Verification PA Association of Student Financial Aid Administrators Conference October 2011

VerificationVerification

PA Association of Student Financial Aid PA Association of Student Financial Aid Administrators Conference Administrators Conference

October 2011 October 2011

Annmarie WeismanTraining Officer

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What is Verification?What is Verification?…let’s review…let’s review

• Process by which certain required data reported on the FAFSA is reviewed for accuracy and completeness

• Verification regulations at 34 CFR §668, Subpart E

• Required Verification policies regulations: 34 CFR § 668.53

Required Verification PoliciesRequired Verification Policies

• Must have written P&P on the following:– Applicant responsibilities/deadlines for

submitting documents and consequences of not meeting deadlines

– Method of notifying students of post-verification award changes

– Student corrections– Referring overpayment cases to ED

(More)

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Required Verification Required Verification Policies (cont.)Policies (cont.)

• Must also give each applicant selected for verification a written statement explaining:– Documents required for verification– Student responsibilities—correction procedures,

deadlines for completing any actions required, and consequences of missing the deadlines

– Notification methods—how your will notify a student of resulting award changes, and the time frame for notification

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How Are Applicants Selected?How Are Applicants Selected?

• CPS selection– Edit checks identify potential errors

and inconsistencies– Random selection

• School selection– School criteria

30% option ends in 11-12

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What Documents Do I Need?What Documents Do I Need?

• For taxable income, base year tax return

• For untaxed income and benefits:– Official agency

documentation– Verification worksheet– Signed statement

• Details on acceptable documents are listed in the FSA Handbook and Federal Register

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IRS Data Retrieval ProcessIRS Data Retrieval Processand Verificationand Verification

• An institution may consider information retrieved through the IRS data retrieval process as acceptable verification documentation if: – The Secretary has identified those items as

having come from the IRS and– The items have not been changed– IRS Request Flag = 02

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How Do I Complete the Process?How Do I Complete the Process?

• Compare the documents with the original FAFSA information– May use a checklist in the file– May use verification tool on FAA Access

• Determine if:– Information is correct– Tolerance option may be used – Corrections must be made

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Verification ToleranceVerification Tolerance

2011-12 AY• No recalculation or

reprocessing required if– no change in non-dollar

items used to calculate EFC*

AND– no dollar amount in excess

of $400

2012-13 AY and forward• No recalculation or

reprocessing required if– no change in non-dollar

items used to calculate EFC*

AND– no dollar amount in

excess of $25

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*Remember, some items affect the EFC that are not obvious.

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Verification Status CodesVerification Status Codes

• Used when reporting Pell and Direct Loan payments to COD

V = Verified S = Selected, but not verifiedW = Paid without DocumentationBlank = ISIR not selected by CPS or school

Interim Disbursements* while Interim Disbursements* while Verification IncompleteVerification Incomplete

• If a school has no reason to suspect that application information is incorrect:– Pell, FSEOG and Perkins: may make one

disbursement for applicant’s first payment period– FWS: employee may work for a maximum of 60

consecutive days from start of enrollment– Direct Loans: may originate (but not disburse)

subsidized loans

*TEACH, PLUS, and Unsubsidized Direct Loans are not subject to verification/interim disbursements

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Update Applicant InformationUpdate Applicant Information

• For any student, must always update a student’s dependency status if it changes during an award year*

• For students selected for verification, must always update household size and number in college at the time of verification*

*Unless the reason is a change in the student’s marital status (may make this change in 12/13 & forward)

““Non-Verification” RemindersNon-Verification” Reminders

• Regardless of verification status– Must resolve all “C codes”– Must resolve all conflicting information

• Separate process from verification• Includes any information of which the school

has knowledge • Done prior to disbursement

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Verification and Verification and Professional JudgmentProfessional Judgment

• If applicant is selected for verification (by CPS or school):– MUST verify

before performing PJ

• If applicant NOT selected for verification: – Verification

NOT required– May perform PJ

as usual

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Mistaken belief that you must verify to do a PJ…

Information to VerifyInformation to Verify2012-132012-13

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Verification Guidance Verification Guidance (2012-13 process)(2012-13 process)

• Dear Colleague Letter (DCL) GEN-11-13– July 13, 2011 Federal Register details FAFSA

information to be verified for AY 2012-13 – Summarizes the process for AY 2012-13

Citations: 34 CFR §§ 668.51 through 668.61

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2012-13 Verification Selection 2012-13 Verification Selection Process and ISIR Flags Process and ISIR Flags

• Long-term goal: customized verification based on applicant info.– Will identify for a selected applicant only

the info. that requires verification based upon that applicant’s data

– Current process requires review of items for all applicants selected for verification

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2012-13 Verification Process 2012-13 Verification Process (cont.) (cont.)

