King University

2025‐001 Significant Deficiency: Working During Scheduled Class Time (U.S. Department of Education, Federal Work Study Program, ALN #84.033) Criteria: In accordance with the 2024-2025 Federal Student Aid Handbook, in general, students are not permitted to work in Federal Work Study positions during scheduled class times. Exceptions are permitted if an individual class is cancelled, if the instructor has excused the student from attending for a particular day, and if the student is receiving credit for employment in an internship, externship, or community work-study experience. Any such exemptions must be documented. Statement of Condition: During the audit, it was noted that a student appears to have been paid for Federal Work Study hours logged and submitted for time the student was scheduled to be in class. The professor confirmed that the student was present for the scheduled class in which this overlap was noted. Questioned Costs: The known monetary error is an over-payment of $11. Extrapolation of the error across all students and pay periods that may have been affected estimates total possible monetary error of $833. Therefore, the monetary impact of this deficiency does not exceed the reporting threshold of $25,000. Perspective Information: The audit included a detailed testing of 4 files for students participating in the Federal Work Study program during the 2024-2025 award year. For the four students tested, auditors vouched class schedules, timecards, and paystubs for two specific pay periods, one in each semester. Of these students for the specific pay periods tested, overlap between submitted work study hours paid and classes scheduled without reasonable exception was identified in one instance. Therefore, we consider the error rate as 1 out of the 4 total participating students, which is 25.00%. Cause and Effect: The student clocked into their Federal Work Study position prior to class, went to class while remaining clocked in, and then returned to the position following class. The University time-clock system has safeguards to prevent a student from initially clocking in to work during their scheduled class time unless over-ridden by a supervisor in the case of early dismissal or canceled class; however, no such safeguard prevents students from clocking in prior to and remaining clocked in during class, which is what occurred here. The student’s work study supervisor did not identify the overlap prior to submission of timecard hours for payment. Recommendation: The University should ensure that proper safeguards, in both software and personnel, are in place to prevent, identify, and remediate such errors to prevent over-payment of federal aid funds. View of Responsible Officials: In response to the deficiency cited above, the Director of Financial Aid and Financial Aid Office Manager (Work Study Coordinator) met with administration and staff to examine our work study policies and procedures and to determine the necessary corrective action. It was determined that additional training was needed for work study supervisors and students to ensure that federal regulations are followed within the work study program. We have also communicated to all department heads the importance of a campus-wide commitment to excellence in our work study program, so they are more fully aware of the procedures necessary to remain compliant with federal regulations.

2025‐001 Significant Deficiency: Working During Scheduled Class Time (U.S. Department of Education, Federal Work Study Program, ALN #84.033) Responsible Officials: Christin Mustard, Director of Financial Aid, is responsible for overseeing campus-based funding, and Melissa Tolbert, Financial Aid Office Manager, manages the work study contracts and training with supervisors and students. Kelly Pennington, Payroll and Benefits Supervisor, is responsible for paying work study students. Summary of Finding: During the audit, it was noted that a student appears to have been paid for Federal Work Study hours logged and submitted for time the student was scheduled to be in class without acceptable exemption, which contradicts guidance provided by the 2024-2025 Federal Student Aid Handbook, resulting in an over-payment of $11. Corrective Action Plan: King University has implemented a new mandatory training module for both work study students and supervisors. This training must be completed before a student is cleared to begin working, and this step will be an annual requirement for all new and returning students and supervisors. The training includes key points from the Work Study Handbook and an assessment test that must be passed in order to be cleared for work. Our Work Study Coordinator is completing individual training with all new supervisors as well as refresher training with returning supervisors. Supervisors are informed of their responsibility to verify the accuracy of all timesheets submitted and to ensure that clocked hours do not overlap with scheduled class time. They are required to meet with their work study students in advance to review the policies and expectations outlined in the Work Study Handbook. Both the student and supervisor must sign a document acknowledging that they have read the handbook. Timely communications and reminders will be sent throughout the academic year to supervisors and students as well. As an added safeguard, our IT department has created a report that compares student timesheets to their class schedules to ensure there is no overlap with class time. This report will be run by payroll or financial aid staff prior to each pay cycle to verify compliance. Anticipated Completion Date: King University has returned the overpayment of $11 to the Department via G6 in September 2025.

