| PublicationDate: 7/1/95 ChapterNumber: 2 ChapterTitle: General Institutional Responsibilities SectionNumber: 6 SectionTitle: Evaluating Your Management of Student Financial Aid Programs PageNumbers: 42-45 2.6 Evaluating Your Management of Student Financial Aid Programs Schools should evaluate the way they administer Title IV programs on a regular basis. This is a priority of the U.S. Department of Education, as well as of the professional communities of business officers and financial aid administrators. ((Goals of evaluation)) Evaluating Title IV administration serves many purposes, two important ones being to ensure that the school is complying with statutory and regulatory requirements and to identify school policies and procedures that need updating or revising. All schools that participate in Title IV financial aid programs must ensure that their student aid operations, procedures, and policies remain in compliance with statutory and regulatory requirements. Failure to do so may have serious consequences: ((Consequences of non-compliance)) - Institutional liabilities--The school will be required to repay any misused funds to ED. - Inequitable student aid distribution--Students at the school may be awarded less or more aid than they are entitled to receive. - Possible fines, limitation, suspension, or termination--If audits and program reviews identify serious instances of non-compliance, inappropriate use of funds, or fraud, the school may be subject to emergency action by ED and may ultimately lose its eligibility for federal student aid programs. - Debarment--Individuals found responsible for fraud or serious misuse of federal funds may be barred from involvement in any federal programs. ((Evaluation methods)) The primary methods for evaluating an institution's management of Title IV programs are: - self-evaluation, - peer evaluation, - ED's Institutional Quality Assurance Program (IQAP),*8* - federal program reviews and audits, - compliance and financial audits, and - State Postsecondary Review Entity (SPRE) reviews. The last three methods (audits and reviews) are required and are conducted by third parties. These procedures are discussed in Chapter 6 of this guide. The following three sections are discussions of evaluation methods that are strongly recommended; they are not required. 2.6.1 Self-Evaluation Institutional self-evaluation provides a way of maintaining internal quality control and serves as an effective management tool. The process helps a school detect and correct small problems before they become potential sources of liability. Self-evaluation also helps the school prepare for future program reviews and audits. A self- evaluation might include: ((Components of self-evaluation)) - reviewing a representative sample of student files, - reviewing written policies and procedures, and - observing activities such as loan counseling sessions. A publication that can help schools develop comprehensive evaluation systems is The Institutional Guide for Financial Aid Self- Evaluation, published by the National Association of Student Financial Aid Administrators (NASFAA). The publication provides a step-by-step outline for reviewing financial aid and fiscal policies, procedures, and practices. The guide can be ordered by calling NASFAA at 202-785-0453. 2.6.2 Peer Evaluation Peer evaluation is another technique for obtaining an independent, objective review of an institution's administration of Title IV programs. The peer evaluator can be a financial aid administrator or fiscal officer from another school or a financial aid consultant. ((Exchange of ideas)) In a peer evaluation, both sides benefit. The school being evaluated obtains an objective evaluation of its operation from someone at a similar institution, while the person performing the evaluation gets a first-hand look at how another school manages financial aid programs. Comparing notes and exchanging ideas are methods by which colleagues in financial aid offices and business offices can share their expertise for the good of all. 2.6.3 Institutional Quality Assurance Program The Institutional Quality Assurance Program (IQAP) was formally established by the Higher Education Amendments of 1992. The program had existed previously only as a pilot project. Under IQAP, schools establish formal quality-control programs that are intended to minimize program errors and improve the school's administration of Title IV programs. IQAP takes a proactive approach, in that it focuses on preventing problems and improving existing procedures rather than penalizing institutions for errors and mismanagement of programs. Schools that participate in IQAP are exempt from certain ED reporting and verification requirements if their institutional quality- control measures duplicate these requirements. Schools that are interested in participating in IQAP should contact ED's Performance and Accountability Improvement (PAI) staff at 202-260-4788. *8*Please note that Direct Loan schools are required to submit a separate Quality Assurance Plan that is not part of IQAP. |