William Carey University

Student Financial Assistance Cluster Federal Supplemental Educational Opportunity Grants, ALN 84.007 Federal Work-Study Program, ALN 84.033 Federal Pell Grant Program, ALN 84.063 Federal Direct Student Loans, ALN 84.268 Teacher Education Assistance for College and Higher Education (TEACH) Grants, ALN 84.379 Nurse Faculty Loan Program, ALN 93.264 U.S. Department of Education & U. S. Department of Health and Human Services Program Year 2024-2025 Criteria or Specific Requirement – Special Tests and Provisions – Return of Title IV Funds (34 CFR 668.22(a)(1) through (a)(5)). Federal regulations require institutions to determine the amount of Title IV aid a student earned as of the withdrawal date using the Return of Title IV (R2T4) calculation methodology, which is based on the percentage of the payment period or period of enrollment completed. The earned percentage is then applied to determine the amount of Title IV aid earned and unearned. Department of Education guidance and standard Return of Title IV (R2T4) calculation methodology require that the earned percentage be calculated with sufficient precision prior to rounding dollar amounts, as premature rounding of the earned percentage may result in inaccurate determinations of earned and unearned Title IV aid. Accurate calculation of the earned percentage is necessary to ensure compliance with the R2T4 requirements under 34 CFR § 668.22 Condition – The University’s internal controls did not ensure the calculation of amounts to be returned to the U.S. Department of Education was correct. Questioned Costs – Pell Grant Program ALN 84.063 under‑returned $2. Direct Loan Program ALN 84.268 under‑returned $82. Context – Out of the population of 108 students who withdrew, 11 were selected for testing. Our sampling method was not, and was not intended to be, statistically valid. During testing of 8 Return of Title IV (R2T4) calculations, the University rounded the earned percentage to the nearest whole number rather than calculating the percentage to an appropriate level of precision (e.g., carrying the calculation to three decimal places) prior to applying it to Title IV aid and institutional charges. As a result, the calculated amounts of Title IV aid earned and unearned differed from auditor recalculations. The exceptions resulted in both over‑returns and under‑returns of Title IV funds depending on the individual student’s withdrawal date and aid amounts. Effect – Improper rounding of the earned percentage resulted in inaccurate R2T4 calculations, causing the University to return incorrect amounts of Title IV funds for affected students. Because the errors resulted in both over‑returns and under‑returns, the net impact varied by student and program. Under‑returns represent amounts potentially owed to the U.S. Department of Education, while over‑returns may represent funds unnecessarily returned on behalf of students. Cause – The University’s internal controls did not ensure proper calculation of earned percentages used in the calculation of returns of Title IV funds. Recommendation – Revise R2T4 policies and procedures to ensure the earned percentage is calculated using appropriate precision prior to rounding and application to Title IV aid. Identification as a Repeat Finding, if Applicable – N/A Views of Responsible Officials and Planned Corrective Actions – There is no disagreement with the audit finding. See corrective action plan.

Finding Reference: 2025-001 Responsible Official: Grant Guthrie, Vice President & CFO Corrective Action Planned: The University administration concurs with this finding. The calculation formula has been amended to prevent rounding to two decimals. Estimated Completion Date: 3/24/26

