In Pursuit of Excellence Preparing for an ISAC Program Review Presented by: Kim Eck, Illinois Student Assistance Commission March 31, 2011

Preparing for an ISAC

Program Review

Presented by: Kim Eck, Illinois Student Assistance Commission

March 31, 2011

General InformationOversight of schools is handled by ISAC’s Compliance Department, Program Services & Operations Division Most reviews are conducted at ISAC’s Deerfield

location

Purpose of the Program Review Evaluate compliance with state and federal rules and

and regulations Identify liabilities that may be owed to ISAC Assist in improving operations and services

Noncompliance is generally the result of misunderstandings or misinterpretations of rules and regulations

Specific ObjectivesTo analyze the school’s data and records and identify any areas of weakness in the school’s procedures and recordkeeping activitiesTo ensure that proper internal controls, processes, procedures, tracking and recordkeeping activities have been establishedTo verify student eligibility and the documentation used to establish eligibilityTo ensure that aid does not exceed cost of attendance and is properly creditedProvide recommendations that will strengthen the school’s compliance with federal and state rulesand regulations

School Review Process

Responsibilities are defined by ISAC Administrative Rules Part 2700, General Provisions

Announcement of review Entrance Conference Review of school documents, transcripts and

student records Exit Conference

Review of findings Next steps

Final Report

The RulesSection 2700.60 Audits and Investigations a) ISAC shall audit participating institutions of higher

learning. Postsecondary institutions participating in ISAC gift assistance programs shall be audited once every three years (schedule permitting) unless more frequent audits appear to be necessary due to circumstances such as: substantial increases in student enrollment, evidence that the institution is experiencing difficulty meeting the requirements of ISAC's rules or federal regulations, or discrepancies in past audits conducted by ISAC. Secondary institutions may be audited when ISAC has a complaint indicating an audit is appropriate. Audits shall usually be announced, but ISAC reserves the right to make unannounced audits.

04/21/23 ILASFAA 2011 Annual Conference 5

Frequency of Reviews

School reviews are conducted on a three-year cycle Rotating schedule Schedule permitting

May be scheduled more frequently due to certain circumstances Evidence that the school is experiencing

difficulties meeting state and/or federal requirements

Default rate 20% or higher

NotificationAnnouncement letter is sent to the school’s financial aid director via e-mail Approximately two months prior to review date

If situation warrants, review may be scheduled on shorter notice or without notice

Letter will include details on Review dates Academic years ISAC programs to be reviewed Materials that should be sent to ISAC in advance Due dates for the program review materials

Follow-up phone call will be made to Confirm dates of the review

Or reschedule as needed Address questions or concerns

Entrance ConferenceConducted via conference call Should include staff members from financial aid office, registrar

and business office Important to have person(s) who understands school’s SAP

policy available May be held at the institution for on-site reviews

Explain purpose and scope of the program reviewDiscuss school’s population and financial aid programs and policiesDiscuss how financial aid office maintains filesIdentify staff members who will be available to answer questions

The RulesSection 2700.60 Audits and Investigations b) ISAC shall have access to all records related

to ISAC programs. These records include, but are not limited to: admission records, financial records, registration records, attendance and enrollment records, financial aid transcripts, grades, academic transcripts and records maintained in accordance with ED verification procedures.


Documents Required for the ReviewISAC Program Review Questionnaire

Due to ISAC: two weeks after the Announcement Letter

School Materials Samples/copies of various school documents Due to ISAC: three weeks after the

Announcement LetterStudent Records For those selected in audit sample groups Due to ISAC: two weeks from the audit

start date

Submitting Required Materials

ISAC Program Review Questionnaire Intended to provide information on the

school’s financial aid operations and procedures as they relate to the administration of ISAC and Title IV programs

Important to complete every question If there are separate policies for different

programs, be sure to provide all of them for each year being reviewed

Can be submitted via mail or e-mail

Submitting Required Materials Program Review Questionnaire Sections

General Information Recordkeeping & Administrative Capability Satisfactory Academic Progress (SAP) Standards Illinois Residency Verification Verification Process Gift Assistance Programs Payment Processing

and Reconciliation MAP Paid Credit Hours Monitoring Refunds Processing for Students FFELP Procedures (if appropriate)