2024‐001 Significant Deficiency: Return to Title IV Funds (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant Program, ALN #84.063; and Federal Supplemental Opportunity Grant Program, ALN #84.007) Criteria: In accordance with 34 CFR 668.22(f), in the calculation of the percentage of payment period and/or period of enrollment completed, the total number of calendar days in a payment and/or enrollment period includes all days within the period, except that institutionally scheduled breaks of at least 5 consecutive calendar days and days in which the student was on an approved leave of absence are excluded from the total number of calendar days in a payment period and/or period of enrollment. Statement of Condition: During the audit, it was noted that the University used the incorrect number of completed days in the payment period or period of enrollment in calculating the percentage of aid earned of withdrawn students. This issue appears to be isolated to Return to Title IV Funds forms completed for students enrolled and withdrawn during the Spring semester, specifically related to miscalculation involving spring break. For certain students, this causes a variance in the percentage of completion as completing over 60% of the term and having earned all awarded aid versus completing under 60% of the term and requiring a partial return of aid. Questioned Costs: The known monetary error is an over-award of $1,029. Extrapolation of the error across all students who may have been affected estimates total possible monetary error of $9,089. Therefore, the monetary impact of this deficiency does not exceed the reporting threshold of $25,000. Perspective Information: The audit included a detailed testing of 13 files for students who withdrew during the spring term, of which this miscalculation applies to 6; of these, 1 student crossed the 60% completion threshold with the correction and should have had aid returned. Based upon withdrawal dates of the full listing of students who withdrew during the Spring, 4 additional students could have been affected similarly with this miscalculation. Therefore, we consider the error rate as 5 out of the 31 total students who withdrew in the Spring, which is 16.13%. Cause and Effect: For noted withdrawal calculations, the completed day count was not performed per the instructions described in the handbook. Completed day count for the identified students was not reduced by the period related to spring break, which should have reduced the completed day count by nine days. This results in a miscalculation of percentage of Title IV aid earned and could result in monetary error. Recommendation: The University should ensure that the completed number of calendar days in the payment period or period of enrollment is counted correctly utilizing the guidance provided by the Compliance Supplement and the Student Financial Aid Handbook, accounting for scheduled breaks appropriately. View of Responsible Officials: We agree with this finding. After review of this student’s Return to Title IV calculation, it was determined that upon beginning the calculation in the PowerFAIDS system, the Refresh button was not used which would have recalculated the completed days to include the 9-day Spring Break. After reviewing this procedure with PowerFAIDS, it was recommended that we also enter the withdrawal date on the R2T4 tab of the POE screen which forces the system to recalculate the completed days prior to beginning the R2T4 calculation. We have added this step to our Return to Title IV procedures. The corrected Return to Title IV calculation was completed, which resulted in an Unsubsidized loan return of $1,029. The loan funds were returned via the Common Origination and Disbursement (COD) system.

2024‐001 Significant Deficiency: Return to Title IV Funds (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268; Federal Pell Grant Program, ALN #84.063; Federal Supplemental Opportunity Grant Program, ALN #84.007; and TEACH Grant Program, ALN #84.379) Name of Contact Person The Director of Financial Aid, Christin Mustard, is responsible for the corrective action plan for this finding. Corrective Action Plan We agree with this finding. After review of this student’s Return to Title IV calculation, it was determined that upon beginning the calculation in the PowerFAIDS system, the Refresh button was not used which would have recalculated the completed days to include the 9-day Spring Break. After reviewing this procedure with PowerFAIDS, it was recommended that we also enter the withdrawal date on the R2T4 tab of the POE screen which forces the system to recalculate the completed days prior to beginning the R2T4 calculation. We have added this step to our Return to Title IV procedures. Anticipated Completion Date The corrected Return to Title IV calculation was completed, which resulted in an Unsubsidized loan return of $1,029. The loan funds were returned via the Common Origination and Disbursement (COD) system.

