oversight

Touro College's Title IV, Higher Education Act Programs, Institutional and Program Eligibility.

Published by the Department of Education, Office of Inspector General on 2008-10-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                 UNITED STATES DEPARTMENT OF EDUCATION
                                      OFFICE OF INSPECTOR GENERAL

                                                                                                                    Audit Services
                                                                                                            New York Audit Region


                                                            October 30, 2008

                                                                                                       Control Number
                                                                                                       ED-OIG/A02H0008

Dr. Bernard Lander
President
Touro College
President’s Office
27-33 West 23rd Street
New York, NY 10010-4202

Dear Dr. Lander:

This Final Audit Report, entitled Touro College’s Title IV, Higher Education Act Programs,
Institutional and Program Eligibility, presents the results of our audit. The purpose of the audit
was to determine if Touro College (Touro) complied with Title IV, Higher Education Act of
1965, as amended (HEA), programs (Title IV) institutional and program eligibility requirements.
Our original review covered the period July 1, 2005, through June 30, 2006. Because our work
indicated that deficiencies existed outside of the original audit period, we extended our review to
include the period July 1, 2002, through June 30, 2005.



                                                         BACKGROUND 



Touro was established in 1970 as a private, not-for-profit institution of higher and professional
education located in New York, New York. Touro offers undergraduate programs leading to
associate and bachelor degrees, and graduate programs leading to master degrees. It operates
professional schools, including a Law School, a College of Health Sciences, a College of
Osteopathic Medicine, a College of Pharmacy, and a College of Education. Touro is licensed to
operate in the states of New York, California, Nevada, and Florida. 1 Touro operates 31
additional locations in New York, four additional locations in California and Nevada, one
additional location in Florida, and four additional locations in Israel, Germany, and Russia.

The Middle States Commission on Higher Education (Middle States) accredited Touro and all of
its instructional locations located in New York, California, Nevada, Germany, Israel, and Russia.

1
 The names of the respective state licensing agencies are the New York State Education Department and the
University of the State of New York, the State of California Department of Consumer Affairs and the Bureau for
Private Postsecondary and Vocational Education, the Nevada Commission on Postsecondary Education, and the
Florida Department of Education Commission for Independent Education.
    The Department of Education's mission is to promote student achievement and preparation for global competitiveness by fostering educational
                                                      excellence and ensuring equal access.
Final Report
ED-OIG/A02H0008                                                                                     Page 2 of 14

On June 25, 2004, Middle States informed Touro that Touro University International (TUI),
Touro’s online distance education program, established in 1998, and located in Cypress, CA, 2
and Touro University California (TUC), established in 1997, and located in Vallejo, CA, along
with its Nevada branch located in Henderson, NV, 3 were considered separately accreditable
institutions, and directed Touro to seek accreditation for these locations from the Accrediting
Commission for Senior Colleges and Universities of the Western Association of Schools and
Colleges (WASC). On February 28, 2005, WASC became the accrediting agency for TUI and
TUC, along with TUC’s Nevada branch. 4

On March 3, 1999, the U.S. Department of Education’s (ED) Federal Student Aid (FSA) granted
a provisional Program Participation Agreement (PPA) to Touro after an FSA program review
found several deficiencies, including late refunds. When the provisional PPA expired on
December 31, 2001, FSA placed Touro in a “month-to-month” extension of its provisional
certification status, which was in effect until April 20, 2008. The total amount of Touro’s Title
IV awards increased from $64,100,041 in the 2002-2003 award year to $103,075,246 in the
2005-2006 award year (a 61 percent increase). During our audit period, while under a month-to-
month extension of its provisional certification status, Touro was approved to award
$335,734,960 in Title IV funds to students as shown below.

                             Award Year                   Title IV Amounts
                             2002-2003                     $     64,100,041
                             2003-2004                           78,968,330
                             2004-2005                           89,591,343
                             2005-2006                         103,075,246
                               Total                       $ 335,734,960

On September 28, 2007, FSA approved six of the nine ineligible additional locations cited in
Finding 1 below, (Office of Postsecondary Education ID (OPE ID) Numbers 01014234,
01014239, 01014240, 01014241, 01014242, and 01014248) 5 as additional locations eligible to
participate in Title IV. In addition, on March 6, 2008, FSA approved one of the nine ineligible
additional locations cited in Finding 1 (OPE ID Number 01014233) as an additional location
eligible to participate in Title IV. Lastly, on July 11, 2008, FSA approved the last two of the
nine ineligible additional locations cited in Finding 1 (OPE ID Numbers 01014243 and
01014245) as branch campuses eligible to participate in Title IV.




2
  On October 31, 2007, Touro sold TUI for $190 million to Summit Partners, a private-equity firm located in Palo
Alto, CA, and Boston, MA.
3
  Touro and the Accrediting Commission for Senior Colleges and Universities of the Western Association of
Schools considered the Henderson, NV, location to be a branch campus of TUC.
4
  Touro College Los Angeles (TCLA) is Touro’s other California location. TCLA opened in 2005 after the transfer
of accreditation of TUI and TUC, and has always been accredited by WASC.
5
  The OPE ID Numbers for the ineligible additional locations in this report reflect the numbers assigned on the
Electronic Application for Approval to Participate in Federal Student Financial Aid Programs during the time of our
audit. These numbers have changed since then; please see Attachment B for the new numbers.
Final Report
ED-OIG/A02H0008                                                                                      Page 3 of 14



                                            AUDIT RESULTS 



Touro did not fully comply with Title IV institutional and program eligibility requirements.
Specifically, Touro disbursed approximately $36,026,364 in Title IV funds to 4,310 students
who attended nine ineligible additional locations that FSA had not approved as eligible to
participate in the Title IV programs. Touro also disbursed $17,825,406 to 1,927 students who
attended TUI, 6 which Touro reported to FSA as an additional location. However, Touro
provided documentation dated March 29, 2000, that FSA did not consider TUI an additional
location because its students did not physically attend classes at the address listed for TUI.
Therefore, Touro did not need prior approval before disbursing Title IV funds to students
attending TUI. Touro never applied to FSA for approval and participation of TUI as a separate
institution or as a branch campus, even though Middle States informed Touro that it considered
TUI to be a separate accreditable institution on June 25, 2004. FSA should have considered TUI
as a branch campus or separate institution. Furthermore, for the award years 2002-2003 through
2004-2005, Touro did not keep adequate records to account for Title IV funds disbursements to
only eligible additional locations.

We provided a draft of this report to Touro for review and comment on February 26, 2008. In
Touro’s comments to the draft report, dated May 20, 2008, Touro did not concur with the
findings and recommendation 1.1. Based on Touro’s comments, we modified Finding 1 and
recommendation 1.1. Although Touro did not comment on the issue regarding TUI, we further
clarified our position and modified recommendation 1.3. For the other recommendations, Touro
did not specifically indicate concurrence or disagreement, but we updated recommendation 2.2
for clarification. Touro’s comments are summarized at the end of each finding.

Except for personally identifiable information (that is, information protected under the Privacy
Act of 1974 (5 U.S.C. § 552a)), the entire narrative of Touro’s comments is included as
Attachment C to this report. All personally identifiable information mentioned in Touro’s
comments was replaced with bracketed text. Because of the voluminous nature of the exhibits
attached to Touro’s comments and the personally identifiable information within, we have not
included them in Attachment C. Copies of the exhibits to Touro’s comments, less the personally
identifiable information, are available on request.




6
  Certain students were counted more than once in the total because they were enrolled in multiple school years. All
student totals in this report may include students who are counted more than once.
Final Report
ED-OIG/A02H0008                                                                                          Page 4 of 14

FINDING NO. 1 – Touro Disbursed Approximately $36,026,364 in Title IV Funds to
                Students Who Attended Ineligible Additional Locations

Touro Disbursed Title IV Funds to Students in Nine Ineligible Additional Locations

Touro disbursed approximately $36,026,364 in Title IV funds to 4,310 students who attended
nine ineligible locations. 7 Based on review of data from FSA’s Postsecondary Education
Participants System (PEPS) and the Electronic Application for Approval to Participate in Federal
Student Financial Aid Programs (EAPP), and interviews with FSA officials, we found that while
on a month-to-month extension of its provisional certification status since 2002, Touro added 17
additional locations through the EAPP. Although Touro reported these locations on the EAPP, it
did not provide any documentation to demonstrate the additional locations were approved by
FSA as eligible additional locations to receive Title IV funds. Since Touro was under a month-
to-month extension of its provisional certification status, Touro was not authorized to disburse
any Title IV funds to students attending any new additional locations without express approval of
the additional locations from FSA.

According to 34 C.F.R. § 600.20(c) 8 —

         A currently designated eligible institution that wishes to expand the scope of its
         eligibility and certification and disburse title IV, HEA Program funds to students
         enrolled in that expanded scope must apply to the Secretary and wait for approval
         to—
             (1) Add a location at which the institution offers or will offer 50 percent or
         more of an educational program if . . . 9
             (i) The institution participates in the title IV, HEA programs under a 

         provisional certification . . . . 


Pursuant to 34 C.F.R. § 600.21(a), an eligible institution must report to the Secretary of
Education (Secretary) no later than 10 days after changing its establishment of an accredited and
licensed additional location at which it offers, or will offer, 50 percent or more of an educational
program if the institution wants to disburse Title IV funds to students enrolled at that location. In
addition, 34 C.F.R. § 600.20(f)(3) provides that if an institution participates in the Title IV
programs under a provisional certification and is required to apply for approval of a new
location, that institution may not disburse Title IV funds to students at the new location before
receiving approval from the Secretary.




7
  Of the 4,310 students, 3,320 students also attended classes at approved additional locations. We identified 950 of

these students who exclusively attended approved, eligible locations for at least one of the three semesters in the 

award years we reviewed.

