WESTERN SEMINARY

Untimely Returns of Title IV Funds (R2T4)Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: When students withdrew whether officially or unofficially, the Seminary did not always return unearned Title IV aid timely. Criteria: 34 CFR 668.22 Questioned Costs: $6,096 Context: Out of 5 students who withdrew during the audit period tested 3 had funds returned late. One official withdrawal for summer 2023 had $2,336 returned 35 days late. Two unofficial withdrawals were not performed by the Seminary although the student withdrew before the 60% date for the semester. These two were identified during the audit process and $6,096 were returned in October 2023 resulting in the funds being returned between 106 and 230 days late. All students who withdrew were tested. Cause: The system for R2T4 tracking is not sufficient. High turnover in the Financial Aid department and the new Director of Financial Aid does not have in-depth training on R2T4 tracking or calculations as they are new to the position. Effect: Returned of Title IV funds were not performed timely. Identification as repeat finding, if applicable: 2022-002 Recommendation: We recommend that the Seminary reviews the R2T4 tracking system to make sure all students that withdrawal are being properly tracked along with the last day of attendance. If the tracking system is deemed to be insufficient, we recommend implementing a new tracking system and put in place a procedure to review students with no passing grades and Title IV aid to determine if an R2T4 for an unofficial withdrawal is required. We also recommend that the Seminary set aside appropriate funds and time for the Director of Financial Aid to attend R2T4 training and professional development so they have the the appropriate knowledge and skill to manage R2T4 calculations. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Untimely Returns of Title IV Funds (R2T4) Planned Corrective Action: We agree with this recommendation. We continue strengthening the tracking system around the timely processing of R2T4 refunds. From the Fall 2023 semester, we developed a report within our Student Information System (SIS) to track students who both received a loan and have dropped classes within Western Seminary’s SIS. From the Spring 2024 semester, we require attendance to be tracked in all classes, including in-person classes. We historically already track attendance of online courses. Financial Aid and the Business Office will have access to regularly scheduled reports to quickly identify when students stop attending class to determine whether an R2T4 form is required and should be processed. Person Responsible for Corrective Action Plan: Jonathan Gibson, CFO Anticipated Date of Completion: June 30, 2024

2022-002

Gramm-Leach-Bliley Act (GLBA) Compliance Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: The Seminary did not sufficiently comply with the updated requirements of GLBA. Criteria: 16 CFR 314.4 Questioned Costs: $0 Context: The Seminary has not: 1) sufficiently documented its security risk assessment and safeguards, including an application-specific assessment 2) implemented multi-factor authentication on all systems containing personally identifiable information (PII) 3) implemented ongoing vendor management policies and reviews 4) implemented an incident response plan that addresses all requirements 5) provided a written, annual report to the board 6) updated employee training in light of the revised regulations from June 2023 7) updated its written information security program to address all components that went into effect in June 2023 Cause: The Seminary has not allocated sufficient resources to address and document compliance with the requirements of GLBA. Effect: The Seminary has not adequately addressed the requirements of GLBA, which may lead to unintended exposure of student information to security risks. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend the Seminary allocate sufficient resources to address all requirements of GLBA. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Gramm-Leach-Bliley Act (GLBA) Compliance Planned Corrective Action We are updating our data security policies and procedures to correct the deficiencies that have been identified in our audit and to prevent their recurrence. We are also expanding our employee training in data security and are enhancing the documentation and reporting of our internal security audits. Person Responsible for Corrective Action Plan: Sean Gordon, Director of Information Technology Operations and Software Development Anticipated Date of Completion: June 30, 2024

Return of Title IV (R2T4) Calculations Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Direct Student Loans Federal Award Identification #: 2021-22 Financial Aid Year Condition: When students withdrew unofficially, the Seminary did not always return unearned Title IV aid. Criteria: 34 CFR 668.22 Questioned Costs: $1,207 Context: Out of 7 students tested for withdrawals, 1 unofficial withdrawal did not have a return calculation initially performed. This student is in the process of being corrected. Cause: This was due to the Seminary evaluating the last date of attendance based on the first absence instead of the last active date of participation. This student's last date of participation was just before the 60% mark of the semester. Effect: A return of loans was not initially completed for one student. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend the Seminary run a 0-credit report be run at the end of each semester to ensure all unofficial withdrawals are followed up on so that R2T4's are completed timely when required. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Return of Title IV (R2T4) Calculations Planned Corrective Action: Upon the current finding of deficient Return of Title IV practices, the Western Seminary Financial Aid office will seek to make three substantial changes to its operational practices, integrate a master calendar integrating processing R2T4, institute standard practices in pulling withdraw data and create a training emphasis around R2T4. First, the Western Seminary Financial Aid Office will see to institute and integrate a Financial Aid Master calendar. This calendar will dictate when withdraw (0-credit) reports will be pulled for an evaluation to assess if a Return to Title IV is necessary. Secondly, the Financial Aid office will implement a standard procedure where the date of last participation is pulled from within the WISE system. The last date of participation data standard will be recorded and updated in the FA Policy and Procedures manual. Thirdly, the Financial Aid office will emphasize training on R2T4 with Attain consulting. Person Responsible for Corrective Action Plan: Matthew Jolley, Director of Financial Aid Anticipated Date of Completion: 06/2023

Incorrect and Late Enrollment Reporting to National Student Loan Data System (NSLDS) DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Direct Student Loans Federal Award Identification #: 2021-22 Financial Aid Year Condition: The NSLDS enrollment status effective date for withdrawals was not accurately sent to NSLDS from the system. Additionally, 4 of 63 submissions to NSLDS were not responded to within 15 days of receiving an error report. Criteria: 34 CFR 685.309 Questioned Costs: $-0- Context: Out of 7 students tested, 2 students had incorrect effective dates reported for their enrollment status. All of these students were official and unofficial withdrawals. On the 4 late responses to NSLDS, the number of days late ranged from 1-2 days. Cause: The field being pulled for NSLDS enrollment reporting did not accurately capture official withdrawals and the last date of participation for unofficial withdrawals. Effect: Inaccurate reporting can impact a student?s loan grace period in school deferment eligibility, beginning loan repayments, appropriate interest charges, etc. Identification as repeat finding, if applicable: Not applicable Recommendation: We recommend the Seminary put a system in place to ensure that the date being reported to NSLDS as the effective date of withdrawal is the actual last date of attendance for the student, that the Seminary is responding to errors within 15 days, and that the Seminary is completing spot checks of enrollment statuses to NSLDS. This may include working with National Student Clearinghouse. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Incorrect and Late Enrollment Reporting to National Student Loan Data System (NSLDS) Planned Corrective Action: Upon the current finding of incorrect enrollment reporting to NSLDS, the Western Seminary Financial Aid office will seek to make three changes to its operational practices; integrating NSLDS reporting into a master calendar, institute standard practices in pulling withdraw data and create a training emphasis around proper withdraw practices. Person Responsible for Corrective Action Plan: Matthew Jolley, Director of Financial Aid Anticipated Date of Completion: 06/2023