Top 10 Audit & Program Review Findings

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1 Top 10 Audit & Program Review Findings Joseph Massman NDASFAA Conference, April U.S. Department of Education Top Audit Findings 1. Repeat Finding Failure to Take Corrective Action 2. Return to Title IV (R2T4) Calculation Errors 3. Student Status Inaccurate/Untimely Reporting 4. R2T4 Made Late 5. Verification Violations 2 Top Audit Findings 6. Pell Overpayment/Underpayment 7. Qualified Auditor s Opinion Citied in Audit 8. Student Credit Balance Deficiencies 9. Entrance/Exit Counseling Deficiencies 10. G5 Expenditures Untimely/Incorrectly Reported 3 For training and discussion purposes only 1

Top Program Review Findings 1. Verification Violations 2. Student Credit Balance Deficiencies 3. Entrance/Exit Counseling Deficiencies 3. R2T4 Calculation Errors TIE 4.

Consumer Information Requirements Not Met 8. Information in Student Files Missing/Inconsistent 9. Pell Overpayment/Underpayment 10. Student Status Inaccurate/Untimely Reporting 10.

2 Top Program Review Findings 1. Verification Violations 2. Student Credit Balance Deficiencies 3. Entrance/Exit Counseling Deficiencies 3. R2T4 Calculation Errors TIE 4. Crime Awareness Requirements Not Met 4. Satisfactory Academic Progress Policy Not Adequately Developed/Monitored 5. Inaccurate Recordkeeping TIE 4 Top Program Review Findings 6. R2T4 Made Late 7. Consumer Information Requirements Not Met 8. Information in Student Files Missing/Inconsistent 9. Pell Overpayment/Underpayment 10. Student Status Inaccurate/Untimely Reporting 10. Lack of Administrative Capability TIE 5 Findings on Both Lists R2T4 Calculation Errors Student Status Inaccurate/Untimely Reporting R2T4 Made Late Verification Violations Pell Grant Overpayment/Underpayment Student Credit Balance Deficiencies Entrance/Exit Counseling Deficiencies 6 For training and discussion purposes only 2

Audit Findings 7 Repeat Finding - Failure To Take Corrective Action Failure to implement Corrective Action Plan (CAP) CAP did not remedy the instances of noncompliance Internal controls not

3 Audit Findings 7 Repeat Finding - Failure To Take Corrective Action Failure to implement Corrective Action Plan (CAP) CAP did not remedy the instances of noncompliance Internal controls not sufficient to ensure compliance with FSA guidelines Regulations: 34 C.F.R and (a) 8 Preventing Repeat Findings Ensure all staff are properly trained Perform quality assurance checks to ensure new policies & procedures are strictly followed Review results of CAP Is it working? Are changes needed to improve process? Accountability assign staff to monitor the CAP 9 For training and discussion purposes only 3

R2T4 Calculation Errors Incorrect number of days Ineligible funds used as aid that could have been disbursed Improper treatment of grant overpayments Incorrect withdrawal date Mathematical and/or

4 R2T4 Calculation Errors Incorrect number of days Ineligible funds used as aid that could have been disbursed Improper treatment of grant overpayments Incorrect withdrawal date Mathematical and/or rounding errors Regulation: 34 C.F.R (e) 10 Preventing R2T4 Calculation Findings Perform periodic self-assessment by reviewing a random sample of student files FSA Assessments: R2T4 module Use ED s R2T4 Tool R2T4 on the Web ( Online R2T4 Training Module ( Pay attention to new regulations; revise procedures as needed 11 Student Status Inaccurate/Untimely Reporting Roster file not submitted timely to NSLDS Failure to provide notification of last date of attendance Failure to report changes in student enrollment status Inaccurate enrollment status reported Regulation: 34 C.F.R (b) 12 For training and discussion purposes only 4

5 Preventing Enrollment Status Reporting Findings Maintain accurate enrollment records Automate enrollment reporting Use correct reporting layouts Designate responsibility for monitoring reporting deadlines Include a backup in case of absence Keep policies and procedures up-to-date Review IFAP notices for updates Use the correct enrollment status codes 13 Return of Title IV Funds Made Late School s policy and procedures not followed Returns not made within allowable timeframe (45 days) Inadequate system in place to identify/track official and unofficial withdrawals No system in place to track number of days remaining to return funds Regulations: 34 C.F.R (j) and (b) 14 Preventing Late R2T4 Findings Designate responsibility for monitoring deadlines Include a backup in case of absence Perform routine self-assessments Periodically review processes and procedures to ensure compliance Tracking/monitoring deadlines Ensuring timely communication between office and/or systems FSA Assessments: Schools R2T4 module 15 For training and discussion purposes only 5