8
  Unless otherwise specified, all C.F.R. citations are to the July 1, 2002 volume.

9
  “Will offer 50 percent or more of an educational program” refers to the intention to offer, in the future, 50 percent 

of a legally authorized postsecondary program of organized instruction or study that leads to an academic, 

professional, or vocational degree, certificate, or other recognized educational credential.

Final Report
ED-OIG/A02H0008                                                                                     Page 5 of 14

Of the 17 additional locations Touro reported through the EAPP, nine were ineligible because
they offered, or intended to offer, 50 percent of an educational program, and received Title IV
funds. 10 Based on our analysis of student data, we identified 4,310 students who attended the
nine ineligible additional locations. Touro disbursed a total of $40,728,507 in Title IV funds to
these 4,310 students. Of the $40,728,507 disbursed to students at the nine ineligible locations,
we conservatively estimated that $4,702,143 could have been disbursed to 950 students who
exclusively attended only eligible locations for at least one of three semesters that we assumed
each student attended in each of the award years. 11 As a result, we conservatively estimated the
improper disbursement amount to students attending the nine ineligible locations to be
approximately $36,026,364. See Attachment A for the results of our analysis of ineligible Title
IV amounts by award year.

Of the nine ineligible additional locations, the location where students were disbursed the most
Title IV funds was Touro University College of Osteopathic Medicine which opened in 2004 in
Henderson, Nevada. We found 381 students who attended this location for whom Touro
disbursed a total of $13,501,642 in Title IV funds (over 37 percent of our estimated total
disbursement of $36,026,364). See Attachment B for a list of all nine ineligible locations.

Touro officials made a management decision to continue disbursing Title IV funds to students at
these nine ineligible additional locations, even though they were not approved by FSA as eligible
additional locations. As a result, Touro improperly disbursed an estimated $36,026,364 in Title
IV funds for students attending nine ineligible additional locations that were neither approved
nor authorized by FSA to receive Title IV funds.

Touro Never Applied to FSA for Approval and Participation of TUI as a Separate
Institution or as a Branch Campus

TUI was 1 of the 17 additional locations that Touro reported through the EAPP. Even though
Touro reported TUI as an additional location through the EAPP, Touro provided documentation
from FSA, dated March 29, 2000, that FSA did not consider TUI an additional location since
TUI offered only online distance education programs and students did not physically attend
classes at TUI's address. As a result, FSA did not require TUI to obtain prior approval from FSA
before disbursing Title IV funds to students.

ED’s definition of a “branch campus” is similar to Middle States’. According to
34 C.F.R. § 600.2, a branch campus is—

        A location of an institution that is geographically apart and independent of the
        main campus of the institution. The Secretary considers a location of an
        institution to be independent of the main campus if the location—
            (1) Is permanent in nature;

10
   Of the eight remaining additional locations added through the EAPP, seven did not offer, or intend to offer, 50

percent of an education program, and one was TUI, an online distance education program.

11
   We assumed that these 950 students attended two of the three semesters in the award years we reviewed and were

eligible for two-thirds of the annual award.

Final Report
ED-OIG/A02H0008                                                                                      Page 6 of 14

             (2) Offers courses in educational programs leading to a degree, certificate, or
                 other recognized educational credential;
             (3) Has its own faculty and administrative or supervisory organization; and
             (4) Has its own budgetary and hiring authority.

TUI was an independent location of Touro College which administered the Title IV funds for its
students, used its own accounting system for tracking its Title IV disbursements, had its own
administrative and faculty staff, and its degrees were approved by the State of California. In
2005, Middle States determined TUI to be a separate accreditable institution and a branch
campus of Touro that should be accredited by WASC, not an additional location. 12 Middle
States defines a branch campus as a location of an institution that is geographically apart and
independent of the main campus of the institution. The location is independent if the location is
permanent in nature; offers courses in educational programs leading to a degree, certificate, or
other recognized educational credential; has its own faculty and administrative or supervisory
organization; and has its own budgetary and hiring authority. Under ED’s definition, TUI should
have been considered a branch campus or separate institution because TUI was independent.
However, Touro never applied to FSA for approval and participation of TUI as a separate
institution or branch campus. Touro disbursed a total of $17,825,406 in Title IV funds to 1,927
students enrolled at TUI.

Recommendations

We recommend the Acting Chief Operating Officer (COO) for FSA require Touro to⎯

1.1	 Determine the exact amount of Title IV funds disbursed to students attending ineligible
     locations, and return the amount improperly awarded (which we estimated to be
     $36,026,364) to ED and the lenders, as appropriate. For Federal Family Education Loans
     Program loans, pay to the appropriate lenders the amount of interest that accrued on the
     borrowers’ loans and pay to ED the amount of interest benefits and special allowance
     payments. FSA should verify Touro’s calculations.

1.2	 Develop written procedures to ensure additional locations are approved by FSA to receive
     Title IV funds before drawing down and disbursing Title IV funds to students.

We also recommend the Acting COO for FSA⎯

1.3	 Determine if Touro should have applied for approval and participation of TUI as a separate
     institution as a result of Middle States’ decision to consider TUI a separately accreditable
     institution, and take actions as appropriate.




12
  Despite the determination that TUI should not be accredited by Middle States, Middle States also stated that TUI
was “within the scope” of Middle States accreditation of Touro College prior to TUI's receipt of accreditation from
WASC.
Final Report
ED-OIG/A02H0008                                                                         Page 7 of 14

Touro Comments

Touro did not concur with our finding and recommendation 1.1. It did not comment on our other
recommendations. Touro did not agree that any of the nine additional locations were ineligible
and provided specific information intended to support the eligibility of six of the nine locations
(OPE ID Numbers 01014233, 01014234, 01014239, 01014240, 01014241, and 01014242). In its
comments, Touro stated that—

1.	 Four of the locations the report identifies as ineligible (OPE ID Numbers 01014234,
    01014240, 01014241, and 01014242) were each “part of a campus constituting a duly
    approved eligible location.” NYSED and Middle States recognized each of these four
    locations as components of a geographic grouping of classroom facilities functioning as
    single operational units. This treatment is consistent with ED’s handling of other urban
    universities. Touro over-reported by including one of these locations on its EAPP, and “the
    OIG has taken a prospective, precautionary prediction and converted it into a current
    statement of fact . . . .”

2.	 “The Department’s regulation concerning approval of sites turns on whether the location
    offers 50% or more of an educational program.” Two of the locations the report identifies as
    ineligible (OPE ID Numbers 01014233, and 01014239) did not offer more than 50 percent of
    a program. For location OPE ID Number 01014233, the EAPP stated that Touro’s intention
    was to offer more than 50 percent of a program at this location in the future. For location
    OPE ID Number 01014239, additional information was provided indicating this location did
    not offer 50 percent of a program for the 2003-2004 through 2005-2006 years.

3.	 It reasonably believed that the additional locations were approved by ED. Touro’s ability to
    utilize the ordinary processes of reporting changes was entirely disrupted by its extended
    month-to-month provisional certification status and issues with ED’s electronic application
    system. Based on its contact with ED’s New York Case Team, it very reasonably understood
    that the reported changes, including new locations, were in fact approved. Further, Touro
    was never advised that any new locations were considered to be ineligible, nor was it ever
    advised to stop disbursing Title IV funds to these new locations. ED’s “continuing pattern of
    conduct over the course of nearly seven years appeared to clearly confirm . . . [that] the
    Department’s own conduct could be relied upon as de facto approval of Touro’s new
    locations.”

4.	 Even if the locations were ineligible, the asserted liability “is incorrectly calculated and
    grossly overstates the amount of Title IV assistance disbursed for coursework at the
    Challenged Locations.” To calculate the liability, the OIG identified all students who took
    any courses at any one of the nine challenged locations and then totaled all the Title IV
    assistance awarded to those students for the entire award year. The OIG “fails to distinguish
    between students who took one course during a single semester, one course during multiple
    semesters, or multiple courses during multiple semesters at any of the Challenged Locations .
    . . . [T]here is no basis whatsoever to take the position that the Asserted Liability can include
    Title IV assistance earned as a result of instruction at other indisputably eligible locations.”
    (emphasis in original.) The asserted liability included disbursements to students for
Final Report
ED-OIG/A02H0008                                                                        Page 8 of 14

   attendance at eligible, undergraduate locations who then, later in an award year, attended
   graduate programs at locations questioned by OIG; some of these students received no Title
   IV assistance for attendance at the questioned locations.

OIG Response

We considered Touro’s response to our finding and recommendation 1.1, and modified Finding 1
and recommendation 1.1. Our responses to each of Touro’s comments are provided below:

1.	 Federal requirements differ from NYSED and Middle States requirements. According to 34
    C.F.R. § 600.10(b)(3), when ED determines eligibility, “[e]ligibility does not extend to any
    location that an institution establishes after it receives its eligibility designation if the
    institution provides at least 50 percent of an educational program at that location . . . ”
    (emphasis added). The regulations do not provide an exception for locations that are close to
    other locations; they are based on the percentage of an educational program provided at the
    location. Similarly, 34 C.F.R. § 600.20(c) provides requirements for an “institution that
    wishes to expand the scope of its eligibility and certification and disburse title IV, HEA
    Program funds to students enrolled in that expanded scope . . . .” Though Touro claims that
    its inclusion of the location on its EAPP was over-reporting, that inclusion did indicate that,
    at the time the EAPP was completed, Touro considered it to be a “new location.” Filing the
    application also triggered a clear obligation to not disburse funds until approval had been
    received.