Student Financial Assistance Cluster Federal Supplemental Educational Opportunity Grants, ALN 84.007 Federal Work-Study Program, ALN 84.033 Federal Pell Grant Program, ALN 84.063 Federal Direct Student Loans, ALN 84.268 Teacher Education Assistance for College and Higher Education Grants, ALN 84.379 Nurse Faculty Loan Program, ALN 93.264 U.S. Department of Education & U. S. Department of Health and Human Services Program Year 2024-2025 Criteria or Specific Requirement – Special Tests and Provisions – Using a Servicer or Financial Institution to Deliver Title IV Credit Balances to a Card or Other Access Device (34 CFR 688.164(e) and (f)). Condition – The University did not provide a URL for the contract to the Department of Education for publication in the Cash Management Contracts Database, and the District did not disclose conspicuously on its website the contract establishing the Tier One arrangement. Questioned Costs – $0 Context – The University did not provide the URL or the contract for publication in the cash management contracts database, nor the link to the disclosure of contract on its website. Effect – The University was not in compliance with the requirements noted above, and information required to be published or disclosed was not. Cause – The University’s internal controls related to compliance with Title IV requirements on use of a servicer did not ensure the required information was reported to the Department of Education and did not disclose contract on its website. Recommendation – The University should update internal controls to ensure requirements noted above for using a servicer are followed and the servicers are properly monitored. Additionally, the University should routinely review the related compliance requirements to ensure future compliance. Identification as a Repeat Finding, if Applicable – N/A Views of Responsible Officials and Planned Corrective Actions – There is no disagreement with the audit finding. See corrective action plan.

Finding Reference: 2025-002 Responsible Official: Grant Guthrie, Vice President & CFO Corrective Action Planned: The University administration concurs with this finding. The third-party refund servicer agreement will be uploaded to the Department of Education Cash Management Contracts Database. Estimated Completion Date: 4/30/26

Student Financial Assistance Cluster Federal Pell Grant Program, ALN 84.063 U.S. Department of Education Program Year 2024-2025 Criteria or Specific Requirement – Eligibility - Pell Calculation – Federal Pell Grant program requires institutions to accurately calculate Pell Grant awards based on students enrollment intensity for each payment period (34 CFR 690.63 and 690.8) . Condition – The University did not accurately calculate Pell Grant awards by using the incorrect enrollment intensity percentages. Questioned Costs – $0 Context – During testing of Pell Grant disbursements, the University incorrectly calculated Pell Grant awards for 1 out of 25 students tested. Our sample was not, and was not intended to be, statistically valid. The errors resulted from using an outdated enrollment intensity schedule, leading to incorrect disbursement amounts of Pell Grants. Effect – One student selected for testing had incorrect Pell Grant disbursement amounts. Cause – The University’s internal controls related to compliance with Title IV requirements on eligibility did not ensure the correct enrollment intensity percentage was used. Recommendation – The University should update internal controls to ensure requirements noted above for Pell Grant calculations are followed. Additionally, the University should routinely review the related compliance requirements to ensure future compliance. Identification as a Repeat Finding, if Applicable – N/A Views of Responsible Officials and Planned Corrective Actions – There is no disagreement with the audit finding. See corrective action plan.

Finding Reference: 2025-003 Responsible Official: Grant Guthrie, Vice President & CFO Corrective Action Planned: The University administration concurs with this finding. The student was reported on 6/16/2025 to have withdrawn from a class officially on 6/7/2025. In between the date the withdrawal was reported and the date the withdrawal was processed, the student’s Pell Grant fund was disbursed (6/9/2025). Since the student’s Pell disbursed before the date that the withdrawal was reported, our system failed to return the funds for this student. We have identified the issue; in future our software system will account for the official last date of attendance and will schedule a return of funds if funds have already disbursed on the student’s account by the time the withdrawal date is uploaded. Estimated Completion Date: 3/31/26

Student Financial Assistance Cluster Federal Pell Grant Program, ALN 84.063 Federal Direct Student Loans, ALN 84.268 U.S. Department of Education Program Year 2024-2025 Criteria or Specific Requirement – Special Tests and Provisions – Enrollment Reporting (34 CFR 690.93(b)(2); 34 CFR 682.610; 34 CFR 685.309). Institutions are required to report enrollment information. Institutions are required to notify Department of Education within 30 days if borrower’s change in enrollment status. Condition – The University did not report timely and accurate student status information to the National Student Loan Data System (NSLDS). Questioned Costs – $0 Context – Out of a population of 3,106 students who received Pell Grants or Federal Direct Loans during the 2024-2025 award year and also had an increase or decrease in enrollment, graduated, or withdrew, a sample of 40 students was selected for testing. Our sample was not, and was not intended to be, statistically valid. Of the 40 students tested, 3 students’ enrollment information was not reported timely. Effect – Incorrect enrollment information was reported to NSLDS, and some of the information was not reported timely. Cause – The University’s internal controls related to NSLDS reporting did not ensure status changes were reported timely and accurately. Recommendation – The University should update internal controls related to NSLDS reporting to ensure changes in students’ enrollment status are reported in a timely and accurate manner on a recurring basis. Identification as a Repeat Finding, if Applicable – Repeated finding. See prior year finding 2024-001. Views of Responsible Officials and Planned Corrective Actions – There is no disagreement with the audit finding. See corrective action plan.

