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H~@ 00    ~@~ B`0 ???~  @~ @ ~    ?~0p 0 ~  #? ? ?  ?> ???> ? ?~ @~0|8 B  ?    ?? ? ?80 ??~ @` @~ P H  ` ?~`   ? ?~ | `?? |??~ B`p~ ~X8@00~p?~   ?Ã~0 @`0~ @0 @C@ @@~   @ ?|{ x?? ???~  ~  @? @p p?p?   ?_   ! ! "?#$$?&@!KNTERPOSWP_DTKN_ATTR_GETWP_DTKN_DATA_FILLWP_DTKN_FILE_OPENWP_POUT_CHARTOBJSWP_POUT_CURRENT_COLORSWP_POUT_CURRENT_PATTERNWP_POUT_EDIT_SELECT_AREAWPDRVUS___EXPORTEDSTUBKERNELUSER+d@1C:\OFFICE\SHARED\WPDRAW\WPDRVUS.DLLA0iTT/ F 0T0v˭3ɕ(,t+,t,56,tsJtrJtr[2AJtɃt2QJtrtJtrYFӋƍ1&Jtsٹ2JtuAJt>sAJtYsvsUn sM FrufTrOs뫭<s4 s,0s@눭3Jt u5,tJtË,t.(UVW.,=uF_^]OPTLOADER - Copyright (C) 1993 SLR Systems All Rights Reserved t؎ ..uUM]F H3 t F&M&u"&D 9 w Iu s &  )t^  tE t)vPY ujhr .6 .6 h. 3Hu"9Mr;Du.9Mtt%9|tt9|uDtQvQY t APXX_^]3. uAjWPWin 6.0/OLE 1.0 Prefix Information MarkerWPDraw30.DrawingXࡱ> &'  !"#$%()*Root Entry`.@pQROle 9WPG20DCompObj^  !)F! WPWin61[0] `.@pWP Draw 3.0 Drawing Embed SourceWPDraw30.Drawing!OL*@ ^  *  MP ^C gggg(ggpWPC @: 8"519@0\0$*!9 aa z?`a}K5& %%$?##" " ! !  ?~ ~  ~ ~8p~`  ?|?|??~@@80~ ~` `~@ @~0 0~0`  `~ ~ 8 ?8?~@`~  @@~ " @0p0~@ ~ ` @B~@@ !Ap??~  p@0@~ 0@@ ~0 ~@0 ~@  ~@` @  ??? ?? ?? ??? ? >?  8 ??  ?~07@ σ?~@   ?ǃ  ?ǃ? ~@@@ 0@~ p 9@~ @|x8x` p >~   p `~@0   `@@~8 8 ~  ~@  ~  p  A~`0@  @ @~  0@ ~ ~ 08 8` ~@ ~A    ~  @p   ?~ ``  l~0   0A@~0 0~@ H@ ~ 00& p ~!@  @@~@@@ p`H@ @0 ~  !  ~ @  @D~Ap@Ba,G  `~ ApЁ`d0~`   x   ~ `$d @@  px?? ~@A@@ ~  @@@0  ??À?|x?x ~ @ ` A l N<0 ~ !@@@~` @# @ ~ @p C  ~!@"F  D0 ~A8  ` p ?cx ~ a ' 1A  ~#@@ ~ @ `~c~ π| >?c< ~ B $  h ~@ @ vB ~P@ ~0@ ~@@8   ? ~P  0x ~ r p ~   pD  ! ~@8@ ~!  ```  ~8@@@@0@` ~F@@ 8@~ <! p>? ~ YpP ~x0P  &z@ >A ~@    @B  ~@  yp@`@ ~ 8`@ @ ~@`0`@ ~P`B ~A`(ā@ ~0x      ~@ @ @@@ ~@_ 0C(`@$ ~@ ` @ "  ~q   ~"  @ ~` @ ~   " ~ A~x Ap`  ߀>~? ~ a @P ~  `  ~  "@@ ~0b     ~ 0  ~ @@  ~8 `#@p ~?G  ^@P?  ~   @p  ~@~pq 0L2 ~ A~ `AL~~  x ! d~  0@~0f B@8@x ~0 GAp0x ~@#`@    ~` ~ )  0 0 ~R0 1@ @ ~`@~`0  ~ ` @ ~@P@`x ~ @D ~@   @  `  ~x@0 ~ pD8%  @ ~  !`8 ~ @ ~1 `~ B@@ 8$~ q0x?v? ~  @ ~Hp(@x@ ~  ~ < `B~`!B~@  @ ~ A ~ &@  `AB@~@@N B~00@ 0   ~)@~P  NB `~@D0  ~ 0@ @@8!0~ D?@BC@~@`G"@  ~`@ ~@ D7DA@8`~ `A  8 8~@>H@~ `1@d@  ~ @ 0  ~ @ d`@@@H@~ ``@~  AP00! ~ `@B!`~( ~ (` ~  A` ~P @` B@`  ~ !0 ~@@  @   ~ @ @   ~@ p@ ~ @@  @G~   @ 8@ ~@@ @@ @   ~00 @0s   @~p`? ~ `~ @ ~A0 ~ @ @ ~@`  ~ @@F ? `x~?p?x8 ~ `@ @~ A |`~b@@ ~@AOB<`  ~@  0 ~D@@@~ A@ ~@@ pQp``  <   ~ @ a@ ~@ p  ~ ` 8 `@ ~`0@ @ ~ @p  `0F@  ??? ?q ~< p`G  ~    00  ~  A`@@ ~  `@@ `  ~@ ~  @B`  ~@0 `,` ~ @~0B  C ?~? ~ ~ C@p@@~@<8"0    ~ @ 8 `@` *@ ?? ~ 8@ ~p@ ~ |xD~88 ~`p 8@~0   ?<`? ~@@8p @  ~ ~@ ;@ p @ ~@? @P ~ `   >0  ~ @|  ?   ??