The U.S Department of Education (USDE) requires independent compliance attestation engagements for third-party servicers that administer Title IV programs for participating schools (with two exceptions *).
For third-party servicers, their audit, performed by firms like Freed Maxick’s Risk Advisory Team, gives the servicer’s clients – typically colleges and universities that participate in Title IV programs – the confidence that they are compliant with USDE requirements. A Title IV audit can be a standalone audit, or part of a larger SOC compliance engagement.
Every year, 3rd party providers should be prepared to discuss the scope and size of their Title IV compliance needs.
The following checklist will assist you when talking to auditors about the scope of your engagement and better prepare your audit team to conduct a comprehensive, efficient audit engagement:
The AICPA provides standards that include the framework and detailed standards for specific types of attestation engagements. For the framework and detailed standards for a USDE Title IV Compliance Attestation Engagement, you can visit:
https://www2.ed.gov/about/offices/list/oig/nonfed/schoolservicerauditguide.pdf
Please note that Title IV audits must also comply with Generally Accepted Government Auditing Standards (GAGAS), which are issued by the Government Accountability Office (GAO).
If you are a third-party servicer that needs a USDE Title IV Compliance Exam, please contact Tim Harvey, Risk Advisory Services Consultant at Timothy.Harvey@freedmaxick.com, or call him at (716) 332-2689 today.
*One exception is for 3rd party servicers that only contract with one participating school, and every aspect of the servicer’s administration of the Title IV programs is involved in that school’s audit engagement. Another exception is if the audit of that school’s participation involves every aspect of the servicer’s administration of the Title IV programs.