oversight

Review of Student Enrollment and Professional Judgment Actions at Tennessee Technology Center at Morristown.

Published by the Department of Education, Office of Inspector General on 2004-09-23.

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

                      UNITED STATES DEPARTMENT OF EDUCATION

                                   OFFICE OF INSPECTOR GENERAL

                                         61 FORSYTH STREET, ROOM 18T71 

                                             ATLANTA, GEORGIA 30303


       Telephone: (404) 562-6470                                            Fax: (404) 562-6509

                                       September 23, 2004

MEMORANDUM

TO:            Theresa S. Shaw
               Chief Operating Officer
               Federal Student Aid

FROM:          J. Wayne Bynum               J. Wayne Bynum
               Regional Inspector General for Audit
               Office of Inspector General

SUBJECT:       FINAL AUDIT REPORT
               Review of Student Enrollment and Professional Judgment Actions at
               Tennessee Technology Center at Morristown, TN
               Control No. ED-OIG/A04-E0001

You have been designated as the action official for the resolution of the findings and
recommendations in the attached final report. We also provided a copy to the auditee and to
your audit liaison officer.

The Office of Inspector General is required to review and approve your proposed Program
Determination Letter (PDL) and the Audit Clearance Document (ACD) before the PDL is
forwarded to the auditee. Our review of these documents will be handled through the
Department’s Audit Accountability and Resolution Tracking System (AARTS).

In accordance with the Inspector General Act of 1978, as amended, the Office of Inspector
General is required to report to Congress twice a year on the audits that remain unresolved after
six months from the date of issuance.

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.

If you have any questions, please contact me at 404-562-6477 or Assistant Regional Inspector
General Mary Allen at 404-562-6465.


Enclosure
                        UNITED STATES DEPARTMENT OF EDUCATION

                                       OFFICE OF INSPECTOR GENERAL 

                                        61 Forsyth Street, Room 18T71 

                                            Atlanta, Georgia 30303


Telephone: (404) 562-6470                                                                             Fax: (404) 562-6509


                                               September 23, 2004


Lynn Elkins
Director
Tennessee Technology Center at Morristown
821 W. Louise Avenue
Morristown, TN 37813-2094


Dear Ms. Elkins:

This Final Audit Report, Control Number A04-E0001, presents the results of our Review of
Student Enrollment and Professional Judgment Actions at Tennessee Technology Center at
Morristown, TN (TTC-M). Audit coverage included the period July 1, 2001, through June 30,
2003 (award years 2001-2002 and 2002-2003). Our objectives were to determine (1) whether
TTC-M enrolled as regular students in its programs of study persons who did not have a high
school certificate or equivalent and/or were under the age of compulsory school attendance and
(2) whether TTC-M’s use of professional judgment and dependency override to make
adjustments to estimated family contribution calculations resulted in appropriate Federal Pell
Grant Program (Pell) awards to students.


                                            AUDIT RESULTS 


FINDING No. 1 -- TTC-M Enrolled Persons in Its Programs of Study Who Did Not Have a
                 High School Certificate or Equivalent and/or Were Under the Age of
                 Compulsory School Attendance

We found that TTC-M enrolled high school students in its programs of study that lead to
postsecondary certificates. This occurred because it is the Tennessee Board of Regents’ policy
to allow secondary (high school) students to attend the Tennessee Technology Centers and earn
both secondary and postsecondary education hours. As a result, TTC-M is not eligible to
participate in the Title IV programs and improperly disbursed over $2.4 million in Title IV funds
to postsecondary students during award years 2001-2002 and 2002-2003.




     Our mission is to promote the efficiency, effectiveness, and integrity of the Department’s programs and operations.
Postsecondary institutions participating in the Title IV Student Financial Assistance programs
are only to admit as regular students individuals who have a certificate of graduation from a high
school, its equivalent, or are beyond the age of compulsory school attendance. Under Sections
101(a)(1) and 102(c)(1)(B) of the Higher Education Act of 1965, as amended, in order to
participate in the Title IV programs a “postsecondary vocational institution” must, among other
requirements, admit “as regular students only persons having a certificate of graduation from a
school providing secondary education or the recognized equivalent of such a certificate . . . .”
Section 102(c)(2) further provides that the “term ‘postsecondary vocational institution’ also
includes an educational institution in any State that, in lieu of the requirement of paragraph (1) of
Section 101(a), admits as regular students persons who are beyond the age of compulsory school
attendance in the State in which the institution is located.”

The regulations at 34 C.F.R. §600.2 (2002), in effect throughout the audit period, defines a
regular student as “A person who is enrolled or accepted for enrollment at an institution for the
purpose of obtaining a degree, certificate, or other recognized educational credential offered by
that institution.”

The Tennessee Department of Education Student Membership and Attendance Accountability
Procedures Manual, Section 49-6-3001(c)(1) (October 1999) states that “Every parent . . .
having control or charge of any child or children between six (6) years of age and seventeen (17)
years of age, both inclusive, shall cause such child or children to attend public or non-public
school . . . .”

According to the Tennessee Board of Regents Admission Policy (2:03:00:00)(2000), all
Tennessee Technology Centers are allowed to admit secondary students into their postsecondary
programs. This policy states that applicants enrolled in high school are eligible for admission
provided that (1) an agreement authorizing such admission is concluded between the Tennessee
Technology Centers and the local school boards and (2) enrollment is limited to one occupational
area. Such agreements are subject to the approval of the Chancellor or his/her designee. We
verified this policy with the Vice Chancellor for the Tennessee Technology Centers. TTC-M
executed a number of agreements with local school boards to allow area high school students to
attend TTC-M.

We reviewed the written agreement between TTC-M and the local school boards. The
agreement allowed high school students to attend TTC-M because the desired technical programs
offered by TTC-M were not available to the students at the schools they were attending. The
agreement also provided that high school students enrolling at TTC-M would be interviewed and
counseled for appropriate program placement.

We found that TTC-M enrolled 170 high school students under the age of 18 during award years
2001-2002 and 2002-2003 (115 during 2001-2002 and 55 during 2002-2003). The high school
students were enrolled in the same programs and received the same instruction from the same
instructors as the postsecondary students. High school students also received the same course
credit as the postsecondary students. High school students who completed the required TTC-M
curriculum received the same certificate as postsecondary students.




ED-OIG/A04-E0001                        FINAL REPORT                            Page 2 of 24
The TTC-M Director stated the following:
• 	 High school students are enrolled in regular programs at TTC-M, provided there is a training
    contract in place with the corresponding school board.
• 	 High school students attend the same classrooms and labs as regular, adult students and
    receive the same instruction.
• 	 High school students are awarded certificates or diplomas if they achieve the competencies
    required.
• 	 One enrollment form is used for all students and there is a section on the form to indicate
    secondary school enrollment, which is marked “secondary” while high school students are
    dually enrolled in high school and TTC-M.
• 	 Of the 117 high school students who enrolled during the audit period, about ten percent
    continued their postsecondary education at TTC-M and only about one percent of those
    students obtained a certificate.

