The Reed Institute

Federal program and specific federal award identification Federal program: COVID-19-Education Stabilization Fund-Higher Education Emergency Relief Fund (HEERF) Assistance listing number: 84.425E ? Student Aid Portion Federal Agency: United States Department of Education Pass-through entity: None Grant ID number: P425E202283 Federal Award Year ended: June 30, 2022 Criteria or specific requirement Quarterly Public Reporting for Student Aid Portion (Assistance Listings 84.425E) Section 18004(e) of the CARES Act requires each institution that received funds under Section 18004 to ?submit a report to the Secretary, at such time and in such manner as the Secretary may require.? For the year ended June 30, 2022, institutions were required to post a report every calendar quarter, with the first calendar quarter report due by October 10, 2020, and covering the period from after their last 45-day or 30-day report through the end of the calendar quarter on September 30, 2020. 2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internal control over the Federal award to provide reasonable assurance that they are managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition found For one of the four quarters inspected (Q1 - 2022), the College did not have the required control procedures to ensure the HEERF student aid portion reporting was reviewed and posted to the College?s website timely. The College did not document when student aid reporting was reviewed and posted to the College?s website, so we are unable to determine the timeliness of the submission. Cause The College did not have adequate internal controls in place related to reporting requirements for the HEERF program student award portion. Possible effect Federal oversight agencies, including the Department of Education, depend on accurate reports to measure program results and institutional compliance with federal requirements. By failing to have an appropriately designed and implemented review control over the HEERF student aid portion reporting in place, the College could have material non-compliance with the requirements of the HEERF Certification and agreement. Identification of questioned costs and how they were computed None. Whether the sampling was a statistically valid sample The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding is a repeat of a finding in the immediately prior audit and, if so, the applicable prior year finding number Yes. Finding 2021-001. Finding 2022-001 had already occurred when finding 2021-001 was identified. Recommendations The College should strengthen its internal controls over HEERF reporting requirements for the Student Aid portion of the grant by developing and documenting a formalized review process, including documentation of the date reporting was uploaded to the College?s website, for the student award reporting. Views of responsible officials The following corrective measures have been implemented: The Director of Financial Aid requests the amounts and number of students who received HEERF funding from the Business Office at the end of each quarter and reviews, confirms, and documents the date of request and review. A log of the website updates is maintained to document timely submission of data. The website was revamped to include all necessary reporting requirements including the number of eligible students for CRSSA HEERF II and ARP HEERF III. This updated process was implemented upon identification of the prior year finding, which occurred after the first quarterly report for fiscal year 2022 was posted."

Federal program and specific federal award identification: Federal program: Student Financial Aid Cluster CFDA: 84.268 - Federal Direct Student Loans Federal Agency: United States Department of Education Pass-through entity: None Grant ID number: None Federal Award Year ended: June 30, 2021 Criteria or specific requirement Disbursements to or on behalf of students: Pursuant to 34 CFR ? 668.165 Notices and authorization (a) Notices, Section 1, Before an institution disburses title IV, HEA program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each title IV, HEA program, and how and when those funds will be disbursed. If those funds include Direct Loan program funds, the notice must indicate which funds are from subsidized loans, which are from unsubsidized loans, and which are from PLUS loans. Pursuant to 34 CFR ? 668.165 Notices and authorization (a) Notices, Section 2(ii) and (iii), if an institution credits a student ledger account with Direct Loan, the institution must notify the student or parent in writing of the student?s right, or parent?s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan and the procedures and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Condition found: The College does not have a secondary review control in place to ensure notifications related to loan disbursements are sent to all students. We selected a sample of 40 students with financial aid disbursements. Out of our sample, management was unable to produce evidence of the notification of the right to cancel for direct loans for 1 student and the notification of disbursement related to 4 PLUS loan disbursements. The total number of students identified with missing notifications in our sample was 4 (one student had both a direct loan and PLUS loan with missing notifications). Management subsequently performed a review of the total student population and identified 4 additional students where evidence that the right to cancel notification was provided to the student was missing. The total affected students with identified missing notifications was 8. For 6 affected students with a missing Spring notification, the required notifications were sent in the Fall disbursement so the students had access to information regarding their loan cancellation rights from the earlier notice. All affected students used affirmative consent to accept their loans, and were provided with the loan terms and conditions as part of this process, which included information on their loans and their rights. Cause: The College?s control failed in detecting it did not send the required notifications to the student in the required timeframe with the required information. Possible effect: As a result of the control failure, 5 students were not provided with the required right to cancel notification. The students had access to information regarding these rights in the Fall disbursement notices and/or the terms and conditions of the loans. As a result of the control failure, 4 students were not provided with required notification of disbursement of PLUS loans. The students and their parents were provided information related to their PLUS loans as part of the the award letter and the affirmative consent process. While these exceptions were not considered material to the compliance requirement, without an appropriate control in place, the College could have material non-compliance with notification requirements. Identification of questioned costs and how they were computed: None reported. Whether the sampling was a statistically valid sample: The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding is a repeat of a finding in the immediately prior audit and, if so, the applicable prior year finding number: No. Recommendations We recommend that the College modify its internal controls to add add a secondary review of the processing of direct loan PLUS loan disbursements to ensure that all required information and notifications were generated and sent to the student or parent. Views of responsible officials: The College has created an updated ?right to cancel? report that is being run weekly by a financial aid counselor who sends the right to cancel email via Banner to the appropriate students and then adds the right to cancel code in RUAMAIL for documentation. Recipients of Parent PLUS Loans are sent the right to cancel email notification via a separate mail merge process. Those emails are then saved to the College?s electronic documentation system, and a RUAMAIL code is also added for documentation. As a quality assurance measure, the associate director runs an audit report every other week to make sure no students that should be receiving the right to cancel email have been missed. If any students are identified during that audit process, the financial aid counselor is notified of the student who still needs to receive the right to cancel notification in order to process it within the appropriate time frame.