6 Verification Violations Verification worksheet missing/incomplete Conflicting data not resolved Untaxed income not verified (Groups V1, V5, V6) Corrections that exceed tolerance not submitted Income tax documents missing/not signed Regulations: 34 C.F.R Preventing Verification Findings Monitor verification process Perform internal quality control file reviews Federal Student Aid Handbook, Application & Verification Guide, Chapter 4 FSA Coach, module B205 ( FSA Assessments: Students - Verification Update policies and procedures Review verification Q&A page ( 17 Entrance/Exit Counseling Deficiencies Entrance counseling not conducted/ documented for first-time borrowers Exit counseling not conducted/documented for withdrawn students or graduates Exit counseling materials not mailed to students who failed to complete counseling Regulation: 34 C.F.R For training and discussion purposes only 6

Preventing Entrance/Exit Counseling Findings Assign responsibility for monitoring the entrance/exit counseling process Develop and implement procedures to ensure entrance/exit counseling is completed

7 Preventing Entrance/Exit Counseling Findings Assign responsibility for monitoring the entrance/exit counseling process Develop and implement procedures to ensure entrance/exit counseling is completed Automate tracking and monitoring Post links on school s web page to Develop procedures for ensuring communication among registrar, business, and financial aid offices FSA COACH: Module B401: Direct Loan Counseling FSA Handbook Volume 2, Chapter 6 19 Pell Grant Overpayment/Underpayment Incorrect Pell formula Inaccurate calculations Proration Incorrect EFC Adjustments between terms Incorrect number of weeks/hours Pell disbursed to students who did not establish attendance Regulations: 34 C.F.R ; ; ; & Preventing Pell Overpayments/Underpayments Use correct enrollment status Use correct Pell Grant formula/schedule Prorate when required Assign responsibility for monitoring to ensure Pell Grant disbursements are accurate and timely FSA Handbook, Volume 3, Chapter 3 FSA Coach module B For training and discussion purposes only 7

8 Qualified Auditor s Opinion Cited in Audit Anything other than an unqualified opinion Serious deficiencies/areas of concern in the compliance audit/financial statements Systemic R2T4 violations Inadequate accounting systems and/or procedures Lack of internal controls Systemic repeat findings Regulation: 34 C.F.R (d)(1) 22 Preventing Qualified Auditor Opinions Assessment of entire financial aid/fiscal process Design an institution-wide plan of action Use FSA Assessments (especially the Policies and Procedures and Institutional Eligibility units) Appropriate internal controls Adequate and qualified staff Training FSA COACH FSA Online and In-Person trainings FSA Handbook, Volume 4, Chapters 5 and 6 Implement appropriate CAP timely and effectively Monitor CAP to ensure it is effective 23 Student Credit Balance Deficiencies Credit balance not released to student within 14 days No process in place to determine when a credit balance has been created Non-compliant authorization to hold Title IV credit balances Insufficient cash on-hand to cover held credit balances Regulations: 34 C.F.R (e) and (b) 24 For training and discussion purposes only 8

Preventing Credit Balance Findings Increase internal controls associated with credit balances Conduct a self-assessment of credit balance disbursements Ensure credit balance authorization is

9 Preventing Credit Balance Findings Increase internal controls associated with credit balances Conduct a self-assessment of credit balance disbursements Ensure credit balance authorization is compliant with Title IV requirements FSA Handbook, Volume 4, Chapter 2 FSA Coach unit C G5 Expenditures Untimely/Incorrectly Reported COD disbursement records reported untimely COD disbursements not reported COD/G5/school records not reconciled or reconciled late Preventing G5/COD Reporting Findings Schedule a routine process for submitting disbursement records to COD. Designate who will oversee COD reporting Automate COD reporting as appropriate Perform routine reconciliation of all program accounts with COD and G5 G5 online training ( COD computer-based training ( For training and discussion purposes only 9

10 Program Review Findings 28 Crime Awareness Requirements Not Met Campus security policies and procedures not adequately developed Annual report not published and/or distributed Failure to develop a system to track and/or log all required categories of crimes for all campus locations Regulations: 34 C.F.R , 34 C.F.R. Part Preventing Crime Awareness Findings Post a link for security reports to school s website Designate responsibility for crime awareness functions Review The Handbook for Campus Safety and Security Reporting and Tutorial Video FSA Assessments: Consumer Information Module Activity 5: Clery/Campus Security Act Consumer Information At-a-Glance document FSA Handbook, Volume 2, Chapters 6 and 7 Online consumer information training ( 30 For training and discussion purposes only 10

SAP Policy Not Adequately Developed/Monitored One or more missing components in school s policy Qualitative measurement, quantitative measurement, pace of completion, maximum timeframe,

