Watchdog Group Finds ED Failed to Comply With Improper Reporting Requirements

Related Topics in the Ref Desk: Direct Loans; Enrollment Status; Cost of Attendance; Need Analysis; Pell Grant;

The Department of Education’s (ED) Office of Inspector General (OIG) found that the agency did not clear a standard as outlined by the Payment Integrity Information Act (PIAA ) to reduce improper payments for fiscal year 2020.

The recent audit found that ED did not clear the compliance threshold due to a failure to meet two of the six compliance metrics outlined by PIAA, specifically citing a failure to demonstrate improvement in reducing improper payments in the Direct Loan program, along with a reporting of improper payment rates exceeding 10% for the Temporary Emergency Impact Aid for Displaced Students (Emergency Impact Aid) and Immediate Aid to Restart School Operations (Restart) programs.

The Direct Loan program’s reported improper payment rate and amount for fiscal year 2020 increased from fiscal year 2019 (from 0.52% to 0.84%, and from $483.14 million to $742.94 million), while ED demonstrated improvement in reducing improper payments in the Pell Grant program because it met its reduction target (the reduction target was 2.22% and the actual rate was 2.19%). However, the report also found improper payment sampling and estimation plans and estimates for the Pell Grant and Direct Loan programs to be unreliable.

ED is required to develop a final corrective action plan within 30 days of the issuance of this OIG report.


Publication Date: 5/21/2021

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