NEW AUDIT GUIDE FOR PROPRIETARY SCHOOLS AND THIRD PARTY SERVICERS
For the first time in sixteen years, the U.S. Department of Education Office of Inspector General (OIG) has released a new Audit Guide for Proprietary Schools and Third Party Servicers. The guide replaces the version last updated in year 2000 and contains new instructions for how independent auditors should audit proprietary schools and colleges compliance with federal financial aid regulations.
Proprietary schools and colleges are required to have an annual financial and compliance audit conducted by an independent auditor each year.
The new guide instructs auditors perform a compliance audit of proprietary schools annually, not just an examination-level attestation engagement of the school’s management’s assertions of compliance as previously required. The guide also expands sample size and procedures for testing a consumer information, gainful employment, placement rates and several other items not typically audited except during a program review conducted by the Department of Education.
The new guide also provides more instruction for how independent auditors should evaluate third-party servicers defining which activities they perform are audit-able, while continuing to require annual compliance attestation engagements.
The new Audit Guide for Proprietary Schools and Third Party Servicers and is effective for fiscal years that begin after June 30, 2016 and can be found here: http://bit.ly/2dzHbCX