The new Audit Guide for Title IV compliance audits includes numerous, expanded requirements for accounting firms to use in conducting required annual audits. The Audit Guide applies to Title IV compliance audits for fiscal years ending June 30, 2017 or later for for-profit higher education institutions and for third-party servicers that administer any aspect of the Title IV programs on behalf of any postsecondary institutions.
The new US Department of Education Audit Guide for Title IV compliance audits – now in effect – contains numerous, expanded requirements for accounting firms to use in conducting required annual audits, which will result in more time-consuming and more expensive audits for all affected entities. The Audit Guide may also impact best practices in compliance at these entities for years to come.
The Audit Guide, released by ED’s Office of Inspector General late last year, applies to Title IV compliance audits for fiscal years ending June 30, 2017 or later for for-profit higher education institutions and for third-party servicers that administer any aspect of the Title IV programs on behalf of any postsecondary institutions. Public and non-profit colleges and universities that are subject to the OMB A-133 audit requirements, including the ED Compliance Supplement for Title IV programs, are not subject to the new Audit Guide, even though in most cases they are subject to the same regulations. However, those colleges and universities should keep their eyes on this new Audit Guide, since it may be a harbinger of expanded audit requirements for their institutions in the future, at least in certain areas. Annual compliance audits conducted under the new Audit Guide requirements are currently underway for some institutions and servicers, with the first audit reports due to ED by December 31, 2017.