oversight

University of Illinois at Chicago's (UIC) Student Support Services (SSS) program.

Published by the Department of Education, Office of Inspector General on 2005-12-15.

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

                                    UNITED STATES DEPARTMENT OF EDUCATION 

                                         OFFICE OF INSPECTOR GENERAL 

                                                               REGION V 

                                                       111 NORTH CANAL, SUITE 940 

                                                         CHICAGO, ILLINOIS 60606 



     Audit                                                    FAX: (312) 353-0244                                                       Investigation
(312) 886-6503                                                                                                                         (312) 353-7891



                                                                                                DEC 15 2004
                                                                                  Control Number ED-OIG/A05-E0002

          Dr. Sylvia Manning, Chancellor
          University of Illinois at Chicago
          601 South Morgan, MC 102
          Chicago,IL 60607-7128

           Dear Dr. Manning:

           This Final Audit Report presents the results of our audit of the University of Illinois at
           Chicago's (UIC) Student Support Services (SSS) program. UIC received a SSS grant
           (PR No. P042A010608) for the five-year period from September 1, 2001, through August
           31,2006. The U.S. Department of Education (ED) awarded UIC $260,050 for the period
           September 1, 2001, through August 31, 2002 (2001-2002 grant year), to provide services
           to 150 eligible SSS participants. The objectives of our audit were to determine if UIC
           (1) provided only eligible services to the number of eligible students required under its
           agreement with ED, (2) maintained support demonstrating that it achieved the program's
           objectives as reported to ED, (3) properly accounted for its use of SSS program funds,
           and (4) only claimed expenses that were allowable and adequately supported for the
           2001-2002 grant year.

           Our audit disclosed that UIC (1) failed to provide evidence of fulfillment of assurances,
           (2) did not accurately report the accomplishments of its SSS program to ED, (3) charged
           unallowable costs to the grant, and (4) could not support all of its personnel expenditures.

           We provided VIC with a draft of this report on August 20, 2004. In its response to the
           draft report (dated September 17, 2004), UIC agreed to implement all procedural
           recommendations but did not agree with all the findings and monetary recommendations.
           After reviewing UIC's response and the additional documentation provided, we made
           minor changes to two findings (Finding Nos. 1 and 4), revised one procedural
           recommendation (Finding No.1), and revised one monetary recommendation (Finding
           No.4). We summarized UIC's comments after each finding and included the response in
           its entirety as an attachment to this report.




                     Our miSSion is to ensure equal access to education and to promote educational excellence throughout the Nation.
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                                       AUDIT RESULTS

Finding No. 1 UIC Failed to Provide Evidence of Fulfillment of Assurances

UIC provided only eligible services to its participants. However, UIC did not maintain
records that showed it fulfilled its assurances that at least two-thirds (approximately 67
percent) of the 2001-2002 grant year program participants were both low-income
individuals and first-generation college students.1 Based on the participant roster for the
2001-2002 Annual Performance Report (APR), UIC served 150 participants. According
to the roster, 106 participants (70.7 percent) were both low-income individuals and first-
generation college students, 40 (26.7 percent) were first-generation college students only,
and 4 (2.6 percent) were low-income individuals.

We reviewed SSS records for all 150 participants listed on UIC's 2001-2002 participant
roster. UIC maintained documentation sufficient to support the eligibility status reported
to ED for only 61 students (40.7 percent). We could not substantiate the eligibility status
UIC reported to ED for 89 (59.3 percent) of the participants. Specifically, we could not
verify:

• 	 the low-income or first-generation eligibility of 11 participants who were shown as
    both low-income individuals and first-generation college students;
• 	 the first-generation eligibility of 49 participants who were shown as both low-income
    individuals and first-generation college students;
• 	 the low-income eligibility of 5 participants who were shown as both low-income
    individuals and first-generation college students; and
• 	 the first-generation eligibility of 22 participants who were shown as first-generation
    college students only.

In addition, we determined that:

• 	 one participant was listed as a first-generation college student only, but the file
    showed the participant qualified as both a low-income individual and first-generation
    college student; and
• one participant was listed as a first-generation college student only, but the file
    showed the participant qualified only as a low-income individual.

According to 34 C.F.R. § 646.32(b),2 a grantee shall maintain participant records that
show the basis for the grantee's determination that each participant is eligible to



1
  According to Section 402A of the Higher Education Act of 1965, as amended, the term “first-generation
college student” means an individual whose parent(s) did not complete a baccalaureate degree. The term
“low-income individual” means an individual from a family whose taxable income from the preceding year
did not exceed 150 percent of an amount equal to the poverty level determined by using criteria of poverty
established by the Bureau of the Census.
2
  All regulatory citations are as of July 1, 2001, unless otherwise noted.


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participate in the project under 34 C.F.R. § 646.3.3 Pursuant to 34 C.F.R § 646.11, a
grantee shall assure that at least two-thirds of a project's participants are both low-income
individuals and first-generation college students. By signing the APR, UIC attested to
the fact that the information in the APR was accurate, complete, and readily verifiable.

UIC could not substantiate its claim that it served 150 eligible participants because of
(1) unsigned statements asserting the eligibility of participants, (2) incorrect
interpretations of questions on Student Aid Reports (SAR), and (3) inconsistent use of
eligibility documentation.

¾ UIC’s SSS application included a section for the potential participant to state family
  income level. However, UIC did not obtain signatures from the potential participants
  or their parents/guardians attesting to the veracity of the low-income status of the
  participants as required by 20 U.S.C. § 1070a-11(e). Without a signed statement or
  other corroborating documentation, ED does not have assurances that the information
  on the applications was an assertion made by the potential participant and/or his/her
  parent or guardian.

¾ UIC’s SSS application also included a section for the potential participant to state the
  educational level of his/her parent/guardian. However, UIC did not obtain signatures
  from the potential participants or their parents/guardians attesting to the veracity of
  the first-generation status of the participants. Without a signed statement or other
  corroborating documentation, ED does not have assurances that the information on
  the applications was an assertion made by the potential participant and/or his/her
  parent or guardian.

¾ To verify first-generation status, UIC’s SSS officials reviewed each potential
  participant’s SSS application. SSS counselors assisted each potential participant if he
  or she did not understand the questions on the application. If the application showed
  first-generation eligibility, SSS officials tried to obtain the potential participant's
  SAR. From the SAR, SSS officials used the potential participant's responses to
  questions 22 (Father's High Grade) and 23 (Mother's High Grade).4 If the response
  on the SAR was "3--College or beyond," the potential participant's first-generation
  status was accepted because UIC officials interpreted the response to mean that the
  parents attended college but did not obtain baccalaureate degrees. When a potential
  participant’s response to the questions were "Unknown" or "Blank," SSS officials
  interpreted the responses to mean the parents did not have baccalaureate degrees, and
  the potential participant was a first-generation college student. We also learned from
  SSS officials that the responses on the SAR were transferred to UIC's financial aid
  report, also called the SAM report. If a potential participant marked "College or
  beyond" on the SAR, the SAM report would show a "C." Similarly, if the potential

3
  Under 34 C.F.R. § 646.3, a student is eligible to participate in a SSS project if, among other requirements,
the student is a low-income individual, a first-generation college student, or an individual with disabilities.
4
  The questions appear as 22 and 23 for the 1996-1997, 1997-1998, 2001-2002, and 2002-2003 SARs. The
questions appear as 21 and 22 for the 1998-1999 SAR, and 23 and 24 for the 1999-2000 and 2000-2001
SARs.

