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Session C-29

Las Vegas. 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. Program Compliance Office, FSA Victoria Edwards, Chief Compliance Officer. School eligibility

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Session C-29

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  1. Las Vegas 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

  2. Program Compliance Office, FSAVictoria Edwards, Chief Compliance Officer • School eligibility • Financial institutions oversight • Integrated partner management • Administrative actions & appeals • Performance improvement & procedures 2

  3. Domestic Schools & Funding By Type Proprietary 1,836 27.7% Public 1,944 29.3% Proprietary $13.3B 17.4% Public $37.2B 48.6% Priv. Non Profit $25.4B 33% Priv. Non Profit 2,012 30.3%

  4. School Eligibility - Foreign Schools Update • 2007 Foreign School Population (FFEL Only) • 20,624 Students • $525 M • 1.0% Default Rate

  5. Annual Financial Statements Annual Compliance Audits School Elig: Ensuring Program Integrity Comprehensive Compliance Review Eligibility & Recertification Program Review Method of Payment

  6. Comprehensive Compliance Review-CCR 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

  7. CCR: School Oversight * A school may be counted in 1 or more of these activities

  8. CCR: Data Anomalies • 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

  9. 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

  10. www.eligcert.ed.gov

  11. 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

  12. 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

  13. School Eligibility - Oversight Activities

  14. 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

  15. Ez-Audit System https://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

  16. 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

  17. 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 17

  18. 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

  19. 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) 19

  20. 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)

  21. 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

  22. 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

  23. 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

  24. 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

  25. 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

  26. 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

  27. 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

  28. 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

  29. 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

  30. 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

  31. 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

  32. 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

  33. FSA Assessments • 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

  34. 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

  35. 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 – Northeast Geneva 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) 428-3750 Rosemary 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) 656-6442 John Loreng – Philadelphia (215) 656-6437 Michael Frola - Wash DC (202) 377-3364 Foreign Schools Barbara Hemelt - Wash DC (202) 377-3168 School Participation Teams-South Central Carolyn 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) 562-6304 Patricia Dickerson-Wash DC (202) 377-4218 Dallas (Arkansas, Louisiana, New Mexico, Oklahoma, Texas) Patrick Kennedy - Dallas (214) 661-9490 Janet 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) 268-0420 Phillip Brumback-Wash DC (202) 377-3464 School Participation Teams - Northwest Douglas Laine, Director – Wash DC (202) 377-3173 douglas.laine@ed.gov Chicago (Illinois, MN, Ohio, Wisconsin, IN) Douglas Parrott - Chicago (312) 730-1532 David 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 x116 Dan 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)-486-5609 Martina Fernandez-Rosario (415)-486-5605 Dyon Toney - Wash DC (202) 377-3639

  36. Handy Websites • 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

  37. Happy Holidays!! We appreciate your feedback & comments Douglas Parrott (312) 730-1532 douglas.parrott@ed.gov Geneva Leon (202) 377-3173 geneva.leon@ed.gov

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