RANDALL UNIVERSITYHigher Education

Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program ALN and Program Expenditures: 84.268 ($1,222,088) Award Number: P268K233315 and P26K223315 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: $-0- Condition Found: The incorrect enrollment status was reported to the National Student Loan Database System (“NSLDS”) for fourteen of the twenty-seven students selected for testing. Criteria: NSLDS informs loan servicers of changes in a student’s enrollment status that indicates when the repayments or interest accrual begins and ends. The date a student enrolls, withdraws, graduates, or drops below half-time status should be reported accurately. Cause: The University began working with a new third-party servicer in fiscal year 2021. The University was responsible for reporting enrollment status changes to the third-party servicer, and the third-party servicer was responsible for updating NSLDS. This process still continued to take longer than anticipated during fiscal year 2023. Possible Asserted Effect: The loan servicers were not aware of the correct deferral, repayment, and interest calculation dates. Repeat Finding: See Finding 2022-005 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should work with the third-party servicer to update the enrollment status of the eleven affected students in NSLDS. In addition, we recommend determining the amount of time the third-party servicer needs to process enrollment status changes. The University should make any necessary changes to its procedures or timeline for reporting enrollment status changes. Management Response: The Student Financial Aid Director corrected the enrollment status and withdrawal date for the students in question in November 2023. Procedures have been improved to ensure the information is communicated timely to the third-party servicer and that third-party servicer reports the changes to NSLDS timely.

Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program ALN and Program Expenditures: 84.268 ($1,222,088) 84.063 ($554,113)M Award Number: P268K233315 P063P223315 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: $4,527 (84.268) $862 (84.063) Condition Found: The R2T4 calculation and Title IV funds were not returned or post-withdraw disbursements were not made timely for four of the twenty-seven students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for one of the four students noted above. The incorrect number of days in the semester was used for the students. The remaining R2T4s calculated by the University were reviewed. Two additional R2T4s were not completed and Title IV funds were not returned timely. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, “a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student’s withdrawal. The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in a module course, the student is ineligible to receive Federal Pell Grant funds for that course. Those Federal Pell Grant funds are automatically returned to the Department of Education. The Federal Pell Grant funds must be recalculated based on the number of hours the student began attendance in. The adjusted Federal Pell Grant figure is used in the R2T4 calculation. Cause: The financial aid director was not always made aware when a student withdrew from the University. In addition, the third-party servicer was slow to process the R2T4 calculation and return the funds or make post-withdraw distributions. Federal Pell Grant funds were properly adjusted for a student who did not begin a module course and properly excluded from the R2T4 calculation, However, the Federal Pell Grant funds were not returned to the Department of Education. For the R2T4 that was miscalculated, the break days were not excluded from the number of days in the semester calculation due to a formula error in the Excel spreadsheet used to calculate the R2T4. Possible Asserted Effect: The following lists the effect for each of the six students associated with the finding: or the first student, the R2T4 was not completed timely, but was calculated correctly. The student is due a $1,849 Federal Pell Grant post withdraw disbursement that was not offered or disbursed. For the second student, the R2T4 was not completed timely and the funds were not returned timely. However, the funds were returned before the end of the award year. For the third student, the R2T4 was not completed timely, but was calculated correctly. The student is due a $862 Federal Pell Grant post withdraw disbursement that was not offered or disbursed. For the fourth student, the R2T4 was not completed timely and the incorrect number of days in the semester was used in the calculation. $4,527 of Unsubsidized Federal Direct Loans should be returned. For the fifth student, the R2T4 was not completed timely and the funds were not returned timely. The R2T4 was calculated correctly. $10,142 of Unsubsidized Federal Direct Loan funds was returned in September 2023.For the sixth student the R2T4 was not completed timely, but was calculated correctly. However, the $862 due to the Department of Education for a module that the student did not begin attendance in has yet to be returned. Repeat Finding: See Finding 2022-003 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. Post-withdraw distributions of $1,849 and $862 should be offered to two of the students in question. $862 of Federal Pell Grant funds should be returned to the Department of Education. The one R2T4 that was not calculated correctly should be recalculated and $4,527 of Unsubsidized Federal Direct Loan funds should be returned to the Department of Education. Management Response: Management agrees that all six R2T4s were completed late and funds were returned late or post-withdraw disbursements were not made timely. The Financial Aid Director will work with University officials to ensure that the Financial Aid Office is informed of enrollment status changes timely. The Financial Aid Director and the CFO will meet with the third-party administrator to resolve the amount of time it is taking for them to review and approve the R2T4s and return funds or award post-withdraw disbursements. The following monetary issues are in the process of being resolved: the first student identified above is due a $1,849 Federal Pell Grant post withdraw disbursement that was not offered or disbursed. $1,849 was posted to the student’s account on February 29, 2024. For the third student identified above, the R2T4 was sent to the third-party administrator for review in November 2023. The University has an ongoing audit being performed by the Department of Education. Based on advice from the University’s Department of Education contact, the resolution for this student should wait until the Department’s audit is complete. For the fourth student identified above, the R2T4 was not completed timely and the incorrect number of days in the semester was used in the calculation. A R2T4 was submitted to the third-party administrator in November 2023. On February 29, 2024, the student’s account show the following amounts were returned to the source: $990 of unsubsidized loan funds, $2,227 of subsidized loan funds, and $1,310 of PLUS Loan funds. For the sixth student identified above, the Student Financial Aid Director missed a notification from the third-party administrator asking for additional files. The information was supplied to the third-party administrator in November 2023. $862 was returned to the source on December 4, 2023.

Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Pell Grant Program ALN and Program Expenditures: 84.063 ($554,113) Award Number: P063P223315 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: $1,461 Condition Found: The amount of Pell grant awarded was calculated incorrectly for one of the nineteen students who received Pell in our sample. The student was awarded Pell grant funds as if the student was enrolled full-time for the fall and spring semesters when the student was only enrolled ¾ time in the fall and half-time in the spring. The Student Financial Aid Office caught the original error. $731 of Federal Pell Grant funds was returned to the Department of Education for the fall semester on March 1, 2023. The Student Financial Aid Director identified that $1,461 should be returned from the spring semester; however, the University has yet to the return the funds. Criteria: Federal Pell Grant eligibility is determined by the student’s expected family contribution (“EFC”), cost of attendance, and enrollment status. Cause: The financial aid office was not informed that the student withdrew from courses after enrollment was finalized. This decreased the enrollment status from full-time to ¾ time in the fall semester and full-time to half-time for the spring semester. Possible Asserted Effect: The student received $1,461 in Pell Grant funds that the student was ineligible to receive. Repeat Finding: There was not a similar finding for the year ended June 30, 2022. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The University should return $1,461 of Federal Pell Grant Funds to the Department of Education. Communication between the offices should be improved so that financial aid is made aware of enrollment status changes timely. In addition, the Student Financial Aid Director should monitor the third-party administrator and follow-up when returns are not completed timely. Management Response: $1,461 was returned to the source on December 4, 2023. Communication between the offices will be improved so that financial aid is made aware of enrollment status changes timely. In addition, the Student Financial Aid Director will monitor the third-party administrator and follow-up when returns are not completed timely.

Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program ALN and Program Expenditures: 84.268 ($1,222,088) Award Number: P268K233315 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: $7,420 Condition Found: The University held excess cash of $7,420 from the Federal Direct Program for more than three days. Criteria: The University was placed on the Heightened Cash Monitoring Method II in May 2023. The University is not allowed to hold excess cash. However, excess cash was held for more than three days from the Federal Direct Loan Program. Cause: The third-party administrator posted a $10,142 Federal Direct Loan return of funds to COD for a student and a total of $2,722 Federal Direct Loans in disbursements to COD for another student. The third-party administrator never returned the $7,420 net of these two transactions to the Department of Education via G5. Three months of monthly Federal Direct Loan reconciliations failed to detect the error as well. Possible Asserted Effect: The University held $7,420 of excess cash. Repeat Finding: There was not a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend that the Student Financial Aid Director and CFO of the University meet with the third-party administrator to determine why the funds were not returned timely and how the monthly Federal Direct Loan reconciliations did not detect the error. $7,420 of Federal Direct Loan funds should be returned to the Department of Education. Management Response: The Student Financial Aid Director and CFO of the University will meet with the third-party administrator in during fiscal year 2024. The $7,420 of Federal Direct Loan program funds were returned on December 15, 2023.

FINDING 2022-001 ? Financial Close and Reporting Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Discounts for El Camino online students were not recorded correctly. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities, are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2022, we proposed adjustments to accounts such as accounts receivable, tuition revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: See Finding 2021-001 for a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions as well as the accurate posting to the books and records. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the Fall of 2021 began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. The contract accounting firm was used in 2021-2022 to address many financial reporting and accounting processes. In response to this finding, Randall University will have an independent review of non-standard journal entries added to the contract accountant?s scope-of-work as a part of Randall University?s financial closing and reporting processes. The contract accountant will communicate with the auditing firm to seek guidance and requirements to better address this issue.

FINDING 2022-002 ? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program TEACH Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.379 ($9,410) Award Number: P268K223315 P379T223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: Nine of the forty federal student financial aid recipients in our sample did not complete or were not sent exit interview instructions to complete. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans or TEACH Grant Cause: The University thought exit interviews were being completed by the third-party servicer. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the University. Repeat Finding: See Finding 2021-004 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the University. We also recommend reviewing the student listing to determine if any other student should have completed an exit interview for the 2021-2022 award year. Management Response: Exit interview instructions were sent to the students in question in October and November 2022. Procedures have been improved to ensure an exit interview is completed when a student withdraws from the University. The process implemented is that a spreadsheet has been created that compares the enrolled credit hours for each student for the Fall -vs- Spring semester of the current Academic Year and the Spring -vs- Fall semester of the next Academic Year. This spreadsheet will identify which students should be receiving exit interview notifications, as well as, any student who needs to have NSLDS enrollment status updated.

