FRESNO PACIFIC UNIVERSITY

Incorrect and Untimely Return of Title IV Funds (R2T4) Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063 Federal Award Identification #: 2023-2024 Award Year Condition: R2T4's were not always performed accurately and timely. Criteria: 34 CFR 668.22 Questioned Costs: $2,509 Context: 3 out of 60 withdrawals tested had incorrect funds returned. For 2 students, the R2T4 was calculated correctly but the University returned $1,177 more of federal direct loans (FDL) than required. 1 R2T4 calculation was missed and completed during the audit resulting in $2,509 of FDL being returned during the audit. Cause: This was an oversight by the University. Effect: Incorrect amounts of federal funding were returned. The one late return was 405 days late. Identification as repeat finding, if applicable: 2023-003 Recommendation: While the University has made significant progress in this area, due to the complexity of the nonstandard term modular program R2T4 calculations, we continue to recommend that a second review and approval of the calculation be completed as part of the R2T4 process. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Need Analysis DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2023-2024 Award Year Condition: Students were over awarded need due to a state grant not being factored into need analysis. Criteria: 34 CFR 685.203 Questioned Costs: $3,295 Context: 1 out of 60 students tested was over awarded need due to an inaccurate need analysis. This resulted in $3,295 awarded as subsidized federal direct loans that should have been awarded as unsubsidized federal direct loans. The student was corrected as part of the audit process. Cause: Because the Golden State Teacher Grant is able to replace EFC, the University had a misunderstanding on how that impacts the federal need analysis for those students. Effect: Students received need based federal aid for which they were not eligible. Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University review all new state and outside scholarships to determine that the student information system parameters for federal need analysis are set up correctly to properly calculate need analysis. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Noncompliance with Cash Management Requirements DEPARTMENT OF EDUCATION ALN #: 84.268 and 84.063 Federal Award Identification #: 2023-2024 Award Year Condition: The University did not disburse Pell or FDL timely after requesting reimbursement. Criteria: 34 CFR 668.162 Questioned Costs: $0 Context: 5 out of 15 drawdowns tested for cash management compliance did not show disbursements per the student rosters within 3 days of receipt of cash. 1 FDL drawdown in September 2023 was $333,564 in excess of actual disbursements but was returned 12 days later. 1 March 2023 drawdown of Pell in the amount of $51,712 was disbursed 2 days late. The other 3 were Pell draws in excess of disbursements totaling $17,247. Cause: Insufficient internal controls after main disbursement for each semester and prior to the final reconciliation for the academic year. Effect: University had cash on hand not allowable per regulations Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University put procedures in place draw down Title IV funds based on actual disbursements. If funds are drawn based on anticipated disbursements, those funds need to be disbursed in 3 days and any amounts in excess of actual disbursements be returned to the Department of Education timely. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Lack of Administrative Capability Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063, 84.007, 84.033, 84.038, and 84.379 (Student Financial Assistance Cluster) Federal Award Identification #: 2022-2023 Financial Aid Year Condition: The administrative capability is currently below the required level for maintaining compliance with Title IV regulations. Criteria: 34 CFR 668.16 Questioned Costs: $498,771 Context: In the current year, we found several areas of noncompliance and one repeated finding with the Department of Education regulations due to the fact that the financial aid system was not designed to appropriately support the current level of staffing for financial aid, the complexity of administering financial aid for the various educational programs, the communication required between departments for appropriate administering of financial aid, and the number of enrolled students receiving financial aid. Cause: The University continued to have staffing challenges and were still in process on addressing prior year findings. Effect: Noncompliance with a number of Title IV regulations. Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University adjust the financial aid system to allow for more checks and balances, correct the withdrawal system errors, and implement more robust review procedures. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Inaccurate and Untimely Returns of Title IV Funds (R2T4) Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063, 84.007, and 84.379 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: When students withdrew either officially or unofficially, the University did not always return unearned Title IV aid timely or accurately. Criteria: 34 CFR 668.22 Questioned Costs: $12,304 Context: Out of 51 withdrawal students tested, we noted a total of 11 students that had a late return of Title IV aid and their return amounts totaled $12,304. For these 11 returns, 6 of them were inaccurate resulting in 4 students under awarded $1,727 and 2 students over awarded $514. We noted an additional 5 students with inaccurate but timely returns resulting in the students being under awarded $8,786. Cause: We noted this was caused by continued challenges with the complexity of modular withdrawal regulations, particularly due to a high number of students with all failing grades in these programs. Additionally the financial aid office is not receiving attendance details timely to process returns timely. The inaccurate returns were caused by using incorrect calendars or the system taking off all aid and these amounts were not included in the amounts that could have been disbursed in the calculations. Effect: Incorrect amount of unearned or earned Title IV funds returned and untimely returns. Identification as repeat finding, if applicable: 2022-002 Recommendation: We continue to recommend that the financial aid office work with the registrar office and those monitoring attendance to ensure that students who stop attending after 2 weeks are followed up on timely to determine if R2T4's are required and ensure that funds are returned within the required 45 days. We also continue to recommend the University have a secondary review of each calendar set up for R2T4 calculations to ensure the correct number of days is used. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Higher Education Emergency Relief Fund (HEERF) Earmarking Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.425E and 84.425F Federal Award Identification #: P425E200101, P425F201431 Condition: The University had drawn all their authorized HEERF funds by the end of the performance period but did not fully spend the student portion, therefore the University did not meet the earmarking requirements for the minimum amount of HEERF funds spent on student grants. Criteria: CARES Act section 18004 (a) (1), CRRSAA Act section 314 (a) (1), ARP Act Questioned Costs: $436,565 Context: The University did not have support for providing $193,858 of grants to students from the HEERF student portion (84.425E) which represents the University's remaining available authorization at the beginning of fiscal year 2023. Due to not fully spending this student portion, this disallowed a prorated amount totaling $242,707 of the institutional portion (84.425F) given the conditions and earmarking requirements for HEERF. Cause: Inadequate reconciliation of HEERF expenditures and drawdowns and lack of review at the end of period of performance. Effect: Since the student grant minimum was not met, the University is not eligible for the full allocation of the institutional portion of the HEERF. Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University return funds as applicable and as directed by Department of Education. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Ineligible Programs Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: The University awarded 34 students in ineligible graduate certificate programs therefore they were not eligible for federal aid. Criteria: 34 CFR 668.8 Questioned Costs: $482,217 Context: During our audit, we identified a number of certificate programs that were not eligible for Title IV aid and in our comparison of these programs to the federal aid listing we identified 34 students that received federal aid. Cause: This was a management oversight for students in a graduate certificate program that was previously eligible and students that were also previously enrolled in an eligible degree program along with a certificate program. Effect: Students receiving federal aid that were not eligible to receive aid. Identification as repeat finding, if applicable: N/A Recommendation: We recommend the University implement system controls to prevent packaging students with federal aid that are only enrolled in an ineligible graduate certificate program. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Gramm-Leach-Bliley Act (GLBA) Compliance Significant Deficiency DEPARTMENT OF EDUCATION ALN #: 84.268, 84.063, 84.007, 84.033, 84.038, and 84.379 (Student Financial Assistance Cluster) Federal Award Identification #: 2022-2023 Financial Aid Year Condition: The University did not sufficiently comply with all the requirements of GLBA. Criteria: 16 CFR 314.3, 16 CFR 314.4 Questioned Costs: $-0- Context: The University has not sufficiently updated its documentation of its information security program, its security risk assessment and safeguards, including general threats, implemented sufficient vendor management policies and reviews, updated its incident response plan to cover all components of the revised regulations, nor provided a written, annual report to the board. Cause: The University has experienced significant turnover in IT personnel that has not allowed sufficient resources to address and document compliance with the requirements of GLBA. Effect: The University 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: N/A Recommendation: We recommend the University 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.

