Federal education officials are seeking the return of at least $230,000 from Metropolitan Community College, based upon an audit showing the Omaha-based college awarded financial aid to unqualified students and to students who had dropped out.
The audit, conducted by the U.S. Department of Education's Office of Inspector General, also recommends a review of all students who received federal financial aid during the 2009-10 school year. Based upon the audit's sampling of that year, the community college may have improperly disbursed up to $4.5 million, the audit report says.
The college defends its handling of student aid and plans to challenge at least some of the report's findings, said Jim Grotrian, Metro's executive vice president. He said the college challenges the statistical sampling used in the audit and has “a high level of confidence” the problems are not as widespread as the auditors' report suggests.
Metro awarded a total of $32.8 million in federal financial aid in 2009-10, $21.5 million in the form of need-based Pell grants. Grotrian said the problems identified in the audit affect only a small percentage of the college's federal aid.
The audit identified problems in six key areas:
» Students who lacked a high school diploma or GED. Although such students can attend classes at Metro, they must first pass an “Ability to Benefit” test — indicating they have the ability to take college coursework — or certify that they were home-schooled.
Auditors reviewed the files of 30 of 274 students who enrolled without diplomas or GEDs, and found that five were awarded aid without documentation that they'd taken the test. In addition, 16 students took an improperly administered Ability to Benefit test at Metro's South Omaha campus. The auditor recommended that Metro be required to pay back $73,874 it received on behalf of the reviewed students.
» Students who did not make satisfactory progress. Auditors randomly selected 40 students from among 7,190 that received Pell grants and found that six had not completed courses as required.
Auditors concluded that Metro improperly distributed $12,212 to the six students. Based on that sampling, the auditors called for a full review of Pell grant students and estimated that Metro could have awarded as much as $4 million improperly, based on the percentage of audited cases where problems were detected.
» Students who received aid even if they didn't show up for class. The auditors said Metro did not properly identify students who never attended courses or who quit attending. Metro improperly kept more than $8,074 in federal aid paid on behalf of 18 students who dropped out, the auditors found.
The auditors also called for review of other students' cases. Based on the percentage of cases where problems were found, the auditors estimated Metro may have kept as much as $500,000 in aid it received on behalf of students who quit.
» Students receiving aid after taking too many remedial courses. Federal regulations allow students to receive aid for up to one year's worth of remedial education. If more is required, they are not considered to be postsecondary students. The auditors found 26 students, who received $26,989 in aid, who had exceeded their limit of remedial courses.
» Students who received aid for nondegree programs that don't qualify for federal aid. The auditors found that $88,000 had been disbursed on behalf of 23 students enrolled in ineligible programs.
» Work-study students whose jobs were not administered in compliance with federal regulations. In some cases, the students' work hours conflicted with their class schedule; in other cases, they were paid for hours they did not work. Auditors concluded that $21,238 of improper payments should be returned to the Education Department.
In a detailed response to the Office of Inspector General, Metro officials conceded some of the findings but said that additional research yielded documentation showing that many of the reviewed students were, indeed, entitled to the aid they received.
Grotrian emphasized that it is part of Metro's mission to assist students who otherwise might not be able to attend college. He said the audit hinges upon whether Metro used correct procedures to determine student eligibility.
He said it is the first time Metro has been audited by the Office of Inspector General, which makes recommendations for consideration by the Federal Student Aid program. He said it may be that Metro attracted the auditor's attention because it is growing fast both in terms of students and federal aid dollars.
The Inspector General's office declined to say why Metro was selected for an audit.
Metro has 30 days to respond to the report.
“This is still early in the process,” Grotrian said. “We're a ways off from any final findings, actually.”
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