• Long-term goal: customized verification– Need more historical FAFSA data to

develop the customized verification model• ED is not implementing a fully customized

verification process for the 2012-13 AY • 2012-13 is a variation of the current process

– Analysis will be used to select applicants with the highest probability of error

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2012-13 Verification Process 2012-13 Verification Process (cont.)(cont.)

• A SAR/ISIR will include only one verification flag to indicate selection – An applicant whose ISIR is so flagged

must verify the info. included in the July 13, 2011 Federal Register

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• Information is to be verified for the applicant and, if appropriate, his or her parent(s) or spouse for all applicants selected for verification:– # of household members– # in college– Food Stamps - if reported– Child Support Paid - if reported

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• Item: # of household members• Documentation: signed statement

• Exceptions: Verification of this item not required for a dependent applicant when the marital status of the parent(s) of the applicant is: – separated or unmarried (single, divorced, or

widowed) and family size on the FAFSA = 2– married and family size on the FAFSA = 3

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• Item: # of household members (cont.)

• Documentation: signed statement

• Exceptions: Verification of this item not required for an independent applicant when the marital status is: – separated or unmarried (single, divorced, or

widowed), and the family size on the FAFSA = 1 – married and the family size on the FAFSA = 2

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• Item: # of household members enrolled at least ½ time in eligible post-secondary institutions

• Documentation: signed statement (or written document from post-secondary institution confirming enrollment if requested)

• Exception: Verification not required if # in college on the FAFSA = 1

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• Item: Food Stamps - Supplemental Nutrition Assistance Program (SNAP) - if receipt is indicated on the 2012-13 FAFSA

• Documentation: copy of document from providing agency

• Exceptions: None

• No need to verify amount, just receipt of benefit

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• Item: Child Support Paid - if reported on the 2012-13 FAFSA

• Documentation: signed statement (or copy of document from court, person receiving support, or coordinating agency if requested)


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Info. for Tax Filers When Info. for Tax Filers When Applicant Selected for VerificationApplicant Selected for Verification

• Adjusted Gross Income (AGI)

• U.S. income tax paid

• Untaxed Income - only the following untaxed income if reported on the 2012-13 FAFSA - – Untaxed IRA distributions– Untaxed pensions– Education credits – IRA deductions– Tax exempt interest

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Info. for Non-Tax Filers When Info. for Non-Tax Filers When Applicant Selected for VerificationApplicant Selected for Verification

• Item: Income earned from work• Documentation: W-2 form and signed

statement that not required to file and the sources of the income


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Less Less Burdensome Burdensome VerificationVerification

Using the IRS Data Retrieval Process is the fastest, easiest, and most secure way to meet verification requirements

*initially FOTW filing

*FOTW corrections28

IRS Data RetrievalIRS Data Retrieval

• Applicants who use the IRS Data Retrieval Process to transfer their tax return info. and do not subsequently change the data will be considered to have verified the applicable FAFSA info (AGI, taxes paid, and any applicable untaxed income items)– Code 02 (IRS retrieval used & data unchanged)

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\\IRS Tax Return IRS Tax Return

Transcript Required Transcript Required • A tax transcript is required when:

– the IRS Data Retrieval Process was not used– the IRS Data Retrieval Process was used, but

data was subsequently changed– the institution has reason to believe that the data

transferred is inaccurate (no routine requests)– a married independent applicant and spouse –or-

the parents of a dependent student filed separate tax returns

…but, wait, there’s more…

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IRS Tax Return IRS Tax Return Transcript Required Transcript Required

• A tax transcript is also required when:– an applicant or applicant’s parent had a

change in marital status after the end of the tax year (December 31)

– the applicant, or parent, or spouse (as applicable) filed an amended tax return.

