If your school has been a Single Audit filer, ED recently provided an update to the submission requirements for 2018 that you’ll want to pay attention to. Last year, the Department required Single Audit filers to submit an audit annually and, in the event that the Student Financial Assistance Cluster, which includes the Title IV programs, was not audited as a major program because it was identified as a low-risk program, filers were instructed to contact their School Participation Division to report the low-risk determination.
Updated Audit Requirements for 2018
Public and non-profit entities with institutions participating in the Title IV programs that submit a Single Audit that does not include the Student Financial Assistance Cluster as a major program will no longer be required to notify their respective School Participation Division of the low-risk assessments.
According to 2 C.F.R. § 200.518(a), under a Single Audit, an auditor must use a risk-based approach to determine which Federal programs are major programs. Part of the major program determination requirements at 2 C.F.R. § 200.518 require an auditor to identify larger Federal programs (Type A programs) which are low-risk. If a Type A program is identified as low-risk, it is not required to be audited as a major program, unless necessary to comply with the percentage of coverage rule. For a Type A program to be considered low-risk, it must, among other requirements, have been audited as a major program in at least one of the two most recent audit periods.
Institutions must still submit (via the Department’s eZ-Audit system) their complete Single Audit each year by the due date regardless of whether the Student Financial Assistance Cluster was audited as a major program.
The impact on year three testing requirements (after two years of low risk assessments) for fiscal year 2019 audits and beyond is still under review.
You can read the full electronic announcement from Federal Student Aid here.