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    participant’s SAR showed "Blank," the SAM report would have an "N" or the field
    would be blank. SSS officials interpreted all of these responses to mean that the
    parents did not have baccalaureate degrees.

    UIC’s interpretation of the responses is incorrect. The questions ask for the highest
    educational level completed. Based on the code definitions provided by ED’s office
    of Federal Student Aid, "College or beyond" means that the parent has completed
    college and obtained, at a minimum, a baccalaureate degree. In addition, "Unknown"
    or "Blank" in these responses reflect that the applicant either does not know his/her
    parents' educational level or did not respond to the questions.

¾ For some students who lived with a guardian, the guardian's income level was used to
  determine low-income status, and the parents’ educational level was used to
  determine first-generation status. However, UIC did not provide us with
  documentation proving the guardians were legal guardians or just individuals with
  whom the potential participant resided. UIC must be able to substantiate its use of
  information from guardians and must use consistent information to determine first-
  generation and low-income eligibility status (that is, if the guardian’s income level
  was used, UIC should use the guardian’s educational level).

Because UIC could not substantiate the eligibility status of the participants as reported to
ED, it is possible that UIC served students who were not eligible to participate in the SSS
program.

Recommendation

We recommend that the Chief Financial Officer (CFO), in conjunction with the Assistant
Secretary, Office of Postsecondary Education (OPE), require UIC to

1.1 	 Return $260,050 to ED because it did not provide evidence that its 2001-2002 grant
      year participants were eligible to be served, and

1.2 	 Provide complete evidence that shows all participants who participated in the SSS
      program for the first time during the 2002-2003 and 2003-2004 grant years were
      eligible to be served or return the funds received for those years to ED.

Auditee Comments
UIC agreed with our finding that one participant was both a low-income individual and a
first-generation college student instead of first-generation only, and that one participant
was a low-income individual instead of a first-generation college student. UIC also
acknowledged that errors were made in coding. UIC stated that the 2001-2002
application included a section for the potential participant to state the income and
educational levels of his/her parents or guardians and their occupations. The counselor
interviewed the potential participant to verify the first-generation status, and other
documentation (SARS, W2s, etc.) was used to verify low-income status. Students
accepted by UIC signed a contract indicating that they met the eligibility status listed.


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UIC provided us with additional documentation it asserted supports the eligibility of 25
of the 93 participants whose eligibility we could not verify. UIC also provided us with
documentation it asserted supports the eligibility of its 2002-2003 and 2003-2004
cohorts. UIC also revised its application to include a signature from the potential
participant, information about the potential participant’s parents, and whether or not the
student lives with the parents.

OIG Response
We eliminated our recommendation to revise the application because UIC provided us
with an example of the revised application. We also slightly revised the finding based on
the additional information UIC provided. However, we did not change the corresponding
monetary recommendation.

We reviewed the additional documentation UIC submitted to support the eligibility of the
participants enrolled during our audit period and questioned in the draft audit report.
Based on this documentation, we agree that six of the participants whose eligibility we
initially questioned, were, in fact, eligible.

We reviewed the contracts we obtained during our fieldwork. The contracts did not
include any statements pertaining to the participants’ eligibility as UIC said they would.
Therefore, the contracts cannot be used to support participant eligibility.

In response to our draft report recommendation to provide evidence of its 2002-2003 and
2003-2004 grant year participants’ eligibility, UIC submitted additional documentation
that it said supported the eligibility of its 2002-2003 and 2003-2004 cohorts. However,
the documentation UIC provided was insufficient to support the eligibility of all students
in its 2002-2003 and 2003-2004 cohorts.

Finding No. 2 UIC Did Not Accurately Report the Accomplishments of Its Program

For the 2001-2002 grant year, UIC inaccurately reported the accomplishments of its SSS
program. In its 2001-2002 grant year application,5 UIC stated it would achieve seven
objectives for its SSS program. In its APR, UIC reported all objectives for SSS were 100
percent accomplished and/or ongoing. We reviewed UIC’s support for achievement of
its program objectives and found the documentation inadequate. UIC did not maintain
adequate support to demonstrate achievement of one objective and did not achieve three
other objectives as reported in its APR.

Objective #1
UIC’s performance agreement stated that its SSS program would identify and select 150
participants by October 1 each year. One hundred and one participants, or approximately
67 percent, would be both low-income individuals and first-generation college students or

5
  Objectives #1 and #2 in the application were revised by a performance agreement, which we used in
reviewing UIC’s achievement of its objectives. Objective #3 was unchanged from the application. The
project objective numbers in this report are the numbers from UIC’s grant application.

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individuals with disabilities; and 33 percent, or 49 participants, would be low-income
individuals, first-generation college students, or individuals with disabilities. In addition,
33 percent of the individuals with disabilities also would be low-income individuals. We
were able to determine the enrollment date for all 150 participants by reviewing the
participant roster from the APR. Based on the roster, only 123 (82 percent) participants
were enrolled in the SSS program before October 1, 2001.

According to the roster, 106 participants were both low-income individuals and first-
generation college students, 4 were low-income individuals only, and 40 were first-
generation college students only. However, we reviewed documentation in all 150
participants’ files for evidence of their eligibility and found that UIC did not have
sufficient documentation to support that 65 of the 106 participants were eligible as both
low-income individuals and first-generation college students. Therefore, UIC did not
achieve this objective as reported in the APR (See Finding No. 1).

Objective #2
UIC’s performance agreement stated that 70 percent of SSS participants would maintain
a semester grade point average (GPA) of 3.0 on a 5.0 scale while participating in the
program. According to the Assistant Director for SSS, achievement of the objective was
determined by calculating the percentage of all enrolled SSS participants who maintained
a GPA of 3.0 or higher on a semester basis. To determine if UIC achieved this objective,
we reviewed the transcripts for all 111 participants who were enrolled during the Fall
2001 semester and all 103 participants who were enrolled during the Spring 2002
semester. Based on our review of the transcripts, 69 percent (76 of 111) maintained a 3.0
GPA for the Fall 2001 semester and only 58 percent (60 of 103) maintained a 3.0 GPA
for the Spring 2002 semester. Therefore, UIC did not achieve this objective as reported
in the APR.

Objective #3
UIC’s grant application stated that 70 percent of SSS participants would maintain a
minimum 12-hour credit load each semester. According to the Assistant Director for
SSS, achievement of the objective was determined by calculating the percentage of all
SSS participants who maintained a 12-hour credit load or higher on a semester basis. To
determine if UIC achieved this objective, we reviewed the transcripts for all 111
participants enrolled during the Fall 2001 semester and all 103 participants enrolled
during the Spring 2002 semester. We determined that only 61 percent (68 of 111) of the
participants maintained a minimum 12-hour credit load during the Fall 2001 semester and
68 percent (70 of 103) of the participants maintained a minimum 12-hour credit load
during the Spring 2002 semester. Therefore, UIC did not achieve this objective as
reported in the APR.

