May 30, 2007

> Control Number
>
> [ED-OIG/A09G00]{.underline}[35]{.underline}

Stephen Weber, President

San Diego State University

5500 Campanile Drive, MH 3340

San Diego, CA 92182

Dear Dr. Weber:

This **Final Audit Report**, entitled *San Diego State University's
Eligibility Determination for Federal Pell Grants Awarded to
Postbaccalaureate Students Enrolled in Teaching Credential Programs*,
presents the results of our audit. The purpose of the audit was to
determine whether San Diego State University (SDSU) has policies and
procedures that provide reasonable assurance that postbaccalaureate
students enrolled in teacher credential programs are eligible for the
Federal Pell Grant Program. Our audit covered the Federal Pell Grants
awarded for the 2005‑2006 award year.

BACKGROUND

Under 34 C.F.R. § 690.6(c), a postbaccalaureate student may receive a
Federal Pell Grant if---

> \(1\) The postbaccalaureate program consists of courses that are
> required by a State for the student to receive a professional
> certification or licensing credential that is required for employment
> as a teacher in an elementary or secondary school in that State;
>
> \(2\) The postbaccalaureate program does not lead to a graduate
> degree;
>
> \(3\) The institution offering the postbaccalaureate program does not
> also offer a baccalaureate degree in education;
>
> \(4\) The student is enrolled as at least a half-time student; and
>
> \(5\) The student is pursuing an initial teacher certification or
> licensing credential within a State.

To be employed in a California public school, elementary and secondary
public school teachers must be certified by the California Commission on
Teacher Credentialing. The Commission issues guidelines for institutions
to use in developing programs designed to prepare students for
certification and approves the programs offered at California colleges
and universities.

SDSU is one of 23 institutions in the California State University (CSU)
system. SDSU offers nine postbaccalaureate programs that prepare
students for initial teacher credential: Multiple Subject, Multiple
Subject with Bilingual Cross-Cultural Language and Academic Development
Emphasis Spanish (BCLAD), Single Subject, Single Subject with BCLAD, and
five special education specialties. For the 2005‑2006 award year, SDSU
disbursed \$925,679 in Federal Pell Grant funds to students enrolled in
these postbaccalaureate programs.

AUDIT RESULTS

SDSU's policies and procedures were adequate to ensure that the students
who were enrolled in its postbaccalaureate teacher credential programs,
met eligibility requirements for receiving Federal Pell Grants. For the
2005-2006 award year, SDSU made 673 Pell Grant awards to students
enrolled in its postbaccalaureate teacher credential programs. Our
review of SDSU's student financial aid and enrollment records for a
random sample of 39 of the 673 awards confirmed that the students met
the requirements for having a baccalaureate degree, having a financial
need, maintaining satisfactory academic progress, and being enrolled at
least half time. We also confirmed that SDSU did not offer a
baccalaureate degree in education and that the postbaccalaureate
programs were designed to prepare students for their initial teacher
credential and did not lead to a graduate degree.

OTHER MATTER

During our review, we found that SDSU's *2005-2006 Bulletin of the
Graduate Division* (Bulletin)[^1] contained language that placed a
stricter requirement on prerequisite courses for teacher credential
programs than was actually applied in SDSU's procedures. The Bulletin
sections covering admission standards and qualifications for four of the
nine teacher credential programs place conditions on the timeframe for
completion for prerequisite courses.[^2]

The Bulletin sections for the Multiple Subject Program and the Single
Subject Program state---

> **Prerequisite Courses.** These courses or approved equivalents must
> be completed with grades of "C," "CR," or higher no more than five
> years prior to admission . . . . The courses may be in progress at the
> time of program application. Proof of registration is required to be
> considered for admission.

The Bulletin sections for the Multiple Subject with BCLAD Program and
the Single Subject with BCLAD Program state---

> **Prerequisite Courses.** The following courses must be completed with
> a grade of \"C\" or better prior to admission to the program, but may
> be in progress at the time of application or taken in the term
> immediately prior to the program start date.

Contrary to the Bulletin statements, SDSU allowed students in the
teacher credential programs to enroll in prerequisite courses as part of
the program and included the credits from the prerequisite courses when
determining a student's enrollment status. Enrollment status is used to
determine the student's eligibility for the Pell Grant program and is
used in the calculation of Pell Grant awards. If credits for the
prerequisite courses had not been included in determining student
enrollment status, several students in our sample would not have been
eligible for a Pell Grant and others would have been eligible for a
lesser amount than awarded.

