MILES COLLEGE

Finding 2025 - 001 - U.S. Department of Education (USD), Title IV Student Financial Aid Programs (material weakness): Information on the federal program – (Federal Award Identification): – Federal Pell Grant Program, FAL No. 84.063, June 30, 2025; Federal Supplemental Opportunity Grant Program, FAL No. 84.007, June 30, 2025; Federal Work-Study Program, FAL No. 84.033, June 30, 2025; Federal Direct Student Loan Program, FAL No. 84.268, June 30, 2025; Federal Teacher Education Assistance for College (TEACH), FAL No. 84.379, June 30, 2025. Criteria – Institutions must determine a student’s financial need by subtracting the expected family contribution and estimated financial assistance from the cost of attendance. 34 CFR 668.2 and 34 CFR 637.5(a). Condition – The Cost of Attendance (COA) budgets provided by the College to determine students’ unmet need were unverifiable. Cause – The condition occurred because the College lacked adequate internal controls and documentation procedures to ensure that COA budgets were consistently established, retained, and applied during financial aid packaging. Effect – There is a risk of overawards or improper disbursements of federal funds to ineligible students which could result in repayment liabilities. Questioned Costs – Unknown Auditor’s Perspective – We observed the following conditions in connection with our testing of the various U.S. Department of Education, Title IV, Student Financial Assistance Programs: Per (34 CFR 685.102 (b)) Forty (40) out of 40 students tested for cost of attendance budgets used the incorrect budgets. Student COA Budgets Not Matching information provided due to overstated / understated budgets (Transportation Costs, Housing Costs, Summer Tuition Costs and Room & Board Charges). Budgets not adjusted based on enrollment status (Full Time, Part Time, Half Time or Less Than Half Time) for Fall, Spring or Summer periods. Repeat Finding – No Auditor's Recommendation – The College should implement corrective actions to ensure that the above findings are resolved and do not recur in future periods. Moreover, internal controls over compliance with federal program regulations should be revisited to ensure adequate supervisory controls, quality assurance reviews of processes, and policies and procedures are being updated and adhered to for compliance purposes. A periodic review of the COA budget should be done to verify. View of Responsible Officials – The College has engaged a financial aid consultant to support the development of cost-of-attendance budgets and ensure they align with industry best practices, thereby making improvements to the College's financial aid operating system. After evaluating the auditors' sample of forty students, the College confirmed that no instances of over/under awarding occurred. There were clarifications and changes made to the initial cost of attendance budgets provided to the auditors that led to the questioned cost. The College will implement ongoing monitoring each semester to further enhance operational efficiency and effectiveness. The cost of attendance budgets have been uploaded into the College’s financial aid system to prevent the recurrence of this issue for the current and future years.

Finding 2025-002 - U.S. Department of Education (USD), Title IV Student Financial Aid Programs (significant deficiency): Information on the federal program – Federal Pell Grant Program, FAL No. 84.063, June 30, 2025; Federal Work-Study Program, FAL No. 84.033, June 30, 2025; Federal Supplemental Opportunity Grant Program, FAL No. 84.007, June 30, 2025; Federal Direct Student Loan Program, FAL No. 84.268, June 30, 2025; Teachers Education Assistance for College (TEACH),FAL No. 84.379, June 30, 2025. Criteria – Under 2 CFR 200.305 and the U.S. Department of Education’s cash management requirements at 34 CFR 668.162, institutions must draw down Title IV funds only for expenditures that have already been incurred and must maintain supporting documentation on file at the time of each drawdown request to demonstrate: 1. The existence of actual, allowable expenditures equal to or exceeding the amount drawn; and 2. That such expenditures were incurred before requesting Federal funds. These regulations require contemporaneous records to support that drawdowns reflect immediate cash needs for allowable program costs. Condition – During our testing of cash drawdowns, we noted In four (4) of the eight (8) drawdowns tested, the College did not maintain adequate supporting documentation to substantiate that allowable expenditures had been incurred at the time of the drawdowns. Additionally, although drawdowns exceeded recorded expenditures at certain points during the year, the College did not have Federal cash on hand at year-end. Cause – The condition resulted from insufficient internal controls over the drawdown and documentation retention processes, including the absence of a timely reconciliation between recorded expenditures and drawdown requests. Effect – Requesting Federal funds without maintaining adequate documentation of actual expenditures increases the risk of noncompliance with Federal cash management requirements and may result in temporary use of Federal funds for unallowable purposes. As a result, questioned costs totaling $58,270 were identified. Questioned Costs – $58,270 Program Title FAL No. Questioned Costs Federal Work Study Program 84.033 $ 8,882 Federal Direct Loans 84.268 49,388 Total Questioned Costs $ 58,270 Auditor’s Perspective – While the College did not have Federal cash on hand at year-end, the lack of documentation and proper reconciliation at the time of drawdown represents a compliance deviation under Uniform Guidance. These conditions increase the risk that future drawdowns may not align with actual cash needs or allowable expenditures. Repeat Finding – No. Auditor's Recommendation – We recommend the College strengthen controls over the cash drawdown process by: • Ensuring that reimbursement requests are supported by complete and readily available documentation at the time of submission; and • Requiring contemporaneous reconciliations between expenditures and drawdown requests; • Implementing improved supervisory review procedures prior to requesting funds. View of Responsible Officials – The College now requires all drawdowns to include supporting documentation of the funds requested from G5, along with sign-offs on preparation and approval. Supporting documents are stored securely on the College's accounting drive for easy access. This procedure took effect as of July 31, 2025.