Federal Direct Loan (FDL) Monthly Reconciliations DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: The University did not adequately complete FDL monthly reconciliations every month and there was lack of support for review and approval. Criteria: 34 CFR 685.300(b)(5) Questioned Costs: $-0- Context: During our audit we determined that the University did not have support for completing a FDL monthly reconciliation for several months during the fiscal year. The reconciliation that was tested in our audit did not have evidence of review and approval. Cause: Turnover and staffing challenges in the financial aid office. Effect: Noncompliance with reconciliation requirements which could lead to unreconciled differences going undetected or not being resolved timely. Identification as repeat finding, if applicable: N/A Recommendation: We recommend that the University review the reconciliation requirements and properly complete the mandatory monthly reconciliations for FDL. The University should also review or refer to the U.S. Department of Education (ED) announcement DL-22-07 which included information to assist higher education institutions with the mandatory reconciliation requirements for the FDL Program. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Aggregate Federal Direct Loan Limits DEPARTMENT OF EDUCATION ALN #: 84.268 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: The University did not properly award a student based on their aggregate subsidized federal direct loan limit and disbursed them subsidized loans in excess of this limit. Criteria: 34 CFR 665.203 (d) Questioned Costs: $4,250 Context: During our audit we noted 1 student had received their annual max subsidized federal direct loan of $5,500 which this amount put the student over their aggregate subsidized federal direct loan limit by $4,250. Cause: Management oversight. Effect: The student is not eligible for Title IV federal aid if over award is not corrected. Identification as repeat finding, if applicable: N/A Recommendation: We recommend that the when students have an ISIR code which indicates the student may have received loans in excess of aggregate limits, the University resolve that issue prior to disbursing loans to ensure that the student isn't over awarded. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Cash Management DEPARTMENT OF EDUCATION ALN #: 84.268 and 84.063 Federal Award Identification #: 2022-2023 Financial Aid Year Condition: The University did not adequately maintain records for drawdowns of Federal Direct Loans (FDL) and Federal Pell Grants (Pell) to support compliance with cash management regulations. Criteria: 34 CFR 668.162 Questioned Costs: $-0- Context: During our audit, we tested 6 drawdowns of FDL and 6 drawdowns of Pell and each did not have adequate support for minimizing time between drawdown and disbursement. There did not appear to be a formal process nor clear understanding for the individual drawdown amounts. However the University provided a detail of federal aid disbursements to students thus we did a comparison of the year to date disbursements to the year to date drawdowns at the time of each drawdown tested. We noted the University did not appear to have drawn FDL and Pell funds in excess of disbursements based on this testing. Cause: Management oversight Effect: Potential noncompliance with cash management requirements and lack of proper record retention. Identification as repeat finding, if applicable: N/A Recommendation: We recommend that the University implement and follow a formal process for making drawdowns and require that supporting documentation include evidence of review and approval and be retained to support compliance with cash management requirements. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Inaccurate and Untimely Returns to Title IV (R2T4) Material Weakness DEPARTMENT OF EDUCATION ALN #: 84.007, 84.063, 84.268 and 84.379 Federal Award Identification #: 2021-2022 Financial Aid Year Condition: When students withdrew either officially or unofficially, the University did not always return unearned Title IV aid within the required 45 days, and therefore, Department of Education considers the return of funds to be untimely. The University also inaccurately calculated R2T4?s for students who withdrew from modular programs. Criteria: 34 CFR 668.22 Questioned Costs: $34,362 Context: Out of 57 students tested who officially or unofficially withdrew, 12 students had funds returned late ranging from 10 to 290 days, 9 students had incorrect R2T4 calculations and funds returned late and 2 students had incorrect R2T4 calculations. Cause: Staffing challenges due to the continued impacts of COVID-19, complexity of new modular withdrawal regulations, particularly due to the high number of students with all failing grades in those programs. Also the financial aid office is not receiving attendance records timely and used incorrect calendars for calculations. Effect: Unearned aid not returned accurately and timely Identification as repeat finding, if applicable: 2021-001 Recommendation: We recommend that the financial aid office work with the registrar office and those monitoring attendance to ensure that students who stop attending after 2 weeks are followed up on timely to determine if R2T4's are required and ensure that funds are returned within the required 45 days. We recommend additional training in the new modular withdrawal regulations. We also recommend the University have a secondary review of each calendar set up for R2T4 calculations to ensure the correct number of days is used. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

