Kentucky Wesleyan CollegeHigher Education

Finding 2025-001, Repeat of 2024-002 Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Federal Pell Grant Program, Assistance Listing 84.063 Criteria: The College must comply with 34 CFR Section 690.83 and 34 Section 685.301(a)(2). Condition: We tested 40 samples for eligibility, and noted that 12 of the samples had reporting errors related to the disbursement dates to Common Origination and Disbursement (COD). 11 of the errors related to Pell disbursements and one related to a disbursement of a direct loan. Cause: The College did not have a procedure in place to properly review COD disbursement dates to verify all students had the proper reporting in COD. Effect: The provisions of 34 CFR Section 690.83 and 34 Section 685.301(a)(2) were not followed and thus 11 students had incorrect reporting of one day in COD related to Pell disbursements and one student had incorrect reporting of 8 days related to a Direct Loan disbursement. Questioned Costs: There were no questioned costs associated with this finding. Recommendation: We recommend that the College review all COD disbursements and perform monthly COD reconciliations by student to verify the disbursement date matches the student account. View of responsible officials and planned corrective actions: The Director of Financial Aid will review and verify the funds that were disbursed to the students’ account match the disbursement dates in COD on the date the transfer batch report is sent to the College’s Business Office by pulling a reconciliation file from COD. The Director of Financial Aid also has in place to pull students who need Pell or Direct Loans to be disbursed by running a report out of CAMS instead of running a selection set in Powerfaids. Monthly reconciliations for both fund types will be completed every 30 days.

Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Federal Pell Grant Program, Assistance Listing 84.063 Federal Supplemental Educational Opportunity Grants, Assistance Listing 84.007 Direct Loan Student Loans, Assistance Listing 84.268 Criteria: The College must comply with 34 CFR Section 668.22(f). Condition: We tested of nine official withdrawals, which included four students that officially withdrew in the Spring semester, with two of those who withdrew subsequent to spring break. We noted the incorrect amount of total days in the Spring semester was used in the return of funds calculation for all students who withdrew in the Spring semester. Additionally, the two of the students that officially withdrew subsequent to spring break incorrectly had included in the total number of days attended in the semester in their return of funds calculation. Cause: The College does not have procedures in place to properly review days used and attended within the return of funds calculation. Effect: The provisions of 34 CFR Section 668.22 were not followed, and thus a total of four students had incorrect return of funds calculations. Questioned Costs: Known question costs total $2,801 in Title IV aid that should have been returned as a result of our testing of nine official withdrawals. Upon additional analysis, there were no other official withdrawals in the Spring semester who were impacted by these errors. Recommendation: The College should implement a process and controls to verify calculations before finalizing returns. View of responsible officials and planned corrective actions: The Director of Financial Aid has verified in the Student Aid Handbook to include the weekend after the last day of class to the next full day of instruction (includes Saturday and Sunday). Powerfaids has been updated to include these other days. Before finalizing any returns, the Assistant Director of Financial Aid will review the R2T4.

Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Federal Pell Grant Program, Assistance Listing 84.063 Federal Supplemental Educational Opportunity Grants, Assistance Listing 84.007 Direct Loan Student Loans, Assistance Listing 84.268 Criteria: The College must comply with 34 CFR Section 668.22(a). Condition: We tested of nine unofficial withdrawals, which included eight students enrolled in modules. For four of these students, the College used the number of days in the module the student withdrew from, instead of using the total amount days the student was enrolled in on the first day of the period or at any time during the period, based on the Title IV rules for modular enrollment. This resulted in the incorrect denominator and inaccurate calculations of earned and unearned aid. For one sample, the student earned sufficient credit hours in the first Fall module to be considered half-time. However, the College still performed a return of funds calculation when the student withdrew from the second module, even though no return of funds was required based on the Title IV rules for modular enrollment. Upon further analysis, there were 34 students that withdrew from the College during the year that were enrolled in modular programs and 12 of those students had an incorrect return of funds calculation. Cause: The College did not have adequate procedures to ensure that the return of funds calculations for modular students were performed in accordance with federal regulations. In addition, the College's procedures did not include controls to identify circumstances in which return of funds were not required for modular students, such as when a student has already earned sufficient credit hours before withdrawal. Effect: Incorrect return of funds calculations for modular students led to inaccurate determinations of earned and unearned Title IV aid. Questioned Costs: Known question costs of $4,743 in Title IV aid that should have been returned as a result of our testing, and $3,480 in Title IV aid that was returned and should not have been, from the original nine unofficial withdrawals. Upon additional analysis, there was $1,656 in Title IV aid that should have been returned as a result of our testing, and $22,829 of Title IV that was returned and should not have been. Total questioned costs are $32,708. Recommendation: We recommend the College implement controls to ensure the number of days used in the return of funds calculation is accurate based on the module-specific rules. We also recommend the College implement a review process to confirm whether a student has completed sufficient coursework to be considered half-time, thereby exempting them from the return of funds requirements, and to provide training to financial aid staff on the return of funds requirements from students enrolled in module programs. View of responsible officials and planned corrective actions: The Director of Financial Aid will review the student’s enrollment on a module-by module basis at the time of withdrawal to determine the applicable payment period and correct number of days in the period. The Director of Financial Aid will develop a standardized R2T4 checklist for module programs that include identification of all modules within the payment period, confirmation of the student’s start and end dates for each module, and documentation of the total days in the payment period and days completed a the time of withdrawal. To ensure appropriate identification of students who may be exempt from R2T4 requirements due to completion of sufficient coursework, the Director of Financial Aid will establish a formal review process to include the following: 1. Prior to completing an R2T4 calculation, Director of Financial Aid will verify whether the student successfully completed coursework equal to or greater than half-time enrollment, in accordance with federal regulations. 2. This review will include confirmation of: a. Completed credit hours b. Applicable academic records or grades 3. Documentation of the half-time determination will be maintained in the student’s financial aid file to support exemption decisions when applicable. The College will enhance training efforts to ensure staff are fully informed of R2T4 requirements specific to module-based enrollment. Training will be conducted annually and incorporated into onboarding for new staff.

Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Direct Loan Program, Assistance Listing 84.268 Teacher Education Assistance for College and Higher Education Grant (TEACH Grant), Assistance Listing 84.379 Criteria: The College must comply with 36 CFR Section 686.165(2). Condition: We tested 26 Direct Loan recipients and 1 TEACH Grant recipient for eligibility, and noted that the 26 and 1 sampled, respectively, were not notified of their right to cancel their loan or TEACH Grant, or notified of the the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or TEACH Grant. Cause: The College did not have a procedure in place to properly notify students or parents of their right to cancel their loan or TEACH Grant, and the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel their loan or TEACH Grant. Effect: The provisions of 36 CFR Section 686.165(2) were not followed and thus a total of 27 students were not notified of their right to cancel their loan or TEACH Grant, nor were they notified of the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or TEACH Grant. Questioned Costs: There were no questioned costs associated with this finding. Recommendation: We recommend that the College update their disbursement letter to students or parents to include wording about the right to cancel their loan or TEACH Grant and the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan or TEACH Grant. View of responsible officials and planned corrective actions: The disbursement letter that we previously had notified they had the right to decline their loans. As with the recommendation of our auditor, the letters wording has already been changed from the right to decline their loan to the right to cancel their loan. Letter also states that the request must be received by KWC within 14 days of the date on the notice.

Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Federal Pell Grant Program, Assistance Listing 84.063 Direct Loan Program, Assistance Listing 84.268 Teacher Education Assistance for College and Higher Education Grant (TEACH Grant), Assistance Listing 84.379 Criteria: The College must comply with 34 CFR 690.83, 34 Section 685.301(a)(2), and 34 CFR Section 686.37(a). Condition: We tested 40 samples for eligibility, and noted that 10 of the samples had errors reporting disbursement dates and/or amounts to Common Origination and Disbursement (COD). 8 students had the incorrect disbursement date on COD. 1 student had a disbursement on COD that was never disbursed to the student. 1 student had a disbursement on their account statement that was not recorded as disbursed in COD. Cause: The College did not have a procedure in place to properly review COD disbursement amounts and dates to verify all students had the proper reporting in COD. Effect: The provisions of 34 CFR 690.83, 34 Section 685.301(a)(2), and 34 CFR Section 686.37(a) were not followed and thus a total of 10 students had incorrect reporting in COD. Questioned Costs: There were no questioned costs associated with this finding. Recommendation: We recommend that the College review all COD disbursements and perform monthly COD reconciliations by student to verify the disbursement date and amount matches the student account. View of responsible officials and planned corrective actions: The College will review and verify the funds that were disbursed to the students account match the disbursement dates in COD on the date the transfer batch report is sent to the College's Business Office.

Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Direct Loan Program, Assistance Listing 84.268 Criteria: The College must comply with 34 Section 685.203. Condition: We tested 26 Direct Loan recipients as part of testing for eligibility, and noted 3 instances where students received an incorrect amount of Direct Loans based on their student classification, and received more Direct Loans than allowed. Cause: The College's Information Technology (IT) system packaged the student's financial aid based on the student's classification from the Institutional Student Information Records (ISIR), instead of using the transcript. The students had filled out the ISIR incorrectly based on their classification per the College's student classification policy, causing the student to get disbursed the incorrect amount of Direct Loans. Effect: The provisions of 34 Section 685.203 were not followed, and 3 students received more Direct Loans than which they were eligible. Questioned Costs: 1 student was a first year by credit hours, but received the loan limits for a second year, resulting in the student receiving $1,000 more subsidized loans than they were eligible. 1 student was a second year by credit hours, but received the loan limits for a third year, resulting in the student receiving $1,000 more subsidized loans than they were eligible. 1 student was an independent second year by credit hours, but received the loan limits for a third year, resulting in the student receiving $1,000 more subsidized loans and $1,000 more unsubsidized loans than they were eligible. The total questioned costs were $4,000, with $3,000 in subsidized loans and $1,000 in unsubsidized loans. Recommendation: We recommend that the College update procedures to use proper information for packaging and to review student classification prior to disbursing a Direct Loan to verify the student is receiving the proper amount. View of responsible officials and planned corrective actions: The College has updated its procedure to include a report to be reviewed of credits earned to verify the amounts to be disbursed to the student is in compliance standards of the correct grade level for Direct Loans. All financial aid staff has been updated on the procedures to review the Direct Loan amounts to credits earned when packaging the student and a final approval from either the Assistant Director of Financial Aid or the Director of Financial Aid before the award letter is sent to the student.

Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Direct Loan Program, Assistance Listing 84.268 Criteria: The College must comply with 34 Section 685.309(b). Condition: During our testing of student status changes for graduates, we noted 2 students, out of our sample of 15 for which the National Student Loan Data System (NSLDS) was not notified timely of the correct student status change. 2 graduates from the Fall semester during the fiscal year ended May 31, 2024 were not reported to the NSLDS within 60 days of the graduation date. Cause: The graduated status for 2 students was not reported to the NSLDS in a timely manner. Effect: Student status changes were not reported within the required timeframe under federal regulations. The provisions of 34 CFR Section 685.309(b) were not followed and thus some students were not reported timely and subsequently were not placed into loan repayment status in a timely manner. Questioned Costs: There were no questioned costs associated with this finding. Recommendation: We recommend that the College implement a control to ensure data is being reviewed for accuracy by the appropriate personnel before roster files are submitted to the NSLDS. In addition, we recommend that the College submit roster files on a regular basis. View of responsible officials and planned corrective actions: The Registrar's Office will review the enrollment roster before the information is uploaded to the National Student Clearinghouse and will do a second review of the report that the National Student Clearinghouse will populate upon processing the enrollment roster. The Registrar's Office will send enrollment rosters every 30 days to the National Student Clearinghouse. Graduate roster will be sent to the National Student Clearinghouse within 60 days of degree completion.

Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Federal Pell Grant, Assistance Listing 84.063 Federal Supplemental Education Opportunity Grant, Assistance Listing 84.007 Federal Work Study Program, Assistance Listing 84.038 Federal Direct Loan Program, Assistance Listing 84.268 Teacher Education Assistance for College Higher Education Grants, Assistance Listing 84.379 Criteria: The College must comply with 34 Section 668.22. Condition: During our testing of unofficial withdrawals, we selected 6 samples and noted 3 students who did not complete the enrollment period that did not have a return of funds calculation performed timely. 1 of the students had a calculation performed subsequent to the auditors discovery. The other 2 students did not have a return of funds calculation performed. Cause: The College did not have a control in place to properly review students who unofficially withdrew to verify the student completed the enrollment period. For those students who unofficially withdrew and did not complete the enrollment period, there was no control in place to verify a return of funds calculation was being performed timely. Effect: There was 1 student who did not have a return of funds calculation performed timely, as well as 2 students who did not have a return of funds calculation performed. Questioned Costs: Known questioned costs of $998 of aid that was returned untimely, due to the return of funds calculation being performed lately. Known questioned costs of $4,361 of funds that should have been returned that were not, due to return of funds calculation not being performed. Recommendation: We recommend that the College review and revise their policies and procedures related to unofficial withdrawals. The College should review the last day attended for all students who unofficially withdrew, to determine if a return of funds calculation is necessary. View of responsible officials and planned corrective actions: The College is not an attendance taking school and will not be using the last date attended, but the College has implemented procedure to use the last date of an academic activity as standard for a non-attendance taking school. At the end of each semester, the College has put a procedure in place to review all grades within 7 business days of final grades being reported. Once reviewed, the Director of Financial Aid will send an email to all faculty for the student to request that last date of an academic activity for on-ground students. For online students, the Director of Online Learning will provide the last date of an academic activity recorded in the online platform. Once the last date of academic activity has been provided to the Financial Office, that date will be used in the return of funds calculation. The College will process all return of funds calculations before the standard 45 day timeframe.

Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Federal Pell Grant, Assistance Listing 84.063 Federal Supplemental Education Opportunity Grant, Assistance Listing 84.007 Direct Loan Program, Assistance Listing 84.268 Criteria: The College must comply with 34 Section 668.22. Condition: During our testing of official withdrawals, we reviewed the calculation used by the College for the return of funds and noted 2 instances of the wrong withdrawal date being used in the return of funds calculation. Cause: The College does not have a procedure in place to properly review the withdrawal date used in the return of funds calculations. Effect: The provisions of 34 CFR Section 668.22 were not followed and thus 2 students had incorrect return of funds calculations. Questioned Costs: Known questioned costs total $16 that should have been returned and $219 that should not have been returned as a result of our testing. Recommendation: We recommend that the College review and revise their policies and procedures related to the return of funds calculation. The College should ensure the correct withdrawal date is used the return of funds calculation. Additional training should be provided to relevant staff on the proper calculation methods to enhance compliance and accuracy. View of responsible officials and planned corrective actions: The College has reviewed its policies and procedures related to return of funds calculations. When a student wants to withdraw from the College, the student will complete an online withdrawal form. Once the form is completed, an electronic copy of the form is sent to several offices, Financial Aid being included. The Financial Aid Office will use the date on the electronic withdraw form in the Return of Title IV calculation.

Federal Program: U.S. Department of Education: Student Financial Aid Cluster: Federal Pell Grant, Assistance Listing 84.063 Direct Loan Program, Assistance Listing 84.268 Criteria: The College must comply with 34 Section 668.22. Condition: We tested 3 official withdrawals as part of testing for official withdrawals, and noted 2 instances where a student was eligible for a post-withdrawal disbursement, and the College did not timely provide the required written notification to the students. Cause: Written notification was not provided to 2 students who were eligible for post-withdrawal disbursements. Effect: 2 students were not notified of required written notifications. The provisions of 34 CFR Section 622.22(a)(6) were not followed. Questioned Costs: There were no questioned costs associated with this finding. Recommendation: We recommend that the College implement a control to ensure students that are eligible for a post-withdrawal disbursement are notified timely the required written notifications. View of responsible officials and planned corrective actions: The College will have the Director of Financial Aid to send the post-withdrawal disbursement letter the same day as performing the return of funds calculations which will be well within the 45 day requirement. If a post-withdrawal disbursement letter is to be sent, it will be recorded and logged on the same spreadsheet the Financial Aid Office tracks withdrawals.

