THE CORPORATION OF GONZAGA UNIVERSITYHigher Education

III. Federal Awards Findings and Questioned Costs FINDING 2025‐001 – Special Tests and Provisions – Enrollment Reporting Significant Deficiency in Internal Control over Compliance Student Financial Assistance Cluster U.S. Department of Education Assistance Listing Number: 84.063,84.268, Federal Program Name: Student Financial Assistance Cluster Award Year: 2024-25 Criteria: Pell Grant, Section 34 CFR Section 690.83(b) (2) An institution shall submit, in accordance with deadline dates established by the Secretary (Secretary of the Department of Education), through publication in the Federal Register, other reports and information the Secretary requires and shall comply with the procedures the Secretary finds necessary to ensure that the reports are correct. Direct Loan, Section 34 CFR Section 685.309(b) (2) Unless the institution 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 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. Condition and context: A sample of 35 students who possessed status changes during the year were selected for our testing procedures. Our sample was selected using a random and judgmental sampling methodology, from a population of 865 total status changes. Student record changes were compared to updated enrollment reports sent to the Secretary. We noted that of 35 students sampled and tested, three student withdrawals and one graduated student were not reported timely. We did not expand our sample. Questioned costs: None Effect: The University did not report all student status changes in a timely manner. This information is utilized by the Department of Education, the Federal Direct Loan program, lenders, and other institutions to determine in‐school status. Cause: A reconciliation process has not been designed or implemented to ensure that all status changes have been captured from the system of record to the National Student Loan Data System (NSLDS). Repeat finding: Yes, 2024-001. Recommendation: We recommend the University implements a reconciliation between the system of record and the reporting system to ensure all student changes (enrollment status and address changes) are reported on a timely basis.

FINDING 2025‐002 – Special Tests and Provisions – Return of Title IV Funds Significant Deficiency in Internal Control over Compliance Student Financial Assistance Cluster U.S. Department of Education Assistance Listing Numbers: 84.007, 84.063, 84.268, 84.379, Federal Program Name: Student Financial Assistance Cluster Award Year: 2024-2025 Criteria: Per 34 CFR §§ 682.605 and 685.305, institutions participating in Title IV programs are required to determine the withdrawal date of a student who has unofficially withdrawn no later than 30 days after the earlier of the following: • The end of the payment period or period of enrollment, • The end of the academic year, or • The end of the student’s educational program. This requirement applies to both attendance-taking and non-attendance-taking institutions. While the method for determining the withdrawal date may differ (e.g., based on the last academically related activity), the timeframe for identifying the unofficial withdrawal remains consistent. In addition, under 34 CFR §668.22, institutions are responsible for calculating the amount of earned Title IV aid based on the student’s withdrawal date. If the student did not earn 100% of the aid disbursed, the unearned portion must be returned by the institution within the timelines prescribed by federal regulations. Condition and Context: A sample of 14 students who withdrew during the year and were recipients of Title IV funding were selected for testing. Our sample was selected using a random and judgmental sampling methodology, from a population of 91 total withdrawals. Two of the unofficial withdrawal students selected for testing we’re not identified as unofficial withdrawals for approximately 88 and 102 days after the last day or the related term which is considered late. Once identified by the University, the calculation was performed, and the funds were returned to the Department of Education in the amount of $9,975. Questioned costs: No Effect: The University did not identify and report unofficial withdrawals within the required timeframe. As a result, the students’ enrollment statuses may have been inaccurately reflected in reporting systems used by the Department of Education, the Federal Direct Loan Program, loan servicers, and other institutions. This could lead to additional delayed return of title IV funds and potential noncompliance with federal financial aid regulations. Cause: The University’s current processes for identifying unofficial withdrawals was not designed to ensure timely detection and reporting within the federally required timeframe. Repeat finding: No Recommendation: We recommend the University enhance its monitoring and review procedures to ensure that all unofficial withdrawals are identified and reported within the federally required timeframe. Strengthening this process will support timeliness of federal compliance.

