oversight

Arkansas State University's Administration of Selected Aspects of the Title IV Programs

Published by the Department of Education, Office of Inspector General on 2013-09-26.

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

                                       UNITED STATES DEPARTMENT OF EDUCATION
                                                           OFFICE OF INSPECTOR GENERAL

                                                                                                                      AUDIT SERVICES
                                                                                                                      Dallas Audit Region


                                                         September 26, 2013


Dr. Tim Hudson
Chancellor
Arkansas State University
P.O. Box 600
State University, AR 72404
Dear Dr. Hudson:

This Final Audit Report, “Arkansas State University’s Administration of Selected Aspects of the
Title IV Programs” presents the results of our audit. The purposes of the audit were to (1) evaluate
Arkansas State University’s (ASU) default prevention and management, (2) determine the
accuracy of selected information ASU reported to the Integrated Postsecondary Education Data
System (IPEDS), (3) evaluate ASU’s quantitative satisfactory academic progress measures, and
(4) evaluate the accuracy of selected consumer information provided by ASU on its Web site. Our
audit covered ASU’s default prevention and management from October 1, 2006, through
September 30, 2012; IPEDS data reported for academic years 2009–2010 and 2010–2011; and data
provided on ASU’s Web site on September 7, 2012, and February 5, 2013. We determined that
(1) ASU’s default prevention and management to address its rising cohort default rate was
reasonable; (2) selected information ASU reported to IPEDS was accurate; and (3) ASU properly
measured quantitative satisfactory academic progress for students. However, we found that ASU
did not provide employment and continuing education data for all degree and certificate programs,
provided unsupported job placement rates, and provided inaccurate graduation data on its Web site
for students who graduated in academic years 2008–2009 and 2009–2010.

In response to the draft of this report, ASU agreed with the finding and recommendations. In
addition, ASU described the corrective actions that it has already initiated and those that they plan
to initiate to address our recommendations. See Attachment 2 for the full text of the comments.




                                                        BACKGROUND


ASU is a 4-year public university founded in 1909 and located in Jonesboro, Arkansas, with
additional locations throughout the State. ASU is accredited by the Higher Learning Commission
of the North Central Association of Colleges and Schools (Higher Learning Commission). ASU
also has programs that are separately accredited by specialized accrediting agencies. ASU is

 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/A06M0013                                                                                  Page 2 of 16
composed of the following ten colleges: Agriculture and Technology, Business, Communications,
Education, Engineering, Fine Arts, Humanities and Social Sciences, Nursing and Health
Professions, Sciences and Mathematics, and University College. ASU offers a range of degree
programs leading to an associate’s, bachelor’s, master’s, specialist, or doctoral degrees. ASU has
been approved by the Higher Learning Commission to offer classes for all of its degree programs
through distance education and offers more than 200 classes online. ASU offers several fully
online degree programs. ASU had 13,877 undergraduate and graduate students enrolled in the fall
of 2012 and has a 19:1 student/teacher ratio.

For award years 2009–2010 through 2011–2012, ASU participated in the following Federal student
assistance programs (Title IV programs): Federal Family Education Loan (FFEL), 1 William D.
Ford Federal Direct Loan (Federal Direct Loan), Federal Pell Grant, Academic Competitiveness
Grant, National Science and Mathematics Access to Retain Talent Grant, Teacher Education
Assistance for College and Higher Education Grant, 2 Federal Supplemental Education Opportunity
Grant, and Federal Work-Study. See Table 1 for a distribution of funding.

                                       Table 1: Title IV Funding
                               Federal
                                              Federal Pell       Other                       Total
            Award Year         Student
                                                 Grant          Title IVb                   Title IV
                                Loansa
            2011–2012          $83,966,027      $28,192,443      $1,742,186              $113,900,656
            2010–2011          $77,355,105      $30,701,799      $1,829,682              $109,886,586
            2009–2010          $78,687,932      $28,433,799      $1,969,651              $109,091,382
              Total           $240,009,064      $87,328,041      $5,541,519              $332,878,624
        a
         The Federal Student Loans amounts included the four types of FFEL and Federal Direct Student Loans
        (Subsidized, Unsubsidized, PLUS, and Graduate and Professional PLUS).
        b
         Other Title IV amounts included the Academic Competitiveness Grant, National Science and Mathematics
        Access to Retain Talent, Federal Supplemental Education Opportunity Grant, and Federal Work-Study.

