oversight

Baker College's Compliance with Selected Provisions of the Higher Education Act of 1965 and Corresponding Regulations

Published by the Department of Education, Office of Inspector General on 2010-08-24.

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

                                   UNITED STATES DEPARTMENT OF EDUCATION
                                                        OFFICE OF INSPECTOR GENERAL

                                                                                                               AUDIT SERVICES
                                                                                                  Chicago/Kansas City Audit Region


                                                                     August 24, 2010

                                                                                                    Control Number
                                                                                                    ED-OIG/A05I0012

James F. Cummins
President
Baker College
1050 West Bristol Road
Flint, Michigan 48507

Dear Mr. Cummins:

This Final Audit Report, entitled Baker College’s Compliance with Selected Provisions of the
Higher Education Act of 1965 and Corresponding Regulations, presents the results of our audit.
The objective of the audit was to determine whether Baker College (College) correctly identified
when distance education students began and ceased attendance when it (1) determined students’
eligibility for Federal student aid disbursements and (2) performed return of Title IV aid
calculations. Our original audit period was award year 2006-2007. However, the College did
not retain source data used for determining the weekly attendance recorded in its electronic
system of records for any of the quarters during that award year. Therefore, we expanded our
audit to include testing the supporting documentation for the fall 2007 and winter 2008 quarters
(part of award year 2007-2008) to determine the reliability of the College’s electronic system for
maintaining attendance records.




                                                      BACKGROUND 



According to the College’s 2007-2008 catalog, the College is a non-profit, independent, co­
educational institution. It was incorporated on September 17, 1909, as a Michigan non-profit
corporation.

The College is accredited by The Higher Learning Commission, a Commission of the North
Central Association of Colleges and Schools. Per its 2007-2008 school catalog, the College is
the largest independent college in Michigan. The College serves more than 35,000 students and
operates 9 campuses, 6 extension sites, and a distance education program. It offers more than
150 programs awarding certificates and associates, bachelors, and masters degrees. Students can
be enrolled in both distance education and traditional courses within a single quarter.

The Baker College Center for Graduate Studies manages the distance education program and
offers online programs in four 12-week quarters consisting of two 6-week sessions. Distance
 The Department of Education's mission is to promote student achievement and preparation for global competitiveness by fostering educational
                                                   excellence and ensuring equal access.
Final Report
ED-OIG/A05I0012                                                                      Page 2 of 37

education classes can be 6 or 12 weeks in duration. Students may enter distance education
programs at the beginning or midpoint of any quarter, and the student’s enrollment status (full­
time or less) is determined by the classes in both sessions. Non-distance education programs are
offered in an academic year consisting of three 10-week quarters (fall, winter, and spring) and a
9-week summer quarter. Students must begin the program at the beginning of a quarter.

The College used two computer systems to document attendance for distance education students.

   1.	 Blackboard™, a commercial web-based software product, is used to deliver the College’s
       online instruction. It is used by both students and instructors. Examples of information
       in the system include student logons, pages viewed, academic postings, grades,
       participation in discussion groups, academic assignments, and records of interactions
       with the instructor. Blackboard data are the primary evidence of class participation
       (attendance) for distance education students.

   2.	 Carina, a College-developed management information system, contains a module to
       record student attendance in both on-line and on-campus classes. Each week, instructors
       determined whether the student attended at any time during the weekly period of
       attendance and entered the determination into Carina. Carina attendance records
       document only that the student attended at some time during the weekly period of
       attendance. The Carina attendance records do not identify the date or nature of the
       student’s last academic activity during the weekly attendance period. The President of
       Baker College Online informed us that the College considers the Carina attendance data
       to be the student’s official record, and the College used those data for determining
       student eligibility and calculating return of Title IV aid for distance education students
       who received Federal funds.

The purpose of the programs authorized by Title IV of the Higher Education Act of 1965, as
amended (Title IV, HEA), is to provide financial assistance to students attending eligible
institutions of higher education. For award years 2006-2007 (July 1, 2006, through
June 30, 2007) and 2007-2008 (July 1, 2007, through June 30, 2008), the College participated in
six Title IV, HEA programs: Federal Pell Grant (Pell); Federal Family Education Loan (FFEL);
Federal Supplemental Educational Opportunity Grant (FSEOG); Federal Work-Study (FWS);
Academic Competitiveness Grant (ACG); and National Science and Mathematics Access to
Retain Talent (SMART) Grant. The College received the following Title IV, HEA program
funding on behalf of its students.
Final Report
ED-OIG/A05I0012                                                                                  Page 3 of 37

Table–Title IV, HEA Program Funding
                    Award Year 2006-2007                                Award Year 2007-2008
                  Distance
                 Education                                     Distance Education
Program           Students       All Students                       Students              All Students
Pell             $3,280,168       $40,682,078                       $4,074,643             $47,769,751
FFEL
Subsidized       $8,355,118       $68,540,699                       $14,089,419            $90,768,191
FFEL
Unsubsidized     $8,601,276       $61,520,211                       $13,491,143            $62,899,687
FFEL Plus          $111,840        $5,147,223                          $115,813             $4,145,836
FSEOG              $143,261        $3,225,574                          $188,162             $3,255,380
FWS                $108,961        $1,496,640                           $88,070             $1,616,561
ACG                   $1,183          $76,762                             $433                 $84,553
SMART              $234,641          $453,766                          $185,319              $329,310
Total           $20,836,448      $181,142,953                       $32,233,002           $210,869,269

The total amount of Title IV, HEA program funding for all of the College’s students, as shown in
U.S. Department of Education (Department) records, includes funding for the College’s nine
campuses and six extension sites. The President of Baker College Online and the College’s Vice
President for Student Services provided us with information about the amounts of Title IV, HEA
program funding that the College’s distance education students received.




                                            AUDIT RESULTS



For distance education students who unofficially withdrew or dropped out, the College did not
correctly identify when the students began and ceased attendance when it (1) determined
students' eligibility for Federal student aid disbursements and (2) performed return of Title IV
aid calculations. The College did not maintain records that were adequate to support its
determination of attendance for its distance education students during award year 2006-2007
(see Finding No. 1). In addition, the College incorrectly identified when distance education
students who unofficially withdrew or dropped out began and ceased attendance during award
year 2007-2008 (see Finding No. 2). We randomly selected 100 of 2,338 distance education
students who received Title IV, HEA program funds and received a failing grade or withdrew
from at least one class, during the fall 2007 and winter 2008 quarters. We identified errors for
22 of the 100 students in our sample. Of those 22, 11 students had errors that had or could have
had a financial effect on the amount of funds the College was allowed to retain.

We recommend that the Chief Operating Officer (COO) for Federal Student Aid (FSA) require
the College to develop and implement written policy and procedures for its automated attendance
system. We also recommend that the College return $9,7901 of Title IV, HEA program funds

1
    $5,516 Subsidized FFEL funds, $1,532 Unsubsidized FFEL funds, and $2,742 Pell Grant funds.
Final Report
ED-OIG/A05I0012                                                                                          Page 4 of 37

disbursed to 8 ineligible students and for 3 students for whom the College’s attendance records
did not support retention of all Title IV, HEA program funds after student withdrawal. The
College also should be required to review its records for distance education students who
received Title IV, HEA program funds for award year 2007-2008 and (1) identify students with
unsupported periods of attendance; (2) determine the amount of Title IV, HEA program funds
disbursed to students who were not entitled to receive the funds because of insufficient
attendance documentation; (3) identify the amount of Title IV, HEA program funds disbursed to
students who were not entitled to receive the funds because of reduced student eligibility; and
(4) return those amounts to the Department and lenders, as appropriate.

We provided a draft of this report to the College for review and comment on September 24,
2009. We received the College’s comments on November 6, 2009. The College disagreed with
all of our findings and recommendations. We summarized the College’s comments at the end of
each finding. Except for personally identifiable information (that is, information protected under
the Privacy Act of 1974 (5 U.S.C. § 552a)), the entire narrative of the College’s comments is
included as Attachment 2 to this report. All personally identifiable information included in the
College’s comments has been redacted.

Based on the College’s comments and our analysis of additional information that the College
provided with its comments, we revised the report to clarify that the College used the last day of
the weekly attendance period as the student’s last date of attendance only for students who
unofficially withdrew. We also revised the discussion of the results of our sample to clarify that
disbursements to 11 of the 100 students could not be supported by the College’s attendance
records. We did not make any other significant revisions to the findings and recommendations.

FINDING NO. 1 – The College Did Not Maintain Records That Were Adequate to
                Support Its Determination of Student Attendance During Award
                Year 2006-2007

The College did not retain records that were adequate to support its determinations of student
attendance during award year 2006-2007. The College considered attendance data recorded in
Carina to be the student’s official record and used Carina data for determining student eligibility
and calculating return of Title IV aid for distance education students who received Federal funds.
The College’s instructors used Blackboard data and information from other sources, such as
emails between the student and instructor, to make and record weekly determinations of
attendance in Carina. However, Carina did not capture the actual dates or nature of the student’s
last academic activity during the weekly attendance period. In Carina, a student who attended at
any point during a week was considered to have been in attendance for the entire week. The
College did not require instructors to retain information external to Blackboard that was used to
make the determinations of attendance entered in Carina.

The President of Baker College Online informed us that source data from Blackboard were
retained only for the three most recent quarters because of limited storage capacity.2 However,
Blackboard captured a record of distance education students’ academic activity and was the
primary support for the attendance determinations that instructors entered into Carina and then
the College used for determining student eligibility and calculating return of Title IV aid. Given
2
    At our request, the College retained the fall 2007 Blackboard data that had been scheduled for deletion.
Final Report
ED-OIG/A05I0012                                                                                       Page 5 of 37

the absence of any other control or method to verify whether the College correctly determined
when distance education students began or ceased attending classes during award year
2006-2007, Blackboard information was necessary to verify the data in Carina.

Because award year 2006-2007 Blackboard data were not available, we tested the adequacy of
Carina attendance records by comparing recorded attendance for 2 quarters of award year
2007-2008 to evidence of academic activity contained in Blackboard. Given that the College’s
system for determining attendance was the same during our original audit period (award year
2006-2007) as it was during the College’s fall 2007 and winter 2008 quarters, it is reasonable to
conclude that the results of testing to determine the reliability of attendance data for the fall 2007
and winter 2008 quarters may also be used to determine the reliability of attendance data during
our original audit period.

