NeASFAA Fall Training - PowerPoint Presentation

NeASFAA Fall Training How to Survive a Title IV Audit or Program Review Diane Stemper Executive D irector Enrollment Services Student 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

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 participantsSection 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 liability Make conclusions and recommendations Determine 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 Guide Due 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 refundsDeficiencies reported by state licensing or accrediting agenciesFinancial responsibility standardsHigh withdrawal ratesSignificant audit findingsRepeat findings or recurrent problemsSignificant risk of noncompliance with administrative capabilityComplaints from students or adverse publicity Institutions that haven’t had a review in a number of yearsFrequent change in financial aid leadership

ED’s Goals Identify any institutional weakness(es) Frame required actions to strengthen institutional compliance Quantify harm of noncomplianceAdministrative action to protect students and taxpayers

Institutional Goals Understand and ensure compliance with Program Review requirements Respond as quickly and accurately as possible to the multiple data requests prior to the on-site visit Remain 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 Review Increase 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 partners Read the letter carefully Contact the reviewerNotify senior campus officials immediatelyDiscuss with staffProvide overview of what to expect

Program Review Timeline 2-4 weeks advanced notice (but sometimes very short notice, especially in cases of serious complaints or adverse media) Typically 1 week on-campus Written 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

How to Prepare Read the 2009 ED Program Review Guide http://www.ifap.ed.gov/programrevguide/2009ProgramReviewGuide.html Review the sample file and policy review checklistsReview and prepare for sample student/staff interview questionsObtain outside help if needed

Rally the Resources Identify key staff to compile required documents – share the responsibility Pull files Conduct 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 Reviews Locate 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 takenWhat procedures are in place?Make sure prior deficiencies are addressed!

Tools of the Trade FSA Handbook ISIR Guide Dear Colleague LettersFederal RegistersCode of Federal RegulationsFSA Assessment ToolNASFAA Standards of Excellence ReviewNASFAA Self-Evaluation GuideThe Blue Book

Preparation for A udit Review operational practicesReview 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 Manual Sample FSA forms Cost 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: ISIRs Latest accreditation status Third 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 P rep ItemsChart of accounts/funds informationControl/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 progressConsortium 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 clarityKeep 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 Visit Give the Program Reviewers space, but be available and check in periodically to see if anything is needed Keep detailed notes of all questions, follow-ups, documents provided Track 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 Interview President/Chancellor Vice President(s)/Provost Directors of key departments (Bursar, Admissions, Comptroller, Chief Fiscal Officer(s), Internal Audit)

Entrance Interview Overview Welcome and introductions Program Reviewers will explain to the group: The purpose of the ReviewThe scope of the ReviewThe 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 Interview Advise campus colleague attendees of any preliminary issues you may be aware of before the Exit Interview Ask a campus colleague to take detailed notes Ask 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 stuffYou will need help – ask for it and keep asking until you get it!Trust that you know thingsRemember that no one knows everything, especially immediately from memoryStress that everyone involved should keep notes on all conversations of substanceEase tension for financial aid staff and other core responders by meeting to discuss the reviewListen 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 reviewersAssume 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 findingsMake sure you keep all reviewed materials together to ensure you know what reviewers saw at the time of the review

Completion of A udit Understand findings so corrective action can occurWrite 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” gradeGrade level information, notification ofFull-time/part-time documentedDegree progress Course repeat rules enforced

Frequent Audit FindingsAuditor opinion c ited in a udit ( q ualified or a dverse)Verification violationsPell over/under payments Student C redit B alance d eficiencies Student c onfirmation r eport f iled l ate/ n ot f iled/ n ot r etained for f ive y ears/ i naccurate 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 Findings Verification Crime awareness reporting Return 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 Findings Consumer information deficiencies Improper dependency overrides Lack of administrative capabilitiesImproper Certification of Student LoansRepeat finding – failure to take corrective actionStudent Status – inaccurate/untimely reportingSome 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 v iolations Pell Grant o ver/ underpaymentsStudent Credit Balance deficienciesRepeat finding – failure to take corrective a ction Student Status – inaccurate/untimely reporting

Next Steps Create priority list for implementation of correcting findings Create an implementation timeline Review frequently

Online Resources Top 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.pdfSuccessfully 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

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Questions? Thank you!