The objective of our audit was to determine the effectiveness of 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.
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.
We made six recommendations, including that FSA ensure that the FAFSA data elements that are selected for verification are those that have the greatest impact on the expected family contribution and are most likely to be misreported, that it evaluate its processes for selecting students for verification and its 30-percent limitation for selecting students for verification, and that it monitor its verification processes to ensure they perform as expected and significant differences are addressed.
Oversight and Monitoring—Student Financial Assistance Programs
See other OIG reports on verification.