The U.S. Department of Education, Office of Inspector General has published its new Guide for Financial Statement Audits and Compliance Attestation Engagements of Guaranty Agency Servicers Administering the Federal Family Education Loan Program (Guide). This Guide supersedes the March 2000 edition of the Audit Guide, Audits of Guaranty Agency Servicers Participating in the Federal Family Education Loan (FFEL) Program, and the related 2006 amendment. The Guide is effective for fiscal years ending on or after December 31, 2020. Early implementation is not permitted.
A servicer that contracts with a guaranty agency to administer any aspect of the guaranty agency’s programs must at least annually have an audit of its financial statements (34 C.F.R. § 668.23(d)(4)) and a compliance audit of the servicer’s administration of the FFEL program loan portfolio (34 C.F.R. § 682.416(e)). A servicer is required to have a compliance audit unless (1) the servicer contracts with only one guaranty agency, and (2) the audit of that guaranty agency’s FFEL programs involves every aspect of the servicer’s administration of those FFEL programs (34 C.F.R. § 682.416(e)(1)).
The guidance and requirements in this Guide apply to the financial statement audits and compliance attestation engagements of all guaranty agency servicers, except those servicers that are exempt under 34 C.F.R. § 682.416(e)(1), as described above, and those servicers that are State, local, or nonprofit organizations subject to single audits in accordance with Subpart F—Audit Requirements of Title 2 of the C.F.R., Chapter II, Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, provided that the single audit covers the portfolios of the guaranty agencies the servicer has contracted with.
If you are a guaranty agency servicer subject to audit in accordance with this Guide, please ensure that your auditor is using this Guide for audits of fiscal years ending on or after December 31, 2020. The Guide and the related transmittal letter are available on the OIG Non-Federal Audit website.
Contact Information
Questions pertaining to this Guide may be directed to the Office of Inspector General’s Non‑Federal Audit Team via email to OIGNon-FederalAudit@ed.gov.