When we compared the data for the fall 2007 and winter 2008 quarters recorded in Carina with
the Blackboard data, we found that the Carina data were not sufficiently reliable to determine the
dates that students had started and ended their attendance. Because the College’s system for
determining attendance was the same during award year 2006-2007 as it was during the fall 2007
and winter 2008 quarters, we concluded that the attendance data recorded in Carina were not
sufficiently reliable to determine when online students began and ceased attendance during
award year 2006-2007. However, we are unable to determine the extent of the attendance
determination errors made during award year 2006-2007. When we began our fieldwork in
May 2008, all supporting documentation for award year 2006-2007 weekly attendance data had
been deleted.

Record Requirements

According to 34 C.F.R. § 668.24 (a)(3),3 “An institution shall establish and maintain, on a
current basis . . . program records that document . . . [i]ts administration of the title IV, HEA
programs in accordance with all applicable requirements; . . . .” According to 34 C.F.R.
§ 668.24(e)(1)(2007), “An institution shall keep records relating to its administration of the
Federal Perkins Loan, FWS, FSEOG, Federal Pell Grant, ACG, or National SMART Grant
Program for three years after the end of the award year for which the aid was awarded and
disbursed under those programs . . . .” The FFEL and Direct Loan programs’ retention period is
provided in 34 C.F.R. § 668.24(e)(2)(i): “An institution shall keep records relating to a student or
parent borrower's eligibility and participation in the FFEL or Direct Loan Program for three
years after the end of the award year in which the student last attended the institution . . . .”

The Federal Student Aid Handbook 2006-2007, Volume 2 - School Eligibility and Operations,
Chapter 9: Recordkeeping and Disclosure, interprets the regulations for participating schools.
The Handbook emphasizes the importance of maintaining complete records:

         The importance of maintaining complete, accurate records cannot be
         overemphasized. Program and fiscal records must demonstrate the school is
         capable of meeting the administrative and fiscal requirements for participating in

3
 Except as noted, all C.F.R. references for Finding No. 1 are to the July 1, 2005, edition. A separate volume
containing regulations for the Title IV, HEA programs was not published in 2006.
Final Report
ED-OIG/A05I0012                                                                        Page 6 of 37

       the FSA programs. In addition, records must demonstrate proper administration
       of FSA program funds and must show a clear audit trail for FSA program
       expenditures. For example, records for each FSA recipient must clearly show
       that the student was eligible for the funds received, and that the funds were
       disbursed in accordance with program regulations. (emphasis is in original)

According to 34 C.F.R. § 668.22(c)(1)(iii), an institution that is not required to take attendance
uses the midpoint of the payment period or period of enrollment as a student’s last date of
attendance if the student ceases attendance without providing official notification. However, an
exception to this requirement is allowed by 34 C.F.R. § 668.22(c)(3)(i), which states, “[A]n
institution that is not required to take attendance may use as the student's withdrawal date a
student's last date of attendance at an academically-related activity provided that the institution
documents that the activity is academically related and documents the student's attendance at the
activity.”

Return of Title IV Aid Calculations Based on Last Date of Attendance Recorded in Carina

The College made its return of Title IV aid calculations using the last date of attendance shown
in Carina. Therefore, the College was required to document the student’s last date of attendance
at an academically related activity to calculate the amount to return to the Title IV, HEA
programs. The College informed us that it retained attendance information contained in Carina
indefinitely and considered the information in Carina the official student record. The College
did not consider the information in Blackboard to be the official attendance record and, therefore,
did not retain the Blackboard data once instructors determined attendance and recorded it in
Carina. However, Carina attendance records document only that the student attended at some
time during the weekly attendance period. The Carina attendance records did not identify the
date or nature of the student’s last academically related activity and, therefore, did not meet the
regulatory requirement. For students who unofficially withdraw, the student’s last date of
academic activity could have been as many as 6 days earlier than the last date of the weekly
attendance period used by the College as the student’s last date of attendance.

In some cases, the last dates of attendance that the College used for the return of Title IV aid
calculations would have directly affected the amount of Title IV, HEA program funds that the
College was allowed to retain. Using the winter 2008 quarter as an example, a student who
stopped attending during the fourth week of the first 6-week (42 day) session within the quarter
could have had a last date of attendance in Carina of January 30, 2008, the last day of the weekly
period of attendance for the fourth week of the session. The session began on January 3, 2008,
and ended on February 13, 2008. Using the first day of the fourth weekly attendance period
(January 24, 2008), as the student’s last date of attendance, the student would have attended only
52 percent (22 of 42 days) of the session and would have been due a partial return of Title IV,
HEA program funds received for the session. However, using the last day of the weekly
attendance period (January 30, 2008) as the student’s last date of attendance, the student would
have been considered to have passed the 60 percent completion point, attending for 28 of the
42 days (67 percent) in the session. Therefore, no return of Title IV aid calculation and no return
of Title IV, HEA program funds would be required.
Final Report
ED-OIG/A05I0012                                                                      Page 7 of 37

Inadequate Control over Determining Distance Education Students’ Attendance

The College lacked an adequate system of internal control over determining distance education
students’ attendance. During award year 2006-2007, the College did not have any written
criteria for determining distance education students’ attendance, and it had not established a
mechanism for ensuring consistent practices for determining what constituted attendance for
distance education students. The President of Baker College Online informed us that the College
required an “academic posting” as support for attendance and further stated that a simple student
logon was not sufficient support for attendance. However, for our audit period, the College did
not provide a definition of “academic posting” to its instructors, and each instructor was allowed
to define the term as he or she chose.

Our interviews with instructors disclosed significant variations regarding the data used to
determine attendance. We interviewed 17 instructors who had distance education students for
whom Carina attendance data were not supported by Blackboard attendance data.

      Ten instructors informed us that they might have used information such as emails, phone
       conversations, text messages, instant messages, and fax transmissions not captured in
       Blackboard when determining students’ attendance.
      Seven instructors said that they used only Blackboard information for determining
       students’ attendance.

Two instructors provided us with copies of emails kept outside Blackboard. We accepted the
emailed submission of an assignment for one student as evidence of academic activity. We did
not accept the emails between another instructor and a student because the emails were simply
about the inability to complete assigned work and missed assignment deadlines.

Our interviews also disclosed significant variances among instructors regarding acceptable
support for an academic posting. For example, several instructors informed us that they required
“meaningful” or “substantial” postings in Blackboard as support for attendance. Another
instructor explained postings must be “academic in nature.” However, other instructors informed
us that they accepted any Blackboard posting as support for attendance. One instructor stated
that simply logging into Blackboard was sufficient support for attendance. Some instructors
accepted emails from students as support for attendance while others did not.

The College did not require instructors to retain any information kept outside Blackboard that
was used in making attendance determinations. In addition, the College did not provide support
from any of these other forms of communication to show that the last dates of attendance for
students in our sample were for academically related activities.

Actions Taken to Address Adequacy of Attendance Records

On March 16, 2009, the President of Baker College Online informed us that the College
automated its attendance procedures in October 2008. The automated attendance procedures
were handled by the College’s information systems department. Attendance determinations are
no longer left to instructor discretion. The automated procedure uses discussion board postings,
assignment submissions, tests, quizzes, and biography postings (but only if they are assignments
to be completed as documented by the course syllabus) to determine whether a student attended
Final Report
ED-OIG/A05I0012                                                                         Page 8 of 37

distance education classes for the week. A simple student logon to Blackboard is not sufficient
support for attendance. Instructors can submit an attendance change request if they believe the
automated report is not correct. However, the request must include proper documentation
supporting the student’s attendance.

The College did not provide us with written policy covering the automated procedures, and we
did not test the data produced by the College’s automated attendance procedures for
completeness or accuracy. If implemented as presented, the automated system should improve
the College’s procedures for determining student attendance. However, the College’s revised
procedures still do not identify the student’s last date of attendance; they identify only the last
week in which the student attended. The College’s revised procedures still use the last day of the
week from the last period of weekly attendance as the student’s last date of attendance for return
of Title IV aid calculations. Regulations governing the return of Title IV aid require schools to
use the student’s last date of attendance, not the last day of the student’s last week of attendance.

Recommendations

We recommend that the COO for FSA require the College to—

1.1	 Develop and implement written policy and procedures for its automated attendance system.
     The policy and procedures should address maintenance of records adequate to support
     student eligibility and ensure that the

       a.	 specific date is documented and retained in accordance with the record retention
           requirements in those cases where the institution has chosen to use the last date of
           academic activity as the last date of attendance; and
       b.	 midpoint is used in all cases where the institution is unable to document the actual last
           date of academic activity.

College Comments and OIG Response

General College Comments: The College did not agree with the finding and recommendations.
The College stated that we—

       Misunderstood its policy for determining the last date of attendance;
       Held the College to a different and higher standard of documentation for attendance than
        other online education providers;
       Used subjective and arbitrary opinions to establish our findings; and
       Misinterpreted the regulation and used subjective criteria and different standards for
        online classes versus traditional on ground classes.

The College reiterated that the Carina data are the official record and that the instructor-recorded
attendance in the Carina system has been the primary method of documentation for all courses
delivered at the College. However, the College indicated that it has made significant
enhancements to its administrative system based on recommendations from the draft audit report.
Final Report
ED-OIG/A05I0012                                                                        Page 9 of 37

OIG Response: Based on the College’s comments, we revised the finding to clarify that the
College’s policy described in this report is for determining the last date of attendance only for
unofficial withdrawals because the College used the last day of the weekly attendance period as
the student’s last date of attendance only for unofficial withdrawals. We also revised the
(1) presentation of the findings to make a clearer distinction between award year 2006-2007 and
award year 2007-2008 and (2) recommendations to tie them more closely to the regulatory
requirements.

We disagree with the College’s assertion that we used subjective and arbitrary opinions as
opposed to industry standards or published regulatory standards to establish the findings. Our
findings are based on the HEA and corresponding requirements. The College did not identify
any alternative industry or regulatory documentation standard used by other providers of online
education.

Although the Department has not published specific guidance for documentation of online
delivery, the regulations and guidance cited in the findings are applicable to all institutions,
including distance education institutions that administer Title IV, HEA programs. The records
requirements do not make a distinction between a school’s “official” records and its other
records. Therefore, we did not make any other significant changes to the finding or
recommendation.