III. Federal Awards Findings and Questioned Costs FINDING 2024‐001 – Special Tests and Provisions – Enrollment Reporting Significant Deficiency in Internal Control over Compliance Student Financial Assistance Cluster U.S. Department of Education Assistance Listing Number: Various Federal Program Name: Student Financial Assistance Cluster Award Year: 2023-24 Criteria: Pell Grant, Section 34 CFR Section 690.83(b) (2) An institution shall submit, in accordance with deadline dates established by the Secretary (Secretary of the Department of Education), through publication in the Federal Register, other reports and information the Secretary requires and shall comply with the procedures the Secretary finds necessary to ensure that the reports are correct. Direct Loan, Section 34 CFR Section 685.309(b) (2) Unless the institution 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 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. Condition and context: A sample of 35 students who possessed status changes during the year were selected for our testing procedures. Our sample was selected using a random and judgmental sampling methodology, from a population of 937 total status changes. Student record changes were compared to updated enrollment reports sent to the Secretary. We noted that the process for reporting conferrals did not take place regularly in the summer months. We noted that of 35 students sampled and tested, one student was reported 2 days late. Upon further investigation we determined that internal controls were not in place and operating effectively to timely report students who graduated during the various summer sessions. We did not expand our sample. Questioned costs: None Effect: The University did not regularly report conferrals in the summer, and as such the status change was not reported timely on the updated enrollment submittals. This information is utilized by the Department of Education, the Federal Direct Loan program, lenders, and other institutions to determine in‐school status. Cause: This occurred because the process in place was not designed effectively to report summer conferrals in time to meet the reporting requirement deadline. Repeat finding: No. Recommendation: We recommend the University implements a process to ensure graduates for all semesters/terms are reported timely.

FINDING 2024‐002 – Special Tests and Provisions – Return of Title IV Funds Significant Deficiency in Internal Control over Compliance Student Financial Assistance Cluster U.S. Department of Education Assistance Listing Numbers: Various Federal Program Name: Student Financial Assistance Cluster Award Year: 2023-24 Criteria: Per 34 CFR Section 668.22, when a student withdraws from an institution before completion of their current academic period and is determined as having not earned 100 percent of their received Title IV assistance, an institution must return the total amount of unearned Title IV assistance received from withdrawn students. The amount of title IV grant or loan assistance that is earned by the student is calculated by determining the percentage of title IV grant or loan assistance that has been earned by the student and applying this percentage to the total amount of title IV grant or loan assistance that was disbursed to the student for the payment period or period of enrollment as of the student's withdrawal date. Unearned funds returned by the institution, or the student, must be credited to outstanding balances on title IV loans made to the student for the payment period or period of enrollment for which a return of funds is required. Those funds must be credited to outstanding balances for the payment period or period of enrollment for which a return of funds is required in the following order: - Unsubsidized Federal Direct Stafford loans, - Subsidized Federal Direct Stafford loans, - Federal Direct PLUS received on behalf of the student. If unearned funds remain to be returned after repayment of all outstanding loan amounts, the remaining excess must be credited to any amount awarded for the payment period or period of enrollment for which a return of funds is required in the following order: - Federal Pell Grants, - Iraq and Afghanistan Service Grants, - FSEOG Program aid, - TEACH Grants. Condition and Context: A sample of 12 students who withdrew during the year and were recipients of Title IV funding were selected for testing. Our sample was selected using a random and judgmental sampling methodology, from a population of 100 total withdrawals. Student records were compared to the calculation of the return of Title IV funds (R2T4). We noted that the review of the R2T4 calculation had not taken place consistently, and therefore the amount returned to Title IV was not calculated correctly. This resulted in additional funding of $625 returned by the institution to the Department of Education. Questioned costs: No Effect: An error in the calculation of the R2T4 funds was not caught and resulted in a return greater than required. Cause: The review process in place was not designed effectively to catch errors prior to the return of Title IV funds and ensure accuracy in the calculation. Repeat finding: No Recommendation: We recommend the University design and implement a robust review process of all R2T4 calculations for official and unofficial withdrawals. This will help ensure the accuracy of the calculation before the return of funding.