Finding Text
Federal Program Information:
Federal Supplemental Educational Opportunity Grants (ALN: 84.007), Federal Work-Study Program (ALN: 84.033), Federal Pell Grant Program (ALN: 84.063), and Federal Direct Student Loans (ALN: 84.268)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation):
N. Special Test and Provisions – Verification - An institution shall require an applicant selected for verification to submit acceptable documentation that will verify or update the following information used to determine the applicant's EFC: adjusted gross income, U.S. income tax paid, aggregate number of family members in the household, number of family members in the household who are enrolled in as at least half-time students in postsecondary educational institutions if that number is greater than one and untaxed income subject to U.S. income tax reporting requirements in the base year which is included on the tax return form, excluding information contained on schedules appended to such forms. Untaxed income and benefits include: Social Security benefits if the institution has reason to believe that those benefits were received and were not reported or were not correctly reported; child support if the institution has reason to believe child support was received; U.S. income tax deductions for a payment made to an individual retirement account or Keough account; interest on tax-free bond; foreign income excluded from U.S. income taxation if the institution has reason to believe that foreign income was received; and all other untaxed income subject to U.S. income tax reporting requirements in the base year included on the tax return form, excluding information contained on schedules appended to such forms. (34 CFR section 668.56).
Condition:
For certain students selected for verification, supporting documentation for the information required to be verified could not be provided by the University.
Cause:
Insufficient administrative oversight and internal controls with respect to verification procedures.
Effect or Potential Effect:
Federal awards were not disbursed in accordance with federal regulations, and the University was not in compliance with verification compliance requirements.
Questioned Costs:
Unknown.
Context:
For 1 of 15 students selected for verification testing, the University did not perform appropriate verification procedures.
Identification as a Repeat Finding:
No similar findings noted in the prior year.
Recommendation:
We recommend that the University enhance its internal controls and implement formal policies and procedures over the applicable compliance requirements to ensure that the appropriate verification procedures are performed for all students who are selected for verification unless excluded by the federal regulations.
Views of Responsible Officials:
The verification for one student was improperly conducted, leading to financial aid awards and disbursements based on unverified or incorrectly verified financial data, specifically regarding untaxed IRA distributions and pensions. The verification failure was due to an oversight by the aid administrator who incorrectly verified the untaxed IRA distribution and pension as zero, despite contradictory evidence or a lack of supporting documentation.
The University partnered with Financial Aid Services (“FAS”) in February 2025 to review the current systems and process, and devise appropriate systems, checks, and balances to address each deficiency in our financial aid processes and personnel.
Resulting from the work of FAS, the verification policies will be thoroughly reviewed, and revised, to ensure comprehensive coverage as mandated by federal regulations. The University will also establish a robust quality control system to regularly review verification practices and compliance, ensuring adherence to updated policies. We will update and maintain a verification checklist that includes all data elements required for verification. This checklist will be used in all verifications, with a secondary review and sign-off by another trained administrator to ensure accuracy and completeness.
In addition, we will bolster training for all financial aid staff, utilizing resources from FAS and the National Association of Student Financial Aid Administrators (NASFAA) to deepen understanding and expertise in verification processes.