the ISIR information. Possible Asserted Effect: If the required documentation were provided and there was differences in the household size, number in college, marital status, or income, the students? Expected Family Contribution (?EFC?) would have changed. If the EFC is changed, the amount of Federal Pell Grant funds awarded would have been incorrect. Repeat Finding: This finding was not reported in the immediately prior audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The household size and number in college should be verified for two of the students in question. The Financial Aid Office should determine if the third student was married when the ISIR was filed. If the student was married, the spouse?s income should be included in the ISIR information. If the student was not married, the marital status and number in the household/college should be updated. The EFC should be recalculated. If the EFC changes, the Pell award should be adjusted. Management Response: Management agrees with the auditors? finding and their recommendation. The Financial Aid Office will gather the required documentation for the three students in question and make any necessary changes to the ISIR information. The EFC and Federal Pell Grant funds awarded will be adjusted as needed. We anticipate having this process completed by January 31, 2022. Procedures will be improved to ensure that the verification process is fully completed before disbursing aid.

FINDING 2021-005? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program CFDA# and Program Expenditures: 84.268 ($509,387) Award Number: P268K217533 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: Five of the twenty-five federal student financial aid recipients in our sample did not complete an exit interview or were not sent exit interview instructions. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans. Cause: The Financial Aid Director did not send exit interviews or exit interview instructions to students who withdrew from the College. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the College. Repeat Finding: This finding was not reported in the immediately prior audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Exit interview instructions should be sent to the students in question. Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the College. We also recommend reviewing the student listing to determine if any other student should have completed an exit interview for the 2020-2021 award year. Management Response: An exit interview was sent to three of students in question in December 2021. Two of the students enrolled in the College for the fall 2021 semester and were not sent exit interview instructions as the students were currently enrolled at least half-time. Procedures will be improved to ensure that an exit interview is completed when a student withdraws from the College.

FINDING 2021-006 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program CFDA# and Program Expenditures: 84.268 ($509,387) 84.063 ($331,937) Award Number: P268K217533 P063P207533 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: The R2T4 was not calculated correctly for two of the twenty-five students in the sample. The incorrect number of days in the semester was used in the R2T4 calculation. Criteria: The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. Cause: There was a mistake made when counting the total number of days in the semester. The total number of days before any break days were deducted was 112. It was incorrectly reported as 121 on the R2T4 calculations. In addition, the week of Fall Break was not included in the break days when it should have been. Possible Asserted Effect: The R2T4 calculations were not completed accurately. One student was eligible for $106 of Federal Pell Grant Funds that were returned and the second student was eligible for an additional $81 of Federal Pell Grant Funds that were returned with the original R2T4 calculation. Repeat Finding: This finding was not reported in the immediately prior audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The R2T4s that were not calculated correctly should be recalculated. A total of $187 of additional Federal Pell Grant Funds should be disbursed to the two students in question. $106 is due to one student and $81 is due to the second student. Management Response: The R2T4s were recalculated in December 2021. An additional $106 and $81 of Federal Pell Grant Funds will be awarded to the two students in question, respectively, in January 2022.

FINDING 2021-007 ? Authorization to Hold Credit Balances Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Pell Grant Program Federal Direct Loan Program CFDA# and Program Expenditure: 84.268 ($509,387) 84.063 ($331,937) Award Number: P268K217533 P063P207533 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: For one of the twenty-five students in our sample, the College held Title IV credit balances for longer than fourteen days without written authorization. Criteria: An institution may not hold a credit balance, which is caused by federal student financial aid funds, on a student?s account for more than fourteen days without written authorization from the student. Cause: There was confusion about whether current year funds were going to be used for prior year charges. After reviewing the College?s policy, current year Federal Student Financial Aid funds can only be used to pay current year charges. The College had refunded the credit balance up to the amount of prior year charges due. Once it was determined that the students had to pay the prior year balance personally, the credit balance had been left on the account for more than fourteen days without written authorization. Possible Asserted Effect: The Title IV credit balance was not returned timely to the student. Repeat Finding: There was not a similar finding in the previous year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The credit balance was created on September 1, 2020 and was returned to the lender on November 6, 2020. Communication should be improved between the offices involved in the disbursement process to ensure that credit balances are refunded timely. Management Response: The credit balance was refunded to the lender for the student in question on November 6, 2020. The financial aid office will follow-up with the appropriate staff to ensure that the credit balance refunds requested are processed timely.

