University of Western StatesHigher Education

Finding 2024-001: Eligibility – Determining Federal Direct Student Loan Awards Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $20,593,109 Questioned Costs: $119,443 Criteria: Per 34 CFR 685.203(b)(iii), in the case of a graduate or professional student for a period of enrollment beginning on or after July 1, 2012, the total amount the student may borrow for any academic year of study under the Unsubsidized Loan program may not exceed $8,500. Per 34 CFR 685.203(c)(2)(v), the additional amount that a student described in paragraph (c)(1)(i) of this section may borrow under the Federal Direct Unsubsidized Loan Program for any academic year of student may not exceed the following: in the case of a graduate or professional student, $12,000. Condition: During testing of eligibility, six out six students selected for testing within the Doctor of Naturopathic Program were overawarded Federal Direct Unsubsidized Loans, noting this encompasses all students within the program. Eligibility testing was performed over 40 other students with no exceptions. We determined that UWS improperly awarded 6 out of 6 students Federal Direct Unsubsidized Loans in excess of the maximum amount for one academic year of $20,500. The total overawards accumulated to $119,443 in total loan funds. Cause: The students were awarded the higher annual Federal Direct Unsubsidized Loan limits for certain graduate and professional health professions students. Schools may award the increased unsubsidized amounts to students who are enrolled at least half time in certain health professions programs. The programs must be accredited by specific accrediting agencies for students to qualify for additional unsubsidized loan amounts. The UWS Naturopathic Medicine Doctoral program has not yet achieved the required accreditation from The Council on Naturopathic Medical Education. Effect: UWS is required to return overawarded funds to the Department of Education in accordance with Department guidelines. Noncompliance with federal guidelines could impact future funding. Questioned Costs: $119,443 Context: Six out six students subject to eligibility testing within the Doctor of Naturopathic Medicine program were overawarded Federal Direct Unsubsidized Loans in excess of the maximum allowed amount of $20,500 for an academic period. Eligibility testing was performed over forty other students with no errors. Management detected the overaward subsequent to year-end, but prior to the start of the audit and informed RSM of the error. Repeat Finding: No. Recommendation: We recommend UWS strengthen internal controls around the establishing of financial aid award limits. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.

Finding 2024-001: Eligibility – Determining Federal Direct Student Loan Awards Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $20,593,109 Questioned Costs: $119,443 Criteria: Per 34 CFR 685.203(b)(iii), in the case of a graduate or professional student for a period of enrollment beginning on or after July 1, 2012, the total amount the student may borrow for any academic year of study under the Unsubsidized Loan program may not exceed $8,500. Per 34 CFR 685.203(c)(2)(v), the additional amount that a student described in paragraph (c)(1)(i) of this section may borrow under the Federal Direct Unsubsidized Loan Program for any academic year of student may not exceed the following: in the case of a graduate or professional student, $12,000. Condition: During testing of eligibility, six out six students selected for testing within the Doctor of Naturopathic Program were overawarded Federal Direct Unsubsidized Loans, noting this encompasses all students within the program. Eligibility testing was performed over 40 other students with no exceptions. We determined that UWS improperly awarded 6 out of 6 students Federal Direct Unsubsidized Loans in excess of the maximum amount for one academic year of $20,500. The total overawards accumulated to $119,443 in total loan funds. Cause: The students were awarded the higher annual Federal Direct Unsubsidized Loan limits for certain graduate and professional health professions students. Schools may award the increased unsubsidized amounts to students who are enrolled at least half time in certain health professions programs. The programs must be accredited by specific accrediting agencies for students to qualify for additional unsubsidized loan amounts. The UWS Naturopathic Medicine Doctoral program has not yet achieved the required accreditation from The Council on Naturopathic Medical Education. Effect: UWS is required to return overawarded funds to the Department of Education in accordance with Department guidelines. Noncompliance with federal guidelines could impact future funding. Questioned Costs: $119,443 Context: Six out six students subject to eligibility testing within the Doctor of Naturopathic Medicine program were overawarded Federal Direct Unsubsidized Loans in excess of the maximum allowed amount of $20,500 for an academic period. Eligibility testing was performed over forty other students with no errors. Management detected the overaward subsequent to year-end, but prior to the start of the audit and informed RSM of the error. Repeat Finding: No. Recommendation: We recommend UWS strengthen internal controls around the establishing of financial aid award limits. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.

