Last month NACUBO reported that a Department of Education memorandum signaled that ED would not require Student Financial Assistance (SFA) audits for FY16 but would pursue an annual audit mandate for FY17 as part of the Office of Management and Budget's (OMB) 2017 Compliance Supplement to federal audit requirements. ED’s August 5 memorandum asked that School Participation Divisions be notified if a Title IV low-risk determination was made under OMB’s Uniform Guidance for FY16, meaning that SFA was not being audited in FY16.
After meeting with ED legal experts, the American Institute of Certified Public Accountants (AICPA) issued a public clarification notice on its Governmental Audit Quality Control Center. The notice reinforces that School Participation Divisions must be contacted if the SFA Cluster is a Type A program not audited in FY16 because it either is considered low-risk or is not needed to meet percentage of coverage requirements under the Uniform Guidance. According to the AICPA, ED School Program Division staff will review the audit assessment criteria, and other information they have access to, and will validate the SFA audit determination. If they agree, SFA will not have to be audited as a major program in FY16.
NACUBO would like to hear from institutions that may receive a contrary indication and a request for an FY16 SFA audit by ED. NACUBO and other associations are monitoring this effort to ensure that every attempt is being made to reduce administrative burden and cost for FY16 audits that are well underway or concluded.
Additionally, some public colleges and universities included in their state’s single audit are exempt from an SFA audit because the program is not needed to meet percentage of coverage criteria. NACUBO would like to understand the extent to which public colleges and universities are included in the single audits of their state.
Please contact NACUBO if (1) you are a low-risk auditee and your School Participation Division believes that SFA should be audited in FY16 or (2) your institution is public and is included in your state’s single audit.
ED has already contacted NACUBO and other associations concerning preliminary work on the FY17 Compliance Supplement. Consequently, we will be participating in and reporting on FY17 Compliance Supplement discussions in the coming months.