Northwest UniversityNon-Profit

Significant deficiency in internal controls over compliance with cash management requirements. Federal Agency: U.S. Department of Education Program Title: Federal Supplemental Educational Opportunity Grants Assistance Listing Number: 84.007 Award Period: 2024-25 Criteria Per 34 CFR 668.162, under the advance payment method, an institution must disburse funds requested from the Department of Education (ED) no later than three days following the date the institution received those funds. ED allows an institution to retain, for up to seven days, excess cash that does not exceed one percent of the total amount of funds drawn by the institution in the prior award year. The institution must return to ED any excess cash over the tolerable amount (one percent) and any amount remaining after the tolerance period (seven days). Condition/Context for Evaluation The University drew down $72,265 in Federal Supplemental Educational Opportunity Grants (FSEOG) funds in October 2024 and disbursed funds to students through January 2025. No amounts were disbursed to students within the required three business days from receipt of funds, and no funds were returned to ED. Effect or Potential Effect This occurred as a result of lack of understanding of cash management requirements for FSEOG funds and resulted in the University holding excess cash that should have been returned to ED beyond the tolerance period. All funds were ultimately appropriately disbursed to students, and error was only an issue for FSEOG funds. Questioned Costs $72,265 Repeat Finding Not applicable. Recommendation We recommend that the University review cash disbursement requirements, and implement control process for FSEOG funds to ensure timely disbursements to students. Views of Responsible Officials Management concurs with the finding and has provided the accompanying corrective action plan.

Significant deficiency in internal controls over compliance with Return of Title IV funds requirements. Federal Agency: U.S. Department of Education Program Title: Federal Pell Grant Program, Federal Direct Student Loans, Federal Supplemental Educational Opportunity Grants, Federal Work-Study Program, Teacher Education Assistance for College and Higher Education Grants Assistance Listing Number: 84.268, 84.063, 84.379, 84.007, 84.033 Award Period: 2024-25 Criteria Per 34 CFR 668.22, an institution must return the amount of Title IV funds for which it is responsible as soon as possible but no later than 45 days after the date of the institution’s determination that the student withdrew. Condition/Context for Evaluation For the population of students who received federal financial aid during the 2024-2025 fiscal year and for whom a Return of Title IV funds was required, we selected a sample of six students. We noted that for two of the six sampled students, funds were returned to ED more than 45 days after the date the University determined the student had withdrawn. For one selection, a Return of Title IV calculation was performed timely, but an administrative error caused the disbursement to be delayed eight months. For the second selection, the University was notified of withdrawal in early March 2025 and student was included in registrar’s withdrawal listing, but was missed in review by Student Financial Services until late April 2025. Effect or Potential Effect Both exceptions were the result of administrative errors with resulted in delayed return of Title IV funds to ED. Questioned Costs None. Repeat Finding Not applicable. Recommendation We recommend that the University further educate and train those involved in the reporting and disbursement of the return of Title IV funds. We also recommend that the University review their documented policies and procedures to ensure controls exist and are well documented to ensure funds are returned timely. Views of Responsible Officials Management concurs with the finding and has provided the accompanying corrective action plan

Finding 2019-001 Significant deficiency in internal control and compliance with enrollment reporting criteria requirement. Federal Agency: U.S. Department of Education Program Title: Federal Direct Student Loans CFDA Number: 84.268, 84.063 Award Period: June 1, 2018 - May 31, 2019 Criteria A student?s enrollment status determines eligibility for in-school status, deferment, and grace periods, as well as for the payment of interest subsidies to FFEL Program loan holders by the Department of Education. Enrollment Reporting in a timely and accurate manner is critical for effective management of the programs. Institutions are responsible for timely reporting, whether they report directly or via a third-party servicer (FFEL, 34 CFR section 682.610; Direct Loan, 34 CFR section 685.309). Internal controls over compliance with Department of Education enrollment reporting criteria should include internal controls that prevent, or detect and correct, inaccurate and untimely reporting as defined in FFEL, 34 CFR section 682.610; Direct Loan, 34 CFR section 685.309. Condition/Context The University reports to the National Student Loan Data System (NSLDS) changes in enrollment status for students every month. The process for ensuring timely and accurate submissions relies on a single individual creating a report, reviewing the report for errors, and uploading the data to NSLDS. Of the 40 students tested, we noted two students whose graduations were not reflected on the NSLDS Website, even though they had graduated in the January-February 2019 time frame. Questioned Costs None. Cause Each month, a file with enrollment status updates is sent to Clearinghouse by the Registrar?s office. Additionally, a file generated by using filters within PowerCampus is sent to Clearinghouse by the Registrar?s office. The information from these two files is sent from Clearinghouse to the NSLDS website and updates are reflected within the NSLDS website. The two students noted in our testing were not included as graduated within either file sent to Clearinghouse, and as such the NSLDS website was not updated and the students were still listed as enrolled. Effect or Potential Effect The two errors noted above resulted in inaccurate enrollment statuses that could affect determining eligibility for in-school status, deferment, and grace periods, as well as for the payment of interest subsidies to FFEL Program loan holders by the Department of Education.Repeat Finding This is not a repeat finding as no similar finding was noted in the prior year Single Audit of the University. Recommendation We recommend that management implement internal controls over enrollment reporting that include a review of the submission spreadsheet before it is submitted to NSLDS by an individual other than the person preparing the report. Furthermore, we recommend that the process be reviewed for potential flaws in the filters used to create the files sent to Clearinghouse to ensure accuracy. Management?s Response Please see attached response from Management.

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