As a condition of Title IV eligibility, an institution agrees to comply with the standards of
administrative capability, which include having a cohort default rate below certain thresholds and
establishing, publishing, and applying reasonable standards for measuring whether a student is
maintaining satisfactory academic progress (34 C.F.R. §§ 668.14(b)(6), 668.16(e), 668.16(m)).
Additionally, institutions agree to annually report data to the U.S. Department of Education
(Department) through IPEDS and to report and disclose to students required consumer information
(34 C.F.R. §§ 668.14(b)(9), 668.14(b)(19); 34 C.F.R. § 668 Subpart D). IPEDS is a system of
interrelated surveys conducted annually by the Department’s National Center for Education
Statistics (NCES).




1
  The SAFRA Act, part of the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), mandated that
no new loans be made or insured under the FFEL program after June 30, 2010,
2
  ASU did not participate in the Federal grant programs of Academic Competitiveness and National Science and
Mathematics Access to Retain Talent in FY 2011–2012. ASU only participated in the Teacher Education Assistance
for College and Higher Education grant program in FY 2011–2012.2
Final Report
ED-OIG/A06M0013                                                                         Page 3 of 16
Cohort Default Rates and Preventing and Managing Loan Defaults

The Department annually issues official CDRs for all Title IV participating institutions. ASU’s
cohort default rates for FYs 2007 through 2010 are presented below in Table 2.



               Table 2: Two-Year Cohort Default Rates FY 2007 through 2010
                               FY 2007      FY 2008       FY 2009         FY 2010
      Default Rate                  8.2%         10.7%         13.3%        13.5%
      Number in Default               317           408           506          569
      Number in Repayment           3,862         3,787         3,795         4284

To help minimize defaults on student loans, institutions may implement a default prevention and
management plan, which is designed to reduce delinquency and default. Under certain conditions,
the Department may require institutions to implement a default prevention and management plan.
During our audit period, the Department did not require ASU to implement a default prevention
and management plan.

For institutions that are not required to implement a default prevention and management plan, the
Department strongly recommends the institutions consider implementing some or all of the
nonregulatory measures listed in the Department’s sample default prevention and management
plan. The Department’s sample plan includes the following six nonregulatory activities:

          • financial literacy for borrowers,
          • communication across campus,
          • National Student Loan Data System date entered repayment report,
          • late stage delinquency assistance,
          • loan record detail report data review, and
          • analyze defaulted loan data to identify defaulter characteristics.

Reporting Required Information to the Department

Institutions that participate in the Title IV programs are required to report data on enrollments,
program completion, graduation rates, faculty and staff, finances, institutional prices, and student
financial assistance. All institutions that participate in or apply to participate in the Title IV
programs are required to annually submit timely and accurate data by completing all surveys in
IPEDS. The IPEDS data are available to students and parents through the NCES College
Navigator Web site (located at http://nces.ed.gov/collegenavigator) and to researchers and others
through the IPEDS Data Center.

The overall graduation rate in IPEDS tracks the progress of students who began their studies as
full-time, first-time degree- or certificate-seeking students to see if they complete a degree or other
award such as a certificate within 150 percent of “normal time” for completing the program in
which they are enrolled. Based on the fall 2005 cohort, ASU’s graduation and retention rates for
6 years are presented below in Table 3.
Final Report
ED-OIG/A06M0013                                                                       Page 4 of 16

                 Table 3: Graduation and Retention Rates (Fall 2005 Cohort)
                                           Beginning Fall Semester
                           2005       2006      2007       2008      2009              2010
      Number
                             1,491       1,290       823         706        392         146
      Enrolled
      Percent
                               -         86.5%      55.2%      47.4%       26.3%       9.8%
      Returned
      Number
                               -           -          19         314        518         599
      Graduated
      Graduation Rate          -           -         1.3%      21.1%       34.7%      40.2%

Monitoring Satisfactory Academic Progress

Students who receive Federal student assistance must complete their programs in a period of time
that is no longer than 150 percent of the published length of their programs. According to
34 C.F.R. § 668.34(a), the school must establish a reasonable satisfactory academic progress policy
for determining whether otherwise eligible students are making satisfactory academic progress and
may continue to receive Title IV financial assistance. Among other requirements, the Secretary
considers the policy to be reasonable if the policy specifies the pace at which the students must
progress through their programs to ensure that they will complete them within the maximum time
frame.

