Federal regulations require the FAO have its records and student files audited every year by a private accounting firm. Program Reviews are performed by the Department of Education as requested.
Auditors review a sample of student aid files to ensure the FAO is in compliance with federal, state, and college polices. The auditors submit a preliminary memorandum of findings to the Director of Financial Aid and the Comptroller who conduct research and prepare a response addressing resolution of the specific discrepancy and appropriate procedures to correct faulty processing.
The only preparation for the audit is to cooperate with the Auditors’ requests. Typically, the Auditors will randomly select a specific number of students from each of the Title IV programs. The files are pulled and given to the Auditors. Any additional assistance requested is responded to promptly.
The institution shall keep records relating to its administration of the Federal Perkins Loan, FWS, FSEOG, Federal Pell Grant, ACG, National SMART Grant, or TEACH Grant Program for three years after the end of the award year for which the aid was awarded and disbursed under those programs, provided that an institution shall keep—
- The Fiscal Operations Report and Application to Participate in the Federal Perkins Loan, FSEOG, and FWS Programs (FISAP), and any records necessary to support the data contained in the FISAP, including “income grid information,” for three years after the end of the award year in which the FISAP is submitted; and
- Repayment records for a Federal Perkins loan, including records relating to cancellation and deferment requests, in accordance with the provisions of 34 CFR 674.19;
The institution shall keep records relating to a student or parent borrower's eligibility and participation in the FFEL or Direct Loan Program for three years after the end of the award year in which the student last attended the institution; and
The institution shall keep all other records relating to its participation in the FFEL or Direct Loan Program, including records of any other reports or forms, for three years after the end of the award year in which the records are submitted; and
The institution shall keep all records involved in any loan, claim, or expenditure questioned by a title IV, HEA program audit, program review, investigation, or other review until the later of—
- The resolution of that questioned loan, claim, or expenditure; or
- The end of the retention period applicable to the record.
A complete listing of financial aid audit guidelines is listed in the Audit Guide published by the U.S. Department of Education.
The Financial Aid Director is the liaison between the FAO and the Auditor.