The Chief Financial Officers Act of 1990 requires the Inspector General to audit the agency’s financial statements each year, which is intended to help improve an agency’s financial management and controls over financial reporting. The Inspector General is also required to audit the Federal Student Aid (FSA) office’s financial statements, as it is a Performance-Based Organization.
The auditors issued a disclaimer of opinion on the FY 2022 consolidated financial statements for FSA. The auditors were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion because management was unable to provide adequate evidential matter to support certain key assumptions used to estimate the subsidy costs stemming from the broad-based debt relief as of September 30, 2022. In addition, the auditors identified one material weakness and two significant deficiencies in internal control over financial reporting for FSA.
The auditors made 21 recommendations to address the weaknesses identified, including that the Department/FSA design and implement controls that require the validation of the relevance and reliability of underlying data used in developing the assumptions related to the subsidy cost estimates.
See other OIG reports on financial statements.