Federal program and specific federal award identification: Federal program: COVID-19-Education Stabilization Fund-Higher Education Emergency Relief Fund (HEERF) CFDA: 84.425E ? Student Aid Portion Federal Agency: United States Department of Education Pass-through entity: None Grant ID number: P425E202283 Federal Award Year ended: June 30, 2021 Criteria or specific requirement: Reporting ? Section 18004(a)(1) Student Aid Portion Quarterly Public Reporting ? 85 FR 53802. Section 18004(e) of the CARES Act requires each institution that received funds under Section 18004 to ?submit a report to the Secretary, at such time and in such manner as the Secretary may require.? This reporting, as stated in the Certificate and Agreement, was due 30 days from the date of the Certification and Agreement and every 45 days thereafter. The DOE subsequently clarified the reporting requirements through its issuance of an Electronic Announcement (EA) on May 6, 2020, which specified that the information must be posted ?in a location that is easily accessible to the public.? The EA also clarified the reporting timeframe to be ?30 days after the date when the institution received its allocation under the CARES Act and updated every 45 days thereafter.? On August 31, 2020, the Department of Education revised the EA by changing the frequency of reporting after the initial 30-day period from every 45 days thereafter to every calendar quarter. Grantees posting a 45-day report on or after August 31, 2020, should instead post a report every calendar quarter, with the first calendar quarter report due by October 10, 2020, and covering the period from after their last 45-day or 30-day report through the end of the calendar quarter on September 30, 2020. On May 13, 2021, the Department of Education published an additional notice for student aid public reporting under CRRSAA and ARP, which requires that institutions publicly post certain information on their website. Institutions must publicly post their report as soon as possible, but no later than 30 days after the publication of the notice or 30 days after the date ED first obligated funds under HEERF I, II, or III to the institution for Emergency Financial Aid Grants to Students, whichever comes later. The report must be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). 2 CFR 200.303(a) requires that non-Federal entities receiving Federal awards establish and maintain effective internal control over the Federal award to provide reasonable assurance that they are managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition found: The College did not have the required control procedures to ensure the HEERF student aid portion reporting was reviewed and posted to the College?s website timely. The College did not document when student aid reporting was reviewed and posted to the College?s website, so we are unable to determine the timeliness of submissions. Cause: The College did not have adequate internal controls in place related to reporting requirements for the HEERF program student award portion. Possible effect: Federal oversight agencies, including the Department of Education, depend on accurate reports to measure program results and institutional compliance with federal requirements. By failing to have an appropriately designed and implemented review control over the HEERF student aid portion reporting in place, the College could have material non-compliance with the requirements of the HEERF Certification and agreement. Identification of questioned costs and how they were computed: None. Whether the sampling was a statistically valid sample: The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding is a repeat of a finding in the immediately prior audit and, if so, the applicable prior year finding number: No. Recommendations: The College should strengthen its internal controls over HEERF reporting requirements for the Student Aid portion of the HEERF grant by developing and documenting a formalized review process, including documentation of the date reporting was uploaded to the College?s website, for the student award reporting. Views of responsible officials: The following corrective measures have been or are currently in the implementation process: The Director of Financial Aid will request amounts and number of students who received HEERF funding from the Business Office at the end of each quarter (1st quarter: January-March; 2nd quarter: April-June; 3rd quarter: July-September; and 4th quarter, October-December) and will review, confirm, and document the date of request and review. A log of the website updates will be maintained to document timely submission of data. The College is in the process of converting the 45 day submission format to quarterly and will be retroactively posting and submitting a Q3 report and will adhere to the quarterly reporting schedule going forward. The website is being revamped to include all necessary reporting requirements including the number of eligible students for CRSSA HEERF II and ARP HEERF III.

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