Objective #6
UIC’s performance agreement stated that it would retain 54 percent of its participating
freshmen through their 4th semester, excluding those who exit the institution for reasons
of health or death. To support achievement of the objective, UIC provided us with a list
of participants who joined SSS during the 2000-2001 grant year. UIC also provided a list


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showing the status of each participant from the 2000-2001 cohort at the end of the 2001-
2002 grant year.6 However, these lists did not support the information in the APR.
Because of the numerous inconsistencies contained in the supporting documentation and
the APR, and because we could not determine the source of the discrepancies, we could
not accept UIC's claim regarding achievement of this objective.

Pursuant to 34 C.F.R. § 74.51(a) and (d), recipients are responsible for managing and
monitoring each project, program, sub-award, function, or activity. Performance reports
must generally contain a comparison of actual accomplishments with the goals and
objectives established for the period and the reasons why the recipient did not meet
established goals, if appropriate.

UIC’s 2001-2002 APR was inaccurate because UIC did not effectively monitor its SSS
program. UIC did not have controls in place to ensure it maintained records sufficient to
support the eligibility status of each participant, track the academic progress of each
participant, and track the activities in which students participated during the grant year.
UIC also did not correctly interpret its SSS objectives as written in the performance
agreement and grant application.

ED awarded UIC $260,050 for the 2001-2002 grant year to provide services to SSS
participants through seven objectives. Had UIC reported that it did not achieve all its
objectives, ED may not have funded the 2002-2003 award in its entirety.

Recommendation

We recommend that the CFO, in conjunction with the Assistant Secretary, OPE, require
UIC to

2.1 	 Develop and implement procedures for effectively and periodically monitoring its
      progress toward achieving each objective and tracking (a) the academic progress of
      each student and (b) the activities in which students participate during the grant
      year.

Auditee Comments (Objective #1)
UIC acknowledged that only 123 of the 150 participants were enrolled before October 1,
2001, and stated it has instituted procedures to more accurately report the SSS project’s
accomplishments and to verify all data in program and participant files. The procedures
include (1) the establishment of a compliance staff who will monitor all program data and
all accomplishments of objectives and verify all information included in the APR, and (2)
bi-monthly reporting of accomplishments by program objective and line item budget
expenditure.

In addition, UIC stated that it revised its application to include information about the
potential applicant’s parents, regardless of whether the student lives with the parents, and
UIC will only document eligibility based on the parents’ income and educational level. If
6
    UIC’s SSS program defines cohort as those participants who entered the program during that year.

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the potential applicants have parents who are deceased, are wards of the state, or have
official legal guardians, UIC will include that documentation in the potential applicant’s
file and use this information as documentation of first-generation and low-income status.
All SSS staff will be trained and instructed to follow these procedures consistently.

OIG Response (Objective #1)
We did not revise the finding. UIC’s objective clearly stated that all 150 participants
would be enrolled by October 1, but UIC failed to ensure that 27 participants were
enrolled by the specified date. (Participant eligibility is addressed in the OIG Response
section in Finding No. 1.)

Auditee Comments (Objective #2)
UIC asserted that it has always used the cumulative GPA each semester to calculate the
percentage of enrolled participants who maintained a GPA of 3.0 or higher. Using this
calculation, UIC claimed it met this objective for both the Fall 2001 (70.3%) and Spring
2002 (70%) semesters. Based on discussions with the OIG, UIC requested and received
approval from the ED program office to revise this objective to more accurately reflect
the way UIC calculates GPA percentages. This objective now states that 70% of enrolled
participants will maintain a cumulative GPA of 3.0 on a 5.0 scale each semester.

OIG Response (Objective #2)
We did not revise the finding. For our audit period, the objective clearly stated that UIC
would use the semester GPA to calculate the percentage of enrolled participants who
maintained a GPA of 3.0 or higher.

Auditee Comments (Objective #3)
UIC asserted that it calculates the total credit hour load in which SSS participants are
enrolled. Courses numbered 001-099 carry equivalent hours although the credits do not
count toward graduation. Equivalent hours contribute toward the calculation of tuition,
full or part-time enrollment status, and financial aid eligibility. UIC claimed that the SSS
program met the objective that 70 percent of its participants maintained a 12-hour credit
load each semester when 001-099 courses were included in the calculation of credit hour
load.

OIG Response (Objective #3)
We did not revise the finding. UIC’s objective specifically stated that each participant’s
credit load would be used to determine achievement of the objective. While the
participants may be enrolled in courses that affect tuition and enrollment status, only
courses that carry credit hours should have been used to determine the percentage of
participants that maintained a 12-hour credit load.

Auditee Comments (Objective #6)
UIC acknowledged the inconsistencies contained in the supporting documentation and
the APR.




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Finding No. 3 UIC Charged Unallowable Costs to the Program

UIC charged $5,065 in telecom expenses directly to the SSS program, failing to treat the
expenses consistently throughout the institution. For other programs and departments
within UIC, telecom expenses are included in the indirect cost pool.

Pursuant to Office of Management and Budget (OMB) Circular A-21, Attachment,
Principles for Determining Costs Applicable to Grants, Contracts, and Other Agreements
with Educational Institutions,7 (D)(1), costs incurred for the same purpose in like
circumstances must be treated consistently as either direct or facilities and administrative
(F&A) costs. According to 34 C.F.R. § 74.73, any funds paid to a recipient in excess of
the amount the recipient is entitled to receive constitutes a debt to the federal
government.

UIC charged telecom expenses directly to the SSS program because UIC officials
misinterpreted the allowability of telecommunication charges under OMB Circular A-21.
UIC claimed that telecom expenses were accounted for in a way that allowed them to be
identified and excluded from the indirect cost rate calculation, and were coded in UIC’s
University Financial and Administrative Systems (UFAS) so that they were eliminated
from the indirect cost rate calculation. However, UIC was not able to provide any
documentation demonstrating that the SSS telecom expenses were excluded from UIC’s
indirect cost pool.

Because telecom expenses were incorrectly included as part of direct costs, $5,065 in
SSS funding was not available to provide direct services to SSS participants. In addition,
UIC incorrectly computed and charged indirect costs to the SSS program. Based on our
calculation for the 2001-2002 grant year, UIC overcharged indirect costs to the program
by $43.8

Recommendations

We recommend that the CFO, in conjunction with the Assistant Secretary, OPE, require
UIC to

3.1 Return $5,1089 in federal funds to ED.
3.2 Ensure telecom expenses are treated consistently throughout the institution.

Auditee Comments
UIC asserted that, although it believes it acted in good faith to charge telecom expenses
directly to the SSS program (because it was a direct line item in the SSS ED-approved
budget), it is working with the University Accounting Office (UAO) to treat the SSS
telecom expenses consistent with other accounts throughout the University. UIC will

7
  Revised August 8, 2000. 

8
  When calculating indirect costs, UIC should exclude telecom expenses from total direct costs before 

applying the indirect cost rate. 

9
  This amount is included in Recommendation 1.1. 


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also work with ED to change the line item in the budget for future funding so telecom
charges are assigned to budget line items that provide additional SSS services. UIC will
request a budget line item change from the Department and will provide the UAO with
this change so SSS telecom expenses are treated consistent with other accounts.
Therefore, it disagreed with the OIG’s recommendation to return $5,108 in federal funds
to ED.

