Objective

To determine the extent of implementation of the four recommendations included in our initial audit report Oversight of the STEM Incentive Program (2017-S-75).

About the Program

Our initial audit report, which was issued on November 28, 2018, determined if the Higher Education Services Corporation (HESC) was effectively monitoring the Science, Technology, Engineering, and Mathematics (STEM) Incentive Program (Program) to ensure recipients were in compliance with the Program rules and regulations, and whether HESC had only made payments on behalf of recipients who were in compliance with Program regulations.

We found that HESC had taken steps to implement the structure necessary to administer the Program. However, we identified issues that could affect many aspects of the Program. For example, HESC did not always ensure applicants met Program eligibility requirements and made $81,198 in Program award payments on behalf of 20 recipients who did not meet Program requirements while in college. We also determined that HESC’s policy to pro-rate loans for any recipients who did not fulfill work and residency requirements was contrary to its regulations. Further, HESC’s data systems were somewhat antiquated and restrictive, limiting their usefulness to HESC officials to effectively monitor and track Program compliance and award repayments.

Key Finding

HESC officials have made progress in correcting the problems we identified in the initial audit report. Of the four recommendations from the prior report, two have been implemented and two have been partially implemented.

Key Recommendation

Officials are given 30 days after the issuance of the follow-up report to provide information on any actions planned to address the unresolved issues discussed in this report.