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Financial Partner Eligibility and Oversight: Review Procedures and Findings

This session covers the review procedures and common findings in financial partner eligibility and oversight, including lender/servicer reviews, school-as-lender reviews, and guaranty agency reviews.

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Financial Partner Eligibility and Oversight: Review Procedures and Findings

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  1. Session 64 Program Review Procedures and Common Findings Gene F. Greene

  2. Financial Partner Eligibility and Oversight (FPE&O) • Four Regions • Eastern – New York (includes Boston) • Northern - Chicago • Southern – Dallas (includes Atlanta) • Western – San Francisco

  3. Types of Reviews • Lenders / Servicers • School-as-Lender • Guaranty Agencies

  4. What We Review • References: • Lender / Servicer Review Guide • Guaranty Agency Review Guide

  5. Pre-review Preparation • Most Important • Timeline • 90 days prior to on-site visit • Review engagement letter and “Documents Requested” • Identify key staff • Send data to Team Lead

  6. Who is Involved • Team Lead contacts: • Lender /Servicer Operations and Finance • School-as-Lender • Financial Aid Officer and Bursar Note: All cases – Information Technology (IT) staff person

  7. Lender / Servicer Review Guide • Includes the following types of reviews: • Lenders • Servicers • Secondary Markets • Tax-exempt Entities • Exceptional Performers

  8. Guaranty Agency Guide • Includes the following types of reviews: • Comprehensive • Voluntary Flexible Agreement • Financial / Form 2000

  9. Finding vs. Observation Finding: Material problem supported by regulation or law Citation and Required Action Observation: No authority in law or regulation for enforcement Make Recommendation

  10. Lender / Servicer Common Findings • Incorrect interest billing start dates • Failure to reconcile LaRS to General Ledger • Collection letters not referencing Ombudsman • Unpaid Consolidation Loan Rebate Fees

  11. Guaranty Agency Common Findings • Incorrect reporting for Form 2000, Line MR-10/10A – Rehab Loans • Overpayment of AMF / Underlying CL loans not paid off • Reporting unaccepted subrogated loans – MR-28

  12. Common Observations • No Internal Auditor • Insufficient Disaster Recovery / Business Continuity Plan • Conflict of Interest Policy needs improvement • School Lenders • Need better audit trail for Use of Interest and Special Allowance Payments

  13. Lessons Learned – Wrap-Up • Review internal procedures • Ensure pre-review work is timely- track progress • “Self-scrub” – a valuable learning tool • Correct known deficiencies • Advise Team Lead of progress • Discuss issues discovered internally and with Team Lead

  14. Technical Slide We appreciate your feedback and comments. We can be reached at: • Phone: (617) 289-0046 • Fax: (617) 289-0165 • Email: gene.greene@ed.gov

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