RECOMMENDATIONS

We recommend that the Chief Operating Officer for Federal Student Aid:

1.1 	 Take immediate action under 34 C.F.R §600.41 to terminate TTC-M’s participation in the
      Title IV programs as a result of it not being an eligible institution.

1.2 	 Review TTC-M’s enrollment practices prior to award year 2001-2002 to identify those
      periods in which it was not in compliance with the Title IV institutional eligibility
      provisions discussed in this report.

1.3 	 Require TTC-M to return the amount of Title IV aid distributed to its students during award
      years 2001-2002 and 2002-2003 ($2,458,347), as well as the amount of such aid distributed
      during those periods in which it was not in compliance with the Title IV institutional
      eligibility provisions.

TTC-M RESPONSE

TTC-M did not concur with Finding No. 1. In its written response to the draft report (see
attachment), TTC-M stated, in part, that –
• 	 Secondary students are not considered to be regular students.
• 	 TTC-M follows the policies and guidelines set forth by the Tennessee Board of Regents.
• 	 Secondary students must be a junior or senior in high school.
• 	 Student’s are interviewed and counseled for appropriate program placement.
• 	 The high school provides TTC-M instructors with a grading scale and grade report sheets for
    recording credit/grades of secondary students.
• 	 A separate Secondary Student Enrollment Form has been developed that more easily
    identifies secondary students.
• 	 The primary objective of students enrolling at TTC-M is to obtain high school credit that will
    count toward their graduation.
• 	 A secondary student may return to TTC-M as a regular, postsecondary student upon high
    school completion. At that time, the student will receive articulated credit for the previous


ED-OIG/A04-E0001                       FINAL REPORT 	                         Page 3 of 24
   training he/she received as a secondary student, and he/she will receive a postsecondary
   diploma upon completion of the program.

A copy of TTC-M’s written response to the draft report is included in this report. Due to the
large volume of pages, we did not include the attachments to TTC-M’s written response. The
attachments are available upon request.

OIG COMMENTS

Although TTC-M’s response indicates that the secondary students are admitted under separate
procedures, the response confirms that the students are regular students for Title IV purposes.
The secondary students are enrolled in the same programs and receive the same instruction from
the same instructors; receive the same course credit as the postsecondary students; and receive
the same certificate as postsecondary students upon completion of a program of study. The
agreement in place with the secondary school system indicates that proficiency certificates and
diplomas will be awarded by TTC-M upon completion of the course requirements.

FINDING No. 2 -- TTC-M Did Not Maintain Adequate Supporting Documentation for
                 Professional Judgment and Dependency Override Actions, and Not All
                 Professional Judgment Actions Were Reported

TTC-M did not maintain adequate documentation to support all professional judgment and
dependency override decisions. Some students also received professional judgment actions, but
their documentation was not coded as having received such an action. This occurred due to a
lack of adequate policies and procedures for documenting professional judgment and
dependency override decisions. We statistically estimated that documentation was inadequate to
support about 216 of the 506 students that received professional judgment and dependency
override actions during award years 2001-2002 and 2002-2003. We also statistically estimated
that about 34 students received professional judgment actions, but were not coded as having
received such actions.

The Higher Education Act of 1965, as amended, Section 479(a) (1998) states:

     Nothing in this part shall be interpreted as limiting the authority of the financial aid
     administrator, on the basis of adequate documentation, to make adjustments on a
     case-by-case basis to the cost of attendance or the values of the data items required
     to calculate the expected student or parent contribution (or both) to allow for
     treatment of an individual eligible applicant with special circumstances. However,
     this authority shall not be construed to permit aid administrators to deviate from the
     contributions expected in the absence of special circumstances . . . . Special
     circumstances shall be conditions that differentiate an individual student from a
     class of students rather than conditions that exist across a class of students.
     Adequate documentation for such adjustments shall substantiate such special
     circumstances of individual students.




ED-OIG/A04-E0001                        FINAL REPORT                            Page 4 of 24
The Higher Education Act of 1965, as amended, Section 480(d) (1998), defines an independent
student as someone who fits into one or more of six specific categories. In addition,
Section 480(d)(7) of the Act states that a student who does not qualify as an independent student
under one of the six specific categories may be considered to be an independent student if he or
she is “a student for whom a financial aid administrator makes a documented determination of
independence by reason of other unusual circumstances.”

According to Dear Colleague Letter, GEN-03-07, issued in May 2003, a student for whom a
financial aid administrator makes a documented determination of independent by reason of other
unusual circumstances is a “dependency override.” The letter also states, “Third party written
documentation supporting a student’s unusual circumstances is generally required. However, we
understand that there may be some instances where the only documentation available to the
financial aid administrator is a statement by the student. In these limited cases, the student’s
statement must include the facts related to the student’s unusual circumstances, and the
institution must include any other pertinent facts in writing.”

Reported Professional Judgment Actions

TTC-M reported that it used professional judgment and dependency override actions to amend
the estimated family contribution for 2121 of its 710 Pell recipients (30 percent) during award
year 2001-2002 and 2942 of its 783 Pell recipients (38 percent) during award year 2002-2003.

We randomly selected the financial aid files for 115 students who were coded as having received
professional judgment or dependency override actions during award years 2001-2002 and 2002-
2003. We reviewed these files to determine if there was adequate documentation of the claimed
special circumstances and of a case-by-case determination that the special circumstances
justified deviating from the expected family contribution. We found that the documentation in
the files was not adequate to support the professional judgment actions for 48 students. We also
found that the documentation in the file for one dependency override decision was inadequate.
The documentation in these files generally contained a brief note regarding a change in the
student’s financial condition. There was insufficient information in the files to substantiate the
reported conditions. For example, one note in the file stated, “I am not employed at the moment
and I’m receiving help from an uncle.” Tables 2.1 and 2.2 below provide additional information
on the results our student file reviews.




1
    Includes 10 students coded as dependency override, two of which were also coded as professional judgment.
2
    Includes 13 students coded as dependency override, three of which were also coded as professional judgment.


ED-OIG/A04-E0001                                FINAL REPORT                                 Page 5 of 24
Table 2.1 – Professional Judgment and Dependency Override File Review for 2001-2002
                                                                  Adequate Support
 Reasons for Professional Judgment (PJ) Decision      Students Maintained in File
                                                                    YES       NO
 Student laid off of job                                  24         21        3
 Student had a reduction in earned income                  7          0         7
 Student's spouse or parent laid off                       3          2         1
 Student, spouse, or parent not employed                   4          1         3
 Student or parent claimed financial hardship              3          0         3
 Parent unable to work due to medical illness              1          0         1
 Student requested a revaluation of Pell eligibility       1          0         1
 Parent on disability                                      1          1         0
 Students incorrectly coded as PJ                          1          0         1
 Reasons for Dependency Override (DO) Decision
 DO Only                                                   1          1         0
 No documentation in file for PJ or DO decision            3          1         2
                                                            3
 Student laid off job and coded PJ and DO                 1           1         0
    TOTAL                                                 50         28        22

Table 2.2 – Professional Judgment and Dependency Override File Review for 2002-2003
                                                                   Adequate Support
 Reasons for Professional Judgment (PJ) Decision          Students Maintained in File
                                                                    YES        NO
 Student laid off of job                                     29      26         3
 Student had a reduction in earned income                     5       2         3
                                                                       3
 Student's spouse or parent laid off                          4      1          3
 Student, spouse, or parent not employed                      9       3         6
 Student or Parent claimed financial hardship                 4       0         4
 Student claimed financial hardship and was also coded DO    14       1         0
 Parent unable to work due to medical illness                 1       0         1
 Student quit job                                             2       0         2
 Student recently divorced                                    1       1         0
 Students incorrectly coded as PJ                             3       0         3
 No documentation in file for PJ decision                     1       0          1
 Reasons for Dependency Override (DO) Decision
 DO Only                                                      4       3         1
 Student recently divorced and coded PJ and DO               15       1         0
    TOTAL                                                    65      38         27


3
  Student was coded both professional judgment and dependency override. The documentation was inadequate for 

professional judgment and adequate for dependency override. 