2022-001 Significant Deficiency: National Student Loan Data System (NSLDS) Report (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268 and Federal Pell Grant Program, ALN #84.063) Criteria: In accordance with 34 CFR 685.309(b) and 34 CFR section 690.83(b)(2), for Direct Loans and Pell grants, respectively, once the Enrollment Reporting roster file is received from the NSLDS, the institution must update the Enrollment Reporting roster file for changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and submit the changes to NSLDS. Statement of Condition: During the 2022 audit, it was noted that the University incorrectly reported student enrollment status at changes in enrollment or did not report an updated status whatsoever. Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature. Perspective Information: The 2022 audit included a detailed testing of 40 student files, of which this significant deficiency applies to 18, indicating an error rate of 45.00%. Cause and Effect: Due to lapses in communication between departments, in certain instances, the University failed to provide NSLDS with accurate updates to student enrollment statuses, resulting in misrepresentation within the NSLDS system. Recommendation: The University should ensure that the correct withdrawal status is reported to NSLDS. View of Responsible Officials: King University uses the National Student Clearinghouse to report enrollment changes to NSLDS. We believe a portion of the untimely reporting to NSLDS is a result of the reporting delays between the National Student Clearinghouse and NSLDS, as documented in GENERAL-22-64 beginning July 25, 2022. The Dear Colleague letter and subsequent updates describe issues with enrollment functionality, which affected enrollment reporting. King conducted a review on a sample of students and found that students were reported correctly to the Clearinghouse but were not appearing in NSLDS. A more frequent enrollment schedule should remedy this issue. We also attribute these delays to changes in leadership/staffing during that timeframe. The enrollment reporting steps were outlined by the prior Registrar when this process transitioned to the Office of Institutional Research, but this staffing transition could have resulted in inaccurate data being captured and reported during a window of time in Fall 2021 (when the reporting responsibility transitioned). Additionally, it was discovered that incorrect coding in the CAMS database management system (DBMS) was causing exclusions based on a missing field. These exclusions began in Summer 2021 due to added majors that were not correctly created.

2022-001 Significant Deficiency: National Student Loan Data System (NSLDS) Report (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268 and Federal Pell Grant Program, ALN #84.063). Incorrectly reported student enrollment status. Name of Contact Person: The Director of Registration and Records, Whitney Cleland, and the Director of Institutional Research and Assessment, Jason Thead, are responsible for the corrective action plan for this finding. Corrective Action Plan: King University uses the National Student Clearinghouse to report enrollment changes to NSLDS. Effective Fall 2022, King University will submit enrollment data uploads to the National Student Clearinghouse at least every 30 days. The first of term submission will occur within 21 days of the start date of the term. Monthly enrollment reporting will correspond with module drop/add periods and will occur no later than 10 business days after a module drop period ends, per the Academic Calendar. Additionally, and as a part of the enrollment submission process for the National Student Clearinghouse (NSC), which provides data to NSLDS, an exception report is generated for each enrollment file prior to submission. This exception report is verified and remedied before data is submitted to NSC. Once data is submitted to NSC, an error report is generated from the NSC system. For any students who have status or level changes, the Director of Institutional Research and Assessment verifies all dates with an internal report, called the Enrollment Analysis by Course report, to ensure dates are accurately reported to the NSC. This report is also used by the Office of Financial Aid to ensure withdrawal dates are consistent. This internal report and process ensures that the dates used for all offices are the same, which remedies any communication issues between offices. Additionally, notices are sent by Financial Aid for adjustments to withdrawal dates, which are corrected in our database management system (DBMS). These additional steps allow the DBMS to accurately and collectively capture all applicable students, and the exception and error reports allow the institution to ensure the correct information is reported. We believe a portion of the untimely reporting to NSLDS is a result of the reporting delays between the National Student Clearinghouse and NSLDS, as documented in GENERAL-22-64 beginning July 25, 2022. The Dear Colleague letter and subsequent updates describe issues with enrollment functionality, which affected enrollment reporting. King conducted a review on a sample of students and found that students were reported correctly to the Clearinghouse but were not appearing in NSLDS. A more frequent enrollment schedule should remedy this issue. We also attribute these delays to changes in leadership/staffing during that timeframe. The enrollment reporting steps were outlined by the prior Registrar when this process transitioned to the Office of Institutional Research, but this staffing transition could have resulted in inaccurate data being captured and reported during a window of time in Fall 2021 (when the reporting responsibility transitioned). Additionally, it was discovered that incorrect coding in the CAMS database management system (DBMS) was causing exclusions based on a missing field. These exclusions began in Summer 2021 due to added majors that were not correctly created. Anticipated Completion Date Per above, effective Fall 2022, enrollment data is now uploaded to the National Student Clearinghouse at least every 30 days. Furthermore, the missing fields in the DBMS have been remedied, and the institution is working with NSC and NSLDS to correct previously misreported records by February 2023.

