Changes to the Compliance Review Process
The Georgia Student Finance Commission (GSFC) is charged with the administration of the state funded scholarship and grant programs in the State of Georgia. This includes the HOPE Scholarship and Grant Programs (HOPE), Leveraging Educational Assistance Partnership (LEAP) and the Georgia Tuition Equalization Grant Program (GTEG). Part of our responsibility includes making sure that the Programs are run properly both in our office and in postsecondary institutions. In order to achieve this, the GSFC Compliance Unit conducts reviews of the scholarships and grants Programs at all participating institutions.
In an effort to continually improve our reviews, we have performed a detailed assessment of our Compliance Program and plan to implement several changes for reviews beginning with those conducted during the 2009 calendar year. Members of the GSFC staff have discussed these changes with members of the Board of Regents (BOR) and Technical College System of Georgia (TCSG) central office staff, a task force of financial aid officers and other members of the financial aid community. Everyone has been extremely helpful in this process.
First, Georgia law requires that in order to receive HOPE and GTEG funds, a student must be a resident of the State of Georgia. The residency policy used to make residency eligibility determinations for BOR and TCSG institutions is, by law, based on the residency policy of the BOR or TCSG. In addition, students are required to meet satisfactory academic progress (SAP) based on the institution’s Title IV SAP policy. Currently, when GSFC Compliance Officers review HOPE and LEAP awards at BOR or TCSG institutions, they review the residency determinations that have been based on their policy. We have reviewed this practice as well as the respective administrative office’s practices on monitoring and auditing compliance with their policies and determined that we will rely on an annual certification from the institution’s president that it is making residency and SAP eligibility determinations for the state scholarship and grant programs in compliance with BOR or TCSG policies. A copy of the certification form is attached for your review. Accordingly, GSFC Compliance Officers will no longer review residency and SAP eligibility determinations for the state scholarship and grant programs for BOR and TCSG institutions. However, if, while conducting a review of other eligibility factors a residency or SAP related conflict or discrepancy is noted, both the school and the respective BOR or TCSG administrative office will be advised so the matter can be properly reviewed and resolved. Institutions have previously been sent the certification letter and asked to return them no later than February 27, 2009. We will advise BOR or TCSG administrative offices of any institution that did not execute the certification since it will be an indicator to us that the institution is unable to certify that it is complying with BOR or TCSG and institutional policies on residency and SAP. While we do not review each school every year, a school scheduled to be reviewed that does not return its certification in a timely manner will receive a full residency and SAP review by our Compliance Team. Since private and proprietary institutions are required by law to adhere to GSFC’s policies on residency and SAP, we will still be reviewing their eligibility determinations with respect to the state scholarship and grants programs.
Our second change relates to schools that receive benchmark scores above the median. In 2007, GSFC began assigning values to findings based on their severity and frequency and using them to calculate a benchmark score for all schools reviewed in a given year. This score was then used to determine how a school performed on its review. Schools with benchmark scores above the median were scheduled for a follow-up review the following year. This year, we plan to change this process. Institutions with benchmark scores above the median will be required to submit corrective action plans to GSFC. GSFC will then make sure that the institution has instituted the plan and will generally wait a year before conducting the follow-up review. Of course, there may be instances where the frequency and severity of the findings require GSFC to expand its review of the current year or not wait a year to conduct a follow-up review.
The final change is one that we believe will be beneficial to both GSFC and the institutions. It is our hope to conduct a large portion of the reviews remotely. We will still visit each school being reviewed and conduct an entrance and exit interview. The entrance interview will still involve a meeting with all the institutional officers involved in the process. The exit interview however will not be as in depth as in previous years and will focus on missing documentation since we will not have completed the review. To accomplish this, we will offer multiple options that a school can use to allow us to access the relevant data.
- We would remotely access and review some of the applicable Banner screens for the students in the sample, and also access student data on the institution’s imaging system if applicable; or
- Receive an encrypted disk containing images or file data of the requested information prior to the on-site review; or
- Be provided access to the downloaded files in the sample via a secure file transfer protocol (FTP) link.
Of course, our access to the Banner system would be limited to the screens specified and for a very limited time period in a read-only format. These are the same screens that the Compliance Review Team currently has access to during an on-site review. We hope you will agree that this new process will help improve the efficiency and effectiveness of our reviews and assist us with its implementation. The specific screen shots that we will need are attached to this article and have already been shared with BOR and TCSG central office staff and with many of the institutions.