OIG Response
We did not revise our finding or the corresponding recommendations. UIC did not
include additional supporting documentation as part of its response to the draft of this
report. Therefore, we could not determine whether the telecom charges were excluded
from UIC’s indirect cost pool and only included in SSS’s direct costs.

Finding No. 4 UIC Could Not Support All of Its Personnel Expenditures

UIC could not provide adequate documentation to support $15,128 in salaries for two
administrative employees for the 2001-2002 grant year. During the grant year, the SSS
program employed two administrative employees who worked on multiple programs.
Both employees received their salary from multiple federal grant programs, and UIC
charged their salaries to the SSS grant based on pre-determined distribution percentages
shown on personnel forms. These employees were full-time, hourly employees who were
required to fill out leave sheets or time sheets each pay period. These leave sheets and
time sheets should have included the programs the employees worked on during the pay
period and the actual, not estimated, time spent on each program. The leave sheets and
time sheets we obtained did not include this information.

Per OMB Circular A-21, Attachment, (J)(8)(c)(2)(a), "Activity reports will reflect the
distribution of activity expended by employees covered by the system," and (e) “For
professorial and professional staff, the reports will be prepared each academic term, but
no less frequently than every six months. For other employees, unless alternate
arrangements are agreed to, the reports will be prepared no less frequently than monthly
and will coincide with one or more pay periods."

By not retaining adequate documentation, UIC cannot demonstrate that the employees’
salaries and wages ($15,128) were used to benefit the SSS program.

Recommendation

We recommend that the CFO, in conjunction with the Assistant Secretary, OPE, require
UIC to

4.1 Return $15,12810 in federal funds to ED.




10
     This amount is included in Recommendation 1.1.

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Auditee Comments
UIC stated that it provided after-the-fact certifications of the amount of time spent on the
SSS program. The administrative employees certified, and their supervisor verified, the
amount of time each employee devoted to the SSS program. UIC also provided after-the-
fact certifications indicating that the two full-time employees worked solely on the SSS
program. The employees signed, and the supervisor verified, the certifications.
Additionally, UIC said it instituted a policy that all employees, administrative and
academic professionals, will sign certifications after every pay period, verifying the
amount of time devoted to the SSS program.

OIG Response
We revised our finding and corresponding monetary recommendation. UIC was able to
provide additional documentation sufficient to support $80,353 in personnel expenditures
for two full-time employees. The after-the-fact certifications UIC provided were signed
and dated during the 2001-2002 grant year. Therefore, we eliminated this amount from
our finding and corresponding recommendation. After reviewing the additional
supporting documentation UIC provided to support the $15,128 in personnel
expenditures for the two administrative employees, we concluded that the after-the-fact
certifications attached to UIC’s response were signed and dated in 2004, after the
completion of our audit. Therefore, we did not consider the certifications acceptable
documentation.

                                   BACKGROUND
According to 20 U.S.C. § 1070a-14a, a SSS program is designed (1) to increase college
retention and graduation rates for eligible students; (2) to increase the transfer rates of
eligible students from 2-year to 4-year institutions; and (3) to foster an institutional
climate supportive of the success of low-income individuals and first-generation college
students and individuals with disabilities. The SSS program is governed by the
regulations in 34 C.F.R. Parts 74, 75, and 646.

UIC received a SSS grant (PR No. P042A010608) for the five-year period from
September 1, 2001, through August 31, 2006. ED awarded UIC $260,050 for the 2001-
2002 grant year to provide services to 150 eligible SSS participants.

              OBJECTIVES, SCOPE, AND METHODOLOGY
The objectives of our audit were to determine whether UIC’s SSS program (1) provided
only eligible services to the number of eligible students required under its agreement with
ED; (2) maintained support demonstrating that it achieved the program’s objectives as
reported to ED; (3) properly accounted for its use of SSS program funds; and (4) only
claimed expenses that were allowable for the period September 1, 2001, through August
31, 2002.




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To achieve our objectives, we

1. 	 Gained an understanding of UIC’s internal controls over its SSS program and
     accounting for federal funds. We did not assess the adequacy of the internal controls.
     Instead, we relied on substantive testing of student files, non-personnel expenses, and
     salaries and fringe benefit expenses.
2. 	 Reviewed the APR and performance agreement for the audit period.
3. Reviewed accounting records.
4. 	 Reviewed all 150 participant files.
5. 	 Reviewed a judgmental sample of non-personnel expenses. We selected 24 SSS
     expenses totaling $12,682 that were large or appeared unusual in relation to similar
     expenses (total non-personnel expenses of $44,811 recorded during the period
     September 1, 2001, through August 31, 2002). We reviewed supporting
     documentation such as purchase orders, invoices, and canceled checks.
6. 	 Reviewed a judgmental sample of salary and fringe benefit expenses for one pay
     period. We judgmentally selected the first pay period of the grant year. The sample
     of salary and fringe benefit expenses for the pay period totaled $16,687. We also
     reviewed 100 percent of the payroll certifications for the 2001-2002 grant year. Total
     personnel expenses for the 2001-2002 grant year were $174,938.
7. 	 Reviewed documentation UIC submitted as attachments to its written response to the
     draft of this report.

We also relied, in part, on computer-processed data recorded in UIC’s UFAS. UIC used
UFAS to record expenses charged to the project. To assess the reliability of the data, we
reviewed accounting records for the 2001-2002 grant year for expenses applicable to the
grant year. The data did not appear to be entirely accurate. However, the accounting
records, as a whole, reflected every transaction related to the SSS program. Because we
had corroborating evidence11 on which we could rely, and because we only intended to
use the accounting records to select transactions for determining the allowability of costs
charged to the SSS grant, the computer-processed accounting data was sufficiently
reliable for the purposes of our audit.

We performed our audit work at UIC’s administrative offices and our Chicago office
from October 2003 through June 2004. We discussed the results of our audit with UIC
officials on June 24, 2004, and provided them with the draft of this report on August 20,
2004. Our audit was performed in accordance with generally accepted government
auditing standards appropriate to the scope of the review 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 will be made by the appropriate
U.S. Department of Education officials.
11
  Corroborating evidence is evidence such as purchase orders, invoices, and canceled checks that supports
information in UFAS.

                                                  - 12 -                                                    

Final Audit Report                                                       ED·OIG/A05·E0002


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 officials who will consider them before taking final Departmental action on
the audit.

                              Jack Martin, Chief Financial Officer
                              Office of the Chief Financial Officer
                              U.S. Department of Education
                              Room4E313
                              400 Maryland Avenue, SW
                              Washington, DC 20202

                              Sally Stroup, Assistant Secretary
                              Office of Postsecondary Education
                              U.S. Department of Education
                              Room 7115
                              1990 K Street, NW
                              Washington, DC 20006

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.