Untimely Returns to Title IV (R2T4) Material Weakness U.S. DEPARTMENT OF EDUCATION ALN: 84.007, 84.063 and 84.268 Federal Award Identification #: 2020/2021 Financial Aid Year Condition: When students withdrew either officially or unofficially, the University did not always return unearned Title IV aid within the required 45 days, and therefore, Department of Education considers the return of funds to be untimely. Criteria: 34 CFR 668.22 Questioned Costs: $14,861 Context: Out of 32 students tested who officially or unofficially withdrew, 8 students had funds returned late ranging from 10 to 603 days. 1 other student who withdrew and was eligible for a COVID exemption, however, her federal direct loans were returned. 7 of these students unofficially withdrew had no R2T4 completed but were identified as part of the audit procedures performed. The University returned the unearned funds as part of the audit process. Cause: COVID-19, financial aid office not being informed when students stop attending during a term. Effect: Unearned aid not returned timely Identification as repeat finding, if applicable: 2020-003 Recommendation: We recommend that the financial aid office work with the registrar office and those monitoring attendance to ensure that students who stop attending after 2 weeks are followed up on timely to determine if R2T4's are required and ensure that funds are returned within the required 45 days. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.

2020-002 NSLDS Reporting Material Weakness DEPARTMENT OF EDUCATION CFDA #: 84.268 Federal Award Identification #: 2019-2020 Financial Aid Year Condition: Enrollment status was not always updated correctly and timely to the National Student Loan Data Service (NSLDS) Criteria: 34 CFR 685.309(b) Questioned Costs: $-0- Context: Out of 81 students tested for accurate enrollment reporting to NSLDS, 4 students in modular programs had wrong effective dates for withdrawals as the term end date was used rather than the date of last attendance. 1 student was still reported as half time even though the student had withdrawn. 1 student was reported as withdrawn at the end of the fall 2019 term but the student was still attending the University. 1 student attended the fall 2019 term and withdrew but then returned in the spring term, however there was no enrollment was reported at all for the fall term. 3 non traditional students who graduated in July 2020 were reported as withdrawn rather than as graduating from the undergraduate program. All the errors were isolated to students in the non-traditional, modular programs. Effect: Inaccurate reporting of enrollment status and effective dates can impact a student?s grace period, in school deferment eligibility, beginning of loan repayment, appropriate interest charges, etc. Registrar system doesn?t appear to be pulling correct enrollment data for modular students. Cause: Due to the Coronavirus Pandemic and staffing levels, reviews over the status updates were not performed. Identification as repeat finding, if applicable: Yes, 2019-003, 2018-003 Recommendation: We recommend that the registrar's office work with National Student Clearinghouse to determine how to prevent errors in enrollment status reporting, particularly with students enrolled in modular programs. We also recommend that there be periodic reviews to spot check accuracy. Views of Responsible Officials: Management agrees with the finding and is addressing the issue. See corrective action plan.

