Post on 30-Dec-2015
Session C-29
Program Compliance 101
An Inside Look at the Operations of the School Participation Teams
Douglas Parrott Geneva Leon
U.S. Department of Education
LasVegas
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Program Compliance Office, FSA
Victoria Edwards, Chief Compliance Officer
• School eligibility• Financial institutions oversight• Integrated partner management• Administrative actions & appeals• Performance improvement & procedures
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FY 2007 Domestic Schools
PublicPrivate Non-ProfitProprietary
Domestic Schools & Funding By Type
FY 2007 Funding Domestic Schools
PublicPrivate Non-ProfitProprietary
Proprietary1,83627.7%
Public1,94429.3%
Priv. Non Profit2,01230.3%
Public$37.2B48.6%
Proprietary$13.3B17.4%
Priv. Non Profit$25.4B
33%
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2007 Foreign School Population (FFEL Only)• 20,624 Students• $525 M • 1.0% Default Rate
Loan Volume
Eligible Schools2007
Funding% of
Funds
$500,000 + 93 19.3% $473,848,671 90.3%
$100,000 – 499,999
168 34.85% $ 42,606,192 8.1%
$1 – 99,999 173 35.9% $ 8,441,800 1.6%
None 48 9.95% -- --
TOTALS 482 100% $ 524,896,663 100%
School Eligibility - Foreign Schools Update
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School Elig: Ensuring Program Integrity
Program Review
Annual Compliance
Audits
Eligibility & Recertification
Annual Financial
Statements
Comprehensive Compliance
Review
Method of Payment
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Every year, Over 50% Schools Reviewed
Eligibility Reviews (e.g., Recertifications, CIOs)
Compliance Audits with Deficiencies
Financial Statements that Do Not Conform
Statistical Analysis of School or Student Data
Program Review
Comprehensive Compliance Review-CCR
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OVERSIGHT ACTIVITIES FY07
Comprehensive Compliance Review 3,498 (56%)
Eligibility and Re-certification 1,874*
Deficient Audit 1,457*
Flagged Financial Statements 1,351*
Completed Merger/CIO 129*
Program Reviews 99*
CCR: School Oversight
* A school may be counted in 1 or more of these activities
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Perform statistical analysis of student & school data
Identify data anomalies & develop action plan
Take follow-up actions & evaluate Examples
• Dependency Override• Verification• AGI Inconsistencies• Recipients over age 65
CCR: Data Anomalies
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Eligibility & Recertification(Begins w/E-App)
Perform Acceptability Review Review Electronic File & Supporting
Documentation, Request Add’l Information Analyze Information Submitted & Verify w/
Accreditor and State Confirm School’s Policies Meet Requirements Examine the School’s Website for Additional
Information
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www.eligcert.ed.gov
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Changes that require 10 day notification only thru E-App: Name, Address, Phone, Fax Principals:
• President, CEO, CFO, FAA, Board• Owners who can influence• 3rd Party servicers
Academic Measurement Closure of a Location Change in Governance New Locations* New Programs*
*unless required to “apply for” & wait for approval
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Eligibility Changes Requiring Application & Approval Prior to
Awarding Title IV Funds New Educational Programs
• Higher Level Offerings, New Vocational Programs, Short-term Programs
New Locations, if• Provisionally Certified, On Cash Monitoring,
Acquired Assets of Another School, Subject to Default Rate Sanction, or Otherwise Restricted by FSA
Changes in Accreditation, Licensure, Structure
Adding New Title IV Programs
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Action# Schools
(FY07)
Revocation 1
Denial (Initial, Recert, CIO) 25
Voluntary Withdrawal 20
Loss of Elig (Other) 68
School Eligibility - Oversight Activities
Action# Schools
(FY07)
Provisional Certification 1,253
Heightened Cash Monitoring 438
Letter of Credit (LOC) 454
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Provisional Reasons
Late Submission of Audits, E-App
Unresolved Program Review or Audit Significant Findings
Provisional Alternative-Letter of Credit
Deficiencies in Administrative Capability
Cohort Default Rates Exceeding Thresholds
Restrictions Imposed by Accreditor & State
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Ez-Audit Systemhttps://ezaudit.ed.gov/EZWebApp/common/login.jsp
Provides Instant Audit Info
Identifies Overdue Audits
Streamlined FSA Review Process
Non-editable PDF file (official record) Retained & Used to Validate Data
Add’l Changes to Reduce Reporting Burden
