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New Audit Guide – What you need to know.

by SST Compliance Audit Manager Karen Eilert 

In January 2000, the education world received its latest and greatest audit guide for Audit of Federal Student Financial Assistance Programs at Participating Institutions and Institution servicers.  And we thought, how are we ever going to make these changes.  But we did, and used this guide for sixteen years.  Over the years regulations continued to change and we adjusted our auditing procedures accordingly, but the guide was the guide.  Our holy grail.  Fast forward to 2016, The Guide for Audits of Proprietary Schools and for Compliance Attestation Engagements of Third-party Servicers Administering Title IV Programs was released.  Our way of thinking had to change.  Can we make these changes?  Are we ready?  Yes, we are!

In the next few weeks, we will address some of these changes.  One major change is our sampling size. Below is the breakdown of how student sample sizes will be selected under the new guidelines.

Sample size:

There are two universes of students when calculating a sample size:  Active/Grads and Drops.  For each universe, the auditor will need to select a sample as follows:

For a universe of 25 or less students, all student files will be tested

For a universe of 26 to 99 students, 25 student files will be tested

For a universe of 100 to 249 students, 25% of the universe will be tested

For a universe of 250 or more students, a minimum of 60 student files will be tested

Here is an example:

School has 50 active/grads; will test 25

School has 16 drops; will test 16

School has 255 active/grads; will test 60

School has 135 drops; will test 25% or 34

 

If these new guidelines leave you with questions that keep you up at night, contact me at keilert@sstcpa.com.  Let’s get you back to dreaming again!

For more details please review the audit guide here.