University of Puerto RicoHigher Education

Finding Number: 2025-002 Federal Program Student Financial Assistance (SFA) Cluster – Various ALN Compliance Requirement Special Tests and Provisions – Return of Title IV Criteria The Uniform Guidance requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal statues, regulations, and the terms and conditions of the federal award. Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date institution determines that the student withdrew. Entity must have effective internal controls in place to perform the return of title IV funds within the established time frame of 45 days of the University becoming aware of the student’s withdrawal. Condition It was noted that there is a lack of internal controls in place to ensure that the return of title IV is done within the established timeline. Specifically, there is a lack of formalized documentation, procedures, and monitoring mechanisms to track and enforce controls related to returning title IV funds within 45 days of the University becoming aware of the student’s withdrawal. Cause Controls over return of title IV funds, related to the timeliness of returning funds within 45 days of the University becoming aware of the student’s withdrawal by the University do not seem to be designed or functioning as intended. Effect The lack of properly designed or effectively operating internal controls could lead to the University not meeting federal requirements in regards to timeliness of return of title IV funds, which could lead to noncompliance, questioned costs and loss of funds. Questioned Costs Not applicable. Context Management was not able to provide sufficient evidence to support that internal controls related to the timely return of Title IV funds are in place and operating effectively. Identification as a repeat finding, if applicable 2024-004 Recommendation We recommend the University implements internal controls and/or monitoring procedures to ensure the timely return of Title IV Funds. Management’s Response The University of Puerto Rico concurs with this finding. Management response is included in a separate document. Conclusion Not applicable. Management’s response is consistent with the finding.

Finding Number: 2024-002 Federal Program Student Financial Assistance (SFA) Cluster - Various ALN COVID-19 Higher Education Emergency Relief Fund (HEERF) - 84.425 Compliance Requirement Cash Management Criteria The Uniform Guidance requires that non-federal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal statues, regulations, and the terms and conditions of the federal award. Furthermore, for drawdowns in the advanced payment method, an entity must have effective internal controls in place to minimize the time elapsing between transfer of federal funds from the federal entity and the disbursement by the non-federal entity. Condition It was noted that there is a lack of internal controls in place to ensure that advanced funds were disbursed within the established timeline. Specifically, there is a lack of formalized documentation, procedures, and monitoring mechanisms to track and enforce controls specifically related to minimizing the time elapsed between transfer of federal funds and disbursement by the University. Cause Controls over cash management, more specifically, related to minimizing the time elapsed between the receipt of advanced funds and disbursement by the University do not seem to be designed or functioning as intended. Effect The lack of properly designed or effectively operating internal controls could lead to the University not meeting federal requirements in regards to time elapsed between receipt and disbursement of advanced funds, which could lead to noncompliance, questioned costs and loss of funds. Questioned Costs Not applicable. Context Management was not able to provide sufficient evidence to support that internal controls related to the timely disbursement of advanced funds are in place and operating effectively. Identification as a repeat finding, if applicable Not applicable. Recommendation We recommend the University implements internal controls and/or monitoring procedures to ensure the timely disbursement of advanced funds. Management’s Response The University of Puerto Rico concurs with this finding. Management response is included in a separate document. Conclusion Not applicable. Management’s response is consistent with the finding.

Finding Number: 2024-003 Program Student Financial Assistance (SFA) Cluster - Various ALN Compliance Requirement Cash Management Criteria Advanced Payment Method: An institution submits a drawdown request for funds utilizing ED’s electronic grants management system, known as G5, that may not exceed the amount of funds needed to make immediate disbursements to eligible students and parents. If the request is accepted, ED initiates an electronic funds transfer to the institution’s account. The institution must then disburse the requested funds no later than three business days following receipt of those funds from ED. For institutions on the Advance Payment Method, any amount of Title IV funds not disbursed to recipients by the end of the third business day is considered excess cash. ED allows an institution to retain, for up to seven days, excess cash that does not exceed one percent of the total amount of funds drawn by the institution in the prior award year. The institution must return to ED any excess cash over the tolerable amount (one percent) and any amount remaining after the tolerance period (seven days). Questioned costs would be those in excess of the one percent threshold. Condition Finding Number: 2024-003 Program Student Financial Assistance (SFA) Cluster - Various ALN Compliance Requirement Cash Management Criteria Advanced Payment Method: An institution submits a drawdown request for funds utilizing ED’s electronic grants management system, known as G5, that may not exceed the amount of funds needed to make immediate disbursements to eligible students and parents. If the request is accepted, ED initiates an electronic funds transfer to the institution’s account. The institution must then disburse the requested funds no later than three business days following receipt of those funds from ED. For institutions on the Advance Payment Method, any amount of Title IV funds not disbursed to recipients by the end of the third business day is considered excess cash. ED allows an institution to retain, for up to seven days, excess cash that does not exceed one percent of the total amount of funds drawn by the institution in the prior award year. The institution must return to ED any excess cash over the tolerable amount (one percent) and any amount remaining after the tolerance period (seven days). Questioned costs would be those in excess of the one percent threshold. Condition From a sample of 40 transaction selected for testing, we noted two instances in which the disbursement date exceeded the time period established by the Department of Education. Cause Processes and controls over the disbursement of requested funds requirements are not functioning as intended to ensure that the University issues payments timely. Effect The University did not comply with cash management requirements, which could lead to funds disallowance. Questioned Costs Not applicable. Context We performed a test of detail where our statistically validated sample consisted of 40 items from a population of 616 cash drawdowns. Identification as a repeat finding, if applicable Not applicable. Recommendation We recommend the University establishes internal controls and compliance processes to ensure disbursement of requested funds for advanced drawdowns are within the required timeframe. Management’s Response The University of Puerto Rico concurs with this finding. Management response is included in a separate document. Conclusion Not applicable. Management’s response is consistent with the finding.

