Copyright 2009 National Student Loan Program

Getting Ready for the AuditorsGetting Ready for the AuditorsA school’s guide to

preparing for annual audits

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FSA participation requirementFSA participation requirement

• Annual financial and compliance audits– conducted by qualified independent auditor – submitted to ED within six months of school’s

(or servicer’s) fiscal year end

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Audited financial statementAudited financial statement

• Most recently completed fiscal year

• Detailed description of related entities

• Details of related parties

• Other documentation as requested

• For proprietary schools– percentage of revenue derived from Title IV

programs

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Compliance auditCompliance audit• Most recently completed fiscal year• All Title IV transactions in fiscal year• All transactions since last audit• Type of audit depends on school type

– for-profit schools use Inspector General’s Audit Guide

– public and nonprofit schools use OMB Circular A-133

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Annual audit waiverAnnual audit waiver

• Annual audit requirement may be waived if certain criteria met

• If waiver granted, audits not required until– end of third fiscal year– end of second fiscal year if recertification

award year is part of third fiscal year

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Questions?Questions?

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Preparing for the auditors basicsPreparing for the auditors basics

• Be prepared to explain institutional policies and procedures

• Make sure all existing policies and procedures are in writing

• Know who does what at your school

• Have the people who can answer the questions available to answer questions

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Pre-visit preparationPre-visit preparation

• Provide list of Title IV recipients to auditor

• Reserve a work space / computer

• Arrange for access to SIS

• Announce visit dates to impacted campus offices

• Gather standard documents needed

• School P & P Manual should be handy

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Pre-visit preparation (con’t.)Pre-visit preparation (con’t.)

• Review findings (if any) from last year

• Show what was done to improve

• Create documentation for eligibility application and program summary grids

• Student budgets and award philosophy

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Institutional eligibility and participationInstitutional eligibility and participation• Program participation agreement

• State authorization to operate

• Accreditation documents

• Any third party agreements—outsourcing

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ReportingReporting

• Last year’s FISAP

• Pell statement of account

• State reports

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Student eligibilityStudent eligibility

• Documentation to show;– regular student in an eligible program– meeting SAP standards– not in default / owe repayment– EFC result—verification completed– passed federal matches (drug, citizenship,

etc.)– enrollment status

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Perkins loanPerkins loan• Final FCC allocation & LOL• List of recipients with backup to document

their eligibility for this fund• P-note signed prior to disbursement• FA awards = business office

disbursements• Annual/Aggregate limits not exceeded• Amount used for administration allowance

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SEOGSEOG

• Final allocation

• List of recipients and their eligibility

• Awarded first to Pell eligible students

• Annual maximum award not exceeded

• Document transfers from FWS/Perkins

• Amount used for administration allowance

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FWSFWS• Final allocation• List of recipients and their eligibility• Proof of hours worked compared to paid amount• Proof of eligibility to work and pay rate• Hours worked not in conflict with class schedule• Transfer of funds to SEOG and administration

allowance

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PELL / ACG / SMARTPELL / ACG / SMART• Origination and disbursement records

submitted and accepted• Award amount calculated correctly based

on enrollment• New/changed awards reported within

timeframes• General and specific program eligibility

met

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DL / FFELPDL / FFELP

• Student eligibility for subsidized and/or unsubsidized documented

• Submitted properly executed application and/or P-note to lender / DOE

• Account for receipt of funds and disbursement

• Lender / DOE notified properly if student withdraws

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DisbursementsDisbursements

• Campus-based, Pell, Direct Loans;

• Three business day rule– drawdown compared to disbursement

• Stafford– generally three days– thirteen if temporarily ineligible– forty-five if verification not complete

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Return of Title IV fundsReturn of Title IV funds• Provide list of impacted students• Document:

– last day of attendance– refund calculation– show when funds returned

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Administrative capabilityAdministrative capability

• Continual negative findings may lead to a question of administrative capability

• Could lead to fines or ineligibility

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Close outClose out

• Eventually, DOE will provide a letter to the Chief Executive Officer accepting the audit report and closing out that year.

• DOE is getting better in doing this sooner

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Questions?Questions?

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ResourcesResources• OMB Circular A-133

http://www.whitehouse.gov/omb/circulars_a133/

• OIG Audit Guide http://ifap.ed.gov/aguides/attachments/sfgd2000.pdf

• OGA Government Auditing Standards http://www.gao.gov/govaud/govaudhtml/index.html

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Resources (con’t.)Resources (con’t.)

• 2008-2009 Federal Student Aid Handbook Volume 2 Chapter 12, “Program Integrity” http://ifap.ed.gov/fsahandbook/attachments/0910FSAHbkVol2Ch12Integrity.pdf

• The Blue Book Chapter 8, “Program Integrity” http://ifap.ed.gov/bbooks/attachments/1005BlueBookCh8ProgramIntegrity.pdf

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Contact informationContact information

Policy Department

National Student Loan Program

askpolicy@nslp.org

1-800-735-8778 ext. 6873