                                              Sin~erel
                                          C7.Ric~ard   . owd
                                                               L£;~         

                                              Regional Inspector General for Audit 



Attachment




                                            ·13· 

Final Audit Report                                                                                        ATTACHMENT
ED-OIG/A05-E0002




                                               U N I VE RSITY OF I LLI NO I S
                                                       AT CHICAGO


          Ofr..,.01 th.e Clw\cellu< (MC 102)
          2lU3 Univc",ity Hall
          601 South Morgan 5t""'t
          Chicago, Illir.oil60607,' I28
                                                                S<:ptember 17, 2004




                Mr. Richard J. Dowd
                Regional lnsp«lor General for Audit
                U.S. Department of Education
                Office of Inspector General
                I! I N. Canal Strttl. Suite 940
                ChIcago. Illinois 60606-7204

                 Re: Control Numbct-E[)"()IGlAOS·EOOlg

                 Dear Mr. no...·d:

                    [am in receipt of tile Draft Audit Report for the Univtl"llily of Ill inois al Chicago's (UIC)
                 Student Support Services (SSS) program for the period September 1. 2001 thrOllgh Augu.st 31.
                 2002 (2001·2002 vant year) and am providing the following responses 10 the findings in
                 accordance WIth lhe instruclionslisted under ~Adminismll~ M.tters~ in the Oraft Audit Repon.

                    We Ill: providing additional in formation and documentation about ( I) fulfillment of
                 aSSUlllntts,( 2) the acwmplishments ofO\lf SSS progIlIrll, (3) .Ilowlble costs charged 10 the
                 grant. and (4) SSS personnel expenciilUTeS.


                                                           Sincerely.


                                                         ~.~
                                                           Sylvll Manntng
                                                           "","",,10<




                 AnachmmlS




                                                                  UIC
                                                  Phone (11l1 41 3-l35O · Fn (3 11) 41 3-3J93




                                                                   -1-

Final Audit Report                                                                                 ED-OIG/A05-E0002




                                UNIVE RSITY OF lLLlNOIS AT C HI CAGO
                           RESPONSE TO TH E DRAFT AUDIT R E PORT O F TH E
                               ST UDE!'(f SUPPORT S ERVICES PROG RAM


             OIG
             Finding No. I VIC Failed to Provide Evidcnce or FuUlIImtnt of Ass urances

             "UIC provided only eligible services to its participants. However. Ole did not maintain
             records that showed it fulfilled its assurances that at least two-thirds (approlCimately 67
             percent) ofille 2001-2002 grant year program participants were both low-income and
             first generation college students. Based on the partieipant roster for the 2001-2002
             Annual Performance Report (APR), UIC served I SO participants. According to the
             roster, 106 participants were both low-income and first-generation college students, 40
             were first generation college students, and 4 were low-in<:ome students.

             We reviewed SSS records for all ISO participants listed on UIC's APR: however, we
             could oot subslantiate the eligibility stalus UlC reported 10 ED. Specifieall y, we could
             not verify;

             •       the low-income or first generation eligibility of 14 participants who wert' shown
                     IS both low-income and fltSt generation college students;
             •       the first gener.J.tion eligibility of 50 participants who were shown IS both low­
                     income and first generation college students;
             •       the low-income eligibility of7 panicipants who wen: shown IS both low-income
                     and flf$l generation college students; and
             •       the first generation eligibility of22 participants who were shown as first
                     generation college students only."

             UIC's Res ponse
             •     We are providing the documentation used to determine the status oCthe 14
                   panicipants who were shown as both low-in<:ome and first- generation college
                   students (Appendix A).
             •     Of the SO participants whose first-generation status was questioned, 14 are stiU
                   enrolled at UIC and have signed a verification {onn that they are first-generation
                   college students (Appendix B). Additionally, we have sent letters to the last
                   known address of the remaining 36 students with return postcards to verify thei r
                   first-generation status (Appendix C). We have attentpted follow-up wi th
                   telephone calls to the last known home telephone number. We ask the indulgence
                   of the OIG until the postcards are J'ttumed. We anticipate that we ahould have the
                   verification no later than 30 days from the date of this response.
             •     We are providing additional documentation that establishel the low-income
                   eligibility of the seven participants (Appendil D).




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Final Audit Report                                                                                  ED-OIG/A05-E0002




              U/C 's
             SSSRupolU(!
              Pag.,



              •        We are in the process of locating the 22 participants who were shown as first­
                       generation college students_ Those that are S1ill enrolled have signed the
                       verification forms (A pptnd b: E); letters and return postcards have been sent to
                       the last known address of the remaining students (Apptndb: C). We ask: OIG's
                       indulgence until the postcards have been return, which we anticipate will be
                       with in 30 days of this response.
              O IG

             " In addition, we determ ined that:

              •        one participant was listed as a first generation college student onl y, but the file
                       showed the participant qualified as both a low-income and first generation college
                       student; and
              •        one participant was listed as a first generation college student only, but the file
                       showed the participant qualified only as a low-income student."

              UIC's Response
              We agree with OIG's determination that one participant was both low-income and first
              generation instead offlrst generation only. One additional student was low-income
              instead offim-gencration. We acknowledge that errors were mooe in coding.

              O IG
              "According 10 34 C.F.R. 646.32(b).1 a grantee shall maintain participant records that
              show the basis for the grantcc's detennination that each participant is eligible to
              participate in !he projcct under 34 C.F.R. 646.3. l Pumlant to 34 C.F. R. 646.11 , a
              grantcc shall assure that at least two-thirds ofa projcct', participants are both low-income
              individuals and first generation college students. UIC's APR staled that by signing the
              repon. VIC is attesting to the fact that the information in !he APR is accurate, complete,
              and readily verifiable."

              "VIC could not substantiate irs claim that it served ISO eligible participants because of
              ( I) unsigned statements asserting the eligibility ofparlicipants, (2) incorrect
              interpretations 10 questions on Student Aid Repons (SAR), and (3) inconsistent use of
              eligibility documentation."

              ..       "UIC's SSS application included a section for the potential participant to slate the
                       educational level ofhislher parent/guardian. The app lication also contained a
                       section for the potential participant to state fami ly income level. However, UIC
                       did not obtain signatures from the potential participants or their parent.slguardians




                                                          -3-                                                          

Final Audit Report                                                                                ED-OIG/A05-E0002




              UIe ,
             .s:s:s RQponse
             Pagel



                     attesting to the veraci ty of the fltSt generation and low-income "atus of the
                     panicipanlS as required by 20 U.S.C. 107a-11(e)(2). Without a signed statement
                     or other corroborating documentation, ED does oot have assurances that the
                     information on the application was an assertion made by the potential partieipant
                     and/or his'her parent or guardian:'

             UIC's Response
             The application packet we used for the 200 1-2002-grant year included a seetinn for the
             potential panicipantto state the income and education levels ofhillher parents or
             guardians and the parent's occupati on. The potential applicant did not sign th at soction
             of the application. However, the potential applicant was interviewed by a COUfl$CIOr to
             veri fy fi~t-generation SUilUS. The Student Aid Report (SAR), W2s, or other
             documentation were used to verify low-income. In instances when the SAR had answers
             to the questions about parents/guardians educationai level that were left " Blank" or had
             ''College'' checked, the counselo~ verified whether the parents/guardians had obtained a
             Baccalaureate. Often, the counselors were prompted 10 do this in their interviews,
             because "'College" was checked on the SAR, but the occupation of the parent (listed on
             the appl ication) was inconsistent with occupations requiring college degrees. The
             counselon found that often the item was checked as ''College'' when the potential
             applicant's parents/guardians had gone to college or even obtained III Associates Degree,
             but had not received a Bachelor's degree. The coufl$Clor completed the intake form and
             listed the potential applicant's first-generation 51atus and verified the low-income status
             with one or more oftbe acceptable forms for documenting low-income status (e.g. W2,
             1040 or other Tax Form, T ANF or AFOC Eligibility Card, etc) Students who were
             8C(:epted based on eligibility signed a eontract indicating that they met the eligibility
             statuses as determined by the program.

