Audit: UH’s financial aid systems did not suitably vet students

School gave out incorrect amounts of money for second consecutive year

The University of Houston gave incorrect amounts of federal money to students seeking financial aid for the second year in a row, state auditors found, though the problems identified affected few students.

The audit focused on UH’s distribution of federal financial aid, including through work-study programs, the Pell Grant for low-income students and the Free Application for Federal Student Aid.

Regents reviewed the audit of the year that ended in August 2017 at a Thursday board meeting, and UH accepted its findings. Auditors attributed the mistakes to the university’s systems, which they said did not properly evaluate which students qualified for aid.

Fixes have been made

Auditors cited UH for the same issues in prior years and wrote up universities across the state for other, sometimes similar, infractions. Spokesman Mike Rosen said UH has completed each of the suggested fixes, and auditors will review their implementation over the summer.

Several issues state auditors found at UH are common to campuses nationally, according to materials from advisory firm Baker Tilly, and multiple universities around Texas were cited for similar problems.

Colleges’ uses of federal dollars for financial aid is increasingly important as the number of students applying for this money grows. In the 2006-2007 academic year, about 14 million students applied for federal financial aid. That figure was just shy of 20 million in the 2015-16 award year, according to the National Association of Student Financial Aid Administrators.

At UH, the audit found that too much federal money was given to several individual students.

UH in one case considered a part-time student as a full-time student and gave $727 too much in Pell Grant money, which was returned. In another case, a student who enrolled but then withdrew for the spring 2017 term received $1,549 in Federal Work-Study money. UH returned the money, according to the audit.

UH also did not accurately verify certain information — such as the number of people in a household — that several students wrote on the FAFSA form that is necessary to receive federal financial aid money.

A more widespread problem, according to the audit, is that UH’s financial aid system did not allow it to accurately track a student’s progress through a degree program. This is important because students can only receive some federal money if they make sufficient progress toward graduation.

For almost half of graduate, law school, pharmacy and optometry programs, UH never set a maximum time for completing those degrees, making tracking student progress difficult. Baker Tilly found this problem was common in higher education.

Auditors will follow up

“Auditors did not identify any students who were ineligible for student financial assistance as a result of that issue,” the audit read. “However, not determining maximum time frames correctly increases the risk that master- and doctoral-level students could receive financial assistance for which they are not eligible or be denied financial assistance for which they are eligible.”

Auditors recommended that UH take several steps to fix the issues, including establishing controls to make sure it gives federal money in correct amounts to enrolled, eligible students.

They will come to UH in June or July to confirm UH has met those requirements, said Don Guyton, chief audit executive.

“Financial aid administrators are responsible for fixing what needs to be fixed,” he said after the meeting.