session c-30 top 10 audit and program review findings and how to identify them tom beckerle laura...
TRANSCRIPT
Session C-30
Top 10 Audit and Program Review Findings and How To
Identify Them
Tom BeckerleLaura Hall
U.S. Department of Education
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Audit Findings: Top 10
• Repeat Finding-Failure to Take Corrective Action
• Return of Title IV Funds Made Late• Return of Title IV Funds Calculation Errors• Entrance/Exit Counseling Deficiencies • Student Status-Inaccurate/Untimely
Reporting
3
Audit Findings: Top 10
• Auditor Opinion Cited in Audit• Verification Violations• Pell Over/Under Payments• Student Confirmation Report Filed Late/Not
Filed/Not Retained for Five Years/Inaccurate (similar to #5)
• Student Credit Balance Deficiencies
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Program Review Findings: Top 10
• Verification Violations • Crime Awareness Requirements Not Met• Return to Title IV Calculation Errors• Entrance/Exit Counseling Deficiencies• SAP Policy Not Adequately Developed
and/or Monitored• Return of Title IV Funds Made Late
Tie
5
Program Review Findings: Top 10
• Student Credit Balance Deficiencies• Information in Student Files Missing or
Inconsistent• Pell Over/Under Payments• Consumer Information Requirements Not
Met• Improper/Undocumented Dependency
Overrides• Lack of Administrative Capability
Tie
Tie
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Findings on Both Lists
• Return to Title IV Calculation Errors• Return of Title IV Funds Made Late• Pell Over/Underpayments• Verification Violations• Entrance/Exit Counseling Deficiencies• Student Credit Balance Deficiencies
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Audit Findings
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Repeat Finding-Failure to Take Corrective Action
• Same finding(s) identified in subsequent audit(s)
• School failed to adequately develop, implement, and/or monitor procedures to ensure Corrective Action Plan was followed
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Repeat Finding-Failure to Take Corrective Action
• Example: Repeat findings for Pell Overpayments, Student Status Confirmation Report Submitted Late, and Credit Balance Deficiencies
• Solution: Determine why CAP was not effective and make adjustments as necessary
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Other Compliance Solutions
• Review results of Corrective Action Plan– 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
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• 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
• Lack of coordination between offices
Return of Title IV Funds Made Late
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• Example: Unearned Pell Grant funds were returned between 76 and 158 days late
• Solution: Ensure a knowledgeable person has responsibility for tracking the return of funds
Return of Title IV Funds Made Late
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• Design processes and procedures to track/monitor the deadlines
• Ensure timely communication between offices
• Use R2T4 on the Web report feature
Other Compliance Solutions
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R2T4 Calculation Errors
• Incorrect institutional charges for the period• Scheduled breaks not included• Incorrect withdrawal date• Use of out-of-date R2T4 forms• Mathematical errors
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R2T4 Calculation Errors
• Example: R2T4 calculation based on incorrect number of days in payment period
• Solution: Review and modify R2T4 policies and procedures to ensure a correct understanding of the calculation requirements
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Other Compliance Solutions
• Use correct institutional charges for the payment period– Prorate if all charges assessed upfront– Understand when to include book charges
• Use R2T4 Worksheets– Electronic Web Application– Paper
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Entrance/Exit Counseling Deficiencies
• Entrance counseling not conducted/not documented for first-time, first-year students
• Exit counseling materials not mailed to students who failed to complete in-person or on-line counseling
• Exit counseling not conducted for withdrawn students
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Entrance/Exit Counseling Deficiencies• Example: School’s system failed to identify
all students who ceased enrollment on at least a half-time basis, resulting in exit counseling materials not mailed to withdrawn students
• Solution: Assign responsibility for monitoring the exit interview process; modify automated system
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Other Compliance Solutions
• Develop process for documenting student completion
• Develop procedures for ensuring communication between Registrar, Educational, and Financial Aid Offices
• Seek support from lenders/GAs or ED (for Direct Loans)
• Provide staff training– FSA Coach, Module 4: Loan Counseling
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• Submittal File not returned within 30 days of receipt of Roster File
• Use of incorrect enrollment status code– “W” for graduated student
• Incorrect graduated effective date• Student(s) reported as withdrawn for
summer break even though expected to return in the fall
Student Status-Inaccurate or Untimely Reporting
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Student Status-Inaccurate or Untimely Reporting