4
  Student was coded both professional judgment and dependency override. The documentation was adequate for

both decisions.

5
   Student was coded both professional judgment and dependency override. The documentation was inadequate for

professional judgment and adequate for dependency override. 



ED-OIG/A04-E0001                            FINAL REPORT                                Page 6 of 24
In summary, TTC-M did not maintain adequate supporting documentation for 49 of the 115
student files reviewed (43 percent). These 49 students received $80,100 in Pell Grant funds. We
found that 37 of the students were disbursed excessive Pell Grant funds as a result of the
unsupported professional judgment and dependency override actions. These 37 students
received $48,712 in excessive Pell Grant disbursements.

Using statistical sampling techniques, we examined the professional judgment and dependency
override actions for award years 2001-2001 and 2002-2003, which totaled 506 actions and Pell
Grant awards totaling $973,618. Our sample of 115 professional judgment and dependency
override actions that included Pell Grant awards totaling $215,005 were chosen randomly to test
compliance with documentation regulations. All student files selected for the sample were
reviewed. Based on the sample results, we estimated that about 216 professional judgment and
dependency override actions were not sufficiently documented for award years 2001-2002 and
2002-2003.6 We also statistically projected that these 216 professional judgment and
dependency override actions resulted in excessive Pell Grant awards to students totaling about
$215,000.7

Unreported Professional Judgment Actions

To determine if professional judgment and dependency override decisions were applied, but not
reported and identified as such, we reviewed files for students who received Pell Grant funds and
were not coded as having received professional judgment and dependency override actions. We
reviewed student files for 115 of the 987 Pell recipients who were not coded as having received
professional judgment actions during award years 2001-2002 and 2002-2003. Our review found
that four student files contained evidence that professional judgment was applied. As such, these
four students should have been identified and reported appropriately. There was sufficient
documentation in the files to support the professional judgment actions.

Using statistical sampling techniques, we examined Pell Grants for award years 2001-2002 and
2002-2003, from a universe of 987 Pell recipients who were not coded as receiving professional
judgment actions. Our sample of 115 student files was chosen randomly to test compliance with
regulations. All student files selected for the sample were reviewed. Based on the sample
results, we estimated that about 34 students received professional judgment and dependency
override actions, but were not coded as such for award years 2001-2002 and 2002-2003.8



6
  We found that 49 of the 115 tested student files did not contain sufficient supporting documentation. Based on our
statistical sample, we are 90 percent confident that the number of student files that did not contain sufficient
supporting documentation totaled about 216 +/- 7.3 percent precision.
7
  We found that 37 of the 115 students received excessive Pell Grant funds totaling $48,712. Based on our statistical
sample, we are 90 percent confident that the excessive Pell Grant awards provided to the estimated 216 students that
did not have adequate supporting documentation totaled about $215,753 +/- 24.14 percent precision (or +/-
$52,083). Note: It is OIG policy not to recommend recovery of statistically estimated dollars unless the precision is
+/- 20 percent or smaller.
8
  We found that 4 of the 115 tested student files received professional judgment actions. Based on our statistical
sample, we are 90 percent confident that the number of students that received professional judgment actions and not
coded as such totaled about 34 +/- 4.0 percent precision.


ED-OIG/A04-E0001                               FINAL REPORT                                 Page 7 of 24
TTC-M Policies and Procedures

TTC-M’s professional judgment policy consisted of a one-paragraph statement that discussed the
purpose of professional judgment, the school’s standard professional judgment request form, and
the committee responsible for approving those requests.

It was TTC-M’s practice to initiate a professional judgment action after a student submitted a
standard form or letter, which was then reviewed by the financial aid committee for approval.
Once approved, the financial aid administrator reduced the income of the student and/or parent
by the amount of the unusual expenses. TTC-M did not maintain a record of the committee
meetings or its reasons for granting professional judgment actions. The Assistant Director and
the Student Services Coordinator, both of whom are committee members, stated that the only
way to recognize that professional judgment was approved for a student was the presence of a
check mark on the form. We found no evidence that the committee members initialed the forms
following approval. We also did not find any written justification or reason by TTC-M for
granting professional judgment on the forms or in the student files. However, where we found
adequate documentation of the special circumstance and indication that a case-by-case
determination had been made, we did not question the aid disbursed.

The TTC-M Director stated that the documentation that was obtained from students who
requested professional judgment was, to the best of the financial aid committee’s knowledge,
adequate based on their interpretation of the rules. The Director said the financial aid department
exercised its authority to perform professional judgment decisions on a case-by-case basis. The
Director said the financial aid committee reviewed each professional judgment request and made
decisions based on the written statements and no log of the meetings was maintained. The
Director said TTC-M was under the impression that a signed statement from the student was
sufficient enough for requests.

The Director stated that TTC-M has written a new, more detailed policy on professional
judgment, and that the new policy will be published in the student handbook and made available
to all students. The Vice Chancellor for Tennessee Technology Centers stated that the policy
developed by TTC-M would be reviewed for implementation at all of the technology centers.

RECOMMENDATIONS

We recommend that the Chief Operating Officer for Federal Student Aid:

2.1 	 Ensure that TTC-M’s revised professional judgment and dependency override policies and
      procedures include controls that require the financial aid office to maintain adequate
      support for each student that substantiates the student’s special circumstance and provides
      for documentation of the reasons for the professional judgment and/or dependency override
      decision.

2.2 	 Require TTC-M to develop policies and procedures to ensure that all professional judgment
      actions are reported to the Central Processing System.




ED-OIG/A04-E0001                       FINAL REPORT 	                         Page 8 of 24
2.3 	 Require TTC-M to refund the $48,712 in Pell Grants disbursed as a result of inadequate
      documented professional judgment and dependency override actions. (This recommended
      recovery amount is also included in the amounts for Recommendation 1.3.)

2.3 	 Require TTC-M to perform a 100 percent review of the professional judgment actions not
      included in our audit for award years 2001-2002 and 2002-2003 through the current period
      and refund any additional Pell Grants disbursed as a result of inadequate support for
      professional judgment and dependency override actions granted. The Chief Operating
      Officer should require verification of this calculation by the appropriate Case Management
      Team.