College Comments on Record Requirements: The College stated the following—

     1) Discrepancies existed between Carina attendance and Blackboard data, but the College
         disagreed with the assertion that it is in violation of 34 C.F.R.§ 668.24(e)(2)(i) because
         it maintains student records indefinitely.
     2) It recorded and maintained comprehensive and accurate program and fiscal records for
         all delivery methods.
     3) It required instructors to record attendance regardless of whether the students were in a
         traditional classroom setting or taking classes online.
     4) It developed policies for online courses and program delivery to ensure that they were
         as closely aligned with face-to-face course policies as possible.
     5)	 The OIG mixed up official and unofficial withdrawals. For official withdrawals, it
         reviewed Blackboard postings to determine the last date of attendance. For unofficial
         withdrawals, the College used the Carina postings for the last date of attendance. The
         only time it used the last day of the weekly attendance period as the last date of
         attendance was in the case of an unofficial withdrawal. Also, even though the College
         was not required to take attendance, it elected to do so. Therefore, for return of Title IV
         aid calculations for unofficial withdrawals, the College used the last date of attendance
         as opposed to the midpoint of the payment period or period of enrollment as the
         student’s last date of attendance.

OIG Response: We disagree with the College’s assertion that it was in compliance with the
FFEL and Direct Loan programs’ record retention requirements. While we agree with the
College that it retains its Carina attendance information for the required period, we concluded
that the College’s Carina attendance data were not sufficiently reliable to show when distance
education students began and ceased attendance because it does not include the student’s actual
Final Report
ED-OIG/A05I0012                                                                       Page 10 of 37

last date of attendance or the nature of the student’s academic activities on that date. Carina
simply captures the instructor’s determination of attendance at some point during the weekly
period of attendance. Blackboard postings are not adequate for determination of the last date of
attendance for official withdrawals because they track activities after the start of the withdrawal
process. For a student who has officially withdrawn, the withdrawal date is the date that the
student began the withdrawal process or the date that the student otherwise provided official
notification to the institution of his or her withdrawal.

The College elected not to use the midpoint of the payment period or period of enrollment as the
last date of attendance for unofficial withdrawals. However, the College’s process for students
who unofficially withdrew used the last date of the weekly period of attendance, not the last date
of attendance at an academically related activity, as the student’s last date of attendance.

College Comments on Control over Determining Distance Education Students’ Attendance: The
College stated that we subjectively interpreted 34 C.F.R. § 668.22(c)(3), which states that an
academically related activity includes, but is not limited to, an exam, a tutorial, computer-
assisted instruction, academic counseling, academic advisement, turning in a class assignment or
attending a study group that is assigned by the institution. The College defines online attendance
as submission of any assignment or discussion board posting. Email conversations between the
student and faculty, in which they discuss the student’s inability to complete assigned work and
the student’s missed deadlines, fall under academic counseling, and, therefore, constitute
evidence of attendance. The interaction between the student and instructor is evidence that the
student intended to remain enrolled.

The College also stated that online faculty are required to complete an 18-week training program
before teaching their first online course. The training covers all College policies and procedures,
including attendance procedures.

OIG Response: We disagree. An institution may use the midpoint of the payment period or
period of enrollment as the student’s last date of attendance, or it may choose to use the student’s
last date of attendance at an academically related activity, provided that the institution documents
that the activity is academically related and documents the student’s attendance at the activity.
The College’s written attendance policy defines attendance as submission of any assignment or
discussion board posting. Though the College claimed that an academic posting is evidence of
an assignment submission, it did not provide any written guidelines or criteria defining what is
acceptable for an academic posting. The weekly determination of attendance, as recorded in
Carina, did not document whether a student’s last activity was academically related.

Despite the College’s 18-week training program for instructors, our audit identified significant
discrepancies among instructors regarding data used to determine attendance and regarding
acceptable support for an academic posting.

College Comments on Actions Taken to Address Adequacy of Attendance Records: The College
stated that it has improved its attendance procedures by automating the process. During each
seminar week, the new procedure will use discussion board postings, assignment submissions,
tests, and quizzes captured by Blackboard to determine student attendance. The College
concluded that documenting the process was not necessary because the process is automated and
online instructors no longer make attendance determinations.
Final Report
ED-OIG/A05I0012                                                                                 Page 11 of 37

The College also stated that it recognizes that a discrepancy exists between Carina attendance
and Blackboard data. Given the various activities and technologies used to establish attendance,
Carina attendance records and Blackboard activity will not be in perfect alignment. However,
the College will no longer accept biography postings as evidence of attendance unless the
biographies are assignments to be completed as documented by the course syllabus. For official
withdrawals, the College will use the last posting on the Blackboard system as the last date of
attendance and will maintain the last posting and attach it to the Title IV worksheet.

The College also noted that the Department has not published guidance that establishes definitive
criteria for documentation of online delivery of postsecondary education. The College defines
online attendance as submission of any assignment or discussion board posting. An academic
posting is considered sufficient for submission of an assignment.

OIG Response: As described, the changes to the College’s procedures would improve its
attendance records. However, we disagree with the College regarding the need to maintain
documentation of the automated attendance process. If the College’s process is not documented,
there will be no way to know whether the records it maintains are sufficient to demonstrate the
College’s compliance with program requirements. Also, it will not be possible to compare the
criteria being used for the automated process to regulatory requirements. Further, the automated
attendance determination process still does not document the academic activities that were used
to make the electronic determination of attendance.

The College agrees that discrepancies existed between its Blackboard and Carina, and stated that
Blackboard and Carina will not be in perfect alignment. However, the College’s Carina
attendance determinations cannot be considered reliable if the Blackboard information used as
the primary source for making the determinations conflicts with the Carina data.

The College’s assertion that the Department has not established separate guidance for distance
education courses is true; however, the criteria we cite for our finding applies to all institutions
participating in the Title IV, HEA programs.

FINDING NO. 2 – The College Incorrectly Identified When Distance Education
                Students Began and Ceased Attendance

The College did not correctly identify when distance education students began and ceased
attendance during the fall 2007 and winter 2008 quarters of award year 2007-2008.4 We
randomly selected 100 distance education students, who received $257,655, from a universe of
2,338 distance education students who (1) received approximately $6 million of Title IV, HEA
program funds for the fall 2007 and winter 2008 quarters and (2) had been enrolled in a distance
education class for which they were at risk of having never attended during the quarters (that is,
the student did not receive a grade higher than an “F” for one of the distance education classes
attended for the quarter). Students with incomplete distance education classes in both the fall
2007 and winter 2008 quarters would have been included twice and had an increased chance for
selection.


4
 We tested the fall 2007 and winter 2008 quarters (award year 2007-2008) because Blackboard data were not
available for award year 2006-2007.
Final Report
ED-OIG/A05I0012                                                                                    Page 12 of 37

We compared the data recorded in Carina to data in Blackboard to determine whether the
College correctly identified when distance education students began and ceased attendance in
distance education classes for the fall 2007 and winter 2008 quarters. To determine whether
Blackboard contained supporting information for distance education classes, we searched various
areas in Blackboard for evidence of academic engagement for each week of instruction for each
distance education class for all 100 students in our sample.5 The various areas in Blackboard
included records of participation in various discussion groups, grades, and academic
assignments.

Because of the volume of Blackboard information, we did not attempt to identify all Blackboard
support for all weeks for all distance education classes taken by the 100 students in our sample,
and we did not attempt to determine the students’ actual last dates of attendance. For the purpose
of the review that we performed for this finding, we considered an entry in Carina to be
acceptable for determining a student’s enrollment status if we found any support in Blackboard
that indicated the student attended at some point during that weekly period of attendance. We
did not consider an entry in Carina to be acceptable if it was for the student’s last date of
attendance in the class, and it was made for a week that included the 60 percent completion point
of the payment period because the entry does not reflect a specific date of any academic activity.

We concluded that the Carina data alone were not sufficiently reliable for determining the actual
dates of attendance or for return of Title IV aid calculations. Carina did not capture the student’s
actual last date of attendance; it documented only the last week during which the student
attended.6 Therefore, the student’s last date of attendance could be as many as 6 days earlier
than the date shown in Carina. An accurate last date of attendance is crucial for preparing a
correct return of Title IV aid calculation.

In addition to concluding that Carina data alone were not sufficiently reliable for determining
students’ actual last dates of attendance, we concluded that the attendance information contained
in Carina for the two quarters we tested did not accurately reflect the distance education
students’ attendance as captured in Blackboard. Based on our comparisons with Blackboard
information, the College lacked evidence of academic activity for either the first or last weeks of
attendance that had been recorded in Carina for 22 of the 100 sampled students. The College
either (1) recorded beginning attendance for which we could find no evidence of academic
activity in Blackboard for the initial week of class (14 students) or (2) did not provide support for
the last week or two of attendance determinations recorded in Carina (9 students).

      1. 	   For the first category of 14 students, the College did not have evidence to show that
             9 of the students ever attended all of their distance education classes. Without
             evidence of attending the distance education classes, the College should have
             determined whether the nine students’ enrollment statuses should have been reduced.
             Four of the nine students attended sufficient additional classes during the quarter to
             remain eligible for the aid they received. However, five of the nine students did not
             attend sufficient additional classes to remain eligible for all of the Title IV, HEA

5
  We did not attempt to verify support for Carina attendance determinations made for non-distance education classes 

attended by students in our sample because that work was outside the scope of our audit.

6
  College officials informed us that the College used the last day of the weekly attendance period for which the 

student stopped attending as the student’s last date of attendance for students who unofficially withdraw. 

Final Report
ED-OIG/A05I0012                                                                                     Page 13 of 37

             program funds they received (as a result of their reduced student enrollment status).
             The five students received $4,617 of Title IV, HEA program funds.7

             For the remaining 5 students in this category, the College had only a student
             biography as evidence of academic engagement for one distance education class.
             These students’ biographies did not contain any evidence of academic engagement.
             None of the biography information we reviewed for these students indicated that they
             attended class or engaged in any activity for the purpose of learning its subject;
             instead, the biographies were general and introductory in nature, more consistent with
             a student’s registration or orientation than with the student’s attendance.8 Two of the
             five students having only the student biography as evidence of attendance for a class
             attended sufficient additional classes during the quarter and were eligible for the
             financial aid they received. The other three students did not attend sufficient
             additional classes to remain eligible for the $2,4349 in Title IV, HEA program funds
             they received.

      2. 	   For the second category of nine students, the College’s Carina attendance data
             showed that six students attended beyond the 60 percent point within the quarter (one
             student was also counted in item number one above for a different class). The
             College could not provide support for the last week or two of attendance for five of
             these students. The College also could not support that one student attended beyond
             the 60 percent point. Because the College could not support the student’s last
             2 weeks of attendance as shown in Carina, it should have prepared a return of Title IV
             aid calculation. We prepared a return of Title IV aid calculation and determined that
             the College should have returned $932 in Unsubsidized FFEL funds.