• Use of third-party servicers– School failed to transmit enrollment data
to servicer– School failed to ensure file was submitted
by servicer timely•School responsible for timely response
to NSLDS
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Student Status-Inaccurate or Untimely Reporting
• Example: Student enrollment status and/or effective date reported incorrectly; SSCR Submittal Files returned late
• Solution: Provide training to personnel on correct status/dates; implement monitoring system to ensure timely reporting
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Other Compliance Solutions
• Develop process for enrollment verification• Maintain accurate enrollment records• Use the correct status codes
– A, D, F, G, H, L, W, X, Z• Designate responsibility for monitoring the
SSCR reporting deadlines• Maintain SSCR documentation
– Acknowledgement/Error File
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Auditor’s Opinion Cited in Audit
• Refers to anything other than an unqualified opinion
• Indicates serious deficiencies/areas of concern in the compliance audit and/or audited financial statements
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Auditor’s Opinion Cited in Audit
• Failure to reconcile program accounts• High Perkins default rate• On-going problems with incorrect R2T4
calculations• Inadequate accounting systems and/or
procedures• Lack of internal controls
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Auditor’s Opinion Cited in Audit
• Example: Lack of Administrative Capability– Incorrect R2T4 Calculations, Improper
Academic Progress Standards, Inadequate Accounting System
• Solution: Review and revise policies and procedures; implement accounting system in accordance with generally accepted accounting principles
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Other Compliance Solutions
• Perform monthly reconciliation of Title IV program accounts
• Develop and implement a Perkins default management plan
• Provide training on how to correctly calculate R2T4– FSA Coach, Module 8
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Verification Violations
• Verification Worksheet not signed• Untaxed income not verified• Conflicting data on ISIR and verification
documents not resolved• Required corrections not processed
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Verification Violations
• Example: Incomplete Verification– No tax return submitted for parent even
though earned income required filing– Incorrect number in household size
• Solution: Follow published verification procedures; ensure all required items are verified; document student files
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Other Compliance Solutions
• Monitor verification process to ensure procedures are followed
• Perform a self-assessment by reviewing a random sample of student files
• Use Verification Worksheets– School developed or ED worksheets
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Pell Grant Over/Under Payment
• Adjustments not made for change in enrollment status between terms
• Attendance not documented in all coursework counted in the enrollment status– Modules or compressed coursework
• Incorrect Pell Formula• Inaccurate proration calculation• Incorrect EFC
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Pell Grant Over/Under Payment
• Example: ISIR correction resulted in an increase to the EFC; however, aid was not recalculated/reduced
• Solution: Develop procedures to ensure all subsequent ISIRs are reviewed and aid is adjusted accordingly
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Other Compliance Solutions
• Use correct enrollment status• Use correct Pell Formula/Schedule• Verify that student began attendance in all
coursework• Prorate when needed
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Student Credit Balance Deficiencies
• 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
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Student Credit Balance Deficiencies
• Example: Credit balance held for 111 days without student authorization
• Solution: Develop and implement procedures and controls to identify and release credit balances timely
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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 new regulations regarding prior year charges– May create more credit balances if entire
program cost is charged upfront
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Program Review Findings
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Program Review Findings: Top 10
• Verification Violations • Crime Awareness Requirements Not Met• Return to Title IV Calculation Errors• Entrance/Exit Counseling Deficiencies• SAP Policy Not Adequately Developed
/Monitored• Return of Title IV Funds Made Late
Tie
39
Program Review Findings: Top 10
• Student Credit Balance Deficiencies• Information in Student Files Missing or
Inconsistent• Pell Over/Under Payments• Consumer Information Requirements Not
Met• Improper/Undocumented Dependency
Overrides• Lack of Administrative Capability
Tie
Tie
40
Crime Awareness Requirements Not Met
• Policies and procedures not developed• Annual report not published and/or
distributed annually to current students/staff
• Failure to report statistics on website or crimes reported in wrong category
• Failure to provide timely warnings and/or notifications of crimes committed
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Crime Awareness Requirements Not Met
