Federal Student Aid’s Process to Select Free Application for Federal Student Aid Data Elements and Students for Verification

The objective of our audit was to determine the effectiveness of Federal Student Aid’s (FSA's) (1) evaluation of its processes for selecting Free Application for Federal Student Aid (FAFSA) data elements to be verified and (2) evaluation and monitoring of its processes for selecting students for verification. Our audit covered FSA’s verification processes implemented for the 2015–2016 and 2016–2017 award years. We found that FSA did not evaluate its process for selecting FAFSA data elements to verify. FSA also did not effectively evaluate three of its four processes we reviewed for selecting students for verification but did effectively evaluate one process. Additionally, FSA did not evaluate the effectiveness of its 30-percent limitation for selecting students it required postsecondary educational institutions (institutions) to verify. Finally, FSA did not monitor its processes for selecting students for verification to ensure the processes performed as expected and any significant differences were addressed. As a result, there is no reasonable assurance that the verification processes effectively identified FAFSAs with errors that would result in improper payments.