We will also be sharing with you a copy of the revised guidelines for Compliance Reviews so you will have a clear understanding of the expectations. We are conducting training sessions on the revised procedures prior to the first review. Very few of the guidelines have changed from prior years with the exception of those related to the changes above. We hope that all institutions will allow secure FTP or remote access to their materials and/or provide a soft copy of the information. However, those that do not or those that are not prepared for the review when our Review Team arrives will receive a full on-site review by the Team.
GSFC’s responsibility for these programs is critical and by working together with the institutions, we are able to make sure that these vital programs assist as many students as possible. Together, we are able to safeguard the state funds and make sure that they will be available for the future.
Please feel free to contact Richard Hawkshead, V.P. of Internal Audit and Compliance at
770-724-9012, or any member of the Compliance Team at complianceteam@gsfc.org should you have any questions about these changes. |
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The Post On-Site Compliance Review Reporting Process of the State Scholarship and Grant Programs
Third in a Series of Three Articles to Help You Better Understand the State Scholarship and Grant Program Compliance Review process
After the Compliance Team has concluded an institution’s on-site Compliance Review of the State Scholarship and Grant Programs (S&G), correspondence and reports between the Compliance Team and the institution will begin. At the Exit Interview, the institutional officers will receive a schedule of preliminary findings noted during the on-site review and documents to assist the institution in resolving the findings. After the lead Compliance Officer explains each finding type, additional information is given concerning the time line for the submission of reports between the Compliance Team and the institution. Following the applicable time line, a Compliance Review of the institution’s S&G program can take several months to complete. In further detail the reporting process time line is as follows:
- Grace Period for Submitting Missing Documentation – 10 days (Business)
- Preliminary Report – 30 days (Calendar)
- Institutional Response – 30 days (Calendar)
- Final Report – 30 days (Calendar)
- Institutional Response – 30 days (Calendar)
- Closure – 30 days (Calendar)
Upon the completion of the on-site Compliance Review process, the institution’s GSFC Compliance Review committee or task group should begin the process of preparing a response to the schedule of preliminary findings (given at the Exit Interview) to be submitted during the 10-day missing documentation grace period. Using the Missing Documentation Guidance for Clearing Findings During 10-Day Grace Period form (see Attachment A) the institution must submit documentation to the lead Compliance Officer no later than ten (10) business days after the Exit Interview. The documents should be securely submitted either by mail, scanned and emailed, fax, overnight mail service or hand delivery. The Compliance Team will review the documentation and will note the result of the additional information on the Preliminary Report unless the documentation clears the finding or the finding is removed by the Compliance Team due to misinterpretation or error. Documentation that does not fit within the guidelines of missing documentation should not be submitted during the 10-day missing documentation grace period. Data Correction Request forms are not considered missing documentation. The institution’s GSFC Compliance Review committee or task group can be useful in the reporting process beginning with the first in a series of reports the institution will receive, the Preliminary Report.