Finding 2024-002: Special Tests: Enrollment Reporting – Improper Reporting of Withdrawal Date Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $20,593,109 Questioned Costs: $0 Criteria: Per the National Student Loan Data System (NSLDS) enrollment reporting guide (Section 4.4.3) when a student withdraws during a term, the effective date for the withdrawn status is the withdrawal date used by the Institution in accordance with 34 CFR 668.22. Condition: During our enrollment testing, we noted that the effective date of withdrawal in NSLDS for 3 students tested was incorrectly listed as the date of determination by UWS instead of the withdrawal date determined in accordance with 34 CFR 668.22. Internal controls in place did not identify the errors. Cause: Three students with incorrect enrollment reporting dates were due to the student’s out of school status treated by the relevant University department as an unofficial withdrawal instead of an official withdrawal for enrollment reporting purposes. The Dates of Determination were therefore used incorrectly. Effect: Incorrect enrollment reporting could impact a student’s repayment period. Noncompliance with federal guidelines could impact future funding. Questioned Costs: $0 Context: 3 out of a total of 24 students tested for enrollment reporting in NSLDS had an incorrect date listed as the effective date of the student’s enrollment status. No other exceptions were noted in our enrollment testing. Repeat Finding: No. Recommendation: We recommend UWS review their policies and internal controls around NSLDS reporting of the withdrawal date to ensure compliance with the regulations. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.

Finding 2024-002: Special Tests: Enrollment Reporting – Improper Reporting of Withdrawal Date Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $20,593,109 Questioned Costs: $0 Criteria: Per the National Student Loan Data System (NSLDS) enrollment reporting guide (Section 4.4.3) when a student withdraws during a term, the effective date for the withdrawn status is the withdrawal date used by the Institution in accordance with 34 CFR 668.22. Condition: During our enrollment testing, we noted that the effective date of withdrawal in NSLDS for 3 students tested was incorrectly listed as the date of determination by UWS instead of the withdrawal date determined in accordance with 34 CFR 668.22. Internal controls in place did not identify the errors. Cause: Three students with incorrect enrollment reporting dates were due to the student’s out of school status treated by the relevant University department as an unofficial withdrawal instead of an official withdrawal for enrollment reporting purposes. The Dates of Determination were therefore used incorrectly. Effect: Incorrect enrollment reporting could impact a student’s repayment period. Noncompliance with federal guidelines could impact future funding. Questioned Costs: $0 Context: 3 out of a total of 24 students tested for enrollment reporting in NSLDS had an incorrect date listed as the effective date of the student’s enrollment status. No other exceptions were noted in our enrollment testing. Repeat Finding: No. Recommendation: We recommend UWS review their policies and internal controls around NSLDS reporting of the withdrawal date to ensure compliance with the regulations. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.

Finding 2024-001: Eligibility – Determining Federal Direct Student Loan Awards Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $20,593,109 Questioned Costs: $119,443 Criteria: Per 34 CFR 685.203(b)(iii), in the case of a graduate or professional student for a period of enrollment beginning on or after July 1, 2012, the total amount the student may borrow for any academic year of study under the Unsubsidized Loan program may not exceed $8,500. Per 34 CFR 685.203(c)(2)(v), the additional amount that a student described in paragraph (c)(1)(i) of this section may borrow under the Federal Direct Unsubsidized Loan Program for any academic year of student may not exceed the following: in the case of a graduate or professional student, $12,000. Condition: During testing of eligibility, six out six students selected for testing within the Doctor of Naturopathic Program were overawarded Federal Direct Unsubsidized Loans, noting this encompasses all students within the program. Eligibility testing was performed over 40 other students with no exceptions. We determined that UWS improperly awarded 6 out of 6 students Federal Direct Unsubsidized Loans in excess of the maximum amount for one academic year of $20,500. The total overawards accumulated to $119,443 in total loan funds. Cause: The students were awarded the higher annual Federal Direct Unsubsidized Loan limits for certain graduate and professional health professions students. Schools may award the increased unsubsidized amounts to students who are enrolled at least half time in certain health professions programs. The programs must be accredited by specific accrediting agencies for students to qualify for additional unsubsidized loan amounts. The UWS Naturopathic Medicine Doctoral program has not yet achieved the required accreditation from The Council on Naturopathic Medical Education. Effect: UWS is required to return overawarded funds to the Department of Education in accordance with Department guidelines. Noncompliance with federal guidelines could impact future funding. Questioned Costs: $119,443 Context: Six out six students subject to eligibility testing within the Doctor of Naturopathic Medicine program were overawarded Federal Direct Unsubsidized Loans in excess of the maximum allowed amount of $20,500 for an academic period. Eligibility testing was performed over forty other students with no errors. Management detected the overaward subsequent to year-end, but prior to the start of the audit and informed RSM of the error. Repeat Finding: No. Recommendation: We recommend UWS strengthen internal controls around the establishing of financial aid award limits. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.