2022-002 Significant Deficiency: National Student Loan Data System (NSLDS) Report (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268 and Federal Pell Grant Program, ALN #84.063) Criteria: In accordance with 34 CFR 685.309(b) and 34 CFR section 690.83(b)(2), for Direct Loans and Pell grants, respectively, unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that a loan under title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended. Statement of Condition: During the 2022 audit, it was noted that the University did not supply status updates to NSLDS in a timely manner, within the 60-day window. Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature. Perspective Information: The 2022 audit included a detailed testing of 40 student files, of which this significant deficiency applies to 4, indicating an error rate of 10.00%. Cause and Effect: Due to lapses in communication between departments, in certain instances, the University provided NSLDS with updates to student enrollment statuses outside of a timeframe that is considered to be reasonably appropriate, resulting in delayed representation within the NSLDS system. Recommendation: The University should ensure that any updates to enrollment status be reported to NSLDS within 60 days of the effective date of change. View of Responsible Officials: King University uses the National Student Clearinghouse to report enrollment changes to NSLDS. We believe a portion of the untimely reporting to NSLDS is a result of the reporting delays between the National Student Clearinghouse and NSLDS, as documented in GENERAL-22-64 beginning July 25, 2022. The Dear Colleague letter and subsequent updates describe issues with enrollment functionality, which affected enrollment reporting. King conducted a review on a sample of students and found that students were reported correctly to the Clearinghouse but were not appearing in NSLDS. A more frequent enrollment schedule should remedy this issue. We also attribute these delays to changes in leadership/staffing during that timeframe. The enrollment reporting steps were outlined by the prior Registrar when this process transitioned to the Office of Institutional Research, but this staffing transition could have resulted in inaccurate data being captured and reported during a window of time in Fall 2021 (when the reporting responsibility transitioned). Additionally, it was discovered that incorrect coding in the CAMS database management system (DBMS) was causing exclusions based on a missing field. These exclusions began in Summer 2021 due to added majors that were not correctly created.