TTC-M RESPONSE

TTC-M did not concur with Finding No. 2. In its written response to the draft report, TTC-M
stated, in part, that –
• 	 The Higher Education Act of 1965, as amended, Section 479(a) (1998) is broad and does not
    specify “acceptable documentation” to support professional judgment decisions.
• 	 TTC-M reviewed the Federal Student Aid Handbook for documentation acceptable for
    verification purposes and determined that a signed statement can be used in lieu of Internal
    Revenue Service (IRS) documentation. TTC-M determined that the same documentation
    should be acceptable for professional judgment.
• 	 Students who requested professional judgment were either asked to fill out a standard
    professional judgment form or provide a written, signed statement outlining the special
    circumstances.
• 	 Many of the students who requested professional judgment were involved in plant closures
    where jobs were eliminated. TTC-M participates in the Tennessee Department of Labor and
    Workforce Development’s Rapid Response Team and helps students complete necessary
    applications for school admission and financial assistance. As a result of working closely
    with these students, representatives of TTC-M did not require any documentation other than
    a signed statement.
• 	 When students requested professional judgment, they were reminded about step seven,
    paragraph two on the Free Application for Federal Student Aid (FAFSA) whereby the
    student agrees to provide information that will verify the accuracy of the completed FAFSA.
• 	 If the Department of Education allows up to $4,050 to be distributed based on a student’s
    signed statement on the FAFSA, it appears that students with unusual or special
    circumstances are being discriminated against by making them provide additional
    documentation.
• 	 Although the staff of TTC-M was operating within their authority, TTC-M and the Tennessee
    Board of Regents have developed and implemented a specific professional judgment
    guideline, which is included in the Tennessee Technology Centers’ Financial Aid Handbook.
    Each Technology Center Director has been updated with the new guideline and they are
    implementing the guideline at each technology center.
• 	 The new professional judgment form will obtain all pertinent information necessary to prove
    the facts stated. Students who do not provide the necessary documentation will not be
    considered complete and will not be reviewed by the professional judgment committee.



ED-OIG/A04-E0001                       FINAL REPORT 	                       Page 9 of 24
• 	 The professional judgment committee will be made up of three to four staff members who do
    not have any prior knowledge of these students’ circumstances; therefore, no predetermined
    opinions should exist, and each case will be reviewed without bias. An unbiased committee
    will help insure that professional judgment decisions are based solely on the documentation
    provided by the student. The committee will meet on an as-needed basis and will maintain
    minutes of each meeting. These minutes will be logged and signed by each committee
    member; and the professional judgment form will be stamped to indicate approval status and
    initialed by the committee members. The Tennessee Technology Centers will include this
    written policy on professional judgment in their school’s student handbook and make it
    available to anyone who requests it.

OIG COMMENTS

TTC-M's comments did not lead us to change our finding. TTC-M's statement that the Federal
Student Aid Handbook permits a signed statement to be used in lieu of IRS documentation
omitted the limited circumstances in which such a statement can be used. The handbook and the
verification regulations provide that a signed statement can be used only in prescribed, limited
circumstances where verifiable documentation filed with or from the IRS is unavailable. Section
479A of the HEA prescribes that adequate documentation must "substantiate" the special
circumstances of individual students. In our review, we looked for documentation to
"substantiate" the circumstances of the student that would allow a financial aid advisor, on a
case-by-case basis, to conclude that it was reasonable to "deviate from the contributions expected
in the absence of special circumstances."

For the students involved in plant closures discussed in TTC-M's comments, we questioned the
documentation for only 6 of the 54 students involved in job lay offs. In addition to a statement
from the students, we found that the files contained other documentation substantiating the
circumstances of the students. These files typically included documentation of participation in
other programs designed to assist workers involved in plant closures.

For the 49 files in total where we found the documentation of professional judgment or
dependency overrides to be inadequate, the documentation was generally limited to brief notes
from the students. The notes did not provide sufficient detail to substantiate his or her
circumstances. A typical example stated only that "I am unemployed at the moment and I'm
receiving assistance from an uncle." The file did not otherwise contain information on the dates
of unemployment, the reason for the unemployment, any unemployment compensation, or the
prospects for additional employment.

The new documentation policy and procedures implemented by the Tennessee Technology
Centers should provide for adequate documentation of professional judgment and dependency
override actions.




ED-OIG/A04-E0001                       FINAL REPORT 	                       Page 10 of 24
                                       BACKGROUND 


TTC-M, established in 1966, is located in Morristown, TN, and is one of 27 technology centers
strategically located throughout Tennessee. TTC-M is a public, less than two-year institution
that has an approximate enrollment of 1,700 full-time and part-time students. TTC-M is
designed to serve both youth and adults in specified geographic areas and is governed by the
Tennessee Board of Regents.

The Tennessee Technology Centers enrolled 3,162 high school students during award years
2000-2001, 2001-2002, and 2002-2003. Not all technology centers enrolled high school students
during these three award years. Table 1.2 below illustrates the number of high school students
enrolled and the number of technology centers that enrolled high school students.

       Table 1.2 - High School Students Enrolled in Technology Centers
                                                        Number of Technology
                            Number of High School Centers that Enrolled High
          Award Year           Students Enrolled            School Students
           2000-2001                 1,050                        20
           2001-2002                 1,093                        21
           2002-2003                 1,019                        22
            TOTAL                    3,162

TTC-M is accredited by the Council of Occupational Education and offers certificates in
programs such as practical nursing, automotive technology, computer electronics, welding, and
others. TTC-M has a Program Participation Agreement with the U.S. Department of Education
for eligible students to receive Title IV aid. As illustrated in the table below, TTC-M received
over $2.4 million in Title IV funds during award years 2001-2002 and 2002-2003.

                 Award Year               PELL              FSEOG*     FWS**
               2001-2002                $1,072,438           $30,000   $35,000
               2002-2003                 1,237,409            37,703    45,797
               Total by Program          2,309,847            67,703    80,797
                 Grand Total            $2,458,347
               *Federal Supplemental Educational Opportunity Grant.
               ** Federal Work Study Program.



               OBJECTIVES, SCOPE, AND METHODOLOGY 


Our audit objectives were to determine (1) whether TTC-M enrolled as regular students in its
programs of study persons who did not have a high school certificate or equivalent and/or were
under the age of compulsory school attendance and (2) whether TTC-M’s use of professional


ED-OIG/A04-E0001                          FINAL REPORT                      Page 11 of 24
judgment and dependency override to make adjustments to estimated family contribution
calculations resulted in appropriate Pell Grant awards to students. The scope of our audit
included award years 2001-2002 and 2002-2003.

To evaluate institutional eligibility regarding the enrollment of high school students, we-

• 	 Reviewed the Higher Education Act of 1965, as amended, and applicable Title IV
    regulations.
• 	 Reviewed State law regarding the age of compulsory school attendance.
• 	 Reviewed the academic files for selected high school students.
• 	 Reviewed TTC-M’s policies and procedures regarding the enrollment of high school
    students.
• 	 Reviewed sample contracts between TTC-M and local school boards for the enrollment of
    high school students.
• 	 Interviewed TTC-M officials and the Vice Chancellor for Tennessee Technology Centers.

