Hendrix CollegeHigher Education

Criteria: Special Tests and Provisions – Return of Title IV Funds (34 CFR 668.173 (b)) – Institutions are required to accurately calculate return of Title IV funds for withdrawn students who began attendance, allocate the return of Title IV funds as required, return Title IV funds timely and notify borrowers of returned loans. Condition: The College did not perform a timely calculation of Title IV funds or return the Title IV funds within 45 days. Questioned Costs: None. Context: During testing of Return of Title IV Funds, one of five selections were not returned within the 45-day period. A sample of five were selected for testing from a population of 49. Our sample selections were not, and were not intended to be, statistically valid. Effect: The College did not return Title IV funds within 45 days of a student's withdrawal. Cause: The College’s processes did not ensure Title IV returns for students on leaves of absences were calculated and returned in a timely manner. Identification as a Repeat Finding, if Applicable: Not a repeat finding Recommendation: The College should implement procedures to ensure calculations are performed for each withdrawn student and where applicable, funds are returned in the required timeframe. Views of Responsible Officials and Planned Corrective Actions: Administration concurs with the finding. On July 7, 2024, the calculation was performed and funds were returned the following day. Additional documentation will be included in the student's exit packaging that will be reviewed by the Financial Aid supervisor to determine if a Return of Title IV calculation is warranted. The Business Office will review all accounts of withdrawn students to determine if any federal aid was received and if so, will communciate with the Financial Aid office to verify that calculation was performed.

Student Financial Assistance Cluster Federal Perkins Loan Program, Assistance Listing Number 84.038 U.S. Department of Education Program Year 2022-2023 Criteria: Special Tests and Provisions – Perkins Loan Recordkeeping and Record Retention – Institutions are required to properly maintain its Perkins loan records in the manner set forth in 34 CFR 674.19.(e). Condition: The College did not maintain Perkins loan records in the manner set forth in 34 CFR 674.19.(e). (Other Instance of Noncompliance) Questioned Costs: None. Context: During testing of Perkins loan recordkeeping and record retention, for open loans at year end May 31, 2023, 13 of 40 selections did not have records of the related master promissory note (MPN) and related documents. A sample of 40 were selected for testing from a population of 372. For loans retired or assigned within the previous three years, 2 of 29 selections did not have records of the related MPN and related documents. A sample of 29 were selected for testing from a population of 189. Our sample selections were not, and were not intended to be, statistically valid. Effect: The College does not have documentation of MPNs and related documents for the errors identified. Cause: The College’s processes did not ensure MPNs and related documents were properly retained. Identification as a Repeat Finding, if Applicable: 2022-002 Recommendation: The College should revisit the record retention for student related files. Views of Responsible Officials and Planned Corrective Actions: Administration concurs with the finding. As of November 30, 2023, the Administration has reviewed documentation for the remaining 220 active loans with balances greater than $0.00. It was determined the College has MPNs for 182 or 82.73% of the outstanding loans. Of the remaining 38 loans, 30 loans contain student-initiated activity that substantiates the debt. 8 Loans, or 3.6%, did not have a record of a MPN or alternative documentation.

Criteria: 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. Condition: The University?s processes did not ensure timely and accurate student status reporting to National Student Loan Data System (NSLDS). Questioned Costs: None. Context: Out of the population of 183 students with student attendance changes a sample of 19 students were selected for testing. Our sampling method was not, and was not intended to be, statistically valid. There were 14 attributes tested for each student with at least one status change. Campus-Level records 1. OPEID Number 2. Enrollment Effective Date 3. Enrollment Status 4. Certification Date Program-Level records 5. OPEID 6. CIP Code 7. CIP Year 8. Credential Level 9. Published Program Length Measurement 10. Published Program Length 11. Program Begin Date 12. Program Enrollment Status 13. Program Enrollment Effective Date Other Records 14. Student changed his or her permanent address The College reported the incorrect Enrollment Status, CIP Code, Program Begin Date, and Program Enrollment Status for 1 student, the incorrect Enrollment Effective Date for 4 students, and the incorrect Program Enrollment Effective Date for 2 students. Additionally, the College did not ensure timely submission of status changes for 5 students. Effect: The College reported incorrect data for students' status changes and did not report the status changes timely. Cause: The College?s processes did not ensure status changes were reported timely and accurately. Identification as a Repeat Finding, if Applicable: N/A Recommendation: The College should update their controls to ensure changes in students? enrollment status are reported in a timely and accurate manner. Views of Responsible Officials and Planned Corrective Actions: Administration concurs with the findings. In the past, the College has reported Campus-Level records, Program-Level records and Other Records to the National Student Clearinghouse (NSC) which in turn transmitted this information to the National Student Loan Data System (NSLDS). NSC historically offers this service to small educational institutions to assist with reporting requirements which may be burdensome due to low staffing levels. The College believes that its reporting to NSC has been reasonably accurate and timely. In fact, NSLDS records no longer reflect the submissions of the College to NSC. The College will research, explore and identify the most efficient method of insuring that complete and accurate data related to enrollment reporting are recorded by NSLDS on a timely basis. Initially the College will explore audit assistance through NSC and if not successful, will further explore direct reporting options to the NSLDS. Anticipated Completion Date: May 31, 2023