             For two of the nine students, Carina attendance data showed that the students attended
             through the fourth week of the quarter. The fourth week of the quarter included the
             60 percent completion point for the two students. The last date of attendance shown
             in Carina for these two students was the last day of the weekly attendance period for
             the fourth week. However, the actual last date of academic activity during the weekly
             attendance period could have been as many as 6 days before the last day of the
             weekly attendance period. The Carina attendance records alone were not sufficient to
             support that the students passed the 60 percent completion point needed to justify
             retention of 100 percent of tuition and fees. If students do not pass the 60 percent
             completion point, the College either must complete a return of Title IV aid calculation
             using the midpoint of the payment period or provide documentation of each student’s
             last date of academic activity. If the student’s last date of documented academic
             activity was prior to the 60 percent completion point, then the College is required to
             complete a return of Title IV aid calculation using either the last date of documented
             activity or the midpoint of the payment period. We prepared return of Title IV aid
             calculations for the two students using the midpoint of the payment period. We
             determined that the two students were due $1,807 in return of Title IV aid funds.10
7
  $2,630 Subsidized FFEL funds, $290 Unsubsidized FFEL funds and $1,697 Pell Grant funds. 

8
  We accepted biography postings as evidence of academic activity for six distance education students’ classes 

because those biographies were instructor-required assignments and contained relevant class content.

9
  $1,389 Subsidized FFEL funds and $1,045 Pell Grant funds.

10
   $1,497 Subsidized FFEL funds and $310 Unsubsidized FFEL funds. 

Final Report
ED-OIG/A05I0012                                                                        Page 14 of 37

A student is eligible to receive Title IV, HEA program assistance if the student is a regular
student enrolled, or accepted for enrollment, in an eligible program at an eligible institution
(34 C.F.R. § 668.32 (a)(1)(i)).11 To receive a FFEL Program loan, the student must attend at
least half-time (34 C.F.R. § 668.32(a)(2)). For Pell program funds, according to 34 C.F.R.
§ 690.80(b)(2)(ii), if a student's projected enrollment status changes during a payment period
before the student begins attendance in all of his or her classes for that payment period, the
institution shall recalculate the student's enrollment status to reflect only those classes for which
the student actually began attendance.

Inadequate Control over Determining Distance Education Students’ Attendance

During award year 2007-2008, the College’s instructors manually entered attendance data into
Carina on a weekly basis. The President of Baker College Online informed us that the College
considered distance education students to be in attendance for the weekly attendance period if the
student made an academic posting in Blackboard at any time during the weekly attendance
period. The College then used the last day of that weekly attendance period as the student’s last
date of attendance for students who unofficially withdrew.

The College’s instructors determined which activities were sufficient to be considered an
academic posting. Examples of acceptable academic postings included turning in required
assignments, taking tests, and participating in various online discussion groups. Some
instructors informed us that they were able to import records, such as emails, text messages, and
phone conversations, into Blackboard when determining weekly attendance. Each instructor
entered a code into Carina indicating whether the student attended during the week. However,
the attendance determination code simply indicated whether the student attended at any time
during the week. The code neither indicated the actual dates of any academic postings that were
made nor identified which academic activities were performed by the student for the week that
the student was determined to be attending.

Summary of Ineligible Disbursements

The College disbursed or retained $9,790 in excess Title IV, HEA program funds for the 11 (of
100) students in our sample.12

     	 Eight students were not eligible for all the funds that they received because they did not
        begin attendance in courses with the required number of credits to qualify for the
        Title IV, HEA program funds that were disbursed. Five students received $4,617, but the
        College did not maintain supporting data showing the students began attending their
        classes.13 Three other students received $2,434, but the College’s sole support for the
        students’ starting classes were biography postings that did not contain evidence of
        academic engagement.14 To illustrate, a student enrolled for two 4-credit classes would
        be considered attending half-time and eligible for a half-time Pell Grant award and FFEL
        funds. However, if the College’s attendance records show that the student began

11
   All C.F.R. references for Finding No. 2 are to the July 1, 2007, edition.

12
   $5,516 Subsidized FFEL, $1,532 Unsubsidized FFEL and $2,742 Pell Grant funds.

13
   $2,630 Subsidized FFEL, $290 Unsubsidized FFEL and $1,697 in Pell Grant funds.

14
   $1,389 Subsidized FFEL funds and $1,045 in Pell Grant funds.

Final Report
ED-OIG/A05I0012                                                                                   Page 15 of 37

        attending only one of the two classes, the student’s status changes to less than half-time,
        and the student would be eligible only for a less than half-time Pell Grant and would not
        be eligible for any FFEL funds.

     	 One student had an unsupported last date of attendance that had a direct effect on the
        return of Title IV aid calculation. The College could not support the Carina attendance
        determinations made for both the fourth and fifth weeks of attendance for one course for
        a student who withdrew from all classes during the winter 2008 quarter. Although the
        College is not required to take attendance, it elected to use Carina data to determine the
        last date of academic activity. The College did not prepare a return of Title IV aid
        calculation for the student because Carina showed that the student had completed more
        than 60 percent of the quarter by attending 5 of the 6 weeks of scheduled instruction for
        that quarter. Therefore, the College determined that the student had earned 100 percent
        of tuition. However, the College could support only the first 3 weeks of attendance
        determinations. The College should have performed a return of Title IV aid calculation
        and returned $932.15

     	 For two students, there was insufficient evidence to show that they passed the 60 percent
        completion point, which the College needed to maintain to justify its retention of
        100 percent of tuition and fees. The last date of attendance shown in Carina for these two
        students was the last day of the weekly attendance period for the fourth week of the
        quarter. However, the last date of academic activity could have been as many as 6 days
        before the last day of the weekly attendance period. We prepared return of Title IV aid
        calculations for the two students using the midpoint of the payment period. We
        determined that the College should have returned $1,807 in FFEL funds for the two
        students.16

The results of our tests of the accuracy of the College’s Carina records indicated that the College
should conduct a 100 percent file review. In total, we identified errors for 22 of the 100 students
in our sample. Of those 22, 11 students had errors that had a financial effect on the amount of
funds the College was allowed to retain.

Recommendations

We recommend that the COO for FSA require the College to—

2.1 	 Return, for the students in our sample, $7,048 of Title IV, HEA program funds to the
      appropriate FFEL lenders and $2,742 of Pell Grant program funds to the Department.

2.2 	 Review its records for the 2,238 distance education students17 who received Title IV, HEA
      program funds for award year 2007-2008 and did not receive a grade higher than an “F” for
      at least one course attended for the quarter and

15
   We used the midpoint of the payment period to determine the amount the College should have returned to the 

Title IV, HEA programs.

16
   $1,497 Subsidized FFEL funds and $310 Unsubsidized FFEL funds.

17
   The 2,338 distance education students in the universe that we used less the 100 students whose records we

reviewed as part of our audit.

Final Report
ED-OIG/A05I0012                                                                            Page 16 of 37

         a.	 identify students with unsupported periods of attendance;
         b.	 determine the amount of Title IV, HEA program funds disbursed to students who were
             not entitled to receive the funds because of insufficient attendance documentation;
         c.	 identify the amount of Title IV, HEA program funds disbursed to students who were
             not entitled to receive the funds because of reduced student eligibility; and
         d.	 return those amounts to the Department and lenders, as appropriate.

2.3 	 Develop, implement, and disseminate written policies and procedures that

         a.	 clearly describe acceptable criteria for determining whether distance education
             students’ began attendance for all classes for which they were awarded Title IV, HEA
             program funds; and
         b.	 provide reasonable assurance that determinations of attendance for enrollment status
             purposes are adequately documented.

2.4 	 Provide all staff with additional training on the procedures for determining and
      documenting a student’s attendance so that the practice is consistent.

College Comments

The College disagreed with the finding and recommendations. The College stated that the
liabilities for this finding are based upon erroneous assertions, assumptions, and findings from
Finding No. 1. The College provided a written response for each of the 22 students comprising
the 23 identified exceptions.18 The comments described in this section are summaries of the
individual comments on the 22 students.

       	 Each of the 22students completed seminars or self-paced orientations to qualify for the
          online courses. Completion of these activities demonstrates the students intended to
          complete the courses.
       	 Five of the 22 students accessed and had “hits” in various sections of the College’s
          system. Because Carina is considered the College’s official attendance record, the
          College stated that one can assume that the student was marked in attendance because the
          instructor was in contact with the student. Blackboard is only one source of attendance
          data.
        One student’s instructor accidentally deleted discussion boards.
        For two other students, the College claimed there were Blackboard postings supporting
          the weeks of attendance in question.

The College asserted that submission of a biography was typically the first assignment in any
online course, and the College considered biography postings as assignments that demonstrate
course attendance. However, the College revised its policy on biography postings subsequent to
the OIG’s audit. Biography postings no longer are used to determine attendance unless the
biographies are assignments to be completed as documented in the course syllabus.

The College took exception with the projected error rate, claiming that only 8 of the 100 sampled
students experienced a financial aid impact due to the perceived error in attendance recording.
18
     There were 22 students with 23 exceptions. One student was included in both groups.
Final Report
ED-OIG/A05I0012                                                                       Page 17 of 37

Therefore, the OIG should report an 8 percent error rate, not a 22 percent error rate. The College
also believed that the 22 percent rate was overstated because OIG stated in the draft report that it
did not attempt to identify all Blackboard support for all weeks for all students in the sample.
Therefore, the College did not believe that a 100 percent review was warranted, necessary, or
feasible.

Finally, the College stated that the majority of issues that the OIG is reporting were resolved
through the College’s file review conducted in response to the Department’s 2008 program
review finding on the issue of unofficial withdrawals.

OIG Response

The College did not provide any evidence to alter our findings for the 22 students in our sample
or support its contention that our error rate was overstated. Completion of an online orientation
or seminar does not demonstrate that the student actually attended a subsequent academic course
of instruction. For the five students that it claims accessed its system, the College did not
provide any evidence of the “hits” or demonstrate that the hits constituted academic activity.

Regarding the student biographies for 5 of the 22 students that were general and introductory in
nature and did not contain any course specific content, we found no evidence to show that the
biographies were graded or otherwise evaluated by the instructor. Therefore, we did not consider
the biographies to be representative of an academic assignment.

The College was unable to view actual discussion board posts for the one student for whom the
instructor deleted the discussion board information in Blackboard, but the College did not
provide any alternative information to support the student’s attendance. Regarding the two
students for whom the College claims had Blackboard postings that supported the students
attendance, the information the College provided did not support the weeks of attendance in
question.