2.	 As stated in our finding, 34 C.F.R. § 600.20(c)(1) requires an institution to apply for approval
    to “[a]dd a location at which the institution offers or will offer 50 percent or more of an
    educational program . . . .” (emphasis added.) For one location (OPE ID Number:
    01014233), Touro stated on the EAPP that its intention was to offer more than 50 percent of
    a program at this location in the future. The regulations do not include any provision for a
    location’s gaining eligibility if, in subsequent years, the percentage of a program offered at
    the location decreases to less than 50 percent, or if an institution does not follow through
    with the originally stated intention to offer more than 50 percent of a program. Therefore, in
    light of Touro’s stated intent, we could not conclude that the first location (OPE ID Number:
    01014233) was eligible, or that Touro was authorized to disburse funds in the absence of
    written authorization from FSA. We questioned the second location (OPE ID Number:
    01014239) because Middle States data indicated that Touro provided at least 50 percent of a
    program there; Touro’s EAPP for this location did not include a statement that more than 50
    percent was offered or that Touro intended to offer more than 50 percent. Touro provided
    additional information indicating this location did not offer 50 percent of a program for the
    2003-2004 through 2005-2006 years (Middle States had attributed off-site clinical education
    to this location). However, Touro did not provide documentation for the 2002-2003 year.
    Therefore, we could not conclude that this location was eligible or if disbursements were
    authorized.

3.	 Under 34 C.F.R. § 600.20(f)(3), an “institution may not disburse title IV, HEA program
    funds to students attending the subject location, program, or branch until the institution
    receives the Secretary’s notification that the location, program, or branch is eligible to
Final Report
ED-OIG/A02H0008                                                                       Page 9 of 14

   participate in the title IV, HEA programs.” Touro did not receive approval for its new
   locations. ED’s awareness of the locations, or Touro’s difficulties with its provisional
   certification status or ED’s electronic application system cannot authorize the disbursement
   of Title IV funds contrary to the regulatory requirements. See In the Matter of Cannella
   Schools of Hair Design, Dkt. Nos. 98-72-SA & 98-73-SA, ED (Decision of the Secretary,
   December 12, 2000) (“Estoppel cannot prevent the application of the correct meaning of
   governing regulations . . .”); and In the Matter of Academia La Danza Artes Del Hogar, Dkt.
   No. 90-31-SP, ED (May 19, 1992) (erroneous or negligent designation of eligibility by ED
   does not prevent recovery of funds disbursed contrary to law).

4.	 We modified our calculation in Finding 1 of the Title IV funds disbursed to students
    attending the nine ineligible locations. We also revised recommendation 1.1 for Touro to
    calculate the exact amount of Title IV funds disbursed to students attending the nine
    ineligible locations.

   In the draft report we questioned the entire annual Title IV award and disbursement for any
   student who attended any of the nine ineligible locations during an award year. We have
   modified our methodology to identify and exclude any student who attended only eligible
   locations during any single semester of an award year. Of the 4,310 students who attended
   ineligible locations, we determined that 950 students attended only eligible locations during
   at least one semester of an award year. However, we could not determine the exact amount
   of funds disbursed to these students for each semester because Touro provided Title IV
   amounts for students only for the whole award year, not individual semesters. Using the
   National Student Loan Data System (NSLDS) data, we made a conservative estimation that
   $4,702,143 could have been disbursed to the 950 students who attended only eligible
   locations for two of three semesters in each of the award years. As a result, we estimated the
   Title IV disbursement to students attending the nine ineligible locations to be approximately
   $36,026,364.

   The modified recommendation that Touro review and determine, subject to ED’s
   verification, the actual amount improperly disbursed to each student also addresses Touro’s
   comment that our calculation overstated the liability for students that did not attend an
   ineligible location for an entire award year. This recommendation is consistent with Touro’s
   obligation under 34 C.F.R. § 668.82(b)(1) to account for Title IV funds received.

   Touro provided no basis to conclude that liability should be reduced if a student
   simultaneously attends eligible and ineligible locations. The regulation at
   34 C.F.R. § 600.20(f)(3) categorically states that an institution may not disburse Title IV
   funds to a student at a new location prior to receiving notice of eligibility from the ED. In
   addition, Title IV awards are based on a student’s entire cost of attendance and are not
   awarded or apportioned on a course-by-course basis.

Although Touro did not comment on the issue regarding TUI, we further clarified our position
and modified recommendation 1.4.
Final Report
ED-OIG/A02H0008                                                                                  Page 10 of 14

FINDING NO. 2 – Touro Did Not Have Adequate Records to Ensure That Title IV
                 Funds Disbursements Were Made Only to Students Attending
                 Eligible Additional Locations for the Award Years 2002-2003
                 through 2004-2005

Touro did not keep adequate records to account for Title IV funds disbursements to students who
attended only eligible additional locations for the 2002-2003 through 2004-2005 award years.
According to the Dean of Enrollment Management and Institutional Research and Review
(Dean), Touro did not maintain a database of Title IV funds disbursed to students by location
attended. 13 The student database from Jenzabar did not contain the location where students
attended classes. 14 Instead, the database tracked students by instructor. The Touro location data
resided on the faculty database, which was separate from the student database. The Dean
informed us that in order to add the locations to each student file, the Information Technology
staff needed to compare the student database and faculty database, and then go into the student
database and manually add the locations for each student.

Since Touro did not track students by location attended, Touro did not have adequate records to
ensure that Title IV disbursements were made only to students attending eligible locations.

According to 34 C.F.R. § 668.16(a), for an institution to meet the standards of administrative
capability, the institution must administer—

        . . . the Title IV, HEA programs in accordance with all statutory provisions
        of or applicable to Title IV, of the HEA, all applicable regulatory
        provisions prescribed under that statutory authority, and all applicable
        special arrangements, agreements, and limitations entered into under the
        authority of statutes applicable to Title IV of the HEA.

In addition, 34 C.F.R. § 668.16(d) states that, to be administratively capable, an institution must
establish and maintain “records required under this part and the individual Title IV, HEA
program regulations.”

According to 34 C.F.R. § 668.24—

        (a) An institution shall establish and maintain, on a current basis, any 

        application for title IV, HEA program funds and program records that 

        document— 

            (3) Its administration of the title IV, HEA programs in accordance with
            all applicable requirements; . . .
            (6) Its disbursement and delivery of title IV, HEA program funds . . .

13
   Touro did not begin maintaining a database of Title IV funds disbursed to students by location until the 2005-
2006 award year. At our request, Touro compiled the student and location information for award years 2002-2003 

through 2004-2005. 

14
   Jenzabar is a higher education administrative system which Touro used to manage its admissions, registrar,

bursar, financial aid, advisement, and development data.

Final Report
ED-OIG/A02H0008                                                                        Page 11 of 14

       (d) General. (1) An institution shall maintain required records in a 

       systematically organized manner. 


Touro did not fully utilize the features in its database system for the 2002-2003 through 2004-
2005 award years to track students who received Title IV funds by location.

Recommendations

We recommend the Acting COO for FSA require Touro to⎯

2.1	 Review its databases to determine if Touro disbursed Title IV funds to students attending
     other ineligible additional locations during the 2002-2003 award year through present.

2.2	 Maintain adequate records on a current basis to ensure that Title IV disbursements are
     made only to students attending eligible locations.

Touro Comments

Touro did not concur with the finding and stated that it complied with the record retention
requirements of 34 C.F.R. § 668.24 and the administrative capability requirements of
34 C.F.R. § 668.16. According to 34 C.F.R. § 668.24, “an institution shall maintain required
records in a systematically organized manner and an institution shall make its records readily
available for review.” The regulations do not require an institution to maintain its records in any
particular format, and the OIG’s report does not argue that Touro failed to provide the student
data that was requested.

The Dean, as cited in Touro’s comments, “never advised auditors that ‘Touro did not maintain a
database of Title IV funds disbursed to students by location attended.’ Rather, the Dean advised
the OIG that Touro did not maintain a database of Title IV disbursements in the specific format
requested by the auditors.” Touro’s internal processes “limit the amount of coursework students
could earn at the locations for which Touro did not understand ED to have provided the required
approvals.” Touro is not required to maintain its records in the format requested by the auditors,
and there is no evidence in the report that Touro failed to provide all of the relevant information
requested by the OIG.

OIG Response

We considered Touro’s response to Finding 2; however, our position remains unchanged.
Touro’s records were not “systematically organized” because they were not maintained in a
manner consistent with its obligations to administer the Title IV programs in compliance with all
requirements. As explained in FSA’s The Blue Book—

       [A] school’s operations must be administered in a way that ensures all the
       information the school receives that might affect a student’s FSA
       eligibility is communicated to the coordinating official and to the financial
       aid office.
Final Report
ED-OIG/A02H0008                                                                       Page 12 of 14

While it is true that records were sufficient after the fact, and after much analysis, to conclude
that most Title IV funds were disbursed at eligible locations, Touro could not provide the
required eligibility information on a current basis to the financial aid office to use in combination
with other student eligibility data prior to award year 2005-2006. Contrary to Touro’s assertion,
we are not disagreeing with the format of its data, rather we have concluded Touro did not make
necessary data currently available to its financial aid office.

Since Touro did not provide any explanation or supporting documentation for its statement that it
had internal processes for limiting the amount of coursework students could earn at the ineligible
locations, we cannot respond to its comment. We modified recommendation 2.2 to emphasize
the requirement to maintain records on a current basis.



                       OBJECTIVE, SCOPE, AND METHODOLOGY 



Our audit objective was to determine if Touro complied with the Title IV institutional and
program eligibility requirements. Our original review covered the period July 1, 2005, through
June 30, 2006. Because our work indicated deficiencies existed outside the original audit period,
we extended our review to include the period July 1, 2002, through June 30, 2005.