11 SAP Policy Not Adequately Developed/Monitored One or more missing components in school s policy Qualitative measurement, quantitative measurement, pace of completion, maximum timeframe, remedial/repeat coursework, warning, probation, appeals, academic plan Failure to consistently or adequately apply SAP policy Aid disbursed to students not meeting SAP standards Regulations: 34 C.F.R (e); (f); Preventing SAP Policy Findings Designate individual responsible to monitor SAP Conduct self-assessments FSA Assessments: Satisfactory Academic Progress (SAP) module FSA Handbook, Volume 1, Chapter 1 Online Satisfactory Academic Progress training ( 32 Inaccurate Recordkeeping Inadequate or mismatched attendance records for schools that are required to take attendance Failure to maintain consistent disbursement records Regulations: 34 C.F.R (a),(d) and For training and discussion purposes only 11

12 Preventing Recordkeeping Findings Communicate the importance of accuracy of all FSA records to all staff members Automate recordkeeping where appropriate Establish procedures to routinely check documents for accuracy Take advantage of FSA Assessments and IFAP training options to ensure that all staff members are well-informed 34 Account Records Inadequate/Not Reconciled Failure to provide appropriate documentation of disbursements to reviewers Failure to balance school s program accounts with G5 and COD Failure to identify Federal funds in institutional bank accounts Regulations: 34 C.F.R , and to Preventing Recordkeeping Findings Perform routine reconciliation of all program accounts with COD and G5 Designate who is responsible for reconciliation Establish internal reporting procedure Review FSA Assessments: Fiscal Management FSA COACH unit B Blue Book FSA Handbook, Volume 4, Chapters 5 and 6 Direct Loan School Guide 36 For training and discussion purposes only 12

Consumer Information Requirements Not Met Required policies and procedures not disclosed Annual Security Report not distributed GE program disclosures not posted to website Disclosures posted online

13 Consumer Information Requirements Not Met Required policies and procedures not disclosed Annual Security Report not distributed GE program disclosures not posted to website Disclosures posted online but unavailable to prospective students Failure to notify borrowers of right to cancel Preventing Consumer Info Findings Designate and empower someone to coordinate consumer information Develop a process and calendar for reporting and updating disclosures Perform self-assessments Review FSA Assessments Consumer Information 11 activities covering different areas of responsibility Consumer Information Disclosures At-a-Glance document FSA Handbook, Volume 2, Chapter 6 Consumer Information online training ( Information In Student Files Missing/Inconsistent No system in place to coordinate information collected in different offices at the school Data on ISIR conflicts with institutional data or other data in student s file Insufficient or missing documentation needed to support professional judgment, dependency override, SAP appeals Regulations: 34 C.F.R (f) and (a),(c) 39 For training and discussion purposes only 13

14 40 Preventing Missing/Conflicting Info Findings Establish communication with other offices to identify and address inconsistent information Perform periodic review of student files Develop process to monitor and verify that all documents are received and reviewed Automate requests for and receipt of documents where possible File and/or scan documents in a timely manner FSA Assessments Verification Activity 1: Resolving Conflicting Data FSA Handbook, Volume 2, Chapter 3 Lack of Administrative Capability Significant and/or systemic findings that indicate a failure to administer aid programs in accordance with Title IV statutes and regulations Inadequate staff to properly administer the Title IV programs R2T4 refunds not made or calculation errors No policies and procedures Unreported additional locations and programs No Title IV reconciliation process; excess cash Failure to disburse credit balances No separation of duties Regulation: 34 C.F.R Preventing Lack of Admin Capability Findings Cultivate an environment of compliance Title IV is an Institution-wide responsibility Institution leadership must support compliance FSA training opportunities Fundamentals of Title IV Administration FSA E-Training website: FSA Coach FSA Assessments FSA Handbook Establish fiscal policies and procedures to ensure that reconciliations are done monthly 42 For training and discussion purposes only 14