2022-002 Significant Deficiency: National Student Loan Data System (NSLDS) Report (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268 and Federal Pell Grant Program, ALN #84.063) ?Did not supply status updates to NSLDS in a timely manner. Name of Contact Person: The Director of Registration and Records, Whitney Cleland, and the Director of Institutional Research and Assessment, Jason Thead, are responsible for the corrective action plan for this finding. Corrective Action Plan: King University uses the National Student Clearinghouse to report enrollment changes to NSLDS. Effective Fall 2022, King University will submit enrollment data uploads to the National Student Clearinghouse at least every 30 days. The first of term submission will occur within 21 days of the start date of the term. Monthly enrollment reporting will correspond with module drop/add periods and will occur no later than 10 business days after a module drop period ends, per the Academic Calendar. Additionally, and as a part of the enrollment submission process for the National Student Clearinghouse (NSC), which provides data to NSLDS, an exception report is generated for each enrollment file prior to submission. This exception report is verified and remedied before data is submitted to NSC. Once data is submitted to NSC, an error report is generated from the NSC system. For any students who have status or level changes, the Director of Institutional Research and Assessment verifies all dates with an internal report, called the Enrollment Analysis by Course report, to ensure dates are accurately reported to the NSC. This report is also used by the Office of Financial Aid to ensure withdrawal dates are consistent. This internal report and process ensures that the dates used for all offices are the same, which remedies any communication issues between offices. Additionally, notices are sent by Financial Aid for adjustments to withdrawal dates, which are corrected in our database management system (DBMS). These additional steps allow the DBMS to accurately and collectively capture all applicable students, and the exception and error reports allow the institution to ensure the correct information is reported. We believe a portion of the untimely reporting to NSLDS is a result of the reporting delays between the National Student Clearinghouse and NSLDS, as documented in GENERAL-22-64 beginning July 25, 2022. The Dear Colleague letter and subsequent updates describe issues with enrollment functionality, which affected enrollment reporting. King conducted a review on a sample of students and found that students were reported correctly to the Clearinghouse but were not appearing in NSLDS. A more frequent enrollment schedule should remedy this issue. We also attribute these delays to changes in leadership/staffing during that timeframe. The enrollment reporting steps were outlined by the prior Registrar when this process transitioned to the Office of Institutional Research, but this staffing transition could have resulted in inaccurate data being captured and reported during a window of time in Fall 2021 (when the reporting responsibility transitioned). Additionally, it was discovered that incorrect coding in the CAMS database management system (DBMS) was causing exclusions based on a missing field. These exclusions began in Summer 2021 due to added majors that were not correctly created. Anticipated Completion Date Per above, effective Fall 2022, enrollment data is now uploaded to the National Student Clearinghouse at least every 30 days. Furthermore, the missing fields in the DBMS have been remedied, and the institution is working with NSC and NSLDS to correct previously misreported records by February 2023.

2022-003 Significant Deficiency: Exit Counseling (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268) Criteria: In accordance with 34 CFR 682.604(a)(1), a school must ensure that exit counseling is conducted with each borrower either in person, by audiovisual presentation, or by interactive electronic means. In each case, the school must ensure that this counseling is provided or conducted within 30 days after learning that the student borrower has withdrawn from school or dropped below half-time enrollment. Statement of Condition: During the 2022 audit, it was noted that certain students who had dropped below half-time enrollment or who had left the University were not provided with exit counseling in relation to outstanding federal direct loan balances. Questioned Costs: Such information is not applicable for this finding since it is nonmonetary in nature. Perspective Information: The 2022 audit included a detailed testing of 40 student files, of which this significant deficiency applies to 7, indicating an error rate of 17.50%. Cause and Effect: Due to a process failure within the Student Financial Aid department, the University did not provide students with the required exit counseling materials related to federal direct loans, resulting in the potential that students may have been under-informed or had false expectations about their liabilities. Recommendation: The University should verify that appropriate communication is made to students leaving the University or lowering enrollment to less than half time, who also have outstanding federal direct loans balances, to provide each with the exit counseling resource. View of Responsible Officials: We now have established clear policies and procedures to correct this finding. As part of the withdrawal process, the financial aid counselors will send exit letters within the required timeframe upon receiving notification from the Office of Registration and Records that a student has withdrawn from the University. The counselors will also utilize the Daily Load Report and a series of selection sets to identify students who have dropped below halftime enrollment, and will send the exit letters as required by federal regulations. The Financial Aid Office has reviewed all students who have withdrawn or dropped below halftime enrollment status in the 2022-23 award year to ensure that exit letters were sent.

