Federal Student Aid - IFAP
   
PublicationDate: 7/1/97
AuditGuideType: Audit Guide for Schools
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SectionTitle: Contents
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TABLE OF CONTENTS


SECTION I
AUDIT PLANNING AND OTHER CONSIDERATIONS


Purpose of Guide - I-1

Engagement Periods and Report Due Dates - I-3a

Matters Requiring Immediate Action - I-3b

Auditor Qualifications - I-4
General Planning Considerations - I-5
Engagement Letter - I-5
Third Party Servicers Audit - I-5
Escrow Agent/Reimbursement - I-5
Follow Up on Prior Audit Findings - I-6
Site Visits - I-6
Corrective Action Plan - I-6
Close Out Examinations - I-6
Student Confirmations - I-7

Audit Report Package - I-7

Financial Statement Audit - I-7
Management and Legal Counsel Representation Letters - I-8
Consideration of Internal Control Structure - I-8
85/15 Revenue Test - I-8
Contact Office - I-8
Financial Statement Reporting - I-9

Compliance Attestation Engagement - I-9
Computer and Electronically Processed Data - I-9
Consideration of The Internal Control Structure - I-10
Materiality - I-11
Sampling Methodology - I-11
Sample Results - I-12
Reporting Noncompliance - I-13
Compliance Attestation Reporting - I-13

Quality Control Review of Audit Reports - I-14

Future Revisions - I-14



SECTION II REQUIRED MANAGEMENT ASSERTIONS, COMPLIANCE REQUIREMENTS AND SUGGESTED PROCEDURES

Introduction - II-1
Institutional Eligibility and Participation - II-2
Reporting - II-8
Student Eligibility - II-11
Disbursements - II-14
Refunds - II-19
Cash Management - II-23
Close Out (If Applicable) - II-25
Perkins Loan Collections and Due Diligence - II-27


SECTION III PLANNING AND OTHER CONSIDERATIONS FOR
AUDITS OF INSTITUTION SERVICERS

Purpose of This Section - III-1

Requirements and Standards for Service Attestation Engagements - III-1
Annual Compliance Audit - III-1
Standards for Servicer Audits Audit - III-2

Engagement Periods and Due Dates - III-3
First Year Engagements - III-3
Subsequent Engagements - III-3
Due Dates - III-3

Servicer’s Reporting Entity - III-3
Contracting with More Than One Institution, Lender or Guaranty Agency - III-3

Servicer’s Responsibilities - III-4
Servicer Corrective Action Plan - III-4

Practitioner Responsibilities - III-4
Engagement and Management Representations - III-4


Planning Considerations for Servicer Audits - III-5
Consideration of the Servicer’s Internal Control Structure - III-5
Materiality - III-6
Sampling Methodology - III-6
Sample Results - III-6
Reporting Noncompliance - III-7
Compliance Attestation Reporting - III-8


SECTION IV REQUIRED SERVICER MANAGEMENT ASSERTIONS,
COMPLIANCE REQUIREMENTS AND SUGGESTED PROCEDURES

Introduction - IV-1
Institutional Eligibility and Participation - IV-2
Reporting - IV-3
Student Eligibility - IV-4
Disbursements - IV-5
Refunds - IV-6
Cash Management - IV-7
Close Out (If Applicable) - IV-8
Perkins Loan Collections - IV-9
Servicer Eligibility - IV-10
Servicer’s Systems and Internal Controls - IV-13


SECTION V - ILLUSTRATIVE REPORTS AND APPENDICES

Financial Statement

Report on the Audit of the Basic Financial Statements - Example A-1
Report on the Internal Control Structure Based on
an Audit of the Basic Financial Statements - Example A-2
Report on Compliance Based on the Audit of
the Basic Financial Statements - No Reportable Instances of Noncompliance - Example A-3



Compliance Attestation

Compliance Report Section - Example B
Servicer Cover Page - Example B-1
Auditor Information Sheet - Example C
Servicer Information Sheet - Example C-1
Report on Management's Assertions on Compliance
With Specified Requirements Applicable to the
SFA Programs - Example D
Summary Schedules A, B and C - Example E
Schedule of Findings and Questioned Costs - Example F
Auditor's Comments on Resolution Matters
Relating to the SFA Program - Example G
Corrective Action Plan - Example H

Appendices

SFA Programs' Minimum and Maximum Amounts....Appendix A
High Risk Indicators....Appendix B
Regional Inspector General for Audit & Related Offices....Appendix C
Instructions for Example E....Appendix D