Common Audit and Program Review Findings

1. Common Audit and Program Review Findings PASFAA Conference, Harrisburg PA Annmarie Weisman | 10.31.2012

2. Agenda • Common Audit and Program Review Findings • Suggestions for Corrective Action • Questions & Answers

3. Return to Title IV (R2T4) Calculation Errors Return(s) Made Late Return(s) Not Made Pell Overpayment/Underpayment Verification Violations Overaward-Financial Need Exceeded Common Audit Findings

4. Enrollment Status Not Verified Before Disbursement Improper Certification of Stafford Loan Credit Balance Deficiencies Satisfactory Academic Progress Errors (SAP) Repeat Finding—Failure to Take Corrective Action Common Audit Findings

5. Verification Violations Crime Awareness Requirements Not Met Credit Balance Deficiencies R2T4 Calculation Errors R2T4 Made Late Common Program Review Findings

6. Entrance/Exit Counseling Deficiencies Account Records Inadequate/Not Reconciled Info. in Student Files Missing/Inconsistent SAP Policy Not Adequately Developed/ Monitored Pell Overpayment/Underpayment Common Program Review Findings

7. Verification Violations R2T4 (Calculation Errors, Made Late, Not Made ) Pell Grant Over/Underpayments Credit Balance Deficiencies SAP Crime Awareness Requirements Not Met Repeat Finding – Failure to Take Corrective Action Our Focus: Findings on Both Lists and Other Significant Findings

8. Verification Worksheet not signed Untaxed income not verified Conflicting data on ISIR and verification documents not resolved Required corrections not processed Regulations: 34 C.F.R. §§ 668.51-668.61 Verification Violations

9. Verification Violations

10. Other Compliance Solutions: Monitor verification process to ensure procedures are followed Perform your own audit of sample files FSA Assessments: Students FSA Verification Use Verification Worksheet School developed or ED worksheet Verification Violations

11. Incorrect institutional charges for the period Payment period vs. period of enrollment Scheduled breaks not correctly determined Incorrect # of days counted for the period Incorrect withdrawal date Mathematical and/or rounding errors Regulation: 34 C.F.R. § 668.22(e) R2T4 Calculation Errors

12. Other Compliance Solutions: Pay attention to new regulations; revise procedures as needed Perform self-assessment by reviewing a random sample of student files FSA Assessments: Managing Funds R2T4 module Use R2T4 Worksheets Electronic Web Application Paper R2T4 Calculation Errors

13. Returns not made timely (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 Lack of coordination between offices Regulation: 34 C.F.R. § 668.22(j) R2T4 Funds Made Late

14. Institution unaware that student withdrew No system in place to verify that R2T4 calculations (or the return) were made Lack of communication/coordination between offices Regulation: 34 C.F.R. § 668.22 R2T4 Funds Not Made

15. R2T4 Calculation Errors

16. R2T4 Funds Made Late

17. R2T4 Funds Not Made

18. Other Compliance Solutions: Design procedures to ensure timely communication among offices Train and assign responsibility to staff for monitoring the R2T4 process Perform internal audit by reviewing a random sample of student files of students who have withdrawn Review internal system to track withdrawals R2T4 Made Late/Not Made

19. Other Compliance Solutions: Periodically review processes/procedures Tracking/monitoring deadlines Timely communication between offices Use R2T4 on the Web FSA Assessment: Managing Funds Fiscal Management R2T4 Funds Made Late?Not Made

20. Adjustments not made for change in enrollment status between terms Attendance not documented in all coursework counted in enrollment status Modules or compressed coursework Incorrect information used Pell formula, EFC, # of weeks/hours Inaccurate proration calculation Regulations: 34 C.F.R. §§ 690.62 and 690.79 Pell Grant Over/Under Payment

21. Pell Grant Over/Under Payment

22. Other Compliance Solutions: Use correct enrollment status Use correct Pell Formula/Schedule Verify that student began attendance in all coursework Prorate when needed Assign responsibility of monitoring to ensure Pell disbursements are accurate and timely Pell Grant Over/Under Payment

23. Credit Balance Deficiencies

24. Other Compliance Solutions: Develop a process to determine when a credit balance is created Develop a system to track number of days remaining to release funds timely Understand regulations regarding minor prior year charges May create more credit balances if entire program cost is charged upfront 2010-11 FSA Handbook, Vol. 4, pp. 4-10 to 4-13 Credit Balance Deficiencies

