Northcentral UniversityHigher Education

FINDING 2023-001 - Special Tests and Provisions - Return of Title IV: Significant Deficiency in Internal Control (See III. Federal Award Findings and Questioned Costs - Finding 2023-0001 for included table) Criteria - 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section. Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdraws. Except in unusual instances, the date of the institution's determination that the student withdrew should be no later than 14 days after the student's last date of attendance as determined by the institution from its attendance records. 34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (1)(3) of this section. Condition/Context-A sample of 31 students of all students who were recipients of Title IV funding and had officially or unofficially withdrawn during the period were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government's Common Origination and Disbursement system. For one student in the sample, Northcentral University (the University) identified the student had withdrawn and calculated the amount to be returned and submitted that amount timely. Subsequently, through a standard review process it was determined there was an error in the initial calculation of the refund. This amount was returned; however, the return was outside the 45-day period described in 34 CFR section 668.220). Cause - The University does review Return of Title IV calculations at various points throughout the calculation and return process. However, these reviews did not identify the error in the original calculation timely. Effect- Errors in the calculations may not be identified timely and incorrect amounts may be refunded. Repeat Finding - This is not a repeat finding. Recommendation-We recommend the University implement a process in which there is a timely final review of the Title IV return after the fact for all students to ensure all aspects are correct and timely. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the importance of ensuring that the return of Title IV funds (R2T4) are performed both timely and accurately. The NCU Processing team has led focused R2T4 training on several subjects, including the importance of return amount inputs to ensure our R2T4 processors receive regular refresher training and coaching to prevent any R2T4 calculation inaccuracies. The Processing team will continue to conduct subject matter training monthly. The Quality Assurance team will continue to conduct weekly R2T4 calculation reviews to demonstrate internal controls and accuracy. The Quality Assurance review process includes reviewing the R2T4 calculation for accuracy and verifying that all system inputs such as EDExpress and COD are completed correctly.

FINDING 2022-001 ? Special Tests and Provisions ? Return of Title IV: Significant Deficiency in Internal Control - See Schedule of Findings and Questioned Costs for chart/table. - Criteria ? 34 CFR section 668.22 (a)(2): A student is considered to have withdrawn from a payment period or period of enrollment if, for a student in a non-term program or a subscription-based program, the student is unable to resume attendance within a payment period or period of enrollment for more than 60 calendar days after ceasing attendance, unless the student is on an approved leave of absence, as defined in paragraph (d) of this section. Institutions required to take attendance are expected to have a procedure in place for routinely monitoring attendance records to determine in a timely manner when a student withdraws. Except in unusual instances, the date of the institution?s determination that the student withdrew should be no later than 14 days after the student?s last date of attendance as determined by the institution from its attendance records. 34 CFR section 668.22(j): Timeframe for the return of Title IV funds. (1) An institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution?s determination that the student withdrew as defined in paragraph (l)(3) of this section. Condition/Context ? A sample of 40 students who were recipients of Title IV funding and had officially or unofficially withdrawn during the year were selected and the student records were compared to the calculation of the return of Title IV funds, if any, and the federal government?s Common Origination and Disbursement system. Northcentral University (NCU) did not identify 3 students as withdrawn within the required timeframe. Additionally, for 4 for of the 40 sample students, the amount to be returned was not returned within the required 45 days after the date of NCU?s determination of withdrawal. Cause ? NCU does review Return of Title IV calculations at various points throughout the calculation and return process. However, these reviews did not timely identify funds required for return. Additionally, the attendance queries periodically used for withdrawal determination purposes were incomplete and failed to identify all students whom had stopped attending class prior to completion of a payment period. Effect ? Students whom stopped attending class prior to the completion of a payment period were not timely identified as withdrawn. Although eventually returned, funds required to be returned were not returned timely. Repeat Finding ? This is not a repeat finding. Recommendation ? We recommend NCU revise their system queries to capture all withdrawn students and implement a process by which the queries are tested annually. We also recommend NCU implement a process in which there is a final review of the Title IV return after the fact for all students to ensure all aspects are correct and timely. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the importance of ensuring that the return of Title IV funds (R2T4) are performed both timely and accurately. The University has instituted a new workflow process that is easily tracked and reported, allowing our team to monitor and control the R2T4 process more effectively. In addition, the quality assurance team at NCU is now performing regular and periodic file reviews to ensure file accuracy. The quality assurance process includes a review of both an assessment of the accuracy of our calculations and that all required R2T4s are complete. These new internal controls ensure we process R2T4 in accordance with 34 CFR section 668.22 (2)(i) in the required timeframe. We anticipate the changes mentioned above will remediate this repeat finding.

