[Federal Register Volume 68, Number 95 (Friday, May 16, 2003)]
[Notices]
[Pages 26586-26587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-12286]
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DEPARTMENT OF EDUCATION
Student Assistance General Provisions
AGENCY: Department of Education.
ACTION: Notice implementing a new electronic process(eZ-Audit) for
submitting compliance and financial statement audits.
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SUMMARY: The Secretary gives notice that on June 16, 2003, the
Department will fully implement the eZ-Audit process under which an
institution that participates, or seeks to participate, in the Federal
student aid programs submits its compliance and financial statement
audit information electronically. The Federal student aid programs are
authorized under Title IV of the Higher Education Act of 1965, as
amended (Title IV, HEA Programs). This notice applies to any compliance
or financial statement audits that an institution is required to submit
under 34 CFR 600.20(a) or (b) to begin or continue participating in the
Title IV, HEA Programs, any financial statement audits required for an
institution that undergoes a change in ownership resulting in a change
in control as provided under 34 CFR 600.20(g), any compliance and
financial statement audits that an institution is required to submit
annually under 34 CFR 668.23, and any compliance and financial
statement audits required of an institution that ceases to participate
in the Title IV, HEA Programs as provided under 34 CFR 668.26(b).
Effective immediately, institutions may voluntarily begin using eZ-
Audit to submit any required audits. Beginning on June 16, 2003, all
institutions are required to use eZ-Audit for submitting electronically
any required audit that is due on or after that date. However, if an
institution is unable to use eZ-Audit to submit its first audit that is
due on or after June 16, 2003, it should contact the person identified
below to make alternative arrangements for submitting that audit.
FOR FURTHER INFORMATION CONTACT: Ti Baker, Management and Program
Analyst, Schools Channel, Federal Student Aid, U.S. Department of
Education, Union Center Plaza, 074G2, 830 First Street, Washington, DC
20202. Telephone: (202) 377-3156, Fax: (202) 275-5726, or via Internet:
[email protected].
If you use a telecommunications device for the deaf (TDD), you may
call the Federal Information Relay Service (FIRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternative format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the program contact person listed under FOR
FURTHER INFORMATION CONTACT.
SUPPLEMENTARY INFORMATION: eZ-Audit is a web-based process designed to
facilitate the submission of compliance and financial statement audits,
expedite the review of those audits by the Department, and provide more
timely and useful information to institutions regarding the
Department's review. This notice deals only with the procedures for
submitting audits under the eZ-Audit process. More detailed information
about other aspects of the eZ-Audit process is available under the
Electronic Announcements section at http://www.IFAP.ed.gov.
Proprietary institutions are required to submit audits directly to
the Department regardless of the reason those audits are required.
Currently, all non-profit and public institutions are required to
conduct and submit annual compliance and financial statement audits in
accordance with Office of Management and Budget (OMB) Circular A-133.
Under OMB Circular A-133, these institutions submit their annual audits
to the Federal Audit Clearinghouse (Clearinghouse) that in turn
provides copies to the Department and other Federal agencies. For any
other audits that a non-profit or public institution is required to
conduct under the Title IV, HEA Program regulations, those audits are
submitted directly to the Department.
OMB Circular A-133 also provides that in response to a request from
a Federal agency, non-profit and public institutions must submit their
annual audits directly to that agency. Accordingly, the Department
hereby requests non-profit and public institutions to submit copies of
their OMB Circular A-133 annual audits directly to us through eZ-Audit.
The Department makes this request to maximize the utility of eZ-Audit
by establishing a uniform process under which all institutions submit
any audit required under the Title IV, HEA Program regulations. We note
that non-profit and public institutions whose annual audits are
conducted in accordance with OMB Circular A-133 must continue to submit
those audits to the Clearinghouse.
The Department will carefully monitor the utility of the eZ-Audit
approach in identifying fraud and reducing error in Federal student aid
programs and improving the validity and reliability of the data
reported. The Department will also ensure that it minimizes the burden
associated with submitting audits under this approach.
After completing the first cycle of audits under this approach, the
Department will implement any reforms necessary to enhance the utility
of the data it receives and reduce burden on institutions. Moreover,
the Department will consider modifying the eZ-Audit process in view of
any significant changes the Clearinghouse may make in accepting
electronic audit submissions and in response to the continuing efforts
by the accounting community to standardize the format and presentation
of electronic audit data.
eZ-Audit Process
An authorized person at an institution submits required audits on
behalf of the institution by (1) accessing the appropriate page on the
eZ-Audit website using identity credentials issued to the institution
by the Department, (2) entering general information about the
institution's compliance audit, (3) entering general information and
specific financial data from the institution's audited financial
statements, and (4) attaching authentic copies of the signed audits.
Identity Credentials
An institution obtains credentials for accessing the eZ-Audit
system by completing and signing registration materials described under
the Electronic Announcements section at http://www.IFAP.ed.gov, and
submitting them to: The U.S. Department of Education, Federal Student
Aid, Attention: Ti Baker,830 First Street, NE.,Washington, DC 20202.
After receiving the registration materials, the Department will
send electronically identity credentials (initially a username and
password) to the institution. Although we expect to be able to issue
identity credentials within a few days after receiving a request, an
institution should submit its registration materials as soon as
possible to ensure that it can use the eZ-Audit system to submit
required audits on and after June 2, 2003.
Entering Information About the Audits
An institution enters general and specific information about its
compliance audits and financial statements on the appropriate eZ-Audit
web pages. General information is used to determine whether the audits
are materially complete and conducted in accordance with applicable
standards.
[[Page 26587]]
Specific financial data is used to make a preliminary determination as
to whether a non-profit or for-profit institution is financially
responsible under 34 CFR part 668, subpart L of the Student Assistance
General Provisions regulations (or in the case of a change in ownership
resulting in a change in control, whether the institution satisfies the
financial ratio requirements under 34 CFR 668.15).
Attaching an Authentic Copy of the Audits
After an institution enters all requested information, it must
attach (or upload) to the eZ-Audit Web page an electronic copy of any
required compliance and financial statement audits that were prepared
and signed by the independent auditor(s) engaged by the institution to
conduct those audits. The electronic copy of any required audit must be
a read-only Portable Document Format (PDF) file made using Adobe
Acrobat version 5.0 or higher.
Electronic Access to This Document
You may view this document, as well as all other Department of
Education documents published in the Federal Register, in text or Adobe
Portable Document Format on the Internet at the following site: http://www.ed.gov/legislation/FedRegister.
To use PDF you must have Adobe Acrobat Reader, which is available
free at this site. If you have questions about using PDF, call the U.S.
Government Printing Office (GPO), toll free, at 1-888-293-6498; or in
the Washington, DC, area at (202) 512-1530.
Note: The official version of this document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO Access at: http://www.access.gpo.gov/nara/index.html.
Program Authority: 20 U.S.C. 1099c.
Dated: May 13, 2003.
Theresa S. Shaw,
Chief Operating Officer, Federal Student Aid.
[FR Doc. 03-12286 Filed 5-15-03; 8:45 am]
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