The Commissioner shall require the performance of a program
compliance audit (also called examination) on a biennial basis for each state
student financial aid and state tuition assistance grant program administered
by a private independent college, university, or school (hereafter called
institution) in accordance with Florida Statutes and State Board of Education
Administrative Rules. The purpose of such audits shall be to determine whether
the institution has administered the state student financial aid and state
tuition assistance grant programs in substantial compliance with applicable
statutes and rules. This rule shall be effective for audits beginning with the
2007-08 school year.
(1) Designation
of auditors. It shall be the responsibility of the institution receiving state
student financial aid and state tuition assistance grant programs to secure an
audit from an independent certified public accounting (CPA) firm at the
institution's expense. The CPA firm shall agree to:
(a) Conduct the audits in accordance with the
instructions of the Department's Office of Student Financial
Assistance.
(b) Provide two (2) or
more audit report copies and management letters to the Department.
(c) Allow the state officials or
representatives access to review the audit workpapers.
(2) Responsibilities of the Department. It
shall be the responsibility of the Office of Student Financial Assistance to
coordinate each program compliance audit performed by a certified public
accounting firm and to ensure that the results of such audits are provided to
the Department in accordance with the provisions of subsection (1) of this
rule. Instructions for the audits are to be provided by the Office of Student
Financial Assistance.
(3)
Responsibilities of the institution. Responsibilities of the institution shall
include:
(a) Submitting, when required, a
refund check to the Office of Student Financial Assistance within thirty (30)
calendar days from the date on the audit determination letter sent to the
institution by the Office of Student Financial Assistance, as provided for in
subsection (7) of this rule; or
(b)
Notifying the Office of Student Financial Assistance that it desires either to
appeal the examination findings or to have a one hundred (100) percent
examination, as provided for in subparagraph (6)(b)2. of this
rule.
(4) Instances of
noncompliance. The certified public accounting firm shall report instances of
noncompliance with applicable statutes and rules found during the examination
in accordance with the following provisions:
(a) Students shall be classified as
ineligible, if the examination of supporting documentation discloses instances
of noncompliance with eligibility criteria specified by applicable statutes and
rules.
(b) Awards shall be
classified as questioned costs, if the examination discloses one (1) or more of
the following conditions:
1. Awards, or the
portions thereof, not properly paid or delivered to students, or not properly
credited to students' accounts;
2.
Awards made to ineligible students; and,
3. Awards for which supporting documentation,
necessary to establish eligibility, is missing and cannot be
located.
(c) Instances of
noncompliance which do not affect student eligibility or cause the
classification of awards as questioned costs shall be reported with the
auditor's findings, but shall have no impact on determining the amount of
refunds or whether to expand a sample as provided in subsection (5) of this
rule.
(5) Sample
selection. For each program administered by the institution, the certified
public accounting firm shall select a random sample of fifty (50) award
recipients, or twenty-five (25) percent of the total number of award
recipients, whichever is less, but no less than ten (10) award recipients;
however, if there are less than ten (10) award recipients, then all award
recipients shall be selected. If the error rate determined for the initial
random sample is equal to or greater than ten (10) percent of the monetary
value of the sample, the sample shall be expanded to become statistically valid
and representative of the entire award population.
(6) Refunds. Refunds shall be determined in
accordance with the following provisions:
(a)
For each program with an error rate of less than ten (10) percent of the
monetary value of the sample awards, the institution shall refund the specific
awards which are classified in the final audit report as questioned
costs.
(b) For each program with an
error rate equal to or greater than ten (10) percent, the institution shall
either:
1. Refund an amount calculated by
multiplying the sample error rate times the total awards in the program
population; or
2. Engage a CPA
firm, at the institution's expense, to audit one hundred (100) percent of the
awards in the program population, and refund the sum of the specific awards
classified as questioned costs.
(7) Audit determination letter. Within ten
(10) working days after receipt of a final audit report, the Office of Student
Financial Assistance will complete a desk review and write the audit
determination letter to the Financial Aid Director and the President of the
institution. The audit determination letter to the concerned institution shall
include:
(a) A reference to the final audit
report and the authority under which a refund, if any, is being
requested;
(b) A computation of the
requested refund, if any; and,
(c)
Notice to the institution that it may appeal the audit determination letter,
within fifteen (15) calendar days from the date of the audit determination
letter, by requesting an informal hearing. The Commissioner, or designee, shall
schedule the informal hearing to be held between representatives of the
institution and Office of Student Financial Assistance within ninety (90)
calendar days of the institution's request. If these parties are unable to
arrive at a satisfactory agreement or are unable to hold an informal hearing
within the ninety (90) calendar days period, the institution may request a
formal hearing by submitting a letter to the Commissioner. The Commissioner
shall request the Division of Administrative Hearings of the Department of
Administration to assign a hearing officer, and the Department shall proceed
with the hearing as prescribed by Section
120.57,
F.S.
