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The Department of Education’s revised eZ-Audit reporting system lacks clear alignment with detailed information required in the new financial responsibility regulation that took effect on July 1, 2020. In response, NACUBO has developed a tutorial and crosswalk between the financial responsibility supplemental schedule (FRSS) and the Department of Education’s ED’s eZ-Audit reporting templates. Financial responsibility reporting and compliance requirements affect all not-for-profit (NFP) and proprietary institutions.

In addition to excluding annuities without donor restriction, the new eZ-Audit reporting system requests several data elements that are not required per the new financial responsibility regulation. Because eZ-Audit instructions do not clearly define requested data, NACUBO’s accounting tutorial and crosswalk assists with navigating between financial statements, the FRSS, and eZ-Audit.

NACUBO also has reached out to ED and asked for clarification concerning:

  • How gains and losses on annuities without donor restrictions should be entered in the eZ-Audit system
  • Whether net assets released from restriction (including donor-restricted endowment assets in the reporting year) are included as revenue
  • If gains or losses on investments are derived by combining the net return on investments without donor restrictions with the amount released for spending from funds functioning as endowment (without donor restriction)
  • Verifying formulas embedded within eZ-Audit to assure the correct additions and subtractions of gains and/or losses used to calculate the primary reserve and net income ratios

Filing deadlines

NACUBO’s financial responsibility accounting tutorials and Advisory 19-04, Financial Responsibility Standards, recommend that the FRSS and related disclosures be included in the Uniform Guidance audited financial statements. Single audits are due nine months after an institution’s reporting year-end in order to comply with the Office of Management and Budget’s (OMB) Uniform Guidance filing date requirements. (In late June, OMB rescinded COVID-related administrative relief provisions that would have extended the single audit submission deadline.)

NFP colleges and universities should start preparing now to comply with financial responsibility requirements by becoming familiar with the FRSS and the eZ-Audit template. NACUBO welcomes your questions and discoveries as you go through this process.

Learn more about this guidance and other updates at the next Telephone Town Hall, October 23 at 2 pm ET.


Sue Menditto

Senior Director, Accounting Policy


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