Finding Reference: 2025-005 Responsible Official: Grant Guthrie, Vice President & CFO Corrective Action Planned: The University administration concurs with this finding. 1. Student information system script for reporting to the National Clearinghouse has been amended to ensure that all students and all statuses are included. 2. Student information system will include a “Leave of Absence” field in order to ensure that the internal student enrollment status matches that of NSLDS. 3. Registrar will degree verify and report to capture students with early graduation dates and ensure all are reported to the National Clearinghouse for submission to NSLDS. Estimated Completion Date: 4/30/26

2024-001

Student Financial Assistance Cluster Federal Supplemental Educational Opportunity Grants, ALN 84.007 Federal Work-Study Program, ALN 84.033 Federal Perkins Loan Program, ALN 84.038 Federal Pell Grant Program, ALN 84.063 Federal Direct Student Loans, ALN 84.268 Teacher Education Assistance for College and Higher Education Grants, ALN 84.379 Nurse Faculty Loan Program, ALN 93.264 U.S. Department of Education & U. S. Department of Health and Human Services Program Year 2024-2025 Criteria or Specific Requirement – Special Tests and Provisions – Gramm-Leach-Bliley Act (GLBA) – Institutions are required to develop, implement, and maintain a comprehensive written information security program that includes reasonable administration, technical, and physical safeguards in accordance with 16 CFR 314.4. Condition – The University did not have a written final comprehensive information security program and policies addressing the GLBA safeguards rule requirements for protecting federal student aid information. Questioned Costs – $0 Context – The University did not finalize or formalize GLBA required information security policies, resulting in gaps between existing IT practices and the documented safeguards mandated by federal regulation. Effect – The absence of comprehensive written GLBA required information security policies increases the University’s exposure to several compliance and operational risks. Without formally documented safeguards, the University cannot ensure consistent protection of sensitive student financial information across departments, which heightens the likelihood of unauthorized access, data misuse, or security breaches. Additionally, the lack of established written standards undermines the University’s ability to demonstrate compliance with federal regulations, potentially resulting in findings during audits, regulatory scrutiny, or financial penalties. This gap also creates operational inefficiencies, as staff may rely on inconsistent or informal practices, further weakening the overall security posture of the University. Cause – The University’s internal controls related to GLBA did not ensure written policies were in place. Recommendation – The University should update internal controls related to GLBA reporting to written policies are in place as they relate to the required compliance data elements. Identification as a Repeat Finding, if Applicable – N/A Views of Responsible Officials and Planned Corrective Actions – There is no disagreement with the audit finding. See corrective action plan.

Finding Reference: 2025-006 Responsible Official: Grant Guthrie, Vice President & CFO Corrective Action Planned: The University administration concurs with this finding. Though the University’s practices comply with the standards under the Gramm-Leach-Bliley Act, we acknowledge that a written comprehensive information security program and policies were not finalized at the time of the audit. The University leadership team will complete its development by the date below. Estimated Completion Date: 5/31/26

