Kentucky State UniversityHigher Education

2024 – 006 – Suspension and Debarment Federal Agency: U.S. Department of Agriculture Federal Program Name: Extension Services at 1890 Colleges and the Education Stabilization Fund Assistance Listing Number: 10.512; 84.425 Federal Award Identification Number and Year: NI201444XXXXG008-0005; P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per 2 CFR 180 and 2 CFR 200.213, nonfederal entities must ensure that vendors are not suspended or debarred from federal programs. Verification can be performed by checking the SAM.gov 'Exclusions' list, collecting a certification from the vendor, or including a clause in the contract requiring compliance. Condition: Documentation supporting the University's suspension and debarment checks for sampled vendors was not maintained. Questioned costs: None. Context: During testing of Suspension and Debarment compliance, we noted that three out of three sampled procurement transactions tested for Program 10.512, as well as two out of two sampled transactions tested for Program 84.425, did not include documentation demonstrating that vendors were verified as not suspended or debarred prior to award. Cause: The University did not maintain records of suspension and debarment checks for sampled transactions. Effect: Without documented verification, there is an increased risk that federal funds could be expended with ineligible vendors, resulting in potential noncompliance with Uniform Guidance and exposure to questioned costs. Repeat Finding: No. Recommendation: We recommend the University implement and enforce procedures to verify vendor status through SAM.gov or other acceptable methods prior to award, retain documentation of the verification in procurement files, and train staff on suspension and debarment requirements under Uniform Guidance. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 007 – Verification Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. Condition: Supporting documentation for students who were selected for verification was not maintained. Questioned costs: None. Context: During our testing of students selected for verification, we selected a sample of twenty-two students to test for proper documentation of verification. Three of the twenty-two students tested had instances of noncompliance as the institution did not retain statements of educational purpose, as required. Cause: The University's policies and procedures did not ensure retention of required documentation. Effect: Student could report incorrect information which could lead to incorrect EFC and over awarding of aid. Repeat Finding: Yes, 2023-012 Recommendation: We recommend management retain electronic files of student verification documentation more securely within school systems/networks. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 008 – Exit Counseling Federal Agency: US Department of Education Federal Program Name: Federal Direct Student Loans Assistance Listing Number: 84.268 Federal Award Identification Number and Year: P268K230147; P268K240147 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per the Code of Federal Regulations, 34 CFR 685.304(b), if a student borrower withdraws or graduates from school, exit counseling must be provided either electronically, by mailing, or by email to the student borrower. Condition: Students who withdrew or graduated from the University did not receive exit counseling information. Questioned costs: None Context: During our testing, it was noted that eight out of the twenty-nine students who were required to receive exit counseling information did not receive it. Cause: The University’s processes and controls did not ensure that exit counseling was completed or did not retain proper support to indicate this process took place. Effect: Students are not receiving the proper loan counseling which may contribute to not repaying loans to the DoE on time. Repeat Finding: Yes, 2023-015 Recommendation: We recommend the University review its policies and procedures around sending exit counseling information to students to ensure students are receiving proper counseling. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 009 – Perkins Loan Record Retention Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Federal Award Identification Number and Year: N/A Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 674.19.(e), states an institution must retain promissory and master promissory notes (MPN), and repayment records for each Perkins Loan program loan made. The original promissory notes and repayment schedules must be kept until the loans are satisfied. An institution shall retain disbursement and electronic authentication and signature records for each loan made using an MPN for at least three years from the date the loan is canceled, repaid, or otherwise satisfied. Condition: Certain loan MPNs were not retained for the three-year retention period. Questioned costs: None Context: During our testing, Twenty-two out of forty open loans tested and forty out of forty of the loans assigned tested, the University was unable to locate the original promissory note and/or MPN. Cause: The University does not have a review process in place to ensure the MPNs are kept for at least three years from the date the loan is cancelled, repaid, or otherwise satisfied. Effect: The University does not have a proper internal control system for the Federal Perkins Loan Program. Repeat Finding: Yes, 2023-19 Recommendation: We recommend that the University keep MPNs for loans for the three-year retention period. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 010 – Capital Asset Inventory Documentation Federal Agency: US Department of Agriculture Federal Program Name: Extension Services at 1890 Colleges Assistance Listing Number: 10.512 Federal Award Identification Number and Year: NI201444XXXXG008-0005 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Regardless of whether equipment is acquired in part or its entirety under the federal award, the recipient or subrecipient must manage equipment. A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years and a control system must be in place to ensure safeguards for preventing property loss, damage, or theft. Any loss, damage, or theft of equipment must be investigated. The recipient or subrecipient must notify the Federal agency or pass-through entity of any loss, damage, or theft of equipment that will have an impact on the program. Additionally, reconciliation to property records and safeguarding of equipment are requirements under (2 CFR 200.313 (d)(2) and (3)). Condition: The University did not have documentation of inventory of federal funding being completed every two years as well as documentation supporting the safeguard of assets, nor was the auditor able to reconcile to property records or physically inspect the equipment. Questioned costs: None Context: During testing of property and equipment it was noted that none of the eight sample selections tested had been inventoried and no physical documentation supporting the property is appropriately safeguarded and maintained. Cause: The University did not have controls in place that comply with the federal regulations around inventory taking and safeguard keeping. Effect: The University is not in compliance with federal regulations around inventory taking and safeguard keeping. Failure to perform these procedures increases the risk of inaccurate property records, misstatement of federal award expenditures, and potential loss or misuse of federally funded equipment. Repeat Finding: No Recommendation: We recommend management implement procedures for physical inventory to be taken within a two-year timeframe as well as maintain evidence of assets possession such as photos of the property and equipment. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 011 – Procurement Federal Agency: US Department of Agriculture, US Department of Education Federal Program Name: Extension Services at 1890 Colleges, Education Stabilization Fund Assistance Listing Number: 10.512, 84.425 Federal Award Identification Number and Year: NI201444XXXXG008-0005, P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Uniform guidance requires auditees to follow procurement standards. Sections of the Uniform Guidance set forth five permissible procurement methods for nonfederal entities expending federal financial assistance: (1) micro-purchases (§ 200.320(a)(1)); (2) small purchases (§ 200.320(a)(2)); (3) sealed bids (§ 200.320(b)(1)); (4) proposals (§ 200.320(b)(2)); and (5) noncompetitive procurement (§ 200.320(c)(1)-(5)). Condition: The University's procurement policy does not currently match all requirements of the Uniform Guidance, and CliftonLarsonAllen LLP (CLA) was unable to sight evidence of their key control being performed. Questioned costs: None Context: The University's procurement policy does not currently match all requirements of the uniform guidance related to defining the required levels of procurement and when competitive bids are required, and CLA was unable to sight evidence of a key control being performed for five of six sample selections for the Extension Services at 1890 Colleges grant. Cause: The University did not have a process in place to ensure the procurement policy met Uniform Guidance. Effect: The University is not in compliance with Uniform Guidance for procurement. Repeat Finding: Yes, 2023-025 Recommendation: We recommend the University review its procurement policy to ensure it meets federal regulations and ensure they retain documentation of quotes received and final approval forms. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 012 – Return of Title IV Funds (R2T4) Federal Agency: US Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in this section and no additional disbursements may be made to the student for the payment period or period of enrollment. If the amount the student earned is greater than the amount disbursed, the difference between the amounts must be treated as a post-withdrawal disbursement (34 CFR 668.22(a)(1) through (a)(5)). Condition: Student who withdrew from the University did not have accurate calculation of Title IV completed to determine the amount to be returned to the Department of Education. Questioned costs: None. Context: During our testing of seven students who withdrew, one student was determined to be refunded $3,704 of Parent Plus, while the University determined and refunded an amount of $3,954. Cause: The University did not have a control in place to calculate refunds accurately for students who withdrew from the University and needed a calculation of Title IV aid to be returned. Effect: The University is not returning the proper amounts to the Department. Repeat Finding: Yes, 2023-016 Recommendation: We recommend the calculation logic be reviewed and corrected to align with approved methodology. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 013 – National Student Loan Database System (NSLDS) Federal Agency: US Department of Education Federal Program Name: Federal Pell Grant Program; Federal Direct Student Loans Assistance Listing Number: 84.063; 84.268 Federal Award Identification Number and Year: P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Per U.S. Department of Education (ED) regulations, all schools participating (or approved to participate) in the Federal Student Aid programs must have an arrangement to report student enrollment data to the NSLDS through a roster file. The school is required to report enrollment status at both the school and program level. The school is required to report changes in the student’s enrollment status, the effective date of the status and an anticipated completion date. An academic program is defined as the combination of the school’s Office of Postsecondary Education Identification (OPEID) number and the program’s Classification of Instructional Program (CIP) code, credential level, and published program length. ED requires the University to report changes in enrollment status and indicate the date that the changes occurred (34 CFR 685.309). Changes in enrollment status must be reported within 30 days. However, if a roster file is expected within 60 days, you may provide the date on that roster file. In addition, regulations require that an institution make necessary corrections and return the records within 10 days for any roster files that don’t pass the NSLDS enrollment reporting edits. ED requires the University to report changes in enrollment status within 30 or 60 days that the University determined the changes occurred (34 CFR 682.610). Condition: Certain students’ enrollment information was not reported accurately or timely to the NSLDS. Questioned costs: None Context: Fifteen students out of a sample of sixty students had status of 'NO RECORD FOUND' on both program and campus enrollment detail, despite having changes in status and receiving federal aid Forty-five students out of a sample of sixty students change in status were not reported within the maximum timeline of sixty days to the campus-level record within NSLDS. Fourteen students out of a sample of sixty students had enrollment status dates of which were not matching between campus and program enrollment detail. Forty-five students out of a sample of sixty students did not have enrollment certification occurring at a minimum of every sixty days. Nineteen students out of a sample of sixty students had enrollment status dates on their transcripts of which did not match what was being reported within the enrollment detail in NSLDS. Cause: Management's procedures to report accurate and timely information to the NSLDS were not operating effectively. Effect: Inaccurate reporting to the NSLDS can impact when students enter repayment periods or affect their interest rates. Repeat Finding: Yes, 2023-018 Recommendation: We recommend the University evaluate its procedures and review policies in overseeing submissions to the NSLDS completed by the third-party servicer. Additionally, we recommend the University review its policies and procedures on reporting enrollment information to the NSLDS to ensure that all relevant information is being captured and reported timely in accordance with applicable regulations. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 014 – Direct Loan Reconciliations Federal Agency: US Department of Education Federal Program Name: Federal Direct Student Loans Assistance Listing Number: 84.268 Federal Award Identification Number and Year: P268K230147; P268K240147 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.300(b)(5), states though a school decides the frequency and methods it will use for internal reconciliation, Direct Loan reconciliation must occur at least monthly and should occur before the required monthly reconciliation to the Direct Loan SAS. Schools must maintain documented results of its monthly reconciliation to provide to auditors and reviewers at their request. Condition: Direct loan reconciliations between the COD, G5 and student accounts did not have evidence of being reviewed. Questioned costs: None Context: During our testing, two out of three direct loan reconciliations tested did not have evidence of being reviewed. Cause: The University did not adhere to controls in place for all reconciliations. Effect: The University is not complying with internal policy. Repeat Finding: Yes, 2023-020 Recommendation: We recommend management maintain proper recordkeeping and retention of documentation and review of such documentation. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 015 – Perkins Compliance Attestation Requirements Review Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Federal Award Identification Number and Year: N/A Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.25(a), an institution may enter into a written contract with a third-party servicer for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated. When an institution uses a third-party servicer for its Perkins Loan program, the institution must perform due diligence to ensure that the third-party servicer is in compliance with the requirements for the functions the third-party servicer is performing for the institution. Such due diligence could include obtaining and reviewing the third-party servicer’s most recent Title IV compliance audit. Condition: There is no oversight or review of the controls at the third-party servicer by the University. Questioned costs: None Context: During our testing, we noted that the University does not have a procedure or control to review the annual compliance attestation report regarding the service provider performing Perkins administration services. Cause: The University did not have a control in place to ensure review of the attestation requirements of their Perkins administrator. Effect: University does not have a procedure or control to review the annual compliance attestation report regarding the service provider performing Perkins administration services. The third-party servicer could have compliance findings that could directly impact the University. Repeat Finding: Yes, 2023-021 Recommendation: We recommend reviewing procedures and requirements regarding Perkins third party service providers and ensure compliance with regulations. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 016 – Perkins Reconciliation Federal Agency: US Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Federal Award Identification Number and Year: N/A Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.25(a), an institution may enter into a written contract with a third-party servicer for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated. When an institution uses a third-party servicer for its Perkins Loan program, the institution must reconcile funds that are reported by the third-party servicer to the University's accounting records. Condition: The University did not reconcile the Perkins Loan Program funds that are recorded on the University's accounting records to the third party servicer's report. There was also no review of the process. Questioned costs: None Context: During our testing, we noted that a control was not identified pertaining to reconciliation of Perkins loans from third party servicer report to the University's accounting records. Cause: The University did not have a control in place to ensure the reconciliation of Perkins loans from third party servicer report to the University's accounting records. Effect: The University accounting records did not reflect the current information. Repeat Finding: Yes, 2023-022 Recommendation: We recommend reviewing procedures around Perkins Loan Program funds and implementing reconciliations and review to the third-party servicer reports. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 017 – HEERF Annual and Quarterly Reporting Federal Agency: US Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The CARES Act 18004(e) and the CRRSAA 314(e) requires an institution receiving funds under Higher Education Emergency Relief Fund (HEERF) I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. Quarterly public reporting for institutional requires a new, separate form to be posted covering aggregate amounts spent for HEERF I, HEERF II, and HEERF III funds each quarterly reporting period due no later than ten days after the end of each calendar quarter. Condition: Annual and quarterly reports were not adhering to compliance requirements. Questioned costs: None Context: During our testing of quarterly reports, one of the three reports tested was not posted on the University's website within ten days of the end of the quarter. During our testing of quarterly reports, three reports tested did not have a supervisor review documented. Cause: The University did not have the controls in place to ensure reporting requirements under the CARES Act 18004(e) and the CRRSAA 314(e) were being followed and met. Effect: The University is not in compliance with the reporting requirements for HEERF funds specified by the Department of Education. Repeat Finding: Yes, 2023-030 Recommendation: We recommend the University should implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure funds are reported accurately and timely, in accordance with grant requirements. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 018 – HEERF Cash Management Federal Agency: Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: P425J200025 - 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR §200.305 – Federal Payment: Requires that payment methods minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Advance payments must be limited to the minimum amounts needed and timed to meet actual, immediate cash requirements for program costs. HEERF Program Guidance: Institutions must not draw down funds in excess of immediate needs and should avoid accumulating excess cash on hand. Interest earned on excess cash over $250 per year must be remitted to the federal government. Condition: The University drew down Higher Education Emergency Relief Fund (HEERF) funds before incurring the related program expenditures. Federal regulations require that these drawdowns align with actual, immediate cash requirements to prevent excess federal cash on hand. Holding funds for extended periods before spending them can result in noncompliance. Questioned costs: None Context: During our testing of cash receipts, it was noted that the University was drawing down funds prior to incurring the related program expenditures. Cause: The University’s cash management process did not adequately align drawdown timing with actual disbursement needs. The drawdown was initiated based on anticipated expenses rather than immediate cash requirements. Effect: Drawing down funds prior to incurring expenditure creates risk of noncompliance with federal cash management regulations and may result in interest liability for excess cash held. Repeat Finding: No Recommendation: The University should revise its cash management procedures to ensure that HEERF drawdowns are based on actual, immediate cash needs rather than anticipated expenditures. Draw requests should be timed as closely as administratively feasible to the disbursement of funds for allowable program costs. Additionally, management should implement monitoring controls to prevent excess cash accumulation and ensure compliance with 2 CFR §200.305 and HEERF guidance. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 019 – Single Audit Report Submission Federal Agency: Various Federal Program Name: Extension Services at 1890 Colleges, Scholarships for Students at 1890 Institutions, Education Stabilization Fund, Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program, Federal Perkins Loan Program Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR Section 200.512(a) requires the data collection form and Single Audit reporting package be submitted the earlier of 30 days after the reports are received from the auditors or nine months after the end of the audit period. Condition: The University did not submit the single audit report package by the required time. Questioned costs: None. Context: Single audit report was due 3/31/25 and was not submitted until January 2026. Cause: The audit report on the financial statements for the year ended June 30, 2024, was issued after the March 31, 2025, deadline. Effect: The University is not in compliance with the provisions of 2 CFR Section 200.512(a) for the year ended June 30, 2024. Repeat Finding: Yes, 2023-031. Recommendation: We recommend the University should implement and maintain an effective system of internal controls over timely submission of the single audit reporting package. Views of responsible officials: There is no disagreement with the audit finding.