15 SCHOOL ELIGIBILITY SERVICE GROUP (SESG) Ron Bennett - Director, School Eligibility Service Group, Washington, DC (202) School Eligibility Service Group General Number: (202) or CaseTeams@ed.gov Or call the appropriate School Participation Division manager below for information and guidance on audit resolution, financial analysis, program reviews, school and program eligibility/recertification, and school closure information. New York/Boston School Participation Atlanta School Participation Division Alabama, Florida, Georgia, Mississippi, North Carolina, Division South Carolina Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, New Jersey, New York, Puerto Rico, Virgin Islands Christopher Miller, Director (404) Betty Coughlin, Director (646) David Smittick Atlanta (404) Tracy Nave Boston (617) Vanessa Dillard Atlanta (404) Patrice Fleming Washington, DC (202) Dallas School Participation Division Chris Curry New York (646) Arkansas, Louisiana, New Mexico, Oklahoma, Texas Philadelphia School Participation Division Cynthia Thornton, Director (214) District of Columbia, Delaware, Maryland, Pennsylvania, Virginia, Jesus Moya Dallas (214) West Virginia Nancy Gifford, Director (215) Kim Peeler Dallas (214) John Loreng Philadelphia (215) Kansas City School Participation Division Sherrie Bell Washington, DC (202) Iowa, Kansas, Kentucky, Missouri, Nebraska, Tennessee Multi-Regional and Foreign Schools Ralph LoBosco, Director (816) Participation Division Dvak Corwin Kansas City (816) Michael Frola, Director Washington, DC Jan Brandow Kansas City (816) (202) Barbara Hemelt Washington, DC (202) Clery/Campus Security (Managed under the Joseph Smith Washington, DC (202) Administrative Actions and Appeals Service Group) Barbara Murray Washington, DC (202) Jim Moore Washington, DC (202) Chicago/Denver School Participation Division Illinois, Minnesota, Ohio, Wisconsin, Indiana, Colorado, Michigan, Montana, North Dakota, South Dakota, Utah, Wyoming Douglas Parrott, Director (312) Earl Flurkey (312) Brenda Yette (312) Sarah Adams (312) San Francisco/Seattle School Participation Division American Samoa, Arizona, California, Guam, Hawaii, Nevada, Palau, Marshall Islands, North Marianas, State of Micronesia, Alaska, Idaho, Oregon, Washington Martina Fernandez-Rosario, Director (415) Gayle Palumbo San Francisco (415) or Seattle (206) Dyon Toney Washington, DC (202) Erik Fosker San Francisco (415) Contacts Chicago/Denver School Participation Division Main Number: Effie Barnett (IIS): George West (IIS): Denver Training Officers Deborah Tarpley: Joseph Massman: firstname.lastname@ed.gov 44 Training Feedback To ensure quality training we ask all participants to please fill out an online session evaluation Go to Evaluation form is specific to Joe Massman This feedback tool will provide a means to educate and inform areas for improvement and support an effective process for listening to our customers Additional feedback about training can be directed to annmarie.weisman@ed.gov 45 For training and discussion purposes only 15

QUESTIONS? 46 Top 11 Resources 47 Top 11 Resources FSA Assessments http://ifap.ed.gov/qahome/fsaassessment.

16 QUESTIONS? 46 Top 11 Resources 47 Top 11 Resources FSA Assessments Consumer Information/Campus Security Return of Title IV Funds Institutional Eligibility Satisfactory Academic Progress Verification Fiscal Management Guide to Creating a Policies and Procedures Manual 48 For training and discussion purposes only 16

17 Top 11 Resources FSA Training Fundamentals of Federal Student Aid Administration FSA Coach Consumer Information Satisfactory Academic Progress Institutional Eligibility Recorded Webinars 49 Top 11 Resources Federal Student Aid Handbook Application and Verification Guide Chapter 4: Verification, Updates and Corrections Chapter 5: Special Cases Volume 1 (Student Eligibility) Chapter 1: School-Determined Requirements Volume 2 (School Eligibility and Operations) Chapter 6: Consumer Information & School Reports 50 Top 11 Resources Federal Student Aid Handbook Volume 4 (Processing Aid and Managing FSA Funds) Chapter 2: Disbursing FSA Funds Chapter 3: Overawards and Overpayments Chapter 5: Reconciliation in the Pell Grant and Campus-Based Programs Chapter 6: Reconciliation in the Direct Loan Program Appendix A: Accounting Systems Volume 5, Chapter 1 (Withdrawals and the Return of Title IV Funds) 51 For training and discussion purposes only 17

18 Top 11 Resources Code of Federal Regulations Title 34, Education Part 84 (Drug Free Workplace) Part 86 (Drug and Alcohol Abuse Prevention) Part 99 (Family Education Rights and Privacy) Part 600 (Institutional Eligibility under the Higher Education Act of 1965, as amended) Part 668 (Student Assistance General Provisions) Parts (Campus-Based Provisions) Part 685 (William D. Ford Federal Direct Loan Program) Part 686 (TEACH Grant Program) Part 690 (Federal Pell Grant Program) 52 Top 11 Resources Campus Security Entrance/Exit Counseling Return of Title IV (R2T4) on the Web 53 Top 11 Resources 2013 Blue Book Direct Loan School Guide ( ) School Data on StudentAid.gov 54 For training and discussion purposes only 18

Top Ten Compliance Concerns

Top Ten Compliance Concerns Rick Renshaw Training Officer Federal Student Aid U.S. Department of Education Agenda Top ten compliance concerns Details of common findings and areas of concern 2 Top Ten Compliance