2022-003 Significant Deficiency: Exit Counseling (U.S. Department of Education, William D. Ford Direct Loan Program, ALN #84.268) Name of Contact Person: The Director of Financial Aid, Christin Mustard, is responsible for the corrective action for this finding. Exit counseling letters are generated by the Financial Aid Counselors, who report to the Director of Financial Aid. Corrective Action Plan: King University concurs with finding 2022-003, that exit interviews were not sent to students as required upon withdrawal from the university or dropping below halftime enrollment status. This functionality was handled by previous staff who are no longer with the university. These duties were not clearly assigned in our policies and procedures, which resulted in inconsistencies in sending out exit letters as required. We now have established clear policies and procedures to correct this finding. These are as follows: As part of the withdrawal process, the Financial Aid Counselors will send exit letters within the required timeframe upon receiving notification from the Office of Registration and Records that a student has withdrawn from the University. The counselors will also utilize the Daily Load Report and a series of selection sets to identify students who have dropped below halftime enrollment, and will send the exit letters as required by federal regulations. Anticipated Completion Date: The Financial Aid Office has reviewed all students who have withdrawn or dropped below halftime enrollment status in the 2021-22 and 2022-23 award years to ensure that exit letters were sent. This corrects these findings.

2022-004 Significant Deficiency: Awarding Eligibility (Federal Pell Grant Program, ALN #84.063) Criteria: In accordance with 34 CFR 690.62, the amount of a student's Pell Grant for an academic year is based upon the payment and disbursement schedules published by the Secretary for each award year, factoring in student enrollment status, cost of attendance, and expected family contribution. Statement of Condition: During the 2022 audit, it was noted that students were disbursed the incorrect amount of Federal Pell based upon enrollment states, cost of attendance, and expected family contribution. Questioned Costs: This finding is monetary in nature. In the instances noted in testing, the total error identified is $1,142 in over-award. In extrapolating the error across the population of students who received Pell awards, potential error amounts to $43,262. Perspective Information: The 2022 audit included a detailed testing of 40 student files, of which this significant deficiency applies to 3, indicating an error rate of 7.50%. Cause and Effect: The University did not accurately account for the factors necessary in the calculation of Pell Grant awards, so multiple students were awarded and retained Pell Grant awards that were beyond eligibility. Recommendation: The University should utilize the appropriate information to ensure that to accurately award and disburse Pell Grant funds to students in line with the guidance provided by the Department. View of Responsible Officials: We concur. There were instances where King failed to calculate/disburse Federal Pell Grant funds appropriately based on their updated Enrollment Status/EFC. We found that the Pell distribution fund was locked, which prevented the Pell recalculation when the higher ISIR transaction was loaded. In addition, there was not a report in place to alert the Financial Aid office of students enrolled in both traditional and modular courses. As a result, those students were not being identified/monitored effectively for enrollment changes.

2022-004 Significant Deficiency: Awarding Eligibility (Federal Pell Grant Program, ALN #84.063) Name of Contact Person: The Director of Financial Aid, Christin Mustard, is responsible for the corrective action of this finding. Financial Aid packaging is performed by the Financial Aid Counselors, who report to the Director of Financial Aid. Corrective Action Plan: We concur there were instances where King failed to calculate/disburse Federal Pell Grant funds appropriately based on their updated Enrollment Status/EFC. We found that the Pell distribution fund was locked, which prevented the Pell recalculation when the higher ISIR transaction was loaded. In addition, there was not a report in place to alert the Financial Aid office of students enrolled in both traditional and modular courses. As a result, those students were not being identified/monitored effectively for enrollment changes. King is currently updating its policies and procedures to capture and monitor enrollment status of traditional students enrolled in a combination of traditional and modular courses. This will ensure that Pell Grant is awarded correctly based on enrollment status and modular courses for which the student verified. Additionally, we will ensure that Pell Grant award distributions are unlocked so that the Powerfaids system will update the Pell award amounts correctly according to EFC changes from subsequent ISIRs. Anticipated Completion Date: All Pell findings have been reviewed, and errors that could be corrected have been resolved.