Providing Required Consumer Information to Current and Prospective Students

Title IV participating institutions are required to disseminate specific consumer information to
current and prospective students, including but not limited to:

           •   financial assistance available to students,
           •   institutional information,
           •   institution’s retention rate as reported to IPEDS,
           •   institution’s completion or graduation rate,
           •   types of graduate and professional education in which graduates of the institution’s
               4-year degree programs enroll, and
           •   placement of and types of employment obtained by the institution’s graduates.
Final Report
ED-OIG/A06M0013                                                                         Page 5 of 16



                                       AUDIT RESULTS


The objectives of our audit were to (1) evaluate ASU’s default prevention and management,
(2) determine the accuracy of selected information ASU reported to IPEDS, (3) evaluate ASU’s
quantitative satisfactory academic progress measures, and (4) evaluate the accuracy of selected
consumer information provided by ASU on its Web site.

We evaluated ASU’s default prevention and management and concluded that its default prevention
and management actions were reasonable. ASU has taken several actions to address its increasing
cohort default rate. Specifically, ASU developed and implemented a default prevention and
management plan that they will continue to develop and adjust as needed. ASU hired a staff
person who is responsible for coordinating with the Department and the Arkansas guarantee
agency and sending letters to former students that are 150 to 240 days delinquent and at risk of
defaulting on their loans. The letters encourage the students to make payments and provide
information concerning their options to avoid default. ASU also informed us that it increased the
minimum test scores it requires students to have for admission to address its increasing cohort
default rate.

We further determined that ASU’s 2009–2010 and 2010–2011 graduation and retention data as
well as instructional expenses per full-time equivalent data reported to IPEDS were accurate. We
also evaluated ASU’s quantitative satisfactory academic progress measures for 2009–2010 and
2010–2011 and concluded that the measures were in compliance with quantitative standards.

We evaluated the accuracy of consumer information ASU provided on its Web site, including
Federal student assistance statements, employment data, job placement rates, and graduation data.
We determined that for students graduating in academic years 2008–2009 and 2009–2010, ASU
did not provide employment and continuing education data, provided unsupported job placement
rates, and provided inaccurate graduation data.

ASU concurred with our finding and recommendations and described the corrective actions that it
has initiated and those it plans to initiate to address our recommendations. See the full text of their
comments as Attachment 2.

FINDING:            ASU Did Not Provide Employment and Continuing Education Data,
                    Provided Unsupported Job Placement Rates, and Reported Inaccurate
                    Graduation Data on its Web Site

ASU did not provide employment and continuing education data of students graduating from 6 of
its 10 colleges in the 2008–2009 academic year and did not provide employment and continuing
education data of students graduating from 8 of its 10 colleges in the 2009–2010 academic year.
In addition, ASU provided unsupported job placement rates for four colleges for the 2008–2009
academic year and for two colleges for the 2009–2010 academic year on its Web site. Although
ASU reported its graduation data accurately through IPEDS, we found that ASU reported
Final Report
ED-OIG/A06M0013                                                                                  Page 6 of 16
inaccurate graduation data on its Web site for undergraduate students who received degrees in
academic year 2008–2009 for 4 of its 10 colleges. We also identified minor graduation data
inaccuracies for academic year 2009–2010.

ASU Did Not Provide Employment Data and Continuing Education Data for Some Colleges on
its Web Site

Institutions are required by 34 C.F.R. § 668.41(d)(5) to make available to enrolled or prospective
students information concerning the placement of and types of employment obtained by
graduates of its degree or certificate programs. Institutions are required by
34 C.F.R. § 668.41(d)(6) to make available to enrolled or prospective students information on
graduate and professional education programs that students enroll in after they graduate from the
institution’s 4-year degree programs. For both the employment and continuing education
information, the institution must identify the source of the information provided as well as any
time frames and methodology associated with it. An institution is required by
34 C.F.R. § 668.24(a)(3) to maintain documentation that its administration of the Title IV
programs is in compliance with all applicable requirements.