Criteria: Special Tests and Provisions ? Perkins Loan Recordkeeping and Record Retention ? Institutions are required to properly maintain its Perkins loan records in the manner set forth in 34 CFR 674.19.(e). Condition: The College did not maintain Perkins loan records in the manner set forth in 34 CFR 674.19.(e). (Other Instance of Noncompliance) Questioned Costs: None. Context: During testing of Perkins loan recordkeeping and record retention, for open loans at year end 5/31/22, 5 of 25 selections did not have records of the related master promissory note (MPN). A sample of 25 were selected for testing from a population of 384. For loans retired or assigned within the previous three years, 4 of 19 selections did not have records of the related MPN. A sample of 19 were selected for testing from a population of 182. Our sample selection was not, and was not intended to be, statistically valid. Effect: The College does not have documentation of MPNs for the errors identified. Cause: The College?s processes did not ensure MPNs were properly retained. Identification as a Repeat Finding, if Applicable: N/A Recommendation: The College should revisit the record retention for student related files. Views of Responsible Officials and Planned Corrective Actions: Administration concurs with the findings. Effective with the Fiscal Year 2014, the College engaged with a third-party provider which put the Perkins loan processing on a digital platform. The College will review its record storage system of both hardcopy documentation as well as digital document storage and access for protection, preservation and completeness. Further the College will perform an inventory of loan documents currently in storage to identify additional files that are missing master promissory notes. Anticipated Completion Date: May 31, 2023

Criteria: Reporting ? Per 2 CFR Part 200.328 and 2CFR Part 200.329, institutions must publicly display on their website the total number of students who have received an Emergency Financial Aid Grant. Institutions are required to submit quarterly budget and expenditure reports detailing institutional expenditures of HEERF funds. Condition: The institution?s count of number of students who have received an Emergency Financial Aid Grant disclosed on the website is not accurate. A quarterly report for institutional portion expenditures was not submitted accurately. Questioned Costs: None. Context: Students eligible to receive an Emergency Financial Aid Grant were reported incorrectly. We received the listing of students used for the reporting disclosures and performed recounts. For the September 30, 2021 disbursement, the College reported 1,291 students received emergency funding instead of the actual number, 1,517, a difference of 226 students. Additionally, for the December 31, 2021 disbursement, the College reported 1,291 students received emergency funding instead of the actual number, 1,514, a difference of 223 students. Finally, the 4th quarter institutional share report inaccurately stated all disbursements were for lost revenues instead of $122,346 being allocated for COVID related expenses. Effect: The disclosures on the website are not accurate. Cause: Internal controls were not adequately designed and implemented to ensure compliance with the program?s reporting requirements. Identification as a Repeat Finding, if Applicable: N/A Recommendation: We recommend implementing controls to ensure the College complies with the programs reporting compliance requirements. Views of Responsible Officials and Planned Corrective Actions: Administration concurs with the findings. The College has corrected the website disclosure of number of students receiving Aid Grants under the program. The College will review and confirm accuracy of any future report submissions. Anticipated Completion Date: May 31, 2023

Criteria: Special Test - Gramm-Leach-Bliley Act - Student Information Security - The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in the Title IV Educational Assistance Programs as "Financial institutions" and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Under an institution's Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. (16 CFR 314.3; HEA 483(a)(3)(E) and HEA 4858 (d)(2)). Condition: The College must perform a risk assessment that addresses the three required areas noted in 16 CFR 314.4 (b), which are (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission, and disposal; and (3) Detecting, preventing, and responding to attacks, intrusions, or other systems failures. Questioned costs: None. Context: The College has designated an individual to coordinate the information security program, and the College has policies in place to safeguard the security of student information; however, the College did not perform a formal risk assessment in accordance with the condition stated above. Effect: Safeguards may not adequately mitigate all risks. Cause: Internal controls did not ensure the security policy was in compliance with the Uniform Guidance. Identification as a Repeat Finding, if applicable: 2020-001. Recommendation: We recommend the College conduct a formal risk assessment to ensure it is in compliance with Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Administration concurs with the finding. Management will conduct a formal risk assessment during the fiscal year ended 2022.

Criteria: Special Test - Gramm-Leach-Bliley Act - Student Information Security ? The Gramm-Leach-Bliley Act (Public Law 106-102) requires financial institutions to explain their information-sharing practices to their customers and to safeguard sensitive data. (16 CFR 314) The Federal Trade Commission considers Title IV-eligible institutions that participate in Title IV Educational Assistance Programs as ?financial institutions? and subject to the Gramm-Leach-Bliley Act (16 CFR 313.3(k)(2)(vi). Under an institution?s Program Participation Agreement with the Department of Education and the Gramm-Leach-Bliley Act, schools must protect student financial aid information, with particular attention to information provided to institutions by the Department or otherwise obtained in support of the administration of the federal student financial aid programs. (16 CFR 314.3; HEA 483(a)(3)(E) and HEA 485B(d)(2)). Condition: The College must perform a risk assessment that addresses the three required areas noted in 16 CFR 314.4 (b), which are (1) Employee training and management; (2) Information systems, including network and software design, as well as information processing, storage, transmission and disposal; and (3) Detecting, preventing and responding to attacks, intrusions, or other systems failures. Questioned Costs: None. Context: The College has designated an individual to coordinate the information security program, and the College has policies in place to safeguard the security of student information; however, the College did not perform a formal risk assessment in accordance with the condition stated above. Effect: Policies and procedures may not adequately mitigate the risk. Cause: Internal controls did not ensure the security policy was in compliance with the Uniform Guidance. Identification as a Repeat Finding, if applicable: N/A. Recommendation: We recommend the College conduct a formal risk assessment to ensure it is in compliance with the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: Administration concurs with the finding. Management will conduct a formal risk assessment during the fiscal year ended 2022.