FINDING 2022-003 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant ALN and Program Expenditures: 84.268 ($1,119,033) 84.063 ($684,817) 84.007 ($34,837) Award Number: P268K223315 P063P213315 P007A213421 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $26.85 (84.268) $97.40 (84.007) Condition Found: Title IV funds were not returned timely for two of the forty students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for two of the three students noted above. The incorrect number of days in the semester was used for both students. The remaining R2T4s calculated by the University were reviewed. Two additional R2T4s were not completed timely and one of the additional R2T4s was not calculated correctly. Federal Pell Grant funds returned for not beginning a module course were not excluded from the R2T4 calculation. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, ?a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student?s withdrawal.? The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in a module course, the student is ineligible to receive Federal Pell Grant funds for that course. Those Federal Pell Grant funds are automatically returned to the Department of Education. The Federal Pell Grant funds must be recalculated based on the number of hours the student began attendance in. The adjusted Federal Pell Grant figure is used in the R2T4 calculation. Cause: The third-party servicer did not process the R2T4 calculation or return the funds timely. Federal Pell Grant funds were properly adjusted for a student who did not begin a module course. However, the Federal Pell Grant disbursed in the R2T4 calculation was not adjusted. The formula used to calculate the number of days did not include the last day of the semester. In addition, break days were not excluded from the number of days calculation for one student. Possible Asserted Effect: The R2T4 calculation was not completed accurately and Title IV funds were not returned timely. Repeat Finding: See Finding 2021-006 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. The three R2T4s that were not calculated correctly should be recalculated and any funds due should be returned to the Department of Education. Management Response: ? For the first student in question, the R2T4 was completed timely, but the incorrect number of days was used in the R2T4 calculation. $26.85 of Federal Direct Loans were returned to the Department of Education in December 2022. ? For the second student in question, the R2T4 was completed and accepted late by the third-party servicer. In addition, the incorrect number of days was used in the R2T4 calculation. An additional $65.59 of Federal Pell Grant funds were disbursed to the student in December 2022. ? For the third student in question, the R2T4 was not completed timely and accepted late by the third-party servicer. The R2T4 was not completed until April 2022 which was more than forty-five days after the date of determination. ? For the fourth student in question, the incorrect Federal Pell Grant disbursed figure was used in the calculation. An additional $97.40 of FSEOG funds were returned in December 2022. In addition, the R2T4 was not calculated within 45 days of the date of determination, so the original funds were returned late. ? For the fifth student in question, the R2T4 was not reviewed and approved by the TPA within 45 days of the date of determination. The correct post-withdrawal disbursement was made in August 2022.

FINDING 2022-004 ? COD Disbursement Dates Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: TEACH Grant Federal Pell Grant Program ALN and Program Expenditures: 84.379 ($9,410) 84.063 ($684,817) Award Number: P379T223315 P063P213315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The Common Origination and Disbursement System (?COD?) disbursement date did not agree with the disbursement date on accounts for two of the three students receiving TEACH Grants and two of the thirty students receiving Federal Pell Grant funds in our sample. A total of four students were affected by this finding. Criteria: The disbursement date to be reported to the COD is the date that the institution credits funds to a student?s account or pays funds to a student or parent directly. Cause: The University began working with a new third-party servicer in fiscal year 2021. The Student Financial Aid Director was not aware that the third-party servicer was reporting disbursements to COD that differed from the date the University posted the funds to the students? accounts. Possible Asserted Effect: The disbursement date in COD is the date interest begins accruing on the Federal Direct Loans. In order for the interest calculation to be accurate, the disbursement date in COD should be the date the students received the loan funds. Repeat Finding: See Finding 2021-005 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should either correct the disbursement dates on the student accounts or in COD so that the two disbursement dates agree. Management Response: The Student Financial Aid Director created a ticket with the third party administrator to have them correct the disbursement dates for the students in question in COD in November 2022. The corrections were made in December 2022. Going forward, the Student Financial Aid Director will verify the disbursement dates agree when the payments are made.

FINDING 2022-005 ? NSLDS Reporting Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program ALN and Program Expenditures: 84.268 ($1,119,033) Award Number: P268K223315 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: $-0- Condition Found: The incorrect enrollment status was reported to the National Student Loan Database System (?NSLDS?) for nine of the forty students selected for testing. Criteria: NSLDS informs loan servicers of changes in a student?s enrollment status that indicate when the repayments or interest accrual begins and ends. The date a student enrolls, withdraws, graduates, or drops below half-time status should be reported accurately. Cause: The University began working with a new third-party servicer in fiscal year 2021. The University was responsible for reporting enrollment status changes to the third-party servicer, and the third-party servicer was responsible for updating NSLDS. This process continued to take longer than anticipated during fiscal year 2022. Possible Asserted Effect: The loan servicers were not aware of the correct deferral, repayment, and interest calculation dates. Repeat Finding: See Finding 2021-003 for a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should work with the third-party servicer to update the enrollment status of the eleven affected students in NSLDS. In addition, we recommend determining the amount of time the third-party servicer needs to process enrollment status changes. The University should make any necessary changes to their procedures or timeline for reporting enrollment status changes. Management Response: The Student Financial Aid Director corrected the enrollment status and withdrawal date for the students in question in November 2022. Procedures have been improved to ensure the information is communicated timely to the third-party servicer and that third-party servicer reports the changes to NSLDS timely.