• Signature of tax filer not required on IRS Tax Return Transcripts

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Exceptions to IRS Tax Exceptions to IRS Tax Transcript RequirementTranscript Requirement

• In limited circumstances, if an institution determines that obtaining an IRS Tax Transcript is not possible, the institution may accept a signed copy of the tax return– Must document the reason for allowing an

applicant to do so– Example: tax return from foreign country or

Puerto Rico

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Interpreting theInterpreting theIRS Account TranscriptIRS Account Transcript

• ED will provide further guidance to schools on how to read the IRS Tax Transcript (locating the info you need on the document)

• Stay tuned to ifap!

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Where are the line item numbers?

Where can you find help?Where can you find help?

• FSA Assessments http://ifap.ed.gov/qahome/fsaassessment.html– Guide to Creating a Policy & Procedures Manual– Management Enhancement Worksheets

• FSA’s Institutional Improvement Specialists• FSA Application and Verification Guide, Ch. 4

http://ifap.ed.gov/qahome/fsaassessment.html



Other ResourcesOther Resources

• Preamble to the Program Integrity Notice of Proposed Rulemaking (NPRM) - 75 FR 34825–34834 (June 18, 2010)

• Preamble and Subpart E of the Program Integrity Final Regulations -75 FR 66902–66913 and 66954–66958 (October 29, 2010)

• Dear Colleague Letter GEN–11–03

• 2012–2013 ISIR Guide

• 2012–2013 SAR Comment Codes and Text

• 2012–2013 COD Technical Reference

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School Participation Team (SPT) School Participation Team (SPT) Contact InformationContact Information

The Institutional Improvement Specialists (IISs) are part of the SPT.

Contact InformationContact Information

• For follow-up questions about this session, contact me at:– Annmarie Weisman, Training Officer– [email protected]– 215-656-6456

• To provide feedback to my supervisor:– Tom Threlkeld, Supervisor– [email protected]– 617-289-0144

mailto:[email protected]

mailto:[email protected]

Your Region III Training TeamYour Region III Training Team

• Greg Martin, Training Officer– [email protected]– 215-656-6452

• Craig Rorie, Training Officer– [email protected]– 215-656-5916

• Annmarie Weisman, Training Officer– [email protected]– 215-656-6456

Thank you!

QUESTIONS?

Supplemental Supplemental InformationInformation

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Ordering an IRS Ordering an IRS Account Transcript—Three MethodsAccount Transcript—Three Methods

IRS WEBSITEIRS WEBSITEOrdering an IRS Account Transcript—Method One:

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Ordering an IRS Ordering an IRS Account TranscriptAccount Transcript

Heightened Cash Monitoring 2 (HCM2)/Reimbursement

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Heightened Cash Monitoring 1 (HCM1)

Advanced Payment

Ordering an IRS Ordering an IRS Account Transcript online (Steps 1-3)Account Transcript online (Steps 1-3)

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Ordering an IRS Ordering an IRS Account Transcript online (Steps 4-6)Account Transcript online (Steps 4-6)

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TELEPHONETELEPHONEOrdering an IRS Account Transcript—Method Two:

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Ordering an IRS Ordering an IRS Account Transcript by TelephoneAccount Transcript by Telephone

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Ordering an IRS Ordering an IRS Account Transcript by TelephoneAccount Transcript by Telephone

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PAPER FORMPAPER FORMOrdering an IRS Account Transcript—Method Three:

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Ordering an IRS Ordering an IRS Account Transcript by Paper FormAccount Transcript by Paper Form

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Ordering an IRS Ordering an IRS Account Transcript by Paper FormAccount Transcript by Paper Form

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Ordering an IRS Ordering an IRS Account Transcript by Paper Account Transcript by Paper

• Processing form 4506T-EZ means validating the information provided on the form.

• If any information does not match the IRS records, the IRS will notify the tax filer that it was not able to provide the transcript.

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Things to Know about theThings to Know about theIRS Account TranscriptIRS Account Transcript

• Tax filers can expect to receive a paper IRS Tax Return Transcript within 5 -10 days of successful validation

• IRS Tax Return Transcripts requested online cannot be sent to a 3rd party if processed by web or phone order

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IRS TAX TRANSCRIPT IRS TAX TRANSCRIPT SAMPLESAMPLE

SUPPLEMTAL INFORMATION:

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Tax Transcript Sample (Part 1)Tax Transcript Sample (Part 1)

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Tax and Credits (cont.)


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The End!The End!

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Verification PA Association of Student Financial Aid Administrators Conference October 2011

Documents

verification incompleteif

verification tolerance2011

verification policies

verification status

required ifno change

certain required data

filemay use verification

nondollar items