Closure of Office of Inspector General Audit of the Characteristics of Loans Purchased under the Authority of the Ensuring Continued Access to Student Loans Act of 2008

Published by the Department of Education, Office of Inspector General on 2010-04-30.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                    UNITED STATES DEPARTMENT OF EDUCATION
                                                          OFFICE OF INSPECTOR GENERAL

                                                                                                                     AUDIT SERVICES

                                                                                  April 30, 2010


To:                   William J. Taggart
                      Chief Operating Officer
                      Federal Student Aid

From:                 Keith West /s/
                      Assistant Inspector General for Audit

Subject:              Closure of Office of Inspector General Audit of the Characteristics of Loans
                      Purchased under the Authority of the Ensuring Continued Access to Student
                      Loans Act of 2008
                      Control Number ED-OIG/A03K0001

This memorandum is to advise you of the closure of our audit of the characteristics of loans
purchased under the authority provided in the Ensuring Continued Access to Student Loans Act
of 2008 (ECASLA). We will not be issuing an audit report. The objective of the audit was to
determine whether the characteristics of loans sold to the U.S. Department of Education
(Department) under the ECASLA Participation and Purchase Programs were representative of
the universe of Federal Family Education Loan Program (FFELP) loans for the 2008-2009
academic year.

During our fieldwork, we interviewed officials from Federal Student Aid (FSA) regarding the
characteristics of the loans and the database that contains loan-level information. We requested,
but had not yet received, 2008-2009 academic year loan-level data from FSA that included
information about specific loan characteristics, such as first disbursement date, loan status, loan
type, original lender, outstanding principal balance, and school type. We also reviewed the
Agreed Upon Procedures reports of lender audits that identified any issues relating to these loan
characteristics in the Department’s database.

We are closing the audit because the SAFRA Act (Public Law 111-152), enacted on
March 30, 2010, terminates the authority to make or insure new FFELP loans after
June 30, 2010. Because no FFELP loans will be made or insured after June 2010, the value of
our audit is significantly reduced, and we have determined that our audit resources would be
better used for other purposes.

      The Department of Education's mission is to promote student achievement and preparation for global competitiveness by fostering educational
                                                        excellence and ensuring equal access.
Audit Closure Memorandum
ED-OIG/A03K0001                                                                 Page 2 of 2
The work we performed was not extensive enough to answer the objective described above.
However, the work performed did disclose that certain reporting requirements included in
ECASLA were not met for fiscal years (FY) 2008 and 2009. We plan to address this matter
separately, in an alert memorandum, because it was not related to the audit objective.

The closure of this audit does not preclude further reviews of this or similar areas by the Office
of Inspector General (OIG) in the future, nor is our review to be construed as a substitute for any
other reviews required by law, license, or accreditation. In addition, closure of this audit should
not be interpreted as agreement with or endorsement of areas reviewed.

In accordance with the Freedom of Information Act (5 U.S.C. § 522), reports and other products
issued by the OIG are available to members of the press and general public to the extent
information contained therein is not subject to exemptions in the Act. This memorandum will be
made available on the OIG internet website.

We wish to express appreciation for the cooperation and assistance extended by your staff during
the review. If you have any questions, please contact Bernard Tadley, Regional Inspector
General for Audit at (215) 656-6279, or via email at bernard.tadley@ed.gov. No response to this
memorandum is required.

Electronic cc:

Marge White, Audit Liaison Officer, FSA
Philip Rosenfelt, Deputy General Counsel for Program Service, Office of General Counsel
Carolyn Adams, Controlled Correspondence, Office of General Counsel