Condition Found: During our audit, we noted the following: ? The University did not record the expenses related to the Paycheck Protection Program loan or HEERF funds correctly. Instead of recognizing qualified expenses as revenue, the University reduced the related expense accounts. ? Student accounts receivable and related deferred revenue were not recorded properly. ? A prior year accounts payable was not reversed when paid. ? A prior period adjustment was necessary to correct the balances in property, plant and equipment. ? Discounts for El Camino online students were not recorded correctly, which also resulted in a prior period adjustment. ? As part of our testing of journal entries, we noted no evidence of documented review nor approval. Criteria: The design and implementation of policies and procedures in place should be sufficient enough for the reconciliation of significant financial accounts and transaction classes to prevent and detect material misstatements in the financial statements. Cause: The University currently does not have a strong process for making sure the ending balances, especially of assets and liabilities are correct before providing the trial balance for audit. The University did hire an outside firm to help with the year end closing, which appeared to be of benefit, however, there were still some errors in the recording of transactions. Independent review of nonstandard journal entries is not included as part of the financial close and reporting process. Possible Asserted Effect: In fiscal year 2021, we proposed several adjustments to accounts such as accounts payable, accounts receivable, tuition revenue, deferred revenue, and various income and expense items. If individual journal entries are not reviewed and approved, misstatements are highly likely to occur in the financial statements without anyone?s knowledge, making it difficult to prevent and detect them, whether due to fraud or error. Repeat Finding: There was not a similar finding in the prior year. Recommendation: We recommend that the University put in place necessary controls and procedures to ensure that all transactions are properly classified, and whether each journal entry represents a valid, accurate transaction. As part of this evaluation, the University should consider the preparation and separate, independent document review and approval of these transactions. While there appears to be review of budget vs. actual and other financial statement review by the management and the Board at an overall level, that level of review was not sufficient to identify the material misstatements noted above. Special attention should be paid to the accounting and reporting of material and/or unusual transactions such as the PPP loan, government grants, donor restricted net assets, significant estimates, and transactions at locations outside the main campus, among others. In addition to the overall review, journal entries should also be reviewed at a granular, individual level. Some journal entries are naturally a part of the monthly reconciliation processes that already have existing document review and approval, which would be standard journal entries. Either all journal entries should be numbered, or all nonstandard journal entries should be numbered separately from the standard entries. The independent reviewer should track the last entry number reviewed when obtaining the next set of entries to review, and the reviewer should have available all supporting documentation in order to make an appropriate conclusion as to the entries? legitimacy. The books and records should be ready for audit before the engagement begins. If there are questions regarding the closing of the books, we encourage you to contact us or your contract accountants for guidance. Management Response: Randall University, beginning in the fall of 2021, began using an outside accounting firm to assist our business office, finance staff, and financial aid staff with financial reporting and accounting. Randall University, in response to this finding will enhance the use of the outside accounting firm to review transactions and use their expertise to recommend or not recommend certain transactions. This firm will also be used to review journal entries. Lastly, the outside accounting firm will be used to enhance and improve financial records, monthly close out, and preparation for future audits.

Condition Found: The University currently has students located in the Los Angeles, California metro-area. The students are all online, but because of the concentration, the University has established a teaching site to support the online instruction. The site is approved by the California Bureau of Private Postsecondary Education (?BPPE?) and the University accreditor, TRACS. While the University records tuition and has the records relating to those students, the University does not record any expenses for that location other than amounts paid pursuant to a memorandum of understanding. Initially, there was no written agreement or memorandum of understanding provided to us. However, we later were provided a Partnership Agreement with El Camino Metro Church (ECM) dated Sept 14, 2015. The agreement outlines what the student expectations are, expectations of online instructors and facilitators, what the El Camino Metro-Church will provide, and what Hillsdale (now Randall University) will do. While there is documentation as to the partnership, financial arrangements, coursework, oversight, etc. the documentation was not presented in one complete document and not in a clear and concise format. In addition, we believe that stronger follow up should be considered to collect any outstanding tuition balances due from students located outside of the local area. It appears that any outstanding student balances for these students are currently being written off. Criteria: Students located outside of the main campus should have proper oversight. Cause: Without stronger oversight, it is difficult for the University to proper supervise the activities of these students. Possible Asserted Effect: If there is anything improper, without additional oversight, it is difficult for the University to ensure the activities of these students are in keeping with the agreement. Repeat Finding: There was not a similar finding in the prior year. Recommendation: We recommend that upper management make visits to any locations outside of the local area at specific intervals to determine that all parties are satisfying the agreement. Management Response: Randall University, over the next several months, will collaborate on recordkeeping to better document the financial payments to ECM, financial terms, the timing of financial payments, and billing and if necessary update the agreement. Those who do not qualify for Federal Financial Aid or will not apply for Stafford Loans due to their fear of loan repayments are generally the ones that incur outstanding balances. Our attempts at collection of balances owed for those who have withdrawn has met with some but little success. The team from California visited the Randall University campus in late 2019. Randall University administrative staff planned to visit ECM in 2020. Due to COVID, travel restrictions, and health and safety concerns this was not able to happen as planned. Members of the Randall University administrative staff are planning a site visit in the Spring/Summer of 2022.