@? ? ~   ~ @ 3?@@ ~   8C` ~@      ? ?~ @ (`  @~ @?8~ @  @  ~  p8$@@ > ?~p0B@@`  < 8~`' ?   `  ?p ~  ~@>0 @~@ @  @@~@! H~@ 00    ~@~ B`0 ???~  @~ @ ~    ?~0p 0 ~  #? ? ?  ?> ???> ? ?~ @~0|8 B  ?    ?? ? ?80 ??~ @` @~ P H  ` ?~`   ? ?~ | `?? |??~ B`p~ ~X8@00~p?~   ?Ã~0 @`0~ @0 @C@ @@~   @ ?|{ x?? ???~  ~  @? @p p?p?   ?_   ! ! "?#$$?&@!KNTERPOSWP_DTKN_ATTR_GETWP_DTKN_DATA_FILLWP_DTKN_FILE_OPENWP_POUT_CHARTOBJSWP_POUT_CURRENT_COLORSWP_POUT_CURRENT_PATTERNWP_POUT_EDIT_SELECT_AREAWPDRVUS___EXPORTEDSTUBKERNELUSER+d@1C:\OFFICE\SHARED\WPDRAW\WPDRVUS.DLLA0iTT/ F 0T0v˭3ɕ(,t+,t,56,tsJtrJtr[2AJtɃt2QJtrtJtrYFӋƍ1&Jtsٹ2JtuAJt>sAJtYsvsUn sM FrufTrOs뫭<s4 s,0s@눭3Jt u5,tJtË,t.(UVW.,=uF_^]OPTLOADER - Copyright (C) 1993 SLR Systems All Rights Reserved t؎ ..uUM]F H3 t F&M&u"&D 9 w Iu s &  )t^  tE t)vPY ujhr .6 .6 h. 3Hu"9Mr;Du.9Mtt%9|tt9|uDtQvQY t APXX_^]3. uAjBOlePartOlePres000hUffnn=?n{;)xn*>|{Ho?an=oj{v|gvnn{=Ӏ;O<=on6p:gg+{yİ17U}&ncG{i 3\ $nn\Py{Hϖ40nd{}p|n=u@t nn @)G( @+iT^<‚xT/ Kxz5}VA 3|zN1@DA !sDZo]Nq`0?Ze^-=߻@8s/wc7s6'[Ҭ/}|~4eu>R,?ct~Fnxt9>l;^vOy?eg?==g? METAFILEPICT*%H* ^  *  MP ^C gggg(ggpUffnn=?n{;)xn*>|{Ho?an=oj{v|gvnn{=Ӏ;O<=on6p:gg+{yİ17U}&ncG{i 3\ $nn\Py{Hϖ40nd{}p|n=u@t nn @)G( @+iT^<‚xT/ Kxz5}VA 3|zN1@DA !sDZo]Nq`0?Ze^-=߻@8s/wc7s6'[Ҭ/}|~4eu>R,?ct~Fnxt9>l;^vOy?eg?==g?OBJECT #0001 dTable_A d((3$ T!   stur I&mage <=8C HKKKKv8Audit ObjveStyle for compliane supplement  HP LaserJet III,,,,,,0+_ 0CG TimesBoldScalable* `CG Times2b0Quick 0  >$Large Circle0  &0 d dH 4heading 4heading 4  XXXW\  `*Times New RomanTTW        W\  `*Times New RomanTTW  H$ 4heading 5heading 5            tHC<< CH$ 4heading 6heading 6             r N$    ݛ_1XXXXԀManagementsrefusaltoprovidethepractitionerwiththerequiredcomplianceandinternal X controlassertionsrelatedtothecomplianceauditmaysubjecttheentitytoadministrativeactionsbyED.#XLXXXQ# `CG TimesW12$Square0..<6X9`("Courier 10cpi($    <6X9`("Courier NewTT J N$    ݛ_7'XX1TheIPAshouldlisttheassertionsapplicabletotheguarantyagency_Ԣservicer_.Likewise,assertionsnotapplicableshouldbe  deleted.#XLX'7J#P(K Kd  p'   ݛ_XXA')xdExA#XLX8#*wddd Xdd Xdd X(#(#w, dd ,dd ,( dd +  3" X Px3XXLGuarantyAgency_ԢServicer_ԀAuditGuide 2!x 2PageI  17  ;*x" ;March2000:0.x3 x P  : { p'   ݛ_XXGuarantyAgency_ԢServicer_ԀAuditGuide@PageII  2  ڈ(#March2000#XLX8#Ԉ X A') xdExA   x9 Z6Times New Roman Regular'dxdH$ 4heading 7heading 7            H$ 4heading 8heading 8            |TABLE BLevel 1Level 2Level 3Level 4Level 5((3$ T!   Table_Bdd2(0Quick II0  &   X  x N$    ݛ_2ThepractitionershoulddiscusswiththeED/_ԢOIG_/ISwhetherornotthereportshouldbe X providedtothe_Ԣauditee_Ԁinordernottointerferewithpotentialfutureinvestigations,legalproceedings,orboth.