NeASFAA Fall Training

How to Survive a Title IV Audit or Program Review

Diane StemperExecutive Director

Enrollment ServicesStudent Financial Aid

The Ohio State University

Agenda

Federal Program Review and Audits What are they? Why?

Preparation While audit is occurring - expectations Completion of audit and findings Next steps

Enrollment Services

Why do we have to endure a U.S. Department of Education Program Review?

Authority for Program Reviews is defined by Congress to

ED to ensure necessary oversight of Title IV institutional

participants Section 498A (administrative capability & financial

responsibility)

What are Program Reviews and Title IV Audits?

“Why?”Purpose is to evaluate compliance, identify

liabilities/risks, and enhance institutional

administrative capabilitiesEnsure the efficient and effective use of taxpayer

dollars in support of American educationIdentify financial aid compliance risks and financial

liabilityMake conclusions and recommendationsDetermine corrective action

Types of Audits•Public & Non-Profit Institutions:

A-133 Due within 9 months of the fiscal year end (FYE) date(-More requirements, more time)

•For-Profit Institutions:SFA Audit GuideDue within 6 months of the fiscal year end (FYE) date

Schools must arrange for regular independent audits that include the operation of the FSA programs.

Types of Audits and Reviews

Focused

Full Scope

Program Review Triggers High cohort default rate Significant changes in Direct Loan or Pell volume Late refunds Deficiencies reported by state licensing or accrediting

agencies Financial responsibility standards High withdrawal rates Significant audit findings Repeat findings or recurrent problems Significant risk of noncompliance with administrative capability Complaints from students or adverse publicity Institutions that haven’t had a review in a number of years Frequent change in financial aid leadership

ED’s GoalsIdentify any institutional weakness(es)Frame required actions to strengthen institutional

complianceQuantify harm of noncomplianceAdministrative action to protect students and

taxpayers

Institutional GoalsUnderstand and ensure compliance with Program

Review requirementsRespond as quickly and accurately as possible to the

multiple data requests prior to the on-site visitRemain professional throughout the site visit and at

all times (email, phone, etc.)Manage the Program Review and follow-up to

mitigate liabilities and administrative action

Positives of a Program ReviewIncrease visibility of our complex financial aid world

(one campus even received additional staff after their Review)

Raise awareness of Federal Title IV compliance as a campus-wide responsibility

Learn what you are doing right!Assess and make focused

improvements/enhancementsMitigate liabilities and administrative actions

You’ve Been Selected

You’ve Received a Letter

Don’t PanicRemember that auditors and reviewers are financial

partnersRead the letter carefully

Contact the reviewerNotify senior campus officials immediatelyDiscuss with staff

Provide overview of what to expect

Program Review Timeline2-4 weeks advanced notice (but sometimes very

short notice, especially in cases of serious complaints or adverse media)

Typically 1 week on-campusWritten report 1-6 months laterSchool response due in 30 daysFinal Determination Letter (or, in cases of few or no

findings, an expedited Determination Letter)Appeal process

PREPARATION

Institutional Responsibility

“Point” Person

Admissions

Financial Aid

President’s Office

Bursar

Registrar

3rd Party Servicers

How to PrepareRead the 2009 ED Program Review Guide http://www.ifap.ed.gov/programrevguide/2009Progra

mReviewGuide.htmlReview the sample file and policy review checklistsReview and prepare for sample student/staff

interview questionsObtain outside help if needed

Rally the ResourcesIdentify key staff to compile required documents –

share the responsibilityPull filesConduct individual interviews as neededResolve issuesPrepare to provide copies of entire student records

(FA files, admission applications, student records, academic transcripts, student account files, R2T4 calculations/payments, etc.)

Internal ReviewsLocate a Program Participation Agreement (PPA)

and Eligibility and Certification Approval Report (ECAR)

Review prior audits Standard of Administrative Capability (34 CFR

668.16) Corrective Action Plan (CAP) should have

indicated corrective steps taken What procedures are in place? Make sure prior deficiencies are addressed!

Tools of the TradeFSA Handbook ISIR GuideDear Colleague LettersFederal RegistersCode of Federal RegulationsFSA Assessment ToolNASFAA Standards of Excellence

ReviewNASFAA Self-Evaluation GuideThe Blue Book

Preparation for Audit

Review operational practices Review and update policy and procedures

documents for packaging Conduct training sessions on regulatory changes,

ongoing reminders and compliance information

Requested Documents Include:Policies and Procedures ManualSample FSA formsCost of Attendance BudgetsPell Electronic Statement of Account (ESOA)

InformationReturn to Title IV (R2T4) worksheetsDocumentation of cash requests/refunds/returnsDefault management plan, if requiredFISAPSatisfactory Academic Program and refund policies

Requested Documents Include: ISIRsLatest accreditation statusThird party servicer contractsAdministrative software utilizedProgram Participation Agreement (PPA) and

Eligibility and Certification Approval Report (ECAR)Financial statements for past two yearsCampus security reportCatalogConsumer information

Specific Prep Items Chart of accounts/funds information Control/process memos List of trainings and in-services for staff Policies for notifying ED and NSLDS of student status

change Reciprocity students Cost of Attendance (COA) budgets Compensation plans Recruiting policies Satisfactory Academic Progress & Academic progress Consortium or other program agreements MOAs