2024 – 020 – HEERF Earmarking Federal Agency: US Department of Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Federal Award Identification Number and Year: P425J200025 – 2024 Award Period: July 1, 2023 – June 30, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: HEERF III funds required the spending of funds in use of implementing evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines and conducting direct outreach to financial aid applicants. Spending under these categories indicates whether an institution has spent funds under a required use of funds established under the ARP. If an institution indicates zero-dollar amount spending for either or both categories, examine earlier annual reports to determine the institution had spending at some point on these two funding categories consistent with ARP FAQ Question 21. Condition: No spending of HEERF funds for implementing evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines and conducting direct outreach to financial aid applicants. Questioned costs: None Context: During our testing of annual report, it was noted that the University did not spend funds under the categories of implementing evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines and conducting direct outreach to financial aid applicants. Cause: The University did not have the controls in place to ensure earmarking requirements under the CRRSAA 314(e) were being followed and met. Effect: The University is not in compliance with the earmarking requirements for HEERF funds specified by the Department of Education. Repeat Finding: No. Recommendation: We recommend the University should implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure earmarking requirements are met. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 012 – Verification Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program; Federal Pell Grant Program; Federal Direct Student Loan; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. Condition: Supporting documentation for students who were selected for verification was not maintained. Questioned costs: None. Context: During our testing of students selected for verification, we selected a sample of 14 students to test for proper documentation of verification. 14 of the 14 students tested had instances of noncompliance as the institution did not retain statements of educational purpose. Cause: The University's policies and procedures did not ensure retention of required documentation. Effect: Student could report incorrect information which could lead to incorrect EFC and over awarding of aid. Repeat Finding: No. Recommendation: We recommend management retain electronic files of student verification documentation more securely within school systems/networks. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 013 – Awarding of Pell Grant Federal Agency: U.S. Department of Education Federal Program Name: Federal Pell Grant Program Assistance Listing Number: 84.063 Federal Award Identification Number and Year: P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 690.62 states the Pell grant for an academic year is based upon the payment and disbursement scheduled published by the Secretary for each award year. The payment schedules take into account the cost of attendance, the student’s EFC, and the enrollment status of the student. Condition: Students were under-award and under disbursed Pell grant funds. Questioned costs: $5,175. Context: During our testing of the Pell Grant program, we selected a sample of 33 students to test for proper calculation and disbursement of Pell funds. 3 of the 33 students tested had Pell grant awarded amounts incorrectly calculated and disbursed. Cause: The University did not have a process in place to review Pell grant awarded amounts to ensure the student was awarded and disbursed based on the proper enrollment and EFC. Effect: Incorrect amounts were awarded and disbursed to students which caused students to be underawarded and disbursed. Repeat Finding: No. Recommendation: We recommend management review individual student calculations of Pell awards to ensure no additional errors in awards disbursed to students. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 014 – Awarding of Title IV Aid Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program; Federal Pell Grant Program; Federal Direct Student Loan; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per the Code of Federal Regulations, 34 CFR 673.5, students may not be awarded need based aid in excess of their calculated need. In addition, 34 CFR 685.203(j) states that in no case may a loan amount exceed the student’s estimated cost of attendance for the period of enrollment for which the loan is intended less the student’s estimated financial assistance for that period and in the case of Direct Subsidized Loans, the borrower’s expected family contribution for that period. Condition: Students were over-awarded and disbursed funds that the students were not eligible for. Questioned costs: $12,121. Context: In our testing of 40 students, it was noted 3 students were over-awarded and disbursed PLUS loans funds and 1 student was over-awarded and disbursed Pell and SEOG funds. Cause: Management incorrectly awarded these students based on their financial need and cost of attendance. Effect: Students were given funding that they were not eligible for. Repeat Finding: No. Recommendation: We recommend the University implement policies to review all student award packages at the start of the academic year to ensure no over awarding exist. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 015 – Exit Counseling Federal Agency: U.S. Department of Education Federal Program Name: Federal Direct Student Loan Assistance Listing Number: 84.268 Federal Award Identification Number and Year: P268K230147; P268K240147 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per the Code of Federal Regulations, 34 CFR 685.304(b), if a student borrower withdraws or graduates from school, exit counseling must be provided either electronically, by mailing, or by email to the student borrower. Condition: Students who withdrew or graduated from the University did not receive exit counseling information. Questioned costs: None. Context: During our testing, it was noted that out of the 4 students selected who were required to receive exit counseling information did not receive it. Cause: The University’s processes and controls did not ensure that exit counseling was completed or did not retain proper support to indicate this process took place. Effect: Students are not receiving the proper loan counseling which may contribute to not repaying loans to the Department of Education on time. Repeat Finding: Yes, 2022-008. Recommendation: We recommend the University review its policies and procedures around sending exit counseling information to students to ensure students are receiving proper counseling. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 016 – Return of Title IV Calculation Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program; Federal Pell Grant Program; Federal Direct Student Loan; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs as outlined in this section and no additional disbursements may be made to the student for the payment period or period of enrollment. If the amount the student earned is greater than the amount disbursed, the difference between the amounts must be treated as a post-withdrawal disbursement (34 CFR 668.22(a)(1) through (a)(5)). Condition: Students who withdrew from the University did not have calculations of Title IV completed to determine the amount to be returned to the Department of Education. Questioned costs: None. Context: During our testing of 5 students who withdrew, 2 students were determined to need a calculation of how much aid show be refunded and such calculations were not performed. Cause: The University did not have a control in place to determine which students who withdrew from the University would need a calculation of Title IV aid to be returned. Effect: The University is not returning the proper amounts to the Department of Education. Repeat Finding: No. Recommendation: We recommend management review policies around determining students who withdrew and if a return of Title IV funds calculation is necessary. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 017 – Cash Management Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program; Federal Pell Grant Program; Federal Direct Student Loan; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Schools must establish and maintain financial records of Title IV transactions, and accounting and internal control systems for Title IV funds. Cash management includes the drawdown and maintenance of Title IV funds destined for student recipients. Certain standards are defined by regulation to ensure proper accountability for these public funds. Condition: The University was unable to provide support for one of the eight cash drawdowns sampled during cash management testing. Questioned costs: None. Context: CLA notes one out of eight cash draws selected, the University was unable to substantiate related support such as drawdown request and form of approval. Cause: The University did not follow policies and procedures in place surrounding maintaining support and approval of transaction. Effect: The University may not be adhering to compliance requirements around when to draw funds down from the government. Repeat Finding: No. Recommendation: We recommend management maintain proper recordkeeping and follow policies and procedures that are in effect at the University. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 018 – Enrollment Reporting to the National Student Loan Database System (NSLDS) Federal Agency: U.S. Department of Education Federal Program Name: Federal Pell Grant Program; Federal Direct Student Loan Assistance Listing Number: 84.063; 84.268 Federal Award Identification Number and Year: P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147- 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Other Matters Criteria or specific requirement: Per U.S. Department of Education (ED) regulations, all schools participating (or approved to participate) in the Federal Student Aid programs must have an arrangement to report student enrollment data to the NSLDS through a roster file. The school is required to report enrollment status at both the school and program level. The school is required to report changes in the student’s enrollment status, the effective date of the status and an anticipated completion date. An academic program is defined as the combination of the school’s Office of Postsecondary Education Identification (OPEID) number and the program’s Classification of Instructional Program (CIP) code, credential level, and published program length. ED requires the University to report changes in enrollment status and indicate the date that the changes occurred (34 CFR 685.309). Changes in enrollment status must be reported within 30 days. However, if a roster file is expected within 60 days, you may provide the date on that roster file. In addition, regulations require that an institution make necessary corrections and return the records within 10 days for any roster files that don’t pass the NSLDS enrollment reporting edits. ED requires the University to report changes in enrollment status within 30 or 60 days that the University determined the changes occurred (34 CFR 682.610). Condition: Certain students’ enrollment information was not reported accurately or timely to the NSLDS. Questioned costs: None. Context: The below was noted during testing: • 4 students out of a sample of 16 students had an enrollment effective date in the campus-level and program-level records in the NSLDS that did not match what was reflected in the University’s records. • 1 student out of a sample of 16 students had an enrollment status in the campus-level and program-level records in the NSLDS that did not match what was reflected in the University’s records. • 16 students out of a sample of 16 students tested were not reported to the campus-level record in the NSLDS in a timely manner. • 16 students out of a sample of 16 students tested were not certified at a minimum every 60 days to the campus-level record in the NSLDS in a timely manner. • 2 students out of a sample of 16 students tested had an enrollment status effective date in the campus-level of the NSLDS that did not match the program-level of the NSLDS. Cause: Management's procedures to report accurate and timely information to the NSLDS were not operating effectively. Effect: Inaccurate reporting to the NSLDS can impact when students enter repayment periods or affect their interest rates. Repeat Finding: Yes, 2022-010 and 2022-012. Recommendation: We recommend the University evaluate its procedures and review policies in overseeing submissions to the NSLDS completed by the third-party servicer. Additionally, we recommend the University review its policies and procedures on reporting enrollment information to the NSLDS to ensure that all relevant information is being captured and reported timely in accordance with applicable regulations. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 019 – Federal Perkins Loan Program Record Retention Federal Agency: U.S. Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Federal Award Identification Number and Year: N/A Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 674.19.(e), states an institution must retain promissory and master promissory notes (MPN), and repayment records for each Perkins Loan program loan made. The original promissory notes and repayment schedules must be kept until the loans are satisfied. An institution shall retain disbursement and electronic authentication and signature records for each loan made using an MPN for at least three years from the date the loan is canceled, repaid, or otherwise satisfied. Condition: Certain loan MPNs were not retained for the three-year retention period. Questioned costs: None. Context: During our testing, 2 out of 5 open loans tested and 1 out of 40 of the loans assigned tested, the University was unable to locate the original promissory note and/or MPN. Cause: The University does not have a review process in place to ensure the MPNs are kept for at least three years from the date the loan is cancelled, repaid, or otherwise satisfied. Effect: Receivable balances are not supported by signed loan agreements. Repeat Finding: No. Recommendation: We recommend that the University keep MPNs for loans for the three-year retention period. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 020 – Direct Loan Reconciliation Federal Agency: U.S. Department of Education Federal Program Name: Federal Direct Student Loan Assistance Listing Number: 84.268 Federal Award Identification Number and Year: P268K230147; P268K240147- 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 685.300(b)(5), states though a school decides the frequency and methods it will use for internal reconciliation, Direct Loan reconciliation must occur at least monthly and should occur before the required monthly reconciliation to the Direct Loan SAS. School's must maintain documented results of its monthly reconciliation to provide to auditors and reviewers at their request. Condition: Direct loan reconciliations between the COD, G5 and student accounts did not have evidence of being reviewed. Questioned costs: None. Context: During our testing, 1 out of 3 direct loan reconciliations tested did not have evidence of being reviewed. Cause: The University did not adhere to controls in place for all reconciliations. Effect: The University is not complying with internal policy. Repeat Finding: No. Recommendation: We recommend management maintain proper recordkeeping and retention of documentation and review of such documentation. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 021 – Federal Perkins Loan Program Third-Party Servicer Federal Agency: U.S. Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Federal Award Identification Number and Year: N/A Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.25(a), an institution may enter into a written contract with a third-party servicer for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated. When an institution uses a third-party servicer for its Perkins Loan program, the institution must perform due diligence to ensure that the third-party servicer is in compliance with the requirements for the functions the third-party servicer is performing for the institution. Such due diligence could include obtaining and reviewing the third-party servicer’s most recent Title IV compliance audit. Condition: There is no oversight or review of the controls at the third-party servicer by the University. Questioned costs: None. Context: During our testing, we noted that the University does not have a procedure or control to review the annual compliance attestation report regarding the service provider performing Perkins administration services. Cause: The University did not have a control in place to ensure review of the attestation requirements of their Perkins administrator. Effect: University does not have a procedure or control to review the annual compliance attestation report regarding the service provider performing Perkins administration services. The third-party servicer could have compliance findings that could directly impact the University. Repeat Finding: No. Recommendation: We recommend reviewing procedures and requirements regarding Perkins third party service providers and ensure compliance with regulations. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 022 – Federal Perkins Loan Program Reconciliation Federal Agency: U.S. Department of Education Federal Program Name: Federal Perkins Loan Program Assistance Listing Number: 84.038 Federal Award Identification Number and Year: N/A Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.25(a), an institution may enter into a written contract with a third-party servicer for the administration of any aspect of the institution's participation in any Title IV, HEA program only to the extent that the servicer's eligibility to contract with the institution has not been limited, suspended, or terminated. When an institution uses a third-party servicer for its Perkins Loan program, the institution must reconcile funds that are reported by the third-party servicer to the University's accounting records. Condition: The University did not reconcile the Perkins Loan Program funds that are recorded on the University's accounting records to the third-party servicer's report. There was also no review of the process. Questioned costs: None. Context: During our testing, we noted that a control was not identified pertaining to reconciliation of Perkins loans from third party servicer report to the University's accounting records. Cause: The University did not have a control in place to ensure the reconciliation of Perkins loans from third party servicer report to the University's accounting records. Effect: The University accounting records did not reflect the current information. Repeat Finding: No. Recommendation: We recommend reviewing procedures around Perkins Loan Program funds and implementing reconciliations and review to the third-party servicer reports. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 023 – Fiscal Operations Report and Application to Participate (FISAP) Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program; Federal Perkins Loan Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033; 84.038 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.24, a school must keep fiscal records to demonstrate its proper use of FSA funds. A school’s fiscal records must provide a clear audit trail that shows that funds were received, managed, disbursed, and returned in accordance with federal requirements. Condition: The University did not maintain proper support for the FISAP. Questioned costs: None. Context: During our testing of the FISAP, the University could not provide documentation for the amounts reported on the FISAP. Cause: The University could not provide any documentation supporting the amounts disclosed on the FISAP. Effect: The University is not complying with regulations on maintaining audit trail documentation. Repeat Finding: No. Recommendation: We recommend management maintain and safeguard all necessary data and documentation to support the FISAP. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 024 – 240 Day Escheatment Federal Agency: U.S. Department of Education Federal Program Name: Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program Assistance Listing Number: 84.007; 84.063; 84.268; 84.033 Federal Award Identification Number and Year: P007A171583; P007A231583; P063P190147; P063P210147; P063P220147; P063P230147; P063Q210147; P063Q220147; P268K230147; P268K240147; P033A211583; P033A231583 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The Code of Federal Regulations, 34 CFR 668.164(h)(2) states that an institution that attempts to disburse funds by check and the check is not cashed, the institution must return the funds to the Department of Education no later than 240 days after the date it issued that check. Condition: During our testing of refund checks, we noted student refunds of Title IV federal financial aid were outstanding more than 240 days. Questioned costs: $96,158. Context: During the testing of student refund checks, it was noted that 39 student refund checks were not returned to the Department of Education within the 240-day deadline. Cause: The University did not have a process in place to return Title IV refund checks outstanding over 240 days. Effect: The University is not in compliance with Department of Education requirements that all student refund checks that are outstanding for more than 240 days be returned to the Department of Education. Repeat Finding: No. Recommendation: We recommend the University review its policies and procedures related to outstanding student refund checks to ensure they are being returned to the Department of Education after 240 days. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 025 – Procurement Policy Federal Agency: Various Federal Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Uniform guidance requires auditees to follow procurement standards set forth. sections of the Uniform Guidance set forth five permissible procurement methods for non-Federal entities expending Federal financial assistance: (1) micro-purchases (§ 200.320(a)(1)); (2) small purchases (§ 200.320(a)(2)); (3) sealed bids (§ 200.320(b)(1)); (4) proposals (§ 200.320(b)(2)); and (5) noncompetitive procurement (§ 200.320(c)(1)-(5)). Condition: The University's procurement policy does not currently match requirements of the Uniform Guidance. Questioned costs: None. Context: The University's procurement policy does not currently match requirements of the Uniform Guidance related to defining the required levels of procurement and when competitive bids are required. Cause: The University did not have a process in place to ensure the procurement policy met Uniform Guidance. Effect: The University is not in compliance with Uniform Guidance for procurement. Repeat Finding: No. Recommendation: We recommend the University review its procurement policy to insure it meets federal regulations. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 026 – Suspension and Debarment Federal Agency: Various Federal Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Recipients and subrecipients are subject to the nonprocurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition: The University did not maintain records obtained from applying suspension and debarment procedures. Questioned costs: None. Context: The University did not maintain records obtained from applying suspension and debarment procedures. As such, 1 of 6 vendors tested did not have support around suspension and debarment. Cause: The University did not maintain records obtained from applying suspension and debarment procedures. Effect: The University is not in compliance with Uniform Guidance for suspension and debarment. Repeat Finding: No. Recommendation: We recommend the University review its policies relating to the retention of records to ensure support regarding the debarment status of venders is maintained. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 027 – Supporting Documentation Federal Agency: Various Federal Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR part 200.403(g) states costs must meet criteria to be allowable under federal awards including be adequately documented. Condition: Credit card statements and receipts for transactions in which credit cards were used were not retained. Questioned costs: None. Context: During our testing, it was noted that 1 out of the 40 tested that the University did not maintain proper support for the expenditure. Cause: The University did not maintain documentation to support the expenditure. Effect: The University did not follow the policies and procedures in place to maintain supporting documentation for expenditures. Repeat Finding: No. Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card receive appropriate approval. We also recommend management maintain proper recordkeeping and retention of documentation. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 028 – Property and Equipment Management Federal Agency: Various Federal Program Name: Research and Development Cluster Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Regardless of whether equipment is acquired in part or its entirety under the Federal award, the recipient or subrecipient must manage equipment. A physical inventory of the property must be conducted, and the results must be reconciled with the property records at least once every two years and a control system must be in place to ensure safeguards for preventing property loss, damage, or theft. Any loss, damage, or theft of equipment must be investigated. The recipient or subrecipient must notify the Federal agency or pass-through entity of any loss, damage, or theft of equipment that will have an impact on the program. (2 CFR 200.313 (d) (2) and (3)). Condition: The University did not have documentation of inventory of federal funding being completed every 2 years as well as documentation supporting the safeguard of assets. Questioned costs: None. Context: During testing of property and equipment it was noted that none of the eleven selection samples tested had been inventoried and no physical documentation supporting the property is appropriately safeguarded and maintained. Cause: The University did not have controls in place that comply with the federal regulations around inventory taking and safeguard keeping. Effect: The University is not in compliance with federal regulations around inventory taking and safeguard keeping. Repeat Finding: No. Recommendation: We recommend management implement procedures for physical inventory to be taken within a two year time frame as well as maintain evidence of assets possession such as photos of the property and equipment. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 029 – Supporting Documentation Federal Agency: Department of Agriculture Federal Program Name: Supplemental Nutritional Assistance Program (SNAP) Assistance Listing Number: 10.561 Federal Award Identification Number and Year: 235KY414Q3903 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR part 200.403(g) states costs must meet criteria to be allowable under federal awards including be adequately documented. Condition: Credit card statements and receipts for transactions in which credit cards were used were not retained. Questioned costs: None. Context: During our testing, it was noted that 1 out of the 17 tested that the University did not maintain proper support for the expenditure. Cause: The University did not maintain documentation to support the expenditure. Effect: The University did not follow the policies and procedures in place to maintain supporting documentation for expenditures. Repeat Finding: No. Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card receive appropriate approval. We also recommend management maintain proper recordkeeping and retention of documentation. Views of responsible officials: There is no disagreement with the audit finding.