Thirty (30) calendar days after the Exit Interview, the Compliance Team will issue to the Institutional Officers via secured email a formal Preliminary Report Letter (see Attachment B) and a formal Preliminary Report (see Attachment C). The Preliminary Report Letter contains instructions on how to respond to the Preliminary Report and the date the institution’s response should be submitted to the lead Compliance Officer which is thirty (30) calendar days from the date the institution receives the report. The Letter also contains a list of each finding type that remained after the 10-day missing documentation was reviewed. In addition, the institution is asked to refrain from remitting any monetary liabilities associated with each finding until after the Final Report and all supporting documentation has been submitted and reviewed. A cover sheet follows the Preliminary Report letter, which contains cursory information about the on-site Compliance Review with the institution’s name, date of review, Compliance Officers conducting the review, list of the institutional officers, and the fiscal year (see Attachment D). The Preliminary Report also contains information about the institution and the Compliance Review detailing the exceptions noted during the on-site Compliance Review process. The report contains detailed information about each finding and may have as many as five (5) different sections that must be addressed by the institution. These sections are:
- FINDINGS
- REQUIRED CORRECTIVE ACTION
- STUDENT LIABILITY
- AREA OF CONCERN
- MANAGEMENT NOTE
The FINDINGS section consists of all the findings listed on the schedule of preliminary findings given to the Institutional Officers at the Exit Interview, minus any findings that were cleared during the 10-day missing documentation grace period. In some cases, findings may be added or removed from the Preliminary Report based on a post-review performed by the Compliance Officers after the initial on-site review. For the purpose of describing the different sections of the Preliminary Report, the components that make up the five sections of the report will be identified as “sub-sections”. After each finding title, there is a sub-section where the institution may concur or not concur with the finding along with a place for the respondent’s signature, title and date. The next sub-section contains the student’s name, last four digits of their social security number, fiscal year(s), award term(s), award amount(s) and the program(s) associated with the finding. There can be several terms and programs associated with a finding. The award amount(s) are the potential monetary liabilities that the institution may or may not be required to refund back to GSFC depending on the finding’s final resolution. The explanation sub-section details what was viewed in the student’s file during the on-site review. Example; a Grade Point Average (GPA) finding explains why the student did not meet the GPA requirement for the HOPE Scholarship. The explanation will identify the Attempted-Hour checkpoint and the reviewers GPA calculation. Next, the regulation sub-section identifies the regulation relevant to the finding. This sub-section can contain references to several regulations for different S&G programs. The regulation sub-section can assist the institution to further address the finding for eventual resolution. The requirement sub-section pertains to the action the institution must perform in order to resolve the finding. This can include the submission of additional documentation, the remittance of funds (after the Final Report is submitted) back to GSFC or both. Following is an example of this section for further clarification.
The REQUIRED CORRECTIVE ACTION section requires the institution to submit corrective action plan for each finding type detailing the actions the institution will take to ensure students receiving State funds meet program requirements. Required Corrective Actions plans can assist the institution by focusing the institution’s attention to their current policy and procedures to determine if there is a need to review and revise the policies or to implement additional measures to their processing procedures.
The STUDENT LIABILITY section is not an institutional finding. However, the institution’s assistance is required in the resolution of a Student Liability but the responsibility of returning any potential monetary liability belongs to the student identified in the Compliance Review. Students are responsible for submitting all information requested by an institution. A student’s failure to submit all the requested information is classified in a Compliance Review as a False Certification – Student Liability. Example; a student submits an admissions application to an institution and fails to disclose all the previous schools the student attended and the corresponding academic transcripts. The student submits an application for the HOPE Scholarship. Unaware of the missing transcripts, the institution determines the student’s cumulative HOPE Grade Point Average. The student is awarded and receives the HOPE Scholarship. Later, a Compliance Review reveals the missing transcript. Thus, the student’s HOPE eligibility is in question. During the reporting process, if the missing transcript is not submitted or once received, the submitted transcript determines the student ineligible, the student is held liable for the return of any HOPE funds. In addition, if the transcript is not received, the institution notifies GSFC to place a refund due status on the student’s file preventing the student from receiving any future State aid until the matter is resolved.
The AREA OF CONCERN section deals with matters noted by the Compliances Officers while reviewing student files during the on-site review process. The Area of Concern section does not contain findings but issues that the Compliance Review process brings to the attention of the institution. For example; during a Compliance Review, it appears that a student may be eligible for the HOPE Scholarship. The student has an application and appears to meet all other HOPE requirements. However, the Compliance Officer will not make the determination of the student’s HOPE eligibility. Determining the student’s eligibility is the institution’s responsibility. The Compliance Officer merely brings to the institution’s attention that the student appears eligible and requests the institution to re-evaluate the student’s eligibility and if eligible, explain the circumstances that prevented the student from being awarded.
The MANAGEMENT NOTE section also does not contain findings. The Management Note section is intended to bring to the institution’s attention matters that could affect the institution’s awarding of State aid. For example; the Compliance Review process identifies that there are discrepancies between the course hours listed on the institution’s academic transcript and the course hours listed in the institution’s course catalog. This could affect the student’s Attempted-Hours Checkpoints, End-of-Spring Checkpoints, Total Paid-Hours and the Total Attempted-Hours calculations. The institution should review the matter and make a determination of any necessary changes.
