As previously stated, a vocational trade school is allowed to participate in the SFA programs only if it "provides an eligible program of training to prepare students for gainful employment in a recognized occupation." Therefore, I submit that the most important performance standard should be the number of students who obtain jobs in the field for which they were trained. If students who are trained at a particular vocational school are getting jobs, then Congress and the taxpayers can be relatively certain that the quality of the training is good. Congress has mandated job placement performance standards before. The 1992 HEA Amendments required that programs of less than 600 clock hours have a verified completion rate of at least 70 percent and a verified placement rate of at least 70 percent. Even this is a modest standard, requiring that only one of every two students enrolled get a job. We believe that Congress should seriously consider a similar provision as a gatekeeping mechanism for all non-degree-granting vocational programs that receive SFA funds. It is important to recognize that not all measurable statutory requirements are meaningful in assuring institutional quality. For example, the current HEA measures course length, but this does not ensure quality training. In fact, our past reviews disclosed that, in some instances, courses were stretched in order to meet the statutory course length requirement for participation in the SFA programs. were routinely certified and recertified despite indicators of administrative capability problems such as high withdrawal and default rates. 1992 HEA Amendments In the HEA Amendments of 1992, Congress added significant financial responsibility requirements for participating schools. Most importantly, all schools were required to have an annual independent financial statement audit submitted to the Department. Schools also were required to meet more stringent financial criteria for them to be considered financially responsible by the Department. The Amendments further added a 50-percent surety requirement for any institution that failed to meet the new financial responsibility criteria. Post-1992 HEA Amendments OIG Audit Work To determine the impact of the 1992 HEA Amendments on the Department's certification process, we conducted a follow-up review last year to evaluate the deficiencies we had reported in our previous audit reports. We concluded that the Department had implemented many of the requirements contained in the 1992 Amendments, and improvements were evident in the recertification process. In particular, the Department's implementation of the annual financial statement audit requirement significantly improved the certification screening process. However, CERTIFICATION/ELIGIBILITY -- LEGISLATIVE REFORMS LEAD TO IMPROVEMENT An example of the successful use of clear, bright-line legislative mandates occurred in another area of the gatekeeping processes. In the HEA Amendments of 1992, Congress set forth specific criteria for the Department to use in its financial and administrative certification of institutions participating in SFA programs. As a result, we have noted significant improvements in the Department's certification process. History of IG Concern Regarding Certification Process Our office issued two audit reports in 1989 and 1991 which addressed the Department's financial and administrative certification processes. At that time, we reported that the Department's certification procedures did not prevent deficient institutions from participating in SFA programs and did not protect student and government interests in the event of school closure. Moreover, nominal surety arrangements were used for the purpose of providing a mechanism for allowing almost any school to be certified to participate in the Title IV programs. In addition, the Department's administrative certification process placed too much reliance on the integrity of institutions in the preparation of certification applications, because the Department did not validate the information. We further found that institutions were routinely certified and recertified despite indicators of administrative capability problems such as high withdrawal and default rates. 1992 HEA Amendments In the HEA Amendments of 1992, Congress added significant financial responsibility requirements for participating schools. Most importantly, all schools were required to have an annual independent financial statement audit submitted to the Department. Schools also were required to meet more stringent financial criteria for them to be considered financially responsible by the Department. The Amendments further added a 50-percent surety requirement for any institution that failed to meet the new financial responsibility criteria. Post-1992 HEA Amendments OIG Audit Work To determine the impact of the 1992 HEA Amendments on the Department's certification process, we conducted a follow-up review last year to evaluate the deficiencies we had reported in our previous audit reports. We concluded that the Department had implemented many of the requirements contained in the 1992 Amendments, and improvements were evident in the recertification process. In particular, the Department's implementation of the annual financial statement audit requirement significantly improved the certification screening process. However, we have been unable to verify the Department's stated increase in certification rejections because the Department cannot provide our office with the specific names of the institutions that have been rejected. Our 1995 review also revealed that there were certain key areas where corrective action had not been completed. The 1992 HEA Amendments contained an additional requirement that the Department recertify all schools participating in SFA programs by July 1997 and then repeat the recertification every four years thereafter. Due to the large number of recertifications required and the limited number of staff available to conduct the reviews, it is our opinion that the Department will not be able to finish the recertification of participating institutions within the statutorily mandated time frame. If the recertification process is not completed as required, it could result in ineligible institutions receiving SFA funds. To complete the recertification process in a manner that will minimize the risk to the Department, we recommended that the recertification of institutions be prioritized by first reviewing institutions that present the highest risk and then restructuring the process to streamline the recertification of the remaining institutions. The Department generally agreed with this recommendation. Our follow-up review further revealed that the Department continues to have problems in maintaining and tracking its files on institutions. We recommended that the Department reevaluate its staff resources to determine how best to ༄ ་་་ ་་་་ |