To accomplish our audit objective, we—
•	 Reviewed Touro’s 2003, 2004, 2005, and 2006 audit reports conducted under U.S. Office of
   Management and Budget Circular A-133 and the workpapers of Touro’s independent public
   accountant (IPA);
•	 Gained an understanding of the pertinent Title IV regulations;
•	 Interviewed management officials from Touro, FSA, and Touro’s IPA;
•	 Reviewed Touro’s written policies and procedures applicable to its Title IV administration
   for institutional and program eligibility;
•	 Examined approvals and correspondence from Touro’s accrediting agencies, Middle States
   and WASC, and respective state licensing agencies;
•	 Gained an understanding of Touro’s use of automated systems to manage Title IV funds;
•	 Obtained and reviewed Touro’s data from its Jenzabar system and from ED’s NSLDS, PEPS,
   EAPP, 15 Eligibility and Certification Approval Report, and Grant Administration and
   Payment System;
•	 Extracted data from the PEPS and the EAPP to identify the eligibility of Touro’s additional
   locations; and
•	 Identified an ineligible student population for each year of our audit period by extracting
   students from our universes who attended the ineligible locations identified.

We assessed the system of internal controls, policies, procedures, and practices applicable to
Touro’s institutional and program eligibility for the Title IV programs. Because of inherent
limitations, a study and evaluation made for this limited purpose would not disclose all material
15
     EAPP data as of April 24, 2007, was used for our review.
Final Report
ED-OIG/A02H0008                                                                    Page 13 of 14

weaknesses in the internal controls. However, our assessment disclosed significant internal
control weaknesses in the institutional and program eligibility area. These weaknesses and their
effects are fully discussed in the AUDIT RESULTS section of this report.

We relied, in part, on a computer generated universe of students from the NSLDS database and
on Touro’s Jenzabar system. For the 2005-2006 award year, we constructed a universe of 11,127
Title IV students by comparing NSLDS and Touro’s Jenzabar data and reconciling discrepancies
of 250 students between the two systems. For the 2002-2003 through 2004-2005 award years,
we compared NSLDS and Touro’s Jenzabar data. We randomly sampled 30 students from
discrepancies of 1,697 students between the two systems. Based on the results of our sample, we
constructed universes for each year of our expanded audit period totaling 27,667 Title IV
students. Based on the assessments we conclude that the data are sufficiently reliable to be used
in meeting the audit objectives.

We performed our fieldwork at Touro’s main location located in New York, New York, between
March 13, 2007, and August 22, 2007.

On August 10, 2007, we issued an Interim Audit Memorandum (IAM) to FSA regarding the
significant amount of Title IV funds disbursed to Touro students attending ineligible additional
locations and Touro’s not maintaining a database of Title IV disbursements to students by
location. The IAM recommended FSA to take immediate steps to ensure no further Title IV
funds were disbursed to students who attended ineligible additional locations, require Touro to
return the Title IV funds disbursed to students attending ineligible additional locations, notify
Touro that it was not in compliance with Title IV requirements, take action regarding Touro’s
not maintaining a database of Title IV disbursements to students by location, and take immediate
action to make a determination regarding Touro’s 17 unapproved additional locations. In its
September 5, 2007, response to the IAM, FSA stated that it will complete the recertification
review of Touro by September 30, 2007, and make a final determination concerning the funds
disbursed to students at the ineligible locations during the completion of the recertification
process. As of July 11, 2008, FSA had subsequently approved the nine cited additional
locations. See the BACKGROUND section for specific details. As of October 29, 2008, FSA
had not made a final determination concerning the funds disbursed to students at Touro’s
ineligible locations.

We conducted the audit in accordance with generally accepted government auditing standards
appropriate to the limited scope of the audit described above.



                            ADMINISTRATIVE MATTERS



Statements that managerial practices need improvements, as well as other conclusions and
recommendations in this report, represent the opinions of the Office of Inspector General.
Determinations of corrective action to be taken, including the recovery of funds, will be made by
Final Report
ED-OIG/A02H0008                                                                      Page 14 of 14

the appropriate Department of Education officials in accordance with the General Education
Provisions Act.

If you have any additional comments or information that you believe may have a bearing on the
resolution of this audit, you should send them directly to the following Department of Education
official, who will consider them before taking final Departmental action on this audit:

                              James Manning
                              Acting Chief Operating Officer
                              Federal Student Aid
                              U.S. Department of Education
                              Union Center Plaza
                              830 First Street, NE, Room 112E1
                              Washington, DC 20202

It is the policy of the U. S. Department of Education to expedite the resolution of audits by
initiating timely action on the findings and recommendations contained therein. Therefore,
receipt of your comments within 30 days would be appreciated.

In accordance with the Freedom of Information Act (5 U.S.C. § 552), reports issued by the
Office of Inspector General are available to members of the press and general public to the
extent information contained therein is not subject to exemptions in the Act.

                                             Sincerely,


                                             /s/
                                             Daniel P. Schultz
                                             Regional Inspector General
                                               for Audit

Attachments
                                                                                                    Touro College




                                                                                                                                                                                                         ED-OIG/A02H0008
                                                                                  Ineligible Title IV Amounts by Award Year
                                                                                       July 1, 2002 through June 30, 2006




                                                                                                                                                                                                                                          Final Report
                                                             TITLE IV r ROGRAo\IS'
                                                                                                                                                                                                    !
                                                                                                                                          STUDENTS
                                                                                                                                         ATrENDlNG
                                                                                                                                            ONLY
                                                                                                                                          ELiC IBLE                                     ESTIMATED
                                                                                                                                         LOCATI ONS TITLE IV FUN DS      ESTIM ATED       TITLE IV
                                                                                                                                        FOR AT LEAST DISBURSED TO         ELIGIBLE    DISBURSEMENTS
                                                                                                                                            ONE         snJ DENTS IN      TIT LE IV    TOSTUDEl\iS
                 NU MB ER                                                                                                                 SEMESTER       COLUMNB      ASSOCIATED WITH   ATrEND INC
    AWARD                         rUL                    rERKINS               FFEL STAFF FF'EL STAFF        n us     AWAKDYEAR          DURING Til E   DUR ING Til E  STUD&oiS FRO)1   INELIG IBLE
                     0'                                                                                                                               1
                                                                                                                                        AWARO YEAR                       COLUMN B)
     YEAR        STU DENTS       GRAI'oT      t"SEOG      LOAN
                                                                      ""          SU B       UNSUB          LOAN        TOTA I,s
                                                                                                                           (A)               (B)
                                                                                                                                                        AWARD YEA R
                                                                                                                                                             (0          (D) - (Ot"',
                                                                                                                                                                                        LOCATIONS
                                                                                                                                                                                           (A-D)

    2002.2003          ."       SI,163,919    m,m         ".000      $%,87{1     $596,616      ~97,941
                                                                                                                "         $2,435,081
                                                                                                                                                '"          5639,090         ~26,060        $2,009,021

    2003·2004             580    1,599.429    121,8 16         0     141,700      575,314        480,545         0         2,918,804            ,SO          838,023          558,682        2,360,122

    2004·2005

    2005·2006
                      1,497

                      1,737
                                 2,083,28 1

                                 1,955,34$
                                              116,134.

                                              189,907
                                                          39,750

                                                           89,750
                                                                     214,453

                                                                     212,214
                                                                                 S,S41,340

                                                                                 8,402,605
                                                                                               5,546,299

                                                                                              10,595,301
                                                                                                             39,520

                                                                                                             48,723
                                                                                                                           13,880,777

                                                                                                                          2 1,493,845
                                                                                                                                                '"
                                                                                                                                                )00
                                                                                                                                                           3,192,452

                                                                                                                                                            2,383,650
                                                                                                                                                                             2,128,301

                                                                                                                                                                             1,589,100
                                                                                                                                                                                            11.752,476

                                                                                                                                                                                            19,904,745




                                                                                                                                                                                                                           ATTACHMENT A
     Till. IV
                     4,310      56.80 1,974   S501,m     Sm,500     5665.237   m,4 1S,875    S17,120.(l86   588,243
     TotalS

-               --
                                                                                                  TOTALS              $40,728,507              950      S7 053 215       S4."m2...ill.. _ $36,026,364


        lLqend
         PELL GRA NT - Federal Pell Grant Prognm
         FSEOG - Federal Supplemental Educalional Opponunily Grant Program
         PERKINS LOAN - Fedenll Perkins Loan Progrnm
         FWS - Federal Work Study Prog.mn
         FFEL STAFF SUB - Federnl Family Education Loan Program, Subsidized Stafford Loan
         FFEL STAF F UNSUB - Fedenl Family Education Loan Program, Unsubsidized Stafford Loan
         PLUS LOAN· federal Family Education Loan Program, PLUS Loan


        I We assumed students attended three semesters in an award year.