2023 – 030 – Annual and Quarterly Reporting Federal Agency: Department of Education Federal Program Name: Education Stabilization FundAssistance Listing Number: 84.425 Federal Award Identification Number and Year: P425J200025 - 2023 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: The CARES Act 18004(e) and the CRRSAA 314(e) requires an institution receiving funds under Higher Education Emergency Relief Fund (HEERF) I and HEERF II to submit a report to the secretary, at such time in such a manner as the secretary may require. Quarterly public reporting for institutional requires a new, separate form to be posted covering aggregate amounts spent for HEERF I, HEERF II, and HEERF III funds each quarterly reporting period due no later than 10 days after the end of each calendar quarter. HEERF III funds required the spending of funds in use of implementing evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines and conducting direct outreach to financial aid applicants. Spending under these categories indicates whether an institution has spent funds under a required use of funds established under the ARP. If an institution indicates zero-dollar amount spending for either or both categories, examine earlier annual reports to determine the institution had spending at some point on these two funding categories consistent with ARP FAQ Question 21. Condition: Annual and quarterly reports were not adhering to compliance requirements. Questioned costs: None. Context: During our testing of annual report, it was noted that the University did not spend funds under the categories of implementing evidence-based practices to monitor and suppress coronavirus in accordance with public health guidelines and conducting direct outreach to financial aid applicants. During our testing of quarterly reports, 1 of the 2 reports tested was not posted on the University's website within 10 days of the end of the quarter and 2 of the 2 reports tested did not have supporting documentation of the dollar amounts reported in the report. Cause: The University did not have the controls in place to ensure reporting requirements under the CARES Act 18004(e) and the CRRSAA 314(e) were being followed and met. Effect: The University is not in compliance with the reporting requirements for HEERF funds specified by the Department of Education. Repeat Finding: Yes, 2022-014. Recommendation: We recommend the University should implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure funds are reported accurately and timely, in accordance with grant requirements.

