WHAT DO WE KNOW ABOUT AUDITORS? Scary / Intimidating Boring Great with Numbers Government Agency

WHY DO WE NEED AN AUDIT? Foreign School Audit Guide - September 2002 Amendment to the guide - August 2003 Amendment to the guide - August 2005

FOUR SECTIONS TO THE AUDIT GUIDE General Requirements Financial Audit Standard Compliance Engagement Alternate Compliance Engagement

FINANCIAL AUDIT REQUIREMENTS < US$500,000: No Financial Audit required US$500,000 – US$3,000,000: home country GAAP annually US$3,000,000 – US$10,000,000: home country GAAP annually with U.S. GAAP every 3 years > US$10,000,000: U.S. GAAP annually

COMPLIANCE AUDIT REQUIREMENTS if > US$500,000 Certified must perform a Standard Compliance Engagement if < US$500,000 Certified must perform an Alternate Compliance Engagement

STANDARD COMPLIANCE ENGAGEMENT Management Assertions Internal Control Over Compliance Follow-up on Prior Audit Findings School Eligibility Student Status Confirmation Reporting Student Eligibility Processing Loans Counselling Return of Title IV Funds Administrative capability

ALTERNATE COMPLIANCE ENGAGEMENT Management Assertions Enrolment and attendance Loan amounts Return of Title IV Funds Administrative capability

FINAL REPORTING PACKAGES Compliance with the Specified Requirements Report on Internal Control Over Compliance Schedule of Findings and Questioned Costs Comments on the Resolution of Prior Audit Findings Report and comment on Final Audit Determination letter

CORRECTIVE ACTION PLAN Comments on Findings and Recommendations Actions Taken or Planned Status of Corrective Actions on Prior Findings

MOVING BETWEEN ENGAGEMENTS New Management Representation Letter Prior Year Findings must be reviewed Different testing and information required Different audit under Australian Auditing Standards

COMMON AUDIT FINDINGS 2013 Year findings – Standard/Alternate Final Audit Determination Letters Single Point of Failure

COMMON AUDIT FINDINGS

SSCR – Timeliness: Documented Policies SSCR Batch Dates Loan Processing: Student Bank Details – Pro-Active Good Communication with processing Department

COMMON AUDIT FINDINGS

SSCR – Accuracy NSLDS Reporting Guide – Appendix C ‘Enrollment Status Codes’

FINAL AUDIT DETERMINATION LETTERS Deficient = Final Audit Determination Letter Non-Deficient = NO Final Audit Determination Letter Satisfactory Corrective Action Plan (CAP)

SINGLE POINT OF FAILURE Establish review policies Shared knowledge of the program Adequate Training

AUSTRALIAN AUDITING STANDARDS ASAE 3100 “Compliance Engagements” ASRS 4400 “Agreed-upon Assurance Procedures to Report Factual Findings"

RISK BASED AUDITS… Planning, planning, planning! “If I had 6 hours to chop down a tree, I’d spend the first four hours sharpening the axe” Abraham Lincoln

WHAT ARE THE REQUIREMENTS? Planning, including an overall risk assessment Gain an understanding of the entity Consider materiality and engagement risk Obtain sufficient and appropriate audit evidence Obtain written representations from management Communicate deficiencies in internal control Communicate breaches to the legislation Compliance Report or Report on Factual Findings

THANKS FOR YOUR ATTENTION! From the team at