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Preparing the Summary Schedule of Prior Findings and Corrective Action Plan

Under the Department of Education, the Office of Inspector General published its Title IV audit guide, “Guide for Financial Statement Audits of Proprietary Schools and for Compliance Attestation Examination Engagements of Proprietary Schools and Third-Party Servicers Administering Title IV Programs” (Guide), back in March 2023. The implemented changes required institutions to report on student financial aid (SFA) compliance findings in the prior and current years’ SFA compliance examinations. Flash forward to today, and the statuses of the prior year’s findings are now presented in schools’ compliance examination engagement reporting package. Schools must go through this audit, tracking the compliance examination engagement reporting package, as well as noting a corrective action plan for all findings. This article offers guidance on preparing the components of the reporting package to avoid a letter of rejection from the Department of Education.

Summary Schedule of Prior Findings

The purpose of the Summary Schedule of Prior Findings is to report on the status of an institution’s compliance examination Schedule of Findings and Questioned Costs, including findings reported as unresolved. Those reported as unresolved must include information on why the finding reoccurred and the corrective action planned to remedy this. This could be caused by a failure to remedy the cause of the re-original finding or a new issue that came up, and the corrective action plan should outline the root of the matter.

The institution’s Summary Schedule of Prior Findings should report the statuses of the following, as stated in the Guide:

  • All findings reported in the prior year SFA compliance examination’s schedule of findings and questioned costs. 
  • All findings reported in program reviews by the Department that occurred during the SFA compliance examination period.
  • Findings that were reported as unresolved in the previous year’s Summary Schedule of Prior Findings.

The summary schedule should also include the school’s letterhead and Audit/Examination Control Number (ACN) displayed in the final audit determination letter from the Department; refer to the findings using the same numbers assigned in the prior examination or program review report; and be formatted as shown on page 161 of the U.S. Department of Education Office of Inspector General’s Audit Guide

If institution’s compliance examination report reported no findings in the prior year Schedule of Findings and Questioned Costs or program reviews that occurred during the current examination period, then the institutions must state: “There were no findings in the prior audit/examination period. The institution was notified via eZ-Audit that no action was required.” If the prior audit or examination engagement report or program review status is reported in eZ-Audit as still under review, then the summary schedule should clearly state as such.

Corrective Action Plan

The corrective action plan must address each finding reported in the Schedule of Findings and Questioned Costs. Actions taken and planned, as well as comments on findings and recommendations, should be noted under each finding number as shown in the corrective action plan example on page 161 of the U.S. Department of Education Office of Inspector General’s Audit Guide. The corrective action plan should also display the school’s letterhead that is consistent with that in the school’s Summary Schedule of Prior Findings; identify each finding using the number the auditor assigned it in the Schedule of Findings and Questioned Costs; and include the signature, title, phone number, and email address of the school’s official that prepared it.

Other considerations while preparing your corrective action plan’s comments on findings and recommendations and actions taken or planned include:

  • Identify how and why the error occurred. i.e., what policies and procedures were not followed? Is the school missing a procedure, such as someone verifying the accuracy of a calculation, and/or is there a need to implement a schedule for regular reporting?
  • What institutional processes and/or procedures will be changed to prevent this error from reoccurring?
  • Who or what office is responsible for implementing the corrective action plan?
  • If there are questioned costs identified by the auditor, have they been resolved? If not, when will the funds be returned to the Department or student (as applicable)?
  • A timeline for when the corrective action plan will be fully implemented.

Next Steps for Education Institutions

Keep in mind that a corrective action plan is often the main roadmap the Department relies on for the resolution of findings identified in a compliance examination. A school’s auditor will check to see if these actions were taken in the following year’s examination. Make sure to follow up and put this plan into place to prevent problems later on.

Avoid having your institution’s compliance examination engagement reporting package from being considered incomplete and noncompliant by taking these important steps. Some of this reporting may be new for many schools, so please reach out to your Title IV SFA compliance auditor with questions when preparing the reporting package for your SFA compliance examination.

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