25. No process in place to determine when a credit balance has been created Credit balances not released to students within required 14-day timeframe Credit balances held without student authorizations Regulation: 34 C.F.R. § 668.164 (e) Credit Balance Deficiencies

26. Missing required components Qualitative, quantitative, completion rate, maximum timeframe, probation, appeals Policy not at least as strict as for non-Title IV recipients Standards inconsistently applied Aid disbursed to students not making SAP Regulation: 34 C.F.R. § 668.16(e) SAP Policy Not Adequately Developed/Monitored

27. SAP Policy Not Adequately Developed/Monitored

28. Other Compliance Solutions: Develop adequate SAP policy remedial and repeat coursework warning/probation periods appeal process Document each student’s file to reflect eligibility for disbursements 34 C.F.R. 668.34 consolidated all SAP regulations - published Nov. 1, 2010 SAP Policy Not Adequately Developed/Monitored

29. Same finding(s) in subsequent audit(s) School failed to adequately develop, implement, and/or monitor procedures to ensure Corrective Action Plan (CAP) was followed Problem identified too late to avoid repeat finding New issue but same finding title Regulations: 34 C.F.R. §§ 668.16 and 668.174 Repeat Finding-Failure to Take Corrective Action

30. Repeat Finding-Failure to Take Corrective Action

31. Review results of CAP Is it working? Are changes needed to improve process? Develop specific procedures for CAP action items Assign responsible person/office to ensure CAP is implemented/monitored Conduct student file reviews FSA Assessments Repeat Finding-Failure to Take Corrective Action

32. Policies and procedures regarding campus security not adequately developed Annual report not published and/or distributed annually to current students/staff by the required deadline Failure to develop a system to track and/or log all required categories of crimes Crime Awareness Requirements Not Met • Regulations: 34 C.F.R. §§ 668.41 and 668.46(c)(1)

33. Crime Awareness Requirements Not Met

34. Other Compliance Solutions: Review Handbook for Campus Crime Reporting http://www.ed.gov/admins/lead/safety/handbook.pdf Review HEOA additional requirements Emergency response, timely warnings Fire safety, missing persons Review Information Required to be Disclosed Under the Higher Education Act: Suggestions for Dissemination http://nces.ed.gov/pubs2010/2010831rev.pdf Crime Awareness Requirements Not Met

35. Include adequate detail. Sample CAP: We trained all staff on proper verification procedures. Better CAP: The DFA developed a checklist to use when completing verification. All FAO staff attended a two hour training session on verification in March 2011. The DFA will review five files where verification was done by each FAO each quarter. Suggestions for a Strong CAP

36. Provide a strong solution. Sample CAP: This finding was the result of staff oversight. Staff will be more careful in the future. Better CAP: The DFA will run a weekly report each Monday to identify withdrawals from the prior week. All FAO staff will review the report for the addition of their assigned students. The DFA will also run a report of students who withdrew more than 30 days ago, but with no R2T4 calculation. Suggestions for a Strong CAP

37. RESOURCES

38. Self-assessment tool designed to assist schools in evaluating their financial aid policies, processes, and procedures Includes assessment modules on Students, Schools, Managing Funds, and Policies and Procedures http://www.ifap.ed.gov/qahome/fsaassessment.html FSA Assessments

40. Help with Title IV Questions • For Schools & Other Professionals • Research and Customer Care Center (RCCC) • 1-800-433-7327 • fsa.customer.support@ed.gov • For Students • Federal Student Aid Information Center (FSAIC) • 1-800-4FED-AID

42. Contact Information • For follow-up questions on this session, contact me at: Annmarie Weisman, Training Officer annmarie.weisman@ed.gov 215-656-6456 • To provide feedback to my supervisor, contact: Jo Ann Borel, Supervisor joann.borel@ed.gov 281-758-8122

43. Region III Training Team • Greg Martin, Training Officer • gregory.martin@ed.gov • 215-656-6452 • Craig Rorie, Training Officer • craig.rorie@ed.gov • 215-656-5916 • Annmarie Weisman, Training Officer • annmarie.weisman@ed.gov • 215-656-6456

44. Evaluation Your attention is appreciated at today’s session! To provide feedback to me and my supervisor, please complete an evaluation form. Thank you!!!

45. QUESTIONS?