As cited in the BACKGROUND section of this report, 34 C.F.R. §
690.6(c)(1) states that postbaccalaureate students may receive a Federal
Pell Grant if, among other requirements, the postbaccalaureate program
consists of courses that are required by a State for the student to
receive a professional certification or licensing credential. SDSU\'s
teacher credential program application forms, which are approved by the
California Commission on Teacher Credentialing, identify the
prerequisite courses as required courses for the teacher credential
programs. As such, SDSU\'s practice of including a student\'s enrollment
in prerequisite courses when determining Pell Grant eligibility and Pell
awards does not conflict with Federal requirements. We suggest that SDSU
take steps to resolve the inconsistency on requirements for prerequisite
courses contained in the Bulletin language and the teacher credential
program application forms.

OBJECTIVE, SCOPE, AND METHODOLOGY

Our audit objective was to determine whether SDSU has policies and
procedures that provide reasonable assurance that postbaccalaureate
students enrolled in teacher credential programs are eligible for the
Federal Pell Grant Program. Our audit covered the Federal Pell Grants
awarded for the 2005‑2006 award year.

## 

To accomplish our objective, we gained an understanding of pertinent
provisions of the Higher Education Act of 1965, as amended; Federal
regulations; and sections of the Department's *Federal Student Aid
Handbook 2005-2006*. We reviewed single audit reports for the CSU system
that were prepared by its independent public accountant for fiscal years
ended June 30, 2004 and June 30, 2005, and a report issued by
CSU's internal audit department. We reviewed written policies and
procedures for awarding Pell Grants and interviewed SDSU staff
responsible for awarding Federal Pell Grants and developing
State-required courses for the teacher credential programs. We reviewed
SDSU's catalogs to confirm that its postbaccalaureate teacher credential
programs did not lead to a graduate degree and that SDSU did not offer a
baccalaureate degree in education.

To evaluate SDSU's internal controls, we reviewed students' financial
aid and enrollment records for a random sample of 39 of the 673 Federal
Pell Grant awards made for the 2005‑2006 award year to students enrolled
in the postbaccalaureate teacher credential programs. For each award, we
confirmed that the student---

-   Had a baccalaureate degree, a financial need, and maintained
    satisfactory progress.

-   Was enrolled as at least a half-time student and that the courses
    used to determine the enrollment status were required by the State
    for the student to receive a teacher credential;

-   Was pursuing an initial teacher credential within the State;

-   Was enrolled in a teacher credential program that was approved by
    the California Commission on Teacher Credentialing.

To select the sample and evaluate SDSU's procedures, we relied on data
extracted by SDSU's staff from the school's financial aid management
system. We assessed the reliability of the extracted data by comparing
the total records provided in the extract to the total records in the
financial aid management system. We also compared the data in the
extract for each sampled award to the student enrollment and financial
aid data shown in the financial aid management system for that award. We
confirmed the award amounts shown in the extract by recalculating the
awards using information in the financial aid management system. Based
on these tests, we concluded that the data was sufficiently reliable for
use in meeting the audit objective.

We performed our fieldwork at SDSU's Office of Student Aid and
Scholarships in San Diego, California. We held an exit briefing with
SDSU officials on May 25, 2007. Our audit was performed in accordance
with generally accepted government auditing standards appropriate to the
scope of the review described above.

ADMINISTRATIVE MATTERS

In accordance with the Freedom of Information Act (5 U.S.C. § 552),
reports issued by the Office of Inspector General are available to
members of the press and general public to the extent information
contained therein is not subject to exemptions in the Act.

We appreciate the cooperation and assistance extended by your staff
during the audit. If you have any questions, please contact me at (916)
930-2399. No response on your part is necessary.

Sincerely,

*/s/ Beverly A. Dalman for*

> Gloria Pilotti

Regional Inspector General for Audit

[^1]: The Bulletin is the catalog that describes SDSU's graduate and
    credential programs and the courses required under each program.

[^2]: The teacher credential programs in special education included a
    list of prerequisite courses, but did not contain the cited language
    on the timeframe for the courses.