Copyright 2009 National Student Loan Program Getting Ready for the Auditors A school’s guide to preparing for annual audits

2 FSA 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

3 Audited 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

4 Compliance 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

5 Annual 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

6 Questions?

7 Preparing 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

8 Pre-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

9 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

10 Institutional eligibility and participation Program participation agreement State authorization to operate Accreditation documents Any third party agreements—outsourcing

11 Reporting Last year’s FISAP Pell statement of account State reports

12 Student 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

13 Perkins 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

14 SEOG 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

15 FWS 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

16 PELL / 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

17 DL / 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

18 Disbursements 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

19 Return of Title IV funds Provide list of impacted students Document: –last day of attendance –refund calculation –show when funds returned

20 Administrative capability Continual negative findings may lead to a question of administrative capability Could lead to fines or ineligibility

21 Close 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

22 Questions?

23 Resources OMB Circular A a133/ a133/ OIG Audit Guide d2000.pdf d2000.pdf OGA Government Auditing Standards dex.html dex.html

24 Resources (con’t.) Federal Student Aid Handbook Volume 2 Chapter 12, “Program Integrity” s/0910FSAHbkVol2Ch12Integrity.pdf s/0910FSAHbkVol2Ch12Integrity.pdf The Blue Book Chapter 8, “Program Integrity” 5BlueBookCh8ProgramIntegrity.pdf 5BlueBookCh8ProgramIntegrity.pdf

25 Contact information Policy Department National Student Loan Program ext. 6873