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Acceptability Review Process
Audits Reviewed for Acceptability & Completeness (Source document is compared to data entered)
Incomplete Notice Posted to the eZ-Audit if not Accepted (return within timeline provided)
Findings are Identified & Sent for Additional Resolution if Necessary
Financial Failures & Adverse Disclosures (i.e. Contingent Liabilities, Debt Agreement Violations, Reviews & Investigations) Identified & Sent for Resolution
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Financial Responsibility
ED Determines by Reviewing Audited Financial Statements (34 CFR §668.171 & 34 CFR §668.15) for the Following:
With an Initial, Recertification, or Reinstate Application to Participate
With a CIO/Merger Application Annually Submitted Audited
Financial Statements
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Add’l Financial Review Tasks Review Zone Reporting Requirements Administer Letters of Credit Release Institutions from Zone,
Provisional & LOC Alternatives Assess Violations of Debt Payment,
Financial Obligation & Past Performance Standards
Perform Pre-Acquisition Review for CIO Make Quality Control Referrals to OIG
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Letters of Credit New Institutions minimum 50% LOC only
Participating Institutions –
• 10% LOC (minimum), Provisional Certification, Zone Reporting Requirements, HCM-1 or HCM-2 or
• 50% LOC (minimum) Considered Financially Responsible
FY 2007: 454 Schools on LOC’s ($298.5 M)
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Integrated Partner Mgmt (IPM)(Phase I: E-App, Ez-Audit, Lender App)
User Interface w/ Additional Help Features Easier Navigation & Single Entry Point for
FSA Service Increased Partner Security Using a Unique
Entity Identifier (Routing Identifier or RID) Proactive Communications w/Partners,
Notifying in Advance When Submissions/Information- Due to FSA
More Electronic Information & Electronic Signatures (App & PPA)
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External Review Process Audits (Annual & OIG)
Program Reviews (ED & GA)
Purpose of External Reviews Evaluate if Institutions are Properly
Administering Title IV Programs
Fulfill Oversight Responsibilities for Title IV Programs
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Audit Resolution Process
ED Performs Acceptability Review
Teams Perform Further Analysis of Compliance Audits w/Deficiencies & CCR
Teams can Contact School or Auditor to Requesting or Clarify Information (may include a total file review)
Teams issue a Final Audit Determination Letter
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Audit – Finding Incorrect
Ask Auditor which Regulation or Law was Violated & Discuss a Reasonable Resolution
Indicate in CAP Reasons Why the Finding is Erroneous
• Necessary for Audit Resolution Process
• Provide Details to Support Position & Cite Regulation or Law in Support of Assertion
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Audit Findings-High Dollar
R2T4 Calculation Errors, Not Made or Made Late
Audit Report Not Submitted – Closed School
Verification Violations
Attendance Records Missing/Policy Inadequate
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Audit Findings-High Dollar (Cont.)
Account Records Inadequate/Not Reconciled
Ineligible Branch/Location FFEL Disbursements Attributed to
Unattended/ Incorrect Payment Periods Single Delivery of FFEL Proceeds/Improper
Disbursement Schedule
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Program Review ProcessAuthority 34 CFR 668.24(f)
Select School for Review
Research Available Data
Determine Type of Review (On or Off-Site; Focused, General Assessment)
Notify the Institution & Request Information
Conduct Entrance Conference & Request Student Files
School Provides Access to Records (FERPA 34 CFR 599.31, 99, 35) & FSA Performs Review
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Program Review: Critical Items
Institutional & Program Eligibility Fiscal & FISAP Review Financial Responsibility Campus Security Incentive Compensation Borrower Choice & Lender/GA Inducements Managing Access to ED Systems
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Program Review: Student Items
Student Eligibility
R2T4 & ATB
Credit Balances
Enrollment Status
Attendance & SAP
Verification & PJ
Dependency Overrides
Cost of Attendance Calculations &
Disbursements-Title IV Funds
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Program Review Outcomes
Conduct Exit Conferences & Provide Preliminary Findings (Optional)
Analyze Workpapers, Prepare & Issue Program Review Report (May Include Total File Review &/or Change in Method of Payment)