2019-001 Material Weakness: Direct Subsidized Loans were Not Awarded before Direct Unsubsidized Loans (U.S Department of Education, William D. Ford Federal Direct Loan Program, CFDA #84.268) Criteria: In accordance with 34 CFR 685.200(a)(iii), a student may not receive a Direct Unsubsidized Loan unless the student has received a Direct Subsidized Loan for the maximum amount for which the student is eligible. Statement of Condition: During the audit, it was noted that the University awarded two students Direct Unsubsidized Loan before awarding the students Direct Subsidized Loans. Questioned Costs: The known monetary error was $5,928, which resulted in an extrapolated error of $63,849. The monetary loss to the students due to interest is $451. Perspective Information: The audit included a detailed testing of 40 student files, of which this material weakness applies to 2, indicating an error rate of 5.00%. The relevant population in which this error was extrapolated consisted of all students who received Direct Unsubsidized Loans in the 2018-2019 aid year, excluding students who received the maximum amount of Subsidized Direct Loans, graduate students, and students who had no need to receive Subsidized Direct Loans. We consider this sample to be statistically valid. Cause and Effect: This issue was caused by an oversight in the type of loan that was awarded to the students. Recommendation: The University should ensure that students are awarded the maximum amount of Direct Subsidized Loans before being awarded Direct Unsubsidized Loans. View of Responsible Officials: The Director of Financial Aid concurs that two students were awarded Unsubsidized Direct loans when they still had eligibility for Subsidized DL Loans. One of the students was manually awarded an Unsubsidized Loan incorrectly when they had Subsidized eligibility. The other student through the financial aid award acceptance process reduced both their Subsidized and Unsubsidized DL Loan.

King University Corrective Action Plan May 31, 2019 Finding from the 2018-19 Audit The Auditors' Report on Compliance for Each Major Program and on Internal Control over Compliance required by the Uniform Guidance noted finding from the 2018-19 audit. 2019-001 Material Weakness: Direct Subsidized Loans were not Awarded Before Direct Unsubsidized Loans (U.S Department of Education, William D. Ford Direct Loan Program, CFDA #84.268) Name of Contact Person Richard J. Brand, Director of Financial Aid, is responsible for the corrective action that is planned by the university. Financial Aid awarding is done in the Financial Aid Office by the Financial Aid Counselors, which report to the Director of Financial Aid. Corrective Action Planned On August 28, 2019 a meeting was held with the financial aid counselors to discuss the finding from the audit report on awarding an Unsubsidized Direct Loan when a student still has eligibility for a Subsidized Direct Loan. The discussion focused on not using the manual packaging function in PowerFAIDs and to make sure to use the automated awarding formulas that have been created in PowerFAIDS to ensure proper eligibility awarding of federal funds. A process using a selection set to identify any student that was not packaged using a packaging formula was also created. Students identified as awarded without a packaging formula will be reviewed to make sure all eligibility is correct. Also, as part of the eligibility review process ii was discussed that PowerFAIDS has a field, called Unreviewed Net Partner Award Reduction. This field identifies when a student reduces one of their awards in their King University Financial Aid Portal. Students who reduce any of their financial aid awards will be reviewed to make sure if they reduced their Subsidized Direct Loan an also accepted an Unsubsidized Direct Loan that the changes have not caused them to take an Unsubsidized Direct Loan when they still have Subsidized Direct Loan eligibility. Anticipated Completion Date Both Hailey Parton and Caitlin Worley's Direct Loans were changed from Unsubsidized to Subsidized in 2018-2019. This corrects these findings and makes sure that these students were not penalized the interest that would have accrued on any Unsubsidized Direct Loan that was incorrectly awarded while they were still enrolled.

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