̀ r p'   ݛ_*wddd Xdd Xdd X(#(#w, dd ,dd ,( dd +  3" X Px3XXGuarantyAgency_ԢServicer_ԀAuditGuide 2!x 2PageI  2  ;*x" ;March2000:0.x3 x P  :   dtvTABLE C U T!   ݛo[X` hp x (#%'0*,.8135@8:<H?AXoXX{;XXԀlXX,XF` hp x (#%'0*,.8135@8:<H?Xl0  1TheservicerisrequiredtohavetheIPAprovideastatementthatthenecessarydocumentswerelocated/obtainedand/orthattheactionsweretaken  eitherwiththecorrectiveactionplan(CAP)orduringtheauditresolutionprocess.  T!   ݛ_XXo[X,XF` hp x (#%'0*,.8135@8:<H?Xo7'XX  2TheIPAshouldmodifythestandardreportifanyofthefollowingconditionsexists:     F 0  Thereisamaterialnoncompliancewithspecifiedrequirements(_ԢSSAE_Ԁ#3asamendedbyparagraphs58through65of_ԢSSAE_Ԁ h #9); %%    F 0  Thereisamatterinvolvingamaterialuncertainty(_ԢSSAE_Ԁ#3asamendedbyparagraph66of_ԢSSAE_Ԁ#9);(%%    F #XLX'7#7'XXL0  Thereisarestrictiononthescopeoftheengagement(paragraphs5558of_ԢSSAE_Ԁ#2,asamendedby_ԢSSAE_Ԁ#9);#XLX'7#%%    F 0  7'XXLTheIPAdecidestorefertothereport(excluding_Ԣservicer_Ԁauditreport)ofanotherIPAasthebasis,inpart,fortheIPA's H report(paragraph59and60of_ԢSSAE_Ԁ#2,asamendedby_ԢSSAE_Ԁ#9);or %% #XLX'7#   F 0  7'XXLIfmanagementdisclosesthenoncomplianceandappropriatelymodifiesitsassertionordisagreeswiththeIPAoverthe  @ existenceofmaterialnoncomplianceanddoesnotincludeinitsassertionadescriptionofsuchnoncompliance,theIPAshouldrefertotheguidancein_ԢSSAE_Ԁ#3,asamendedbyparagraphs5864of#XLX'7#7'XXL_ԢSSAE_Ԁ#9.#XLX'7J# / T!   ݛo[X` hp x (#%'0*,.8135@8:<H?AXoXX{;XXԀlXX,XF` hp x (#%'0*,.8135@8:<H?Xl0  2EDmayhaveissuedaFADforaprioraudit/examination.AFADdescribesanycorrectiveactionstheservicerisrequiredtotakewithin45daysof  receipt(unlessotherwisestated)oftheFAD.   H$ 4heading 9heading 9            h:Default ParaDefault Paragraph FontXXXW\  `*Times New RomanTTW        W\  `*Times New RomanTTW  p'   ݛ_ XXA')xdExA#XKX 8#*wddd Xdd Xdd X(#(#w, dd ,dd ,( dd +  3"  Px3 XXKGuarantyAgency_ԢServicer_ԀAuditGuide 2!(x 2PageI  17  ;*(x" ;March2000:0.(x3 x P  :x9 Z6Times New Roman Regular  )   ݛ_^i _XXԀOURMISSIONISTOENSUREEQUALACCESSTOEDUCATIONANDPROMOTEEDUCATIONEXCELLENCETHROUGHOUTTHENATION#XLX _^i;#^:endnote refeendnote referenceXXXW\  `*Times New RomanTTW        W\  `*Times New RomanTTW<;T .footerfooter   (#        >4X` hp x (#>   )   ݛ_^i _XXԀOURMISSIONISTOENSUREEQUALACCESSTOEDUCATIONANDPROMOTEEDUCATIONEXCELLENCETHROUGHOUTTHENATION#XLX _^i;#* `(CG TimesScalable0.Normal S =j|(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`|(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`($$   1  H xu r p'   ݛ_*wddd Xdd Xdd X(#(#w, dd ,dd ,( dd +  3" X