AuditGuideType: Audit Guide for Schools
SectionTitle: Cover Letter
In June 1995, we transmitted by Dear Colleague letter the U.S. Department of Education's (ED) Audit Guide, Compliance Audits (Attestation Engagements) of the Federal Student Financial Assistance Programs at Participating Institutions (Guide). That Guide required all institutions participating in Title IV HEA Programs to have an annual compliance audit, and applied to award years ending June 30, 1995, and thereafter. This letter serves as notice to institutions and third party servicers that, to the extent that an institution contracts with a servicer to administer any aspect of the Title IV HEA Programs, the applicable compliance requirements contained in the Guide also apply to that servicer.
Accompanying this letter is an update to the Guide that provides guidance to independent public accountants (IPA) engaged to audit functions performed by institution servicers when the functions performed are applicable to the administration of the Title IV HEA Programs, and provides guidance when auditing and reporting on a servicer's compliance with the Title IV requirements. This update also provides clarifications, identifies additional compliance requirements and management assertions applicable to institutions and institution servicers, and includes information on changes required as a result of regulations that are effective July 1, 1997. Care must be exercised to ensure that laws and regulations applicable to the audit period are being used as criteria for the determination of compliance.
Please note that audit packages submitted under this Audit Guide must contain all the components required by the Guide, including all the required elements listed on page I-13 or III-7 and 8 of the Guide, as applicable. Audit packages submitted without all the required components are incomplete and will be rejected and returned to the institution or servicer. Institutions and servicers that do not submit a complete audit in accordance with the Audit Guide may be subject to administrative sanctions pursuant to 34 CFR 668 Subpart G.
This update consists of a list of changes to be made by pen and ink as well as new and revised pages to be inserted to the Guide. In lieu of making the pen and ink changes and inserting new pages and sections, an updated version of the audit guide (SFA Audit Guide-Updated 1997) with these changes already inserted is available on the Internet at this URL: http://home.gvi.net/~edoig/. The Guide as amended by this update must be used by the IPA for performing the compliance audits of any institution or institution servicer participating in or administering any aspect of Title IV HEA Programs, except for institution or institution servicers which obtain an audit in accordance with the Office of Management and Budget Circulars A-128 or A-133.
Questions pertaining to the Guide and update should be faxed directly to the Non-Federal Audit Team at (214) 767-2024. We look forward to working with you to implement the compliance audit requirements for Title IV HEA program institutions and institution servicers.
Thomas R. Bloom