Asbury Theological SeminaryHigher Education

Finding No. 2022-001: Enrollment Reporting; Federal Agency: U.S. Department of Education; AL Number and Title: 84.268 ? Federal Direct Student Loan Program; Criteria: Title 34, Section 685.304 of the CFR states that an institution must ensure that entrance counseling is conducted with each Direct Subsidized Loan or Direct Unsubsidized Loan student borrower prior to making the first disbursement of the proceeds of a loan to a student borrower. Condition: During our audit, we noted that for 1 out of 40 students we selected for testing, the Seminary did not provide entrance counseling to a first-time borrower prior to disbursing the proceeds of the loan to the student borrower. Cause: The Seminary did not have a control in place to ensure timely completion of the entrance counseling. Effect: The Seminary did not comply with Title 34, Section 685.304 with respect to the above referenced first-time borrower. Recommendation: We recommend that the Seminary establish controls to ensure that first-time borrowers complete entrance counseling prior to the disbursement of funds to the student?s account. View of responsible officials: ATS agrees with the audit finding. With the Department of Education terminating Financial Awareness Counseling, this helps avoid confusing the two documents. To prevent disbursing future Title IV loan funds to student accounts without the proper entrance counseling on file, a new process has been implemented. The Associate Director of Financial Aid, Mariah Shumate, will now cross check each new disbursement record prior to requesting funds from the Department of Education.

Finding No. 2021-001: Enrollment Reporting Federal Agency: U.S. Department of Education AL Number and Title: 84.268 ? Federal Direct Student Loan Program Criteria: When a Direct Loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student ceased to be enrolled on at least a halftime basis or failed to enroll on at least a half-time basis for the period for which the loan was intended, the institution must report the change in its next updated Enrollment Reporting Roster file (due within 60 days of the change) to the lender or the guaranty agency. The school is responsible for timely reporting whether they report directly or via a third-party servicer. Condition: In testing individual student status changes, we selected a sample of 19 students who had received student financial assistance and had withdrawn or graduated from the Seminary during the fiscal year as identified by internal records. We compared the enrollment information and withdrawal or graduation date per the Seminary?s records to the information reported to the National Students Loan Data System (NSLDS). We noted the status changes for 3 graduated students and 2 withdrawn students were not reported to NSLDS timely. Cause: The Seminary did not have a control in place to ensure timely reporting of all status changes. Effect: Without timely notification of withdrawals or graduation, the NSLDS is unable to accurately determine when a student enters repayment status. Recommendation: We recommend that the Seminary establish controls to ensure student enrollment status in the NSLDS is updated in a timely manner to ensure compliance with Federal requirements. View of responsible officials: The Seminary concurs with the finding. The Registrar?s Office Enrollment Official will run a report to check for changes in enrollment status every 30 days. We will continue our regular reporting process through the Clearinghouse. The purpose of reviewing enrollment status changes is to capture individual situations that would not be reported in a timely manner through the Clearinghouse. For those instances, the Registrar?s Office Enrollment Official will directly report individual students to NSLDS.

Finding No. 2021-002: Special Tests and Provisions ? Return of Title IV Funds Federal Agency: U.S. Department of Education AL Number and Title: 84.268 ? Federal Direct Student Loan Program Criteria: Per 34 CFR 668.21 If a student does not begin attendance in a payment period or period of enrollment the institution must return all Direct Loan funds that were credited to the student's account at the institution or disbursed directly to the student for that payment period or period of enrollment. Additionally, the institution must return those funds no later than 30 days after the date that the intuition becomes aware that the student will not or has not begun attendance. Condition: In testing students who withdrew during the period, we selected a sample of 6 students who had received student financial assistance and had withdrawn from the Seminary during the fiscal year as identified by internal records. For one of the students selected, there was no evidence that the Seminary returned the required portion of the Title IV aid to the Department of Education when the Seminary became aware that the student did not begin attendance. Questioned Costs: Questioned costs consist of funds not returned to the Department of Education (the ?Department?) in the amount of $10,142. Cause: The Seminary did not have a control in place to ensure that students who received Direct Loans and who did not begin attendance had Title IV funds returned to the Department in a timely manner. Effect: Without proper monitoring of Title IV returns, the Seminary is at risk of noncompliance with the above referenced criteria. Recommendation: We recommend that the Seminary establish controls to ensure the return of Title IV funds are calculated properly and returned timely. View of responsible officials: The Associate Vice President of Enrollment Management and Registrar will work with the Provost to ensure a new check is implemented to ensure students who do not begin attendance are identified, timely.

Finding No. 2020-001: Special Test and Provisions ? Return of Title IV Funding Federal Agency: U.S. Department of Education CFDA Number and Title: 84.268 ? Federal Direct Student Loan Program Criteria: 34 CFR Section 668.22(f) states that the percentage of the payment period completed or period of enrollment completed is determined in the case of a program that is measured in credit hours, by dividing the total number of calendar days in the payment period or period of enrollment into the number of calendar days completed in that period as of the student?s withdrawal date. The total number of calendar days in a payment or enrollment period includes all days within the period, except that institutionally scheduled breaks of at least five consecutive calendar days (including module programs that a student is not required to attend for five 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 or period of enrollment and the number of calendar days completed in that period. Condition: The number of calendar days in the enrollment period was incorrectly calculated for the Fall semester in accordance with 34 CFR Section 668.22(f). Cause: There was not a procedure in place to verify the accuracy of the number of days in the enrollment period used in the Return of the Title IV Funds calculation. Effect: An incorrect number for days in the enrollment period was used in the calculation of the Return of Title IV Funds for three students. Consequently, a total of $10,412 of Title IV Funds was returned to the Department of Education for these students. The correct total that should have been returned was $10,469 resulting in a deficiency of $57. Accordingly, and additional $57 should be returned to the Department of Education. Recommendation: We recommend the Seminary review its current procedures in regards to reviewing the number of days in the enrollment period in order to ensure funds are being returned in the proper amount to the federal government.

Finding No. 2019-001: Financial Aid Administration ? Noncompliance and Control Deficiency Federal Agency: U.S. Department of Education CFDA Number and Title: 84.033 ? Federal Work Study Program (FWS) Criteria: 34 CFR Section 675.18(g)(4) states that an institution must use at least seven percent of the sum of its initial and supplemental FWS allocations for an award year to compensate students employed in community service activities. In meeting this requirement, the institution must include at least one FWS program fund recipient who serves as a reading tutor for children who are preschool age or are in elementary school or who participates in a family literacy activity. Condition: During the year, the Seminary did not have meet the seven percent requirement specified in, 34 CFR Section 675.18(g)(4). Cause: The Seminary experienced a decrease in the amount of work-study applications from which to select to fill open positions. Based on communication with students, the amount of pay was the primary issue. The Seminary also used a local daycare, adjacent to the campus, as one of their community service resources. The daycare closed unexpectedly, giving the Seminary limited time to establish a new relationship to specifically fulfill the family literacy component of the FWS program. Although a new relationship was established in a timely manner, the lack of interest from students resulted in a lack of positions filled. Effect: In accordance with 34 CFR Section 668.84, the Secretary of Education may levy fines and/or penalties on the institution or suspend future participation in federal student financial assistance programs for failure to comply with the requirements applicable to Title IV of the Higher Education Act of 1965 (HEA). Recommendation: Ensure that the Seminary has enough community service opportunities that when one community service program either declines or shuts down that the Seminary will have enough to meet the required 7%. The Seminary should consider requesting a waiver.