School Materials Detailed list includes items such as:

School catalogs Consumer information Policies and procedures for awarding, verification, refunds,

withdrawals If separate policies or budgets for different programs, be sure to

provide all of them Documentation from College Zone or College Illinois is not

acceptable; must be detailed and school-specific Attendance and Leave of Absence policies MAP institutional reports

Items should be shipped to ISAC rather than sent electronically

Submitting Required Materials School Materials

Organize to correspond to numbered list For example:

2. School catalogs 3. Consumer Information

Package each category of items bundled together with an index tab or label for easy identification

Links to electronic documents are not acceptable Must print and send hard copies for review Because the audit is for previous year, may

not be able to access old links


Student Records For selected audit samples

Academic transcripts SAP monitoring documents Award letters Verification documents

Details are included in an e-mail sent to the school indicating the documents that should be provided for each student sample group

Submitting Required Materials For example: #1: MAP Sample

Documents Instructions Sample Size

Academic Transcripts and any other documents used to report grades

Alphabetical order to match the sample

MAP & IIA Reconciliation Institutional Reports

Please do not send copies of MAPnet reports. Provide explanation of institutional reports, and state how the reports are used.

Withdrawal Reports Policies and Procedures should have the name of the institution, department and title.

MAP & IIA Reconciliation Procedures

Policies and Procedures should have the name of the institution, department and title.

SAP Probation & Appeals Any student listed on the sample that had SAP issues.

Submitting Required Materials For example: #4: Verification Samples - MAP & IIA

For example: #6: IVG Sample


Copies of the 2010-11 ISIRs

Verification Worksheet

Federal Income Tax documents (student and/or parent)

Additional pertinent verification documents collected from the students that support this process.


Academic Transcripts and any other documents used to report grades

Alphabetical order to match the sample

Reconciliation Procedures Please do not send My Zone Payment Reports


Carefully read and follow the instructions provided for submitting materials Important to send requested materials to

ISAC in a timely manner Some requested materials can be submitted

via school’s FTP site Others must be sent through the mail

Clearly identify materials and samples to correspond to the items requested in the instructions


An e-mail will be sent to provide information and instructions about audit samples (student records) being requested Audit samples are sent in an Excel format and

the files are placed in the school’s MAPnet “FTP” folder

Electronic documents sent to ISAC must be password-protected if SSNs are included If sending screen prints from school

systems, be sure to protect/remove SSNs

Preparing for the Review

Advise appropriate staff of review dates and times to ensure availabilityEnsure that all applicable records will be readily accessible during the review Complete student files are not required Unofficial transcripts are acceptable

Establish a work area for the reviewers if the review is on-site

The RulesSection 2700.60 Audits and Investigations c) ISAC audits shall be conducted in

accordance with generally accepted audit standards as promulgated by the U.S. General Accounting Office publication "Standards for Audit of Governmental Organizations, Program Activities and Functions," where applicable.


The ReviewA thorough examination of materials and audit samples is conducted to identify: Discrepancies or violations of policies and procedures Suggestions for improvement Required corrective action

Findings that could result in liabilities being assessed Ineligible loan or grant award Required refund not made or calculated incorrectly Incorrect student status resulting in an ineligible

payment04/21/23 ILASFAA 2011 Annual Conference 22

The RulesSection 2700.60 Audits and Investigations d) The institution shall be extended an

opportunity to review and comment on the auditor's preliminary findings before the final audit report is submitted to the institution's chief executive officer. Audit findings may be appealed in accordance with Section 2700.70, Appeal Procedures.


The RulesSection 2700.60 Audits and Investigations e) If an audit identifies gift assistance funds

which were claimed on behalf of ineligible students, the funds shall be repaid to ISAC by the institution.