Px3XXGuarantyAgency_ԢServicer_ԀAuditGuide 2!x 2PageI  2  ;*x" ;March2000:0.x3 x P  :<:Definition T|(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`|(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`  N$    ݛ_XX1Ifthereportableconditionslistedintheaboveparagraphareconsideredtobematerialweaknesses,changethe  lastsentenceinthisparagraphtoread:However,ofthereportableconditionsdescribedabove,weconsideritems[identifythefindingnumberswhicharematerielweaknesses]tobematerialweaknesses.Table_D2c0Quick 220 (hH  Z 6Times New Roman Regular<:Definition L , |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`86Definition<NNDI:QuickFormat1X XXXX XXX X XXXX XXX (3&H1 S =j&  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`  5Q\  `$Times NewRomanQ  '  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]` XXX 1[Q\  `$Times NewRomanQ  (( &H2 S =j&  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`  FQ\  `$Times NewRomanQ'  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]` XXX 1[Q\  `$Times NewRomanQ(( &H3 S =j&  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`  1[Q\  `$Times NewRomanQ'  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]` XXX 1[Q\  `$Times NewRomanQ((&H4 S =j&  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]` XXX =jQ\  `$Times NewRomanQ'  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]` (( &H5 S =j&  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`  Q\  `$Times NewRomanQ'  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]` XXX 1[Q\  `$Times NewRomanQ(( &H6 S =j&  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`  ŸQ\  `$Times NewRomanQ'  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]` XXX 1[Q\  `$Times NewRomanQ20Address|(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`|(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`86Blockquote S =j , , |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`   |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`,*CITE,dj*CODEK<6X9`(Courier NewKXXXQ\  `$Times NewRomanQ42Emphasis64Hyperlink    <:FollowedHype    (9 Z 6Times New Roman RegularTABLE A L T!   ݛ_XXX"XXX$X` XX$ N    ݀#XLX"XT#  H     X N    1Theopinionparagraphshouldbemodifiedasnecessaryunderthecircumstances,e.g.,ifqualifiedopinion,adverseopinion,ordisclaimerofopinionistobeissued.  4gm2Keyboard K<6X9`(Courier NewK XXXQ\  `$Times NewRomanQ<:Preformatted|( ,Kk #%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`pbdK<6X9`(Courier NewK|(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`XXXQ\  `$Times NewRomanQ<24:zBottom of ?* **?  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`B  ?