Finding 2021-001 (repeat finding 2020-001) Federal Program: U.S. Department of Education Direct Loan Program, CFDA 84.268 Criteria: Per 34 CFR 685.309, unless the school expects to complete its next enrollment report within 60 days, the school must notify the lender or the guaranty agency within 30 days, if it discovers that a student who received a loan either did not enroll or ceased to be enrolled on at least a half-time basis. The school is responsible for timely reporting whether they report directly or via a third party servicer. Per 34 CFR 685.200, a borrower who completes an undergraduate program and who has not become responsible for accruing interest on Direct Subsidized Loans as a result of attendance in the program does not become responsible for accruing interest prior to completing that program. Condition: Out of a sample of three students that withdrew with Direct Loans, the College failed to correctly notify NSLDS of one of the students' status changes. Cause: The College did not have a control in place to ensure that timely reporting of all status changes is occurring. Effect: Without notification, the NSLDS is not timely updated of change in status for students who have withdrawn or graduated. Timely notification allows the NSLDS to determine when a student enters repayment status. Recommendation: We recommend that internal controls be established to verify that students who have received a loan and ceased enrollment are reported to the guaranty agency within a timely manner. Views of responsible officials and planned corrective actions: To ensure that NSLDS is given a timely update of the change in status for students who have withdrawn or graduated, the Vice president of Academic Affairs along with the Registrar have made a policy change that grades of E's will no longer be awarded during the semester. This policy has already been put into effect and should remedy the situation that created the finding. Initially we were manually entering the withdrawal status and effective date in the National Student Loan Clearinghouse, but the College recently discovered with the grade of E, the course load was not updated to reflect the withdrawn status on the monthly submission to the clearinghouse. This was overriding our manual entries.

Finding 2021-002 Federal Program: U.S. Department of Education Federal Pell Grant Program, CFDA 84.063 Criteria: Per 34 CFR 668.2, an Institution is required to award Pell grants to students based on their enrollment status, cost of attendance, expected family contribution and maximum Pell eligibility. Condition: We noted that out of a sample of twenty-five students, the College did not award the appropriate level of Pell grant to one student. Cause: The College did not have a control in place to ensure that the appropriate level of Pell grants were awarded to all students based on their eligibility. Effect: The College is not in compliance with the U.S. Department of Education and has questioned costs of $598 due to inappropriate awarding of the Pell grant to one student. The College identified and corrected the overpayment in August 2021. Recommendation: We recommend that the College implement a control to ensure that the appropriate level of Pell grants are awarded to each student based on their maximum eligibility. Views of responsible officials and planned corrective actions: We pull a status and Load report the day after census to review all financial aid awards to enrollment status. Our student information system, CAMS, does not have a feature integrated within the software to notify of a Pell overaward/underaward in recognition of a student's enrollment. Each financial aid counselor manually looks at a Pell chart to determine the award and will enter the awards into CAMS. When reviewing census information and the Status and Loan award information, we will have to do a double check on any student that has dropped below full-time status to check the students' Pell amount per ECF and enrollment status to properly ensure the amount has been entered correctly into the CAMS system before originating and disbursing.