Concluding the ReviewExit Conference

Oral report provides a summary of tentative findings Address next steps in the process

Schools have five days to submit additional documentation

Preliminary Program Review Report Issued 14 business days after the Exit Conference Cites findings, regulations, requirements and liabilities Responses must be submitted within 21 days

Final Program Review Report Issued 14 business days after the response

period for the Preliminary Program Review Report has ended


Exit ConferenceInformal report on Findings Suggestions for improvement Discrepancies and recommended or required

corrective actions Amount of any liabilities assessed Time schedule for completing corrective action Tentative follow-up review date, if needed Format and procedure for submitting final report Any disputes by the school in regard to the findings

Not intended to be an in-depth discussion or debate of the findings

Preliminary Program Review ReportAllows schools to:

Review exceptions noted by ISAC Submit any documentation which may have been

overlooked or previously unavailable

Consists of Program Review Digest Findings Summary Verification Process Observations MAP & IIA Findings Categories Preliminary Summary of Liabilities


School Responsibilities

If report cites any findings: The school must take the required corrective

action on all findings immediately The school must respond to ISAC within

timeframe specified in the report, explaining the action taken for each finding

The school must make immediate payment if a liability is assessed

Audit findings may be appealed in accordance with ISAC Rules

School Response to Findings

Responses or comments on findings must be well-documentedIf school agrees with findings and liabilities assessed, a refund check is required prior to the final report being issuedOnce the findings make it to the preliminary report, it’s too late to appeal Will carry forward to Final Report


Final Program Review ReportSent to school president and financial aid

directorPresents the final review determination and closes the reviewIncludes Scope of Review Program Review Digest Findings Summary Verification Process Observations/Recommendations Summary of Liabilities

Final ProceduresISAC reviews school’s response to determine if corrective action was taken.When findings are adequately resolved, ISAC will notify the school that the audit is closed. ISAC will also notify ED’s Division of Audit

and Program Review that the audit is closed.

The RulesSection 2700.60 Audits and Investigations f) ISAC may visit institutions to conduct

investigations related to fraud and abuse of its programs. Campus administrators and/or campus security police may be consulted as part of any ongoing investigation


Most Common Review Findings

Approved MAP and IIA Award Letter Language not being usedIllinois residency not verifiedMAP reconciliation issuesOverbillingSatisfactory Academic Progress policy either not in compliance or not monitored

Award LettersSchools are required to Announce MAP awards to the eligible

students enrolled at their institutions Clearly identify MAP on their award

notifications as: State of IL MAP Grant (Est) Include required MAP language on the

school-issued award letter Notify applicants of changes in their

eligibility status.



Award LettersFor 2010-11, ISAC is sending an Acknowledgement Letter upon receipt of each student application A copy of the MAP Rights & Responsibilities form is also

sent with each letter.

In 2011-12, ISAC will send only Ineligible Award Acknowledgements that include the reason for ineligibility Since only ineligible applicants will receive the letter,

schools may want to provide students with a link to the MAP Rights & Responsibilities form or to CollegeIllinois.org




Award LettersElectronic award letters Links to electronic versions are not

acceptable for review purposes Must send hard copies or screen prints

If not available, then must send the template used to program the electronic award letter


Illinois ResidencyISAC Rules -- Sections 2700.20 and 2735.20 Verification guidance -- Section 2700.50

Recipients of MAP must be residents of the State of Illinois. It is the college or university’s responsibility to ensure that all MAP recipients meet the Illinois residency requirements.If a student is selected for verification for federal student assistance, the student’s information must also be verified to determine MAP eligibility, even if the student is ineligible for federal student assistance.


Illinois ResidencyBecause ED verification procedures do not include procedures for verifying a student as a resident of Illinois, the following provisions shall be followed by the institution. 1) Residency status shall be verified if the institution has any

information that indicates the applicant may not be a resident of IL. 2) Residency status shall be verified for each applicant who is

selected for verification and has changed dependency status to become an independent student.

3) Residency verification shall not be required for an applicant who received payment of a MAP award during the previous academic year.

