Finding 1088491 (2024-001)

Criteria According to 34 CFR 668.59: (a) For the subsidized student financial assistance programs, if an applicant's FAFSA information changes as a result of verification, the applicant or the institution must submit to the Secretary any changes to – (1) A nondollar item; or (2) A single dollar item of $25 or more. (b) For the Federal Pell Grant Program, if an applicant's FAFSA information changes as a result of verification, an institution must – (1) Recalculate the applicant's Federal Pell Grant on the basis of the EFC on the corrected valid SAR or valid ISIR; and (2) (i) Disburse any additional funds under that award only if the institution receives a corrected valid SAR or valid ISIR for the applicant and only to the extent that additional funds are payable based on the recalculation; (ii) Comply with the procedures specified in §668.61 for an interim disbursement if, as a result of verification, the Federal Pell Grant award is reduced; or – (iii) Comply with the procedures specified in 34 CFR 690.79 for an overpayment that is not an interim disbursement if, as a result of verification, the Federal Pell Grant award is reduced. (c) For the subsidized student financial assistance programs, excluding the Federal Pell Grant Program, if an applicant's FAFSA information changes as a result of verification, the institution must – (1) Adjust the applicant's financial aid package on the basis of the EFC on the corrected valid SAR or valid ISIR; and (2) (i) Comply with the procedures specified in §668.61 for an interim disbursement if, as a result of verification, the financial aid package must be reduced; (ii) Comply with the procedures specified in 34 CFR 673.5(f) for a Federal Perkins loan or an FSEOG overpayment that is not the result of an interim disbursement if, as a result of verification, the financial aid package must be reduced; and (iii) Comply with the procedures specified in 34 CFR 685.303(e) for Direct Subsidized Loan excess loan proceeds that are not the result of an interim disbursement if, as a result of verification, the financial aid package must be reduced. Condition The financial aid award process includes consideration of financial and demographic data provided by the student applicant. To evaluate the reliability of this data, a participating institution is required by the Federal Government to select a sample from its student population and verify certain prescribed data. The selected students’ files should be revised to incorporate any changes in the supplied data. The College’s policy is to verify the information of those students identified by the Federal Government’s processor. During our testing, we noted 1 student, out of a sample of 40, that did not complete verification before aid was disbursed. Cause The Colleges failed to have the proper review procedures in place to ensure students flagged for verification complete verification before aid was disbursed. Effect The student’s EFC was calculated using incorrect data. Since the student’s EFC is used to calculate the financial aid award, an incorrect EFC can result in an improper award. Questioned Costs Not applicable. Identification as a Repeat Finding Not applicable. Recommendation The Colleges should continue to strengthen their controls surrounding verification. The Colleges should implement policies that require all student ISIR’s subject to verification be reviewed once the verification process is complete. The reviewer should be well-versed in the verification process and requirements. Once reviewed, all verified ISIR’s should be re-submitted to the Federal Government’s processor for recalculation of the applicant’s EFC prior to awarding aid. View of Responsible Officials The Colleges agrees with the finding.