             We received guidance from 34 CFR 646 and 2Q U.S.C. 107 a-I 1(e)(2) as 10 the
             documentation needed to assure the low-income "atll5 of potential apptiClllts, but both
             the CFR and the U.S.C are silent about what is aceeptable documentation to assure first­
             generation status. Additionall y, the Free Application for Federal Student Aid (FAFSA)
             instructions provide no infonnation, ex planation or instructions for interpreting the
             questions abo ut "Highcst School Completed." UIC used counselor verification and
             student interviews where fi~t generation status was questioned, because o r our
             experience with studenlS' misinterpretation orthe question. Our st udents also signed
             contracts aner counselor interviews attesting to their eligibility for the program; however
             based on the recommendation from OIG, we have revised our application packet to
             contain a signature from th e potential applicant, and have added grades I J, 14, IS, and




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Final Audit Report                                                                                   ED-OIG/A05-E0002




             UIC 's
             SSS Response
             Page 4




             AA degree as additional options rrom which the potential applicant ean ehoose 10
             doeument hislher first genel"lltion status (A ppe nd il: F),

             OIG
             ...      ''To veriry first generation status, VIC's SSS officials reviewed each potential
                      participant's SSS application. SSS counselors assisted each potential participant
                      irhe or she did not understand the questions on the application. If the application
                      claimed first generation eligibility, the SSS officials tried to obtain the potential
                      participant's SAR. From the SAR, SSS officials used the potential participant's
                      responses 10 questions 22 (Father's High Grade) and 23 (Mother's High Grade). J
                      Irthe response status was accepted beeau$C UIC officials intetpreted the response
                      to mean that the parents attended college but did nol obtain Bachelors' degrees.
                      When a potential panicipant's response to the questions we "Unknown" or
                      "Blank," SSS officials interpreted the responses to mean the parents did not have
                      Bachelors' degrees. and the potential participant was a first generation college
                      student. We also learned from SSS officials thai the responses on the SAR were
                      transrerrt:d to VIC's financial aid report, also called the SAM report. Ir a
                      potential panicipanl marked '''College Of beyondHon the SAR. the SAM report
                      would show a "C." Similarly, irthe potential participant's SAR showed "Blank,"
                      the SAM repon wouki have an "'N" Of the field would be blank. SSS officials
                      interpreted all of these responses 10 mean that the parents did not have Bachelors'
                      degrees.."

                      "VIC's interpretation of the responses is incorrect. The questions ask ror the
                      highest education grade level completed. Based on the code definitions provided
                      by ED's office ofFcdcnll Student Aid, "College or beyond" means that the parent
                      has completed college and obtained, at a minimum, a Bachelor', degree. In
                      addition, "Unknown" or "Blank" in these responses reflect that the applicant
                      eilhcrdocs not know hislher patents educational level or did not respond to the
                      questions."

             VIC'. RespilllSe
             Because of our experience with potential applicants' misinterpretation orthe question,
             "College or Beyond", and the research done by the Illinois Student Assistance
             Commission regarding the first gencnttion SUltUS orrccipicnts or state student financial
             assistance, we obtained infonnation through additional questionnaires scntto the
             applicant rather than rely completely on the FAFSA or SAR (ISAC, 2003; ISAC. 2004
             {Appendix G {). UIC used counselor verification and student interviews whc:re first
             gencnttion sUltus was in question. Our students also signed contracts after counselor




                                                          -5-                                                           

Final Audit Report                                                                                ED-OIG/A05-E0002




             UIC's
             SSS Response
              PageS




              interviews. verifying their eligibility for the program; however bas«! on the
              recommendation from OIG, we have revised our application packet to contain a signature
              from the potential applicant and have added grades 13, 14, 15, and AA degree 1.5
              additional options from which the potential applicant can choose to document hislher fint
              geneTlltion status (Appendls: F),

              OIC
              ..    " For some students who lived with a guardian, the guardian's income level W/llJ
                    used to detennine low-income status, and the parents' educational level was used
                    to determine first geneTlltion status. However, UIC did not provide us with
                    documentation proving the guardians were legal guardians or just individuals with
                    whom the potential panicipant resided. UIC must be able to substantiate its use
                    of information from guardians and must be consistent in its source ofinfonnation
                    to determine fllSt geneTlltion and low-income eligibility status."
             " B«ause UIC could not substantiate the eligibility status ofthe participants as reported
             10 ED, it is po5Sible thai UIC served Sludents who were oot eligible to participate in the
             SSS program."


              UlC's Res ponse
              We have revised our application to include information about the potential applicant'.
              parents whether or not the student lives with the parents and wi ll only docUment
              eligibility based on the parents' income and educalionallevel. If the potential applicants'
              have parents who are deceased, are wards of the state or have offici II legal guardians, we
              will inc lude that documentation in the potential applicant', file and use this information
              as documentation offmt generation and low income Il8IUS. All SSS stafTwill be trained
              and instrucled 10 follow these procedures consistently.



              OIC
              Recommendation
              "We reconunend that the ChiefFinanciaJ Officer (CFO), in conjunction with the
              Assistant Secretary, Office of Postsecondary Education (OPE), require UIC to
              1.1 Provide documentation supponing the eligibility of participants for the 200 1-2002
                  grant year and subsequent years of the grant (2002-2003 and 2003-2(04) or return
                  $260,050 to ED.
              1.2 Revise its SSS application to inc lude a space for obtaining signatures from polenlial
                  participants and/or their parents to ensure thatllle statements made on the
                 application are truthfu l."




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             U/e's
             SSSRu polUe
             Page 6



             VIC's R npo nR
             We an: providing documentation supporting the eligibility of participants for the 2001.
             2002·grant year to accoWlt for some of the 150 eligible students we served during the
             2001·2002·grant year. The new application referred to in Appendil F was just instituted
             with the fall 2004 cohon of potential applicants. Because of the CIG request for
             verification of additional cohor1S of students (2002·2003 and 2003·2004 grant yellB), we
             are in the pro<:ess of obtaining signed forms verifyill8 the first·generation status of these
             cohorts. Again, we request the indulgence of the OIG as we work diligentl y 10 obtain
             verification forms from ali of our 2002·2003 and 2003·2004 cohorts of students.

             Based on the recommendation ofOIG, we have revised our SSS application to include a
             space for student signature on the application, verifying the information provided
             (AppeDdlJ: F).