2020-003 Inaccurate Calculation and Late Returns of Title IV (R2T4) Material Weakness DEPARTMENT OF EDUCATION CFDA #: 84.268 and 84.063 Federal Award Identification #: 2019-2020 Financial Aid Year Condition: The University did not calculate return to Title IV (R2T4) correctly for students who withdrew during a term, and one return was completed after the 45 day window. Criteria: 34 CFR 668.22 Questioned Costs: $0 Context: Out of 24 students tested, three students in modular programs had the incorrect amount of Title IV funds returned based on incorrect calculations. Incorrect number of days in the term and incorrect number of days completed were used. In each case, more Title IV aid was returned than required for a total of $2,142. One of these students also had their $194 in Pell returned 7 days late. Effect: Inaccurate calculations resulting in inaccurate returns of Title IV funds. Cause: No secondary review of the R2T4 is completed. Identification as repeat finding, if applicable: not applicable Recommendation: Due to the complexity of the nonstandard term modular program R2T4 calculations, we recommend that a second review and approval of the calculation be completed as part of the R2T4 process. We also recommend that the number of days completed and number of days in term be documented in the file since each student has a specific schedule and these have to be manually calculated. This would aid in the review of the calculation. Views of Responsible Officials: Management is in agreement with this finding. See attached corrective action plan.

2019-003 Enrollment Status Reporting to NSLDS Material Weakness DEPARTMENT OF EDUCATION CFDA #: 84.268 Federal Award Identification #: 18/19 Financial Aid Year Condition: Enrollment status changes were not always reported accurately to National Student Loan Data System (NSLDS). Criteria: 34 CFR 685.309(a) Questioned Costs: $0 Context: Out of 70 students tested, 9 students who withdrew from modular programs were properly reported as withdrawn but had an incorrect effective date reported ranging from 30 to 161 days after actual date of withdrawal. 1 student had withdrawn but was still reported as enrolled. 1 student graduated but was still reported as enrolled. Effect: Inaccurate reporting can impact a student?s loan grace period, in school deferment eligibility, beginning loan repayments, appropriate interest charges, etc. Cause: For students who withdrew from non traditional programs, in most cases the end of the term was used rather than the date of last attendance. Identification as repeat finding, if applicable: Yes, 2018-003 Recommendation: We recommend that the registrar's office work with National Student Clearinghouse to determine how to prevent errors in enrollment status reporting, particularly with students enrolled in modular programs. We also recommend that there be periodic reviews to spot check accuracy. Views of Responsible Officials: Management agrees with the finding and is addressing the issue. See corrective action plan.

2019-004 Non Compliance with Gramm-Leach-Bliley-Act (GLBA) Significant Deficiency DEPARTMENT OF EDUCATION CFDA #: SFA Cluster Federal Award Identification #: 18/19 Financial Aid Year Condition: The University did not sufficiently comply with all the requirements of GLBA. Criteria: 16 CFR 314.3, 16 CFR 314.4 Context: Risk assessment and safe guards not documented. Effect: The University has not adequately addressed the requirements of GLBA, which may lead to unintended exposure of student information to security risks. Cause: The University has not allocated sufficient resources to address the requirements of GLBA. Identification as repeat finding, if applicable: Not applicable Recommendation: We recommend the University allocate sufficient resources to address all requirements of GLBA. Views of Responsible Officials: Management is in agreement with the finding and is in the process of addressing the issue. See attached corrective action plan.

2019-005 Under Awarding Pell Grants DEPARTMENT OF EDUCATION CFDA #: 84.063 Federal Award Identification #: 18/19 Financial Aid Year Condition: Students were not always awarded Pell based on enrollment status. Criteria: 34 CFR 690.80 Questioned Costs: $0 Context: Out of 42 students tested, 2 student were under awarded Pell. Effect: Student not awarded Pell based on correct enrollment status. Both students were corrected as part of the audit process. Cause: Students were awarded Pell based on anticipated enrollment status and their Pell grant award was not adjusted when actual enrollment status changed. Identification as repeat finding, if applicable: Not applicable Recommendation: We recommend the University put procedures in place to review Pell awards after the add drop period to insure proper awarding of Pell based on actual credit hours taken for the term. Views of Responsible Officials: Management is in agreement with the finding and is in the process of addressing the issue. See attached corrective action plan.

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