Program Review and Audit: Helpful Hints

Provide single point of contact

Ask for requests in writing or confirm understanding in writing for clarity

Keep copies of everything provided: you will look at the stuff again

Provide a comfortable place for reviewers to work

Respond promptly to requests

Do not answer the “unasked” question

Challenge findings

Managing the VisitGive the Program Reviewers space, but be available

and check in periodically to see if anything is neededKeep detailed notes of all questions, follow-ups,

documents providedTrack open items and resolutionsIf possible, have your staff review COD and NSLDS

records of student sample group before the visit (or as soon as you receive the list)

Entrance InterviewPresident/ChancellorVice President(s)/ProvostDirectors of key departments (Bursar, Admissions,

Comptroller, Chief Fiscal Officer(s), Internal Audit)

Entrance Interview OverviewWelcome and introductionsProgram Reviewers will explain to the group:

The purpose of the Review The scope of the Review The Timeframe, including the date/time of the Exit

Interview (typically with the same invitees)Clarify the campus operating parameters (hours of access to

campus personnel) for Program Reviewers Clarify who Program Reviewers will need to meet withRemain professional, courteous and cautious responding only

to what is requested (and prepare others accordingly)

Exit InterviewAdvise campus colleague attendees of any

preliminary issues you may be aware of before the Exit Interview

Ask a campus colleague to take detailed notesAsk for regulatory citations for any issues you may

questionPrepare your own list of questions for the Program

ReviewersDiscuss any findings or unresolved issues

appropriately – it is ok to ask questions (but don’t be confrontational)

50 Ways to Survive a Federal Title IV Program

Advise legal counsel of the visit in case they are needed Do everything you can to maximize the success of the review – do not feel

bad about asking staff or key responders to reschedule/postpone leave or appointments to accommodate the review – this is important stuff

You will need help – ask for it and keep asking until you get it! Trust that you know things Remember that no one knows everything, especially immediately from

memory Stress that everyone involved should keep notes on all conversations of

substance Ease tension for financial aid staff and other core responders by meeting to

discuss the review Listen more, talk less DON’T ANSWER QUESTIONS THAT ARE NOT ASKED

50 Ways to Survive a Federal Title IV Program

Be sure you understand any questions before trying to answer An honest answer to any question is all that is needed– however, do

not answer when you don’t know (no guessing!) or unnecessarily expand an answer – it’s okay to say “I’d like to get back to you on that”

Ask questions; respectfully disagree – a reviewer may not be an expert in every area of financial aid (like systems)

Keep organized; if you have the option, use an “assistant” Don’t treat reviewers like the enemy; be cautious but professional Establish a congenial working relationship with the reviewers Assume there will be findings

50 Ways to Survive a Federal Title IV Program

When discussing findings, ask questions if you are unclear – you can state “do not concur”

You will have a good sense of what will be shared at the exit interview - prepare those who will attend no matter how negative the findings – it is much better to hear it from you first than in a group setting with the reviewers

During review ask for regulatory/statutory citations and make sure you understand how they apply to the findings

Make sure you keep all reviewed materials together to ensure you know what reviewers saw at the time of the review

Completion of Audit

Understand findings so corrective action can occur Write responses in timely fashion, involve other units Potential items:

Inaccurate/untimely reporting of enrollment status Attendance first day (distance vs. non-distance) Withdrawal date Earn and unearned “F” grade Grade level information, notification of Full-time/part-time documented Degree progress Course repeat rules enforced

Frequent Audit Findings Auditor opinion cited in audit (qualified or adverse)

Verification violations

Pell over/under payments

Student Credit Balance deficiencies

Student confirmation report filed late/not filed/not retained for five years/inaccurate

Return of Title IV late, calculation errors

Entrance/Exit Counseling

Repeat finding – failure to take corrective action

Student Status – inaccurate/untimely reporting

Most Frequent Program Review FindingsVerification Crime awareness reportingReturn of Title IV late, calculation errorsEntrance/Exit CounselingSAPStudent Credit Balance deficienciesMissing or inconsistent information in student filesPell over/under paymentsIneligible Pell disbursement

Most Frequent Program Review FindingsConsumer information deficiencies Improper dependency overridesLack of administrative capabilitiesImproper Certification of Student LoansRepeat finding – failure to take corrective actionStudent Status – inaccurate/untimely reporting

Some additional recent findings:FWS students paid for time they were scheduled for classDocumenting Pell recipients’ initial attendance and/or

documenting dropping a class and reducing Pell accordingly

Findings on Both Lists

Return of Title IV late, calculation errors Entrance/Exit Counseling deficiencies Verification violations Pell Grant over/underpayments Student Credit Balance deficiencies Repeat finding – failure to take corrective action

Student Status – inaccurate/untimely reporting

Next Steps

Create priority list for implementation of correcting findings

Create an implementation timeline Review frequently

Online ResourcesTop 10 Audit and Program Review Findings: 

http://www.nasfaa.org/Main/orig/2012/Top_10_Audit_and_Program_Review_Findings.aspx

 

Compliance Resources for Financial Aid Professionals:    http://www.nasfaa.org/compliance/

Program Review Guide for Institutions 2009:                http://ifap.ed.gov/programrevguide/attachments/2009ProgramReviewGuide.pdf

Successfully Managing a Program Review (again, much of today’s slide deck came from this NASFAA presentation): http://www.nasfaa.org/EntrancePDF.aspx?id=2595

FSA Handbook, Volume 2, Chapter 9, “Program Reviews, Sanctions & Closeout”  http://ifap.ed.gov/fsahandbook/attachments/1112FSAHbkVol2Ch9.pdf

Moving Forward – OSU QA Model

Compliance

TrainingQuality Assurance

Questions?

Thank you!

Diane Stemper DStemper@esue.ohio-state.edu