2023 – 031 – Single Audit Report Submission Federal Agency: Various Federal Program Name: Research and Development Cluster, Education Stabilization Fund, Supplemental Nutritional Assistance Program (SNAP), Federal Supplemental Educational Opportunity Grant Program, Federal Pell Grant Program; Federal Direct Student Loans; Federal Work Study Program, Federal Perkins Loan Program Assistance Listing Number: Various Federal Award Identification Number and Year: Various Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR Section 200.512(a) requires the data collection form and Single Audit reporting package be submitted the earlier of 30 days after the reports are received from the auditors or nine months after the end of the audit period. Condition: The University did not submit the single audit report package by the required time. Questioned costs: None. Context: Single audit report was due 3/31/24 and was not submitted until calendar year 2025. Cause: The audit report on the financial statements for the year ended June 30, 2023, was issued after the March 31, 2024, deadline. Effect: The University is not in compliance with the provisions of 2 CFR Section 200.512(a) for the year ended June 30, 2023. Repeat Finding: Yes, 2022-019. Recommendation: We recommend the University should implement and maintain an effective system of internal controls over timely submission of the single audit reporting package.

Student Account Credit Balance Reimbursement Information on the Federal Program: Student Financial Aid Cluster (AL Numbers 84.268, 84.063, 84.033, 84.379, 84.038, and 84.077) – U.S. Department of Education Criteria or specific requirement: 34 CFR 668.164(h) - If a credit balance occurred on or before the first day of class of a payment period, it must be paid directly to the student or parent within 14 days of the first day of class. If a credit balance occurred after the first day of class of a payment period, it must be paid directly to the student or parent within 14 days of the occurrence. Condition: Out of a population of 1,623 students, we sampled 40. Out of this sample, the University failed to reimburse student account credit balances timely for 5 students. Questioned Cost: $10,456 Cause: The University did not have a control in place to ensure credit balances were refunded timely. Effect: The University is not in compliance with Title 34, Section CFR 668.164 with respect to the referenced students. Recommendation: We recommend that the University establish controls to ensure that credit balances are paid directly to the student or parent within 14 days of the first day of class or within 14 days of the occurrence of a credit balance.

Academic Probation Notifications Information on the Federal Program: Student Financial Aid Cluster (AL Numbers 84.268, 84.063, 84.033, 84.379, 84.038, and 84.007) – U.S. Department of Education. Criteria or specific requirement: 34 CFR 668.16(e)(9) - An institution must provide notification to the students of their results of an evaluation that impacts their eligibility for Title IV. Condition: Out of a sample of 40 students, we identified 14 that did not meet Satisfactory Academic Progress (SAP). Out of the 14, the University failed to timely notify 1 of the students of academic probation status. Questioned Cost: $-0- Cause: The controls in place to ensure academic probation notifications are sent to students in a timely manner appeared to fail for the student identified above. Effect: The University is not in compliance with Title 34 Section 668.16 with respect to the students referenced. Recommendation: We recommend the University review the controls in place to ensure that academic probationary notifications are sent out promptly and enhance the controls if warranted.

Exit Counseling Notification for Withdrawn Students Information on the Federal Program: Federal Direct Student Loan Program (AL Number 84.268) – U.S. Department of Education Criteria or specific requirement: 34 CFR 685.304(b)(3) - If a student borrower withdraws from school, exit counseling must be provided either electronically, by mailing, or by email to the student borrower within 30 days. Condition: Out of a population of 26 withdrawn students, we sampled 5. Out of this sample, the University was unable to provide evidence of exit counseling notifications being sent to 4 students. Questioned Cost: $-0- Cause: The University did not have a control in place to ensure exit counseling notifications were sent to withdrawn students timely. Effect: The University is not in compliance with Title 34, Section 685.304 with respect to the referenced withdrawn students. Recommendation: We recommend that the University establish controls to ensure that exit counseling notifications are sent timely once a student has been identified as a withdrawal.

Incomplete Summary Level Report of Title IV Funds Not Returned Information on the Federal Program: Federal Direct Student Loan Program (AL Number 84.268) – U.S. Department of Education Criteria or specific requirement: CARES Act Section 3508(2) - The Secretary shall require each institution using a waiver relating to the withdrawal of recipients to report the number of such recipients, the amount of grant or loan assistance associated with each such recipient, and the total amount of grant or loan assistance for which each institution has not returned assistance under title IV to the Secretary. Condition: Out of a population of 26 withdrawn students, we sampled 5. Out of this sample, 1 student was not included in the Summary Level Report of Title IV Funds not returned. Questioned Cost: $-0- Cause: There was not a procedure in place to verify that all students who withdrew from the University after attending less than 60% of the enrollment period were included in the Summary Level Report. Effect: The number of recipients and total amount of assistance included in the Summary Level Report was understated. Recommendation: We recommend the University develop a procedure for verifying that all withdrawn students are included in the Summary Level Report to ensure accurate reporting to the Department.

NSLDS Notification of Withdrawn Status Information on the Federal Program: Federal Direct Student Loan Program (AL Number 84.268) – U.S. Department of Education Criteria or specific requirement: 34 CFR 685.309 - Unless the school expects to submit 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 population of 26 withdrawn students, we sampled 5. Out of this sample, the University failed to correctly notify NSLDS of 1 student’s status change. Questioned Cost: $-0- Cause: The University relied on their third-party servicer for reporting and did not have a control in place to ensure that timely reporting of all status changes to NSLDS was 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 the University establish controls to review the reporting function of their third-party servicer to ensure student enrollment status in the NSLDS is updated in a timely manner in compliance with federal requirements.

Exit Counseling Notification for Graduated Students Information on the Federal Program: Federal Direct Student Loan Program (AL Number 84.268) – U.S. Department of Education Criteria or specific requirement: 34 CFR 685.304(b)(1) - A school must ensure that exit counseling is conducted with each Direct Subsidized Loan or Direct Unsubsidized Loan borrower and graduate or professional student Direct PLUS Loan borrower shortly before the student borrower ceases at least half-time study at the school. Condition: Out of a population of 118 graduated students, we sampled 16. Out of this sample, the University was unable to provide evidence of exit counseling notifications being sent to 15 students. Questioned Cost: $-0- Cause: The University did not have a control in place to ensure exit counseling notifications were sent to graduating students timely. Effect: The University is not in compliance with Title 34, Section 685.304 with respect to the referenced graduated students. Recommendation: We recommend that the University establish controls to ensure that exit counseling notifications are sent prior to the date of graduation.

NSLDS Notification of Graduated Status Information on the Federal Program: Federal Direct Student Loan Program (AL Number 84.268) – U.S. Department of Education Criteria or specific requirement: 34 CFR 685.309 - Unless the school expects to submit 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 population of 118 graduated students, we sampled 16. Out of this sample, the University failed to correctly notify NSLDS of 8 students’ status changes. Questioned Cost: $-0- Cause: The University relied on their third-party servicer for reporting and did not have a control in place to ensure that timely reporting of all status changes to NSLDS was 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 the University establish controls to review the reporting function of their third-party servicer to ensure student enrollment status in the NSLDS is updated in a timely manner in compliance with federal requirements.

Right to Cancel Notifications Information on the Federal Program: Federal Direct Student Loan Program (AL Number 84.268) – U.S. Department of Education Criteria or specific requirement: 34 CFR 668.165(a)(2)(ii) - If an institution credits a student ledger account with Direct Loan, or Federal Perkins Loan funds, the institution must notify the student or parent of their right to cancel all or a portion of that loan, or loan disbursement. Condition: Out of a population of 66 graduate students, we sampled 6. Out of this sample, the University failed to provide evidence that right to cancel notifications were sent for all 6 students. Questioned Cost: $-0- Cause: The University did not have a control in place to ensure right to cancel notifications were sent to graduate students timely. Effect: The University is not in compliance with Title 34, Section 668.165 with respect to graduate students. Recommendation: We recommend that the University establish controls to ensure that right to cancel notifications are sent when student ledger accounts are credited.

Improper Reporting of HEERF Funds Information on the Federal Program: HEERF Student, Institutional, and HBCU Portion (AL Numbers 84.425E, 84.425F and 84.425J) – U.S. Department of Education Criteria or specific requirement: Federal Register Vol. 85, No. 169 and Vol. 86, No. 91 state that reporting information must appear in a format and location that is easily accessible to the public. This information must be updated no later than 10 days after the end of each calendar quarter. Additionally, HEERF FAQ guidance published by the Department of Education states an Institution can discharge the complete balance of student debt and reimburse themselves through their HEERF grants by reporting the discharge as lost revenue from academic sources in quarterly and annual reporting. Condition: The report for the quarter ended March 31, 2022, was revised in 2023, and the University removed the original version from their website. All quarterly reports, excluding the Institutional report for the quarter ended December 31, 2023, used cumulative totals of grant receipts instead of quarterly totals. Questioned Cost: $-0- Cause: The University did not have the proper internal controls in place to ensure that all reporting requirements were being adhered to. Effect: The University is not in compliance with the reporting requirements for HEERF funds specified by the Department of Education. Recommendation: We recommend the University review all previously submitted reporting documentation and update per the current guidance posted by the Department of Education. The University should also implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure funds are reported accurately and timely, in accordance with grant requirements.

