Following the initial release of the well-known and controversial 2010 GAO report concerning alleged abuses in the for-profit sector, Secretary of Education Arne Duncan issued a public letter to Senators Tom Harkin and Mike Enzi, in which he stated that the Department was “in the process of hiring more than 60 additional staff to strengthen oversight of schools and conduct 50 percent more program reviews of postsecondary institutions each year.”
In the years subsequent to this declaration, the Department appears to have made good on Secretary Duncan’s promise, with increased program review activity reported not only among for-profits, but among non-profit institutions, as well. These program reviews range from general reviews of an institution’s student aid administration to focused audits examining Clery Act compliance, online consumer information disclosures, and other select topics.
Despite the overall increase in program review activity, most schools have given little thought to preparing for a potential review. And this, of course, is understandable. Postsecondary institutions face very real challenges on a daily basis, and have little free time to spend contemplating hypothetical audits. Unfortunately, as a result, most administrators are ill-prepared to receive “the call” when it does occur. With this in mind, we’ve provided below a short list of objectives for an institution’s very first interaction with the Department.
With regard to the call, when it does come, it will be made by the “team lead.” This is the Federal Student Aid (FSA) staff member from the school’s regional Participation Division who will serve as the senior member of the program review team. The team lead first will attempt to call the institution’s president. Following the conversation with the president, the team lead will reach out to the financial aid director (FAD). If the team lead’s effort to reach the president is unsuccessful, he or she will leave a message (standard protocol), then immediately call the FAD. Because, either way, the FAD will get a call, it may make the most sense for the FAD to take primary responsibility for ensuring that the following objectives are met during this initial round of correspondence:
Establish a clear point of contact (POC) for all pre-visit communications with the team lead, and ask that all critical correspondence be relayed through the POC. Throughout the program review process, an institution should ensure that all communication and messaging with the Department is deliberate, controlled, and consistent. Critical to achieving this purpose is the designation of a POC for all correspondence with the Department during the review. Also of great importance, both the Department and institutional staff need to be made aware of this designation, and (politely) encouraged to respect it.
Consider whether you have any conflicts with the proposed dates for the review and, if so, communicate them to the team lead. During my time in-house, I oversaw six program reviews, and more than once we had scheduling issues arise. On one occasion the Department initially proposed conducting the review during the first week of our term, and on another occasion the review was proposed the same week our institution was undergoing an accreditation renewal visit. In both instances, the Department understood our concern and was willing to negotiate revised dates. Unfortunately, institutions often are reticent to voice concerns with the Department, with the result that reviews are scheduled at inopportune times.
- Confirm the purpose of and cause for the review. Most commonly, program reviews are general assessments of an institution’s overall administration of the federal financial aid programs. However, the Department can and does conduct focus reviews concentrated on particular issues (e.g., preferred lender activity, campus security, gainful employment disclosures, etc.). Ensure that you fully understand the nature of the review that will be conducted. Also, inquire as to the basis for the review. Typically, the Department will indicate that an institution has been selected at random. However, program reviews can be initiated based on specific reports of non-compliance.
Confirm which of your locations will be part of the review. Most often, the Department will include your main location and all additional locations within the scope of the review. The onsite portion of the review will be limited to the main location, while the off-site and file review portions of the review will incorporate all locations within your OPEID. It is entirely within the Department’s discretion, however, to alter this standard practice. The Department could limit the entire review to a single additional location, or elect to conduct an onsite visit at every location within the OPEID. Accordingly, it is important that an institution understand as early as possible which locations will be included within the review, and which will host an onsite visit.
Confirm the review period. Typically, a program review will cover the two most recent award years, with the understanding that the Department may, in its discretion, expand the time period at a later date. The review period can vary, however, particularly where the Department is conducting a review in response to specific concerns of non-compliance.
Ideally, an institution will address the aforementioned points during its initial conversation with the Department, thereby enabling it to begin preparations immediately. And speed is important, as program reviews can be announced only a few short weeks before an onsite visit.