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Institution Support in Assisting the Department in Responding to the GAO Audit on Potentially Improper Disbursements in the Federal Direct Loan and Federal Pell Grant Programs

Publication Date: June 17, 2001

Author: General Manager: SFA School Channel

Summary: Institution Support in Assisting the Department in Responding to the GAO Audit on Potentially Improper Disbursements in the Federal Direct Loan and Federal Pell Grant Programs

Posted on June 17, 2001

To: All Destination Points
From: Department of Education, Student Financial Assistance, Schools Channel
Subject: Institution Support in Assisting the Department in Responding to the GAO Audit on Potentially Improper Disbursements in the Federal Direct Loan and Federal Pell Grant Programs

The General Accounting Office (GAO) is auditing the Department's Direct Loan and Pell Grant disbursement systems. The GAO has a number of questions regarding Federal Pell Grant and Federal Direct Loan disbursements where Direct Loan and Pell data do not match Social Security Administration records; or records show the students are under 12 or over 70 years of age. GAO is categorizing these payments as potentially improper.

Department staff have researched the GAO issues, and have determined that the majority of the payments were, in fact, proper. But, some questions and data discrepancies for a small number of students and PLUS borrowers remain. Because determining eligibility and making proper payments are responsibilities shared between institutions and the Department, we need your help in resolving the remaining data issues

To resolve these remaining issues, we need information institutions may have used to verify student eligibility and enrollment. Department of Education, Direct Loan and Pell customer service representatives (CSR) will begin calling institutions in the next few days to ask for copies of any documentation you have that could help us validate our disbursement records. The number of student disbursements in question is very small and we are hopeful that the amount of research we are asking you to do is minimal. The questions are confined to award years 1997-98, 1998-99, 1999-2000, and to a small number of institutions.

The Department of Education's systems and controls are being audited, not your institution systems, or your business processes. The documentation you provide to us will not be used, but itself, to trigger a program review or other unplanned oversight activity.

We understand that this is a busy time for you on your campuses and we very much appreciate any assistance you can provide, as our collective efforts strengthen the integrity of the student aid programs.

If you have questions about this message, please contact the Customer Support Branch at 1-800-433-7327 or email sfa_customer_support@ed.gov.

Last Modified: 06/16/2001