Finding 2025-003 - U.S. Department of Education (USD), TRIO Programs (Significant Deficiencies): Information on the federal program – Student Support Services, FAL No. 84.042A, June 30, 2025; Ronald McNair Program, FAL No. 84.217A, June 30, 2025. a) Cash Management/Drawdown Supporting Documentation and Recordkeeping Criteria – Under 2 CFR 200.305, non-Federal entities must request Federal funds only for allowable program costs that have been incurred, and must maintain contemporaneous supporting documentation demonstrating: 1. Actual, allowable expenditures existed at the time Federal funds were drawn; and 2. Records supporting the nature and timing of those expenditures were on file and readily available. These requirements ensure that drawdowns reflect immediate cash needs supported by verifiable program expenditures. Condition – During our testing of cash drawdowns, we noted in four (3) of the four (4) drawdowns tested, the College did not maintain adequate supporting documentation to substantiate that allowable expenditures had been incurred at the time of the drawdowns. Additionally, although drawdowns exceeded recorded expenditures at certain points during the year, the College did not have Federal cash on hand at year-end. Additionally, two (2) of these four (4) unsupported transactions lacked evidence of required approval, such as documented review or authorization prior to requesting Federal funds. Cause – The condition resulted from insufficient internal controls over the drawdown and documentation retention processes, including the absence of a timely reconciliation between recorded expenditures and drawdown requests. Effect – Requesting Federal funds without maintaining adequate documentation of actual expenditures increases the risk of noncompliance with Federal cash management requirements and may result in temporary use of Federal funds for unallowable purposes. As a result, questioned costs totaling $52,159 were identified. Questioned Costs – $52,159 Program Title FAL No. Questioned Costs Ronald McNair Program 84.217A $ 32,684 Student Support Services 84.042A 19,475 Total Questioned Costs $ 52,159 Auditor’s Perspective – Although no Federal cash was on hand at year-end and funds were ultimately applied to allowable TRIO costs, the absence of adequate support at the time of the drawdowns constitutes a compliance deviation. Without contemporaneous documentation, the accuracy and allowability of drawdown requests cannot be assured. Repeat Finding – No. Auditor's Recommendation – We recommend the College strengthen controls over the cash drawdown process by: • Ensuring that reimbursement requests are supported by complete and readily available documentation at the time of submission; and Requiring contemporaneous reconciliations between expenditures and drawdown requests; • Implementing improved supervisory review procedures prior to requesting funds. View of Responsible Officials – The College now mandates that G5 drawdown requests include approved documentation stored on the accounting drive, effective July 31, 2025. b) Time and Effort Reporting & Grant Salary Accuracy Criteria – (Compensation – Personnel Services Documentation Requirements): Under 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and such records must: • Be supported by a system of internal controls providing reasonable assurance that the charges are accurate, allowable, and properly allocated; • Reflect 100% of the employee’s compensated activities, both Federal and non-Federal; • Be incorporated into the official records of the non-Federal entity; and • Be completed and documented in a timely and consistent manner. For TRIO programs, personnel costs must be supported by complete and accurate documentation demonstrating the portion of time dedicated to allowable TRIO activities Condition – During our testing of time and effort reporting and salaries charged to the TRIO programs, we identified the following exceptions: 1. Incorrect Salary Charge – For one (1) of the nine (9) time and effort reports tested, the salary expense charged to the McNair grant did not agree with the employee’s documented distribution of time. As a result, $24,947 of personnel costs charged to the grant were not supported by the corresponding time and effort report. 2. Incomplete Time and Effort Reports – Two (2) of the nine (9) reports tested, (both were for the same employee noted in the error above), were incomplete and did not reflect the employee’s full allocation of time across both restricted (grant-funded) and unrestricted activities. These omissions resulted in incomplete documentation to support the distribution of payroll costs. The College corrected the documentation after our inquiry; however, the corrections were not in place at the time of testing. Cause – The condition resulted from inconsistent application of time and effort reporting procedures and insufficient review controls to verify the completeness and accuracy of time distribution records prior to charging payroll costs to TRIO programs. Effect – Charging salaries without accurate, complete, and timely time and effort documentation increases the risk of unallowable personnel costs being charged to the program. As a result, questioned costs totaling $24,947 were identified for unsupported salary charges. Additionally, incomplete reports undermine the reliability of payroll allocations used to support Federal expenditures. Questioned Costs – Ronald McNair Program, FAL No. 84.217A: $24,947. Auditor’s Perspective – Although the College corrected the incomplete reports after our inquiry, corrections made after the fact do not demonstrate compliance at the time costs were charged. Accurate and complete time and effort reporting is essential to ensuring that salary costs charged to TRIO programs are allowable and properly supported. Repeat Finding – No. Auditor’s Recommendation – We recommend the College strengthen internal controls over time and effort reporting for TRIO programs by: • Ensuring all reports reflect 100% of compensated activities for each employee; • Implementing a supervisory review process to confirm accuracy before payroll is allocated to the grant; • Providing refresher training to staff responsible for preparing and approving time and effort documentation; and • Maintaining documentation that is complete, accurate, and contemporaneous with the period of performance. Views of Responsible Officials – Time and Effort reports must be submitted monthly with supervisor sign-off before reaching the Office of Sponsor Programs, showing 100% time allocation. Any changes will require a Personnel Action Form and administrative signatures of approval.