2024-001: Special Tests and Provisions - Enrollment Reporting. Finding Type: Noncompliance. Program Tested: Student Financial Aid Cluster. Federal Agency: U.S. Department of Education. Context: The OMB compliance supplement requires Institutions to report enrollment information under the Pell Grant and the Direct and Federal Family Education loan programs via the National Student Loan Data System. Repeat Finding: No. Critieria: The OMB compliance supplement requires institutions to report enrollment information under the Pell Grant and the Direct and Federal Family Education loan programs via the National Student Loan Data System within 60 days or every other month. Condition: During our audit of the Student Financial Aid Cluster major program, we noted the University failed to submit enrollment reports within 60 days to the Nation Student Loan Data System. Cause: The University encountered technical difficullties with their reporting software after a required update was installed which prevented them from submitting the enrollment reports. Effect: Failure to submit enrollment reports timely could allow students that have withdrawn from the University to receive funding and cause students' financial aid repayments to be delayed. Recommendation: Management should oversee resolution of IT issues in a timely manner to ensure the required enrollment reports are submitted within 60 days. Views of Management: See Auditee Corrective Action Plan.

The University respectfully submits the following corrective action plan. Audit Period: June 30, 2024. The finding discussed below is numbered consistently with the number assigned in the schedule of findings and questioned costs. Corrective Action Plan for Federal Awards Findings and Questioned Costs. 2024-001 Special Tests and Provisions - Enrollment Reporting. As a result of the delayed NSLDS enrollment reporting and subsequent finding, William Carey University has implemented the following measures to ensure timely future reporting. 1. Any difficulties in federal reporting, technical or otherwise, will be reported to the area vice president and to the CFO promptly. 2. Any difficulties in federal reporting, technical or otherwise, will be reported to the federal agency promptly for purposes of notification, to seek guidance regarding possible alternative reporting methods, and/or to request extension to the reporting period. 3. All documentation and communication regarding the reporting difficulty will be kept by the responsible department director and submitted to the CFO. The offices of Academic Affairs and Business Affairs will cooperate to ensure immediate implementation. Name of Responsible Person: Grant Guthrie, Vice President and Chief Financial Officer. Expected Date of Completion: Current.

Finding # 2021-001 Special Test (N) (Return of Title IV Funds) Finding Type: Significant Deficiency Program Tested: Student Financial Aid Cluster Criteria - According to 34 CFR 668.22(j)(1), a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days from the determination of a student?s withdrawal. Condition - The University?s internal control procedures did not allow for compliance with the regulations for return of Title IV funds within the required 45 days. Questioned Costs - Undetermined. Effect - The University could fail to return unearned Title IV funds within the time required by 34 CFR 668.22(j)(1). Cause - The University?s internal control procedures did not ensure the timely return of Title IV funds for the Student Financial Aid Cluster programs. Recommendation - The University should continue to implement its new control procedures to ensure compliance with the return of unearned funds in a timely manner. Views of Management - See the Auditee Corrective Action Plan.

The University respectfully submits the following corrective action plan. Audit Period: June 30, 2021 The finding discussed below is numbered consistently with the numbers assigned in the schedule of findings and questioned costs. Corrective Action Plan for Federal Awards Findings and Questioned Costs 2021-001 Special Test (N) (Return of Title IV Funds) The University has implemented a process that provides greater control over the return of any unearned funds following a student?s withdrawal. The updated process and enhanced internal controls significantly decrease the likelihood of the University?s failure to return funds within the time allowed by 34 CFR 668.22(j)(1). A student may withdraw from the University via his/her online student portal or written letter of request. Email notifications are sent to the Refund Specialist, Student Account Director, and Controller when a student submits a withdrawal request using the online student portal. When a request is received, the Refund Specialist enters specific information in a worksheet. This information includes the following: - Student?s identifying information - Term - Date of request - If student has completed 60% of the term - If student has Pell Grant - If student has Federal loans - If the student is withdrawing or voiding - Effective date in CAMS When this information has been entered, the worksheet indicates if any financial aid should be returned to the Department of Education. The worksheet also tracks the number of days since the date of request and changes the color of a cell based upon this number; going from green to red as the 45 day mark approaches. The worksheet ceases counting when the date and amount of the return has been entered. Each week the Student Account Director generates a report from the student management system that lists students with financial aid whose enrollment dropped below five credit hours compared to the prior week. The Student Account Director compares this report to the worksheet to ensure the correct tracking information is entered. Any discrepancies are investigated, and the worksheet is updated as necessary. The Student Account Director will also research any student who has funds to be returned. Each term the Controller reviews the worksheet, the report of students with a change in hours, and a separate log of any paper requests received by the Registrar. The Controller tests random students to check accuracy of the date and amount returned to the Department of Education. Additionally, the Controller reviews several random withdrawal requests received throughout the term to ensure the request was completed and entered into the worksheet. Any anomalies are analyzed and corrected prior to the end of the 45 day period. Instances of non-compliance span both the 2020 and 2021 fiscal years as a result of the implentation of the new controls described above in the Fall 2020 term following the 2020 audit finding. Name of Responsible Person: Grant Guthrie, Vice President and Chief Financial Officer Expected Date of Completion: Current