             OIG
             FindiDg No.2 VIC Did Not Accuntely R eport tbe Acto mplishmeJl u of Iu Prognm

             "For the 2001·2002 grant year. VIC inaa:urately reported the accomplishments of its SSS
             program. In its 200 1·2002 grant year application, 4 VIC stated it would achieve seven
             objectives for its SSS program. In its APR, VIC reported all objectives for SSS wen: 100
             percent accomplished and/or ongoing. We reviewed VIC's iUpport for achievement of
             its program objectives and found the documentation inadequate. UlC did not maintain
             adequate support to demonstrate achievement of one objective and did not achieve three
             other objectives as reported in its APR."

             Objective II I
             "VIC's performance ag:reementstated that its SSS program would identify and select 150
             participants by October I each year. One hundred and one participants, or approl(imately
             67 percent, would be both low·income and first generat ion college lIudents or individuals
             with disabilities; and 33 pe«:ent, or 49 participants, would be low·income students, first
             generation college students, or individuals with disabi lities. In addition, 33 percent of the
             individuals with disabilities also would be low·income students. We were able to
             determine the enrollment date for all 150 participants by reviewing the participant roster
             from the APR. Based on the roster, only 123 (82 percent) participants were enrolled in
             the SSS program before October 1,2001."

              VIC's Retpoale
              We acknowledge that only 123 of the 150 partiCipants were enrolled before October I .
              2001, but we continued to notify retLiming students that they needed to report for




                                                         -7-                                                           

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             U/e's
             SSSRu polUe
             Page 6



             VIC's R npo nR
             We an: providing documentation supporting the eligibility of participants for the 2001.
             2002·grant year to accoWlt for some of the 150 eligible students we served during the
             2001·2002·grant year. The new application referred to in Appendil F was just instituted
             with the fall 2004 cohon of potential applicants. Because of the CIG request for
             verification of additional cohor1S of students (2002·2003 and 2003·2004 grant yellB), we
             are in the pro<:ess of obtaining signed forms verifyill8 the first·generation status of these
             cohorts. Again, we request the indulgence of the OIG as we work diligentl y 10 obtain
             verification forms from ali of our 2002·2003 and 2003·2004 cohorts of students.

             Based on the recommendation ofOIG, we have revised our SSS application to include a
             space for student signature on the application, verifying the information provided
             (AppeDdlJ: F).

             OIG
             FindiDg No.2 VIC Did Not Accuntely R eport tbe Acto mplishmeJl u of Iu Prognm

             "For the 2001·2002 grant year. VIC inaa:urately reported the accomplishments of its SSS
             program. In its 200 1·2002 grant year application, 4 VIC stated it would achieve seven
             objectives for its SSS program. In its APR, VIC reported all objectives for SSS wen: 100
             percent accomplished and/or ongoing. We reviewed VIC's iUpport for achievement of
             its program objectives and found the documentation inadequate. UlC did not maintain
             adequate support to demonstrate achievement of one objective and did not achieve three
             other objectives as reported in its APR."

             Objective II I
             "VIC's performance ag:reementstated that its SSS program would identify and select 150
             participants by October I each year. One hundred and one participants, or approl(imately
             67 percent, would be both low·income and first generat ion college lIudents or individuals
             with disabilities; and 33 pe«:ent, or 49 participants, would be low·income students, first
             generation college students, or individuals with disabi lities. In addition, 33 percent of the
             individuals with disabilities also would be low·income students. We were able to
             determine the enrollment date for all 150 participants by reviewing the participant roster
             from the APR. Based on the roster, only 123 (82 percent) participants were enrolled in
             the SSS program before October 1,2001."

              VIC's Retpoale
              We acknowledge that only 123 of the 150 partiCipants were enrolled before October I .
              2001, but we continued to notify retLiming students that they needed to report for




                                                         -8-                                                           

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              UIC's
              SSS Response
              Page 7




              mandatory services if they wished to be considered as continuing participants. We have
              instituted procedures to more accurately report SSS accomplishments and to verify all
              data in program and participants files. The procedures inc lude:
                      The establishment ora compliance staffwho will monitor all program data and all
                       accomp li&hments of objectives and verify all infonnalion included in the APR;
                       and bi-monthly reporting of accompl ishments by program objective and line item
                       budget el[peoditures.

              OIG
              "According to the roster. 106 participants were both low-income and first generation
              college students, 4 were low-income only, and 40 were first generation college students
              only. However, we reviewed documentation in all 150 participants' files for evidence of
              their eligibili ty and found that UTC did not have sufficient documentation 10 support 72 of
              the 106 participants were eligible as both low-income and first generation co llege
              students. Therefore. UIC did not achieve this objective as reported in the APR (See
              Finding No 1)."

              VIC's Response
              We have revised our application 10 include infonnation about the potential applicant's
              parents whether or not the student lives with the parents and will only document
              eligibility based on the parents' income and eduC8tionallevel. If the potential applicants'
              have parents who arc deceased, are ward.! oftbc stale or have official legal guardians, we
              will include that documentation in the potential appl icant'. fill.nd U5C this infonnation
              as documentation offirst generation and low income status. All SSS staffwiJl be trained
              and instructed 10 follow these procedures consistently.

              OIG
              ObjKtive N2
              "UIC's perfonnanc:e agreement stated that 70 percent ofSSS participants would maintain
              a semester gntde point average (GPA) oD.O on a 5.0 scale while partiCipating in the
              program. According 10 the Assistant Director for SSS, achievement of the objective was
              detennined by calculating the percentage of all enrolled SSS participants who maintained
              a GPA of3.0-0r higherona semester basis. To detcnnine ifUIC achieved this
              objective, we reviewed the transcripts for all III participants who were enrolled during
              the Fall 2001 semester and all 103 partici pants who were enrolled during the Spring 2002
              semester. Based on our review of the transcripts. only 69 percent (76 of III) maintained
              a 3.0 GPA for the Fall 2001 semester and only 58 percent (60 of 103) maintained a 3.0
              GPA for the Spring 2002 semester. Therefore, U IC did not achieve this objcctive as
              reported in the APR."




                                                         -9-                                                         

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             UIC's
             SSSRupons~
             Pap 8



             VIC's Response
             The SSS program has always used the cumulative GPA each semester to calculate the
             percentage of enrolled participants who maintained a GPA of3.0 or h igher. Using thi s
             calculation, UIC met this objective for both the Fall 2001 (10.3 %) and Spring 2002
             (700/.). Based on discussions with the OIG, UlC requested and received approval from
             the ED program office to revise this objective to more accunltely reflect the way UIC
             calculates GPA percentages (A ppendb; H). This objective now stales that 700/0 of
             enrolled participants will maintain a cumulative GPA of 3.0 on a 5.0 scale each semester.


             O IG
             O bjectIve #3
             "UIC's grant application Slated that 70 percent o f SSS participants would maintain a
             minimum l2-hour credit load each semester. According to the A.s5istant Director for
             SSS, achievement of the objective was detennined by calculating the percentage of all
             SSS participants who maintained a 12-hour credit load or higher on a semester basis. To
             determine if UIC achieved this objective, we reviewed the transcriptS for all III
             participants enrolled during the Fall 200 1 semester and all 103 participants enrolled
             during the Spring 2002 semester. We detennined thl! only 61 percent (68 of III) o f the
             participants maintained a minimum 12·hour credit load during the Fall 200 1 semester and
             68 percent (10 of 103) o f the participants maintained a minimum 12·hour credi t load
             during the Spring 2002 semester. Therefore, UIC d id not achieve this objective as
             reported in the APR. ~

              VIC's Respoase
              UIC calculates the total credit hour load in which SSS participants are enrolled. CoUI'$CS
              numbered 001-099 carry equivalent hours although no credit toward graduation.
              Equivalent hours contribute toward the calcul ation of lUi lion, full or paM-time enroll ment
              status and financial aid eligibility. The SSS program met the objective that 10% ofilS
              participants maintained a 12-hour credit load each semester when 001 · 099 courses wen:
              inc luded in the calculation of c redit hour load.