ASU did not comply with 34 C.F.R. §§ 668.41(d)(5) and (6) for data reported for academic year
2008–2009. Specifically, ASU did not provide employment and continuing education data of
students graduating from 6 of its 10 colleges 3 on its Web site. ASU used its Web site as the sole
means for disseminating employment and continuing education data for academic years 2008–
2009 and 2009–2010. ASU relied on the individual colleges to provide employment and
continuing education data; however, only four of ASU’s colleges provided employment data and
only two of the four colleges provided continuing education data. For example, ASU’s College
of Business and College of Communications provided employment data that included the
employers of the graduates that reported employment and listed whether the graduates were
planning to enroll in or were enrolled in a graduate program or continuing their education.
However, ASU’s College of Engineering and College of Agriculture and Technology provided
employment data, but did not include continuing education information for the graduates.

ASU did not comply with 34 C.F.R. §§ 668.41(d)(5) and (6) for data reported for academic year
2009–2010. Specifically, ASU did not provide employment and continuing education data of
students graduating from 8 of its 10 colleges on its Web site. Only two of ASU’s colleges
provided employment data for ASU’s Web site: the College of Communications and the College
of Nursing. For its graduates, the College of Communications listed the employers, position
titles, and the graduate schools attended for graduates who were continuing their education at
ASU and three other universities. For its graduates, the College of Nursing reported the number
of graduates who were employed or had continued their education. However, the College of
Nursing did not provide the same level of detailed information as the College of Communications
because its submission did not include employment data such as employers or types of jobs.

For both academic years (2008–2009 and 2009–2010), ASU officials stated that reported
employment and continuing education data were based on returned graduate surveys. ASU
3
 The six colleges that did not provide employment and continuing education data were Education, Fine Arts,
Humanities and Social Sciences, Nursing and Health Professions, Sciences and Mathematics, and University College.
Final Report
ED-OIG/A06M0013                                                                          Page 7 of 16
disclosed such employment and continuing education data that it obtained from its Colleges on its
Web site; however, ASU did not maintain documentation to support that data, as required by
34 C.F.R. § 668.24(a)(3).

ASU Provided Unsupported Job Placement Rates on its Web Site

Institutions are not required to calculate job placement rates, but institutions must disclose all
rates that they choose to calculate (34 C.F.R. § 668.41(d)(5)(iii)). Also, the institution must
disclose the source of the information provided, as well as any time frames and methodology
associated with it (34 C.F.R. § 668.41(d)(5)(ii)). An institution is required by
34 C.F.R § 668.24(a)(3) to maintain documentation that its administration of the Title IV
programs is in compliance with all applicable requirements.

ASU did not comply with 34 C.F.R. § 668.24(a)(3) to maintain documentation when it provided
on its Web site unsupported job placement rates for students who graduated in the 2008–2009
and 2009–2010 academic years. ASU provided job placement rates on its Web site for students
graduating from 4 of its 10 colleges (College of Business, College of Communications, College
of Engineering, and College of Agriculture and Technology) in the 2008–2009 academic year and
provided job placement rates for 2 of its 10 colleges (College of Nursing and College of
Communications) in the 2009–2010 academic year. For both academic years, ASU calculated
job placement rates based on returned graduate surveys and disclosed those rates on its Web site.
However, ASU did not maintain copies of the surveys sent by the individual colleges, a list of the
graduates who were provided the surveys, or the survey responses of the graduates who
responded to the surveys. Rather, for supporting documentation, ASU maintained a one-page
summary from the four colleges for academic year 2008–2009 and from the two colleges for
academic year 2009–2010 that reported a job placement rate. Furthermore, ASU did not always
disclose (1) the source of the job placement data, (2) the time frames of the job placement data, or
(3) the methodology associated with calculating the job placement rates, as required by
34 C.F.R. § 668.41(d)(5)(ii).

Additionally, ASU reported inaccurate job placement data. In February 2013, we noted that ASU
posted on its “Quick Facts” Web page that 99 percent of students registered with ASU’s Career
Management Center found employment within a year of graduation. According to ASU’s
Associate Vice Chancellor for Student Affairs, the information posted on its “Quick Facts” Web
page was “not true.” ASU removed the information after we brought it to the institution’s
attention.