FINDING 2022-002 ? Special Tests and Provisions ? Enrollment Reporting: Significant Deficiency in Internal Control: See Schedule of Findings and Questioned Costs for chart/table" in place of the chart or table within the text. - Criteria ? 34 CFR section 685.309(b)(2): Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, a school must notify the Secretary within 30 days after the date the school discovers that (i) a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or (ii) A student who is enrolled at the school and who received a loan under title IV of the Act has changed his or her permanent address. Condition/Context ? A sample of 48 federal aid recipient students were selected from system generated reports of students who graduated, reported a physical address change, withdrew, or dropped during the 2021-2022 academic year. The enrollment information and withdrawal, address change, or graduation date per NCU?s records was compared to the information reported to the National Student Loan Data System (NSLDS) in order to determine if status changes were reported within the required timeframes. Three of the 48 students whom had a change in address, graduated, or withdrew were not reported to the NSLDS within the required timeframe. One student whom had withdrawn during the 2021-2022 academic year was reported timely, however, had an incorrect effective date reported to the NSLDS. Cause ? The queries written to identify students with status changes did not capture all withdrawn students. In addition, existing internal controls did not prevent late or incorrect reporting within the required timeframe resulting in non-compliance. Effect ? The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by the United States Department of Education, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans. Repeat Finding ? This is a repeat finding. See 2021-001. Recommendation: We recommend that the University develop additional procedures to monitor the accuracy of information provided by its third-party servicer on behalf of the University to NSLDS. One additional monitoring control could be to review a sample of students within NSLDS after each roster file response to ensure that the enrollment status is accurate. Each institution has access to correct information directly within NSLDS at any time. Views of Responsible Officials and Planned Corrective Actions ? Management agrees with the importance of ensuring timely and accurate NSLDS reporting in accordance with 34 CFR section 685.309(b)(2)(i)). The NCU Quality Assurance team now reviews enrollment reporting on a regular basis to confirm the reporting process is consistent with the Title IV regulation. In the event that the Quality Assurance review yields inaccurate reporting, the Quality Assurance team will lead the investigation to determine the cause of the inaccurate reporting and will work with the appropriate departments and teams to ensure that any required corrections to process, reporting, reporting code or systems is rectified. Management agrees with the importance of communicating with the Department of Education when an enrolled student ceases to be enrolled at least half-time.

See the notes to the SEFA for chart/table. Criteria: The National Student Loan Data System (NSLDS) is the Department of Education?s (ED) centralized database for students? enrollment information. It is the University?s responsibility to update this information timely and accurately when the enrollment status of a student that has received federal aid changes. The University is ultimately responsible for the timeliness and accuracy of this information even when a third-party servicer is used as an intermediary to report on the University?s behalf. The University currently contracts with a third-party servicer and has elected to receive an Enrollment Reporting roster file every 30 days from NSLDS. At a minimum, institutions must certify the enrollment status of all students included on the roster file within 15 days of receiving the roster file. If errors are identified, the University has 10 days to resubmit a corrected response. Unless the University expects to complete its next roster within 60 days, the school must notify the lender or the guaranty agency within 30 days if it discovers that a student who received a federal aid either did not enroll or ceased to be enrolled on at least a half-time basis (34 CFR section 685.309). Condition/context: We selected a sample of students identified by the University as having received some federal assistance and who either withdrew from the University or graduated from the University during the year ended June 30, 2021. Our sample consisted of 26 students that were identified as withdrawn during the year and a sample of 14 students that were identified as graduates. We then compared the enrollment information and withdrawal or graduation date per the University?s records to the information reported to NSLDS. We identified two students that graduated during the year and were reported as withdrawn. In addition, the students? status were not updated within the required timeframe following their conferral. Questioned costs: No questioned costs were identified as part of this finding.Effect: Enrollment status is utilized by students, ED, the Direct Loan program, lenders, and other institutions to determine in-school status. NSLDS also uses the newly submitted enrollment data to recalculate a student?s 150% limit for direct subsidized loans to determine if loss or protection of the subsidy should occur. Therefore, this significant deficiency in enrollment reporting could result in incorrect future eligibility for undergraduate aid, as well as impact future subsidy loss or protection related to the 150% limit. Cause: The University established new School of Law degree programs in 2021. Changes were made to the University?s systems and processes around enrollment reporting to accommodate the new programs, which resulted in some students? graduations going unreported. Repeat finding: This is not a repeat finding. Recommendation: We recommend that the University develop additional procedures to monitor the accuracy of information provided by its third-party servicer on behalf of the University to NSLDS. One additional monitoring control could be to review a sample of students within NSLDS after each roster file response to ensure that the enrollment status is accurate. Each institution has access to correct information directly within NSLDS at any time. Views of responsible officials and planned corrective actions: The University agrees with the finding and has correctly reflected the two students? status in NSLDS. The University has also established two new procedures including 1) staff will compare its NSC degree verify reporting to internal degree conferral count reports, and 2) the quality assurance team will add new steps to its monthly process to include review of degree-conferred students for three months.

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