DE-DC-MD CONFERENCEHOW TO PREPARE FOR AN AUDIT11/9/2011Dawn Y. Mosisa, Director, University Financial Aid Compliance

Johns Hopkins University

•Perspective is critical

•Manage the audit/review process carefully

•Ensure your office is in good shape

How to Prepare for An Audit or Program Review?

•Annual Audit

•General Assessment Reviews

•Focused Reviews

Types of Audits and Reviews

•Independent Auditors •The U.S. Department of Education •Office of the Inspector General (OIG) •Others

Who performs Audits & Reviews?

•Independent Auditors•The Dept of Education•Other Agencies•Coordinated onsite reviews

Do They Speak To Each Other?

•Annual Audit •General Assessment Program Review •Focused Program Review •Recertification

What is the Typical Focus of an Audit/Program Review?

•High CDR•Deficiencies reported by state, accrediting, or other agency•Significant changes in Pell or Loan volume•Late refunds•High withdrawal rates•Significant Audit Findings•Repeat Findings or recurrent problems•Complaints from students or adverse publicity•Haven’t had a review in a number of years

What are Some Possible Triggers for a Program Review?

•Typically you work with your auditors to identify a mutually agreeable timeframe.

•The Department of Education generally provides 2-4 weeks notice for a general assessment program review.

Timing for an Audit or Review?

•Complaints from law enforcement agencies •Serious, credible complaints from students•OIG complaints•Negative reports from state or accrediting agencies•Adverse articles in the media•Information from employees (current or prior)•Possible fraud and abuse

Factors That Could Result In Short Notice For a Review

•R2T4 calculation errors•Pell overpayment / underpayment•Late return of TIV funds•Verification errors•Overawards•R2T4 not made•Enrollment status not verified prior to disbursement•Improper certification of loans•Credit balances not refunded in a timely manner•Ineligible students – not meeting SAP•Repeat finding – failure to take corrective action

Common Audit Findings

•Verification errors•Crime Awareness requirements not met•Credit balances not refunded in timely manner•R2T4 calculation errors•R2T4 done late •Entrance/exit counseling deficiencies•Account Records inadequate / not reconciled•Missing/inconsistent information in files•SAP policy not adequately developed and/or monitored•Pell overpayment / underpayment•Enrollment report (SSCR) issues•Repeat findings or failure to take corrective action

Common Program Review Findings

•Verification errors•R2T4 calculation errors•R2T4 performed late•Pell Grant underpayment / overpayment•Credit balances not refunded in timely manner•SAP issues•Repeat finding / failure to take corrective action

What is on both lists?

•Involves more than just the financial aid office•More than student eligibility and the management of Title IV funds•Institutional compliance with TIV laws

What Should You Know About the Audit Process?

•What is the level of knowledge of your auditor/reviewer?•Do you think it is better to have a more knowledgeble auditor? Or less?

Who Is Your Auditor / Reviewer?

•Letter•Request for Information•Onsite Visit

• Entrance Interview• Audit / Review is conducted• Exit Interview – usually with preliminary findings

•Initial Letter of Findings•Institutional Response with Corrective Action Plans (CAP) as appropriate•Final Report of Findings

Snapshot of the Typical Audit

•Be calm!•Listen and understand what is being asked•Be cooperative, responsive, and honest•Be direct in your responses and to the point•Do not answer the “unasked” question•Say you don’t know if you don’t know (find out the answer)•Document what was said, and any outcome or action items•Ask for requests in writing, or confirm in writing for clarity•Keep copies of anything you provide to them

During the Onsite Visit…..

•Who is conducting the audit / review?•What is their focus and how were you selected?•What type of information will they request and will you be able to easily provide it?•Are your student files organized and by AY?•Who should you involve? Notify leadership and relevant offices, including IT.•Select a “point person” for the auditor/reviewer to work with.•Designate a quiet work area for your auditor.

How Do You Prepare for An Upcoming Onsite Audit / Review?

•Policy and Procedure Manual•Cost of Attendance Budgets•SAP Policy•Pell and Loan account information•R2T4 Policy and process•List of enrolled students, and withdrawals•ISIRs and student files•Access to documents/SIS•SSCR documentation•Other

What Documents Are Typically Requested?

•Ongoing due diligence•Ensure previous audit findings are corrected•Ensure new laws and regulations are implemented•Have safety nets in place in your operations•Don’t ignore repeat questions/issues raised by students & staff - they could indicate a weak area or gap•Ensure your staff is properly trained ongoingly•Meet regularly with your staff•Ensure your student files are organized, and that actions and decisions are documented•Keep your P&P updated

How to Prepare for Audits and General Assessment Reviews

•Internal Audits•Mock Program Review by outside consultant•NASFAA Self-Evaluation Guide•Program Review Guide for Institutions on IFAP•FSA Assessments on IFAP

What Else?

•On IFAP under Tools•Developed in collaboration with FA Professionals•Purpose is to help schools with compliance and with making improvements

What is FSA Assessments?

It has 3 main topic areas, with several sections under each, and several specific topics/sub-sections under each section. These main topic areas are:

•Students•School•Campus-based

There’s an FAQ page with guidance on how to navigate and begin using!

What Does FSA Assessments Offer?

The “Students” main topic includes 3 sections:

•Student Eligibility•Satisfactory Academic Progress•Verification

FSA Assessments - “Students”

The “School” main topic area includes 7 sections:

•Guide to create a P&P•Automation•Consumer Information•Default Prevention and Management•Fiscal Management•Institutional Eligibility•R2T4

FSA Assessments - “School”

The“Campus-based” main topic includes 3 sections:

•FSEOG•FWS•Perkins

FSA Assessments – “Campus-based”

Provides guidance on which sections and/or activities to complete based on your current situation, such as:

•Deficient Audit•Recertification•Fiscal Reconciliation•Program Review Deficiencies•No Action or Deficiencies

• 2 Assessments per AY is recommended

FSA Assessments Chart

15 sub-sections – with 3 activities

Student eligibility CitizenshipAcademic Qualification SAPFA History Valid SSNSelective Service ACG/SMARTDrug-related offenses TEACH GrantTelecommunications Study AbroadFinancial Need VerificationRegular Student in Eligible Program

FSA Assessments – Student – Student Eligibility

9 sub-sections – with 5 activities

Recertification PPA

Gainful Employment Consumer Information

Financial Responsibility Preferred Lender Lists

Accred/State Approval Written Arrangements

Program Eligibility/AY Requirements

FSA Assessments – School – Institutional Eligibility

•No Surprises•Know the scope, perspective, and reason for the audit/review•An institutional review•Select a “point person”•Be organized•Always be professional, responsive, and direct•Document

In Summary

Questions???

Good Luck!!!