BACONE COLLEGE, INC.

Special Tests and Provisions: Enrollment Reporting Grant Period?Year ended July 31, 2020 Federal Program?Student Financial Assistance Cluster CFDA Nos. 84.007, 84.033, 84.063 and 84.268 Significant Deficiency Criteria: Enrollment reporting is required by Title 34 CFR Section 685.309 for all schools that participate in Title IV assistance. These regulations require schools to report information requested by the U.S. Department of Education (the ?Department?) in a timeframe specified by the Department. Student enrollment information must be reported within 30 days whenever attendance changes for students unless a roster is submitted within 60 days. The institutions must complete and return within 15 days the enrollment reporting roster files placed in their Student Aid Internet Gateway mailboxes sent by the Department. Condition: Out of a sample of 60 students from a population of 234, we noted that 3 students had enrolled as full-time or ? time student for the fall 2019 and/or spring 2020 semesters. Two students? status were not reported to the National Student Loan Data System (NSLDS) during this time frame and had missing campus and program enrollment history. Those students? status were reported in the following semester. One student?s enrollment status was not reported correctly to NSLDS. The correction to the status was made to NSLDS in April 2021. Cause: The review process performed by the Registrar Office was not effective to ensure the required reports was submitted accurately and timely to NSLDS and the Department. Those students? status were reported in the following semester. Effect: Inaccurate and late enrollment reporting can impact a student?s loan grace period, in-school deferment eligibility, beginning loan repayment period, appropriate interest charges, and proper administration of the Title IV Student Aid Programs. Questioned Costs: Not applicable. Recommendation: We recommend that the College have policy and procedures in place to ensure that the student enrollment information are reported timely and accurately. Views of Responsible Officials and Planned Corrective Actions: Management?s views, responses, and corrective action plan are reported at the end of this report.

Finding 2020-002: Special Tests and Provisions: Enrollment Reporting The College?s discussion included acknowledgement of the current process that happens before the Registrar can review. There were 2 recognized points; attendance reporting from Faculty/Adjunct and the other was incomplete enrollment files from the Admissions office. The current state of the Admissions office causes a bottleneck due to current policy and procedures coupled with COVID exceptions thus making the student enrollment information tardy to the Registrar's Office. As the College focuses on continuous improvement, policy and procedure reviews have been at the forefront.

2019-002

Finding 2019-002: Special Tests and Provisions: Enrollment Reporting Grant Period?Year ended July 31, 2019: Federal Program?Student Financial Assistance Cluster CFDA No. 84.007, 84.033, 84.063 and 84.268 Significant Deficiency Criteria: Enrollment reporting is required by Title 34 CFR Section 685.309 for all schools that participate in Title IV assistance. These regulations require schools to report information requested by the U.S. Department of Education (the ?Department?) in a timeframe specified by the Department. Student enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster submitted within 60 days. The institutions must complete and return within 15 days the enrollment reporting roster files placed in their Student Aid Internet Gateway mailboxes sent by the Department. Condition: Out of a sample of 60 students from a population of 244, we noted that five students had enrolled as full-time student for the fall 2018 and spring 2019 semesters, those students? status were not reported to NSLDS during this time frame. Those students? status were reported in the following semester. We also noted that there was one instance of incorrect Status and Effective date reported to the NSLDS. Cause: The review process performed by the Registrar Office was not effective to ensure the required reports was submitted accurately and timely to NSLDS and the Department. Those students? status were reported in the following semester. Effect: Inaccurate and late enrollment reporting can impact a student?s loan grace period, in-school deferment eligibility, beginning loan repayment period, and appropriate interest charges. Questioned Costs: Not applicable. Recommendation: We recommend that the College have policy and procedures in place to ensure that the student enrollment information are reported timely and accurately. Views of Responsible Officials and Planned Corrective Actions: Management?s views, responses, and corrective action plan are reported at the end of this report.

Finding 2019-002: Special Tests and Provisions: Enrollment Reporting The College has proposed and implemented the following Corrective Action Plan. 1. Files to be sent to the NSLDS will be exported out of the College Database Management System (CAMS). These files will be formatted per the NSLDS Handbook. 2. Exported files will then be sent to the Director of Financial Aid for review and a comparison will be made to Financial Aid files. 3. Following a review of these files, the Director of Financial Aid and Registrar will confer and send the files directly to the NSLDS database, thus bypassing the National Student Clearing House to ensure accuracy of dates of reporting and data. This policy will to be placed in the College?s Policy Handbook and Catalog.