Finding 2024-001 - U.S. Department of Education (USD), Title IV Student Financial Aid Programs (significant deficiency): Information on the federal program – Federal Pell Grant Program, FAL No. 84.063, June 30, 2024; Federal Work-Study Program, FAL No. 84.033, June 30, 2024; Federal Supplemental Opportunity Grant Program, FAL No. 84.007, June 30, 2024; Federal Direct Student Loan Program, FAL No. 84.268, June 30, 2024; Teachers Education Assistance for College (TEACH), FAL No. 84.379, June 30, 2024 Criteria – Federal regulations governing Title IV programs. Condition – Instances of noncompliance were noted as more fully described in the context below. Questioned Costs – $0 Context – We observed the following conditions in connection with our testing of the various U.S. Department of Education, Title IV, Student Financial Assistance Programs: (a) Six (6) out of 6 students tested for withdrawals and the return of Title IV funds were completed using the incorrect semester dates. 34 CFR 668.22. (b) Three (3) out of 3 students tested for Enrollment Reporting had untimely reporting. 34 CFR 685.309(b), 34 CFR 682.610(c), 34 CFR 674.33(j). (c) We noted postings for the Fall and Spring awards in Direct Loans and Pell were posted to student accounts after the payment period and fiscal year ended June 30, 2024. Cause – Oversight by responsible employees of properly monitoring regulatory requirements Effect – The College’s participation in the Title IV programs could be subject to USDE sanctions as applicable. Repeat Finding – No. Auditor's Recommendation – The College should implement corrective actions to ensure that the above findings are resolved and will not recur in future periods. View of Responsible Officials – (a) All six students have been recalculated with the correct date. The issue originated from implementing the Colleague (ERP) system. The College has now established a procedure to ensure this process is reviewed during the RT24 calculation. (b) The College has hired a financial professional with experience in the Colleague (ERP) system. This professional has provided staff training and established standard operating procedures to promote better operating efficiency and effectiveness. (c) The issue resulted from implementing the Colleague (ERP) system. Standard Operating Procedures have been developed, and the financial aid staff has been trained to help prevent these types of issues in the future.