FINDING 2021-008 ? Drug Free Workplace Policy and Drug and Alcohol Abuse Prevention Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Pell Grant Program Federal Direct Loan Program CFDA# and Program Expenditure: 84.268 ($509,387) 84.063 ($331,937) Award Number: P268K217533 P063P207533 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: The Drug Free Workplace Policy and other drug and alcohol abuse prevention material does not include all of the required documentation. Criteria: The College?s published policy must include the following: o information on preventing drug and alcohol abuse; o standards of conduct that clearly prohibit, at a minimum, the unlawful possession, use, or distribution of drugs and alcohol by students and employees on the school's property or as part of the school's activities; o a description of the sanctions under local, state, and federal law for unlawful possession, use, or distribution of illicit drugs and alcohol; o a description of any drug and alcohol counseling, treatment, or rehabilitation programs available to students and employees; o a description of the health risks associated with the use of illicit drugs and alcohol; and o a clear statement that the school will impose sanctions on students and employees for violations of the standards of conduct (consistent with local, state, and federal law) and a description of these sanctions, up to and including expulsion, termination of employment, and referral for prosecution. Cause: The College administration has not revised the policy to comply with the SFA regulations. Possible Asserted Effect: The policy did not contain all of the required documentation listed above. Staff and students were unaware of the College?s full policy and drug prevention efforts. Repeat Finding: This finding was not reported in the immediately prior audit. Recommendation: The College administration should rewrite the Drug Free Workplace Policy and drug and alcohol abuse prevention information to include the information listed above. In addition, the drug free workplace policy and drug and alcohol abuse prevention information should be distributed annually to students. This information should also be included in the Annual Security Report. Management Response: Management will update the drug free workplace policy and drug and alcohol abuse prevention in the 2022 fiscal year. The information will be distributed to the staff and students.

FINDING 2021-009 ? Biennial Review of the Drug and Alcohol Abuse Prevention Program and Policies Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Pell Grant Program Federal Direct Loan Program CFDA# and Program Expenditure: 84.268 ($509,387) 84.063 ($331,937) Award Number: P268K217533 P063P207533 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: The College administration did not complete the biennial review of their Drug Free Workplace Policy and drug free prevention process. Criteria: The biennial review should include the following: ? the number of drug and alcohol-related violations and fatalities that occur on a College?s campus or as a part of any of the College?s activities that are reported to campus officials; and ? the number and type of sanctions that are imposed by the school as a result of drug and alcohol-related violations and fatalities on the College?s campus or as part of any of the College?s activities. Cause: The College administration did not complete the biennial review because they were not aware of the requirement and the College?s policies did not contain all of the required elements which would allow the College to complete the biennial review. Possible Asserted Effect: The College administration cannot determine or document the effectiveness of their policies. The College cannot determine if improvements to policies should be made. Repeat Finding: This finding was not reported in the immediately prior audit. Recommendation: The College Administration should complete and document biennial review of the drug free workplace and drug prevention policies. The policies are going to have to be updated and the necessary information tracked before this can completed. Management Response: Management will complete the biennial review after the drug free workplace and drug and alcohol abuse prevention polices have been updated and the required data has been tracked.

FINDING #2020-003 Enrollment Reporting Significant Deficiency Grantor: U.S. Department of Education Federal Program Names: Federal Direct Student Loans and Federal Pell Grant Program CFDA Numbers: 84.268 and 84.063 Condition While Carolina College of Biblical Studies returned the roster files timely throughout the year, the status for two students was not updated timely. Criteria 34 CFR 685.309 and 34 CFR 690-83(b)(2) require an institution to report enrollment status changes within 30 days, unless a roster file will be submitted within 60 days. Questioned Cost None. Effect While roster files were returned every 60 days within the 15-day time frame, changes in two student enrollment statuses were not updated within the roster file on a timely basis. Inaccurate or late reporting can impact a student's loan grace period, in-school deferment eligibility, beginning loan repayments, appropriate interest charges, etc. Cause Procedures were not in place to ensure that enrollment status changes were reported timely. Identification as a Repeat Finding Not applicable. Context Based on a sample of 8 students, 2 students had enrollment changes that were not reported timely.Recommendation Procedures should be developed and implemented to ensure that financial aid personnel review, update and verify student enrollment statuses, program information, and effective dates that appear on the roster file prior to each submission. Views of Responsible Officials and Planned Corrective Actions Management agrees with this finding and is currently addressing the issue. See attached Corrective Active Plan.