ASU Reported Inaccurate Graduation Data on its Web Site

Institutions are also required to disseminate to prospective and enrolled students accurate
information including the completion or graduation rate of full-time undergraduates (Higher
Education Act of 1965, as amended (HEA), § 485(a)(1) and § 485(a)(1)(L)).
Final Report
ED-OIG/A06M0013                                                                                    Page 8 of 16
ASU was not in compliance with the HEA when it reported inaccurate graduation data on its Web
site for undergraduate students who received degrees from 4 of its 10 colleges 4 for academic year
2008–2009 and from 3 of its 10 colleges 5 for academic year 2009–2010. ASU’s Assistant
Registrar provided us with the number of graduates from each college for each year. We
compared the number of graduates to the number provided on ASU’s Web site and found that the
graduation data reported on the Web site were inaccurate. Based on our comparison, we
determined that the graduation data on ASU’s Web site for the cohort who received degrees in
the 2008–2009 year were inaccurate for four ASU’s colleges. Three of the 4 ASU’s colleges
understated the number of graduates and one college overstated the number of graduates. For
example, the Registrar’s Office reported that 287 students earned an undergraduate degree from
the College of Business in the 2008–2009 academic year. However, ASU’s Web site stated that
121 students earned an undergraduate degree from that college in that academic year, which
means it underreported the amount of graduates by 166 students (58 percent). Similarly, the ASU
Web site underreported College of Agriculture and Technology graduates by 13 students
(14 percent) and College of Communication graduates by 24 students (28 percent). The Web site
also overreported College of Engineering graduates by 20 students (36 percent). We also
determined that the graduation data on ASU’s Web site for the cohort who received degrees in
the 2009–2010 year were inaccurate for three colleges. However, the data were only off by one
student for each of the three colleges. ASU officials could not explain the difference in the
number of graduates reported on the Web site and the number of graduates the Registrar’s office
provided us.

We recommend the Chief Operating Officer for Federal Student Aid require ASU to establish policy
and procedures to—

1.1 Make available employment and continuing education data to enrolled or prospective students
    for all colleges.

1.2 Collect, maintain, and verify the accuracy of documentation to support required disclosures of
    employment and continuing education data, job placement rates, and graduation data reported
    on its Web site or by other means of dissemination.

1.3 Ensure that any required job placement rate disclosures include the required disclosures of the
    source, time frames, and methodology associated with job placement rate.

ASU Comments

ASU concurred with the finding and all of our recommendations and described the corrective
actions that it has initiated and those it plans to initiate to address our recommendations.




4
  The four colleges that reported inaccurate graduation data for academic year 2008–2009 were Agriculture and
Technology, Business, Communications, and Engineering.
5
  The three colleges that reported inaccurate graduation data for academic year 2009–2010 were Business, Education,
and Humanities.
Final Report
ED-OIG/A06M0013                                                                      Page 9 of 16


                  OBJECTIVES, SCOPE, AND METHODOLOGY


The objectives of our audit were to (1) evaluate ASU’s default prevention and management;
(2) determine the accuracy of selected information ASU reported to IPEDS; (3) evaluate ASU’s
quantitative satisfactory academic progress measures for students; and (4) evaluate the accuracy of
selected consumer information ASU provided on its Web site. Our audit scope covered the fiscal
years ending September 30, 2007 through 2012 for default prevention and management; academic
years 2009–2010 and 2010–2011 for reported IPEDS data and satisfactory academic progress; and
the data on ASU’s Web site on September 7, 2012, before the entrance conference, and again
before the exit conference on February 5, 2013, during our fieldwork phase.

To accomplish our objectives, we performed the following procedures.

   •   Reviewed relevant sections of the Higher Education Act of 1965, as amended, and Federal
       regulations.
   •   Reviewed relevant sections of the Federal Student Aid handbook 2009–2010, IPEDS New
       Keyholder Guide 2012–2013, and Cohort Default Rate Guide, Revised November 2011.
   •   Evaluated ASU’s policies and procedures for Title IV processes related to our audit
       objectives for disbursement of Federal student aid based on quantitative satisfactory
       academic progress measures, tracking of academic requirements, evaluation of satisfactory
       academic progress measures, and for obtaining and reporting IPEDS data for graduation,
       retention, and instructional expenses per full-time equivalent and consumer information on
       its Web site.
   •   Assessed ASU’s internal controls for default management and prevention, collecting and
       reporting data for IPEDS, quantitative satisfactory academic progress measures, and
       publishing consumer information on its Web site.
   •   Reviewed ASU’s default prevention and management and the actions taken to reduce loan
       defaults.
   •   Reviewed ASU’s Web site and its Undergraduate and Graduate bulletins to identify ASU’s
       communication of required consumer information including Federal student aid statements,
       employment data, job placement rates, and graduation data.
   •   Reviewed randomly selected samples of students to test the reliability of data and to
       determine whether ASU was consistent in its satisfactory academic progress methodology
       for students receiving and not receiving financial aid.

