Compliance Test Areas - MaxKnowledge



Campus Compliance Audits

Potential Testing Areas

|TEST AREA |RECOMMENDED TESTING METHOD OPTIONS/COMMENTS |

|General Institutional Requirements |

|Institutional Effectiveness |Verify that a plan is documented. |

| |Test plan objectives as desired. |

| |If institution is on “reporting” for areas of deficiency, test to ensure reports are submitted timely and that items indicated on plan are actually in place. |

|Structure and Governance |Clearly stated in catalog |

| |Note: Auditors should understand fully the legal structure of entities and the institutional structure as it relates to OPE ID’s for effective testing in other |

| |key areas. |

|Reporting |Ensure that external reports are submitted timely. |

| |Test for accuracy of a sampling of data provided in reports. Require back up data supporting key numbers reported. |

|Financial Stability |Request evidence of financial stability of the company. |

|Disclosures |Test to ensure that disclosures for employees and students are available upon request and published/distributed as required. |

|FERPA and Privacy |Review institution’s policy regarding this matter and test accordingly. |

| |“Mystery inquire” about a student’s records to test school’s enforcement of privacy. |

| |Interview employees to see if they know what can and cannot be released without consent. |

|Document Retention |Interview employees regarding policy on destruction of records and measure against regulatory bodies. |

| |Identify documents that should be purged and test to see that they are not on file. |

| |Review process for identifying documents to purge. |

|Campus Approvals |Request current Participation Agreements and ECARs. Ensure that all locations and programs are listed if Title IV funds are being disbursed. |

|Human Resources |

|Compliance with all relevant labor laws |Key areas to test include: FLSA statuses (exempt vs. non-exempt), EEOC (discrimination in hiring, promotions, etc.), ADA considerations, COBRA – timeliness of |

| |notification to ex-employees, harassment – policy in place regarding all types of harassment (not just sexual) and opportunities to report and have allegations |

| |investigated. |

|Compensation within regulatory guidelines |Key areas include compensation to employees in admissions, enrollment and financial aid positions. |

|Admissions representatives licensed, if |Check for evidence of licenses on file for all practicing representatives based on state requirements. |

|required | |

|Employees meet relevant qualification |For positions where specific qualifications are required, check for evidence of credential on file. |

|requirements | |

|Faculty credentials |In keeping with regulatory guidelines – match by course/program as required. |

| |Supporting documentation available – official evidence of credential(s) earned. |

| |Ensure required documentation is on file including resumes, data sheets, transcripts, job descriptions, etc. based on relevant regulations. |

|Faculty course load |Ensure that the amount of courses a faculty is teaching is within regulatory guidelines (typically programmatic and accrediting body regulations). |

|Ratio of full-time to part-time faculty |Compare actual ratio to any regulatory body requirements – typically the institutional and programmatic accrediting agencies. |

|acceptable | |

|Training/development opportunities provided |Check for evidence of training and development (in-service) typically required for key management employees and faculty. |

|for staff and faculty as required | |

|Employees maintain memberships and |Check requirements and compare evidence of current memberships and certifications as required. |

|certifications as required | |

|I-9s on file |Test sample of current and former employee files for evidence of I-9s on file. |

|Facilities |

|Approved by all relevant regulatory bodies |Check local requirements and test accordingly. |

|In compliance with all fire, safety and |Verify evidence of compliance with appropriate agencies. |

|sanitation requirements |As you tour building, verify that fire extinguishers are not expired. |

|In compliance with accessibility |Perform general check for provision of accommodations for disabled persons. Parking, ramps, elevators, restroom stalls and wide doors are the basics. |

|requirements. |Review process for reviewing and providing for reasonable accommodations. |

|Appropriate for type of instruction |Programmatic requirements should be reviewed and verified. |

|Classrooms appropriate for volume of |Occupancy limits are sometimes posted. Verify against class counts for classrooms and/or perform visual check. |

|occupants | |

|Equipment and furniture appropriate for type|During tour, note any concerns and research for any potential violations. |

|and volume of occupants. | |

|Recruitment/Admissions |

|Recruitment efforts not |Mystery shop |

|misleading/embellished |Review scripts used for training/during calls/interviews with prospects. |

|(Communications between employees and | |

|prospective students) | |

|Recruitment materials not |Determine if documents were “approved” internally based on company approval process (if any). |

|misleading/embellished |Check to see that all advertisements (print, web, audio and video) are in compliance with all regulations. (most regulatory bodies have checklists – most |

|(Advertisements) |include the following at a minimum) |

| |Factual – no hyperbole/superlatives |

| |Reference to training versus job availability |

| |Appropriate references to accreditation and approval bodies (institutional, state, and programmatic) |

