Federal Student Aid Controls Over the School Verification Process

The objective of our inspection was to describe Federal Student Aid’s (FSA) control activities over institutional processes for completing verification and reporting verification results in accordance with Federal requirements.We found that FSA implemented control activities over institutional processes for completing verification procedures and reporting verification results. Specifically, we identified five significant control activities over these processes: (1) annual compliance audits, (2) program reviews, (3) W code reports, (4) management information system (MIS) reports, and (5) verification guidance.We found that FSA performed ongoing monitoring of the verification guidance control activity; but FSA did not monitor the other control activities on a regular basis. However, in September 2018, FSA’s Enterprise Risk Management (ERM) group issued a document titled “Verification Internal Review Report” (ERM Report) that described its separate evaluation of the processes FSA had in place to ensure institutions performed verification. We found that FSA did not address all of the control issues identified in the ERM Report and did not always determine the appropriate corrective actions or complete or document the corrective actions taken.