oversight

Edison State Community College's Compliance with Selected Requirements of the Student Financial Assistance (SFA) Programs.

Published by the Department of Education, Office of Inspector General on 2006-03-15.

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

                       UNITED STATES DEPARTMENT OF EDUCATION
                                      OFFICE OF INSPECTOR GENERAL
                                               Chicago/Kansas City Audit Region

                       111 N. Canal St. Ste. 940                            8930 Ward Parkway, Ste 2401
                       Chicago, IL 60606-7297                               Kansas City, MO 64114-3302
                       Phone (312) 886-6503                                 Phone (816) 268-0500
                       Fax (312) 353-0244                                   Fax (816) 823-1398

                                                       March 15, 2006

                                                                                 Control Number ED-OIG/A05G0012

Dr. Kenneth A. Yowell
President
Edison State Community College
1973 Edison Drive
Piqua, Ohio 45356

Dear Dr. Yowell:

The purpose of this letter is to notify you that we are terminating our audit of Edison State
Community College’s (College’s) compliance with selected requirements of the Student
Financial Assistance (SFA) programs authorized under Title IV of the Higher Education Act of
1965, as amended (HEA). The objectives for our audit were to determine if, for the fiscal year
ended June 30, 2005, the College complied with the HEA and student financial assistance
regulations governing (1) the use of professional judgment in determining the amount of SFA
funds that students are entitled to receive, (2) the return of SFA funds for students who had
withdrawn from programs, and (3) appeals for unsatisfactory academic progress.

We identified two issues during our survey.

   • 	 The College has a published Satisfactory Academic Progress (SAP) policy that does not
       comply with the federal maximum-credit-hours-attempted limit for SFA recipients.
       However, the College had not awarded any SFA funds to any students who had exceeded
       this federal limit. It also agreed that its SAP policy is not in compliance with the federal
       maximum-credit-hours-attempted limit and stated that it would correct the problem.

   • 	 The College’s Academic Catalog and its website could be interpreted as guaranteeing
       immediate employment upon graduation to students enrolled in certain of its programs.
       The College stated that it would revise its Catalog and website to clarify that immediate
       employment is not guaranteed for any of its students.

We have terminated our audit because we did not identify any material noncompliance with the
SFA regulations governing our three audit objectives other than the minor issues identified
above.

Methodology

Before terminating our audit, we performed the following procedures:



          Our mission is to promote the efficiency, effectiveness, and integrity of the Department’s programs and operations.
Dr. Yowell                                                                               Page 2 of 3
ED-OIG/A05G0012

• 	 Reviewed the HEA, student financial assistance regulations, and relevant portions of the
    2004-05 FSA Handbook and interviewed staff of the FSA Case Management Team to clarify
    certain FSA requirements;

• 	 Interviewed auditors of Deloitte and Touche LLP, which was the firm that conducted
    independent audits of the College required under Office of Management and Budget Circular
    A-133, and reviewed supporting documentation for their audits of the College for the fiscal
    years ending June 30, 2004 and June 30, 2005;

• 	 Interviewed personnel in the College’s student financial aid office as well as students who
    had filed SAP appeals or appeals of professional judgment decisions;

• 	 Determined if the College’s data on student awards was consistent with data from the
    National Student Loan Data System and the Central Processing System to support whether
    we could rely on the computer generated data of the school for evaluating SFA
    disbursements;

• 	 Determined the reliability of the lists of students with professional judgment adjustments,
    satisfactory academic progress appeals, and return of SFA funds calculations that the College
    provided by selecting and testing control samples;

• 	 Determined from file reviews of all SFA recipients who had met or exceeded the maximum
    limit of credit hours attempted allowable by federal regulations as a further test that the
    College had not made any overawards. Determined if the College had data to support its
    statement in the online catalog that some of its programs lead to immediate employment
    upon program completion.

We also obtained and tested separate data samples in three areas. These consisted of samples
evaluating whether the College followed the HEA and all Departmental guidance regarding the
use of professional judgment in determining the amount of SFA funds that its students were
entitled to receive, a sample for evaluating and documenting appeals for unsatisfactory academic
progress, and a sample for calculating the amounts of SFA funds that should have been returned
to the Department and/or lending institutions and comparing them to the actual returns . We
found no exceptions in any of these tests. The following table shows the sizes of the universes
and samples for each of our tests:

                                Universe and Sample Sizes
                    What We Tested             Size of Universe Size of Sample
          Approved Professional Judgment              89              30
          Professional Judgment Control Sample       1,530            30
          Approved SAP Appeals                             120                30
          Denied SAP Appeals                               10                 10
          SAP Control Sample                              1,489               30
          Calculations of Returns of SFA Funds             170                30
          SFA Returns Control Sample                      1,449               30
Dr. Yowell                                                                                     Page 3 of 3
ED-OIG/A05G0012

         Note: We conducted control sample testing to provide some assurance that the lists
         provided by the College included all of the cases that should have been included in
         each category.

We conducted our onsite fieldwork between December 5, 2005, and December 8, 2005 at
Deloitte and Touche LLP offices in Dayton, Ohio, and during the period from December 12,
2005 to January 13, 2006. We performed our work in accordance with generally accepted
government auditing standards appropriate to the scope of our audit.

Administrative Matters

Our audit was limited to the work described above and would not necessarily disclose all
material weaknesses in the College’s administration of the SFA programs. Accordingly, the
contents of this letter should not be construed as acceptance or approval of the College’s
administration of SFA programs. The termination of this audit does not preclude further reviews
and audits of this or similar areas by the Office of Inspector General, and it does not preclude the
U.S. Department of Education from taking further action concerning the College’s
administration of the SFA programs. The work we performed is not a substitute for any other
reviews or audits required by law, license, or accreditation.

In accordance with the Freedom of Information Act (5 U.S.C. § 552), reports and other
documents 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.

We wish to express appreciation for the cooperation and assistance extended by your staff during
the audit. Should you have any further questions regarding our work, please contact Margaret
Montgomery at (816) 268-0514 or Jonathan Enslen at (312) 886-8649. No response to this letter
is required.

                                       Sincerely,



                                       Richard J. Dowd
                                       Regional Inspector General
                                        for Audit

cc: 	 Sue Szabo, General Manager for Borrower Services, FSA
      Douglas Parrott, Chicago Area Case Director, FSA
      Sherry Quade, Audit Liaison Officer, Institutional Audits, FSA