Financial Aid Audits: How to Prepare and What to Expect

Financial aid departments must adhere to federal guidelines for institutional eligibility and financial responsibility. The Department of Education often conducts audits to confirm that institutions are conforming to these rules. Annual audits help the government ensure they’re sending money to institutions that remain compliant with all current regulations. These audits can be stressful times for financial aid departments, so knowing how to prepare is helpful. FA Solutions LLC recommends the best practices for Financial Aid Directors to take to prepare for these audits well.

Knowing Who Performs the Audit

Even though the Department of Education receives the final results, most are conducted by third parties. These can be either independent public accountants with Title IV knowledge or government-assigned auditors.

Understand What Is Reviewed During a Financial Aid Audit

During the audit, the auditor will check several things including but not limited to:

• Compliance: Your institution needs to comply with all federal requirements for the Title IV program in order to continue receiving financial aid through federal programs.
• Operational effectiveness: The auditor will check that your organization is effective and efficient in providing student services to those seeking financial aid.
• Finances: The auditor may check to ensure you are handling financial aid awards appropriately, including the return of Title IV funds when possible and proper handling of Title IV credit balances.
• Academics: Academic progress must be satisfactory for those receiving financial aid, and this could be part of the audit

Preparing with Proper Documentation

Documentation of your financial aid office's practices is critical for a smooth audit. Your software should help with this, but you may wish to have additional documentation to present to the auditors. Keeping careful records will ensure you have all of the data needed to pass your audit without trouble.

Staying on Top of Changing Requirements

 One of the key problems financial aid offices face is the changing Title IV requirements. In order to remain compliant, your office needs to know the current requirements. Sometimes, working with a third-party financial aid servicer that keeps up with these changes is key to success. The consultant will ensure that you remain compliant as you move forward with the

audit process.

Get Professional Help Preparing for Financial Aid Audits

As you prepare for a financial aid audit, partner with FA Solutions. Our consulting services will help you learn about current regulations and embrace best practices throughout the school year. If there are deficiencies that could hurt your audit, we will assist you in fixing these, so you can better serve your students and stay compliant with all the current regulations. Reach out to our team today to learn more about financial aid consulting and membership services.

Need some help finding the right financial aid solutions so you can keep funding higher education without losing sleep? FA Solutions is here to help, offering consulting, staffing and third party processing to smooth your workday and support enrollment at your university. 

Our motto is "A True Extension to your Financial Aid Office," and that’s exactly what we seek to provide to all our clients. Want to learn more? Please feel free to check out our services or get in  touch today.