Top Five Most Common Audit Findings For Career Education Programs—And Strategies For Improvement
Findings are every career education program’s worst nightmare during an audit, but they are by no means the end of a school. By implementing new systems and processes, schools can rebound from findings and continue serving students.
Every year, Federal Student Aid issues a report on the most common findings issued to schools. Findings aren’t an automatic kiss of death to your school, but they must be addressed quickly to avoid Heightened Cash Monitoring. No surprise to anyone who has ever tried to complete Return To Title IV (R2T4) calculations, three out of the top five findings are centered around R2T4.
Here are the top five most common reasons schools received findings with strategies on how to avoid them.
1. Repeated Finding: Failure to Take Corrective Action
Because of the nature of this finding, there is no one-size-fits-all approach to fixing it. Repeated findings may cover various non-compliance issues, but the most important factor in preventing this finding is showing your auditor that you’re willing to take corrective action.
According to a report by FSA, the Department of Education (ED) views inability or unwillingness to resolve a deficiency may indicate a lack of administrative capability, as well as a lack of control over Title IV funds. Schools that fail to address repeated findings could be placed on Heightened Cash Monitoring for two reasons:
- Administrative capability: Concerns about the institution’s ability to manage the Title IV programs, including student file maintenance, record retention, and verification
- Financial responsibility: School has a failing or a zone composite score or other concerns such as unreconciled accounts
ED finds repeated findings to be one of the biggest risk indicators, so the best way to approach this is to address findings as soon as they occur. But, of course, this is easier said than done.
Many findings stem from incorrect aid calculations or a failure to document processes and data. Fortunately, new software exists to manage everything from accounting, record storage and student enrollment, and Return to Title IV management. While not every repeated finding can be solved with software, good software saves your staff time and empowers them with the insights they need to implement strong processes and positive change, setting your school up for a successful audit.
2. Student Status—Inaccurate or Late Reporting
According to the ED, it’s critical to know student statuses immediately to determine if they are considered in school, must be moved into repayment, or are eligible for an in-school deferment.
Findings regarding student status include the following violations:
- Inaccurate reporting of student enrollment status and effective dates
- Failure to report last date of attendance/changes in student enrollment status
- Inaccurate reporting of program-level data
- Late reporting of specific student information
But how can your school report that information immediately if you don’t know it until days, if not weeks later?
With manual attendance solutions—pen and paper, biometric scanners, etc.—administrators may not have an accurate FDA or LDA until days later. Plus, if your school offers online learning with asynchronous activities, administrators are stuck waiting until instructors enter activities into the SIS to determine a student’s last activity.
Implementing real-time attendance software gives administrators a near-immediate view of LDA and FDA, regardless of learning environment. With a software solution, administrators can begin the R2T4 process immediately, reducing the chance of future findings.
3. Return To Title IV Calculation Errors
Let’s be honest; most administrators took their jobs because they love students, not because they have a passion for math. R2T4 calculations are difficult enough with accurate data but impossible with inaccurate data. Implementing a real-time attendance solution kills two birds with one stone, improving inaccurate/late reporting while giving administrators accurate data for R2T4 calculations.
In addition to giving administrators accurate data for R2T4 calculations, software also eliminates the burden of manual data entry. As a result, administrators have additional time to spend ensuring the accuracy of R2T4 calculations.
While it’s best to ensure that every calculation is accurate, ED does understand that this calculation is complex. Although “mathematical and rounding errors” are grounds for a finding, one-off mistakes are acceptable. Schools are simply asked to correct the mistaken data. However, if the audit report has multiple instances of the same error, ED may seek further data to review.
4. Return of Title IV Funds Made Late
Schools only have 14 days after a student drops to complete R2T4 calculations. But administrators are stuck jumping through hoops to get the attendance data they need to begin the complicated calculations.
But, this policy isn’t limited to delayed R2T4 funds. Other violations include:
- The IHE’s policy and procedures are not followed
- Inadequate system in place to identify/track official and unofficial withdrawals
- No system to track the number of days remaining to return Title IV funds to the Department
Schools must have policies and procedures in place to track the entire R2T4 process. Having a software system that quickly and accurately identifies LDA helps identify unofficial withdrawals is the first step, but it’s important to integrate your software. Data is automatically transferred between systems when your software works together, giving you a clear view of your entire process without manual data entry.
5. Verification Violations
Finally, schools must ask applicants to verify the information reported on the FAFSA. ED publishes a Federal Register notice annually announcing the FAFSA information that schools and students must verify for each year, including income, household size, high school completion, etc. If a school does not verify the information used to calculate federal aid, students may receive extra Title IV funds.
Findings under this heading include:
- Inaccurate verification of selected applicants
- Verification documentation missing/incomplete
- Interim disbursement rules not followed
- Missing verification policies
Ensuring your school has all the documented information needed to comply with ED also helps protect against fraudulent identity theft complaints. But chasing down and managing this information is a full-time job in itself. Fortunately, many common SISs include document management systems that allow for digital submission and record storage. Storing these important verification records digitally helps your staff quickly determine that all the files are submitted and ready for audit and protects your school against bad actors.
Protecting Your Career Education Program from Audit Findings
Staying compliant is a team effort, and the best teams are empowered with the tools they need to succeed. However, teams stuck managing compliance using pen, paper, and spreadsheets can quickly become spread thin, increasing the potential for errors that lead to findings.
If you’d like to learn more about how CourseKey helps schools manage compliance and prevent findings, request a demo with a member of our team.
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