Program Review Procedures and Common Findings

1
Session 64

• Program Review Procedures and Common Findings
• Gene F. Greene

2
Financial Partner Eligibility and Oversight
(FPEO)

• Four Regions
• Eastern New York (includes Boston)
• Northern - Chicago
• Southern Dallas (includes Atlanta)
• Western San Francisco

3
Types of Reviews

• Lenders / Servicers
• School-as-Lender
• Guaranty Agencies

4
What We Review

• References
• Lender / Servicer Review Guide
• Guaranty Agency Review Guide

5
Pre-review Preparation

• Most Important
• Timeline
• 90 days prior to on-site visit
• Review engagement letter and Documents
  Requested
• Identify key staff
• Send data to Team Lead

6
Who is Involved

• Team Lead contacts
• Lender /Servicer Operations and Finance
• School-as-Lender
• Financial Aid Officer and Bursar
• Note All cases Information Technology (IT)
  staff person

7
Lender / Servicer Review Guide

• Includes the following types of reviews
• Lenders
• Servicers
• Secondary Markets
• Tax-exempt Entities
• Exceptional Performers

8
Guaranty Agency Guide

• Includes the following types of reviews
• Comprehensive
• Voluntary Flexible Agreement
• Financial / Form 2000

9
Finding vs. Observation

• Finding
• Material problem supported by regulation or law
• Citation and Required Action
• Observation
• No authority in law or regulation for
  enforcement
• Make Recommendation

10
Lender / Servicer Common Findings

• Incorrect interest billing start dates
• Failure to reconcile LaRS to General Ledger
• Collection letters not referencing Ombudsman
• Unpaid Consolidation Loan Rebate Fees

11
Guaranty Agency Common Findings

• Incorrect reporting for Form 2000, Line MR-10/10A
  Rehab Loans
• Overpayment of AMF / Underlying CL loans not paid
  off
• Reporting unaccepted subrogated loans MR-28

12
Common Observations

• No Internal Auditor
• Insufficient Disaster Recovery / Business
  Continuity Plan
• Conflict of Interest Policy needs improvement
• School Lenders
• Need better audit trail for Use of Interest and
  Special Allowance Payments

13
Lessons Learned Wrap-Up

• Review internal procedures
• Ensure pre-review work is timely- track progress
• Self-scrub a valuable learning tool
• Correct known deficiencies
• Advise Team Lead of progress
• Discuss issues discovered internally and with
  Team Lead

14
Technical Slide

• We appreciate your feedback and comments.
• We can be reached at
• Phone [phone]
• Fax [phone]
• Email gene.greene_at_ed.gov