%2A`Arial?/r  H/  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`C  XXXQ\  `$Times NewRomanQ<44:zTop of ForA***A  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`B  ?%2A`Arial?/r  H/  |(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`C  XXXQ\  `$Times NewRomanQ0dj.SampleXXXK<6X9`(Courier NewKXXXQ\  `$Times NewRomanQ0.Strong 8dj6TypewriterK<6X9`(Courier NewKXXXQ\  `$Times NewRomanQ42Variable:8HTML MarkupB    C    2 0CommentB  C  X Xd<6X9`(Courier New\  `$Times NewRoman1992* `(CG TimesScalable%2A`ArialxuTABLE A r N$    ݛ_1X޷XXXԀManagementsrefusaltoprovidethepractitionerwiththerequiredcomplianceandinternal  controlassertionsrelatedtothecomplianceauditmaysubjecttheentitytoadministrativeactionsbyED.#XKXXX޷Q#(hH  Z 6Times New Roman RegularDTABLE D* `(CG TimesScalable x N$    ݛ_2ThepractitionershoulddiscusswiththeED/_ԢOIG_/ISwhetherornotthereportshouldbe  providedtothe_Ԣauditee_Ԁinordernottointerferewithpotentialfutureinvestigations,legalproceedings,orboth.̀* `(CG TimesScalableDTABLE D | p'   ݛ_ XXGuarantyAgency_ԢServicer_ԀAuditGuide@%PageII  18  ڈA(#March2000#XKX 8#Ԉ  A') xdEyxA z * `(CG TimesScalable L T!   ݛ_XXX^L"XXX$X` XX$ N    ݀#XKX"X^LT#  H     X N    1Theopinionparagraphshouldbemodifiedasnecessaryunderthecircumstances,e.g.,ifqualifiedopinion,adverseopinion,ordisclaimerofopinionistobeissued.  <6X9`("Courier 10cpi* `(CG TimesScalable s T!   ݛ_0XXt%0+        t%%tt%%t          1      t%%tt%%t  #X޷X%t8#;'XX޷#4(';W#;'(4TheauditorshouldusetheportionsofexamplesA2andA3thatapplytoaspecificsituation.Forexample,iftheauditorwillbe H givinganunqualifiedopiniononcompliancebuthasidentifiedreportableconditionsoninternalcontrol,thecompliancesectionofthisreportwouldbeusedalongwithinternalcontrolsectionofexampleA3.Alternatively,iftheauditorwillbegivingaqualifiedopiniononcompliancebuthasnotidentifiedreportableconditions,theinternalcontrolsectionofthisreportwouldbeusedalongwiththecompliancesectionofexampleA3.+v        ݀#X޷X';#&)XX޷# )&2#&) * `(CG TimesScalable\  `*Times New RomanTT  T!   ݛ_0XX t%0+         t%%t t%%t          2       t%%t t%%t  # X޷X%t8# ;'XX޷#4(';W# ;'(4Describeanydeparturefromthestandardreport(forexample,aqualifiedopinion,amodificationastoconsistencybecauseofa H changeinaccountingprinciple,orareferencetothereportofotherauditors).# X޷X';# &)XX޷# )&2# &) * `(CG TimesScalable\  `*Times New RomanTT2Table_AY  T!   ݛ_ 0XXt%0+        t%%tt%%t          3      t%%tt%%t  #X޷X%t8#;'XX޷# 4(';W#;'(4Thestandardsapplicabletofinancialauditsincludethegeneral,fieldwork,andreportingstandardsdescribedinchapters3,4,and H 5ofGovernmentAuditingStandards.  #X޷X';#&)XX޷#  )&2#&) * `(CG TimesScalable\  `*Times New RomanTT M T!   ݛ_0XXt%0+        t%%tt%%t          4      t%%tt%%t  #X޷X%t8#;'XX޷#4(';W#;'(4Seeparagraphs5.18and5.19ofGovernmentAuditingStandardsforthecriteriaforreporting. H #X޷X';#&)XX޷# )&2#&) <;T .headerheader   (#        >4X` hp x (#>  `:footnote reffootnote referenceW\  `*Times New RomanTTW        W\  `*Times New RomanTTW(92N$ T!    CRight ParRight-Aligned Paragraph NumbersI.A.1.a.(1)(a)i)a)3|w T) `*CG Times lable)W1ableble^^0 PQ^P) `*CG Times lable)W1ablebleXXR PQXP( T$  * `(CG TimesScalable TDTTVTTDT+TTD T,+ T.+fmx'lPICTing~*U\  `*Times New RomanTTP 8Body Text 2Body Text 2  XXXW\  `*Times New RomanTTW        W\  `*Times New RomanTTW  \  `*Times New RomanTT h T!   ݛ_ 0XX#t%0+        #t%%t#t%%t          5      #t%%t#t%%t  ##X޷X%t8##;'XX޷# 4(';W##;'(4ԀIftheauditorhasissuedaseparatelettertomanagementtocommunicateothermattersinvolvingthedesignandoperationof H internalcontroloverfinancialreporting,thisparagraphshouldbemodifiedtoincludeastatementsuchasthefollowing: However,  wenotedothermattersinvolvinginternalcontrolover[listcompliancearea],whichwehavereportedtomanagementof[_ԢServicer_]inaseparateletterdatedAugust15,19xx.Thisreferenceisnotintendedtoprecludetheauditorfromincludingothermattersin d theseparatelettertomanagement.Furthermore,thereferencetomanagementisintendedtobeconsistentwithparagraph5.28of  GovernmentAuditingStandards,whichindicatesthatcommunicationsto topmanagementshouldbereferredto.  ##X޷X';##&)XX޷#  )&2##&) * `(CG TimesScalabledd\  `*Times New RomanTT  T!   ݛ_+        %0XX&t%0          1  w    &X޷X%t%XKXXX޷  %4(XXK&;'(4TheauditorshouldusetheportionsofExamplesA2andA3thatapplytoaspecificsituation.Forexample,iftheauditorwillbe H givinganunqualifiedopiniononcompliancebuthasidentifiedreportableconditionsoninternalcontrol,#&X޷X';#&;'XX޷#%4(';#&;'(4Ԁthecompliancesectionof  ExampleA2wouldbeusedalongwithinternalcontrolsectionofthisreport.Alternatively,iftheauditorwillbegivingaqualifiedopiniononcompliancebuthasnotidentifiedreportableconditions,theinternalcontrolsectionofExampleA2wouldbeusedalongwiththecompliancesectionofthisreport.#&X޷X';##%XKXXX޷4#&X޷XXXK* `(CG TimesScalable\  `*Times New RomanTTa, b, c,Level 1Level 2Level 3Level 4Level 56#14Quick a. '  .0 'A, B,Level 1Level 2Level 3Level 4Level 54#2*2Quick A.)  .0 )V! :footnote texfootnote text              T!   ݛ_+        -0XX/t%0          2  w    /X޷X%t-XKXXX޷  -4(XXK/;'(4Describeanydeparturefromthestandardreport(forexample,aqualifiedopinion,amodificationastoconsistencybecauseofa H changeinaccountingprinciple,orareferencetothereportofotherauditors).