Lost Revenue Information on the Federal Program: HEERF Institutional Portion (AL Number 84.425F) – U.S. Department of Education Criteria or specific requirement: 2 CFR Section 200.334 - Financial records, supporting documents, statistical records, and all other non-federal entity records pertinent to a federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the federal awarding agency or passthrough entity in the case of a subrecipient. Higher Education Emergency Relief Fund Lost Revenue Frequently Asked Questions - An institution must adequately document its estimate of lost revenue, including its rationale, calculations, methodology, underlying data, and budgets or projections used to determine the amount of lost revenue. Condition: At the time the lost revenue estimation was made, the University did not contemporaneously document its rationale, calculations, or methodology. Based on a review of parking revenue data subsequently compiled from the previous four years, it was determined that the amount reported as lost revenue in 2022 was reasonable; however, the contemporaneous record retention criteria was not satisfied. Questioned Cost: $-0- Cause: The University did not retain contemporaneously prepared documentation supporting its estimate of lost revenue including its rationale, calculations, and methodology. Effect: Contemporaneously prepared documentation and justification of the lost revenue estimation was not available to be audited. Historical parking revenue data from the previous four years was subsequently compiled and provided to support the amount reported as lost revenue in 2022 was reasonable. Recommendation: We recommend the University review the internal controls over the administration of federal funds to ensure future documentation is created and retained in accordance with specific grant requirements with an emphasis on the specific requirements of grants new to the University.

Unidentifiable Federal Funds Information on the Federal Program: Coronavirus State and Local Fiscal Recovery Funds (AL Number 21.027) – U.S. Department of the Treasury Criteria: 2 CFR 200.302 (b) (1) -The financial management system of each non-federal entity must provide for the identification, in its accounts, of all federal awards received and expended and the federal programs under which they were received. federal program and federal award identification must include, as applicable, the Assistance Listings title and number, federal award identification number and year, name of the federal agency, and name of the pass-through entity, if any. Condition: Federal funds totaling $138,700 were not identified within the accounts of the University’s financial management system. These funds were posted in a payment holding account and were not identifiable as federal funds. Questioned Cost: $-0- Cause: The internal controls in place to ensure the identification of all federal payments received and expended failed to identify the above funds as federal funds. Effect: Without further investigation into the holding account, these funds would not have been identifiable within the University’s financial management system and would have been excluded from the Schedule of Expenditures of federal Awards. Recommendation: We recommend the University review the controls in place to identify federal funds and enhance if warranted.

SNAP-Ed Unallowable Expenditures Information on the Federal Program: SNAP Cluster (AL Number 10.561) – U.S. Department of Agriculture Criteria: 2 CFR Section 200.475(b) - Costs incurred by employees and officers for travel, including costs of lodging, other subsistence, and incidental expenses, must be considered reasonable and otherwise allowable only to the extent such costs do not exceed charges normally allowed by the non-federal entity in its regular operations as the result of the non-federal entity's written travel policy. In addition, if these costs are charged directly to the federal award then documentation must justify that: (1) Participation of the individual is necessary to the Federal award; and (2) The costs are reasonable and consistent with non-Federal entity's established travel policy. OMB Compliance Supplement 2023 - SNAP-Ed funds must be used for the administrative costs of planning, implementing, operating, and evaluating a SNAP-Ed program in accordance with the state’s approved SNAP-Ed Plan. Guidance from the State of Kentucky regarding allowable costs restrictions on travel and conferences is included in award number SC7362000001287 and SC362200001080. Condition: The University expended $38,596 of SNAP-Ed funds for 27 employees to travel to the annual Association of Administrators System-Wide Conference. We were only able to substantiate allowable expense for 3 of these employees to costs related to the SNAP-Ed program. We were unable to substantiate the travel cost for the other 24 employees as costs related to the SNAP-Ed program through prior written approval from the pass-through entity. Questioned Cost: $35,296 Cause: The University expended federal funds on travel that could not be substantiated, through prior written approval from the pass-through entity, as allowable expenditures related to the SNAPEd program. Effect: The University is not in compliance with the allowable activities outlined by the pass-through entity or provisions as outline in 2 CFR Section 200.475(b) of the Code of Federal Regulations. Recommendation: We recommend the University ensure staff working with federal funds are provided adequate training to understand the allowable requirements of federal programs. Furthermore, the University should maintain records on approvals from the federal agencies or passthrough agencies on all travel expenses and approvals in a centralized manner for maintains records for the required amount of time.

SNAP-Ed Record Retention Information on the Federal Program: SNAP Cluster (AL Number 10.561) – U.S. Department of Agriculture Criteria: 2 CFR Section 200.334 - Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. State of Kentucky guidance per award number SC7362000001287 and SC362200001080 – the University must submit monthly and quarterly reports to the DCBS Division of Family Support, Director's office. Condition: Monthly and quarterly reports required to be submitted by the University to the State were not adequately retained during the required three-year period beginning July 1, 2021. Questioned Cost: $-0- Cause: The University did not have the proper internal controls in place to ensure that all required reporting documents were retained during the specified three-year period. Effect: Monthly and quarterly reporting for all periods were not available to be audited. Recommendation: We recommend the University review the internal controls over the administration of federal funds to ensure documentation is created and retained in accordance with federal and pass-through requirements.

Information on the Federal Program: HEERF Student Aid Portion (CFDA Number 84.425E) – U.S. Department of Education Criteria: In accordance with 2 CFR § 200.305(b) of the Uniform Guidance, which applies to the HEERF grants, grantees must seek to minimize the time between drawing down funds from the G5 system and applying those funds to support a grant award’s activities. Consistent with this requirement, grantees must maintain grant funds in interest-bearing accounts, and any interest earned on grant funds above $500 per year must be remitted to the Federal government. An institution should refund any portion of the HEERF award that it does not have an immediate ability to expend on emergency financial grants to students, until the institution has a plan for the orderly distribution of the remainder of the funds. It can then be re-drawn from the institution’s account in G5. Condition and context: The University transferred $633,744.80 of HEERF Student Aid funds to the KSU Foundation for the purpose of holding and releasing funds to students. $146,242.20 of checks distributed to students did not clear, and these funds were held in an interest-bearing account. As of September 15, 2023, accrued interest totaled $49,145.32. The University did not refund the portion of the HEERF award that could not be disbursed back to the Department of Education. The University also did not remit the accrued interest. Questioned Cost: $195,387.52 Cause: The University did not have an adequate plan in place for the orderly distribution of the HEERF award that it did not have an immediate ability to expend. Effect: The University is not in compliance with the refund requirements of the Department of Education. Recommendation: We recommend the University complete the refund procedures for the funds unable to be disbursed and the accrued interest. Additionally, the University should establish a plan for the orderly distribution of the remaining balance of HEERF funds.

Information on the Federal Program: HEERF Student, Institutional, and HBCU Portion (CFDA Numbers 84.425E, 84.425F and 84.425J) – U.S. Department of Education Criteria: Federal Register Vol. 85, No. 169 and Vol. 86, No. 91 state that reporting information must appear in a format and location that is easily accessible to the public. This information must be updated no later than 10 days after the end of each calendar quarter. Additionally, HEERF FAQ guidance published by the Department of Education states an Institution can discharge the complete balance of student debt and reimburse themselves through their HEERF grants by reporting the discharge as lost revenue from academic sources in quarterly and annual reporting. Condition and context: The University does not have the Student Funding Report for the quarter ending June 30, 2021, posted to their website. The Institutional and HBCU portion report for the quarter ended September 30, 2020, was created more than 10 days after the end of the quarter. The Institutional and HBCU portion report for the quarter ended March 31, 2021, was revised in 2022, and the University removed the original version from their website; therefore it cannot be determined if the reporting deadline requirement was met. The University reported discharge of student debt as emergency financial aid grants to students instead of lost revenue from academic sources on the Institutional and HBCU portion report for the quarter ended March 31, 2021. Questioned Cost: $0 Cause: The University did not have the proper internal controls in place to ensure that all reporting requirements were being adhered to. Effect: The University is not in compliance with the reporting requirements for HEERF funds specified by the Department of Education. Recommendation: We recommend the University review all previously submitted reporting documentation and update per the current guidance posted by the Department of Education. The University should also implement and maintain an effective system of internal controls over the administration of HEERF funds to ensure funds are reported accurately and timely, in accordance with grant requirements.

Information on the Federal Program: HEERF HBCU Portion (CFDA Number 84.425J) – U.S. Department of Education Criteria: Consistent with the cost principles of the Uniform Guidance (2 CFR part 200 subpart E), the calculation of lost revenue must measure the amount of baseline revenue and lost revenue consistently. Condition and context: Lost Revenue for Fall 2021 was calculated by applying the year over year percent increase in dining revenue to the Fall 2020 dormitory revenue and subtracting that amount from the actual Fall 2021 dormitory revenue. Questioned Cost: $688,691 Cause: To measure the amount of baseline revenue and lost revenue consistently, lost revenue should have been calculated by subtracting Fall 2020 dormitory revenue from Fall 2021 revenue. Effect: Lost Revenue was incorrectly calculated and therefore overstated. Recommendation: We recommend the University improve its administration of federal grant funds. KSU should allocate sufficient staff and resources to ensure grant funds are spent in accordance with federal statutes, regulations, and the terms and conditions of the various federal awards. Specifically, the University should implement and maintain an effective system of internal controls over the administration of federal funds to ensure funds are spent appropriately and in accordance with the specific grant requirements. This includes establishing a chain of command that has the skills and knowledge to administer the funds and to ensure internal controls are not circumvented or overridden.