We relied on computer-processed student data from the Department’s National Student Loan Data
System and IPEDS as well as from ASU’s Banner software. Banner is a software application
developed specifically for higher education institutions. ASU converted its computer system over
to the Banner software for the fall 2006 semester. We assessed the reliability of the data ASU
provided for the first three audit objectives by (1) interviewing ASU officials knowledgeable of the
data, (2) performing testing for completeness by comparing ASU’s data to the National Student
Loan Data System and IPEDS, and (3) reviewing existing information about the data and the
Banner system that produced them for accuracy. We did not rely on computer-processed data for
the fourth objective.
Final Report
ED-OIG/A06M0013                                                                     Page 10 of 16

For audit objective 2, ASU provided two databases of student records for its fall 2004 and fall 2005
first time freshmen attending ASU full time. The two databases of students made up the initial
cohorts for academic years 2009–2010 and 2010–2011 graduation data reported by ASU to IPEDS.
Since the two years of graduation data started with fall 2004 and 2005 enrollment data, we also
used the enrollment data to address our audit objective 3 (satisfactory academic progress
measures). We compared the databases’ totals to the totals of 1,373 and 1,576 students that ASU
reported in IPEDS as its 2009–2010 and 2010–2011 graduation universes. We noted minor
discrepancies between the totals of 5 and 8 students respectively and determined the 13 students
(0.44 percent) of the 2,949 students in our 2 universes to be immaterial for our audit purposes.

Once we determined that ASU provided a complete universe for audit objectives 2 and 3, we
randomly selected 25 students from the 2009–2010 graduation data and 25 students from the 2010–
2011 graduation data. For the sampled students, we verified graduate or nongraduate status and
compliance with satisfactory academic progress measures from fall 2004 through summer 2010 for
the 25 students in the 2009–2010 graduation data and from fall 2005 through summer 2011 for the
25 students in the 2010–2011 graduation data. We reviewed college transcripts to ensure ASU
reported the graduate and nongraduate status. We reviewed aid given to the sampled students to
ensure ASU stopped disbursing aid to students who exceeded 150 percent of the program length.

In addition, ASU provided four databases of student records for its fall 2009 and fall 2010 first-
time freshmen attending ASU seeking a bachelor’s degree, two databases were full-time students
and two databases were part-time students. The databases of students that made up the academic
years 2009–2010 and 2010–2011 retention data reported by ASU to IPEDS. We compared the
databases’ totals to the totals that ASU reported in IPEDS as its 2009–2010 and 2010–2011
retention universes. We also reviewed ASU’s policies and procedures for creating the two
databases and the actual process for the years included in our review. Based on this testing, we
determined that the graduation and retention universes ASU provided to be complete. We then
randomly selected 100 full-time students and 20 part-time students to verify that the students
returned to ASU the next fall.
Final Report
ED-OIG/A06M0013                                                                     Page 11 of 16

Our sample universes and sample sizes by audit objective are presented below in Table 4.

            Table 4: Sample Universes and Sample Sizes Data Reliability Testing
                                for Audit Objectives 2 and 3
                                                             Sample     Sample
                                                             Universe    Size
           Audit Objective 2 and 3:
              2009–2010 Graduation Rate and Satisfactory
                                                              1373        25
                 Academic Progress Measures
              2010–2011 Graduation Rate and Satisfactory
                                                              1576        25
                 Academic Progress Measures
           Audit Objective 2:
             2009–2010 Full-Time Retention Rate               1650        50
             2010–2011 Full-Time Retention Rate               1665        50
             2009–2010 Part-Time Retention Rate                75         10
             2010–2011 Part-Time Retention Rate                51         10

We selected six random samples, each from a separate list of students as shown in Table 4. The
separate student lists were sorted by either social security number or student identification number
and then each student was assigned a new consecutive sequence number. We then used a
computer software program to generate a list of random numbers spanning the list size so that each
student’s sequence number had a chance of selection. We selected the first 10, 25, or 50 random
numbers and selected the corresponding student whose sequence number matched the random
number. While the samples of students were selected with a random process, the sample sizes
varied between samples based on auditor judgment. We did not consider these to be probability
samples and the results should not be projected over the entire population.