2018-002

Finding 2019-003: Eligibility Grant Period?Year ended July 31, 2019: Federal Pell Grant Program?CFDA No. 84.063 Significant Deficiency Criteria: Each year, based on the maximum Pell grant established by Congress, the Department provides to institutions Payment and Disbursement Schedules for determining Pell awards. All of the Schedules are based on the cost of attendance and enrollment status. Condition: During our testwork, out of 60 samples, we noted four students did not receive the correct amount of Pell award based on their enrollment status, as follows: ? Student 1 was under-awarded $1,500 due to error ? Student 1 was under-awarded $400 due to using the wrong expected family contribution ? Student 3 was over-awarded $2,145 due to using the wrong expected family contribution ? Student 4 was under-awarded $1,862 due to error Cause: The review process performed by the College was not effective to ensure the student received the correct amount of Pell award. Effect: The incorrect amount of Pell award was disbursed to the student and the College was not in compliance with the Eligibility requirements for the student financial assistance program. Questioned Costs: Known net questioned cost of $1,617, projected questioned cost unknown. Recommendation: We recommend that the College have policy and procedures in place to ensure the Title IV assistance funds were disbursed correctly to the eligible students and the Student Financial Aid Director review students? financial assistance calculation each semester prior to disbursing financial assistance. Views of Responsible Officials and Planned Corrective Actions: Management?s views, responses, and corrective action plan are reported at the end of this report.

Finding 2019-003: Eligibility At the recommendation of our auditors, the College is implementing changes to its policies and procedures that will address two causes of Pell errors: In previous years, and primarily among a small cohort of Pawnee Nation College students, Pell-eligible students had been allowed to divide their scheduled awards over three semesters in a manner not supported by the official Pell Grant disbursement tables released by the Department of Education. This led to noticeable under-awards when those students did not actually enroll for summer classes. This first issue is being addressed in changes to our Policy and Procedures manual that ensure the official Pell Charts must be followed unless LEU calculations for a student with an LEU of over 500% demonstrate that a lower amount would be appropriate. This is to be supplemented by a more accurate packaging process that will help automate the creation of offer letters, remove the ability of financial aid staff to split a scheduled award in a non-standard way, and also automate LEU calculations. Another cause of concern was changes to ISIRs that were not identified in a timely manner. This second issue is being addressed in changes to our Policy and Procedures manual which require students to return to the financial aid office upon any student-initiated change to an ISIR to provide more information and to sign a new offer letter if appropriate. This is to be supported by improved ongoing communication between the financial aid office and professors, administrators, advisors, and coaches to explain the potential impact of inaccurate awards on both the affected student and the school as a whole. There will be an additional change in procedures related to the amount of time dedicated to identifying these and other potential sources of errors.

2018-006

Finding 2019-004: Financial Responsibility and Administrative Capability Grant Period?Year ended July 31, 2019: Federal Program?Student Financial Assistance Cluster CFDA No. 84.007, 84.033, 84.063 and 84.268 Material Weakness Criteria: CFR Section 34, Part 668 requires a not-for-profit entity administering Title IV programs to maintain certain financial ratios to demonstrate that it is financially responsible. The composite score of the ratios must be at least 1.5. Administrative capability is required by Title 34 CFR Section 668.16 for all schools that participate in Title IV assistance. These regulations require the College to demonstrate to the Department that the College is capable of adequately administering and coordinating those Title IV programs in accordance with all statutory provisions, including designating a capable individual to be responsible for administering all the Title IV programs. Condition: The College?s composite score ratio at July 31, 2019, was less than the 1.5 requirement. The administrative capability was below the required level for maintaining compliance with Title IV regulations during the year. In our testing in the current fiscal year, we found multiple areas of noncompliance and repeated findings. Cause: The College?s operating results for the year were not sufficient to achieve a passing composite score. The College has inadequate financial aid staffing to sufficiently administer the Title IV programs given the complexity and the number of students enrolled. Effect: The College was not in compliance with the financial responsibility requirement and had multiple instances of noncompliance with Title IV program requirements. Questioned Costs: Not applicable Repeat Findings: Repeat of finding in prior audit. Recommendation: In the previous year, the College elected to function under the Zone Alternative as defined by the Department of Education and posted an irrevocable letter of credit of 10% of its Title IV funding. We suggest the College continue to operate under the Zone Alternative, on a reimbursement basis, and post an irrevocable letter of credit, if required. We also recommend that the College provide proper training and add additional experienced staff or adjust system requirements and controls to provide the College with the necessary expertise to administer the Title IV Program. Views of Responsible Officials and Planned Corrective Actions: Management?s views, responses, and corrective action plan are reported at the end of this report.

Finding 2019-004: Financial Responsibility and Administrative Capability The College is aware that it would benefit from additional, experienced financial aid staff. By the admission of those auditors who visited us in person, the College has made significant improvements over the previous year. The College expects those improvements to continue. The FY2019 CFI was 1.3 compared to 0.6 for FY2018. While the CFI is below the 1.5 requirement, the College is projecting a 2.0+ CFI for FY2020 with the retirement of long-term debt and higher reserves.

2018-008

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2017-011

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2017-001

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2017-002

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2017-005

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2017-004

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2017-011

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2016-001

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2016-002

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2016-005

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2016-006

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2016-007

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2016-003

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2016-009

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2015-001

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2015-004

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2015-002

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2015-003

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