2024 Common Findings Corner for Institutions: Top Compliance Findings

As 2023 came and went, Title IV institutions saw the sunsetting of the 2016 Guide for Audits of Proprietary Schools and Compliance Attestation Engagements of Third-Party Servicers Administering Title IV Programs. The new year ushered in the beginning of the 2023 Guide for Financial Statement Audits of Proprietary Schools and Compliance Attestation Examination Engagements of Proprietary Schools and Third-Party Servicers Administering Title IV Programs. The most recent cycle of audit findings, conducted by the Department of Education annually, occurred over the summer and included its top ten school audit and school program review findings of 2022.

So, what was on the Department’s radar during this last cycle of audit findings?

School Audit Findings

  1. Student Status – Inaccurate/Late Reporting
  2. Repeat Finding – Failure to Take Corrective Action
  3. Return to Title IV (R2T4) Calculation Errors
  4. Return to Title IV (R2T4) Funds Made Late
  5. Student Credit Balance Deficiencies
  6. Qualified Auditor’s Opinion Cited in Audit
  7. CARES Act/HEERF Noncompliance
  8. Verification Violations
  9. Entrance/Exit Counseling Deficiencies
  10. Inaccurate Disbursement Dates/Amounts Reported to COD

School Program Review Findings

  1. Student Status – Inaccurate/Late Reporting
  2. Loan Discharge
  3. Return to Title IV (R2T4) Calculation Errors
  4. Student Credit Balance Deficiencies
  5. Verification Violations
  6. Entrance/Exit Counseling Deficiencies
  7. Inaccurate Recordkeeping
  8. Satisfactory Academic Progress Policy not Adequately Developed/Monitored
  9. Lack of Administrative Capability
  10. Ineligible Student – High School Student

The Department’s Focus

For those of you keeping score at home, this list largely resembles the Department’s prior year findings, which we can attribute to these being more complicated areas of the audit. Further, this tells us the findings the Department will continue to focus on.

Actions Your Title IV School should Take

In terms of examination preparation, schools need to pay extra attention to these concerns and apply this knowledge to alleviating potential issues moving forward. We’re seeing this trend in the Department’s ongoing findings, indicating where schools must look to improve within their operations.

Student Enrollment Reporting: We, as auditors, will meticulously examine student details to avoid noncompliance with the Department and will, therefore, likely request additional information from your institution. We see that areas, such as student enrollment reporting, are only being scrutinized more – and fully expect this finding to be among the Department’s top three concerns in the future.

Gramm-Leach-Bliley Act (GLBA): As of early June 2023, updates to the Gramm-Leach-Bliley Act (GLBA) were implemented. We speculate that concerns related to this required implementation will be within the Department’s top findings – if not number one on the list.

We’re already seeing many schools that have not fully updated their plans to meet the requirements or don’t even have these requirements in place. The GLBA requires schools to take a much deeper analysis of their information security program, often requiring the assistance of an IT professional to help establish the proper framework and required risk assessments. If your GLBA plan does not meet the updated requirements, you’ll want to address this sooner than later. We have seen responses from the Department at this point requiring institutions to respond to correspondence within 10 days and provide an updated and acceptable corrective action plan within 30 days.

Prevention for Long-term Compliance

The adage “an ounce of prevention is worth a pound of cure” still holds true today. Prevention is a saving grace in running a business, often eliminating having to be reactive later on. The Department of Education releases guidance well in advance of most changes, so be sure to be planful and read through any major changes (always updated here). You can find current and previous audit guides here as well.

Speak with a Sikich Expert

You can always reach out to your auditor or examiner with any questions you have throughout the year. We’ll take the time to assist you through the process of prevention to make sure your institution stays compliant. Please get in touch with our Title IV audit team if you’d like to talk through any of these findings.

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