Information on the Federal Program: Governor's Emergency Education Relief Fund (CFDA Number 84.425C) – U.S. Department of Education Criteria: PL 116-260 Consolidated Appropriations Act Section 312(c)(2) Grant funds must be used to provide emergency support to institutions of higher education that have been significantly impacted by coronavirus to support the ability to continue to provide educational services and support the on-going functionality of the institution. Condition and context: Out of a population of 62 expenditures made from GEER funds totaling $324,757.83, we sampled 4 expenditures totaling $17,268.97. Out of this sample, $5,245 were spent on activities other than those outlined in the CRRSA Act and Grant Agreement. Questioned Cost: $5,245 Cause: The University used a portion of GEER funds to purchase bounce houses, waterslides, and other inflatable entertainment for a Pre-College Academy Event. Effect: The University is not in compliance with the allowable activities outlined by the awarding agency. Recommendation: We recommend the University must ensure staff working in federal grant expenditures are provided adequate training to understand the specific requirements of each grant and federal spending in general, including the factors affecting allowability of costs, that costs are necessary and reasonable for the performance of the award, and that sufficient documentation is maintained.

Information on the Federal Program: Higher Education Institutional Aid (CFDA Number 84.031B) – U.S. Department of Education Criteria: The University’s approval policy, as found in the Business Policies and Procedures Manual, is outlined as follows: • Purchases less than $10,000 require the approval of the Department Chair and the Principal Investigator • Purchases between $10,000 and $19,999.99 require the additional approval of the Director, Dean, Associate/Assistant VP • Purchases between $20,000 and $39,999.99 require the additional approval of the Vice President • Purchases above $40,000 require the additional approval of the President Condition and context: Out of a population of 1,377 expenses, including 18 credit card payments, made from Title III Part B funds totaling $1,774,314, we sampled 42 expenditures, including 2 credit card payments, totaling $353,291.64. Out of this sample, the University failed to correctly provide approval for both of the credit card expenditures. The University pays all corporate credit card bills without consideration of the published approval policy. Therefore, it can be determined that the entire population of credit card expenditures were not in compliance with the above criteria. Questioned Cost: $12,639 Cause: The University pays all corporate credit card bills without consideration of the published approval policy. Effect: Expenditures made via corporate credit card were not subject to approval. Recommendation: We recommend the University develop a procedure for ensuring all expenditures made via corporate credit card receive appropriate approval.

Information on the Federal Program: Federal Direct Student Loan Program (CFDA Number 84.268) – U.S. Department of Education Criteria: 34 CFR 685.309 Unless the school expects to submit 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 and context: Out of a population of 34 withdrawn students, we sampled 7. Out of this sample, the University failed to correctly notify NSLDS of 4 students’ status changes. Questioned Cost: $0 Cause: The University relied on their third-party servicer for reporting and did not have a control in place to ensure that timely reporting of all status changes to NSLDS was 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 the University establish controls to review the reporting function of their third-party servicer to ensure student enrollment status in the NSLDS is updated in a timely manner in compliance with Federal requirements.

Information on the Federal Program: Federal Direct Student Loan Program (CFDA Number 84.268) –U.S. Department of Education Criteria: 34 CFR 685.309 Unless the school expects to submit 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 and context: Out of a population of 127 graduated students, we sampled 17. Out of this sample, the University failed to correctly notify NSLDS of 9 students’ status changes. Questioned Cost: $0 Cause: The University relied on their third-party servicer for reporting and did not have a control in place to ensure that timely reporting of all status changes to NSLDS was 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 the University establish controls to review the reporting function of their third-party servicer to ensure student enrollment status in the NSLDS is updated in a timely manner in compliance with Federal requirements.

Information on the Federal Program: Student Financial Aid Cluster (CFDA Numbers 84.268, 84.063, 84.033, 84.379, 84.038, and 84.007) – U.S. Department of Education Criteria: 34 CFR 668.164(h) If a credit balance occurred on or before the first day of class of a payment period, it must be paid directly to the student or parent within 14 days of the first day of class. If a credit balance occurred after the first day of class of a payment period, it must be paid directly to the student or parent within 14 days of the occurrence. Condition and context: Out of a population of 1,425 students, we sampled 40. Out of this sample, the Institution failed to reimburse student account credit balances timely for 5 students. Questioned Cost: $3,987 Cause: The University did not have a control in place to ensure credit balances were refunded timely. Effect: The University is not in compliance with Title 34, Section CFR 668.164 with respect to the referenced students. Recommendation: We recommend that the University establish controls to ensure that credit balances are paid directly to the student or parent within 14 days of the first day of class or within 14 days of the occurrence of a credit balance.

Information on the Federal Program: Federal Direct Student Loan Program (CFDA Number 84.268) –U.S. Department of Education Criteria: 34 CFR 668.165(a)(2)(ii) If an institution credits a student ledger account with Direct Loan, or Federal Perkins Loan funds, the institution must notify the student or parent of their right to cancel all or a portion of that loan, or loan disbursement. Condition and context: Out of a population of 79 graduate students, we sampled 8. Out of this sample, the Institution failed to provide evidence that right to cancel notifications were sent for all 8 students. Questioned Cost: $0 Cause: The University did not have a control in place to ensure right to cancel notifications were sent to graduate students timely. Effect: The University is not in compliance with Title 34, Section 668.165 with respect to graduate students. Recommendation: We recommend that the University establish controls to ensure that right to cancel notifications are sent when student ledger accounts are credited.

Information on the Federal Program: Federal Direct Student Loan Program (CFDA Number 84.268) – U.S. Department of Education Criteria: CARES Act Section 3508(2) The Secretary shall require each institution using a waiver relating to the withdrawal of recipients to report the number of such recipients, the amount of grant or loan assistance associated with each such recipient, and the total amount of grant or loan assistance for which each institution has not returned assistance under title IV to the Secretary. Condition and context: Out of a population of 34 withdrawn students, we sampled 7. Out of this sample, 1 student was not included in the Summary Level Report of Title IV Funds not returned. Questioned Cost: $0 Cause: There was not a procedure in place to verify that all students who withdrew from the institution after attending less than 60% of the enrollment period were included in the Summary Level Report. Effect: The number of recipients and total amount of assistance included in the Summary Level Report was understated. Recommendation: We recommend the University develop a procedure for verifying that all withdrawn students are included in the Summary Level Report to ensure accurate reporting to the Department.

Information on the Federal Program: Federal Direct Student Loan Program (CFDA Number 84.268) –U.S. Department of Education Criteria: 34 CFR 685.304(b)(3) If a student borrower withdraws from school, exit counseling must be provided either electronically, by mailing, or by email to the student borrower within 30 days. Condition and context: Out of a population of 34 withdrawn students, we sampled 7. Out of this sample, the University failed to correctly notify 2 students of exit counseling. Questioned Cost: $0 Cause: The University did not have a control in place to ensure exit counseling notifications were sent to withdrawn students timely. Effect: The University is not in compliance with Title 34, Section 685.304 with respect to the referenced withdrawn students. Recommendation: We recommend that the University establish controls to ensure that exit counseling notifications are sent timely once a student has been identified as a withdrawal.

Information on the Federal Program: Federal Direct Student Loan Program (CFDA Number 84.268) – U.S. Department of Education Criteria: 34 CFR 685.304(b)(1) A school must ensure that exit counseling is conducted with each Direct Subsidized Loan or Direct Unsubsidized Loan borrower and graduate or professional student Direct PLUS Loan borrower shortly before the student borrower ceases at least half-time study at the school. Condition and context: Out of a population of 127 graduated students, we sampled 17. Out of this sample, the University failed to correctly notify 6 students of exit counseling. Questioned Cost: $0 Cause: The University did not have a control in place to ensure exit counseling notifications were sent to graduating students timely. Effect: The University is not in compliance with Title 34, Section 685.304 with respect to the referenced graduated students. Recommendation: We recommend that the University establish controls to ensure that exit counseling notifications are sent prior to the date of graduation.

