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(95-G-274) This letter transmits the U.S. Department of Education's Audit Guide, Compliance Audits (Attestation Engagements) of the Federal Family Education Loan Program to Participating Lenders.

DCLPublicationDate: 3/1/95
DCLID: 95-G-274
AwardYear:
Summary: This letter transmits the U.S. Department of Education's Audit Guide, Compliance Audits (Attestation Engagements) of the Federal Family Education Loan Program to Participating Lenders.


March 1995
95-G-274
95-L-176

Dear Colleague:

This letter transmits the U.S. Department of Education's Audit
Guide, Compliance Audits (Attestation Engagements) of the Federal
Family Education Loan Program at Participating Lenders. Section
428(b)(1)(U) of the Higher Education Act of 1965, as amended, and
Section 682.305(c) of the Code of Federal Regulations require all
lenders participating in the Federal Family Education Loan (FFEL)
Program to have an annual compliance audit performed by a non-
Federal auditor. A participating lender is any lender who
originates or holds FFEL Program loans. All compliance audits
(attestation engagements) conducted to satisfy the annual compliance
audit requirement, except for audits of lenders that are nonprofit or
governmental organizations, must be done in accordance with this
guide. Lenders that are nonprofit or governmental organizations have
the option of obtaining an audit (attestation engagement) in
accordance with this guide or obtaining an audit in accordance with
OMB Circular A-133, Audits of Institutions of Higher Education and
Other Nonprofit Institutions and OMB Circular A-128, Audits of
State and Local Governments, (or successor circulars), respectively.
However, it is highly recommended that auditors consult this guide to
identify the compliance requirements to be tested in an A-133 or
A-128 audit of FFEL Program lenders.

Initial Audit Periods and Due Dates

The audit (attestation engagement) applies to any lenders' fiscal year
(FY) in which the lender originates or hold loans. The implementing
regulation (34 CFR 682.305(c)) requires annual audits beginning
with lenders' first fiscal years that began after July 23, 1992.
Lenders with fiscal years ending July 23 through December 31 have
the option of having an annual audit for FYs 93 and 94 or a combined
audit for the two years. The initial audit for lenders with fiscal years
ending January 1 through July 22 is required for their FY 94. Lender's
with FYs ending January 1 through March 31 have an option of having
a combined audit for their FYs 94 and 95. The initial audit(s) for all
lenders should be completed by , and, if required to be submitted (see
Submission Requirements below), submitted by September 30, 1995.

Subsequent audits are required to be completed six months after
the end of the lender's fiscal year.

Submission Requirements

The following lenders are required to submit the full lender's reporting
package identified on pages IV-1 and IV-2 of the guide:

1. Lenders that originate and/or hold $10,000,000 or more in a FY.

2. Other lenders whose reports identify findings of noncompliance.

These lenders should submit the full audit report to the Department of
Education at the following address:

Guarantor and Lender Oversight Staff
U.S. Department of Education
600 Independence Avenue SW
Room 4624, ROB-3
Washington, DC 20202-5132

Lenders that originate or hold less than $10,000,000, whose reports do
not disclose findings of noncompliance, should hold the reports for a
period of three years and shall submit them only if requested. The
Guarantor and Lender Oversight Staff intends to request a random
sample of these reports to be submitted. In addition, these reports
may be requested by staff performing program reviews or other audit
work to assist in planning such work and to avoid duplicating the work
performed by the non-Federal auditor.

Questions pertaining to the audit guide should be directed to the
cognizant Regional Inspector's General office listed in Appendix A
of the guide. We look forward to working with you to implement the
compliance audit requirements for FFEL Program lenders.

Sincerely,


James B. Thomas, Jr.


Enclosure

Last Modified: 02/28/1995