We randomly selected for review 69 of the 170 high school students’ files that TTC-M identified
as being enrolled at TTC-M during the audit period. We obtained and reviewed the
documentation contained in the academic files for the students in our sample.

To evaluate TTC-M’s use of professional judgment and dependency override adjustments, we:

• 	 Reviewed financial aid files, student ledger cards, and other supporting documentation
    relating to professional judgment and dependency override.
• 	 Reviewed Title IV of the Higher Education Act of 1965, as amended (particularly Sections
    479A and 480(d)); the Department’s Student Financial Assistance Handbook for the award
    years audited; and the Dear Colleague Letter of May 2003 (GEN-03-07).
• 	 Reviewed the State of Tennessee’s OMB Circular A-133 audit report for the year ended 2002
    and the Tennessee Comptroller of the Treasury’s Financial and Compliance audit for
    Tennessee Technology Center at Morristown for the years ended 2000 and 2001.
• 	 Reviewed disbursement and other student related data from the Department’s National
    Student Loan Data System and the Central Processing System.
• 	 Reviewed TTC-M’s drawdown and disbursement data using the Department’s Grants
    Payment Administration System.
• 	 Interviewed TTC-M officials involved in professional judgment and dependency override
    actions.
• 	 Interviewed staff at the Five Rivers Career Center, Tennessee Department of Labor.
• 	 Contacted staff from the Department’s Office of Federal Student Aid, Case Management and
    Oversight offices in Atlanta, GA, and Kansas City, MO.

To evaluate the adequacy of documentation maintained to support professional judgment and
dependency override actions, we reviewed a random sample of students who received Pell Grant
awards and whose Student Aid Report (SAR)/Institutional Student Information Record (ISIR)
reported comment code 027 (estimated family contribution adjustment) or comment code 164
(dependency override). These codes indicated that professional judgment or dependency
override had been applied. We identified a universe of 710 and 783 students who received Pell


ED-OIG/A04-E0001                        FINAL REPORT 	                        Page 12 of 24
Grant funds during award years 2001-2002 and 2002-2003, respectively. TTC-M reported
professional judgment and dependency override decisions for 212 of the 710 Pell recipients in
award year 2001-2002 and 294 of the 783 Pell recipients in award year 2002-2003. Total Pell
Grant awards distributed to the students who received professional judgment and dependency
override actions was $375,951 for award year 2001-2002 and $597,667 for award year 2002-
2003. To evaluate TTC-M’s use of professional judgment and dependency override actions, we
selected a random sample of 50 student files from award year 2001-2002 and 65 student files
from award year 2002-2003 for review. Total Pell Grant award distributed to the sampled
students was $95,855 for award year 2001-2002 and $119,150 for award year 2002-2003.

To evaluate the risk that professional judgment or dependency override was used, but not
reported, we selected a random sample of students who received Pell Grant awards during the
audit period and whose SAR/ISIR did not report the use of professional judgment or dependency
override (i.e., no comment code 027 or 164). We identified a universe of 498 students in award
year 2001-2002 and 489 students in award year 2002-2003 who were not coded as receiving
professional judgment or dependency override. We selected a random sample of 50 students
from award year 2001-2002 and 65 students from award year 2002-2003 for review.

During the audit, we relied in part on computer-processed data contained in TTC-M’s financial
aid processing and disbursement systems. We tested the accuracy and completeness of the data
by comparing TTC-M’s records to source documents and the data in the Department’s systems.
Based on these tests and assessments, we concluded that the data was sufficiently reliable for use
in meeting the audit objectives.

Audit work was conducted during the period November 2003 though February 2004. An exit
conference was held with TTC-M officials and the Vice Chancellor for Tennessee Technology
Centers on March 10, 2004. Our audit was performed in accordance with generally accepted
government auditing standards appropriate to the scope of the review described above.


              STATEMENT ON MANAGEMENT CONTROLS 


We did not assess TTC-M’s management control structure applicable to its institutional
eligibility for participation in Title IV programs because it was not necessary to achieve our
objective related to institutional eligibility.

As part of our audit, we gained an understanding of the controls over professional judgment and
dependency override determinations. We did not assess the adequacy of the management control
structure applicable to TTC-M’s use of professional judgment and dependency override to
determine the nature, extent, and timing of our testing. Instead, we relied on substantive testing
of financial aid and accounting records. Our review of student files disclosed significant
noncompliance with the requirements for professional judgment and dependency override in the
Higher Education Act that led us to believe that material weaknesses existed in TTC-M’s
controls over professional judgment and dependency override. These weaknesses and their
effects are fully discussed in the AUDIT RESULTS section of this report.


ED-OIG/A04-E0001                        FINAL REPORT                          Page 13 of 24
                          ADMINISTRATIVE MATTERS 


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 Education Department
official, who will consider them before taking final Departmental action on this audit:

               Theresa S. Shaw 

               Chief Operating Officer, Federal Student Aid 

               U.S. Department of Education         

               Union Center Plaza 

               830 First Street, NE, Room 112G1 

               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 greatly 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,

                                                    J. Wayne Bynum

                                                    J. Wayne Bynum
                                                    Regional Inspector General
                                                    Region IV




ED-OIG/A04-E0001                       FINAL REPORT                         Page 14 of 24
Attachment – Written Response to the Draft Report




                             TENNESSEE
                             TECHNOLOGY
                             CENTER I I Morrnto.. n
                              " Th e IlighwlI)' To      S u<:~I'$$"
                              .. _   _ ot .......   I_.......


       orn c [ OF nr JlECTOR

                June l), 2004



                Mr.   J. Wa yne Bynum
                Regional Inspector GeneraJ
                US De partment of Education
                Office ofInspcclor Gcncrnl
                6 1 Fors)1h Street. Room 18TI 1
                Atlanta. Georgia J0303

                Dear Mr. Bynwn:

                Enclosed is the Te nnessee Technology Cenler at MOlTistown's response to the Orali
                Aud it Report Te<:ei\·ed from the Office o f In~p<..'(tor Ge neral o f the Department of
                Education.

                If ~'OU have any questions or need addition:!! information. please contact us.

                Sincerely.

               Cf)'O""'-      Ell, . "
                Lynn Elkins
                 LJircclOr

                 Lr:.imd

                 E nclo~urc

                 c:        James King, Vice Chancellor. Tennessee Technology Centers. Te n ncs~t:o;; nuard
                           of Regents
                           Christine MoJishcr. GcncmJ CUUIl!lC1. Tcnm.:sSI.'1.: Bouru of Regents




       ~ :I   WF_'iT LOU ISE AV EN UE - MORRISTOWN, TEN NESSEE 378 1).2094 · PHO~E(.jB ) S86-S77 I· FAX (423) 586,8030
                                             Wr Arr An Alfirma1i"r A""on l £quol OpporlUl1ilY Em,."""u




ED-OIG/A04-E0001                                                FINAL REPORT                             Page 15 of 24 

Attachment – Written Response to the Draft Report



                                                                                OR.   UKA~   1 AloUl1 RU'I.I111   1tl~1'I)N~1o
                                                                                                                    "" llf2OO.I
                                                                                                                   p,;< I   ~.-"

                                        TIC-MORRJSTOWN COMMENTS
                                            DRAFT AUDIT REPORT
                                       OFFICE OF INSPFCTOR GENERAL
                                      CONTROL ]\'UI\'IBER ED/OIG A04 · EOOI


        Finding No. I _.         TTC·M Enrolled Persons in Its Progr:l.ms of Study Who Did NOI HlIve 11
                                 High Schoo! CcrtificlIIe or Equivah!nt rmdlor Were Under the Age of
                                 Compulsory School Attendance.