Finding 2021-003 Federal Program: U.S. Department of Education - Student Financial Aid - Cluster (consisting of): Federal Pell Grant, CFDA 84.063 Federal Work Study, CFDA 84.033 Federal Supplemental Education Opportunity Grant, CFDA 84.007 Federal Perkins Loan, CFDA 84.038 Federal Direct Loan Program, CFDA 84.268 Teacher Education Assistance for College and Higher Education grant, CFDA 84.405 Criteria: The College must comply with the Gramm-Leach-Bililey Act (GLBA) section 16 CFR 314.4(b). Condition: During our audit procedures, we noted that a security assessment (including procedures for Internal, External, and Office 365 Cloud security) was performed within the last year. KWC has also committed significant time and resources to improve their security posture over the past year. In addition, KWC has worked with legal counsel to review and improve some employee training and incident response governance. The security assessment contains certain elements relevant to an IT risk assessment, however it does not meet the GLBA IT risk assessment requirements provided by the Department of Education. Therefore, we must conclude that KWC has not performed an IT risk assessment during the fiscal year as required by GLBA. GLBA requires an IT risk assessment be performed to identify reasonable, foreseeable internal and external risks to the security, confidentiality, and integrity of student information that addresses the following areas: a. Employee training and management. b. Information systems, including network and software design, as well as information processing, storage, transmission and disposal. c. Detecting, preventing and responding to attacks, intrusions, or other systems failures. d. Definitions for threats, vulnerabilities, likelihood and impacts. Cause: The College did not have a control in place to ensure an annual IT risk assessment was performed that met GLBA requirements. Effect: The College is not in compliance with GLBA requirements. Recommendation: We recommend that the College conduct an annual IT risk assessment addressing the following areas: a. Employee training and management. b. Information systems, including network and software design, as well as information processing, storage, transmission and disposal. c. Detecting, preventing and responding to attacks, intrusions, or other systems failures. d. Definitions for threats, vulnerabilities, likelihood and impacts. Views of responsible officials and planned corrective actions: KWC respectfully disagrees with this finding, believing that it has intended to and did comply with 16 CFR ?314.4(B), both in law and spirit. During the course of the audit period, KWC committed significant time and resources to assessing its security posture, including hiring an IT firm to conduct an IT security assessment and a law firm to assess and advise on incident response preparation and data governance. Further, as confirmation of these assessments, KWC invested hundreds of thousands of dollars in implementing the recommendations of its experts, including an overhaul of its IT infrastructure and implementing numerous IT security and data governance improvements. Notwithstanding, KWC administration will ensure in the future that it has complied with the GLBA guidance provided by the Department of Education.

Finding 2020-001 (repeat finding 2019-001) Federal Program: U.S. Department of Education Direct Loan Program, CFDA 84.268 Criteria: Per 34 CFR 685.309, unless the school expects to complete its next enrollment report within 60 days, the school must notify the lender or the guaranty agency within 30 days, if it discovers that a student who received a loan either did not enroll or ceased to be enrolled on at least a half-time basis. The school is responsible for timely reporting whether they report directly or via a third party servicer. Per 34 CFR 685.200, a borrower who completes an undergraduate program and who has not become responsible for accruing interest on Direct Subsidized Loans as a result of attendance in the program does not become responsible for accruing interest prior to completing that program. Condition: Out of a sample of five students that withdrew with Direct Loans, the College failed to correctly notify NSLDS of one of the students' status changes. Cause: The College did not have a control in place to ensure that timely reporting of all status changes is occurring. Effect: Without notification, the NSLDS is not timely updated of change in status for students who have withdrawn or graduated. Timely notification allows the NSLDS to determine when a student enters repayment status. Recommendation: We recommend that internal controls be established to verify that students who have received a loan and ceased enrollment are reported to the guaranty agency within a timely manner. Views of responsible officials and planned corrective actions: The College concurs with the recommendation. Student statuses are reported every 30 days to the National Student Loan Clearinghouse by the Registrar, Lindsey Crowe. The registrar?s office now submits each withdrawal to the Clearinghouse and sends a copy of the status change sheet to the financial aid department in order to double check the NSLDS to make sure enrollment detail has been updated and is correct.

Finding 2020-002 Federal Program: Higher Education Institutional Aid CARES Act - HEERF, CFDA 84.425F Criteria: Per section 18004(a)(1) of the CARES Act, all HEERF grantees that received a Section 18004(a)(a) Institutional Portion award are required to post information publicly on the institution?s primary website quarterly. Reports are required to be posted within 10 days after the calendar quarter end. Condition: We noted that the College posted the required quarterly reporting outside of the of the 10-day window as described in the CARES Act. Cause: The College did not have a control in place to ensure timely reporting. Effect: The College is not in compliance with the reporting requirement within the CARES Act. Recommendation: We recommend that the College implement a control that ensures timely reporting for all grants based on their requirements. Views of responsible officials and planned corrective actions: In October 2020, the College hired an experienced grant writer and manager to oversee the management and reporting requirements of the CARES Act Funding as well as other grants. A procedure has been put in place to ensure that future reporting will be posted no later than the 10th of the month proceeding the quarter?s end. Quarterly, Annual and Final reports will be completed in a timely manner by the grant writer and submitted to the VP of Finance or a designee to approve accuracy prior to posting. The approved report will then be posted to https://kwc.edu.heerfreporting/ by the VP of Advancement.

