JOHN F. KENNEDY UNIVERSITYHigher Education

Finding 2019-001 ? Special Tests and Provisions: Return to Title IV Funds ? Significant Deficiency Criteria: An institution must return the total amount of unearned Title IV assistance. The unearned amount of Title IV assistance to be returned is calculated by subtracting the amount of Title IV assistance earned by the student, from the amount of Title IV aid that was disbursed to the student as of the date of the institution's determination that the student withdrew (34 CFR 668.22). An institution must determine the withdrawal date for a student who withdraws without providing notification to the institution no later than 30 days after the end of the earlier of the: (1) payment period or period of enrollment, (2) academic year in which the student withdrew, or (3) educational program from which the student withdrew (34 CFR section 668.22(j)). Returns of Title IV funds are required to be deposited or transferred into the student financial aid account or electronic funds transfers initiated to U.S. Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew (34 CFR section 668.173(b)). Condition/Context: From a population of approximately 100 students who were recipients of Title IV funding and had officially or unofficial withdrawn during the fiscal year ended June 30, 2019, we tested 10 students for potential requirement of return of Title IV funds by comparing student records to the calculation of the return of Title IV funds, if any, and the federal government?s Common Origination and Disbursement system. From our testing, we noted two instances for online students where funds, totaling $9,010, were not returned timely as the date of return was past the 45 days after the date of JFKU?s determination that the student withdrew. In addition, based on the review of additional analysis performed by JFKU over online students who received Title IV funding, we noted eight instances were funds, totaling $34,082, were not returned timely as the date of return was past the 45 days after the date of JFKU?s determination that the student withdrew. We noted that all Title IV funds were returned prior to our testing. Cause: All instances are related to new online program that started in October 2018. The finding occurred due to the program being primarily administered manually resulting at the time in inadequate controls to ensure attendance policy and student?s school statuses were accurately and timely administered. Effect: JFKU did not return certain Title IV funds timely to the U.S. Department of Education. Repeat finding: This is not a repeat finding. Recommendation: We recommend JFKU implement a review process for online students to more closely monitor the return of funds to ensure funds due to the U.S. Department of Education are returned within 45 days of determining the student?s withdrawal date. Views of responsible officials and planned corrective actions: JFKU acknowledges this finding. When the omissions were discovered in-house a task force which included the JFKU President, CFO, FA Director, Registrar, and others were put together to address the issues. All withdrawals from the inception of the program were reviewed and appropriate refunds were calculated and required funds were returned to the Common Origination and Disbursement system at the point of discovery. Additional resources including personnel, training and proper controls have been put in place to assure this program stays in compliance. See Schedule of Findings and Questioned Costs for chart/table.

Finding 2019-002 ? Special Tests and Provisions: Enrollment Reporting ? Significant Deficiency Criteria: The National Student Loan Data System (NSLDS) is the Department of Education?s (ED) centralized database for students? enrollment information. It is JFKU?s responsibility to update this information timely and accurately when the enrollment status of a student who has received federal aid changes. JFKU is ultimately responsible for the timeliness and accuracy of this information even when a third-party servicer is used as an intermediary to report on JFKU?s behalf. Unless JFKU expects to submit its next updated enrollment report within the next 60 days, JFKU must notify the lender or the guaranty agency within 30 days after the date JFKU discovers that a student who received a Direct Subsidized, Direct Unsubsidized, or Direct PLUS Loan has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended (34 CFR section 685.309(b)(2)(i)). Condition/Context: A sample of 25 federal aid recipient students were selected from system generated reports of students who graduated or withdrew during the 2018-2019 academic year. Our sample consisted of 16 students out of a population of approximately 125 students that were identified as graduates during the year and 9 students out of a population of approximately 100 students that were identified as withdrawn during the year. The enrollment information and degree award date or withdrawal date per JFKU?s records was compared to the information reported to the NSLDS in order to determine if status changes were reported within the required timeframes. An exception was noted with 4 graduated students out of the 25 students that were selected for testing. The students graduating during the 2018?2019 academic year were not reported as graduated to the NSLDS within the required timeframe. The students? status for the 4 students was eventually correctly reported. Cause: The finding occurred due to the transmission schedule that was set up for JFKU by the National Student Clearinghouse (NSC) containing a gap between Winter and Spring Quarters that exceeded the 60-day requirement. Also, changes in student enrollment status during the term were not currently identified by the program that JFKU runs in SOAR to create enrollment reports. Effect: The NSLDS database did not include accurate information until the point at which it was corrected. This information is utilized by Department of Education, the Direct Loan program, lenders, and other institutions to determine in-school status, deferment, and grace periods of student loans. Incorrect information could result in incorrect deferment, grace periods, billing, and repayment of student loans. Repeat finding: This is a repeat finding from the prior year audit, Finding 2018-003. Recommendation: We recommend that JFKU design additional processes and procedures to monitor the enrollment reporting process. In addition, JFKU should follow up on special cases to ensure timely determination of student enrollment status. Views of responsible officials and planned corrective actions: JFKU acknowledges this finding. JFKU has adjusted the NSC reporting calendar to ensure that there are no gaps in reporting that exceed the 60-day requirement. JFKU reported the student status change error to the SOAR IT Help Desk in June 2019, and until it can be corrected in the system, JFKU is running a query and manually updating the NSC enrollment report for all students who have enrollment changes within the term. See Schedule of Findings and Questioned Costs for chart/table.

Finding 2019-003 ? Matching, Level of Effort, Earmarking ? Significant Deficiency Criteria: An institution must use at least 7% of its Federal Work Study federal allocation for an award year to pay the federal share of wages to students employed in community service jobs for that year (34 CFR 675.18(g)). Condition/Context: During our testing, we noted that JFKU did not use at least 7% of its Federal Work Study allocation for the award year to pay the federal share of wages to students employed in community service jobs for that year. We obtained JFKU?s Federal Work Study general ledger and recalculated the community service requirement. The community service requirement was $9,068, whereas, total community service awarded to recipients was $8,670. Cause: The finding occurred due to a lack of monthly tracking by JFKU to address any shortfalls in time to take appropriate actions to meet the requirements. Effect: JFKU failed to meet the Federal Work Study community service requirement and did not return Federal Work Study funds in an amount that represented the difference between the amount JFKU should have spent for community service and the amount it actually spent. Repeat finding: This is not a repeat finding. Recommendation: We recommend that JFKU develop a process to facilitate placement for enough students in community service jobs during the year to meet the requirement and prevent noncompliance; or obtain a waiver from the U.S. Department of Education for this compliance requirement. Views of responsible officials and planned corrective actions: JFKU acknowledges this finding. For award year 2020, JFKU has implemented additional monthly tracking to include off campus employment against run rate targets to ensure, as JFKU proceeds throughout the year, JFKU is on track to meet the requirement and if not, identify the gap timely to allow for adequate opportunity to increase the current spend and ultimately meet the requirement. See Schedule of Findings and Questioned Costs for chart/table.

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