FINDING 2021-003 ? NSLDS Reporting Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program CFDA# and Program Expenditures: 84.268 ($1,347,520) Award Number: P268K213315 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: The incorrect enrollment status was reported to the National Student Loan Database System (?NSLDS?) for eleven of the forty students selected for testing. Criteria: NSLDS informs loan servicers of changes in a student?s enrollment status that indicate when the repayments or interest accrual begins and ends. The date a student enrolls, withdraws, graduates, or drops below half-time status should be reported accurately. Cause: The University began working with a new third-party servicer. The University was responsible for reporting enrollment status changes to the third-party servicer, and the third-party servicer was responsible for updating NSLDS. This process took longer than anticipated. Possible Asserted Effect: The loan servicers were not aware of the correct deferral, repayment, and interest calculation dates. Repeat Finding: There was not a similar finding in the prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should work with the third-party servicer to update the enrollment status of the eleven affected students in NSLDS. In addition, we recommend determining the amount of time the third-party servicer needs to process enrollment status changes. The University should make any necessary changes to their procedures or timeline for reporting enrollment status changes. Management Response: The Student Financial Aid Director corrected the enrollment status and withdrawal date for the students in question in December 2021. Procedures are being improved to ensure the information is communicated timely to the third-party servicer and that third-party servicer reports the changes to NSLDS timely.

FINDING 2021-004 ? Exit Interview Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program TEACH Grant CFDA# and Program Expenditures: 84.268 ($1,347,520) 84.379 ($28,320) Award Number: P268K213315 P379T213315 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: Thirteen of the forty federal student financial aid recipients in our sample did not complete or were not sent exit interview instructions to complete. Criteria: An exit interview should be completed or mailed to a student to complete within thirty days from when a student withdraws, graduates from school, or is enrolled less than half-time for Federal Direct Loans or TEACH Grant Cause: The University thought exit interviews were being completed by the third-party servicer. Possible Asserted Effect: The students were unaware of the loan repayment responsibilities at the time the students withdrew from the University. Repeat Finding: There was not a similar finding in the prior Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: Procedures should be improved to ensure that an exit interview is completed when a student withdraws from the University. We also recommend reviewing the student listing to determine if any other student should have been completed an exit interview for the 2020-2021 award year. Management Response: Exit interview instructions were sent to the students in question in October and November 2021. Procedures will be improved to ensure that an exit interview is completed when a student withdraws from the University.

FINDING 2021-005 ? COD Disbursement Dates Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program CFDA# and Program Expenditures: 84.268 ($1,347,520) 84.063 ($731,677) Award Number: P268K213315 P063P203315 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: The Common Origination and Disbursement System (?COD?) disbursement date did not agree with the disbursement date on accounts for three of the thirty-three students receiving Federal Direct Loans and one of the twenty-nine students receiving Federal Pell Grant funds in our sample. A total of four students were affected by this finding. Criteria: The disbursement date to be reported to the COD is the date that the institution credits funds to a student?s account or pays funds to a student or parent directly. Cause: The University began working with a new third-party servicer. The Student Financial Aid Director was not aware that the third-party servicer was reporting disbursements to COD that differed from the date the University posted the funds to the students? accounts. Possible Asserted Effect: The disbursement date in COD is the date interest begins accruing on the Federal Direct Loans. In order for the interest calculation to be accurate, the disbursement date in COD should be the date the students received the loan funds. Repeat Finding: There was not a similar finding for the year ended June 30, 2020. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The Student Financial Aid Director should correct the disbursement dates on the student accounts so that the dates agree with the COD disbursement dates. Management Response: The Student Financial Aid Director corrected the disbursement dates for the students in question in November and December of 2021. Going forward, the Student Financial Aid Director will verify the disbursement dates agree when the payments are made.

FINDING 2021-006 ? R2T4 Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant CFDA# and Program Expenditures: 84.268 ($1,347,520) 84.063 ($731,677) 84.007 ($19,000) Award Number: P268K213315 P063P203315 P007A203421 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: Unknown Condition Found: The return of Title IV funds was not returned timely for three of the forty students in the compliance testing sample. In addition, the R2T4 was not calculated correctly for two of the three students noted above. The incorrect number of days in the semester was used for one student and one student never began attendance; therefore making the student ineligible to receive Title IV funds. Criteria: Per the Student Financial Aid Handbook Volume 5, Chapter 2, ?a school must return unearned funds for which it is responsible as soon as possible but no later than 45 days after the date of determination of a student?s withdrawal.? The number of days in the semester is calculated by counting the number of days in the semester less any breaks of four or more days. If a student does not begin attendance in any of the courses registered for; the student is ineligible to receive federal aid. Cause: The third-party servicer did not process the R2T4 calculation or return the funds timely. The student never began attendance. This was not noticed until reviewing students with 0.00 GPA at the end of the semester. The weekend days surrounding a week long break were not included in the number of break days total. Possible Asserted Effect: The R2T4 calculation was not completed accurately and Title IV funds were not returned timely. Repeat Finding: See Finding 2020-001 for a similar finding the prior year. Recommendation: Procedures and communication should be improved with the third-party servicer to ensure that the third-party servicer is given all of the information needed to complete the calculation and that the R2T4 calculation is completed and the funds are returned to the Department of Education timely. The two R2T4s that were not calculated correctly should be recalculated and any funds due should be returned to the Department of Education. Management Response: ? For the first student in question, the R2T4 was completed and accepted late by the third-party servicer. The funds were returned in November 2021 which was after the 45 day mark. ? For the second student in question, after reviewing the initial R2T4 calculation, it was determined that the student never began attendance, and thus, was not eligible to receive Title IV funds. An updated R2T4 was submitted to the third-party servicer. $2,721 of Unsubsidized Federal Direct Loan Funds and $1,587 of Federal Pell Grant funds were returned in February 2022. This was after the forty-five day timeframe. ? For the third student, the third-party servicer has yet to approve the R2T4. Any funds due will be returned to the Department of Education after the third-party servicer completes the R2T4 process. ? The Financial Aid Director will work with the third-party servicer to streamline the R2T4 process and decrease the amount of time it takes to process an R2T4.

