What's in Your Audit?

A Comparison of NASFAA Peer Reviews with Annual Audit Requirements

By Mandy Sponholtz, Blue Icon Advisors Director of Operations

Generally, schools participating in the Title IV aid programs must submit compliance and financial audits to the U.S. Department of Education (ED) each year. Many believe the compliance audit is sufficient to ensure they comply with the plethora of rules and regulations. But do you really know what goes into your audit? Having an evaluation from Blue Icon Advisors, NASFAA Consulting, will uncover issues that your auditors may miss. 

Let's compare the professional experience, instructions provided, and topics evaluated between your annual audit and consulting services from Blue Icon Advisors.

Who Performs Your Audit?

Audit FirmAudit Firm - Schools must have financial and compliance audits performed each year. According to the FSA Handbook, audits must be prepared by either independent public accountants or government auditors who meet specified standards. To save money, schools may engage the same firm to perform both financial and compliance reviews. This means that someone outside of the financial aid industry could perform your school's compliance review. 

SOEBlue Icon Advisors - Compliance and operational reviews are conducted by consultants selected and vetted by Blue Icon. Many of our consultants are current financial aid practitioners. All consultants must have at least five years of experience, but many have decades more. Our experienced consultants can not only verify you are in compliance with federal rules, but also provide you with ways to improve your operations. 

How Much Instruction Do Your Auditors Receive?

To perform an effective evaluation, reviewers need to know what to assess. The federal government provides general guidance on completing Title IV compliance audits in one of two documents, depending on school type:

While each auditing firm may have separate worksheets and checklists to determine the level of detail to include in the audit, ED states “These guides are not intended to be a complete manual of procedures, nor intended to supplant the auditor's judgment of the work required.”

Blue Icon consultants have the backing of NASFAA resources. This includes continuing education through NASFAA U credentials, and 19 have earned the FAAC® designation. Each consulting project is overseen by a Blue Icon project manager and compliance reports are reviewed by NASFAA training and regulatory assistance staff members. 

What Does Your Auditor Review?

Compliance audits focus on one thing: whether the school fulfills the requirements outlined by Title IV aid rules and regulations. While the rules are important, they are not the only aspect of administering federal financial aid. Consulting services with Blue Icon Advisors can not only evaluate adherence to rules, but also assess your operations to ensure you are maximizing your limited resources. 

Blue Icon offers several types of consulting packages to meet your evaluation needs:

  • Standards of Excellence (SOE) Reviews are the most comprehensive option available. The SOE review is a three-day examination of all compliance and operational aspects of financial aid and other offices involved in the delivery of federal financial aid for the most recently completed award/academic year.
  • Operational Reviews explore the organizational effectiveness of the financial aid unit and provide recommendations to improve efficiency and student service.
  • Compliance Reviews evaluate the institution's compliance with the laws, regulations, and sub-regulatory guidance that govern the administration of Title IV federal student aid. Areas evaluated are consistently in ED's top 10 findings.
  • Single-Topic Assessments target a particular area of federal financial aid administration from a compliance perspective. Topics may include, but are not limited to consumer information, satisfactory academic progress, return of Title IV funds, verification, and Title IV credit balances. 

Does This Mean My Audit Isn't Enough?

Not necessarily. The detail and expertise of audit firms will vary, but it may be time for an outside evaluation to make sure critical compliance and operational issues are not missed. To learn how consulting opportunities with Blue Icon Advisors can help your school, complete our project request form, send an email to [email protected], or call 202-785-6953.

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