Sneak Preview: ED OIG Urges FSA To Consistently Follow Audit Resolution Procedures

Jerry Ashworth
August 8, 2019 at 14:08:24 ET
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(The following was excerpted from a recent article in the Single Audit Information Service.) The Department of Education (ED) Office of Financial Student Aid (FSA), when reviewing compliance audits of student academic progress from institutions of higher education (IHEs), plans to place more emphasis on ensuring that its audit resolution specialists follow agency policies and procedures to ensure corrective actions in final audit determination letters are completed, in response to a recent ED Office of Inspector General (OIG) report.

IHEs receiving Title IV financial assistance to provide financial aid for students are monitored by FSA to ensure the funds are disbursed only to eligible students and managed properly. Recipient IHEs must establish, publish and apply reasonable standards for ensuring that students are maintaining satisfactory academic progress (SAP).

IHEs must undergo required annual compliance audits, and submit reports of the audits to FSA, which verifies that the institutions have developed corrective action plans to address any findings. During audit resolution, an ED audit resolution specialist reviews the compliance audit report findings and corrective actions and requires assurances from the IHE that it has or will implement the corrective actions. At the conclusion of this process, the ED program compliance office will issue a final audit determination letter to the institution that includes the corrective actions that the IHE is required to implement to resolve the audit findings.

FSA also annually conducts program reviews of about 300 IHEs participating in the Title IV program to determine whether they are complying with program requirements. ED’s program compliance office will issue a program review report to the IHE containing any findings and required corrective actions. After reviewing the institution’s response to the findings, ED determines whether the IHE completed the necessary correct actions. If the corrective actions are completed, ED will issue a final progress review determination letter with no action required, or if corrective actions are not completed, it will issue a determination letter with details on steps required to address any remaining corrective actions.

After reviewing 27 compliance audits and 21 program reviews, OIG found FSA did not ensure that IHEs completed corrective actions for 11 of the compliance audits and for one of the program reviews. “This occurred because the program compliance office did not always perform the required resolution activities or add all SAP-related findings in the final determination letter,” it explained. “As a result, [IHEs] may have [had] repeated SAP findings, ineligible students may receive[d] Title IV program funds, noncompliant [IHEs] may have continue[d] to participate in Title IV programs and FSA may not [have] establish[ed] liabilities payable from [IHEs] that disbursed Title IV program funds to students that did not meet SAP requirements.”

(The full version of this story has now been made available to all for a limited time here.)

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