Finding 2022-001 - U.S. Department of Education (USDE), Title IV Student Financial Aid Programs (Material Weakness): Information on the federal program - Federal Pell Grant Program, CFDA No. 84. 063, June 30, 2022; Federal Work-Study Program, CFDA No. 84.003, June 30, 2022; Federal Supplemental Educational Opportunity Grants, CFDA No. 84.007, June 30, 2022; Federal Teacher Education Assistance for College and Higher Education Grants (TEACH), CFDA No.84.379, June 30, 2022 Federal Direct Student Loans, CFDA No. 84.268, June 30, 2022; Criteria - Federal regulations governing the Title IV programs. Condition - Numerous compliances were noted, as more fully described in the context below. Questioned Costs -As provided below. Context-We observed the following condition in connection with our testing of the various U.S. Department of Education, Title IV, Student Financial Assistance Programs: a. The College did not submit required supporting documentation for five (5) students not meeting Satisfactory Academic progress during fieldwork. The questioned cost is $59,488. b. Two (2) out of 60 students had conflicting award letters and student account statements. Payments from the Business Office did not match the award amounts. The questioned cost is $23,085. c. The College has variances in the following programs which do not reconcile to the general ledger or COD. ? Federal Direct Loans ? Federal Pell ? Federal Work-Study ? Federal SEOG Cause - Oversight by responsible employees of properly monitoring required elements. Effect- The Center's participation in the Title IV programs could be subject to USDE sanctions as applicable. Auditor's Recommendation - The Center should implement corrective actions to ensure that the above findings are resolved and do not recur in future periods. Moreover, internal controls over compliance with federal program regulations should be revisited to ensure adequate supervisory controls, quality assurance reviews of compliance steps, technical training of staff, and adequate procedures are being followed for compliance purposes.

Finding 2020-001 - U.S. Department of Education (USDE), Title IV Student Financial Aid Programs (significant deficiency): Information on the federal program: Federal Direct Student Loans, CFDA No. 84.268, June 30, 2020; Federal Pell Grant Program, CFDA No. 84.063, June 30, 2020; Federal Supplemental Educational Opportunity Grant, CFDA No. 84. 007, June 30, 2020; Federal Work-Study Program, CFDA No. 84.033, June 30, 2020 and Federal Teacher Education Assistance for College and Higher Education Grant (TEACH), CFDA No. 84.379, June 30, 2020 Criteria - Federal regulations governing Title IV Programs, 34 CFR 668.166. Condition - Noncompliance was noted, as more fully described in the context below. Questioned Costs- N/A Context- The College took the first step in the reconciliation process by identifying variances between the Business and the Financial Aid Offices using data recorded in student accounts and the Common Origination and Disbursement (COD) system. However, the noted variances were not properly resolved in a timely manner. The College had differences in the following programs which were not reconciled to the general ledger, COD, and/or the FISAP. *Federal Work-Study - (Financial Aid vs FISAP $28,153) *Federal Pell - (Financial Aid vs General Ledger $5,828), (Financial Aid vs COD $75,937), (Financial Aid vs FISAP $21,624), (COD vs General Ledger $70,110) and (General Ledger vs FISAP $15,797) *Federal Direct Loans - (Financial Aid vs General Ledger $21,840), (Financial Aid vs COD $64,417) and (COD vs General Ledger $44,577) Cause - Management oversight of properly monitoring and administering the student financial aid reconciliation process. Effect- Lack of compliance with program regulations may lead to repayment of funds to Federal government. Repeat Finding - No. Auditor's Recommendation - We recommend the College follow the regulations and guidelines for the reconciliation process, which requires the College to identify and resolve discrepancies/variances in a timely manner. Views of Responsible Officials - The College's financial aid department and certain accounting staff received training during the FAS Training Conference 2020 virtual workshop. The training provided participants with a clear understanding from start to finish of the Title IV reconclllatlon process to maintain compliance with the Code of Federal Registers as follows: ? PELL Grant 34 CFR 668.166 ? Direct Loan Program -34 CFR 685.300(b) (5) ? Federal Work-Study (FWS) Program -34 CFR 675.19 (b)(2)(iv) ? Federal Supplemental Educational Opportunity Grant (FSEOG) Program - 34 CFR 676.19 (b)(2) The College will Implement this process effective Immediately and include Title IV reconciliations as part of the monthly closeout schedule. The Senior Vice President for Finance and Administration will ensure corrective actions are implemented by June 30, 2021.

