Top 10 Department of Education Audit Findings & Suggested Solutions
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Top 10 Department of Education Audit Findings & Suggested Solutions

At the 2012 National Association of Student Financial Aid Administrators (NASFAA) National Conference, U.S. Department of Education (ED) officials indicated that there has been an increase in program reviews in recent years. Schools that have not had a program review in many years may receive notification that ED is coming. 

ED officials reported out on the top 10 audit findings and program findings as they relate to student financial aid.  This month, we’ll feature the top 10 audit findings and suggested solutions.

  1. Repeat finding — failure to take corrective action
    • Ensure all staff are properly trained.
    • Perform quality assurance checks to ensure new policies and procedures are strictly followed.
    • Review results of the Corrective Action Plan (CAP).  Is it working? Are changes needed to improve process?
    • Assign staff to monitor the CAP and hold them accountable.
  2. Return to Title IV (R2T4) calculation errors
    • Work with registrar to ensure clear understanding of when classes meet, including weekends; be sure to exclude all class breaks of five days or more.
    • Pay attention to new regulations; revise procedures as needed. 
    • Perform self-assessment by reviewing a random sample of student files. 
    • “FSA Assessment” software:  Schools R2T4 module. 
    • Use R2T4 Worksheets — Electronic Web Application/Paper. 
  3. R2T4 funds made late 
    • Periodically review processes and procedures to ensure compliance through tracking/monitoring deadlines, ensuring timely communication between offices and/or systems. 
    • R2T4 on the Web. 
    • “FSA Assessments” software: Schools R2T4 module. 
  4. Student status — inaccurate/untimely Student Status Change (enrollment reporting) 
    • Maintain accurate enrollment records.
    • Automate enrollment reporting with batch uploads or individual online updates.
    • Update frequently. 
    • Designate responsibility for monitoring the reporting deadlines. 
    • Review National Student Loan Database System (NSLDS) newsletters for updates. 
    • Use the correct status codes. 
  5. Pell overpayment/underpayment 
    • Establish internal controls and procedures to verify enrollment status before disbursing aid and resolving over/underpayments. 
    • Conduct random file reviews. 
    • Assign responsibility for monitoring to ensure Pell Grant disbursements are accurately and timely. 
  6. Verification violations 
    • Revise verification procedures to ensure submission of all required documents. 
    • Create a verification checklist. 
    • Monitor verification process, and perform internal quality control file review. 
    • “FSA Assessments” software Students — Verification module. 
    • Review Federal Student Aid Handbook, Application & Verification Guide, Chapter 4 and verification regulations (Published October 29, 2010, Effective July 1, 2012). 
  7. Student credit balance deficiencies 
    • Develop and implement procedures and controls to identify and release credit balances timely. 
    • Provide training for staff. 
    • Conduct a self-audit of credit balance disbursements. 
    • Ensure credit balance authorization is compliant with Title IV requirements. 
  8. Qualified auditor’s opinion cited in audit 
    • Assessment of entire process — Design an institution-wide plan of action with adequate and qualified staff, appropriate internal controls and training (FSA COACH, “FSA Assessments” software, FSA Online and In-Person trainings). 
    • Implement appropriate CAP timely and effectively. 
  9. Entrance/Exit counseling deficiencies 
    • Develop and implement procedures to ensure entrance/exit counseling is completed. 
    • Automate tracking and monitoring. 
    • Post links on school’s web page: for entrance, for exit. 
    • Assign responsibility for monitoring the entrance/exit interview process. 
    • Develop procedures for ensuring communication between registrar, business, and financial aid offices. 
    • Provide staff training (FSA COACH training for Module 4 — Loan Counseling, “FSA Assessments” software Schools module). 
  10. Overaward — Financial need exceeded 
    • Check enrollment at census date, and make necessary adjustments to aid. 
    • Establish procedures to ensure consistent handling of outside scholarships. 
    • Determine if student costs exceed original cost of attendance (professional judgment). 
    • Routinely monitor FWS earnings to ensure students do not exceed allowable tolerance. 
    • Determine if any aid can replace EFC, such as TEACH, PLUS or Unsubsidized Direct Loan.

Next month we’ll feature the top 10 program findings that the Department of Education notes in their program reviews.


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Vicki VanDenBerg