FINDING 2021-007 ? Pell Award Calculation Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Pell Grant Program CFDA# and Program Expenditures: 84.063 ($731,677) Award Number: P063P203315 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: The amount of Pell grant awarded was calculated incorrectly for one of the twenty-nine students who received Pell in our sample. The student was awarded Pell grant funds as if the student was enrolled ? time when the student was enrolled full-time. Cause: The financial aid office was not informed that the student enrolled in an additional course. This increased the enrollment status from ? time to full-time. Criteria: Federal Pell Grant eligibility is determined by the student?s expected family contribution (?EFC?), cost of attendance, and enrollment status. Possible Asserted Effect: The student is eligible to receive an additional $250 of Pell grant funds. Repeat Finding: There was not a similar finding for the year ended June 30, 2020. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The University should award an additional $250 to the student in question. Communication between the offices should be improved so that financial aid is made aware of enrollment status changes timely. Management Response: The University is working with the third-party servicer to award an additional $250 of Federal Pell Grant funds to the student in question. Communication between the offices will be improved to ensure that the financial aid office is made aware of enrollment status changes timely.

FINDING 2021-008 ? TEACH Grant Eligibility Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal TEACH Grant CFDA# and Program Expenditures: 84.379 ($28,320) Award Number: P379T213315 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $5,646 Condition Found: Two students were awarded TEACH grants when they did not meet the GPA qualifications to receive the award. Cause: For a first-year student, the high school GPA was not verified and for the continuing student, the cumulative GPA at the University was not verified. Criteria: To be eligible for TEACH grant funds, a first-year student must have an unweighted high school GPA of 3.75 or score above the 75th percentile on college admissions tests. A second, third, or fourth-year student must have at least a cumulative 3.25 GPA on a 4.0 scale before each payment period. Possible Asserted Effect: The two students in question were awarded a combined total of $5,646 in TEACH Grant funds that they were ineligible to receive. Repeat Finding: There was not a similar finding for the year ended June 30, 2020. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: The University should return the $5,646 of TEACH Grant funds to the Department of Education. Procedures should be improved to make sure the student has an eligible GPA before awarding TEACH Grant funds. Management Response: The University returned the $5,646 to the Department of Education in February 2022. Procedures will be improved to ensure a student?s GPA meets the minimum requirements to receive a TEACH Grant before disbursing funds.

FINDING 2021-009 ? Biennial Review of the Drug and Alcohol Abuse Prevention Program and Policies Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Work Study TEACH Grant Federal Supplemental Educational Opportunity Grant CFDA# and Program Expenditures: 84.268 ($1,347,520) 84.063 ($731,677) 84.033 ($21,594) 84.379 ($28,230) 84.007 ($19,000) Award Number: P268K213315 P063P203315 P033A213421 P379T213315 P007A203421 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: The University administration did not complete the biennial review of their Drug Free Workplace Policy and drug free prevention process. Criteria: The biennial review should include the following: ? the number of drug and alcohol-related violations and fatalities that occur on a University campus or as a part of any of the University?s activities that are reported to campus officials; and ? the number and type of sanctions that are imposed by the school as a result of drug and alcohol-related violations and fatalities on the University?s campus or as part of any of the College?s activities. Cause: The University administration did not complete the biennial review because they were not aware of the requirement and the University?s policies did not contain all of the required elements which would allow the University to complete the biennial review. Possible Asserted Effect: The University administration cannot determine or document the effectiveness of their policies. The University cannot determine if improvements to policies should be made. Repeat Finding: This finding was not reported in the immediately prior audit. Recommendation: The University Administration should complete and document biennial review of the drug free workplace and drug prevention policies. The policies are going to have to be updated and the necessary information tracked before this can completed. Management Response: Management will complete the biennial review after the drug free workplace and drug and alcohol abuse prevention polices have been updated and the required data has been tracked.

FINDING 2021-010 ? Prior Year Charges Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant CFDA# and Program Expenditures: 84.268 ($1,347,520) 84.063 ($731,677) 84.007 ($19,000) Award Number: P268K213315 P063P203315 P007A203421 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: More than $200 of prior year charges (expenses for the 2019-2020 award year) were paid with current year (2020-2021 award year) funds for three of the forty students in our sample. Criteria: The University may include up to $200 of prior year charges in the payment periods for the current award year. Cause: The Bursar was unaware of the requirement to return credit balances at the end of the academic year. This allowed prior year charges to be paid with current year funds. Possible Asserted Effect: More than $200 of prior year charges were paid with current year funds. Repeat Finding: There was not a similar finding for the year ended June 30, 2020. Recommendation: Procedures should be improved to ensure that all credit balances are returned at the end of the academic year. The credit balance authorization form expires at the end of each academic year. Management Response: The Student Financial Aid Director discussed the $200 prior year charge limit and the requirement to return credit balances at the end of the academic year with the Bursar. The Bursar is now aware of these requirements and the policies and procedures have been updated going forward.