Finding 2024-001: Eligibility – Determining Federal Direct Student Loan Awards Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $20,593,109 Questioned Costs: $119,443 Criteria: Per 34 CFR 685.203(b)(iii), in the case of a graduate or professional student for a period of enrollment beginning on or after July 1, 2012, the total amount the student may borrow for any academic year of study under the Unsubsidized Loan program may not exceed $8,500. Per 34 CFR 685.203(c)(2)(v), the additional amount that a student described in paragraph (c)(1)(i) of this section may borrow under the Federal Direct Unsubsidized Loan Program for any academic year of student may not exceed the following: in the case of a graduate or professional student, $12,000. Condition: During testing of eligibility, six out six students selected for testing within the Doctor of Naturopathic Program were overawarded Federal Direct Unsubsidized Loans, noting this encompasses all students within the program. Eligibility testing was performed over 40 other students with no exceptions. We determined that UWS improperly awarded 6 out of 6 students Federal Direct Unsubsidized Loans in excess of the maximum amount for one academic year of $20,500. The total overawards accumulated to $119,443 in total loan funds. Cause: The students were awarded the higher annual Federal Direct Unsubsidized Loan limits for certain graduate and professional health professions students. Schools may award the increased unsubsidized amounts to students who are enrolled at least half time in certain health professions programs. The programs must be accredited by specific accrediting agencies for students to qualify for additional unsubsidized loan amounts. The UWS Naturopathic Medicine Doctoral program has not yet achieved the required accreditation from The Council on Naturopathic Medical Education. Effect: UWS is required to return overawarded funds to the Department of Education in accordance with Department guidelines. Noncompliance with federal guidelines could impact future funding. Questioned Costs: $119,443 Context: Six out six students subject to eligibility testing within the Doctor of Naturopathic Medicine program were overawarded Federal Direct Unsubsidized Loans in excess of the maximum allowed amount of $20,500 for an academic period. Eligibility testing was performed over forty other students with no errors. Management detected the overaward subsequent to year-end, but prior to the start of the audit and informed RSM of the error. Repeat Finding: No. Recommendation: We recommend UWS strengthen internal controls around the establishing of financial aid award limits. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.

Finding 2024-002: Special Tests: Enrollment Reporting – Improper Reporting of Withdrawal Date Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $20,593,109 Questioned Costs: $0 Criteria: Per the National Student Loan Data System (NSLDS) enrollment reporting guide (Section 4.4.3) when a student withdraws during a term, the effective date for the withdrawn status is the withdrawal date used by the Institution in accordance with 34 CFR 668.22. Condition: During our enrollment testing, we noted that the effective date of withdrawal in NSLDS for 3 students tested was incorrectly listed as the date of determination by UWS instead of the withdrawal date determined in accordance with 34 CFR 668.22. Internal controls in place did not identify the errors. Cause: Three students with incorrect enrollment reporting dates were due to the student’s out of school status treated by the relevant University department as an unofficial withdrawal instead of an official withdrawal for enrollment reporting purposes. The Dates of Determination were therefore used incorrectly. Effect: Incorrect enrollment reporting could impact a student’s repayment period. Noncompliance with federal guidelines could impact future funding. Questioned Costs: $0 Context: 3 out of a total of 24 students tested for enrollment reporting in NSLDS had an incorrect date listed as the effective date of the student’s enrollment status. No other exceptions were noted in our enrollment testing. Repeat Finding: No. Recommendation: We recommend UWS review their policies and internal controls around NSLDS reporting of the withdrawal date to ensure compliance with the regulations. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.