The institution’s response to the Preliminary Report should be submitted to the lead Compliance Officer no later than thirty (30) days after the institution receives the Preliminary Report. However, if the institution is unable to meet that deadline, the institution can request a fifteen (15) day extension. The extension must be requested before the Preliminary Report response deadline. For each finding response, the sub-section (concur with this finding/do not concur with this finding) should be completed along with the respondent’s signature and date. If the institution concurs with a finding, it should be noted on the response. If the institution does not concur with a finding, it should be noted along with a written explanation accompanying the response and any relevant documentation that provides proof of eligibility as it pertains to that finding. The institution is expected to logically organize the documentation submitted to the lead Compliance Officer. All supporting documentation received should numerically correspond to the finding number it relates to. Example; with finding #23: Missing Academic Transcript, the institution submits the missing transcript labeling it #23. It is important to note that the institution will have several opportunities to submit documentation to resolved findings.
If the Compliance Review identifies discrepancies in data (hours-IRD and tiers-INV) between the institution’s records and GSFC’s records, the institution will also receive a Data Correction Request form (see Attachment E) to use in submitting a request to GSFC for correcting the data. The Preliminary Report will specifically identify the data that needs to be corrected. The Data Correction Request form should indicate the corrections are in response to a Compliance Review. The form should be submitted to the GSFC Financial Aid Operations Department. The lead Compliance Officer must also receive copies of the Data Correction Request form with the institution’s Preliminary Report response.
Corrective action plans should also be submitted with the institution’s response to the Preliminary Report. As described earlier, the REQUIRED CORRECTIVE ACTION requires the institution to submit a corrective action plan for each finding type detailing the actions the institution will take to ensure students receiving State funds meet eligibility requirements. The institution’s response should also be logically organized.
If the Preliminary Report contains a STUDENT LIABILITY and/or an AREA OF CONCERN section, the institution must indicate if it concurs or does not concur with each section. The institution should submit a response following the instructions listed in the requirements sub-section for each STUDENT LIABILITY and each AREA OF CONCERN. Following the earlier example for a STUDENT LIABILITY, if the missing transcript is not received, the State funds must be returned to GSFC as follows:
- A notification letter is sent to the student from your institution indicating the student’s ineligibility for the HOPE funds awarded in the terms listed above.
- Your institution should forward a copy of this letter to GSFC for our record-keeping purposes.
- GSFC will post a refund due status in the student’s account to prevent future awards.
- Once the funds are collected from the student, they should be forwarded to GSFC.
- The remittance should include the student’s name and SSN and awards information.
- The student’s refund due status will be removed upon the completion of the adjustment of funds.
- The student's eligibility for future awards can be reinstated when the refund is paid in full, if all other eligibility criteria are met.
The same applies for the AREA OF CONCERN section. The institution must indicate if it concurs or does not concur with the Area of Concern. In following the earlier example of a student identified as a potential HOPE Scholar, but not awarded, the institution must explain the circumstances that prevented the student from being awarded State funds. If the institution concurs after performing a re-evaluation, the institution should contact GSFC Financial Aid Operations to request a retroactive award as follows:
- A notification letter is sent to the attention of GSFC Financial Aid Operations on institutional letter head requesting a retroactive award.
- The letter must have the student’s name, social security number, terms(s) of award, tier, term hours, award amounts by tuition, fees and books.
- A copy of the request referencing the program review should be forwarded to the Compliance Team.
If the institution does not concur, the institution must provide GSFC with an explanation as to the circumstances that prevented the student from being awarded the HOPE Scholarship for the terms indicated on the Preliminary Report.
The MANAGEMENT NOTE section generally does not require a response. However, it is expected that the institution will examine the disclosed information and address the situation accordingly, if needed. The Preliminary Report will give an explanation of what was observed during the Compliance Review. If the institution needs additional information, a request for further explanation should be added to the institution’s response to the Preliminary Report.