The error rate that we are reporting is valid. The College relied on the following statement in our
draft report to support its assertion that the rate of error in its attendance records may have been
lower than 22 percent:

       Due to the volume of Blackboard information, we did not attempt to identify all
       Blackboard support for all weeks for all distance education classes taken by the
       100 students in our sample, and we did not attempt to determine the students’
       actual last dates of attendance.

However, this statement does not indicate that we did not examine all evidence in Blackboard
that we needed to reach our conclusions. During our audit, if we found sufficient evidence of
attendance during a given week, we stopped our review of attendance for that particular week
and did not attempt to identify all evidence of attendance for that week. If, however, we
concluded there was no evidence of attendance during a given week, we based that conclusion on
an examination of all possible areas of Blackboard where we expected to find evidence of
attendance. Therefore, we have not changed our conclusion that 22 of the 100 students in our
sample had unsupported periods of attendance.
Final Report
ED-OIG/A05I0012                                                                                 Page 18 of 37

We disagree with the College’s suggestion that an error rate should be reported only for
instances with a financial impact. Reporting an error for the accuracy of the attendance recorded
in Carina provides perspective on the reliability of Carina’s data for Title IV determinations. We
have, however, clarified our discussion of the exceptions for the 22 students to indicate an
11 percent error for cases where the disbursement or retention of Title IV, HEA program funds
could not be supported by the College’s attendance records.

We also disagree with the College’s assertion that the majority of issues we are reporting were
resolved through the College’s file review conducted in response to the Department’s 2008
program review finding on the issue of unofficial withdrawals. We further disagree with the
College that additional file review work is not needed. As noted above, the College was unable
to support Carina attendance determinations for 22 percent of the students in our sample.




                                         OTHER MATTERS 



The College Did Not Identify All Students Who Unofficially Withdrew

The College did not identify all distance education students who received Title IV, HEA
program funds and unofficially withdrew from the institution. We identified 1 of 20
judgmentally selected award year 2006-2007 Title IV, HEA program recipients who, according
to Carina attendance records, attended only one week of class during each of the two 6-week
sessions for that quarter but had not been identified as withdrawn. College officials informed us
that the student was still considered enrolled because one of the student’s instructors failed to
report that the student had stopped attending. The College did not prepare a return of Title IV
aid calculation for the student, who received $1,350 in Pell and $1,09619 in FFEL funds for the
summer 2007 quarter.

This issue was outside the scope of our audit because our objective was to review dates of when
a student began and ceased attendance at the College. Therefore, we did not pursue the matter.
However, FSA determined that returns of Title IV, HEA program funds were not always made
for unofficial withdrawals during a June 23-27, 2008, program review at the College.




19
  This student was identified and included in an FSA review that included the amount of Title IV, HEA program
funds to be returned.
Final Report
ED-OIG/A05I0012                                                                     Page 19 of 37




                  OBJECTIVE, SCOPE, AND METHODOLOGY 



The objective of our audit was to determine whether the College correctly identified when
distance education students began and ceased attendance when it (1) determined students’
eligibility for Federal student aid disbursements and (2) performed return of Title IV aid
calculations. Our original audit period was award year 2006-2007. However, the College did
not retain source data used for determining the weekly attendance recorded in its electronic
system of records (Carina) for any of the quarters during that award year. Therefore, we
expanded our audit to include testing the supporting documentation for the fall 2007 and winter
2008 quarters’ attendance records to determine the reliability of the College’s system for
maintaining electronic attendance records.

To achieve our objective, we performed the following procedures.

1.	 Reviewed selected provisions of the HEA, regulations, and FSA guidance applicable to our
    audit objective.
2.	 Identified, from Department records, the amount of Title IV, HEA program funds that the
    College received on behalf of all students during award years 2006-2007 and 2007-2008. In
    addition, the President of Baker College Online and the College’s Vice President for Student
    Services informed us of the amounts of Title IV, HEA program funding that the College’s
    distance education students received during award years 2006-2007 and 2007-2008.
3.	 Reviewed the College’s Web site, 2006-2007 and 2007-2008 Graduate/Undergraduate
    catalogs, and organizational charts to gain an understanding of the College’s history and
    organization.
4.	 Reviewed Baker College and Subsidiaries Consolidated Financial Report with Additional
    Information August 31, 2004, 2005, and 2006; and Baker College and Subsidiaries Federal
    Awards Supplemental Information August 31, 2004, 2005, 2006, and 2007, prepared by
    Plante & Moran, PLLC.
5.	 Reviewed written policies and procedures and interviewed College officials to gain an
    understanding of the College’s internal control structure, policies, procedures, and practices
    applicable to its determination of students’ beginning and ending dates of attendance and the
    College’s preparation of return of Title IV aid calculations for distance education students.
6.	 Reviewed attendance, grade, student account, and return of Title IV aid calculation
    information for 20 judgmentally selected students who (a) received Title IV, HEA program
    funds for award year 2006-2007, (b) attended at least one distance education course for a
    quarter, and (c) had possibly withdrawn within the quarter (W or F grade), as identified in
    Carina, to determine whether the College correctly identified the week during which the
    students began and ceased attendance. We selected students from each of the four quarters
    within award year 2006-2007 who attended five of the College’s campuses and whose
    records indicated they only attended for a short period.
7.	 Reviewed the attendance, grade, student account, and return of Title IV aid calculation
    information for 100 randomly selected students who (a) attended at least one distance
    education course during the fall 2007 or winter 2008 quarters, or both; (b) received
    Title IV, HEA program funds for the fall 2007 or winter 2008 quarter, or both; and (c) did
Final Report
ED-OIG/A05I0012                                                                                  Page 20 of 37

    not have a grade higher than an “F” for at least one course for either quarter, or both (we did
    not consider a grade of “W” to be higher than a grade of “F”).20 Distance education students
    with incomplete distance education classes in both the fall 2007 and winter 2008 quarters
    would have been included twice and had an increased chance for selection. The President of
    Baker College Online informed us that the College disbursed about $9.5 million to students
    attending at least one distance education class during the fall 2007 quarter and about
    $9.2 million to students attending at least one distance education class during the winter 2008
    quarter.
8.	 Reviewed FSA’s program review report dated July 23, 2008; the College’s February 2, 2009,
    response to the program review report; and FSA’s April 8, 2009, Final Program Review
    Determination Letter regarding the College’s failure to return Title IV, HEA program funds
    for all students who unofficially withdraw.

We relied on computer-processed student ledger and transcript data from Carina to identify our
universes of distance education students who received Title IV, HEA program funds. To assess
the accuracy and completeness of the universes, we reviewed the queries the College used to
extract the data from Carina. To corroborate Carina financial information, we compared
Title IV, HEA program funding information recorded in Carina to information from the
Department’s National Student Loan Data System and Common Origination and Disbursement
system for 22 (of the 100) students randomly selected from the universe of students who
attended at least one distance education course during the fall 2007 and winter 2008 quarters and
did not have a grade higher than “F” for at least one course for either quarter. In addition, we
applied logic tests to the Carina data provided by the College for our sample of 20 students from
award year 2006-2007. The logic tests included tests for (1) missing data, (2) the relationship of
one data element to another, (3) values outside of a designated range, and (4) dates outside a
valid range or in an illogical progression. Based on these tests, we concluded that the Title IV,
HEA program funding information recorded in Carina was sufficiently reliable to use as the
source for our universes.

We also assessed the accuracy of Carina attendance records by comparing recorded attendance to
evidence of academic activity contained in Blackboard. However, our comparison of the Carina
attendance records identified a significant percentage of online attendance recorded in Carina
that was not supported by Blackboard data. As a result, we concluded that the Carina attendance
data were not sufficiently reliable to determine when online students began and ceased
attendance (see Finding Nos. 1 and 2).

We conducted our audit from May 2008 through May 2009 at the College’s office in Flint,
Michigan, and at our offices. We discussed the results of our audit with College officials on
June 22, 2009, and received the College’s written comments on a draft of this report on
November 6, 2009.

We conducted this performance audit in accordance with generally accepted government
auditing standards appropriate to the scope of the review described above. Those standards
require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objectives. We believe the

20
 We selected the sample from a universe of 2,338 students who received approximately $6 million in Title IV,
HEA program funds.
Final Report
ED-OIG/A05I0012                                                                      Page 21 of 37

evidence obtained provides a reasonable basis for our findings and conclusions based on our
audit objective.




                            ADMINISTRATIVE MATTERS



Statements that managerial practices need improvements, as well as other conclusions and
recommendations in this report, represent the opinions of the Office of Inspector General.
Determinations of corrective action to be taken, including the recovery of funds, will be made by
the appropriate Department of Education officials.

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

                              William J. Taggart
                              Chief Operating Officer
                              Federal Student Aid
                              U.S. Department of Education
                              Union Center Plaza, Room 112G1
                              830 First Street, N.E.
                              Washington, DC 20202

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

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


                                             Sincerely,

                                             Lisa F. Robinson /s/
                                             for
                                             Gary D. Whitman
                                             Regional Inspector General for Audit

Attachments
Final Report
ED-OIG/A05I0012                                                              Page 22 of 37

                                                                             Attachment 1


                    Acronyms/Abbreviations Used in Report



ACG               Academic Competitiveness Grant

C.F.R.            Code of Federal Regulations

College           Baker College

COO               Chief Operating Officer

Department        U.S. Department of Education

FFEL              Federal Family Education Loan

FSA               Federal Student Aid

FSEOG             Federal Supplemental Educational Opportunity Grant

FWS               Federal Work-Study

Pell              Federal Pell Grant

SMART             National Science and Mathematics Access to Retain Talent

Title IV, HEA     Title IV of the Higher Education Act of 1965, as amended
Final Report
ED-OIG/A05I0012                                                                  Page 23 of 37

                                                                                Attachment 2




              Attachment 2: College Comments on the Draft Report
(All personally identifiable information mentioned in the College’s comments was replaced with
bracketed text.)
Final Report
ED-OIG/A05I0012                                                                     Page 24 of 37


November 6, 2009

Gary D. Whitman
Regional Inspector General for Audit
US Department of Education
Office of Inspector General
Citigroup Center
500 West Madison Street, Suite 1414
Chicago, IL
Re: ED- OIG/A05 10012

Dear Mr. Whitman,

Baker College (the College) vigorously disputes both Findings No. 1 and No. 2 in the draft report
which is referenced as ED- OIG/A05 10012 and was forwarded to the College by the U.S.
Department of Education, Officer of Inspector General (Ed-OIG). The College disputes the
following assertions, assumptions and findings relative to both Finding No. 1 and Finding No. 2
for the following reasons:

   1.	 The College feels that Ed-OIG misinterpreted 34CFR668.22(c)(3) by using subjective
       criteria which was inconsistent with the spirit and intent of the regulation. Additionally,
       the Ed-OIG interpretation does not take into account the typical behaviors of the adult
       learner who is juggling college along with a full-time job.
   2.	 The Ed-OIG is using significantly different standards for online classes versus traditional
       on ground classes. For many college classes the only documentation of academic activity
       would be recorded attendance just based upon the very nature of the class.
   3.	 Based upon our research of current practices, the Ed-OIG is holding the College to a
       different/higher standard of documentation for attendance than it does major national
       providers of online education.
   4.	 The Ed-OIG has used subjective and arbitrary opinions as opposed to industry standards
       or published regulatory practices to establish erroneous findings.
   5.	 The Ed-OIG contends that the College did not provide communication to faculty
       regarding attendance policies and procedures. This is completely incorrect.
   6.	 The draft report and findings repeatedly confuse Baker College policy relative to
       determining the last date of attendance for official and unofficial withdrawals. The Ed-
       OIG contends that the College uses the last day of the week to determine Return to Title
       IV Calculations for all online withdrawals. The College documents and uses the actual
       last date of attendance for Return to Title IV Calculations with the exception of unofficial
       withdrawals for the zero GPA students that are done after quarter end.
   7.	 The College disagrees with the assertion that the College is in violation of
       34CFR668.24(e)(2)(i) as the College maintains student records indefinitely.
Final Report
ED-OIG/A05I0012                                                                      Page 25 of 37

Finding No. 1 – The College Did Not Maintain Records That Were Adequate to Document
the Eligibility of Its Students

Record Requirements

The College does not agree with the tone and wording of Finding No. 1. The College records and
maintains a comprehensive and accurate program and fiscal records for all delivery methods. The
College requires instructors to record attendance regardless of whether the student is in a
traditional classroom setting or taking classes online. Policies for the online delivery of courses
and programs were developed to ensure that they were as close in alignment to face-to-face
course policies as possible. In fact, online courses require students to do more than simply walk
into the classroom as in the face-to-face classroom format. Students must interact with the
instructor through discussion boards, e-mail messages, phone calls, assignment submission, or
other like activities, to demonstrate attendance in online courses. Active participation is an
element in grading criteria. This is not true of face-to-face delivery at most educational
institutions.
The College employs a thorough record of all student academic and fiscal activity in all course
delivery formats. The instructor-recorded attendance on the Carina system has been the primary
method of documentation for all courses delivered at Baker College. Student accounts
receivable transactions, including all adjustments to Title IV are also maintained indefinitely.
Attendance and accounts receivable data are maintained on Carina well past the three years
required by the Department for Title IV records.
The College recognizes that a discrepancy exists between Carina attendance and Blackboard
data. However, the Department has furnished no formal guidance regarding online delivery of
post-secondary education. Given the various activities and technologies used to establish
attendance, Carina attendance records and Blackboard activity will not be in perfect alignment.
However, as of Fall 2008 quarter, the College is able to provide a stronger, but not yet perfect,
correlation between Blackboard and Carina. If necessary, other systems of attendance
documentation will be developed in lieu of the Carina and Blackboard methodology currently in
use.
The overwhelming majority of any attendance issues are now discovered with strengthened
compliance to DCL-GEN-04-03, February 2004, which was achieved in the Summer 2008
quarter. Information regarding changes to the attendance procedures was clearly communicated
via email to all online faculty and staff. Documentation of the communications was provided to
the OIG as part of their review.
Inadequate Control over Determining Distance Education Students’ Attendance

Baker College feels that the Ed-OIG has subjectively interpreted 34CFR668.22(c)(3), which
states the following: An ‘‘academically-related activity’’ includes, but is not limited to, an exam,
a tutorial, computer-assisted instruction, academic counseling, academic advisement, turning in
a class assignment or attending a study group that is assigned by the institution
(http://www.studentclearinghouse.org/audit/pdfs/34cfr668.22.pdf, accessed 10/19/09, p. 424).
Based on the above definition in relation to academic counseling, Baker College believes that
email conversations between student and faculty discussing the inability to complete assigned
work and missed deadlines constitutes attendance (See Draft Report, p. 6, ¶3).
Final Report
ED-OIG/A05I0012                                                                     Page 26 of 37

The interaction between student and instructor evidences the student’s intention to remain
enrolled.

Contrary to the findings in the Draft Report (p. 7, ¶3), Baker College provided the OIG with
copies of the online student and faculty handbook and course syllabi that document the
attendance policies and procedures. The College defines online attendance as the following, as
documented in our student and faculty handbooks:

   Attendance is reported on a weekly basis. Attendance is defined as submission of any
   assignment or discussion board posting. The details of this attendance policy are as follows:
       1.	 A student not attending within the first five days of week one will be dropped from the
           course. Please note that the College refunds 100% of tuition for an online class if the
           student withdraws within the first seven days. The College is not attempting to
           enhance revenue from students either unable or unwilling to successfully navigate the
           challenges of online education.
       2.	 A student not attending within the first five days of any week will be marked absent
           for the entire week.
       3.	 In the case of excessive absences, the instructor may request that the student be
           administratively withdrawn from the course.

Baker College has determined that the above definition is the most commonly used in the
industry based on information gathered from a sample of 27 online college and university
websites.

Consequently, the College considers the following to be evidence of academic activity:
   1.	 Email and phone exchanges between students and instructors.
   2.	 Biographical postings (please note that we have changed this policy subsequent to the
       Ed-OIG visit even though we do not necessarily concur with the rationale).
   3.	 Assignment submission via email or Blackboard.
   4.	 Discussion Board postings to Blackboard.
   5.	 Group/Team Participation via Blackboard, phone, or other technologies.

As you are most certainly aware, technology fails at times. Consequently, students may often
have to adapt for interim periods.

Baker College Online requires all online students to complete an online orientation and training
before registering for their first online course. The orientation gives the students an opportunity
to use and practice with the course management system. The orientation also allows the student
to determine if online learning is a good match to their learning style, at little or no cost.

On ground students wishing to enroll in an online course, in addition to their face-to-face
courses, complete a self-paced online orientation. This orientation includes technical training,
practice using the online course management system, information regarding policies and
procedures of online courses, attendance and participation requirements, and strategies to be a
successful student in the online environment. This course takes approximately 10 hours to
complete. There is no charge for this orientation.
Final Report
ED-OIG/A05I0012                                                                       Page 27 of 37

Students enrolled in 100% online programs must complete a three-week, online, teacher-led
seminar before completing their first online course. This seminar covers everything in the self-
paced orientation. In addition, the seminar includes information regarding student services,
online student handbook, study skills, library resources, advising, career services, and additional
practice using the online course management system. There is a minimal course fee ($60) for this
seminar.

Baker Online faculty are required to complete an 18-week training program before teaching their
first online course. This training covers all Baker College policies and procedures, Baker College
orientation, technical orientation to Blackboard, definitions of attendance and participation,
online teaching strategies, and online assessment methods. In addition, new instructors are
paired with a mentor for additional training. As part of this training, instructors learn about
attendance procedures.

Recent Actions Taken to Address Adequacy of Attendance Records

The College recognizes that the recording of attendance by instructors can result in human error.
The College has refocused its efforts to eliminate any reporting errors. Given the various
activities used to define online attendance, the College does not consider it feasible that
Blackboard activity and recorded attendance will always be completely in sync. Additionally,
there is no published guidance from the Department of Education that establishes set criteria for
the documentation of online delivery of post-secondary education. For this reason, Baker
College decided to improve our attendance procedures by automating attendance (as documented
in Draft Report, p. 7, ¶3). The automated procedure uses discussion board postings, assignment
submissions, tests, and quizzes to determine student attendance during each seminar week.
Biography postings are no longer used to determine attendance unless they are assignments to be
completed as documented by the course syllabus. Even though attendance is now automated
based on Blackboard data, instructors may submit a request to change attendance if the student
was in contact with the instructor via email, phone, or other methods. Information regarding
changes to the attendance procedures was clearly communicated via email to all online faculty
and staff. Documentation of the communications was provided to the OIG as part of their
review.

Finding No. 2 – The College Incorrectly Identified When Distance Education Students
Began and Ceased Attendance

In disputing Findings Nos. 1 and 2, the College will respond to the specific liabilities cited in
Finding No. 2 as all the liabilities set forth in Finding No. 2 are based upon what the College
sincerely believes are erroneous assertions, assumptions and findings from Finding No. 1. Also,
based upon the documentation provided to the College by Ed-OIG, it is difficult to determine the
actual dollar exception referenced in the report.

Following are the College’s responses to the data provided for each contested file:
      Final Report
      ED-OIG/A05I0012                                                                                   Page 28 of 37


No   *UIN    OIG Finding          Impact of       Per Baker In                        Issue                       Registered
                                OIG findings    compliance with                                                   Subsequent
                                 on Title IV   34CFR668.22(c)(3)                                                   Quarter
                                 OIG Adj. /
                                 Total aid
1           No Blackboard       ($359) /       Yes                 Completed self-paced orientation to           Yes –
            support for         $718                               qualify for online courses. Given this, the   Registered
            attendance                                             student intended to complete the course.      through Fall
            during the course                                                                                    2008
                                                                   Student accessed the system on the first
                                                                   day of class with several “hits” to the
                                                                   discussion board and communications
                                                                   area. Instructor may have been contacted
                                                                   via the communications area counting for
                                                                   first week’s attendance. Given that
                                                                   Blackboard is only one source of
                                                                   attendance data and Carina is considered
                                                                   our official attendance record, we can
                                                                   assume the student was marked in
                                                                   attendance because the instructor was in
                                                                   contact with the student.

                                                                   Student initiated withdrawal at the
                                                                   Muskegon campus. Student indicated last
                                                                   date of attendance as 2/14/08, which
                                                                   coincides with Carina documented
                                                                   attendance records.
2           No Blackboard       None /         Yes                 Completed three-week seminar to qualify       Yes and
            support for         $5,421                             for online courses. Given this, the student   currently
            attendance                                             intended to complete the course.              registered for
            during the course                                                                                    Fall 2009
                                                                   Student may have contacted instructor via
                                                                   email qualifying for first week’s
                                                                   attendance. Given that Blackboard is only
                                                                   one source of attendance data and Carina
                                                                   is considered our official attendance
                                                                   record, we can assume the student was
                                                                   marked in attendance because the
                                                                   instructor was in contact with the student.