| |Includes institutional name prominently |

| |Location information as required (full address for most) |

| |Testimonials factual and documented with approval by author |

| |References to Title IV funding include reference to availability only if qualified |

|Incentive compensation |Policy review |

| |Review payroll records – flag major changes from one period to the next; review for detail. |

|Referral incentives appropriate. |Review current regulatory guidelines (have changed several times over a relatively short period of time). |

| |Request list of all payments made that are coded to this type of transaction. Review for compliance with above guidelines. |

|Consistency in docs – enrollment agreement, |Select sample. Pull files to review enrollment agreement; compare to catalog in effect at time of enrollment, request transcript from system of record. All |

|Catalog, transcript |should match. |

| |May also choose to compare catalog program info to that approved by all regulatory bodies. |

|Enrollment agreements/incentives |Ensure enrollment agreements contain information required by regulatory bodies. Most national accrediting agencies have a checklist specific to enrollment |

| |agreement requirements. |

| |Ensure enrollment agreement accurately reflects what should be included for the program. Make sure incentives are within regulatory guidelines and that |

| |agreement clearly reflects such. |

|Quotas/pressure |Interview admissions/enrollment representatives. |

| |Determine if statistics reveal unusually high volume of early drops, high cancel rates, low retention rates. |

| |Perform statistical analysis to determine how entrance exam scores relate to student success/completion. |

| |Determine if rate of enrollment volume approaching start is unusually high. |

|Admissions Policies |Either using system data and/or file contents, determine if students have the documentation to support program eligibility. (Proof of HS/GED, entrance exam |

| |scores, etc.) |

|Catalog |Review against accrediting body checklist. (Typically a lengthy list – often included as an addendum to regulatory guidelines/standards). |

|Tuition discounts |Review tuition adjustments posted to sample students’ accounts (or using system generated report for larger population testing). Identify reason for |

| |adjustments. Determine if each adjustment is appropriate and if it was properly documented. |

|Disabled students |There are two points on this – first, is to make sure students are not admitted that have a disability that would prevent them from being successful in the |

| |program and/or in the career field. On the other hand, admissions should not discriminate if the disability will not impact student and career success and if |

| |reasonable accommodations can be made to assist the student. From a testing perspective, this is a difficult area to audit. Ask for procedures for identifying |

| |students who require accommodations and requirements for admission that involve standards relative to physical and mental abilities. Interview admissions and |

| |academic employees (including faculty) to identify any exposure in this area. |

| |Proactive suggestion: Create standards for each program based on bona fide requirements. |

|Disclosure requirements |Identify disclosure requirements based on regulations for school. Request proof of providing such to students and request to view the disclosure documents. |

|Placement test |If advanced placement or remedial courses are offered based on assessment results, audit files or system in data for test scores. Ensure students reviewed were |

| |appropriately scheduled based on their assessment results. |

|Entrance tests |If entrance tests are required, check exam scores in database and/or pull files to validate that they meet minimum requirements for admittance into relevant |

| |program. |

|Background checks/drug screens |If required, validate that such are on file for a sample of students. |

|Student testimonials/endorsements |Verify that signed releases are on file |

| |For some regulatory bodies, only graduates may provide. Verify graduate status of individuals quoted. |

|3rd party contract recruiters, how and where|Ensure any outsourced recruiting activities (i.e. lead generation, referrals) are in compliance with specific regulations for location of recruitment |

| |activities, compensation for services rendered and how prospects are approached. |

|Not guaranteed FA and job |Interview students |

| |Review admissions scripts |

| |Mystery shop |

|Placement/retention rates |Where required, ensure that rates are accurate and provided to enrollees per guidelines. |

| |Ensure that any references to rates are within regulatory guidelines for your institution – typically includes accrediting body and state requirements. |

|Non-discrimination |Review documents that include demographic information. Ensure that these are not used as a basis for admitting students. |

|Grievance procedure |Verify that a grievance procedure is published for students and that it meets regulatory guidelines. |

| |Request list of students who have filed grievances. Review files for documentation relative to the grievance filed. |

|Foreign students |Ensure that foreign student requirements met including: |

| |Eligibility – proof of prior education w/English translation and interpretation, if necessary. |

| |Visa requirements met |

| |English fluency |

| |Verify that tracking methods are in place to report foreign student enrollment figures accordingly. |

|Academics |

|Student recordkeeping |Ensure that published policies are consistent in the various places they are noted. (i.e. compare catalog, student handbooks, forms, syllabi, etc.). Note the |

| |following key areas for consistency: |

| |SAP |

| |Transfer credit |

| |Attendance |

| |Grades |

| |Select sample of students or pull data report for sample period. Test for the following: |

