Annual Watchdog Audit Finds ED Failed to Meet Compliance Reporting Requirements

By Hugh T. Ferguson, NASFAA Senior Staff Reporter

The Department of Education’s (ED) Office of Inspector General (OIG) found that the agency was not in compliance with all six reporting requirements, as outlined by the Payment Integrity Information Act of 2019 (PIIA), to reduce improper payments for fiscal year 2021.

The recent audit found that ED reported an improper payment estimate for the Improving Basic Programs Operated by Local Educational Agencies (Title I, Part A) program, which exceeded 10%.

The programs in question administered by the Office of Federal Student Aid (FSA) in OIG’s fiscal year 2021 Agency Financial Report (AFR) included the Pell Grant, and the William D. Ford Federal Direct Loan.

Direct Loans and Pell Grant improper payment rates fell below targets, but OIG said those calculations are unreliable because the improper payment sampling and estimation plan for both programs included non-random student-level sampling from some of the compliance audits that FSA used to calculate the estimates, which affects the appropriateness and accuracy of the confidence intervals.

OIG reviewed the corrective action plans and found the Department’s Title I, Part A proposed corrective actions to be inadequate and ineffective in addressing the true root cause of the reported improper payments. The other three programs (Emergency Impact Aid, Restart, and Emergency Assistance to IHEs), with a reported improper payment estimate for FY 2021, did not require a corrective action plan because the reported estimates did not exceed the statutory threshold.

The report was conducted to determine whether ED complied with tPIIA, which requires each agency’s Inspector General to determine the agency’s compliance with the statute for each fiscal year.

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

Details on the 2020 and 2019 report can also be found.


Publication Date: 7/5/2022

Vincent F | 7/5/2022 11:14:44 AM


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