Presentation on theme: "HEA Title IV Audit Appeals and Program Reviews Jennifer Mauskapf, Esq. Brustein & Manasevit, PLLC Spring 2011 Forum."— Presentation transcript:
HEA Title IV Audit Appeals and Program Reviews Jennifer Mauskapf, Esq. Brustein & Manasevit, PLLC Spring 2011 Forum
OVERVIEW Audits vs. Program Review Visits Federal Audit Process Overview Visit Preparation After the Audit Visit: Resolution Process Recent Findings Preventative Measures 2
Overview of the Federal Players Office of the Inspector General (OIG) USDE Office of Postsecondary Education (OPE) Office of General Counsel (OGC) Office of Hearings and Appeals (OHA) Administrative Law Judges (ALJs) 3
4 Audits vs. Monitoring Visits AUDIT ED OIG Few weeks notice Usually know which program Likely to quantify cost of adverse findings Relatively formal MONITORING VISIT ED Program Side Generally scheduled well in advance Usually notice of the indicators they will monitor May quantify cost of adverse finding Less formal KEY SIMILARITY: ED may issue a determination letter in either case. Must be prepared for both!!!
Life Cycle of a Federal Audit 5 Notification of Audit Visit Entrance Conference Exit Conference Release of Draft Audit Report Auditee Response (30 Days) Release of Final Audit Report Auditee Response to POC at ED Issuance of PDL 180 days from Final Audit Report Corrective Action Plan from Auditee (Often 60 Days) Application for Review of PDL Submission of Evidence (90 Days) Initial Decision of OALJ Petition for Review of Initial Decision (30 Days) Final Decision of the Secretary (60 Days from Initial Decision) Judicial Review – U.S. Circuit Court of Appeals (60 Days from Final Agency Decision) 2- 4 weeks 60 Days from PDL At least 4 weeks At least 2 months At least 3 months 30 Days
6 VISIT PREPARATION: What to Expect and How to Prepare
7 Setting the Tone Common concern: Grantees are wary of challenging USDE and compromising relationship. Balancing Act Opportunity to maintain and enhance relations with ED, BUT This is not a social call and you cannot treat it as just that.
8 Preparing for the Visit Planning Helps Prevent Avoidable Findings! Know what to expect. Organize for the visit. Preparing for Known Substantive Areas Preparing Employees Documentation Ready
9 Visit Time Physical Arrangements Room space, including phones and copying availability. Management Involvement Have higher-ups involved; at least for the meet and greet.
10 Post-Visit: Determination Letters Adverse Findings - not at all uncommon Findings are often based on very technical violations Findings can be, and often are, successfully challenged BUT…Avoid being in that position by being PROACTIVE! TRAIN, EVALUATE, and PREPARE!
AFTER THE VISIT: Resolving Adverse Audits and Program Review Reports 11
Audit Resolution Stages 1) Draft Audit Report (DAR) 2) Final Audit Report (FAR) 3) Program Determination Letter (PDL) 4) ALJ Review 5) Final Decision of the Secretary 6) Judicial Review 12
OIG Draft Audit Report Auditors Findings and Recommendations Not Public Response is to the Regional IG OIG Opportunity to Revise Draft Audit Report based on your response! 30 Days for Response Extensions may be made upon request Special Considerations re: Response to DAR 13
OIG Final Audit Report Auditors Final Findings and Recommendations to USDE Will be made PUBLIC! Includes your response to DAR Response is to the Asst Sec (OPE) 30 days for Response Extensions may be given upon request Special Considerations re: FAR Response 14
Program Determination Letter Issued by USDE office Responding to PDL File Application of Review to OALJ 34 CFR §§ 81.12, days to file Failure to Respond = Waiver of Appeal Interest accrues as of PDL date (31 USC § 3717) 15
OALJ truly objective Submit timely appeal! Settlement negotiations can lower amount returned Special Considerations Different Audience, different legal arguments 16 Program Determination Letter (cont.)