Finding 2024-002: Special Tests: Enrollment Reporting – Improper Reporting of Withdrawal Date Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $20,593,109 Questioned Costs: $0 Criteria: Per the National Student Loan Data System (NSLDS) enrollment reporting guide (Section 4.4.3) when a student withdraws during a term, the effective date for the withdrawn status is the withdrawal date used by the Institution in accordance with 34 CFR 668.22. Condition: During our enrollment testing, we noted that the effective date of withdrawal in NSLDS for 3 students tested was incorrectly listed as the date of determination by UWS instead of the withdrawal date determined in accordance with 34 CFR 668.22. Internal controls in place did not identify the errors. Cause: Three students with incorrect enrollment reporting dates were due to the student’s out of school status treated by the relevant University department as an unofficial withdrawal instead of an official withdrawal for enrollment reporting purposes. The Dates of Determination were therefore used incorrectly. Effect: Incorrect enrollment reporting could impact a student’s repayment period. Noncompliance with federal guidelines could impact future funding. Questioned Costs: $0 Context: 3 out of a total of 24 students tested for enrollment reporting in NSLDS had an incorrect date listed as the effective date of the student’s enrollment status. No other exceptions were noted in our enrollment testing. Repeat Finding: No. Recommendation: We recommend UWS review their policies and internal controls around NSLDS reporting of the withdrawal date to ensure compliance with the regulations. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.

FINDING 2019-002 ? Special Tests and Provisions: Student Status Changes ? Significant Deficiency in Internal Control Over Compliance and Instances of Noncompliance Federal Program: Federal Perkins Loan (CFDA #84.038) Federal Agency: U.S. Department of Education Award Year: 2018-19 Criteria: Under the Perkins Loan Program, schools making Perkins Loans are required to conduct exit counseling. The schools should conduct exit interviews with borrowers either in person, by audiovisual presentation, or by interactive electronic means. There are several required elements of exit counseling, which include a review of terms and conditions of the loan (to include interest rate, grace period and the date the first installment payment will be due), to inform the student as to the average anticipated monthly repayment amount, to suggest debt-management strategies that would facilitate repayment, to emphasize the seriousness and importance of the repayment obligation, and to explain the use of the Master Promissory Note, among other requirements as detailed at 34 CFR 674.42(b). Although many institutions use a third-party service organization to perform this function, the responsibility for exit counseling remains with the institution. Condition: During our testing of Perkins loan repayment, we identified in 1 of the 8 students tested, an exit interview was not performed and a repayment plan was not provided. Questioned costs: None to be reported. Context: As a result of our audit procedures, we noted 1 student who had not received exit counseling for the Perkins loan repayment plan. The third party organization is engaged by the University to provide electronic exit counseling for the Perkins loan program. The exit counseling for the selected student was not performed due to an error in separation date entry at the third party organization. Cause/ Effect: The University inquired of the third party organization as to the cause of the missed interview. The third party organization noted the student was missed due to an employee of the third party organization manually entering the student?s separation date, which bypassed the system controls to flag the student for exit counseling. In order for a repayment plan to generate, the exit counseling must be performed, therefore, the student did not receive the Perkins loan repayment plan. The University has performed an analysis of all Perkins loans in repayment in conjunction with their discussions with the third party organization. There were several previous students that were noted to have not received an exit interview due to the manual entry. Recommendation: We recommend the University routinely reviews the exit counseling performed by the third party organization using the Student Exits listing in order to ensure exit interviews are performed and repayment plans are provided. Views of responsible officials and planned corrective actions: The University has worked with their third party service provider to identify borrowers that did not receive exit counseling or repayment plans. All applicable documents have been generated and provided to the impacted borrowers. The University also implemented a periodic review and cross-reference of students who have received exit counseling through the third party service provider in conjunction with the University?s list of student exits to monitor the third party?s performance of exit counseling. Lastly, the University changed the electronic file upload process with the third party service provider to eliminate the manual data entry processes.