        3These Title IV amounts were based on disbursement data from the National Student Loan Data System (NSLDS).
        We calculated these amounts based on th e assumption lhat these sludents anended eligible locations for two of lh ree
        ScmCSltn in a year.
    Final Report
    ED-OIG/A02H0008                ATTACHMENT B

                                     Touro College 

                            Ineligible Additional Locations 

                          July 1, 2002 through June 30, 2006 


     OPE ID Number          New OPE ID
    During Audit Period       Number                       School Location
                                          Touro College - Brownsville
1        01014233             01014242    250 Blake Avenue
                                          Brooklyn, NY 11212
                                          Touro College - Boro Park Center
2        01014234             01014233    5323 18th Avenue
                                          Brooklyn, NY 11204
                                          Touro College - Winthrop University Hospital
3        01014239             01014235    286 Old Country Road
                                          Mineola, NY 11501
                                          Touro College - Starrett Classroom and Admin Site
4        01014240             01014236    1390 Pennsylvania Avenue
                                          Brooklyn, NY 11239-2103
                                          Touro College - Speech and Hearing Center
5        01014241             01014237    1610-20 East 19th Street
                                          Brooklyn, NY 11229-1302
                                          Touro College - Graduate Center
6        01014242             01014238    950 Kings Highway
                                          Brooklyn, NY 11223-2338
                                          Touro College - Touro University College of
                                          Osteopathic Medicine
7        01014243             01014239
                                          874 American Pacific Drive
                                          Henderson, NV 89014-8800
                                          Touro College - Los Angeles
8        01014245             01014241    1317 North Crescent Heights
                                          West Hollywood, CA 90046
                                          Touro College - Touro College South
9        01014248             01014244    1703 Washington Avenue
                                          Miami Beach, FL 33139-7541
Final Report
ED-OIG/A02H0008                                 ATTACHMENT C                                  Page 1 of 26

                           Touro’s Comments on the Draft Report



                 TOURO COLLEGE
                 Office of the 50'1;0(" Vice PresidBnt                                    27-33 West 23rd Street
                 and Chief Financial Officer                                          New York, N. Y. 10010-4202
                                                                                     Tef(212) 483-0400, Ext. 715
                                                                                              Fax (212) 627-9049


                                                     May 20, 2008



  Mr. Daniel P. Schultz
  Regionallnspector General for Audit
  U.S. Department of Erlucation
  Office of Inspector General
  32 Old Slip, 26 th Floor
  Financial Square
  New York, New York 10005

  Re:      Toum College Draft Audit Report
           Control Number ED-OIGIA02HOOO8

  Dear Mr. Schultz:

         On behalfofTouro College,l am writing to provide supplemental comments respecting
  the above-referenced Draft Audit Report. These comments incorporate the separate initial
  remarks related to the liability calculation methodology provided to you yesterday and therefore
  provide a complete set of all ofTouro's current comments to the Draft Audit Report.

          We appreciate the continued cooperation your office has extended to ToW'Q during the
  audit process. We hope that Touro's comments to the Draft Audit Report will further the
  completion of an accurate and comprehensive final audit report.

            Please call if you have any questions about the attached.

                                                         Sincerely,



                                                         Melvin M. Ness
                                                         Senior Vice President and
                                                         Chief Financial Officer
                                                         Touro College

  Attachments

  cc: Dr. Bernard Lander, Pn;siuent

  8chultzluusdeplcdll
Final Report
ED-OIG/A02H0008                      ATTACHMENT C                               Page 2 of 26

                     Response of Touro College to Draft Report 

                               ED-OIG/A02H0008 

                                  May 20, 2008 

    ______________________________________________________________________

         We are in receipt of the Draft Audit Report, dated February 26, 2008, entitled

“Touro College’s Title IV, Higher Education Act Program Institutional and Program

Eligibility” (“Draft Report”) which presents the initial comments of the Office of

Inspector General (“OIG”) concerning the compliance of Touro College (“Touro” or the

“College”) with the institutional and program eligibility requirements of Title IV of the

Higher Education Act of 1965, as amended, and its implementing regulations (“Title

IV”). The College offers the following response.



Finding No. 1 – Touro Disbursed $40,728,507 in Title IV Funds to Students Who
Attended Ineligible Additional Locations

         The Draft Report identifies nine Touro addresses as “ineligible additional

locations” and asserts that Touro should repay $40,728,507 in Title IV funds (the

“Asserted Liability”) as improperly disbursed at these locations. For several reasons,

Touro does not agree that any of the nine addresses at issue (the “Challenged Locations”)

fail to qualify as eligible additional locations pursuant to 34 C.F.R. § 600.21. 1




1
  Further, as the College has established in its submission of May 19, 2008, even if any of
the Challenged Locations are ultimately deemed to be “ineligible additional locations,”
the calculation methodology used to calculate a repayment amount for these locations
grossly overstates the amount of Title IV assistance actually associated with coursework
at these locations. For the convenience of the OIG, we have repeated in full in this
document the response submitted on May 19, 2008 as Section IV of this document.
Final Report
 ED-OIG/A02H0008                      ATTACHMENT C                            Page 3 of 26

                  Response of Touro College to Draft Report 

                             ED-OIG/A02H0008 

                                May 20, 2008 

 ______________________________________________________________________

I.     TOURO OPERATES LOCATIONS ON A CAMPUS BASIS


       As is the case with most larger universities, the physical address of each of

Touro’s classrooms is not a standalone location. Rather, with the approval of both state

licensing agencies and accreditors, geographic groupings of classroom facilities function

as single operational units. The Draft Report includes four such classroom facilities

among its Challenged Locations. For the reasons discussed below, each such facility is

part of a campus constituting a duly approved eligible location (hereafter identified as

“Campus Facilities”).


       The College’s main campus, headquartered at 27-33 West 23rd Street, includes

multiple instructional locations in the surrounding neighborhood. The College also

operates multiple locations in Brooklyn in the neighborhoods of Boro Park, Starrett City

and Flatbush, each as a campus. While the specific classroom addresses of the four

Challenged Locations were not listed on the College’s Eligibility and Certification

Approval Report (“ECAR”), each of these was operated as an integral part of a campus in

connection with instructional addresses that were listed on the College’s ECAR. It

should be noted that the concept of a “campus” subsuming a material geographic area is

nothing new. Based on our understanding of the U.S. Department of Education’s

(“Department”) practice, Touro’s treatment of these locations as part of a larger campus

that does not require separate reporting on the ECAR is consistent with the Department’s

handling of other urban universities such as New York University.
Final Report
 ED-OIG/A02H0008                       ATTACHMENT C                             Page 4 of 26

                  Response of Touro College to Draft Report 

                             ED-OIG/A02H0008 

                                May 20, 2008 

 ______________________________________________________________________

       The College’s treatment of certain location groups as Campus Facilities is

consistent not only with Title IV requirements and Department practices, the treatment is

also consistent with the requirements of the College’s other regulators. It has long been

the practice of the New York State Education Department (“NYSED”) to recognize

separate facilities that function together as single operating units. For example, NYSED

identifies the facilities at 1301 45th Street and 1273 53rd Street, located several blocks

apart, as constituting a single Boro Park Extension Center. (Exhibit A). NYSED looks to

operational status rather than relying on any specific distance limitations on the

recognition of campuses. Indeed, as early as 1993, NYSED recognized that a location in

Nassau County was properly part of the branch campus with the main address across the

county line in Suffolk County because of the operational configuration of the locations.

(See Exhibit B).

       Similarly, the Middle States Commission on Higher Education (“MSCHE”)

recognizes single operating units which are a combination of individual classroom

locations. Notably, MSCHE has done so after originally identifying individual addresses

on Touro’s Statement of Accreditation Status (“SAS”). Compare the SAS dated

November 1998 (attached as Exhibit C), which identifies three separate Kings Highway

facilities, to the current SAS (attached as Exhibit D) which recognizes a single Kings

Highway operating unit which subsumes the individual facilities under one location.

       Following are specific analyses of the Campus Facilities identified in the Draft

Report as Challenged Locations.
Final Report
 ED-OIG/A02H0008                      ATTACHMENT C                           Page 5 of 26

                  Response of Touro College to Draft Report 

                             ED-OIG/A02H0008 

                                May 20, 2008 

 ______________________________________________________________________

       A.      Boro Park

       Touro currently operates three Campus Facilities in the New York City Borough

of Brooklyn as the Boro Park Extension Center: 1301 45th Street (identified as K1301 and

K1305, OPEID 01014230), 1273 53rd Street (identified as K1273, OPEID 01014221) and

5323 18th Avenue (identified as K5323, one of the Challenged Locations). From the time

the K5323 facility opened, NYSED recognized the K5323 facility as being included

within the scope of the approval of the Extension Center campus. (See Exhibit E) The

MSCHE “Institutional Profile 2004-2005,” which is part of the OIG’s work papers as

Exhibit HC: I-100, identifies at page 13 a single Boro Park location that includes

headcount information for a single, combined unit, inclusive of K5323. (See Exhibit F)

Since the Boro Park Extension Center is unquestionably an eligible additional location on

Touro’s ECAR, it is improper to consider any of the related Campus Facilities included

in such Center as ineligible locations.

       It appears that the OIG included K5323 as a Challenged Location on the basis of

an erroneous reading of Touro’s own disclosure in Question 69 of the Department’s

electronic application as submitted in 2001 and included in the OIG work papers as

Exhibit HC: F-5-b. The application states:

       Touro College is requesting approval of three new locations … 5323 18th

       Avenue, Brooklyn, New York, 11204. At the present time, we will be

       offering less than 50% of an educational programat [sic] these locations.

       We have included the locations in this application based on our intention
Final Report
 ED-OIG/A02H0008                       ATTACHMENT C                             Page 6 of 26

                  Response of Touro College to Draft Report 

                             ED-OIG/A02H0008 

                                May 20, 2008 

 ______________________________________________________________________

       to offer more than 50% of a program at these locations in the future and

       would like the locations certified on that basis. (Emphasis supplied)

       As a result of the very significant delay in the Department’s recertification

process, as discussed more fully below, Touro generally considered it appropriate to

over-report information to the Department. In this instance the OIG has taken a

prospective, precautionary prediction and converted it into a current statement of fact,

and in doing so declared a facility to be ineligible. The fact that in an excess of caution

Touro reported the K5323 facility to the Department, despite its status as part of the Boro

Park Extension Center, is an improper basis for the Draft Report’s conclusion that this

Campus Facility is an ineligible additional location. (See Exhibit G) This is a classic

Catch-22 situation. While it is correct that two of the Boro Park facilities, both integral

parts of the Boro Park Extension Center unit, were previously separately reported to the

Department, the OIG appears to take the curious position that Touro should be penalized

for reporting more information than is necessary under the Department’s regulations.