• Example: Failed to develop/disclose procedures when a student reports a crime to campus pastoral counselors/professional counselors
• Solution: Develop/disclose procedures to guide counselors in their dealings with students
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• Develop process for gathering crime statistics
• Identify person(s) responsible for campus crime requirements
• Develop communications plan for timely warnings and notifications
Other Compliance Solutions
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SAP Policy Not Adequately Developed/Monitored
• Policy fails to address required components– Qualitative, quantitative, completion rate,
and/or maximum timeframe• Policy less strict than policy for non-Title IV
recipients • SAP standards not consistently applied• Aid disbursed to students who were not
meeting minimum SAP standards
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SAP Policy Not Adequately Developed/Monitored
• Example: Students were not meeting minimum GPA at the end of a probationary period and were therefore not eligible for aid; however, school disbursed the aid
• Solution: Develop procedures to ensure policy is followed; check SAP prior to disbursing aid
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• Develop adequate SAP policy– Required components, remedial and
repeat coursework, probationary periods, appeal process
• Document each student’s file to reflect eligibility for disbursements
• Follow your written policy!
Other Compliance Solutions
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Information in Student Files Missing or Inconsistent
• Institutional data (admissions, registrar) conflicts with ISIR data
• ISIR data conflicts with other documentation in financial aid file
• No documentation to support professional judgment/dependency override
• Failed to retain ISIR used to establish award
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Information in Student Files Missing or Inconsistent
• Example: Income on ISIR conflicts with income reported on Institutional Non Tax-Filer Form; inconsistency not resolved
• Solution: Design process to ensure all conflicts are researched and resolved
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Other Compliance Solutions
• Pay attention to student files• Perform your own ‘review’ of student files• Review all subsequent ISIRs• Establish communication with other offices
at the institution to identify and address inconsistent information
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Consumer Information Requirements Not Met
• Written verification policy not provided to students selected for verification
• R2T4 policy not published or incomplete– Withdrawal policy– Basic explanation of R2T4 calculation
• SAP policy incomplete
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Consumer Information Requirements Not Met
• Example: Written verification policy did not include the required components– Deadlines, consequences, notifications,
procedure for correcting data
• Solution: Revise policy to include all required components
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• Ensure all required consumer information is accurate, complete, and provided to students in writing
• Ensure someone is available during normal operating hours to address student questions or concerns about consumer information
Other Compliance Solutions
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Improper/Undocumented Dependency Overrides
• Dependency override performed for invalid reason– Student was self-sufficient– Parent(s) didn’t claim student on tax
return• No documentation in student file• Failure to confirm continued unusual
circumstance in new award year
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Improper/Undocumented Dependency Overrides
• Example: Routinely performed dependency overrides for students whose parents reside in a foreign country and the students supported themselves
• Solution: Develop policies that conform to Title IV rules; obtain adequate documentation to support the unusual circumstance
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• Develop written procedures• Make decisions by committee• Ensure your process does not allow for
‘mass’ D/O based on similar situations• Document, document, document!
Other Compliance Solutions
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Lack of Administrative Capability
• Indicates numerous/significant findings• Most common areas of noncompliance
involve– Separation of duties– Adequate checks and balances– System of internal controls– Adequate staffing
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Lack of Administrative Capability
• Example: Late R2T4, incorrect COA used for awarding, incomplete verification, loans not prorated, Perkins Loan Program not adequately administered
• Solution: Designate capable individual(s) to oversee financial aid process; develop and implement internal controls
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• Hire and retain adequate number of experienced personnel
• Establish a process of timely communication between all relevant offices
• Ensure that no one person or office has the ability to award and disburse aid
Other Compliance Solutions
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• 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
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Contact Information
We appreciate your feedback and comments
Tom Beckerle• Phone: (816) 268-0418• Email: [email protected]
Laura Hall• Phone: (404) 562-6265• Email: [email protected]