1. NeASFAA Fall Training How to Survive a Title IV Audit or Program Review Diane Stemper Executive Director Enrollment Services Student Financial Aid The Ohio State University

2. Agenda  Federal Program Review and Audits  What are they?  Why?  Preparation  While audit is occurring - expectations  Completion of audit and findings  Next steps

3. 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?

4. “Why?”  Purpose is to evaluate compliance, identify liabilities/risks, and enhance institutional administrative capabilities  Ensure the efficient and effective use of taxpayer dollars in support of American education  Identify financial aid compliance risks and financial liability  Make conclusions and recommendations  Determine corrective action

5. 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.

6. Types of Audits and Reviews  Focused  Full Scope

7. 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

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

9. 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

10. 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/enhancements  Mitigate liabilities and administrative actions

11. You’ve Been Selected

12. You’ve Received a Letter Don’t Panic  Remember that auditors and reviewers are financial partners  Read the letter carefully  Contact the reviewer  Notify senior campus officials immediately  Discuss with staff  Provide overview of what to expect

13. 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 later  School response due in 30 days  Final Determination Letter (or, in cases of few or no findings, an expedited Determination Letter)  Appeal process

14. PREPARATION

15. Institutional Responsibility “Point” Person Admissions Financial Aid President’s Office BursarRegistrar 3 rd Party Servicers

16. How to Prepare  Read the 2009 ED Program Review Guide  http://www.ifap.ed.gov/programrevguide/2009Progra mReviewGuide.html http://www.ifap.ed.gov/programrevguide/2009Progra mReviewGuide.html  Review the sample file and policy review checklists  Review and prepare for sample student/staff interview questions  Obtain outside help if needed

17. Rally the Resources  Identify key staff to compile required documents – share the responsibility  Pull files  Conduct individual interviews as needed  Resolve issues  Prepare to provide copies of entire student records (FA files, admission applications, student records, academic transcripts, student account files, R2T4 calculations/payments, etc.)

18. 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 taken  What procedures are in place?  Make sure prior deficiencies are addressed!

19. Tools of the Trade  FSA Handbook  ISIR Guide  Dear Colleague Letters  Federal Registers  Code of Federal Regulations  FSA Assessment Tool  NASFAA Standards of Excellence Review  NASFAA Self-Evaluation Guide  The Blue Book

20. 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

21. Requested Documents Include:  Policies and Procedures Manual  Sample FSA forms  Cost of Attendance Budgets  Pell Electronic Statement of Account (ESOA) Information  Return to Title IV (R2T4) worksheets  Documentation of cash requests/refunds/returns  Default management plan, if required  FISAP  Satisfactory Academic Program and refund policies

22. Requested Documents Include:  ISIRs  Latest accreditation status  Third party servicer contracts  Administrative software utilized  Program Participation Agreement (PPA) and Eligibility and Certification Approval Report (ECAR)  Financial statements for past two years  Campus security report  Catalog  Consumer information

23. 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

24. 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

25. 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 resolutions  If possible, have your staff review COD and NSLDS records of student sample group before the visit (or as soon as you receive the list)

26. Entrance Interview  President/Chancellor  Vice President(s)/Provost  Directors of key departments (Bursar, Admissions, Comptroller, Chief Fiscal Officer(s), Internal Audit)

27. Entrance Interview Overview  Welcome and introductions  Program 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 with  Remain professional, courteous and cautious responding only to what is requested (and prepare others accordingly)

28. 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 question  Prepare your own list of questions for the Program Reviewers  Discuss any findings or unresolved issues appropriately – it is ok to ask questions (but don’t be confrontational)

29. 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

30. 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

31. 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

32. 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

33. 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

34. Most Frequent Program Review Findings  Verification  Crime awareness reporting  Return of Title IV late, calculation errors  Entrance/Exit Counseling  SAP  Student Credit Balance deficiencies  Missing or inconsistent information in student files  Pell over/under payments  Ineligible Pell disbursement

35. Most Frequent Program Review Findings  Consumer information deficiencies  Improper dependency overrides  Lack of administrative capabilities  Improper Certification of Student Loans  Repeat finding – failure to take corrective action  Student Status – inaccurate/untimely reporting Some additional recent findings:  FWS students paid for time they were scheduled for class  Documenting Pell recipients’ initial attendance and/or documenting dropping a class and reducing Pell accordingly

36. 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

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

38. Online Resources Top 10 Audit and Program Review Findings: http://www.nasfaa.org/Main/orig/2012/Top_10_Audit_and_Program_R eview_Findings.aspxhttp://www.nasfaa.org/Main/orig/2012/Top_10_Audit_and_Program_R eview_Findings.aspx Compliance Resources for Financial Aid Professionals: http://www.nasfaa.org/compliance/http://www.nasfaa.org/compliance/ Program Review Guide for Institutions 2009: http://ifap.ed.gov/programrevguide/attachments/2009ProgramR eviewGuide.pdfhttp://ifap.ed.gov/programrevguide/attachments/2009ProgramR eviewGuide.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 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.pd fhttp://ifap.ed.gov/fsahandbook/attachments/1112FSAHbkVol2Ch9.pd f

39. Moving Forward – OSU QA Model Compliance Training Quality Assurance

40. Questions? Thank you! Diane Stemper DStemper@esue.ohio-state.edu