FEDERAL STUDENT AID: The Program Review Process – A Former Fed’s Advice on what to Expect and How to Respond

If you are reading this, you are probably well aware that Federal Student Aid (FSA) in the U.S. Department of Education (Department) conducts program reviews at institutions such as yours to verify compliance with the Title IV Higher Education Act (Title IV) rules and regulations. We think it would be helpful to know what to expect when the inevitable happens.

There are currently five types of program reviews:

• General Assessment Reviews: All-inclusive.
• Focused Reviews: Narrows the scope of the review.
• Compliance Assurance Reviews: Conducted at low risk schools to test selection methods.
• Incentive Compensation Reviews: Are just that.
• Joint Program Reviews: Adverse action or significant liabilities are considered likely outcomes. FSA may work jointly with the Department’s Office of the Inspector General, the Office of General Counsel, or the Enforcement Unit within FSA.

The Inevitable Begins

You’ve done your homework, you get regular updates from Information for Financial Aid Professionals (IFAP), ensure your financial aid staff is well trained through attendance at conferences and seminars, and of course, you’ve memorized the Federal Student Aid Handbook!

Then you receive the Announcement Letter from FSA:

• An Advance Notice letter is received within four weeks of the start of the review.
• A Short Notice letter could be delivered the first day of the review, triggered by the perceived possibility of fraud or abuse.

Included in the letter:

• The date the review will begin.
• The Lead Reviewer’s contact information.
• A very long list of items the Reviewer will want in advance or available at the start of the review.

Typically a review covers the current and last award year, 15 student files from each year; however, the Reviewer could expand the time frame or the number of files to review. Respond quickly and completely to all of the requested information, and in the format requested.

You will have to provide specific data elements for each student in each award year (yes, each student). From there the Reviewer will select the student files to review.

They’re here! Now what?

First up – the Entrance Conference with Staff from various offices.

The Review Team should tell you details of what to expect and an estimate of the length of the review, which can change. They may tell you why your school was selected for review, but if not, you can always ask. They still might not tell you, but nothing lost by trying!

During the Entrance Conference the Reviewers will want in-depth information on how your school operates, and which office does what.

Policies and procedures manual? Not required, but you are required to have policies and procedures so it just makes sense to put them in a manual. The Reviewers will be checking to see if you and your staff are following your own policies and procedures.

Next up! What should you do?

Provide the reviewers with:

• A secure working space.
• Access to a photocopy machine.
• Access to any databases containing student information.
• Any staff or students upon request.

What else?

• Appoint a staff member to be the contact person for all questions or requests.
• Prepare your staff, as the Reviewers will want to interview them. Be sure to let them know that they should just answer any questions truthfully, and that it’s ok to say “I don’t know.” Above all, they shouldn’t guess.
• They will want to interview the staff who actually perform the work, not their supervisor.
• They may also interview students.

What is the Reviewer looking for and where?

• In the student files, basic student and program eligibility.
• In your fiscal operation, adequate documentation and timeliness of drawdowns and reconciliations.
• On your website, complete and accurate consumer information.
• Everything else, everywhere else.

If you aren’t getting any feedback, ask for it! Ask for a daily meeting to update you on the progress of the review, and for you to ensure they are getting all that they need, and all of their questions answered. Your overall goal for the duration of the on-site visit is to be sure all questions are adequately answered and that there are no surprises at the end.

Exit Conference or Status Meeting?

At the end of the on-site visit the Reviewers will usually provide an Exit Conference. If not they should provide a Status Meeting to give you an opportunity to address any remaining questions or concerns, either theirs or yours.

An Exit Conference should indicate the on-site part of the review is substantially done; a Status Meeting would likely indicate they still have some work to do.  Either the Exit Conference or Status Meeting should include a discussion of any preliminary findings and information on any outstanding items. You should ask if there are any actions you must implement immediately. The Reviewers should answer any questions you may have, and give an estimate of when you can expect to receive a report. The discussion should also provide details of what the report will include, or in the case of a Status Meeting details of what they have so far. Now is the time to resolve any issues or clarify any misunderstandings in advance of receiving the report: be sure to ask for specific information on what documents you will need to resolve findings.

After The Visit – Possible Outcomes:

• Expedited Determination Letter (“EDL”): Insignificant or resolved findings – the review is done! Best possible outcome.
• A Program Review Report (“PRR”): Most likely outcome; it is a preliminary document and includes any findings identified during the on-site visit.

Use the time while waiting for the PRR to gather any documents that you will need to respond to the findings identified at the Exit Interview.

What’s in the Findings?

• The regulatory language and citation that supports the finding.
• Details of how the school was not in compliance.
• Actions required of the school to be in compliance.
• Any relevant appendices or enclosures.

Worst case scenario!

An unsatisfactory review may result in referrals to:

• Administrative Actions and Appeals Service Group (“AAASG”)
• Office of Inspector General (“OIG”)
• State Authorizing and Accrediting Agencies
• Institutional Improvement Services (“IIS”)
• Clery Act Compliance Team (“CACT”)

What Should You Do?

Read the report carefully, be sure you understand the requirements for each finding. Ensure that your response clearly and succinctly addresses each finding. Provide any requested documentation in an orderly manner that is easily understood, and in the format specified. Be sure you completely understand the finding and what is required. If something in the report is unclear, contact the Reviewer and ask for clarification – don’t make assumptions.

File review required? Be sure to include all of the data elements requested and any back up documentation organized as directed. You want to make it easy for the reviewer to evaluate your response. Above all, don’t provide anything that isn’t requested!

Very Important!

Keep a separate copy of every file the Reviewers examined, plus every document given on-site or sent in response to the report, including all email correspondence. Maintain these documents separately until the review is successfully closed.

The PRR will give you a “response due” date but if you find that you cannot meet the deadline, contact the reviewer in writing (email is fine) and ask for an extension. You will need to give them a valid reason for your request and how much additional time you need. Be realistic! You should receive a written response to the request that will either grant or deny it.

Don’t respond to the PRR? Then you could incur liabilities equal to all the Title IV funding your Institution has received since your last audit.

Final Program Review Determination

When all is said and done you will receive the Final Program Review Determination letter (“FPRD”). FPRDs should be issue within 30 to 90 days of receiving your response unless there are extenuating circumstances, and extenuating circumstances are becoming the norm.

What’s in the FPRD?

• Details of each finding.
• Any liability or fine associated with each finding.
• Instructions for any further actions required.

Also included are detailed instructions to pay any fines or liabilities. If you disagree with any monetary liability you must file an appeal within 45 days of receipt of the FPRD. Instructions for filing an appeal are included in the FPRD. Follow them carefully.

Although you are not required to pay liabilities until you receive the FPRD, if you decide to do so, that fact will be noted in the FPRD.

The FPRD is a final document subject to release under FOIA. FPRDs are also posted regularly on the ed.gov website.

 

 

About the Author

With more than 40 years of experience in the financial aid field, Pat Edelson has extensive knowledge of the Title IV rules and regulations. Ms. Edelson was a Program Reviewer with the Department for over 20 years and conducted over 100 program reviews at post-secondary institutions. Prior to that, she was a Financial Aid Director and School Manager for a large publicly-traded school chain.