Information on the Federal Program: Student Financial Aid Cluster (CFDA Numbers 84.007, 84.033, 84.038, 84.063, 84.268, 84.379) ? U.S. Department of Education ? 2019 ? 2020 Award Year Criteria: Withdrawal date for a student who withdraws from an institution that is not required to take attendance- 34 CFR 668.22(C)(4 & 5) -An institution must document a student's withdrawal date determined in accordance with paragraphs (c)(1), (2), and (3). For purposes of this section, for a student who ceases attendance at an institution that is not required to take attendance, the student?s withdrawal date is: (i) The date, as determined by the institution, that the student began the withdrawal process prescribed by the institution; (ii) The date, as determined by the institution, that the student otherwise provided official notification to the institution, in writing or orally, of his or her intent to withdraw; (iii) If the student ceases attendance without providing official notification to the institution of his or her withdrawal in accordance with paragraph (c) (1)(i) or (c)(1)(ii) of this section, the mid-point of the payment period. Scheduled breaks - 34 CFR 668.22(f)(2)(i) and (ii) (B) - Institutionally scheduled breaks of five or more consecutive days are excluded from the return of Title IV funds calculation as periods of nonattendance and, therefore, do not affect the calculation of the amount of federal aid earned. Condition: During our testing of return of Title IV funds, we noted multiple control deficiencies and instances of noncompliance with federal compliance regulations surrounding the return of funds process. Questioned Cost: $0 Context: During our testing of return of funds, we selected seven students in our non-statistical sample from a total population of 79 withdrawn students to test for internal controls and compliance with federal regulations. We noted the following internal control deficiencies and compliance findings: ? We noted there was no secondary, documented review of return of funds calculations to ensure accuracy and completeness of the calculation. ? We noted five instances in which the University used was unable to support the unofficial withdrawal date used within the return of funds calculation. ? During our review of the calculation of days in the enrollment period for the Spring semester return of funds calculations, we noted the dates for Spring Break entered into Banner for break days did not align with the University?s published academic calendar. We also noted the Sunday surrounding Spring Break where no regular classes are held was not properly accounted for resulting in a 2-day error in the days in enrollment period calculation for Spring semester withdrawn students. We noted four instances in our sample affected by this error. Effect: The University may not comply with federal regulations and may not return the appropriate amount of unearned Title IV funds. Cause: There are no internal controls in place to review the return of funds calculations for accuracy and completeness. There is also no formal review of the calculation of break days to ensure scheduled breaks are calculated in accordance with the published academic calendar and in accordance federal guidelines. Repeat Finding: Yes. See Finding 2019-004. Recommendation: We recommend the Financial Aid Office implement the following processes: 1.) a process to review the University?s academic calendar and break days in the enrollment period to ensure the days in the enrollment period calculation is accurate and complete and consider Sundays surrounding Spring Break where there is no schedule classes; 2.) develop a timely secondary review process to detect potential errors and ensure return of funds calculation are completely entered into the Banner software; and 3.) develop a process to ensure appropriate supporting documentation is maintained to support withdrawal dates used in the return of funds calculation. Under the CARES Act passed in March 2020, institutions are not require to return Title IV funds under the waiver exception, however, the Department of Education has outlined specific reporting requirements under the CARES Act include: Identifying information for each student for whom R2T4 was waived under the CARES Act; the payment period ?begin? and ?end? dates for the period that the student did not complete as a result of the COVID-19 emergency; the amount of Title IV grant or loan assistance (other than Federal Work Study funds) that each such student received for the payment period in which he or she withdrew; and the total amount of Title IV grant or loan assistance that each institution has not returned to the Secretary as a result of the CARES Act provisions. Institutions should retain this information for each student who withdraws and qualifies for an R2T4 waiver under the CARES Act, and should plan to provide, for each student, identifying information, payment period begin and end dates, and information regarding the Title IV grant and loan disbursements (except for Federal Work Study) that the student received for the payment period. In order to fulfill the third reporting requirement, an institution must determine the total amount of grant and loan assistance that otherwise would have been returned, identified in Step 5 of the R2T4 calculation, had the calculation been performed. Therefore, it will continue to be necessary for institutions to perform an R2T4 calculation for each student covered by the CARES Act R2T4 waiver. Views of responsible officials and planned corrective action: Management agrees with the finding. See corrective action plan.

Finding 2019-002 - Verification Information on the Federal Program: Student Financial Aid Cluster (CFDA Numbers 84.007, 84.033, 84.038, 84.063, 84.268, 84.379) ? U.S. Department of Education Criteria: 34 CFR 668.59(b) ? Changes to FAFSA Information ? For the Federal Pell Grant Program, if an applicant?s FAFSA information changes as a result of verification, an institution must (i) recalculate the applicant's Federal Pell Grant on the basis of the EFC on the corrected valid SAR or valid ISIR; and(2)(i) disburse any additional funds under that award only if the institution receives a corrected valid SAR or valid ISIR for the applicant and only to the extent that additional funds are payable based on the recalculation; (ii) comply with the procedures specified in ?668.61 for an interim disbursement if, as a result of verification, the Federal Pell Grant award is reduced; or - (iii) comply with the procedures specified in 34 CFR 690.79 for an overpayment that is not an interim disbursement if, as a result of verification, the Federal Pell Grant award is reduced. Condition: During our examination of the Title IV verification process, we noted instances in which information within a student?s verification worksheet did not agree to information being reported within a students ISIR and was not properly updated by University management. Questioned Cost: $900 under awarded, $751 over awarded of Federal Pell Grant Program funds (84.063) Context: During our testing of verification, we selected 25 students in our non-statistical sample to test for compliance surrounding the verification process. We noted five instances in which verification worksheets completed by the student noting a change from the initial ISIR that was not updated by the University. In one instance, the number of individuals in the student?s household increased from 4 to 5 resulting in a decrease in the student?s EFC and an increase in the amount of Pell the student was eligible to receive by $900. In another instance, the student?s initial ISIR stated there were two household members attending college and the verification worksheet noted only one household member in college. The impact was an increase to the student?s EFC and a decrease in the amount of Pell the student was eligible to receive by $751. For the remaining three instances noted where verified information was not properly updated, there was no change to the student?s EFC or amount of aid awarded/disbursed. Effect: The University may not be in compliance with federal regulations. Cause: Verification worksheets were not being properly reviewed and compared to students most recent ISIR to ensure information is consistent and properly updated. Repeat Finding: No. Recommendation: We recommend management review internal controls surrounding the verification process to ensure verification worksheets are properly maintained and being compared to students ISIR?s to ensure information is correct and accurate. Views of responsible officials and planned corrective action: Management agrees with the finding. See corrective action plan.

Finding 2019-003 ? Aggregate Subsidized Loan Limits Information on the Federal Program: Federal Direct Student Loans (CFDA Number 84.268) ? U.S. Department of Education Criteria: 34 CFR 685.203(d) - The aggregate unpaid principal amount of all Direct Subsidized Loans and Subsidized Federal Stafford Loans made to a student but excluding the amount of capitalized interest may not exceed the following: (1) $23,000 in the case of any student who has not successfully completed a program of study at the undergraduate level. (2) $65,500 in the case of a graduate or professional student, including loans for undergraduate study. Condition: During our examination of Title IV student eligibility, we noted one instance in our testing sample of 25 students in which a student was awarded and disbursed direct loans in excess of the aggregate direct subsidized loan amount of $23,000. Questioned Cost: $53 of Federal Direct Student Loans (84.268) (Known) Context: During our testing of Title IV eligibility and disbursements, we selected 25 students in our non-statistical sample to test for compliance with federal regulations. We noted one instances where a student was awarded and disbursed $2,803 of subsidized loans during the 2018-2019 aware year resulting in the student?s aggregate subsidized loan increasing to $23,053 which exceeds the maximum amount of subsidized funding a student can receive in aggregate by regulations. Effect: The University is not in compliance with federal regulations. Cause: The University package software did not limit the amount of subsidized loans for the student to not exceed the aggregate limit. Repeat Finding: No. Recommendation: We recommend management review internal controls within the financial aid module to ensure system limitations are in place to ensure aggregate loan limits are not exceeded when packaging aid. Views of responsible officials and planned corrective action: Management agrees with the finding. Management has adjusted the student?s subsidized loan amount for the 2018-2019 award year. See corrective action plan.

Finding 2019-004 - Return Of Title IV Funds Information on the Federal Program: Student Financial Aid Cluster (CFDA Numbers 84.007, 84.033, 84.038, 84.063, 84.268, 84.379) ? U.S. Department of Education Criteria: Withdrawal date for a student who withdraws from an institution that is not required to take attendance- 34 CFR 668.22(C)(4 & 5) -An institution must document a student's withdrawal date determined in accordance with paragraphs (c)(1), (2), and (3) of this section and maintain the documentation as of the date of the institution's determination that the student withdrew, as defined in paragraph (l)(3) of this section. (i) ?Official notification to the institution? is a notice of intent to withdraw that a student provides to an office designated by the institution. (ii) An institution must designate one or more offices at the institution that a student may readily contact to provide official notification of withdrawal. Timeframe for the return of title IV funds. - 34 CFR 668.22(j)(1 & 2) An institution must return the amount of title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section. The timeframe for returning funds is further described in ? 668.173(b). Scheduled breaks - 34 CFR 668.22(f)(2)(i) and (ii) (B) - Institutionally scheduled breaks of five or more consecutive days are excluded from the return of Title IV funds calculation as periods of nonattendance and, therefore, do not affect the calculation of the amount of federal aid earned. Condition: During our testing of return of Title IV funds, we noted multiple control deficiencies and instances of noncompliance with federal compliance regulations surrounding the return of funds process. Questioned Cost: $413 under-returned Title IV funds ? includes Federal Pell Grant Program (84.063) and Federal Direct Student Loans (84.268) (Known) Context: During our testing of return of funds, we selected seven students in our non-statistical sample to test for internal controls and compliance with federal regulations. We noted the following internal control deficiencies and compliance findings: ? We noted in all seven instances there was no secondary, documented review of return of funds calculations to ensure accuracy and completeness of the calculation. ? We noted two instances in which the University failed to timely return funding within the required 45 days of the date of the school?s determination that the student withdrew. ? We noted six instances in which the University used the incorrect withdrawal date resulting in the University returning an incorrect amount of financial aid. ? During our review of the calculation of days in the enrollment period for the Spring semester return of funds calculations, we noted the dates for Spring Break entered into Banner for break days did not align with the University?s published academic calendar. We also noted the Sunday surrounding Spring Break where no regular classes are held was not properly accounted for resulting in a 2-day error in the days in enrollment period calculation for Spring semester withdrawn students. We noted four instances in our sample affected by this error. Effect: The University may not comply with federal regulations and may not return the appropriate amount of Title IV funds. Cause: There are no internal controls in place to review the return of funds calculations for accuracy and completeness. There is also no formal review of the calculation of break days to ensure scheduled breaks are calculated in accordance with the published academic calendar and in accordance federal guidelines. Repeat Finding: Yes. See Finding 2018-006. Recommendation: We recommend the Financial Aid Office implement the following processes: 1.) a process to review the University?s academic calendar and break days in the enrollment period to ensure the days in the enrollment period calculation is accurate and complete and consider Sundays surrounding Spring Break where there is no schedule classes; 2.) develop a timely secondary review process to detect potential errors and ensure return of funds calculation are completely entered into the Banner software; and 3.) develop a process to ensure appropriate supporting documentation is maintained to support withdrawal dates used in the return of funds calculation. Views of responsible officials and planned corrective action: Management agrees with the finding. See corrective action plan.

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