Preparing for a DOE Onsite Review of Your Federal Student Aid Program
If you’ve been notified by the Department of Education’s Inspector General (OIG-DOE) that your school’s federal student financial aid program is scheduled for review, you’re far from alone. And if you haven’t yet been selected, it’s no stretch of the imagination to expect your turn will come too — and sooner than later.
Those of us at CLA who serve higher education clients have fielded more calls from panicked school officials in the last two years than ever before. The frenzy of DOE program reviews is unprecedented, but it’s just the tip of the iceberg in the government crackdown on non-compliance with federal regulations. These reviews aren’t going away, so your best defense is preparation.
For those institutions whose number is up, there are still things you can do in advance of the onsite review to gain some control of this process. The remaining schools that will otherwise endure this inevitability someday down the line have the advantage of time; use it wisely. In either case, don’t let the IG darken your door before you have done all you can to get ready.
How to prepare before notice of program review
If you haven’t yet received a letter or call for the OIG-DOE about program review, don’t get too comfortable. There are things you can do now to keep reviewers at bay and to do well when they eventually arrive later. Schools that have already gone through a review can take heed of the following tips, too — they are best practices that should be regarded as a way of conducting good business.
Set the right tone at the top
School presidents, student financial assistance directors, CFOs, and other authorities at the top of the institution have often invited a program review simply by striking the wrong tone with regulators. And that tone has typically been one of disregard for the rules. If you seek to add students to your rolls while flaunting federal regulations, tend to get a little too creative with your interpretations of the rules, or flat-out ignore findings from previous audits, you are begging to be set straight by DOE auditors, who are keen to make an example of you and “send a message” that compliance is king.
Instead, set a tone of integrity and willingness to work within the federal parameters. You can fight the regulatory excesses in other ways, but, cooperation is your ally. Auditors in turn are more likely to correct noncompliance rather than penalize it when that occurs.
Build relationships with regulators
Engage DOE auditors in a consultative relationship before they ever step across your threshold. Try expressing a desire to be compliant and ask for help in interpreting communications and understanding rules. If they see you laboring in earnest to meet their requirements, they’ll be more inclined to pass over your school for a review or to guide you to corrective action rather than throw the book at you during an audit.
Strive for zero errors
You’re familiar with the term “zero tolerance.” It boldly communicates the expectation of perfection. DOE has a high respect for institutions that have established zero tolerance for noncompliance, and it will usually avoid those that are known for high quality work. (Ironically, however, when an institution has zero findings in a series of consecutive annual audits, a red flag goes up at DOE and the reviewers are dispatched; perfection in a rigorous environment is highly suspicious.) The regulators become familiar with stronger institutions by the reports that cross their desk and the ongoing communications they may have had with your school.
Training, training, training
Regulations are always changing. You have to keep up. On-the-job experience is effective to a certain degree, but formal training is essential for student financial aid employees. The DOE provides free annual training near the end of November or start of December; it is very good and has the added benefit of networking opportunities. You can also hire outsourced trainers to come to you or send your people to any number of good conferences or online sessions. It’s an investment you should make without reserve.
How to prepare for an impending review
If the DOE has set a date and will be paying your school a program review visit, don’t panic. Prepare.
DOE self-assessment and audit guide
You’ll get a strong sense of what your onsite program review will be like by taking the DOE’s self-assessment. It’s a top-to-bottom checklist of federal regulations, written by the regulators themselves, that tends to emphasize the policies and processes du jour. In preparing for a review, going through the checklist is a must. (In fact, you should make it an annual exercise, regardless of whether a review is scheduled or not.) Include all of your SFA professionals and make it a team event so everyone is informed and ready when the auditors arrive.
Program reviewers defer to the DOE’s own audit guide as they inspect your institution. Bone up on it. You’ll get insights into their thinking that can help you anticipate the type of information they’ll be looking for.
Ask your CPA for some intel
The CPA firm that completed your student financial aid compliance audit can be a helpful resource. The CPA will have other clients that have gone through recent program reviews and may know what areas of compliance the reviewers are focusing on in particular. And there is a good chance she or he knows about your designated auditor and what his or her personality and preferences are like.
Make the onsite review itself as pleasant as possible
There are a few extra things you can do to make the review go smoothly and minimize findings:
- If you are confused by an inquiry, either written or verbal, ask the auditors for clarification before you respond.
- Request a conference call prior to the meeting. Ask what the expectations are and what information you are to provide them.
- The auditors will note a day they will be coming, but if that does not fit into your schedule, it’s okay to ask for a different time frame.
- Make the auditors feel welcome. Give them a comfortable, well-lit space to work in the vicinity of the people they will be interacting with.
- Be on time for meetings, and be prepared to answer questions.
- Bring more than one person to meetings with the auditors. Confusion and misinterpretation tend to be minimal when more people are interacting.
- Have all requested information ready for the auditors.
- Set certain times each day that you and your team can sit down with the auditors and answer their questions.
- If you have a disgruntled employee in the department, limit his or her access to the auditors.
- If there are findings, ask what level of severity each of the findings represents.
- Also, ask what type of response you should have for the findings, as they may be able to steer you in the right direction.
- If you disagree with an auditor, do not argue! Find a solution or the answer that is backed by the regulations and show any disagreement politely.
Responding to findings
Most people take great pride in their work, especially if they care. Even so, nobody is perfect, so cut yourself some slack — and extend the same courtesy to your reviewers. The first reaction to a finding is to point fingers at the auditors and insist that they were wrong or punitive, but usually they are neither.
In responding to any OIG-DOE findings, take a position of cooperation. Acknowledge the issue and commit to mitigating the errors going forward. Whether mistakes were truly made or information demonstrating actual compliance was insufficient makes little difference at this point. Express a desire to remedy any erring policies and procedures and become compliant in the future.
In the rare cases the findings are truly erroneous or unsupported, there are measures you can take to appeal, of course.
How we can help
Whether a DOE review is scheduled or simply looms on the horizon as a strong probability in today’s intense regulatory climate, a strategy of cooperation and compliance is your best approach to preparation. Our higher education industry professionals are privy to these review procedures. We can guide your institution with best practices that keep you in line with the regulations and help minimize findings. We can also assist with recovering from any findings or helping through an appeals process.