                    We do nOi concur with Findin!; No. 1. ,\ccord iog to the Federal Guiddincs · ddinition of
        ;U\   ··Eligible Insti tution" and tht.: Tt: rlllt:~~t:t: Board of Rt.:gt.: nts Admissions Policy.

                  Postseconda ry insti tutions participating in [he Title IV Sludent Finant.:ial
                  Assistancc programs an: on ly \0 admit as regular students individuals who have a
                  certificate of gradumion from a high school. its equivalent. ur :m: beyond the 3£e
                  of compulsory school attendllnce. Under Stttions I Ol(a)( 1) and I02(c)( 1)(13) 1.11'
                  the Higher Education Act of 1965. as amended. in order to participate in the Title
                  TV programs a "postsecondary vocational institution" must. among other
                  r(qui~ments. admil '.:1$ regular sludents only persons having II ccrtific:l!e of
                  graduation from a school providing secondary eduealion or the rttugnizl'd
                  equivalent of such a cenificute .. :· 5e(tion I02(cX2) fu n hcr provides Ihal the
                  '"[enn 'poslSl!tondary \'ocational instilUlLon' also includes an educational
                  institution in any State that. in lieu of the I'1:quirement of parugraph (I) of Section
                   101(a), admi ts as nogular slude nlS persons who are beyond the age of eompulsol)
                  school attendance in the Stale in which Ihe inslitUlion is located:'

               As ind icntcd in our letter dated /I.·larch 15. 2004. lTC-Morristown spe<.:ilicJ huw
        secondary smden!s n~ not considered regular ~lUdent s. A eopy of Ihe leiter nnd MtaehrnenlS are
        includcd with this report 10 substantiate nC-M's stnnce on secondary student enrollments
        (Attachment I A).

                The Tennessee Technology Center at Morri stown is governed by the Tennessee Buard of
        Rege nts and follow$ thc policies and guidelines SCI forlh by the governing agency. The TAR
        Ad missions Policy (No. 2:03:00:00) (Anachmcl1t A) states in secliun (I II) (13) thm ".rpplicallts
        eruoHed in high school arc eligible for admission p ru\"i d ~d that:

                      I. An agreemen t authorizing such admission is cunciw.kd between lIn: lucal Board
                         of Education and the Tenm: ssce I"echnol0ll-Y Center. Such agreements arc subject
                         10 Ihe approval of the Chancellor or his designee.
                      2. Enrollment is limited to one (I) o«(.:upa!ional area:'

               Accordin.!! to the dr.l.ft report. wrillen ;!j!r«ments between -lTC-Morristown and local
        school boards forthe years audiled (2:001-2:002 and 2002.2003) lind studC!nt records fur 170 high
        school students (115 duri ng 200 1·2002 and 55 during 2002-2003) were reviewed. indieatin!; thai
        Siooents without a hig h school diploma or c'lui\<a.knt IUld were under the tlse of compulsory




ED-OIG/A04-E0001                                FINAL REPORT                                              Page 16 of 24 

Attachment – Written Response to the Draft Report



                                                                             I)le; DIIAH IIl!PtT !U,I'{JRT Rr ,<PO," .~
                                                                                                             ',,\\n'~
                                                                                                            ra ~" 1 ,'14


        ,."hoo! attendan~e wer~ duall~ .,molled :ll rrC-M and the contracted hi!,!h schools. The (l1tw:hd
        ..:Ontr:lct (Attachment B) indi~ates under QUALIFICATIONS:

                   •   Must be:l JWliof or a Senior in high school:
                   •   Must Il:lVe ~ ntinimwlI o f a 2.0 gradc point ,wcl1lge on a 4.0 scale ,IT fhe
                       equivalent:
                   •   Applicants must have- a statl'" employment objective:
                   •   Must have a Slltisfactory mtendmlct! record: and
                   •   Applicants shall he required to take the TedUlology ruurJdalions As~e55menl
                       lliven by the Tcchnology Center.

                 In <lddition, under AP PLlCATION PROCEDURES, number three statcs. "Qualitid
        applicants will be interviewed for anticipated upenings b~' the Technolog)' Center's persnnnel
        during June," Number four Slates. "The participants selected lI"ill Ix: by mutual agreement
        hct\\'een the Technology Center and the high school Principal aud his/her designec. The
        ~election is to be completed by August I of !:a~h ~a!cndar ycar.'" Numb<.'r eight states. "'Each
        student wil! be interview.:d and counseled lor appropriate prugranl placement."'

                 Under thc sectioll EVALUATION. number two states. "The hi gh school is to provide the
        Technology Center instnlctors with <I gradin g scale nnd grade report sheets for recording
        credi t/grades:'

                 The first stipu'ation of the high sdJOol CUlllnIC\ states. "TIle desired technical programs
        arc !lot. nOr can be m~de available loea!l~'." The contract itself indicates that secondary students
        will nOl eoter into programs on the same basis as regular slUdents.

               The allached copy of all enrollment report from Ihe TBR office (Altnchmcm C) will show
        secondary hours in [1 separalt: columll. The attached allnual report (Attachment F) to the
        accrediting agency. Council on Occupational Education. indicates that secondar y students are
        tracked separately than regular students (Column 5). These students are not in ::my way
        accounted for in the same maJUler as regu lar students.

                The draft report indicates Ihat secondary studentS complete the same enrollmcnt torm as
        regular. adult students. Al!hough we Sl"f" no legal reason for creating a separate fonn, we have
        provided a Secondary Student Enrollment Form (Attachment G) thm morl! c<lsily identities the
        secondary students, a copy of which is attached ror you r revielV The previous fonn did provide
        for a distinction between secondary and postsecondary students.             It \\Jas lIIilizcd for
        simplification and ecunomy.

                The regulations at 34 C.F.R. §600.2 (2002) deliJ\e.~ a regular student as " A person who is
        enrolled or accepted for enrollment af an institution for the purpose of obtaining a dcgre~.
        certificate, or other recognized educational credential offered hy that institutiun."

                 TIle primary objective of student~ cnmllin!,: at TTC·M is to ubtaill high school credit that
        \\Jill count toward thdT graduation. A copy of the report IAttlchment H ) required by the high
        school for reporting hours and grades received is induded for your review.