If Institution Disagrees w/Finding(s) It Should Provide Details to Support Position
Review Institution’s Response Make & Send Final Determinations
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Program Review & Audit Liabilities
Must be Repaid within 45 Days of Receipt of the FPRD Unless:• Institution Makes Repayment Plan w/ED
• Files an Appeal within 45 days Appeal of Liabilities Must Include:
• Findings, Issues & Facts Being Disputed
• School’s Position w/ Pertinent Facts & Reasons for Position Clearly Stated
• Copy of Final Audit or PR Determination Letter
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PR Findings-High Dollar Improper/Undocumented Dependency
Overrides
Pell- Ineligible Pell Disbursements
Ability to Benefit Violations
Refunds Calculation-Most Fair & Equitable Not Used
Falsification of Records
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PR Findings-High Dollar (cont.) Improper Certification of FFEL
Ineligible Program-Approval Requirements Not Met
Verification Violations
Pell-Overpayment/Underpayment
Fed Perkins Prom Note-Missing, Unsigned, Inaccurate
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Self-assessment Tool Designed to Assist Schools in Evaluating their Financial Aid Policies, Processes, & 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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Method of Payment Advanced Funding – Most Schools Receive
Title IV thru the Method
HCM 1–FSA Uses This Restriction Generally w/Financial Failure & Requires Additional Financial Reporting & Disbursements First
HCM 2 – More Strict Used w/Administrative Capability Concerns (Permits FSA to Sample Submission)
Reimbursement – Similar to HCM2 (No Sampling) Major Program Integrity Concerns
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Program Compliance School Eligibility Victoria Edwards, Chief Compliance Officer– DC (202) 377-4275 Robin Minor, General Manager – Wash DC (202) 377-3173
Call the appropriate School Participation Team for information and guidance on audit resolution, financial analysis, program reviews, school and program eligibility/recertification and school closure information.School Participation Teams – NortheastGeneva Leon, Director – Wash DC(202) 377-3173 geneva.leon@ed.gov
New York/Boston (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, New Jersey, New York, Puerto Rico, Virgin Islands)
William Swift – New York (646) 428-3750Rosemary Torpey - Boston (617) 289-0133Elizabeth Coughlin-New York (646) 428-3737Patrice Fleming - Wash DC (202) 377-4209
Philadelphia (DC, Delaware, Maryland, Pennsylvania, Virginia, West Virginia)
Nancy Gifford - Philadelphia (215) 656-6442John Loreng – Philadelphia (215) 656-6437Michael Frola - Wash DC (202) 377-3364
Foreign SchoolsBarbara Hemelt - Wash DC (202) 377-3168
School Participation Teams-South CentralCarolyn White, Director – Wash DC (202) 377-3173 carolyn.white@ed.gov
Atlanta (Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina)
Charles Engstrom - Atlanta (404) 562-6315Christopher Miller – Atlanta (404) 562-6304Patricia Dickerson-Wash DC (202) 377-4218
Dallas (Arkansas, Louisiana, New Mexico, Oklahoma, Texas)
Patrick Kennedy - Dallas (214) 661-9490Janet Dragoo - Dallas (214) 661-9481Clifton Knight - Wash DC (202) 377-4244
Kansas City (Iowa, Kansas, Kentucky, Missouri, Nebraska, Tennessee)
Ralph LoBosco-Kansas City (816) 268-0410Dvak Corwin – Kansas City (816) 268-0420Phillip Brumback-Wash DC (202) 377-3464
School Participation Teams - NorthwestDouglas Laine, Director – Wash DC (202) 377-3173 douglas.laine@ed.gov
Chicago (Illinois, MN, Ohio, Wisconsin, IN)
Douglas Parrott - Chicago (312) 730-1532David Heath – Chicago (312) 730-1522 Earl Flurkey – Chicago (312) 730-1521
Denver (Colorado, Michigan, Montana, North Dakota, South Dakota, Utah, Wyoming)
Harry Shriver - Denver (303) 844-3677 x116Dan Whiting - Denver (303) 844-3677 x120
San Francisco/Seattle (American Samoa, Arizona, California, Guam, Hawaii, Nevada, Palau, Marshall Islands, N. Marianas State of Micronesia, Alaska, Idaho, Oregon, Wash.)
Linda Henderson- San Fran (415)-486-5609Martina Fernandez-Rosario (415)-486-5605Dyon Toney - Wash DC (202) 377-3639
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Schools Portal: www.fsa4schools.ed.gov
Students Portal: www.studentaid.ed.gov
Information for Financial Aid Professionals: www.ifap.ed.gov
School & Program Eligibility/Recertification: http://www.eligcert.ed.gov
Handy Websites
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We appreciate your feedback & comments
Douglas Parrott (312) 730-1532douglas.parrott@ed.gov
Geneva Leon (202) 377-3173 geneva.leon@ed.gov
Happy Holidays!!