                                                                   Student initiated withdrawal at the Online
                                                                   campus. The last date of attendance used
                                                                   is 9/23/07 which coincides with Carina
                                                                   documented attendance records.
3           No Blackboard       ($359) /       No                  Completed self-paced orientation to           Yes –
            support for         $4,579                             qualify for online courses. Given this, the   Registered
            attendance                                             student intended to complete the course.      through Spring
            during the                                                                                           2008
            course.                                                Student accessed announcement section
            This account was                                       of the online course. Instructor may have
            adjusted on 6/19                                       been contacted via this area counting for
            in concurrence                                         first week’s attendance. Given that
            with the audit                                         Blackboard is only one source of
            finding.                                               attendance data and Carina is considered
                                                                   our official attendance record, we can
    Final Report
    ED-OIG/A05I0012                                                                  Page 29 of 37

                                                assume the student was marked in
                                                attendance because the instructor was in
                                                contact with the student.

                                                Student initiated a withdrawal at the
                                                Owosso campus for only one of two
                                                online courses. This indicates that she
                                                intended to complete this course, but
                                                failed to do so.
4       No Blackboard       None / $718   Yes   Completed self-paced orientation to           Yes –
        support for                             qualify for online courses. Given this, the   Registered
        attendance                              student intended to complete the course.      through Spring
        during the course                                                                     2009
                                                Instructor may have been contacted
                                                counting for seminar two and three
                                                attendance. Given that Blackboard is only
                                                one source of attendance data and Carina
                                                is considered our official attendance
                                                record, we can assume the student was
                                                marked in attendance because the
                                                instructor was in contact with the student.

                                                Student was withdrawn at the Owosso
                                                campus with no charge for tuition, even
                                                though attendance is documented,
                                                because she did not attend the first week
                                                of the course (special circumstances).
                                                Student remained enrolled, was
                                                withdrawn with an LDA of 11/19/2007
                                                per the student’s request. The student’s
                                                tuition was reduced at 100% due to her
                                                special circumstances not for lack of
                                                enrollment and attendance.
5       No Blackboard       ($2,920) /    Yes   Completed three-week Graduate Seminar         Yes –
        support for         $2,920              to qualify for online courses. Given this,    Registered
        attendance                              the student intended to complete the          through Spring
        during the course                       course.                                       2008

                                                Student accessed the system on several
                                                days during the first week of class with
                                                several “hits” to the discussion board and
                                                communications area. However, the
                                                instructor accidently deleted discussion
                                                boards in the Blackboard course for
                                                which she was enrolled. We are unable to
                                                view actual discussion board posts.

                                                Student initiated withdrawal at the
                                                Graduate School. According to Bb
                                                records before deletion, her last date of
                                                attendance was 1/13/08.
6       No Blackboard       ($719) /      Yes   Completed self-paced orientation to           Yes –
        support for         $3,634              qualify for online courses. Given this, the   Graduated
        attendance                              student intended to complete the course.      with Bachelor
        during the course                                                                     degree in
                                                Student accessed the system on the first      Spring 2008
                                                day of class with several “hits” to the
    Final Report
    ED-OIG/A05I0012                                                               Page 30 of 37

                                             discussion board and communications
                                             area. In addition, the instructor may have
                                             been contacted via the communications
                                             area counting for first week’s attendance.
                                             Given that Blackboard is only one source
                                             of attendance data and Carina is
                                             considered our official attendance record,
                                             we can assume the student was marked in
                                             attendance because the instructor was in
                                             contact with the student.

                                             Student initiated withdrawal at the Flint
                                             Campus and indicated that her last date of
                                             attendance was 2/14/08 which coincides
                                             with Carina documented attendance.
7       No Blackboard       None /     Yes   Completed self-paced orientation to           Yes –
        support for         $2,693           qualify for online courses. Given this, the   currently
        attendance                           student intended to complete the course.      registered for
        during the course                                                                  Fall 2009
                                             The student completed and posted a
                                             biography introducing herself to the
                                             course. The Student also accessed the
                                             system on the first day of class with
                                             several “hits” to the discussion board and
                                             communications area. Instructor may
                                             have been contacted via the
                                             communications area counting for first
                                             week’s attendance. Given that
                                             Blackboard is only one source of
                                             attendance data and Carina is considered
                                             our official attendance record, we can
                                             assume the student was marked in
                                             attendance because the instructor was in
                                             contact with the student.

                                             Student initiated withdrawal at the
                                             Owosso campus. Last date of attendance
                                             was not documented because the
                                             withdrawal was processed during the first
                                             week of the course with a 100% tuition
                                             refund.
8       No Blackboard       ($260) /   Yes   Completed self-paced orientation to           Yes –
        support for         $2,354           qualify for online courses. Given this, the   Graduated
        attendance                           student intended to complete the course.      Summer 2009
        during the course
                                             Instructor may have been contacted
                                             counting for first week’s attendance.
                                             Given that Blackboard is only one source
                                             of attendance data and Carina is
                                             considered our official attendance record,
                                             we can assume the student was marked in
                                             attendance because the instructor was in
                                             contact with the student.

                                             Student initiated withdrawal at the
                                             Auburn Hills Campus. The student
                                             indicated her last date of attendance as
     Final Report
     ED-OIG/A05I0012                                                             Page 31 of 37

                                            11/03/07, which coincides with Carina
                                            documented attendance.
9        No Blackboard       None /   Yes   Completed self-paced orientation to           Yes –
         support for         $1,834         qualify for online courses. Given this, the   Graduated
         attendance                         student intended to complete the course.      Winter 2009
         during the course
                                            Instructor may have been contacted
                                            counting for first week’s attendance.
                                            Given that Blackboard is only one source
                                            of attendance data and Carina is
                                            considered our official attendance record,
                                            we can assume the student was marked in
                                            attendance because the instructor was in
                                            contact with the student.

                                            Student initiated withdrawal at the Online
                                            Campus. The documented last date of
                                            attendance was 11/06/07, which coincides
                                            with Carina documented attendance.
10       No Blackboard       None /   Yes   Completed self-paced orientation to           No – Winter
         support for         $4,013         qualify for online courses. Given this, the   2008 was last
         attendance                         student intended to complete the course.      quarter of
         during the last                                                                  attendance
         few weeks of                       Instructor may have been contacted
         class                              counting for attendance during seminar
                                            four. Given that Blackboard is only one
                                            source of attendance data and Carina is
                                            considered our official attendance record,
                                            we can assume the student was marked in
                                            attendance because the instructor was in
                                            contact with the student. Instructors are
                                            often in contact with students, especially
                                            when the student is struggling with the
                                            course material or falls behind in the
                                            course.

                                            Student did not withdraw from this
                                            course. The student successfully
                                            completed at least one class so an LDA
                                            would not be needed to determine any
                                            adjustment to Title IV funds. Therefore,
                                            this finding is inaccurate.


11       No Blackboard       None /   Yes   Completed self-paced orientation to           Yes –
         support for         $4,528         qualify for online courses. Given this, the   Currently
         attendance                         student intended to complete the course.      registered for
         during the last                                                                  Fall 2009
         few weeks of                       Instructor may have been contacted
         class                              counting for attendance during seminar
                                            three. Given that Blackboard is only one
                                            source of attendance data and Carina is
                                            considered our official attendance record,
                                            we can assume the student was marked in
                                            attendance because the instructor was in
                                            contact with the student. Instructors are
                                            often in contact with students, especially
     Final Report
     ED-OIG/A05I0012                                                           Page 32 of 37

                                          when the student is struggling with the
                                          course material or falls behind in the
                                          course.

                                          Student did not withdraw from this
                                          course. The student successfully
                                          completed at least one class so an LDA
                                          would not be needed to determine any
                                          adjustment to Title IV funds.
                                          Therefore, this finding is inaccurate
12       No Blackboard     None /   Yes   Completed self-paced orientation to           Yes –
         support for       $3,887         qualify for online courses. Given this, the   Registered
         attendance                       student intended to complete the course.      through Spring
         during the last                                                                2008
         few weeks of                     Instructor may have been contacted
         class                            counting for attendance during seminars
                                          two and three. Given that Blackboard is
                                          only one source of attendance data and
                                          Carina is considered our official
                                          attendance record, we can assume the
                                          student was marked in attendance because
                                          the instructor was in contact with the
                                          student. Instructors are often in contact
                                          with students, especially when the student
                                          is struggling with the course material or
                                          falls behind in the course.

                                          Student did not withdraw from this
                                          course. This file was reviewed as part of
                                          Title IV audit for unofficial withdrawals
                                          and accepted as being in compliance by
                                          the Department of Ed’s audit staff.
13       No Blackboard     None /   Yes   Completed three-week seminar to qualify       Yes –
         support for       $3,750         for online courses. Given this, the student   Registered
         attendance                       intended to complete the course.              through Fall
         during the last                                                                2008
         few weeks of                     The finding cited by the auditors is
         class                            incorrect. There were postings, as
                                          indicated by course statistics, in the
                                          course by the student that indicates the
                                          student attended the course until 3/04/08.

                                          Student initiated withdrawal at the Online
                                          Campus. The documented last date of
                                          attendance was 3/04/08, which coincides
                                          with Carina documented attendance. The
                                          student successfully completed at least
                                          one class so an LDA would not be needed
                                          to determine any adjustment to Title IV
                                          funds.
14       No Blackboard     None /   Yes   Completed self-paced orientation to           Yes –
         support for       $3,625         qualify for online courses. Given this, the   Registered
         attendance                       student intended to complete the course.      through Spring
         during the last                                                                2008
         few weeks of                     According to Blackboard information,
         class                            this student demonstrated attendance
                                          during seminars one, two, and three.
     Final Report
     ED-OIG/A05I0012                                                                Page 33 of 37

                                               Instructor may have been contacted
                                               counting for seminar four and five
                                               attendance. Given that Blackboard is only
                                               one source of attendance data and Carina
                                               is considered our official attendance
                                               record, we can assume the student was
                                               marked in attendance because the
                                               instructor was in contact with the student.
                                               Instructors are often in contact with
                                               students, especially when the student is
                                               struggling with the course material or
                                               falls behind in the course.

