Federal Reports

Our audit sought to determine whether OPE’s internal controls were adequate for evaluating grantees for duplication of effort; whether the Talent Search, Upward Bound, and Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP) programs resulted in duplication of services provided by selected grantees; and whether selected grantees experienced administrative burdens or inefficiencies as a result of administering multiple programs with similar objectives. Based on our review of student records, we did not identify any duplication of services provided under the three programs, nor did we identify any duplication of services at the two schools reviewed, Berea College and Eastern New Mexico University-Roswell, for FY 2011. In addition, officials at both schools stated that they did not experience burdens or inefficiencies. We did, however, determine that OPE had not implemented adequate internal controls to provide assurance that grantees minimized the duplication of services, and we could not determine whether duplication of services occurred at Eastern New Mexico during FY 2009 and FY 2010 because the school did not maintain documentation that would have enabled us to do so. Also, regarding Eastern New Mexico University-Roswell, for FY 2009 and FY 2010, the school’s GEAR UP records did not support the services provided, the number of students served, or certification of its annual performance reports. As a result, the Department may have awarded grant funds to the school in excess of what it should have received. Based on our findings, we recommended that OPE ensure that grantees provide information that would enable it to assess their efforts to coordinate, collaborate, and minimize duplication with other similar programs, and that it review Eastern New Mexico-Roswell’s GEAR UP data for FY 2009 and FY 2010 to determine whether funds should be recovered.

We found that the Department did not adequately address the risks that schools offering direct assessment programs pose to the Federal student aid programs and did not establish sufficient processes to ensure that only programs meeting Federal regulatory requirements are approved as eligible. We also identified weaknesses related to the Department’s direct assessment application review processes: the Department was not documenting the basis for approval or denial of an application, and FSA School Participation Division managers were not fully informed of issues raised during the application review process. Further, we found that the Department’s communication with accrediting agencies involved in the application process was not adequate to make well-informed decisions. Although we agreed with the Department that few schools offering direct assessment programs have applied to have their programs deemed eligible to participate in the Federal student aid programs, and the amount of Federal aid currently at risk is relatively low, the program eligibility decisions that the Department is making for these early-implementing schools could set a precedent for future direct assessment programs and have a lasting, negative impact on the Federal student aid programs.

There continues to be open old HUD administered grants for which de-obligations

ARC has continued emphasis on follow-up on ARC administered grants with limited disbursement of ARC funds

Recognizes that construction grants are administered by other agencies and these grants often involve factors, such as environmental, land rights or funding issues, that delay start up or completion actions

A review of the current Memorandums of Understanding or Agreements (MOU) between ARC and Federal agencies administering ARC construction grants disclosed a need to update the MOUs to better address or clarify several issues