FINDING 2021-011 ? Authorization to Hold Credit Balances Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Supplemental Educational Opportunity Grant CFDA# and Program Expenditures: 84.268 ($1,347,520) 84.063 ($731,677) 84.007 ($19,000) Award Number: P268K213315 P063P203315 P007A203421 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: $-0- Condition Found: For seven of the forty students in our sample, the College held Title IV credit balances for longer than fourteen days without written authorization or credit balances were not returned at the end of the academic year. Criteria: An institution may not hold a credit balance, which is caused by federal student financial aid funds, on a student?s account for more than fourteen days without written authorization from the student. All credit balances must be returned at the end of the academic year. Cause: The Bursar was unaware of the requirement to return credit balances at the end of the academic year. In addition, there was a change in third-party servicers and there was confusion about which entity was responsible for the credit balance authorization form. Possible Asserted Effect: The Title IV credit balance was not returned timely to the student. Repeat Finding: There was not a similar finding for the year ended June 30, 2020. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: All of the credit balances had been returned by January 2022. An Authorization to Hold Credit Balances should be created based on the examples in the Student Financial Aid Handbook. Procedures should be improved and updated to ensure that Title IV credit balances are returned timely. All Title IV credit balances must be returned at the end of the academic year. Management Response: The students in question no longer have a credit balance on their respective account. The third-party servicer has created an Authorization to Hold Credit Balances form. This will be completed during the financial aid awarding process. The Bursar is aware of the regulations surrounding credit balances. Procedures have been updated to ensure that Title IV credit balances are returned to the student timely.

FINDING 2021-012 ? Annual Security and Fire Safety Report Federal Agency: U.S. Department of Education; Office of Federal Student Aid Pass through Entity: Not applicable Program Name: Federal Direct Student Loan Program Federal Pell Grant Program Federal Work Study TEACH Grant Federal Supplemental Educational Opportunity Grant CFDA# and Program Expenditures: 84.268 ($1,347,520) 84.063 ($731,677) 84.033 ($21,594) 84.379 ($28,230) 84.007 ($19,000) Award Number: P268K213315 P063P203315 P033A213421 P379T213315 P007A203421 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: None Condition Found: The Annual Security and Fire Safety Report did not contain all of the required documentation and information. The Annual Security Report must include: 1. The crime statistics submitted to the Department of Education. 2. A statement of current campus policies regarding procedures for students and others to report criminal actions or other emergencies on campus. The statement must include the institution's policies concerning its response to these reports including ? o Policies for making timely warning reports to members of the campus community regarding the occurrence of crimes. o Policies for preparing the annual disclosure of crime statistics; and o A list of the titles of each person or organization to whom students and employees should report the criminal offenses described below for the purpose of making timely warning reports and the annual statistical disclosure. ? This statement must also disclose whether the institution has any policies or procedures that allow victims or witnesses to report crimes on a voluntary, confidential basis for inclusion in the annual disclosure of crime statistics, and, if so, a description of those policies and procedures. 3. A statement of current policies concerning security of and access to campus facilities, including campus residences, and security considerations used in the maintenance of campus facilities. 4. A statement of current policies concerning campus law enforcement that - o Addresses the enforcement authority of security personnel, including their relationship with state and local police agencies and whether those security personnel have the authority to arrest individuals; o Encourages accurate and prompt reporting of all crimes to the campus police and the appropriate police agencies; and o Describes procedures, if any, that encourages pastoral counselors and professional counselors, if and when they deem it appropriate, to inform the persons they are counseling of any procedures to report crimes on a voluntary, confidential basis for inclusion in the annual disclosure of crime statistics. 5. A description of the type and frequency of programs designed to inform students and employees about campus security procedures and practices and to encourage students and employees to be responsible for their own security and the security of others. 6. A description of programs designed to inform students and employees about the prevention of crimes. 7. A statement of policy concerning the monitoring and recording through local police agencies of criminal activity in which students engaged at off-campus locations of student organizations officially recognized by the institution, including student organizations with off-campus housing facilities. 8. A statement of policy regarding the possession, use, and sale of alcoholic beverages and enforcement of State underage drinking laws. 9. A statement of policy regarding the possession, use, and sale of illegal drugs and enforcement of federal and state drug laws. 10. A description of any drug or alcohol-abuse education programs. 11. A statement of policy regarding the institution?s campus sexual assault programs to prevent sex offenses, and the procedures to follow when a sex offense occurs. The statement must include: o A description of educational programs to promote the awareness of rape, acquaintance rape, and other forcible and non-forcible sex offenses; o Procedures students should follow if a sex offense occurs, including procedures concerning who should be contacted, the importance of preserving evidence for the proof of a criminal offense, and to whom the alleged offense should be reported; o Information on a student?s option to notify appropriate law enforcement authorities, including on?campus and local police, and a statement that institutional personnel will assist the student in notifying these authorities, if the student requests the assistance of these personnel; o Notification to students of existing on- and off-campus counseling, mental health, or other student services for victims of sex offenses; o Notification to students that the institution will change a victim's academic and living situations after an alleged sex offense and of the options for those changes, if those changes are requested by the victim and are reasonably available; o Procedures for campus disciplinary action in cases of an alleged sexual offense, including a clear statement that- ? The accuser and the accused are entitled to the same opportunities to have others present during a disciplinary proceeding; and ? Both the accuser and the accused must be informed of the outcome of any institutional disciplinary proceeding brought alleging a sex offense. Compliance with this paragraph does not constitute a violation of the Family Educational Rights and Privacy Act. For the purpose of this paragraph, the outcome of a disciplinary proceeding means only the institution's final determination with respect to the alleged sex offense and any sanction that is imposed against the accused; and ? Sanctions the institution may impose following a final determination of an institutional disciplinary proceeding regarding rape, acquaintance rape, or other forcible or non-forcible sex offenses. 12. A statement advising the campus community where law enforcement agency information provided by a state under 42 USC 1407(j)) concerning registered sex offenders may be obtained, such as a local law enforcement office of the institution, a local law enforcement agency with jurisdiction for the campus, or a computer network address. 13. A description of the school's emergency response and evacuation procedures. 14. A statement of the school's policy regarding missing student notification procedures. The Annual Fire Safety Report must include: 1. The fire statistics submitted to the Department of Education. 2. A description of each on-campus student housing facility fire safety system. 3. The number of fire drills held during the previous calendar year. 4. The institution's policies or rules on portable electrical appliances, smoking, and open flames in a student housing facility. 5. The institution's procedures for student housing evacuation in the case of a fire. 6. The policies regarding fire safety education and training programs provided to the students and employees. In these policies, the institution must describe the procedures that students and employees should follow in the case of a fire. 7. For purposes of including a fire in the statistics in the annual fire safety report, a list of the titles of each person or organization to which students and employees should report that a fire occurred. 8. Plans for future improvements in fire safety, if determined necessary by the institution. If the institution publishes two reports instead of a combined report, both reports must reference the other report. Cause: The University complied and released the crime statics to the students and staff; however, the University?s administration was unaware of the remaining requirements surrounding the Annual Security and Fire Safety Report. Possible Asserted Effect: The students and staff were not aware of certain policies and procedures. Repeat Finding: There was not a similar finding for the year ended June 30, 2020. Recommendation: The University should review and revise its institutional policies. The University should improve procedures to ensure the Annual Security and Fire Safety Report contains all required documentation. Management Response: The management of the University reviewed the requirements of the Annual Security and Fire Safety Report. The University is in the process of writing and implementing the necessary policies and procedures. Once the required polices and data have been gathered, the administration will complete the report. The students and staff of the University will be notified of the availability of the report and a copy of the report was placed on the University?s website.

