Uncovering the Hidden Liabilities in Your Office

MASFAA Conference 2008November 19, 2008

Kimberly Tibbetts Jean RickerVP for Compliance Financial Aid ManagerHigher Education Asst. Group Franklin W. Olin College of Engineering

You should leave this session knowing how to

locate tools with which to find the hidden liabilities in your office

put together a Compliance Committee develop your own internal review plan create a corrective action plan

Group Work to get you in the mood FA Forensics at Work

Compliance Committee Identify Areas of Liability Develop a periodic review plan Create an effective Corrective Action Plan

Open Discussion

1) New Academic Programs: Your Academic Department has created a new certificate program and failed to inform Financial Aid. What do you do?

2) Institutional Disclosure Requirements – Your Campus Security Office refuses to send out the annual crime statistic notification. What do you do?

3) SAP- Institutional vs. FA. A student is not making SAP for Financial Aid purposes but the institution is choosing to allow the student to remain enrolled and take courses. What do you do?

4) IT- system upgrades- your institutions integrated system periodically delivers updates/upgrades based on changes in DOE regulation- some FA related some institutionally related. Your IT Dept is behind in the installation of these upgrades which causes institutional vulnerability with regard to compliance. What do you do?

5) Withdrawals- your Registrar has a habit of back dating withdrawals and/or failing to notify FA when a student withdraws from the institution. What do you do?

Put together a Compliance Committee consisting of at least the following members: FAO Registrar Bursar/Student Account Office Admissions Academic Affairs Faculty IT

Meet every other week for the first 6 – 12 months - monthly thereafter

Develop a list of topics to discuss Currently existing issues Upcoming changes to regulations Solicit topics from other departments More topics will emerge as more meetings

take place

Allow time for each department to update the committee about what is going on in his/her area This will be your opportunity to discover what

the other departments are doing and if it will have an impact on the FAO

This opens up the opportunity for discussion and becomes a regulatory training moment

This sets the foundation for future collaboration with other departments

To ensure institutional compliance To kindly remind all departments of their

responsibilities as compliance officers To find any hidden liabilities within your

institution To develop stronger partnerships with

essential departments

Double Review Process

Create a policy and procedure (P&P) to support the following process to be performed every enrollment period

Secondary review of verification prior to disbursement

Secondary review of R2T4 prior to returning aid

To find any hidden problems before they grow exponentially If there is a consistent problem, this provides

you with the opportunity to develop a Corrective Action Plan, adjust your P&P, and retrain your staff

To give the FAO time to correct the problem before the student leaves your institution

If your office is too busy to do a secondary review…

do a mini audit before the end of the enrollment period

Remember…if you begin to find a significant number of problems, it would be best to utilize the Double Review Process

Select a small sampling of verified files Review student eligibility Review verification Review the award Review disbursed aid amounts

Select a small sampling of students who withdrew from the semester or institution Review R2T4 process Review NSLDS reporting

Cure files Alter your P&P to reflect the changes Train FAO personnel

Perform an internal compliance review to determine if there are any errors that can be corrected prior to the A133 review or before the aid year closes Use the list of Common Findings and findings

from your previous A133 reviews to develop a list of areas to review

If you have a Corrective Action Plan in place, be sure to test to ensure that your office is complying with its own plan

To find any hidden problems It is always better to know the areas that may

be problematic in an A133

To give the FAO time to correct the problem and develop a corrective action plan to have ready for the auditors if needed

Late Refund/Returns to Title IV Account Incorrect Return of Title IV Funds Calculation Entrance/Exit Counseling Deficiencies Enrollment Report (SSCR) Issues Repeat Finding-Failure to Take Corrective

Action Auditor Opinion Cited in Audit Student Credit Balance Deficiencies Verification Violations Pell Over/Under Payments

A Corrective Action Plan must describe the corrective action taken or planned in response to findings identified.

Once a problem has been identified, either though an A133 or your own FA Forensics plan, you need to develop a corrective action plan to correct the problem and ensure that it does not occur again.

Identify issues Schedule a meeting

Bring together all the folks who impact or are impacted by the issues

Be sure to include IT if the solution will require utilization of the system

Meet Lay out the problem and explain why it is an

issue Explain the regulation that must be met Brainstorm a solution

Document the solution Implement the solution Test the implemented solution Conduct a follow up meeting if any

tweaking is needed Be sure to test this area in next year’s

annual internal review audit

IFAP website FSA Assessment NASFAA Self Evaluation Guide Annual Auditor Training Conference

Higher Education Assistance Group, Inc Verification Review Form (www.heag.us) Compliance/Efficiency Guide (www.heag.us)

Share your successesWhat have you implement at your school to ensure that your institution is compliant?

How did you create a institution wide compliance team?

Anything you would like to share with the group?

Any problems to bring to the group?

Kimberly Tibbetts (617) 620-5875VP for ComplianceHigher Education Asst. Groupkdowd@heag.cnc.netwww.heag.us

Jean Ricker (781) 292-2343Financial Aid ManagerOlin College of Engineering jean.ricker@olin.edu