Finding 2019-001 (Repeat Finding of 2018-006) Federal Program: U.S. Department of Education Direct Loan Program, CFDA 84.268 Criteria: Per 34 CFR 685.309, unless the school expects to complete its next enrollment report within 60 days, the school must notify the lender or the guaranty agency within 30 days, if it discovers that a student who received a loan either did not enroll or ceased to be enrolled on at least a half-time basis. The school is responsible for timely reporting whether they report directly or via a third party servicer. Condition: Out of a sample of twenty-four students that graduated or withdrew with Direct Loans, the College failed to correctly notify NSLDS of three students' status changes. Cause: The College did not have a control in place to ensure that timely reporting of all status changes is occurring. Effect: Without notification, the NSLDS is not timely updated of change in status for students who have withdrawn or graduated. Timely notification allows the NSLDS to determine when a student enters repayment status. Recommendation: We recommend that internal controls be established to verify that students who have received a loan and ceased enrollment are reported to the guaranty agency within a timely manner.Views of responsible officials and planned corrective actions: The College concurs with the recommendation. Student statuses are reported every 30 days to the National Student Loan Clearinghouse by the Registrar, Lindsey Crowe. The Registrar and Director of Financial Aid will work together on the grad report instead of a line by line comparison as before. The Registrar will continue to work closely with the Director of Financial Aid in continuing to manually enter all students who withdraw from the College as the Director of Financial Aid will double check NSLDS to make sure the enrollment detail has been updated and is correct.

Finding 2019-002 Federal Program: U.S. Department of Education Perkins Loan Program, CFDA 84.038 Criteria: Per 34 CFR 668.217, if the cohort default rate is equal to or greater than 30%, the school must create a default prevention task force to assemble and submit a default prevention plan to the U.S. Department of Education for review. If the cohort default rate is equal to or greater than 30% for a second consecutive year, the default prevention plan must be revised and resubmitted to the U.S. Department of Education for further review. Condition: We noted that the College has an official Perkins cohort default rate that has surpassed the 30% mark for the past two years. Cause: Students who are entering the repayment phase are defaulting on their loans within two years. Effect: The College will receive additional requirements surrounding Perkins loans and may ultimately lose the ability to award their students financial aid. Recommendation: We recommend that the Colleges implement procedures that allow for further education of the students on the requirements upon entering repayment and implement and follow default provision plans. Views of responsible officials and planned corrective actions: The College concurs with the recommendation. We will review our listing of defaulted Perkins loans as it appears that there are several which were pay-off and consolidated residual balances that remain after the loan had essentially been paid off. Further we will make sure that we employ proper collections practices to ensure that any defaulted loans are minimized.

Finding 2019-003 Federal Program: U.S. Department of Education Direct Loan Program, CFDA 84.268 Criteria: Per 34 CFR 668.22, a school must return any unearned Title IV funds within 45 days or offer any postwithdrawal disbursement within 30 days of the date the school determined that the student withdrew. Condition: Out of a sample of three students that withdrew with Direct Loans, the College failed to credit funds for a withdrawing student and returned funds in a timely manner. Cause: The College did not have a control in place to ensure that funds were being returned timely. Effect: The College must timely return loan funds back to the lender and credit the student account for a refund within 45 days. Recommendation: We recommend that the College should require a second complete review of all return of funds calculations by a separate individual to ensure that returns are completed within the required period.Views of responsible officials and planned corrective actions: The College concurs with the recommendation. To ensure a refund is returned in a timely manner, the Director of Financial Aid, Crystal Hamilton has created a cover sheet for the R2T4 calculation with a line for a date to be entered on the day the awards were corrected in COD. Along with the R2T4 cover sheet, screen shots of COD will be printed to include with the R2T4 packet.

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