Financial Aid Forensics:

1
Financial Aid Forensics

• Uncovering the Hidden Liabilities in Your Office
• MASFAA Conference 2008
• November 19, 2008
• Kimberly Tibbetts Jean Ricker
• VP for Compliance Financial Aid Manager
• Higher Education Asst. Group Franklin W. Olin
  College of Engineering

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Session Goal

• You should leave this session knowing how to
• locate tools with which to find the hidden
  liabilities in your office
• put together a Compliance Committee
• develop your own internal review plan
• create a corrective action plan

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Session at a Glance

• Group Work to get you in the mood
• FA Forensics at Work
• Compliance Committee
• Identify Areas of Liability
• Develop a periodic review plan
• Create an effective Corrective Action Plan
• Open Discussion

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Group Work

• 1) New Academic Programs Your Academic
  Department has created a new certificate program
  and failed to inform Financial Aid. What do you
  do?
• 2) Institutional Disclosure Requirements Your
  Campus Security Office refuses to send out the
  annual crime statistic notification. What do you
  do?
• 3) SAP- Institutional vs. FA. A student is not
  making SAP for Financial Aid purposes but the
  institution is choosing to allow the student to
  remain enrolled and take courses. What do you
  do?
• 4) IT- system upgrades- your institutions
  integrated system periodically delivers
  updates/upgrades based on changes in DOE
  regulation- some FA related some institutionally
  related. Your IT Dept is behind in the
  installation of these upgrades which causes
  institutional vulnerability with regard to
  compliance. What do you do?
• 5) Withdrawals- your Registrar has a habit of
  back dating withdrawals and/or failing to notify
  FA when a student withdraws from the institution.
  What do you do?

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On-Going

• Put together a Compliance Committee consisting of
  at least the following members
• FAO
• Registrar
• Bursar/Student Account Office
• Admissions
• Academic Affairs
• Faculty
• IT

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Compliance Committee

• Meet every other week for the first 6 12 months
  - monthly thereafter
• Develop a list of topics to discuss
• Currently existing issues
• Upcoming changes to regulations
• Solicit topics from other departments
• More topics will emerge as more meetings take
  place

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Compliance Committee

• Allow time for each department to update the
  committee about what is going on in his/her area
• This will be your opportunity to discover what
  the other departments are doing and if it will
  have an impact on the FAO
• This opens up the opportunity for discussion and
  becomes a regulatory training moment
• This sets the foundation for future collaboration
  with other departments

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Goals of a Compliance Committee

• To ensure institutional compliance
• To kindly remind all departments of their
  responsibilities as compliance officers
• To find any hidden liabilities within your
  institution
• To develop stronger partnerships with essential
  departments

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Every Enrollment Period

• Double Review Process
• Create a policy and procedure (PP) to support
  the following process to be performed every
  enrollment period
• Secondary review of verification prior to
  disbursement
• Secondary review of R2T4 prior to returning aid

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Secondary Review of Verification
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Secondary Review of R2T4
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Goals of Enrollment Period Review

• To find any hidden problems before they grow
  exponentially
• If there is a consistent problem, this provides
  you with the opportunity to develop a Corrective
  Action Plan, adjust your PP, and retrain your
  staff
• To give the FAO time to correct the problem
  before the student leaves your institution

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Alternative to Secondary Review

• If your office is too busy to do a secondary
  review
• do a mini audit before the end of the enrollment
  period
• Rememberif you begin to find a significant
  number of problems, it would be best to utilize
  the Double Review Process

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Mini Audit

• Select a small sampling of verified files
• Review student eligibility
• Review verification
• Review the award
• Review disbursed aid amounts
• Select a small sampling of students who withdrew
  from the semester or institution
• Review R2T4 process
• Review NSLDS reporting
• Cure files
• Alter your PP to reflect the changes
• Train FAO personnel

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Every Year

• Perform an internal compliance review to
  determine if there are any errors that can be
  corrected prior to the A133 review or before the
  aid year closes
• Use the list of Common Findings and findings from
  your previous A133 reviews to develop a list of
  areas to review
• If you have a Corrective Action Plan in place,
  be sure to test to ensure that your office is
  complying with its own plan

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Goals of Yearly Review

• To find any hidden problems
• It is always better to know the areas that may be
  problematic in an A133
• To give the FAO time to correct the problem and
  develop a corrective action plan to have ready
  for the auditors if needed

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Common Findings

• Late Refund/Returns to Title IV Account
• Incorrect Return of Title IV Funds Calculation
• Entrance/Exit Counseling Deficiencies
• Enrollment Report (SSCR) Issues
• Repeat Finding-Failure to Take Corrective Action
• Auditor Opinion Cited in Audit
• Student Credit Balance Deficiencies
• Verification Violations
• Pell Over/Under Payments

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Develop a Corrective Action Plan

• A Corrective Action Plan must describe the
  corrective action taken or planned in response to
  findings identified.
• Once a problem has been identified, either though
  an A133 or your own FA Forensics plan, you need
  to develop a corrective action plan to correct
  the problem and ensure that it does not occur
  again.

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Corrective Action Plan

• Identify issues
• Schedule a meeting
• Bring together all the folks who impact or are
  impacted by the issues
• Be sure to include IT if the solution will
  require utilization of the system
• Meet
• Lay out the problem and explain why it is an
  issue
• Explain the regulation that must be met
• Brainstorm a solution

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Corrective Action Plan

• Document the solution
• Implement the solution
• Test the implemented solution
• Conduct a follow up meeting if any tweaking is
  needed
• Be sure to test this area in next years annual
  internal review audit

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RESOURCES

• IFAP website
• FSA Assessment
• NASFAA Self Evaluation Guide
• Annual Auditor Training Conference
• Higher Education Assistance Group, Inc
• Verification Review Form (www.heag.us)
• Compliance/Efficiency Guide (www.heag.us)

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Open Discussion

• Share your successes
• What have you implement at your school to ensure
  that your institution is compliant?
• How did you create a institution wide compliance
  team?
• Anything you would like to share with the group?
  
• Any problems to bring to the group?

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Contact Information

• Kimberly Tibbetts [phone]
• VP for Compliance
• Higher Education Asst. Group
• kdowd_at_heag.cnc.net
• www.heag.us
• Jean Ricker [phone]
• Financial Aid Manager
• Olin College of Engineering
• jean.ricker_at_olin.edu