University of Southern California’s Use of Professional Judgment

Submitting OIG:

Report Description:

The objectives of our audit were to determine whether the University of Southern California (1) applied and documented its use of professional judgment, including dependency override, in accordance with sections 479A and 480(d) of the Higher Education Act of 1965, as amended and (2) reported its use of professional judgment, including dependency override, in accordance with the Federal Student Aid Handbook, Application and Verification Guide. This was the third in a series of audits on this subject. Prior two audits can be found here: https://oig.ed.gov/search?keys=professional+judgment.

Date Issued:

Thursday, August 24, 2023

Agency Reviewed / Investigated:

Department of Education

Submitting OIG-Specific Report Number:

A20IL0007

Component, if applicable:

Federal Student Aid

Location(s):

United States

Type of Report:

Audit

Questioned Costs:

Funds for Better Use:

Number of Recommendations:

Report updated under NDAA 5274:

View Document:

Attachment	Size
A20IL0007-USC-PJ-Final-Audit-Report-08-24-2023-508.pdf	14.04 MB

Recommendation Number	Recommendation Status	Significant Recommendation
1.1	Open	Yes
We recommend that the Chief Operating Officer for Federal Student Aid (FSA) require USC to— 1.1 Calculate the actual amount of improper Pell and any other Title IV payments made to the 13 students for whom it did not apply professional judgment other than dependency override in accordance with section 479A of the HEA and return those funds to the Department.
1.2	Open	Yes
We recommend that the Chief Operating Officer for Federal Student Aid (FSA) require USC to— 1.2 Review its records for the 6,062 students for whom the school reported that it applied professional judgment other than dependency override for award year 2019–2020 or award year 2020–2021 but were not included in our sample and (a) identify those students for whom it improperly adjusted the value of data items affecting AGI based on allowances or expenses unrelated to special circumstances, (b) provide FSA with a listing of the improperly disbursed Title IV funds and the records associated with those students for whom financial aid administrators improperly applied professional judgment, and (c) return the improperly disbursed Title IV funds to the Department.
2.1	Open	Yes
We recommend that the Chief Operating Officer for FSA require USC to— 2.1 Review its records for the 6,162 students for whom the school reported that it applied professional judgment other than dependency override for award year 2019–2020 or 2020–2021; identify records adequately documenting the use of professional judgment; and provide the records for any students with inadequately documented professional judgment to FSA along with a listing of the amount of Title IV funds, if any, that were improperly awarded and disbursed to students.
3.1	Open	Yes
We recommend that the Chief Operating Officer for FSA require USC to— 3.1 Provide additional records that adequately document the financial aid administrators’ determinations of independence for the six students or return to the Department $3,700 in Pell funds and $26,200 in Direct Loan funds.
3.2	Open	Yes
We recommend that the Chief Operating Officer for FSA require USC to—Review its records for the 81 students not included in our sample; identify records adequately documenting the financial aid administrators’ determinations of independence; and provide the records for any students with inadequately documented dependency override to FSA along with a listing of the amount of Title IV funds, if any, that the school improperly awarded and disbursed to the students.
4.1	Open	Yes
We recommend that the Chief Operating Officer for FSA require USC to— 4.1 Develop and implement procedures for confirming that its student information system data are corroborated by its financial assistance records before reporting the use of professional judgment to the Department’s Central Processing System.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

1.1

Open

Yes

We recommend that the Chief Operating Officer for Federal Student Aid (FSA) require USC to— 1.1 Calculate the actual amount of improper Pell and any other Title IV payments made to the 13 students for whom it did not apply professional judgment other than dependency override in accordance with section 479A of the HEA and return those funds to the Department.

1.2

Open

Yes

We recommend that the Chief Operating Officer for Federal Student Aid (FSA) require USC to— 1.2 Review its records for the 6,062 students for whom the school reported that it applied professional judgment other than dependency override for award year 2019–2020 or award year 2020–2021 but were not included in our sample and (a) identify those students for whom it improperly adjusted the value of data items affecting AGI based on allowances or expenses unrelated to special circumstances, (b) provide FSA with a listing of the improperly disbursed Title IV funds and the records associated with those students for whom financial aid administrators improperly applied professional judgment, and (c) return the improperly disbursed Title IV funds to the Department.