                                               The student did not withdraw from this
                                               course. This file was reviewed as part of
                                               Title IV audit for unofficial withdrawals
                                               and accepted as being in compliance by
                                               the Department of Ed’s audit staff.
15       No Blackboard     None /        Yes   Completed three-week seminar to qualify       No
         support for       $1,494              for online courses. Given this, the student
         attendance                            intended to complete the course.
         during the last
         few weeks of                          This course requires the student to log
         class                                 into another system for writing labs.
                                               Attendance may have been documented
                                               in this system for seminar five. In
                                               addition, the instructor may have been
                                               contacted counting for seminar five’s
                                               attendance. Given that Blackboard is only
                                               one source of attendance data and Carina
                                               is considered our official attendance
                                               record, we can assume the student was
                                               marked in attendance because the
                                               instructor was in contact with the student.
                                               Instructors are often in contact with
                                               students, especially when the student is
                                               struggling with the course material or
                                               falls behind in the course.

                                               The student did not withdraw from this
                                               course. This file was reviewed as part of
                                               Title IV audit for unofficial withdrawals
                                               and accepted as being in compliance by
                                               the Department of Ed’s audit staff

16       No Blackboard     None / $718   Yes   Completed self-paced orientation to           Yes –
         support for                           qualify for online courses. Given this, the   Registered
         attendance                            student intended to complete the course.      through Spring
         during the last                                                                     2009
         few weeks of                          Instructor may have been contacted
         class                                 counting for seminar three’s attendance.
                                               Given that Blackboard is only one source
                                               of attendance data and Carina is
                                               considered our official attendance record,
                                               we can assume the student was marked in
                                               attendance because the instructor was in
                                               contact with the student. Instructors are
     Final Report
     ED-OIG/A05I0012                                                               Page 34 of 37

                                              often in contact with students, especially
                                              when the student is struggling with the
                                              course material or falls behind in the
                                              course.

                                              Student did not withdraw from this course
                                              and stopped attending after seminar three.
                                              The student successfully completed at
                                              least one class so an LDA would not be
                                              needed to determine any adjustment to
                                              Title IV funds.
17       No Blackboard       None /     Yes   Completed three-week seminar to qualify       No
         support for         $2,811           for online courses. Given this, the student
         attendance                           intended to complete the course.
         during the last
         few weeks of                         The finding cited by the auditors is
         class                                incorrect. The student submitted a posting
                                              during seminar four. There were other
                                              postings in the course by the student that
                                              indicates the student attended the course
                                              until 12/05/07. The postings were sent via
                                              email to the OIG on 8/20/2008.

                                              Student initiated withdrawal at the Online
                                              Campus. The documented last date of
                                              attendance was 12/05/07.

18       No Blackboard       None /     Yes   Completed self-paced orientation to           Yes –
         support for         $1,407           qualify for online courses. Given this, the   Registered
         attendance                           student intended to complete the course.      through Fall
         during the last                                                                    2008
         few weeks of                         Instructor may have been contacted
         class – Liability                    counting for seminar three and four
         paid as part of                      attendance. Given that Blackboard is only
         the Department                       one source of attendance data and Carina
         of Ed’s audit of                     is considered our official attendance
         unofficial                           record, we can assume the student was
         withdrawals.                         marked in attendance because the
                                              instructor was in contact with the student.
                                              Instructors are often in contact with
                                              students, especially when the student is
                                              struggling with the course material or
                                              falls behind in the course.

                                              Student did not withdraw from this course
                                              and stopped attending after seminar four.
19       Biography           ($719) /   Yes   Completed self-paced orientation to           Yes, Currently
         posting only        $5,780           qualify for online courses. Given this, the   registered for
         support for                          student intended to complete the course.      Fall 2009
         attendance and is
         not an academic                      Submission of a biography is typically the
         activity                             first assignment in any online course, as
                                              demonstrated in the self-paced
                                              orientation. Baker College considers
                                              biography postings as assignments that
                                              demonstrate course attendance.
     Final Report
     ED-OIG/A05I0012                                                                           Page 35 of 37

20        Biography           None /       Yes            Completed three-week seminar to qualify       Yes, Currently
          posting only        $3,280                      for online courses. Given this, the student   registered for
          support for                                     intended to complete the course.              Fall 2009
          attendance and is
          not an academic                                 Submission of a biography is typically the
          activity                                        first assignment in any online course, as
                                                          demonstrated in the self-paced
                                                          orientation. Baker College considers
                                                          biography postings as assignments that
                                                          demonstrate course attendance.
21        Biography           ($1,388) /   Yes            Completed self-paced orientation to           No
          posting only        $1,388                      qualify for online courses. Given this, the
          support for                                     student intended to complete the course.
          attendance and is
          not an academic                                 Submission of a biography is typically the
          activity                                        first assignment in any online course, as
                                                          demonstrated in the self-paced
                                                          orientation. Baker College considers
                                                          biography postings as assignments that
                                                          demonstrate course attendance.
22        Biography           None / $28   Yes            Completed self-paced orientation to           No
          posting only                                    qualify for online courses. Given this, the
          support for                                     student intended to complete the course.
          attendance and is
          not an academic                                 Submission of a biography is typically the
          activity                                        first assignment in any online course, as
                                                          demonstrated in the self-paced
                                                          orientation. Baker College considers
                                                          biography postings as assignments that
                                                          demonstrate course attendance.
23        Biography           ($326) /     Yes            Completed three-week seminar to qualify       Yes –
          posting only        $3,154                      for online courses. Given this, the student   Registered
          support for                                     intended to complete the course.              through Spring
          attendance and is                                                                             2008
          not an academic                                 Submission of a biography is typically the
          activity                                        first assignment in any online course, as
                                                          demonstrated in the self-paced
                                                          orientation. Baker College considers
                                                          biography postings as assignments that
                                                          demonstrate course attendance.
                              ($7,050) /
                              $64,735
     *[Student Identifiers Deleted]

     The College does acknowledge that it could have had a better administrative system for
     recording and documenting attendance for online classes.            Based upon the Ed-OIG
     recommendations, the College has made significant enhancements to its administrative system.
     As mentioned previously and contrary to information contained in the Draft Report, of Ed-OIG
     all changes to the attendance procedures have and had been clearly communicated to faculty and
     staff.

     The College also disputes the following sections of the OIG report:

     Page 11, Paragraph 2 – Audit Results
Final Report
ED-OIG/A05I0012                                                                        Page 36 of 37

Error rate – The College takes issue with the Ed-OIG’s projected error rate. Even if assuming
that the findings are correct, there were only 8 students out of the 100 sampled that had a
financial aid impact due to the perceived error in attendance. That does not calculate out to a
22% error rate either in student files or absolute dollars as noted. In addition, the OIG did not test
all courses in the sample.

       Due to the volume of Blackboard information, we did not attempt to identify all
       Blackboard support for all weeks for all distance education classes taken by the 100
       students in our sample, and we did not attempt to determine the students’ actual last
       dates of attendance (Draft Report, p. 8, ¶3).

The College believes that our error rate is much lower than 22% as indicated in the Report (p. 11,
¶2).

Page 3, Paragraph 1 – Audit Results
The College did correctly identify student’s eligibility for Title IV disbursements and the correct
dates for Title IV withdrawals.

To wit:
    1. In the case of the official withdrawals, the College Academic Office examined the last
        posting on the Blackboard System and used that date as the last date of attendance.
        Admittedly, that date may not correspond to the last date of attendance on Carina.
        However, the date is earlier than the end of the corresponding week and would provide a
        greater sum due to the Department of Education or lender as the case may be.
    2. On unofficial withdrawals for zero GPA students, the College used the last day of the
        week as the last date of attendance. We concur that this is not the optimal way to
        calculate the refund amount. However, that methodology was approved by the
        Department of Education during the course of the audit that was conducted concurrently
        with the Ed-OIG examination.

Page 4 – Paragraph 1
The College steadfastly maintains that the Carina data is the official record. The College notes
that when a student officially withdrew, the College reviewed the Blackboard posts and used the
last post as the last date of attendance. Going forward, the College will maintain the last posting
and attach it to the Title IV worksheet.

Page 5 – Last Paragraph
This paragraph mixes up official and unofficial withdrawals. In no case, was the last date of the
week used when a student had a posting on Blackboard which was different than the last date of
attendance. The Ed- OIG is correct that the College did not maintain the posting.

Page 6 – Paragraph 2
This paragraph contains inaccurate information. Baker College’s Online Attendance Policy is
posted in the Faculty Handbook, Student Handbook, Student Online Orientations, Catalog, and
in every online course syllabus. As mentioned previously, online students complete an
orientation that covers attendance and participation requirements in detail. Online Faculty must
complete an 18-week orientation and training, which covers such policies, before teaching in the
online environment. Improvements have been made to our attendance procedures since the OIG
Final Report
ED-OIG/A05I0012                                                                     Page 37 of 37

visit. Since Fall 2008, attendance is recorded automatically from database information in our
course management system and posted to Carina each week. Faculty may submit changes to
attendance by submitting a request to the Academic Office. Faculty were notified of the changes
during implementation of the automated attendance system.

Page 7 – Paragraph 3
The only time the College uses the last day of the week as the last date of attendance was in the
case of an unofficial withdrawal. In the case of an official withdrawal, the College looks at
Carina postings for the last date of attendance.

Unofficial Withdrawals Policy in General

The College elects to take attendance even though not required to do so. When performing
Return to Title IV Calculations on unofficial withdrawals, the College has elected to use the last
date of attendance as opposed to the 50% option. The College believes the recorded last date of
attendance, in general, provides a greater return of loan dollars and reduces a student’s loan debt
and repayment amount.

Online Class Last Date of Attendance/Attendance for Unofficial Withdrawals

The College does acknowledge that it could have had a better administrative system for
recording and documenting attendance for online classes.            Based upon the Ed-OIG
recommendations, the College has made significant enhancements to its administrative system.
As mentioned previously, and contrary to information contained in the Draft Report, all changes
to the attendance procedures have and had been clearly communicated to faculty and staff.
The College feels that it was and is in compliance relative to industry standards, published
regulations and practices of other post-secondary online providers.

Based upon the Draft Report findings and recommendations, with which we take vigorous
exception, we do not feel that a 100% review is warranted, necessary or feasible. To repeat a
prior response to the Ed-OIG, the College is of the opinion that the majority of issues were
resolved in the completed audit for unofficial withdrawals conducted by the Department of
Education. The College is working on a better system of documentation of online attendance
which will be completed shortly for unofficial LDAs.

The College feels that our current process for official withdrawals also needs improvement, in
addition to actions already taken. However, the College feels Business Office procedures and
correspondence with Online faculty and other Academic Office staff is effective in establishing
accurate attendance dates and accurate dates for calculating withdrawals.


Sincerely,

/s/
F. James Cummins, President
Baker College