| |Attendance posted with accuracy and timeliness. |

| |Grades posted with accuracy and timeliness. |

| |Grade assignments appropriate. |

| |In keeping with published grade scale. (Any grades issued that are not in catalog AND on transcript fee should be noted). |

| |No evidence of grade inflation. |

| |Transfer credits awarded and documented appropriately. |

| |Test outs or experiential credits awarded and documented appropriately. |

| |Transcript content matches grade scale and relevant standards and program content as stated in the catalog and on the relevant enrollment agreement. |

| |Status changes processed timely. |

|Enrolled students never attending class |Using list of students identified as “new starts” (or equivalent terminology) from last start date, request attendance records. Note any students indicated as a|

| |start that do not have attendance posted. |

|All approvals in place – e-app |See General Institutional Requirements Section |

|Instructor qualifications |See Human Resources Section |

|Lesson plans, syllabus approval |Select sample of classes offered during current term. Request syllabi and lesson plans in accordance with regulatory requirements. |

|Leaves of absence |Review policy as stated in the catalog. Ensure policy is within regulatory guidelines. |

| |Select sample (or entire) group of students who have taken LOA within certain period of time. Using sample, review for the following: |

| |Complies with institutional policy. |

| |Does not exceed 180 day requirement |

| |Returns dated in accordance with policy to return at point of departure |

| |Documentation on file supporting “reasonable” expectation to return. |

|Satisfactory Academic Progress (SAP) |Verify that policy is stated in catalog. |

| |Ensure that policy includes required components. |

| |Select sample of students (or complete group cohort) who have hit the timeframe for SAP review. Test against the following. |

| |Timing of measurements appropriate. |

| |Qualitative measurement (to reach minimum GPA at graduation). |

| |Quantitative measurement (prevent exceeding maximum time frame). |

| |Applied to all students (not just Title IV recipients). |

| |Probation guidelines enforced. |

| |Grades applied according to policy (i.e. withdrawals, repeat coursework, leaves, pass/fail vs. letter grades, course incompletes, etc.). |

| |Enforcement based on policy including SAP status for students approved to return after withdrawal period. |

|Contact hours for courses |Observe class start times and end times to ensure classes are conducted for time listed in schedules (if relevant). |

|Pre-requisites |Select sampling of student transcripts. Ensure pre-requisites were enforced based on course completion dates. |

|Class size limits |Review regulatory requirements (most institutional and programmatic agencies have guidelines). Request rosters or report showing volume of students in each |

| |course to compare to restrictions. |

|Document retention |See General Institutional Requirements Section |

|Language proficiency |See Admissions Section |

|International students – SEVIS |See Admissions Section |

|Student services – ATB mandates |Review regulatory requirements. Ensure that staffing includes Student Services representatives in accordance with guidelines. |

|Student evaluations of courses and |Request access to evaluations maintained on file. Determine frequency of evaluations. |

|instructors | |

|OSHA requirements |See General Institutional Requirements Section |

|FERPA/Campus Crime stats |See General Institutional Requirements Section |

|Faculty development/continuing Ed |See Human Resources Section |

|Advisory Boards |Ensure that advisory boards in existence and meeting regularly as evidenced by minutes/notes. |

|Library/Resource Center |Review regulations and visually verify that resource center and appropriate type and volume of resources are accessible to students. |

|Curricula |Verify that curricula offered is approved (approval notification on file) and in keeping with all regulatory requirements (including programmatic approval |

| |bodies, where applicable). |

| |Units of conversion appropriate (credit-to-clock; clock-to-credit) based on mix of lecture, lab, and practical components. |

| |Program lengths acceptable. |

| |Credential awarded acceptable. |

|Copyright/Software Licensing |Request to see documentation supporting volume of software licenses in use. |

| |Observe work areas to identify any possible breaches to copyright laws. |

|Financial Aid |

|Discrepancies in file documents – multiple |Look for changes (white out, crossed out info, erasures, etc.) Compare documents. Any discrepancies should be clarified in additional supporting documentation. |

|files | |

|Financial records (ledger) maintained for |Request sample of student ledgers. Review to ensure that each clearly show charges, payments and balance. |

|each student. | |

|Financial aid awards |Verify that award decisions are made by appropriate employees. |

| |Ensure award letters are issued within guidelines. |

|Tuition and fees |Review sample of students within same enrollment period. Review to check for consistency for all enrollees within effective period of rates. |

| |Review guidelines on charges and ensure that school is charging in accordance with requirements. (i.e. fixed rate for program, etc.) |

|Title IV eligibility requirements met. |Accurate cost of attendance (COA). |

| |Accurate Expected Family Contribution (EFC). |

|Institutional Scholarships/Grants documented|Request listing of all institutional scholarship and grant recipients. |

|and awarded appropriately. |Ensure all are appropriately published and information readily available/provided to all students. |