ED-OIG/A04-E0001                              FINAL REPORT                                           Page 17 of 24 

Attachment – Written Response to the Draft Report



                                                                              OIG ORAn ,\t;nll' I(i".KlR f   I(r.SPON~ E
                                                                                                              6 11 f.![)[).t
                                                                                                                '
                                                                                                             1'"," _, "rq



                A student who was a ~ccondary student may return 10 D·C·)'I as II regular. postsecondary
        ~ I ud ent
                upon high ~chool completion. At thaI time. the Mudent wi!! receive artieul1:llcd credit fur
        the previous training helshc received llS a secondary studenL and he/she will receive a
        POslsc!;ondary diploma upon cnmpktion of the program. It is important 10 note that no
        ~econdary student received a dip!oma from TTC· M during the audit period.


                 "fTC·M. operating ill accordance to T8R admission policies. i~ in compliance with the
        lith: IV institutional eligibility requirements, If audi ts at all post secondnry institutiOns who
        partie-ipate in TITLE IV fund ing are nOI wlldw;:tt'd. [hell TTC·;-"·l and Tht' T ~·nncssec 80ard of
        Rt'gents would be singled-out and penalized for providing lruining opportunities f()r the eilize n ~
        o f Trnnessee by assuring acccss 10 Olqual educational upportunitie •.

                     TTC·M has dIedivc measures in place 10 differenliale     slUdelll~   based on their nigh
        school achievement. In no way. shape, form or fashion has       Ii flOC}   high school eompJctcr ever
        hccn pilid any Title IV financial assistance.




ED-OIG/A04-E0001                               FINAL REPORT                                          Page 18 of 24 

Attachment – Written Response to the Draft Report



                                                                            01(; DRAFT ,\ UDtT REroRT RC ~I'ON~F
                                                                                                       ...· t   lf~Q0)4

                                                                                                       ~"~<~      ofq

        ~ inding   No.2 --    TTC-M Did Not Maintai n AJl'ljume Supponing Documentation for
                              Professional Judgment and Dt:pendency Override Ac tions. and NO! All
                              Professional Judgment Actions Were Reponed.

                  We do not COrlCU! with finding No.2 or any of the Recommendations ix't.:ause 'ITC- M
        exercised its authority to m!lke professional judgments and dept:lldcncy overridl: dccisions as
        .~ tated in Scetiol1 479(a) (1998) of The Higher E(lucation Act of 1965:


               Nothing in this part shall be interpreted as limiting the authority uf the financia l aid
               administrator. on the basis of adequate documentation. to make adjustlllents on a case-by­
               case basis to the cost of allendanec or the values of the data items required tu t.:a!culate
               the expected student or parent contribution (or both) to allow for treatment of an
               individual eligible applicant with spt:ciul circumstances_ However. this authority slmll
               not be constn;ed to permit aid administrators to deviate from the contributions expected
               in the absence of special circumstances ... Special circumstances shall b~ conditions th::.t
               differentiate an individual student from a class of smdents rather than cOllditiotlS that
               exist across a class of students. Adequate documentation for such adjustments shall
               substantiate such special circum stance of Individual students.

                 Because thc above mle is so broad and does not specify ··accept<lble documentation-' to
        ~ upport   professional judgment decisiOlls. TIr -M re\'iewed ac.;; ... ptabJe documentatiOn tor
        \'erifie3tion from Chapter 3. Verification. of the Federal Student Aid Handbook and dctcrmint:u
        that the same documentation should be accept3bl .... A ~ i gned statement can be used in lieu of the
        studenfs IRS tax trMlscript, other signed IRS fonns wilh lax data. Foml W-2. or Form 4868.

                All students at 'rrC-M who requested professional judgment were either asked to fill out
        J  standard professional judgment fonn or provide a written. signed statement outlining their
        ~peeial circumstances,     Many vf the students who requested proks5ional judgment wl;rc
        involved in plant closures where jobs were eliminatcd. TTC-M participates in TIle Tennessee
        Dcpanment of Labot and Workfo rce Devclopnlcnt's Rapid Response Tcalli and hdps students
        w mplctc necessary applications for sehoul admission and financial ilssbtance, As a result of
        wo rking so closely with these students. represcnttuives uf rrC-M did not reljuire any
        ,Iocumenlution other than a signed statement.

                 Additionally, when stLld~nts requested professional judgment. they we r~ rcmindd about
        ;Stcp Seven, Paragnlph two, on the FAFSA Ihat States. "If yOLI arc the parent or the student. by
        ,;jgning this application you agree. if asked, to provide information that will verify the accuracy
        of your completed fonn _ This information may include your U.S . or state income ta.'( fonns .
         '\lso_ you ccrtify that you understand that the Secretary of Education has lhe authority 10 verify
        mfonnation reponed on this application with tim Internal Kt:venue Service and other federal
        agenCICS. If you purposely givc f::llse or misleading infonTlmion. you may be fined $20.000. sent
        to prison. or both." T he Dcpanmcnt of Education accepts FAFSAs that arc mailed in or
        ~o mpleted online. processes them. and authorizes paymellt~ be Illade 10 the applicant. If a
         ,lUdell! is not chosen fOr vcrific;lIion. their financial ns~isl<lnce is disbursed based on hislhcr
        -;igncd statement un the FArSA




ED-OIG/A04-E0001                             FINAL REPORT                                        Page 19 of 24 

Attachment – Written Response to the Draft Report



                                                                            OIG DRAn AUDIT REPORT RESI'ONSE
                                                                                                   NI II2\11J4
                                                                                                     1'0;0 5 or 9

                If the Department of Ed ucation allows up to $4.050 to be di.~trihuted based on a student's
       ~igned    statement. included on the FAFSA. it nppears thn t studenls with 1I1lusunl or spceifl!
       ci rcumstances are being d iscri minated againsl by making them provide additional
       documenta tion. 'jTC-M lind the Tellilessee Board of Regents go to gn:at lengths to comply wit h
       .d l policies 10 insure non_di~rim inati on.

                '\ .11 result oflhe recent audit. TTC-M has n better understanding of what the Depanment
       ,'ollsiders adequate documentation. Although the stalf of TIC-M were operating within their
       .Iuthority. rrC- M and the Tennessee Board of Re gents have developed and implemented a
       .;pecific professional judgment guideli ne. which is included in thc T cnnessee Tcchnology
       Centers' Financial Aid Handbook.              This handbook is updated annually ami dist ributed
       Ihroughout the TIC system. which includes 26 Tennessee Technology Centers th roughout the
       , tate. Each TTC Director has been upduted with the new guideline and is implementing at e,lch
       .:cntcr.