Indeed, it is important to recognize that the College’s electronic application was in a

locked status for nearly seven years pending recertification, as will be discussed further

in Section III below. As a result, the College was not allowed ready access to the typical

routine self-update functions available to other institutions.

       B.      Starrett City

       Starrett City is a single very large apartment complex located in the Canarsie

neighborhood of the Borough of Brooklyn, constituting 20,000 people living in 46

apartment buildings spread over 153 acres reclaimed from marshland in the 1960s.
Final Report
 ED-OIG/A02H0008                      ATTACHMENT C                             Page 7 of 26

                  Response of Touro College to Draft Report 

                             ED-OIG/A02H0008 

                                May 20, 2008 

 ______________________________________________________________________

Starrett City is universally recognized as a single neighborhood, and consistent with this

fact MSCHE recognizes all of the College’s Starrett City Campus Facilities at 1461

Geneva Loop (KS146, OPEID 01014223), 1540 Van Sicklen Avenue (KS154), 1430

Freeport Loop (KS143), 1426 Freeport Loop (KS142), and 1390 Pennsylvania Avenue

(Challenged Location KS139) as constituting a single Starrett City campus. See the

Starrett City approved MSCHE additional location on the current SAS at Exhibit D.

NYSED has also consistently recognized the Starrett City campus as a single unit. In

2001, Touro submitted an application for expansion of the Starrett City Extension Center

to include the new space at 1390 Pennsylvania Avenue (Challenged Location KS139).

See the application attached as Exhibit H.

       Since Starrett City is an eligible additional location on Touro’s ECAR (the

primary location at KS146 was listed on the ECAR during the audit period), and since

each Campus Facility located within Starrett City is integral to that campus unit, all

separate Campus Facilities, including KSD139, are appropriately recognized components

of an eligible location.

       C.      Flatbush Neighborhood

       Touro operates seven separate Campus Facilities as part of the single campus

located in the Flatbush neighborhood of Brooklyn. The main campus address is 1602

Avenue J (K16AJ, OPEID 01014206). All of the facilities making up this campus are

within walking distance of each other, with only 200 feet separating some. Consistent

with this, NYSED recognizes the Challenged Locations K1901 and K946 as part of the
Final Report
 ED-OIG/A02H0008                     ATTACHMENT C                            Page 8 of 26

                  Response of Touro College to Draft Report 

                             ED-OIG/A02H0008 

                                May 20, 2008 

 ______________________________________________________________________

Flatbush campus, along with 1103 Kings Highway (K1103, OPEID 01014208) and 1726

Kings Highway (K1726, OPEID 01014207). See NYSED correspondence at Exhibit I.

        Like NYSED, MSCHE also considers the Flatbush facilities a single operational

unit. See MSCHE correspondence at Exhibit J from 1996, before the establishment of

K1901 and K946, clearly identifying the facilities as a campus unit.

        Since the Flatbush branch campus is an eligible additional location on Touro’s

ECAR (indeed in this instance three separate facility addresses were on Touro’s ECAR

during the audit period), all of the related Campus Facilities, including K1901 (located

around the corner from 1726 Kings Highway) and K946 (located diagonally across the

street from 1103 Kings Highway), are similarly eligible as recognized components of that

eligible location.




II. 	   NOT ALL CHALLENGED LOCATIONS PROVIDED 50 PERCENT OR
        MORE OF AN EDUCATIONAL PROGRAM

        Touro did not offer 50% of a program at two of the Challenged Locations

identified in the Draft Report: 250 Blake Avenue (K250) or 286 Old Country Road

(LMINE). Accordingly, these Challenged Locations are not ineligible locations pursuant

to the Department’s regulations.


        A. 	    250 Blake Avenue

        The College did not offer 50% of a program at 250 Blake Avenue in Brooklyn,

NY. Yet, the Draft Report cites the K250 classroom site as an “ineligible location.”

Exhibit E.3.2 of the OIG work papers clearly demonstrates that the OIG’s determination
Final Report
 ED-OIG/A02H0008                      ATTACHMENT C                             Page 9 of 26

                  Response of Touro College to Draft Report 

                             ED-OIG/A02H0008 

                                May 20, 2008 

 ______________________________________________________________________

as to the eligibility of the K520 classroom site is based on its application of the 50% rule.

In support of the applicability of the 50% rule for the K250 location, the OIG work

papers reference Question 69 of a 2001 update to the Department’s electronic application

(Work paper Exhibit HC: F-5-b), the MSCHE 2004-2005 Institutional Profile (Work

paper Exhibit HC: I-100), the MSCHE 2003-2004 Institutional Profile (Work paper

Exhibit HC: I-99), and the MSCHE 2002-2003 Institutional Profile (Work paper Exhibit

HC: I-98). As demonstrated below, none of the these Exhibits to the OIG’s work papers

contradict Touro’s statement that it did not offer 50% of a program at the K250

classroom site.

       When Touro submitted an application update to the Department in 2001, it

advised that it was not currently offering 50% of an educational program at 250 Blake

Avenue:

       Touro College is requesting approval of three new locations… 250 Blake
       Avenue, Brooklyn, New York 11212… At the present time, we will be
       offering less than 50% of an educational programat [sic] these locations.
       We have included the locations in this application based on our intention
       to offer more than 50% of a program at these locations in the future and
       would like the locations certified on that basis. (Emphasis supplied).


See Work paper Exhibit HC: F-5-b, relevant page included here as Exhibit G.


       The MSCHE Institutional Profile requires institutions to report extended learning

sites under three classifications: Branch Campus, Additional Location or Other

Instructional Site. By MSCHE definition, the terms “Branch Campus” or “Additional

Location” are applied to sites that may offer 50% or more of a program. An “Other
Final Report
ED-OIG/A02H0008                       ATTACHMENT C                              Page 10 of 26

                  Response of Touro College to Draft Report 

                             ED-OIG/A02H0008 

                                May 20, 2008 

 ______________________________________________________________________

Instructional Site” is defined as “a location, other than a Branch Campus or Additional

Location, at which the institution offers one or more courses for credit.” See the

definitions listed on the MSCHE SAS at Exhibit D. Touro properly reported the 250

Blake location on the MSCHE Institutional Profiles for 2002-2003, 2003-2004, and

2004-2005 under the “Other Instructional Sites” category of facilities since it has not

offered 50% or more of a program at that location.

       Consistent with this, Touro’s disclosure of 250 Blake Avenue to the Department

on the electronic application in 2001 clearly stated that less than 50% of an educational

program was provided at the time of the disclosure, and this was in fact the case. As

demonstrated in the attached report, which lists each student who earned credits for

coursework at the K250 site during the audit period, as well as the total number of credits

each student earned from July 1, 2002 to the current semester, Touro’s records document

that no student was enrolled for 50% or more of an academic program at 250 Blake

Avenue. See Exhibit K. As it is clear that Touro offers less than 50% of any educational

program at the K250 site, this location is incorrectly identified as an ineligible location in

the Draft Report.

       B.      286 Old Country Road

       Touro never offered 50% of a program at the Winthrop Extension Center at 286

Old Country Road site in Mineola, NY (Challenged Location LMINE). As part of the

physician assistant curriculum offered at the LMINE location, students at the Mineola

site earn significant credit for work at clinical locations as well as for coursework taught

at the Bay Shore location (LLBAYS).
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         The Touro School of Health Sciences offers a bachelors of science in physician

assistant studies through its Bay Shore (LLBAYS) and Winthrop Extension Center

(LMINE) locations. As demonstrated at Exhibit L, which describes the entrance

requirements, program curriculum, and list of clinical education centers affiliated with

the Physician Assistant Studies Program, students entering the Physician Assistant

Studies Program must have previously completed 60 transferable semester credits in

general liberal arts and sciences at an accredited college or university, and must then

complete an additional 52 credits of classroom instruction 2 and 45 credits of clinical

instruction, for a total of no less than 157 credits for the award of the degree. Less than a

third of the total number of credits required for the Physician Assistant Studies Program

are taught at the Winthrop Extension Center and significantly less than half of the 97

non-transfer credits are obtainable at that site. The facts clearly demonstrate that a

student cannot enroll in courses leading to more than 50% of his or her degree program at

the Winthrop Extension Center.

        Exhibit E.3.2 of the OIG work papers documents the OIG’s application of the

50% rule for the Challenged Locations. The OIG references the MSCHE 2005-2006

Institutional Profile (Work paper Exhibit HC: F-25a), the MSCHE 2004-2005

Institutional Profile (Work paper Exhibit HC: I-100), and the MSCHE 2002-2003

Institutional Profile (Work paper Exhibit HC: I-98) in support of its assertion that the

Winthrop Extension Center violates the 50% rule. Yet, MSCHE’s reporting structure


2
 Several of the 52 classroom credits are earned at the Bay Shore site. (See the 2006 classroom course
schedule attached at Exhibit M illustrating that Human Anatomy, Clinical Procedures and Diagnostic
Modalities, Pharmacology and Medicine II, a total of 13 credits, were taught at the LLBAYS location.)
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does not alter the reality of what percentage of a program is actually offered at the

Winthrop Extension Center. Consistent with MSCHE’s practices, Touro completes the

annual Institutional Profiles to report that students can earn a bachelor’s degree at the

Winthrop University Hospital & Medical Center. For MSCHE’s own classification

purposes, clinical coursework is attributed to the Winthrop Extension Center, which is

designated an MSCHE “Additional Location” so that each individual clinical education

affiliation center is not required to be separately listed on the Institutional Profile. The

Department’s regulation concerning approval of sites turns on whether the location offers

50% or more of an educational program. Accordingly, since the record is clear that

Touro offers less than 50% of the Physician Assistant Studies Program at the LMINE

site, this location is incorrectly identified as an ineligible location in the Draft Report.