| |Audit sampling (or all if small number) of recipients to determine if selection criteria was administered accordingly. |

|Default Management |Select files of dropped and graduated students. Ensure that evidence of entrance and exit counseling is contained within files. (Note dates to see if counseling|

| |was conducted timely). |

| |Check default rates for last three years to identify any trends which may warrant intervention. |

|Lender Notification |Request proof of notification to lenders for students who fall below half-time enrollment status. |

|Professional Judgment |Request files of students for whom professional judgment decisions were exercised. Validate that documentation on file supports sound decision making. |

| |(Particular area of focus has been dependency overrides). |

|C codes verified |Review sampling of files that had c-codes and verify that they were properly cleared prior to disbursement of awards. |

|Appropriate signatures on documents |Review sampling of files. Check for signatures based on dependency and marital status. (Check for student, spouse and parent signatures as required). |

|Verification |Select sample of students selected for verification. Validate that deadlines are set for concluding verification. Determine enforcement of procedure in place if|

| |verification is not concluded. |

|Non-selected students don’t have information|Particularly a risk area in campuses where prospects are asked to bring in tax information during initial visit. Select files that were NOT flagged for |

|in file that was not used for verification |verification. If tax information is contained in file, determine how/if this documentation was used. |

|Admissions requirements met – HS/GED, etc. |Previously listed in Admissions section. |

|Disbursements |Test sample of disbursements for the following: |

| |Timing |

| |Appropriate amounts |

| |Student eligibility met |

| |Units earned/attempted |

| |SAP requirements met |

| |Verification concluded, if selected. |

|Refunds |Refund policy within regulatory guidelines and stated in catalog. |

| |Test sample of dropped students. Determine if refunds were made with accuracy and timeliness. Include test for 30 day issuance of refund and 45 day clearance of|

| |payment. |

|Non-citizen eligibility |Select sample (or all if small number) of non-citizens. Ensure documentation is on file in compliance with Federal guidelines for eligible non-citizens. |

|Satisfactory Academic Progress (SAP) |See Academics Section |

|Date of Determination (DOD) |Select sample of students or pull report from system. Test by calculating the days between last date of attendance and date of determination. Compare to catalog|

| |policy on attendance guidelines related to institution initiated withdrawals. |

| |Identify students who requested withdrawal and ensure that DOD aligns with their request date. |

|Credit balances |Select sample of students with credit balances for a prior date. Determine if balance was released timely (stipend) or that authorization to retain funds was on|

| |file for student. |

|Separation of duties |Interview staff, review processes and procedures; verify that signatures relate to appropriate titles/departments supporting guidelines. |

|IPEDS, SSCR and other external reports |Check for submission of such reports. Verify timeliness of submission. Verify accuracy of content by requesting supporting data files/reports. |

|FERPA |See General Institution Requirements Section |

|Federal Work Study |Areas to test include: |

| |Community service requirements met |

| |Family literacy requirement met |

| |Timesheets accurate and signed |

| |Off campus agreements maintained |

| |Responsibilities within guidelines |

|90/10 Guidelines |Request documentation supporting last reported 90/10 calculation. Verify that correct formula was used including how various fund sources were applied to the |

| |calculation. |

|Placement |

|Verification of employment |Documentation validating such verification should be on file (hard file and/or electronically). |

|Employer satisfaction surveys |Request evidence of surveys – review for frequency of surveys. |

|Authenticity of placement documents |Review documents – ensure graduate signatures are in place where required. |

| |If exit documents required, ensure on file and within appropriate timeline (not just a mass collected recently). |

| |Ensure that other documents are in place as required. |

| |Waivers – for reasons deemed legitimate for the regulator with supporting documentation as required. |

| |Proof of continuing education or military duty if required. |

|Graduate surveys |Request evidence of surveys – review for frequency of surveys. |

|Placement rates/methodology, appropriate for|Review relevant guidelines and formulas for reporting placement rates. Ensure definitions of each category were accurately considered and that placement rates are |

|each state and/or accrediting body |accurate based on the definitions and formula calculations. |

| |Ensure that date of placement is in compliance with guidelines based on graduation date. |

|Externship sites |Determine if evidence is on file verifying the quantity and quality of sites used for externships. |

|Reporting salaries |If salary reporting is required, verify accuracy of most recent reporting period against documentation contained within files and through phone verification with |

| |employers and/or graduates. |

|Length of internship/externship, %, length |Ensure that percentage of program spent in internship is in compliance with regulatory bodies (usually institutional accreditation and programmatic agencies). |

|Collection of documentation of attendance at|Validate that process in place to gather and report student attendance at internship is reasonable and consistent with guidelines and program completion |

|internship |requirements. |

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