4) Residency verification shall not be required for an applicant who was enrolled in an ISAC-approved MAP institution or an ISAC-approved Illinois high school (see Section 2700.30) for the preceding consecutive 12 months prior to the start of the academic year for which assistance is requested.


Illinois ResidencyFor a dependent student, the parent who is required to complete the FAFSA must physically reside in Illinois and Illinois must be his/her true, fixed, and permanent home.For an independent student, s/he must have physically resided in Illinois at the time of application and for 12 continuous full months immediately prior to the start of the academic year for which assistance is requested, and Illinois must be his/her true, fixed, and permanent home.


Illinois ResidencyKey Issues Any conflicting data must be resolved Important to communicate and coordinate

with admissions/records office e.g. in-state tuition charge does not necessarily

equal Illinois residency for ISAC programs When school certifies payment request,

it is also certifying that the student is an eligible Illinois student

Illinois ResidencyNon-Illinois students will come up in audit samples Social Security Numbers are one way to

monitor SSNs starting with 318 – 361 were issued in

Illinois http://www.ssa.gov/employer/stateweb.htm


ReconciliationSection 2735.40 m) 2) Institutional Processing of Payments Institutions are required to reconcile payments received through

MAP and, as applicable, submit all necessary corrections to student records on a timely basis. Any payments received by the institution that are determined in the reconciliation to be refunds payable to ISAC are to be processed and returned to ISAC no later than 60 days following the end of the academic term unless ISAC has already deducted outstanding refunds from institutional payment requests during the applicable fiscal year. Refunds may be caused by billing errors, retroactive withdrawals and other miscellaneous reasons. Refunds showing as owed to ISAC must be remitted within 30 days after the end of the institution's regular school year. Should the payment arrive after the end of the regular school year, the institution will have 60 days following receipt of payment to complete the reconciliation process and return any refunds due.


ReconciliationWill review records to verify that reconciliation was completed in a timely manner Using information from Comptroller showing

when money was released, when check was cashed and when reconciliation (credits and adjustments) took place

Important to reconcile at the end of every term, not just at the end of the year Not only is it a requirement, it also results

in more accurate records04/21/23 ILASFAA 2011 Annual Conference 46

OverbillingCommon issue is when credit hours billed is greater than the enrollment records justify Caused by add/drop, program changes, etc.

Student records are checked to ensure Appropriate adjustments were made There were no conflicting grants or

scholarships


Satisfactory Academic Progress

ISAC Rules define SAP as: An institutional policy that establishes

minimum standards of academic performance. For purposes of ISAC-administered programs, the standards must be at least as stringent as those required by ED pursuant to section 484 of the HEA (20 USC 1091). Policy must be consistently applied to all

identifiable groups Must be as strict or stricter than school’s

standard for non-aid students


Satisfactory Academic Progress

Audit samples should include grades If necessary, include screen prints from systems

(e.g. Banner)

Areas reviewed include: Grade point averages Completion requirements Consistency in monitoring SAP at the end of

specified intervals Appeal process Communication process


Satisfactory Academic ProgressCommon SAP problem areas: Periods of enrollment for which the student did not

receive financial aid not being counted Lapses in attendances Development courses Course of study changes Pass/fail courses Transfer credit policy Repeat courses Ineligible courses Noncredit courses


Compliance & Fiscal Services Department

Staff Johan Brown, Assistant Director, Compliance

and Fiscal Services Sharon Bankston, Compliance Examiner Tony Morris, Compliance Examiner

Conducts 30 – 35 reviews within a cycle July 1 – June 30


Recommended ResourcesFSA Assessments

www.ifap.ed.gov Tools for Schools

Policies & Procedures Templates A Guide to Creating a Policies & Procedures

Manual

NASFAA www.nasfaa.org

Professional Practice Tools Formulating Policies & Procedures Self-Evaluation Guide Award Letter Self-Assessment Guide


Future DiscussionsCompliance Webinar Q & A with Compliance Staff Summer 2011

Satisfactory Academic Progress Workshops Regional To discuss new ED rules that go into effect July

1, 2011

Financial Aid 201 Workshops Offered quarterly


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