              O IG
              Obj ective #6
              " UIC's perfonnance agreem ent staled that it wo uld retain 54 percent of its participating
              freshmen through their 4'" semester, excluding those who exit the institution for reasons
              of health or death. To s upport achievement orthe objective, UIC provided us with a list
              of participants who joined SSS during the 20Q0.200\.grant year. UIC also provided a list
              showing the status of each participant from the 2000·2001 cohort at the end of the 200 1-




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Final Audit Report                                                                                ED-OIG/A05-E0002




             we'"
             sss RespolUe
             Page    9



             2002 grant year.' However, these lists do nol suppon the information in the APR.
             Because of the numerous ioconsistencies contained in the supponing documentation and
             the APR, and because we cou ld not detennine the source of the discrepancies, we cannot
             accept UIC's claim regarding achievement of this objective."

             "VIC's 2001-2002 APR was inaccurate because UIC d id not effectively moru tor its SSS
             program. UIC did not have controls in place to ensure it maintained records sufficient to
             track the academic progress o f each participant and the acti vi ties in which students
             panicipated during the grant year. UIC also did not correctly interpret its SSS objectives
             as written in the perronnance agreement and grant application."

              UIC', Rtsponse
              We acknowledge the inconsistencies contained in Ihe supponing documentat ion and the
              API<

              OIG
             Rec:o PlPleild adon
             "We recommend that the CFO, in conjunction with the Assistant Secretary, O PE, require
             UIC to

              2. 1 Develop and implement procedw-es for effectively and periodically monitoring its
                 progress toward achieving each objective and tracking <a) the academic progress of
                 each sNdent and (b) the activities in which students participate during the grant year."

              VIC', Rn poDse
              In addition to the improved monitoring by the compliance staff, the SSS program now
              uses a computer program to input all participant data. including academic progress every
              month, well before semester grades are given. This monthly monitoring o f panicipant
              progress will allow us to intervene with necessary suppon services so that more slUdents
              will be retained and their GPAt; will improve. The dales and types o f suppon services are
              also entered into OUT computer monitoring system. The comp lete en tries are checked and
              verified by our compliance staff on a bi-monthly basis.

              OIG
              FIDding No. 3 UI C C barged Unallow able Costs to tbe Progra m

              "UIC charged $5,065 in telecom expenses directly to the SSS program. fai ling to treat the
              expenses consistently throughout the institution. For other programs and departments
              within UIC, telecom expenses are included in the indirect cost ponl."




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Final Audit Report                                                                                  ED-OIG/A05-E0002




             UIC's
             SSS R.esponse
             Page 10



             "UIC charged teleoom expenses directly to the SSS program because UIC officials
             mis interpreted the a1lowabilityoftelecommunication charges under OMB Circular A-2 1,
             Attachment, (J)(7). UIC claimed that telecom expenses were accounted for in a way that
             allowed them to be identified and excluded from the indirect cost rate calculation, and
             were coded in UIC's University Financial and Administrative Systems (UFAS) so that
             they were eliminated from the indirect cost rale calculation, However, UlC was not able
             to provide any docwnentation demonstrating that the SSS telecom expenses were
             excluded from UIC's indirect cost pool."

             OIG
             Recomme ad lt loos
             "We recommeoo that the CFO, in conjWlction with the Assistant Secretary, OPE, require
             UICto

              3.1    Return S5,IOS1 in federal funds to ED.
              3.2    Ensure telooom expenses are treated consistently throughout the institution.


             UIC', R esponse
             Although we beliC\'e we acted in good faith to charge tel¢Otn expenses directly 10 the
             SSS program because it was a d irect line item in the SSS ED approved budget, we are
             workinS with the Uni'iersity Accounting Office (UAO) to treat the SSS lelocom expenses
             consistent with other accounts throughout the Univenity tIw have fixed iDdircct cost that
             cannoc be adjusted in an indirect cost pool and that have similar PUl'pOSCS and like
             circumstances, We will also wort with the Department 10 change the line item in the
             budget for future funding so that the leleoom cllarges are assigned to budget line items
             that provide additional SSS services. We will request I budget line item change from the
             Department and will provide !he UAO with thi s change so !hat SSS leleoom expenses are
             trealed consistent with other at:OOWlts. Therefore we disagree with the recommendation
             to return S5,108 in federal funds 10 ED.

              OIG
              "FlndlDg No4 UlC Co uld Not Support All o( Ib Penoanel Elpcnd ltuns"

              "UIC could not provide adequate documentation to support SI 5, 12S in salaries for two
              administrative employees and SSO, 353 in salaries ror two full-time emp loyees for the
              2001-2002 grant year",




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Final Audit Report                                                                               ED-OIG/A05-E0002




             Ule',
             .s;ss RespolUe
             Page 1/



             •       "The SSS program emplo~ two administrative employees who worked on
                     multiple programs during the grant year. Both employees received the ir salary
                     from multiple federal grant programs, but UIC charged their salaries to the SSS
                     grant based on pre-detennined distribution percentages shown on personne l
                     fonns. These employees were full-time hourly employees who arc required 10 fill
                     out leave sheets or time sheets each pay period. These leave sheets and time
                     sheets should have included the programs the employees worked on during the
                     pay period and the specific time spent on each program. The leave sheets and
                     time sheets we obtained did not include this infonnation."

             VIC's Res ponse
             We are provid ing aRer-the-fact certification of the amount of time spent on the SSS
             program. The employees have certified and their supervisor has verified the amount of
             time each employee devoted to the SSS program (Appen d b: I).

             OIG
             •       "For the two full-time emp loyoes working solely on SSS, we did not receive after­
                     the· fact certifications stating that the employees worked only o n SSS for !he
                     period QOwro:i by the certifications."

             "By not retaining adequatedocumc:ntation, U1C cannot demonstrate that the employees'
             salaries and wages (595, 481) were used 10 benefit the SSS program."

             O IG
             Recom me nda tiOD
             " We ~mrnend that the CFO, in conjunction with the Assi stant Secretary, OPE, require
             Uleto
             4. 1  Provide documentation adequate to support 595,481 ' or return the funds to ED

              VIC's Res ponse
              We are providing after-the-fact certification indicating that the two full-time employees
              worked solely on the SSS program. The cert ifications have been .igned by the
              employees and verified by their supervisor (Appendix J). Additionally, we have
              instituted a policy that al l employees, administrati ve and academic professionals sign
              certifications ancr every pay period. verifying the amount of time d evoted to the SSS
              program, although it is the policy of the University that academic professionals only
              submit faculty analysis reports. The documentation in Apptndb: I and J support the fact
              that the employees in question spent the time indicated and approved in the SSS budget.




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