After the institution submits its response to the Preliminary Report, the responses and all the supporting documentation will be reviewed by the Compliance Officers. Thirty (30) calendar days later, the institution’s President, will receive a formal Final Report Letter (see Attachment F) and a formal Final Report (see Attachment G) via secured email. The Institutional Officers will receive a copy of the Final Report Letter and Final Report. The Final Report Letter contains the date the institution is expected to submit a response to the Final Report and instructions in the remittance of any monetary liabilities. Like the Preliminary Report Letter, the Final Report Letter will contain a list of each finding type. A cover sheet follows the Final Report Letter, which contains cursory information about the on-site Compliance Review with the institution’s name, date of review, Compliance Officers conducting the review, list of the institutional officers, and the fiscal year (see Attachment H). The Final Report is constructed very similar to the Preliminary Report. However, a noticeable difference from the Preliminary Report to the Final Report, the Final Report will not contain the sub-section where the institution may concur or not concur with the finding nor the respondent’s signature, title and date. The Final Report will address all the sections on the institution’s response to the Preliminary Report. For the findings the institution concurs with, the findings may be Closed with no further action required by the institution. For example; a finding of IRD (Incorrect Reporting of Data) and INV (Incorrect Invoicing), requires a Data Correction Request form from the institution. After the Compliance Officers reviews the forms, the finding should result in a Closed status and noted on the Final Report. A finding can also remain Open due to additional requirements or documentation needed from the institution or the remittance of funds back to GSFC. With both a Closed and an Open status, there is an explanation located in the requirements sub-section of each finding. An Open finding may be associated with a monetary liability where the documentation received did not resolve the finding in order to receive a Closed status. For example; the institution concurs with a GPA finding. The finding will remain Open until the institution returns the monetary liabilities for the term(s) associated with the GPA finding. The Required Corrective Action plans, Student liability and Area Of Concerns will either be Closed or will remain Open depending on whether or not the institution submits a response to each section following the instructions listed on the Preliminary Report.
After the Final Report is submitted, the institution will have thirty (30) calendar days to submit their response. The institution should address those findings that remained Open on the Final Report. If additional documentation (example; academic transcripts, S&G applications, etc.) was not submitted with the institution’s response to the Preliminary Report, the institution should submit the documents in their response to the Final Report. It is important to note that the institution has thirty (30) days to submit relevant documentation to Close a finding and relieve any associated monetary liability after the institution submits its response to the Final Report. However, there is an established Compliance Review Appeals Policy (see Attachment I) that allows an institution to appeal a finding that the institution feels it correctly awarded. If there are no appeals or additional documentation submitted for review, the institution should remit any monetary liabilities to GSFC using the remittance device (see Attachment J). The remittance device is pre-populated with the student’s name, last four digits of their social security number, fiscal year, award year, term, program, term hours and a section for tuition, fees and books. In remitting funds back to GSFC, the institution should place a check mark in the last column to indicate if funds for this term are included in the refund.
After all findings, corrective action plans, student liabilities and area of concerns have been resolved and all monetary liabilities refunded to GSFC, the institution’s President will be issued a Closure Letter (see Attachment K) with a copy sent to the Institutional Officers. The Closure Letter will acknowledge the receipt of funds remitted back to GSFC as a result of the monetary liabilities associated with the review. The institution’s contact person will later receive a survey from the Compliance Team requesting their input on the Compliance Review process.
The administration of the State’s Scholarship and Grant programs is challenging given changes in the program regulations, new staff hires, etc. Sometimes, the Compliance Review process identifies an institution’s need for training. In this situation, the institution will receive a Compliance Review Training Letter (see Attachment L) referring the institution to the GSFC Learning Resources Team (LearningResources@gsfc.org) for training. An excellent resource, the Learning Resource Team can assist the institution with any training needs necessary to the institution for the proper administration of the State’s Scholarship and Grant programs. The Learning Resource Team will contact the institution to schedule a time and location for training. In addition, the Georgia Student Finance Commission Program Administration Team (ProgramAdministration@gsfc.org) can assist institutions in answering any regulatory questions about financial aid. However, any specific questions concerning the Compliance Program Review of your institution should be addressed to the Compliance Team.
The GSFC Compliance Team is dedicated to our mission to work with the Georgia institutions in the proper administration of the State Scholarship and Grant Programs so that we can all be good stewards of State funds. The GSFC Compliance Team encourages all institutions to contact us at ComplianceTeam@gsfc.org any time prior to, during, or after the review for assistance in answering Compliance related questions or providing clarification about the Compliance Review process. You may also contact Richard Hawkshead, Vice President of Internal Audit & Compliance, at 770-724-9012 or Richard@gsfc.org, should you have any questions or comments.
Read Part I of this series here.
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