We conducted onsite visits at ASU during the weeks of September 24, 2012, and
November 26, 2012. We held an exit conference with ASU on February 27, 2013, to discuss the
results of the audit. We conducted our audit work from September 2012 through June 2013.

During our audit work, we assessed ASU’s internal controls and performed limited testing of the
internal controls. For the fourth objective, we noted internal control weaknesses because ASU did
not have control activities in place to ensure the accuracy of the data on its Web site. We also
noted an internal control weakness in information and communication because the graduate survey
supporting documentation was not maintained and unavailable.

We conducted this performance audit in accordance with generally accepted government auditing
standards. 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 that the evidence obtained provides a reasonable basis for our finding
and conclusions based on our audit objectives.
Final Report
ED-OIG/A06M0013                                                                    Page 12 of 16


                            ADMINISTRATIVE MATTERS


Statements that managerial practices need improvements, as well as other conclusions and
recommendations in this report, represent the opinions of the Office of Inspector General.
Determinations of corrective action to be taken will be made by the appropriate 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:
                             James W. Runcie
                             Chief Operating Officer
                             Office of Federal Student Aid
                             U.S. Department of Education
                             400 Maryland Avenue, SW
                             Washington, D.C. 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,


                                            Keith M. Maddox /s/
                                            Regional Inspector General of Audit


Attachment(s)
Final Report
ED-OIG/A06M0013                                               Page 13 of 16


Attachment 1: Abbreviations, Acronyms, and Short Forms
              Used in This Report
ASU          Arkansas State University

C.F.R.       Code of Federal Regulations

Department   U.S. Department of Education

FFEL         Federal Family Education Loan

FY           Fiscal Year

HEA          Higher Education Act of 1965, as amended

IPEDS        Integrated Postsecondary Education Data System

NCES         National Center for Education Statistics
Final Report
ED-OIG/A06M0013                                                                          Page 14 of 16
                                Attachment 2: ASU Comments




July 30, 2013

Mr. Keith Maddox
Regional Inspector General of Audit
1999 Bryan Street
Dallas, TX 75201

         RE: Control Number ED-OIG/A06M0013

Dear Mr. Maddox:

Please find attached the response to the audit work performed at Arkansas State University from
September 2012 through June 2013. The audit addressed several areas of Arkansas State University
and its compliance with federal regulations, including default prevention and management, accuracy of
selected information reported to the Integrated Postsecondary Education Data System (IPEDS),
evaluation of ASU’s quantitative satisfactory academic progress policy, and evaluation of selected
consumer information provided by ASU on our web site.

According to the response the only items that were cited in the final Draft Audit Report of Arkansas
State University was the failure to provide employment and continuing education data for all degree
and certificate programs, unsupported job placement rates, and provided inaccurate graduation data on
its web site for students that graduated in academic years 2008-2009 and 2009-2010. Specifically, the
finding reads as follows; ASU did not provide employment and continuing education data, provided
unsupported job placement rate and reported inaccurate graduation data on its web site.

We concur with these findings and offer the attached response to the corrective actions that are already
underway at the university and the actions that will be undertaken in the future to correct these issues.

Please feel free to contact our staff if any additional information is needed. We appreciate your
comments in helping make Arkansas State University a better university.