III.	   TOURO REASONABLY UNDERSTOOD THE DEPARTMENT TO HAVE
        APPROVED ITS ADDITIONAL LOCATIONS AND OTHER CHANGES

        Touro College was first approved to participate in the Title IV programs in 1971,

and has been a continuous participant since that time. On December 31, 2001, Touro’s

then current Program Participation Agreement expired. Despite having properly filed its

application for continued participation, Touro was not issued a new Program

Participation Agreement until 2008, so that for nearly seven years the Department

continued the College’s participation under a month-to-month certification. During this

extraordinarily long (and to the knowledge of Touro, unprecedented) period, Touro’s

ability to utilize the ordinary processes of reporting changes was entirely disrupted.

Instead, Touro maintained regular contact with the Department’s New York Case Team
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for the purpose of apprising the Case Team of changes in the institution, notably its

growth in the medicine and health related fields, as well as other developments necessary

to maintain curricula, meet new state licensing requirements and serve Touro’s dynamic

and diverse student population. Based upon its regular contact with the Case Team,

Touro very reasonably understood that the reported changes, including new locations,

were in fact approved. Indeed, over the course of nearly seven years, there was never

even a suggestion that there was a concern on the part of the Department about allegedly

ineligible locations; the first inkling that there was such a question came during the OIG’s

review.

          To the extent possible given the limitations of the system, Touro entered new

information into the Department’s electronic application (“E-App”), which is intended to

provide the data base from which the Department generates an ECAR, which is in turn

intended to describe in detail all of the elements of an institution’s Title IV eligibility.

However, the E-App is well known to be an imperfect instrument. Most significantly, it

can only handle one open institutional application at a time. When Touro submitted its

recertification application in 2001, the system erected a barrier to any other applications

related to additional changes. Thus, during the nearly seven years that the Department

maintained the recertification application in a pending status, the Department itself was

unable to issue typical eligibility updates such as approval letters and an ECAR for new

Touro locations, because all of that information is tied up on the E-App.

          As a matter of technological impossibility, Touro could not report new facilities

through the use of the standard electronic process. Every time a Touro official wanted to
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revise application information, he or she had to directly bring the matter to the attention

of a member of the Case Team staff, a contact which in turn was dependent on the

availability of Case Team personnel at any given moment in time. Even after this

communication did take place, the College still had to wait for the Case Team to

manually enable access to the electronic application. Only after this process was

complete could the College access the application for a narrow window of time to enter a

routine update, after which the virtual window would slam shut until the next request. As

a result, the College was not allowed to engage in the typical self-update functions

available to other institutions.

        Touro was never provided with any reason for maintaining the pending status of

the recertification application for such an unconscionable period, and Touro never had

any reason to understand that this was intended as an unprecedented de facto growth

limitation. Furthermore, during this time, and while it was regularly apprising the Case

Team of institutional changes including new locations, Touro was never advised that any

new locations were considered to be ineligible, nor was Touro ever advised to stop

disbursing Title IV funding for new locations. At various points in this lengthy span, the

College was advised by members of the Case Team that it was “days away” from issuing

a recertification and a new ECAR. Case Team representatives even initiated contact with

Touro to request that any additional updates be provided so that the recertification could

be finalized.

        Touro reasonably believed, and the Department’s continuing pattern of conduct

over the course of nearly seven years appeared to clearly confirm, that in light of the
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technical limitations of the E-App that prevented issuance of standard new approval

letters and an updated ECAR, the Department’s own conduct could be relied upon as de

facto approval of Touro’s new locations. Over so long a period of time, Touro had no

reason not to so rely and every reason to do so.

IV. 	   ASSUMING ARGUENDO THAT ANY OF THE CHALLENGED
        LOCATONS ARE ACTUALLY INELIGIBLE, THE LIABILITY
        CALCULATION IS FATALLY FLAWED

        Specifically, the Draft Report, as noted above, identifies a grand total of

$40,728,507 in Title IV funds disbursed to 4,310 students who attended classes at the

Challenged Locations. During its review of the auditor work papers, the College was

provided with hard copy print-outs of spreadsheets numbered E.3.3, E.3.5, E.3.7 and

E.3.9 (the “Work Paper Spreadsheets”). These Work Paper Spreadsheets provided the

basis for the Asserted Liability, as identified on Attachments A through D of the Draft

Report. The College has reconstructed the process used to calculate the Asserted

Liability, and, in doing so, has identified several categories of error. Based on the

College’s analysis, the College has determined that the Asserted Liability is incorrectly

calculated and grossly overstates the amount of Title IV assistance disbursed for

coursework at the Challenged Locations. As such, the Asserted Liability cannot be relied

upon in issuing the final audit report.

        Because the College was only supplied work paper information in hard copy, non-

electronic, format and has had the Work Paper Spreadsheets in its possession for a

limited time, it has not been able to analyze every student record identified in the Draft

Report as a liability. However, as the errors the College has identified at this point are
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generic in character, the College can provide examples of several categories of error, as

described more fully below, which conclusively establish that the Asserted Liability is

not reliable and cannot be used even as an estimate of potential liability.

       The OIG used the student data provided by Touro to identify all students who

took any courses at any one of the nine Challenged Locations. The OIG then associated

this list of student names with the total Title IV assistance awarded to those students for

the relevant award year, resulting in the Asserted Liability. However, this process is

based on several fundamentally flawed assumptions, and therefore grossly and

improperly overstates the amount of Title IV assistance disbursed at the Challenged

Locations.

       The most basic error arises from the fact that the amounts listed on the Work

Paper Spreadsheets as representing an Asserted Liability include all Title IV assistance

disbursed to a student in an award year during which the student took any credits at any

Challenged Location. The Report therefore fails to distinguish between students who

took one course during a single semester, one course during multiple semesters, or

multiple courses during multiple semesters at any of the Challenged Locations. Thus,

based on the methodology used by the OIG, if a full-time student took one course during

an award year at a Challenged Location, the entire amount of Title IV assistance

disbursed to that student during the award year was considered assistance disbursed at

that Challenged Location. This is simply factually unsupportable: it is inappropriate to

assume that all Title IV assistance disbursed to a student during a given award year was

related to course work at the Challenged Location.
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       Touro understands that the OIG has taken the position that a repayment liability

may be asserted with respect to Title IV assistance that was earned by a student on the

basis of instruction at the Challenged Locations (assuming for the sake of argument that

any such Challenged Locations are appropriately determined to be ineligible locations).

However, there is no basis whatsoever to take the position that the Asserted Liability can

include Title IV assistance earned as a result of instruction at other indisputably eligible

locations. Put another way, the process utilized by the OIG to arrive at the Asserted

Liability includes Title IV funds properly disbursed to students with respect to attendance

at indisputably eligible locations. As such, the calculation of the Asserted Liability is

grossly inadequate, significantly overestimating the amount of questioned costs related to

the finding, and cannot provide the basis for any assertion of repayment liability against

the College.

       The following examples explain categories of error in which students attended

both eligible locations and Challenged Locations during the same award year. However,

as noted above, based upon the limited amount of time afforded the College to analyze

the applicable work papers, especially given the format of those work papers, these

examples may not be exhaustive of all of the categories which have given rise to the

OIG’s overstatement of the Asserted Liability. Further, the College is only providing an

example student for each category explained below. Due to the limited time available for

the review, the College is not able to present an exhaustive list of all of the students

associated with each category cited. The College’s review does establish without any

doubt whatsoever that these errors in the methodology used in the calculation of the
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Asserted Liability appear with respect to most if not all of the Challenged Locations and,

if corrected, would significantly reduce the estimate of potential liability related to this

finding. 3




Category 1: 	 Touro Undergraduates Who Subsequently Enrolled as Graduate
              Students at Challenged Locations


         It is the nature of Touro that a significant number of its undergraduate students

continue at Touro in pursuit of a graduate degree. Two of the Challenged Locations,

K946 and K1901, are graduate locations and do not serve undergraduate students. While

the types of aid and eligibility requirements may vary, both undergraduate and graduate

students are eligible for Title IV assistance. However, it is also clearly true that certain

students who qualified for and accepted Title IV aid while pursuing undergraduate work

did not seek Title IV assistance for graduate work. Each of these circumstances needs to

be considered in calculating the assessment of liability with respect to the audit of Touro.


         A.       Aid During Both Undergraduate and Graduate Education

         To illustrate this category of error, we have attached and analyzed the applicable

documentation related to [STUDENT A], who graduated from Touro with a bachelor of

science degree in the Fall of the 2005-2006 academic year. See Exhibit N. The entirety

of [STUDENT A’s] undergraduate instruction was at an indisputably eligible location.
3
  Please note that the course listings provided as exhibits to this section are print-outs of filtered results
from the excel spreadsheet of student information originally provided to the OIG during the audit process
(“Course Listing”). The OIG has this identical information in its work papers and used this information to
compile the flawed Work Paper Spreadsheets and, consequently, to arrive at the grossly overstated
Asserted Liability.
Final Report
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[STUDENT A] continued his studies as a graduate student in the Spring of the 2005-2006

academic year, with some of his graduate studies at a Challenged Location, K946. The

Work Paper Spreadsheets identify a liability associated with the K946 Challenged

Location of $1914 in Pell Grant and $8500 in Stafford Subsidized Loans.