After ALJ Decision Issued… Appeal to Secretary Appeal to US Circuit Court of Appeals Appeal to US Supreme Court 17
18 AUDIT DEFENSE: Recent Findings and Defenses
Standard for Repayment of Funds 19 OIG can recommend the grantee repay funds for a number of different reasons: Violation of the Programs Statute, Regulations (ex. – incorrect calculation of award) Violation of OMB Circulars (ex. – failure to adequately document) Be creative in defending the audit
Most Common Audit Findings 1. Return of Title IV Funds Calculation Errors 2. Pell Over/Under Payments 3. Return of Title IV Funds Made Late 4. Verification Violations 5. Overaward – Financial Need Exceeded 6. Return of Title IV Funds Not Made 7. Enrollment Status Not Verified Before Disbursement 8. Improper Certification of Stafford Loan 9. Student Credit Balance Deficiencies 10. TIE: 1. Ineligible Student – Not Making Satisfactory Academic Progress 2. Repeat Finding – Failure to Take Corrective Action 20
Most Common Prog. Review Findings 1. Verification Violations 2. Crime Awareness Requirements Not Met 3. Student Credit Balance Deficiencies 4. Return of Title IV Funds Calculation Errors 5. Return of Title IV Funds Made Late 6. Entrance/Exit Counseling Deficiencies 7. Account Records Inadequate / Not Reconciled 8. Information in Student Files Missing or Inconsistent 9. SAP Policy Not Adequately Developed/Monitored 10. Pell Over/Under Payments 21
MOST COMMON on both lists! Return of Title IV Funds Made Late Return to Title IV Calculation Errors Verification Violations Pell Grant Over/Underpayments Student Credit Balance Deficiencies Satisfactory Academic Progress 22
R2T4 Made Late 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 Regulation: 34 C.F.R. §668.22(j) 23
R2T4 Calculation Errors Incorrect institutional charges for the period Scheduled breaks not included Incorrect number of day counted for the period Incorrect withdrawal date Mathematical errors Regulation: 34 C.F.R. §668.22(e) 24
Verification Violations Verification worksheet not signed Untaxed income not verified Conflicting data on ISIR and verification documents not resolved Required corrections not processed Regulation: 34 C.F.R. §
Pell Grant Over/Underpayments 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 Estimated Family Contribution Incorrect number of weeks/hours Regulations: 34 C.F.R. § &
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 Regulation: 34 C.F.R. § (e) 27
Compliance with Satisfactory Academic Progress Requirement Missing required components Qualitative, quantitative, completion rate, maximum timeframe, probation, appeals Policy not at least as strict as for non-Title IV recipients SAP standards inconsistently applied Aid disbursed to students not meeting the standards Regulation: 34 C.F.R. § (e) 28
29 PREVENTATIVE MEASURES
30 IMPORTANCE OF TRAINING Helps you stay in compliance. You are responsible for constant changes and innuendos in ED policy! Demonstrates to ED that you are proactive and take compliance seriously. Make sure trainers know what they are talking about and are up to date on current issues!
31 ABOUT WHAT? FIRST: Start Broadly. THEN: Get more specific tailoring to new issues and your specific weaknesses. CONTINUE: Refresher trainings are always helpful. Also, new trends or changes in the law…keep your staff and subrecipients up to date!
32 Resources: Staying Up-to-date Your Specific Problem Areas Recent Audits (Internal and Single) Recent Monitoring Reports (ED or Internal) ED Policy and Trends OIG Monitoring Reports ED Guidance ED Press Releases ED Policy Letters to CSSOs, etc.
RESOURCES OIG Whats New (Chron. Listing) OIG Audit Reports by Office USDE Office of Hearings and Appeals Information for Financial Aid Professionals 33
34 This presentation is intended solely to provide general information and does not constitute legal advice or a legal service. This presentation does not create a client-lawyer relationship with Brustein & Manasevit, PLLC and, therefore, carries none of the protections under the D.C. Rules of Professional Conduct. Attendance at this presentation, a later review of any printed or electronic materials, or any follow-up questions or communications arising out of this presentation with any attorney at Brustein & Manasevit, PLLC does not create an attorney-client relationship with Brustein & Manasevit, PLLC. You should not take any action based upon any information in this presentation without first consulting legal counsel familiar with your particular circumstances.