RANDALL UNIVERSITY Schedule of Findings and Questioned Costs June 30, 2020 Section III ? Federal Award Findings and Questioned Costs June 30, 2020 Findings: 2020-001 Significant Deficiency DEPARTMENT OF EDUCATION CFDA #: 84.268 and 84.063 Federal Award Identification #: 19/20 Award Year Condition: Registrar?s Office did not always timely notify the Student Financial Aid office upon some student withdrawals in the Summer of 2020. Criteria: 16 CFR 314.3, 16 CFR 314.4 Questioned Costs: $5,419 Context: Funds not returned in a timely manner. Cause: Registrar not notifying Student Financial Aid office in a timely manner when students withdrew. Effect: Non-compliance with returning unearned Title IV funds within 45 days of official withdrawal. Identification as repeat finding, if applicable: Not applicable. Recommendation: It is recommended that the University work with the Registrar to implement procedures. Views of Responsible Officials: Management is in agreement with the finding and is in the process of addressing the issue. See attached corrective action plan. Prior year Findings: 2019-001 Gramm-Leach-Bliley-Act Compliance (GLBA) Significant Deficiency DEPARTMENT OF EDUCATION CFDA #: 84.268, 84.063, 84.007, 84.033, 84.038 and 84.379 Federal Award Identification #: 18/19 Award Year Condition: Although the University designated a ?Point Person,? they did not sufficiently comply with all the requirements of GLBA. Recommendation: It was recommend the University allocate sufficient resources to address all requirements of GLBA. Identification as repeat finding, if applicable: Not applicable. Resolution/Status: Implemented.

Section III ? Federal Award Findings and Questioned Costs 2019-001 Gramm-Leach-Bliley-Act Compliance (GLBA) Significant Deficiency DEPARTMENT OF EDUCATION CFDA #: 84.063, 84.033, 84.007, and 84.268 Federal Award Identification #: 18/19 Award Year Condition: Although the University designated a ?Point Person,? they did not sufficiently comply with all the requirements of GLBA. Criteria: 16 CFR 314.3, 16 CFR 314.4 Questioned Costs: $0 Context: Risk assessment and safeguards are not documented. Effect: The University has not adequately addressed the requirements of GLBA, which may lead to unintended exposure of student information to security risks. Cause: The University has not allocated sufficient resources to address the requirements of GLBA. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend the University allocate sufficient resources to address all requirements of GLBA. Views of Responsible Officials: Management is in agreement with the finding and is in the process of addressing the issue. See attached corrective action plan.

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