             The new section that was added to the rennessec Tcdmulogy Ccntcrs Finnncial Aid
       Handboo k is as follows:

       egOFESSIONA J. JUDGEMENT

                Termessee Technology Cente rs will use the Professional Judgment form developed
       Juring the initial audi t from Thc Office of Inspector General. U.S. Department of Education. and
       wi n obtain all pertinent infonnation n(Xessnry to prove the facts stated. Students who do not
       provide tbe necessary documentation will not be conside red complete :md will not be reviewed
       by the prolessional judgment committee. The professional j udgment committee will be made up
       of tlm~e to four staff members who do not have any prior knowledge of thcsc students'
       ~i rcum st ance s: therefore, no-predetcrmincd opinions should exist. and cach C;!S!: will b.:
       rcviewed wi thout bias. A Center may al low the fi nancial aid admi niStriltor to serve on the
       ~onl!n ittee as a non-voting mem ber. An unbiased committee will help insure tbat profestiion;!j
       ludg mcnt decisions arc based soley on the documentatio n provided by the student. lhe
       ,ommittce will meet on an as-needed basis and will maintain minutes o f each me~ting . Thes.:
       minUles \\ ill be lo ~~cd und signed by each committee member: and the proic,ssional judgment
       req uest form will be stamped to indicate ap proval status and initialed by the comminee members.
                TIC's shall include this \\"Titten policy on professional judgment in their schools' student
       handbook and make it available to anyone who requests it.




ED-OIG/A04-E0001                              FINAL REPORT                                      Page 20 of 24 

Attachment – Written Response to the Draft Report



                                                       Ule.. DRAfT AUDIT Rf.I'OR I Rl;SPQI'SE
                                                                                    ",l l/.!O(l.+
                                                                                   Plfe .. ""~


        Professional Judgment

        Since the formula used to determine e ligibility for the Federal
        Pell Grant is basicall y the same for all applicants, students who
        have experienced extenuating circumstances beyond their
        con trol may request "'Special Conditions" or "Pro fessiona l
        Judgment".

        There must be rare and unusual reasons for the fi nancia l aid
        administrator to request a financial aid comm ittee meeting on
        students behalf. In addition, the student must provide adeq uate
        documentation to support any adj ustments before the committee
        will meet.

        Possibly extenuating circumstances could include the following:

        divorce Of separation of student, spouse or parent;
        death of a spouse or parent;
        loss of untaxed income of student, spouse or parent;
        disability of student, spouse or a parent;
        unusua l medical expenses of student, spouse or parent;
        tuition expenses of student. spa lise or parent;
        or loss of a job by ei ther the stud ent, spouse or the parent;

        The Fi nancial Aid Comminee' s decision regarding special
        circumstances is j inul and cannot be appealed.

        A Financial Aid " Request for Special Cond itions" form can be
        obtained in the Financial Aid Office.




ED-OIG/A04-E0001                  FINAL REPORT                               Page 21 of 24 

Attachment – Written Response to the Draft Report



                                                                                (IIG OlUF'T ,\ljOlT RFP()RT   R E.~ P<)NSL
                                                                                                                t>l I, !2llM
                                                                                                               l'"~C   7 ,,1'/


       Tennessee Technology Center at Morristown
       Required Documentation for Rc-ev a luation of Financial Aid Eligibility

       The following documenlation is ncq uircd for the   ~Iudt:nl   and parentIs) if dependent - or req1..!in:::d
       for the slUdenUspouse if independcnI.

       StcpOne:       Prov ide a detailed ",,"nen explanation of your cxtenu:iting citeuillstances on the
                      back of this fonn in the space pro vided.

       Step Two:      Indicate why you arc requesting your 1]na11Ci:ll aid be re-evaluated:

          _ _ Lu~s of employment or change in employment s rntu~
          • Letters from prior employers slating termi nation dates. year-to-date earnings on
             letterhead. signed and dated.
          • Letters from current employers stati ng expt!cted earnings for the current year.
          • Unemployment recap 5howing amuunt of benefits received :iIld the expected henefits to
             be received in the current year OR a notarized stat('mcnl indicati ng no benefits were
             received or expected to be ~cei\'cd by YC'ar end.
          • Estimation of any anticipated earnings and/or untaxed irlcome through year end.

          _ _ Divorce or separation of student fi r parent
          • Divurce: Copy of divorce de{; rcl:!
          • Separatio n: Copy of (he legal separation document: a sigm:d statement from yo ur ~momcy
             ~ how illg the dale of5eparation: or a nOtarizro statement from an unrela ted third p..my.

          _ _ Death of II spouse or parent
          • A death certificate. an obituary notice. " r a nota rized statement from           all   unrel:!ted third
            party.

          _ _ Lon o[untaxed income
          • A copy of a letter from the agency that provided the benefits detailing the tennin:uion of
            benefits and copies of summaries of benefits.

          _ _ Disability
          • Mcdi{;al docu mentation of disability and benefits reccived as a res ult of the disability.

          _ _ Un usual medical or dcnt:a l bills or tx penscs
          • ..... copy of schedule A of the federal 1040 form or cancell"d checks or receipts shol.'.ing
             the amount paid. Also. 11 statcmem from rhe insurance compan y shOWing that rhe
             e xpenses were not reimbursed .
          • Pronf of no insurance.

                   Other unusllu! circumstances nut covered ahove
              •    Explanation and documcntatiun.




ED-OIG/A04-E0001                             FINAL REPORT                                               Page 22 of 24 

Attachment – Written Response to the Draft Report



                                                                                     01(; OR ... n AlmlT RUOIH RI,SI'IINSE
                                                                                                                 1)1 1111001
                                                                                                                  p"~ .!   ,,(9

        5dow. please complete you r detailed \\TillCn cxphlni.ltion u f ." our ~·xt<:!lui.l!lng drcumsti.l rlccs




        New expected income from work                     Student


                                                                                     !====
                                                          Spouse
                                                          Muther/Step Mom
                                                          FillherlSlep Dad           $_ - -

        Unemployment benefits expected                    Studcnt
                                                          Spouse
                                                          MOlherl Slep /I.·lom
                                                          Father/Step Dad

        Rctin::mcnt bcnefil$ expected                     Studenl
                                                          Spouse
                                                          Mother/Step MOm
                                                          Father/S tep Dad

        ,\ny un taxed income expected by anyone in you r immediate                   $_ _ __ _ _
        family. including Social Security benefits, disability and
        child support.


        Signatu re Student                                          D::lIe


        Signature of Spouse or Parent                               Date
                                                                             SCIIOOl.US[o,\' \.r




ED-OIG/A04-E0001                                 FINAL REPORT                                              Page 23 of 24 

Attachment – Written Response to the Draft Report



                                                                            Oil; I)R"'FT AUIlIT 11.1 roM. r   RI~r.IN~F
                                                                                                               N III2I1">.l
                                                                                                              1',~~9,,( '1




               After the Departmcnt of Education issued an updated clarification fur dependency
       o verrides with GEN-03·07 (Attachment E), n ·C·M does not perform dependency overrides
       unte~s the student elln provide the documentrllion listed liS accepLabk. A copy oft~lI ~ puhhc.nion
       is enclose<!.

               TrC-M should not be TCquired to rclUm any Title tV fUllds hased on Ihis finding. Based
       (In local interpretation of professional judgmen t .1ulhori ty. ·'Te-}.'] is in full compliance.
       Financial Ilid records arc maintained with exceplion1l! ()ceumcy. and thai department is diligent 10
       comply wit h all Fwcral. State. and locill regulations. No Title IV funds were diw ibuted wi th
       less tha n ho norable intentions or with malicious inlen!.




ED-OIG/A04-E0001                             FINAL REPORT                                             Page 24 of 24