       First, it is obvious that the asserted Pell Grant liability is factually impossible: a

graduate student is ineligible for a Pell Grant, and there is no assertion whatsoever that

[STUDENT A] received Pell Grant funds other than as an undergraduate. Indeed,

[STUDENT A] properly received the entire $1914 of Pell Grant funds during the

Summer and Fall semesters while he was an undergraduate student attending an

indisputably eligible undergraduate location. Therefore, only the $8500 in Stafford Loan

funds could in any way be associated with the K946 Challenged Location. Further, as

discussed below, asserting the ineligibility of the totality of [STUDENT A’s] Stafford

Loan is in error.

       The Course Listing for [STUDENT A] clearly demonstrates that [STUDENT A]

attended classes in buildings K1726 and M2733 during Summer 2005 (Term AA), K532

and K1726 during Fall 2005 (Term CC) and K946 and M2733 during Spring 2006 (Term

EE). All of the buildings at which [STUDENT A] took classes, other than K946, are

indisputably eligible locations. The Stafford Loan is shown to have been disbursed in the

Spring 2006 semester, during which time one of the three classes in which [STUDENT

A] was enrolled was offered at an indisputably eligible location. Therefore, even if the

Challenged Location is ultimately determined to be ineligible, only a portion of the $8500

Stafford Loan can be included in any asserted repayment liability.
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       B.      Aid Only During Undergraduate Education

       As an example of this situation, we offer the case of [STUDENT B], attached as

Exhibit O, who graduated from Touro with a bachelor of arts degree in the Summer of

the 2004-2005 academic year. [STUDENT B] continued her studies as a graduate

student in the Fall of the 2004-2005 academic year. The OIG identifies a liability of

$380 in Pell Grant funds which it associates with [STUDENT B’s] attendance at the

K946 Challenged Location. However, [STUDENT B] actually received such Pell funds

for undergraduate coursework during Summer 2004 (Term AA) while attending the

M2733 and K16AJ eligible locations. [STUDENT B] did not receive any Title IV funds

while enrolled at the K946 Challenged Location and obviously could not have received

Pell Grant funds for her graduate studies. As such, the $380 in Pell Grant funds

disbursed to this student cannot be included in any computation of liability.




Category 2:	 Students who Completed only Non-Credit Coursework
             at a Challenged Location


       Touro provides non-credit seminars at various college locations. As described in

Exhibit P which reproduces a relevant page from the 2005-2007 catalog of the Lander

College of Arts and Sciences, these seminars are required for teacher licensing in New

York state and elsewhere. One such seminar is EDU-513, a school violence seminar

offered at the K946 Challenged Location. A significant number of students who attend

non-credit seminars do not take any other courses at Challenged Locations. Since non-

credit courses alone do not qualify students for Title IV eligibility and since these
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students took full-time course loads at eligible locations, all of their Title IV assistance

arose from their enrollment at the eligible locations. Therefore, it is improper to include

any Title IV assistance disbursed to students in this category in any calculation of

repayment liabilities.

       Another example is that of [STUDENT C], who attended Touro for the Fall and

Spring semester during the 2004-2005 academic year. As demonstrated by the Course

Listing attached as Exhibit Q, during Spring 2005 (Term EE), [STUDENT C] enrolled in

11 total courses. One such course was the non-credit seminar EDU-513 taught at the

K946 Challenged Location, which was the only course in which [STUDENT C] was

enrolled at that location. [STUDENT C’s] eligibility for Title IV assistance was based

entirely on enrollment in his credit-bearing courses, all of which he took at indisputably

eligible locations. Accordingly, none of the $3100 in Pell, $3500 in Stafford Subsidized

Loan or $4000 in Stafford Unsubsidized Loan funds identified as liabilities on the Work

Paper Spreadsheets can be included in any computation of repayment liability.




Category 3: 	 Students Who Completed Courses At Challenged Locations Only
              During Some Semesters Of An Award Year


       As is not unusual for large, multipurpose universities, Touro allows students the

opportunity to enroll in courses offered at various locations. Students who attended

courses offered solely at eligible locations in one semester may have attended courses

offered at a Challenged Location during a later semester. It is improper to include in any
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computation of repayment liability any Title IV assistance disbursed in semesters where a

student completed coursework only at indisputably eligible locations.

       As demonstrated in the Course Listing attached as Exhibit R, [STUDENT D]

attended Touro during the Fall and Spring semesters of the 2005-2006 academic year.

During the Fall (Term CC), [STUDENT D] attended the K250 Challenged location.

During the Spring (Term EE), [STUDENT D] attended the main campus, location

M2733. Accordingly, of the $5200 in total Title IV assistance listed as a repayment

liability on the Work Paper Spreadsheets with respect to this student, $1200 in Federal

Pell Grant, and $2800 in Federal Work Study assistance cannot be included in any

computation of repayment liability since the student earned these Title IV funds solely

while attending an eligible location.




       Similarly, as the Course Listing attached as Exhibit S clearly demonstrates, during

the Fall (Term CC) of the 2005-2006 academic year, [STUDENT E] attended Touro at

the LBAYS eligible location. During Spring (Term EE), [STUDENT E] attended the

LMINE Challenged Location. Accordingly, of the $9550 in Title IV funds identified as a

repayment liability on the Work Paper Spreadsheets for this student, $2025 in Pell, $500

in SEOG, and $1750 in Stafford Subsidized Loan funds arose from [STUDENT E’s]

enrollment at the indisputably eligible LBAYS location and therefore cannot be included

in any computation of repayment liability arising from enrollment at an allegedly

ineligible location.
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Category 4:	 Students who took credit-bearing courses at eligible locations and
             Challenged locations during the same semester


       As noted above, it is common for Touro students to take courses at more than one

location during a single semester. Title IV amounts representing credits earned at

indisputably eligible locations cannot be attributed to liabilities asserted for enrollment in

allegedly ineligible locations.

       For example, as shown in the Course Listing attached as Exhibit T, during the

2005-2006 academic year, [STUDENT F] completed credit-bearing courses at both the

K1726 eligible location and the KS139 Challenged Location. Accordingly, of the $3880

in Title IV assistance listed as a repayment liability on the Work Paper Spreadsheets with

respect to this student, only that part attributed to the allegedly ineligible locations can be

included in any computation of a purported repayment liability.

       As such, the calculations underlying the proposed liability arising from the

alleged ineligible locations are so completely flawed in methodology that they cannot

provide the basis for any assertion of liability whatsoever.


Finding No. 2 - Touro Did Not Keep Adequate Records to Account for Title IV
Funds Disbursements to Only Eligible Additional Locations for the School Years
2002-2003 through 2004-2005

       Touro does not believe anything in the Draft Report, and particularly anything

relative to the OIG’s use of the data supplied from Touro’s computer system,

demonstrates a lack of administrative capability. As noted previously, Touro has had no

reason to consider any of the nine Challenged Locations to be “ineligible additional
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locations” for purposes of Title IV disbursements. Touro had internal processes to limit

the amount of coursework students could earn at the locations for which Touro did not

understand ED to have provided the required approvals. Touro strenuously argues that it

is in compliance with the record maintenance requirements of 34 C.F.R. § 668.24 and

accordingly the administrative capability requirements of 34 C.F.R. § 668.16.

        The Department’s regulation relative to record maintenance, set forth at 34 C.F.R.

§ 668.24, states that: “an institution shall maintain required records in a systematically

organized matter” and “an institution shall make its records readily available for review.”

The regulation does not require institutions to maintain those records in any particular

form or format provided that the form and format of choice is “readily available for

review” and “systematically organized.”

        Touro maintains its student records in a manner that provides the necessary access

to school officials to ensure the proper administration of the Title IV programs. Touro

financial aid staff use the student data to ensure student eligibility for financial aid

awards. Title IV disbursements are appropriately documented by student and term.

Academic advisors access course location information to advise students respecting the

availability of appropriate courses, including where limitations exist on the work that

may be completed at a particular site, taking into account state, accreditor, and federal

approvals. Indeed the Draft Report acknowledges that Touro’s admissions, registrar,

bursar, financial aid, advisement and development data is managed through a well-known

administrative computer system commonly used among colleges and universities.

During the five months of the audit fieldwork, Touro fully cooperated in making all
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student data available for review, including making Touro officials available to assist the

reviewers in accessing and using Touro’s record management system.

       There is no argument that Touro provided the OIG the requested student data

reports with significant assistance from the College’s Office of Information Technology.

However, it is incomprehensible that the Draft Report would allege that providing such

expert assistance, from within its own resources, reflected Touro’s failure to maintain

adequate records respecting student eligibility for Title IV disbursements. Rather, the

need for such involvement reflected the nature of the auditor’s requests, which were

materially different from the operational uses for which the system was very properly

designed.

       The Draft Report misconstrues communication from the Dean of Enrollment

Management and Institutional Research and Review’s communication to the auditors.

The Dean never advised auditors that “Touro did not maintain a database of Title IV

funds disbursed to students by location attended.” Rather, the Dean advised the OIG that

Touro did not maintain a database of Title IV disbursements in the specific format

requested by the auditors. The auditors requested student data in a report format that

differed from any of Touro’s standard reports. Therefore, Information Technology staff

created a process to retrieve the underlying data and College staff manually added certain

information to format a new report in accordance with the auditors’ requests. The data

requested by the auditors was in the College’s database and was provided in the specific

format requested by the auditors. Stated another way, the College put significant

resources and time into preparing the information in the format requested by the auditors,
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despite the fact that its systems were not required to maintain the information in the

format requested by the auditors.

       Touro appreciates the OIG’s observations regarding potentially enhanced

capabilities of its data system, and notes that professional advice is always welcome.

However, there is not a scintilla of evidence of any inadequacy of the data management

system or the ability of the College to make available for review all of the relevant

information requested by the OIG. There is neither a factual nor a legal basis for this

finding, which should be eliminated from the final audit report.