Institutions that wish to apply to participate in Title IV Federal Student Aid Programs may not initially realize that as part of the Title IV application process, an institution must not only provide two full fiscal years of audited financial statements that were prepared according to Generally Accepted Accounting Principles or GAAP, but new schools must also submit the same two years of financials, audited under Generally Accepted Government Auditing Standards known as GAGAS. Fail to submit both financial statements and your application will simply be delayed. It’s best to get your ducks in a row now and save yourself some frustration later on.
Schools that are using an auditor unfamiliar with the Title IV process BEWARE!
Accrediting agencies only require a GAAP audit. When a school submits its application to participate in Title IV Federal Student Aid programs, they are often surprised, not to mention frustrated by the additional requirement and the resulting delays.
Often only experienced auditors know that although the school hasn’t ever received Federal Title IV funding before, they must still conduct the audit using GAGAS procedures, following GAGAS format, and will simply footnote that there has never been any prior federal funding. Simple, but it hangs everyone up it seems.
If your institution is planning to apply for Participation in Federal Student Aid Programs, make sure that your auditors are able to prepare and audit your financial statements according to both GAAP and GAGAS.