FINDING #2019-003 Updating Common Origination and Disbursement (COD) with Actual Disbursement Dates Grantor: U.S. Department of Education Federal Program Names: Federal Pell Grant Program CFDA Numbers: 84.063 Condition 19 Pell disbursements were tested to verify the COD was updated with the correct disbursement date and amount. The disbursement dates reported in COD for 3 of the 19 disbursements were not in agreement with the actual disbursement dates. All 3 disbursements reporting errors related to the same date and were reported as disbursed 6 days prior to the actual disbursement date. Criteria 34 CFR 690.83 Questioned Cost None. Effect Not updating Pell COD can affect a student?s lifetime eligibility if they withdraw from the College and are close to the 600% lifetime eligibility limit and receive Pell at a subsequent institution. Cause This was an inadvertent oversight by student financial aid personnel to correct the anticipated disbursement date with the actual disbursement date. Identification as a Repeat Finding Prior year finding. Context Out of 19 students tested for accurate Pell COD disbursement dates, 3 students had a COD disbursement date that was not updated to agree to the actual date of disbursement. Recommendation We recommend that the College create a process to ensure that actual disbursement dates are updated in COD subsequent to the disbursement of funds to verify that the COD records agree with the College?s records. Views of Responsible Officials and Planned Corrective Actions Management agrees with this finding and is currently addressing the issue. See attached Corrective Active Plan.

FINDING #2019-004 Enrollment Reporting Material Weakness Grantor: U.S. Department of Education Federal Program Names: Federal Direct Student Loans CFDA Numbers: 84.268 Condition Carolina College of Biblical Studies did not report students? enrolment status changes within the required timeframe. Criteria 34 CFR 685.309 requires an institution to report enrollment status changes within 30 days, unless a roster file will be submitted within 60 days. Questioned Cost None. Effect Student enrollment status was not updated on NSLDS on a timely basis. Inaccurate or late reporting can impact a student's loan grace period, in-school deferment eligibility, beginning loan repayments, appropriate interest charges, etc. Cause Procedures were not in place to ensure that enrollment status changes were reported timely. Identification as a Repeat Finding Not applicable. Context Based on a sample of 8 students, 6 students had enrollment changes that were not reported timely. Recommendation Procedures should be developed and implemented to ensure that enrollment changes are reported timely and captured on the SCHER1 file. Views of Responsible Officials and Planned Corrective Actions Management agrees with this finding and is currently addressing the issue. See attached Corrective Active Plan.

FINDING #2019-005 Student Eligibility ? Calculation of Benefits Material Weakness Grantor: U.S. Department of Education Federal Program Names: Federal Direct Student Loans and Federal Pell Grant Program CFDA Numbers: 84.268 and 84.063 Condition Carolina College of Biblical Studies over-awarded financial aid to two students selected for eligibility testing. One student was over-awarded Pell in the amount of $104 and one student was over-awarded a direct loan in the amount of $1,000. Both amounts were promptly returned to the Department of Education upon discovery during the audit process. Criteria 34 CFR 685.200 and 34 CFR 690.75 Questioned Cost $1,104 Effect The over-award of financial aid was returned late to the Department of Education. Cause The Pell over-award was the result of a student changing their enrollment status from full-time to half-time and Pell was awarded based on full-time attendance. The direct loan over-award was due to financial aid staff making an inaccurate determination that the student had completed their first year of study when in fact they had not. The calculation of benefits, particularly as it relates to directs loans, has components that are manually calculated which can lead to inadvertent errors by financial aid staff. In addition, due to the limited number of individuals involved in the financial aid process, a review of the benefit calculations is not performed. Identification as a Repeat Finding Not applicable. Context Of the 25 students selected for eligibility testing, one student was over-awarded Pell and another student was over-awarded a direct loan. Recommendation We recommend that manual calculations be cross reviewed by financial aid personnel in order to catch errors and oversights. We also recommend that any manual components of the calculation of benefits process be explored to determine if the calculations can be automated within the school?s management software. Views of Responsible Officials and Planned Corrective Actions Management agrees with this finding and is currently addressing the issue. See attached Corrective Active Plan.

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