Finding 2020-002 - U.S. Department of Education (USDE), Title IV Student Financial Aid Programs (significant deficiency): Information on the federal program - Federal Direct Student Loans, CFDA No. 84.268, June 30, 2020; Federal Pell Grant Program, CFDA No. 84.063, June 30, 2020; Federal Supplemental Educational Opportunity Grant, CFDA No. 84.007, June 30, 2020; Federal Work-Study Program, CFDA No. 84.033, June 30, 2020 and Federal Teacher Education Assistance for College and Higher Education Grant (TEACH), CFDA No. 84.379, June 30, 2020 Criteria - Federal regulations governing Title IV programs, 34 CFR 668.166 and 34 CFR 668.22 Condition - Non-compliance was noted, as more fully described in the context below. Questioned Costs - As provided below. Context- We observed the following conditions in connection with our testing of the various U.S. Department of Education, Title IV, Student Financial Assistance Programs: a) One ( 1) out of sixty (60) students tested was awarded financial aid using an incorrect EFG with questioned costs of $919. b) One (1) out of 60 students tested was missing an official college transcript with questioned costs of $8,847. c) One (1) out of 60 students was awarded Federal College Work-Study with a questioned cost of $610. There were two checks totaling $610 that did not clear the bank account as of June 30, 2020. These checks should have been listed as outstanding on the College's bank reconciliation as of June 30, 2020, but were not. We noted that there was not a review and approval process for the bank reconciliations, which would help ensure the accuracy of the reconciliations. d) The College did not provide sufficient documentation for unofficial withdrawals. Cause - Management oversight of properly monitoring and administering student financial aid federal cash drawdowns. Effect- Lack of compliance with program regulations may lead to repayment of funds to Federal government. Repeat Finding - No. Auditor's Recommendation -The College should implement corrective actions to ensure that the above findings are resolved and do not recur in future periods. Views of Responsible Officials - a) The Office of Financial Aid uses the U.S. Department of Education's Ed Express system for packaging and Title IV records management. In the event of a system error and records become inaccessible within Ed Express for electronic packing, the College reverts to a manual packing process. All manually packaged records will be reviewed/approved by the Director or Assistant Director of Financial Aid for accuracy before being released to the student's account. Staff will receive additional/counseling on the method for performing manual packaging in addition to the electronic packaging process used by Ed Express. b) The Office of Records has reviewed its standard operating procedure following federal regulations related to Student Assistance General Provision, 34 CFR 668.22. - The College's policy/procedure identifies whether a return of Federal Title IV is necessary when a student falls to attend or ceases to attend all classes and does not withdraw. A review is done at mid-point of the semester to determine official withdrawals for timely completion for the Return of Title IV calculation. UNOFFICIAL withdraws will be determined at the end of the semester by awarding a FA grade. The Records Office wlll conduct tralnlng(s) for the faculty/staff to ensure there is a clear understanding of the required regulation. c) Academic Transcript's - The Office of Admission has invested in a new admissions software package which assist in managing and monitoring documents required for admission. The system provides the ability to limit (processing holds) functionality to the Vice President of Enrollment Management. Furthermore, If the admitted student has missing document(s), the Financial Aid Office will not pay Title IV Aid to that student's Business Office account until it can verify that the individual has provided Official document(s) for enrollment. The College has returned the questioned cost of $8,847 to the US Department of Education related to this finding. d} All stale-dated checks related to the Federal College Work-Study will be aged 240 days from the date is issued. The College will implement the above referenced corrective action plan effective immediately as part of the day-to-day operations plan and will ensure these corrective actions are implemented by June 30, 2021 as follows: Persons Responsible: Senior Vice President for Finance and Administration Finding: (A & D) Persons Responsible: Provost and Senior Vice President, Office of Academic Affairs Finding: (B) Persons Responsible: Vice President of Enrollment Management Finding: (C)

Finding 2019-001 ? U.S. Department of Education (USDE), Title IV Student Financial Aid Programs (significant deficiency): Information on the federal program: Federal Direct Student Loans, CFDA No. 84.268, June 30, 2019; Federal Pell Grants Program, CFDA No. 84.063, June 30, 2019; Federal Supplemental Educational Opportunity Grant, CFDA No. 84.007, June 30, 2019; Federal Work-Study Program, CFDA No. 84.033, June 30, 2019 and Federal Teacher Education Assistance for College and Higher Education Grant (TEACH), CFDA No. 84.379, June 30, 2019 Criteria ? Federal regulations governing Title IV programs: 34CFR 668.166. Condition ? Non-compliance was noted, as more fully described in the context below. Questioned Costs ? $350,674. Context ? In August 2018, the College drew down funds of $350,674 in excess of expenditures for its Federal Direct Student Loan Program and subsequently returned the excess cash on November 29, 2018. Cause ? Management oversight of properly monitoring and administering student financial aid federal cash drawdowns. Effect ? Lack of compliance with program regulations may lead to repayment of funds to Federal government. Repeat Finding ? No Auditor?s Recommendation ? We recommend the College review its cash management procedures to ensure compliance with the U.S. Department of Education Federal Title IV regulation CFR 668.166 three-day rule guidance to prevent sanctions that could impact the College?s ability to request federal program advances.Finding 2019-001 ? U.S. Department of Education (USDE), Title IV Student Financial Aid Programs:

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