Sincerely,

Tim Hudson, Ph.D. /s/
Chancellor

TH:slj

xc:      Dr. Rick Stripling, Vice Chancellor for Student Affairs
         Mr. Terry Finney, Director of Student Financial Aid and Scholarships
Final Report
ED-OIG/A06M0013                                                                                     Page 15 of 16

Keith M. Maddox
Regional Inspector General of Audit
1999 Bryan Street
Dallas, Texas 75201

RE: Control Number ED-OIG/A06M0013

Dear Regional Inspector General Maddox;

In regards to the Draft Audit Report, “Arkansas State University’s Administration of Selected
Aspects of the Title IV Programs” results of your audit, we concur with your specific finding and
will comply with your recommendations This letter will address actions already taken and future
plans to address the corrective action and recommendations:

FINDING NO. 1: ASU Did Not Provide Employment and Continuing Education Data,
Provided Unsupported Job Placement Rates, and Reported Inaccurate Graduation Data on
its Web Site

Action taken:
In regards to the posting in February 2013 on the “Quick Facts” “web page reporting 99 percent of
student registered with ASU’s Career Management Center found employment within a year of
graduation”, as soon as we were notified of that posting by your staff, the information was taken
down within the hour. ASU had launched a new web look for the campus and one of the web
designers had pulled that information from a source more than 6 years old and placed it there
without contacting anyone for permission or notification. The information was pulled six years
ago when it was discovered for the same reason. It was incorrect.

When we were notified of your preliminary results of the audit in March, on March 25, 2013, an
email message was sent to all deans, provost and vice chancellor for Academic Affairs, and the
director of Career Services to withdraw all data from all web pages pertaining to employment and
continuing education data (see “Attachment A”). 6 The only piece of information remaining on any
web sites is a “Graduate & Professional Education Placement for ASU Graduates-Fall 2011”
obtained from the Arkansas Department of Higher Education (Attachment D). The information
can be viewed at the following locations on the web: Consumer Information, Right to Know, and
Career Services.

Future Action
A committee was formed in March to develop a survey that could be used by all colleges and
Career Services to obtain the graduation and employment data as required. The criteria (34 C.F.R.
668.41(d) (5) and (6), and 34 C.F.R. 668.24(a) (3)) were provided to the committee to assist in the
development of an instrument(s) and procedure for obtaining and providing required information.

ASU conducts graduation ceremonies in May, August and December. Employment and
Continuing Education information will be obtained through 2 methods. 1. A pre-graduation survey
6
    ASU provided several Attachments (A-E) with its letter. These attachments will be made available upon request.
Final Report
ED-OIG/A06M0013                                                                     Page 16 of 16
(Attachment B - Senior Exit Survey, pages 10 and 11 of document house employment and
continuing education sections) will be distributed prior to each graduation ceremony at the time the
prospective graduates will be picking up their caps and gowns for graduation. A professional staff
member from Career Services, along with a student worker from the Assessment department, will
administer the pre-graduation survey at an adjacent table to the cap and gown table. The cap and
gown table is operated for three days. Staff will be assigned to the table to administer the pre-
graduation survey at all times for those three days that the cap and gown table is open. With the
aid of the student information system, self-reported information can be extracted according to
demographics within the system such as college, major, sex, ethnicity, etc.

Ninety days after each graduation ceremony, a post-graduation survey (Arkansas State University
Graduate Survey) will be emailed to all graduates of the previous graduation whether they
completed the pre-graduation survey or not (Attachment C – Post Graduation Survey). This survey
will provide an updated employment and continuing education look at the graduates 90 days past
their graduation with self-reporting information.

The data from the surveys (pre and post graduation surveys) will be collected and analyzed by the
Assessment Office of Arkansas State University according to the criteria of the federal statutes.
Using one central office to collect and disseminate the information will reduce the possibility of
error of reporting associated with individual colleges and departments doing their individual
things. Summarized information for graduation will be displayed on the Consumer Information,
Right to Know, and Career Services departments’ web links. The ASU colleges and departments
web sites will be monitored to make sure any information being presented is in accordance with the
federal guidelines: 34 C.F.R. 668.41(d)(5) and (6); 34 C.F.R. 668.24(a)(3); HEA 485(a)(1); HEA
485(a)(1)(L); and 34 C.F.R. 668.41(d)(5)(iii) and (ii).

It is our belief and hope that these actions will allow ASU to 1. Make available employment and
continuing education data to enrolled or prospective students for all colleges; 2. Allow us to
collect, maintain, and verify the accuracy of documentation to support disclosures of employment
and continuing education data, job placement rates, and graduation data reported on our web sites
and via other means; 3. And ensure that any required job placement rate disclosures include the
required disclosures of the source, time frames, and methodology associated with job placement
rate disclosure. We hope to have the first of this information ready and available in the fall
semester based on the post-graduation survey for the spring 2013 and August 2013 graduation
classes (see attachment E for timeline).