Finding Number: 2024-004 Program Student Financial Assistance (SFA) Cluster - Various ALN Compliance Requirement Special Tests and Provisions – Return of Title IV Funds Criteria 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 the 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. The amount earned Title IV grant or loan assistance is calculated by determining the percentage of Title IV grant or loan assistance that has been earned by the student and applying that percentage to the total amount of Title IV grant or loan assistance that was or could have been disbursed to the student for the payment period or period of enrollment as of the student’s withdrawal date. A student earns 100 percent if his or her withdrawal date is after the completion of 60 percent. Otherwise, the percentage earned by the student is equal to the percentage (less than 60 percent) of the payment period or period of enrollment that was completed as of the student’s withdrawal date. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student from the amount of Title IV aid that was disbursed to the student as of the date of the institution’s determination that the student withdrew (34 CFR 668.22(e)). Returns of Title IV funds are required to be deposited or transferred into the SFA account or electronic fund transfers initiated to ED as soon as possible, but no later than 45 days after the date institution determines that the student withdrew. Condition We sampled and selected 40 out of 664 transactions and noted 8 instances in which the return of funds was issued after the 45-day period of the official withdrawal date of the students. Cause Processes and controls over the return of payment requirements are not functioning as intended to ensure that the University returns funds timely. Effect The University is not compliant with return of title IV funds requirements. Questioned Costs Not applicable. Context Finding was identified per review of the University’s compliance with the specified requirements where a statistically validated sample of 40 items was made from a population of 664 of students who withdrew, stopped attending or never attended. Identification as a repeat finding 2023-003 Recommendation We recommend the University establishes procedures to ensure funds are returned timely and accurately in order to comply with the requirements stated in the Compliance Supplement. Management’s Response The University of Puerto Rico concurs with this finding. Management response is included in a separate document. Conclusion Not applicable. Management’s response is consistent with the finding.

Finding Number: 2024-005 Program Student Financial Assistance (SFA) Cluster - Various ALN Compliance Requirement Special Tests and Provisions – Enrollment Reporting Criteria Institutions are required to report enrollment information under the Pell grant and the Direct and FFEL loan programs via the NSLDS. The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS. There are two categories of enrollment information “Campus Level” and “Program Level”, both of which need to be reported accurately and have separate record types. Institutions are responsible for accurately reporting all Campus-Level Record and Program-Level Record data elements. When a Direct Loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student ceased to be enrolled on at least half-time basis or failed to enroll on at least half-time basis for the period for which the loan was intended,; or a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address, the institution must report the change in its next updated Enrollment Reporting Roster file (due within 60 days of the change). Condition Out of a sample of 60 students, 1 student selected for testing, had a status change which was not reported to the National Student Loan Data System (NSLDS). Cause Processes and controls over the reporting of the student status change to the Department of Education are not functioning as intended to ensure that the University complies with this requirement. Effect The University is not in compliance with the stated requirements for timely reporting of enrollment data. Questioned Costs Not applicable.   Context We performed a test of detail where our statistically validated sample consisted of 60 items from a population of 5,843 students that had a reduction or increase in attendance levels impacting enrollment status. Identification as a repeat finding, if applicable 2023-004 Recommendation We recommend that the University establishes procedures to ensure that enrollment status changes are updated and accurately reported in a timely manner in the NSLDS database. Management’s Response The University of Puerto Rico concurs with this finding. Management response is included in a separate document. Conclusion Not applicable. Management’s response is consistent with the finding.