2020-001

Finding # 2020-001 Special Test (N) (Return of Title IV Funds) Finding Type: Significant Deficiency Program Tested: Student Financial Aid Cluster Criteria - According to 34 CFR 668.22(j)(1), a school must return unearned funds for which it is responsible as soon as possible but no later than 45 day from the determination of a student?s withdrawal. Condition - The University does not have adequate internal control procedures in place to monitor compliance with the regulations for return of Title IV funds. Questioned Costs - Undetermined. Effect - The University could fail to return unearned funds in the time allowed by 34 CFR 668.22(j)(1). Cause - The University has not established a framework to ensure the timely return of Title IV Funds for the Student Financial Aid Cluster programs. Recommendation - The University should implement procedures to ensure compliance with the return of unearned funds in a timely manner. Views of Management - See the University's Corrective Action Plan.

The University respectfully submits the following corrective action plan. Audit Period: June 30, 2020 The finding discussed below is numbered consistently with the numbers assigned in the schedule of findings and questioned costs. Corrective Action Plan for Federal Awards Findings and Questioned Costs 2020-001 Special Test (N) (Return of Title IV Funds) The University has implemented a process that provides greater control over the return of any unearned funds following a student?s withdrawal. The updated process and enhanced internal controls significantly decrease the likelihood of the University?s failure to return funds within the time allowed by 34 CFR 668.22(j)(1). A student may withdraw from the University via his/her online student portal or written letter of request. Email notifications are sent to the Refund Specialist, Student Account Supervisor, and Controller when a student submits a withdrawal request using the online student portal. When a request is received, the Refund Specialist enters specific information in a worksheet. This information includes the following: -Student?s identifying information -Term -Date of request -If student has completed 60% of the term -If student has Pell Grant -If student has Federal loans -If the student is withdrawing or voiding -Effective date in CAMS When this information has been entered, the worksheet indicates if any financial aid should be returned to the Department of Education. The worksheet also tracks the number of days since the date of request and changes the color of a cell based upon this number; going from green to red as the 45 day mark approaches. The worksheet ceases counting when the date and amount of the return has been entered. Each week the Student Account Supervisor generates a report from the student management system that lists students with financial aid whose enrollment dropped below five credit hours compared to the prior week. The Student Account Supervisor compares this report to the worksheet to ensure the correct tracking information is entered. Any discrepancies are investigated, and the worksheet is updated as necessary. The Student Account Supervisor will also research any student who has funds to be returned. Each term the Controller reviews the worksheet, the report of students with a change in hours, and a separate log of any paper requests received by the Registrar. The Controller tests random students to check accuracy of the date and amount returned to the Department of Education. Additionally, the Controller reviews several random withdrawal requests received throughout the term to ensure the request was completed and entered into the worksheet. Any anomalies are analyzed and corrected prior to the end of the 45 day period. Name of Responsible Person: Grant Guthrie, Vice President and Chief Financial Officer Expected Date of Completion: Current