#/X޷X';##-XKXXX޷#/X޷XXXK* `(CG TimesScalable\  `*Times New RomanTTC\  P6QP\  `*Times New RomanTTXXP\  P6QXP\  `*Times New RomanTTW\  P6QP\  `*Times New RomanTT<\  P6QP\  `*Times New RomanTT s T!   ݛ_ XXZ  +        Z  ZZ  Z          1      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7TheauditorshouldusetheportionsofexamplesA2andA3thatapplytoaspecificsituation.Forexample,iftheauditorwill H begivinganunqualifiedopiniononcompliancebuthasidentifiedreportableconditionsoninternalcontrol,thecompliancesectionofthisreportwouldbeusedalongwithinternalcontrolsectionofexampleA3.Alternatively,iftheauditorwillbegivingaqualifiedopiniononcompliancebuthasnotidentifiedreportableconditions,theinternalcontrolsectionofthisreportwouldbeusedalongwiththecompliancesectionofexampleA3.+v        ݀#XX&#Gw(XX#(Gw2#Gw(  T!   ݛ_ XXZ  +        Z  ZZ  Z          2      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7Describeanydeparturefromthestandardreport(forexample,aqualifiedopinion,amodificationastoconsistencybecauseofa H changeinaccountingprinciple,orareferencetothereportofotherauditors).#XX&#Gw(XX#(Gw2#Gw(  T!   ݛ_ XXZ  +        Z  ZZ  Z          3      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7Thestandardsapplicabletofinancialauditsincludethegeneral,fieldwork,andreportingstandardsdescribedinchapters3,4, H and5ofGovernmentAuditingStandards.  #XX&#Gw(XX#(Gw2#Gw( M T!   ݛ_ XXZ  +        Z  ZZ  Z          4      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7Seeparagraphs5.18and5.19ofGovernmentAuditingStandardsforthecriteriaforreporting. H #XX&#Gw(XX#(Gw2#Gw(  T!   ݛ_+        M0XXTt%0          3  w    TX޷X%tMXKXXX޷  M4(XXKT;'(4Thestandardsapplicabletofinancialauditsincludethegeneral,fieldwork,andreportingstandardsdescribedinchapters3,4,and H 5ofGovernmentAuditingStandards.#TX޷X';##MXKXXX޷#TX޷XXXK , T!   ݛ_ XXZ  +        Z  ZZ  Z          5      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7ԀIftheauditorhasissuedaseparatelettertomanagementtocommunicateothermattersinvolvingthedesignandoperationof H internalcontroloverfinancialreporting,thisparagraphshouldbemodifiedtoincludeastatementsuchasthefollowing: However,wenotedothermattersinvolvinginternalcontrolover[listcompliancearea],whichwehavereportedtomanagementof[_ԢServicer_]inaseparateletterdatedAugust15,19xx.Thisreferenceisnotintendedtoprecludetheauditorfromincludingothermattersintheseparatelettertomanagement.Furthermore,thereferencetomanagementisintendedtobeconsistentwithparagraph5.28ofGovernmentAuditingStandards,whichindicatesthatcommunicationsto topmanagementshouldbereferredto.  #XX&#Gw(XX#(Gw2#Gw((43c$ T!    d ty  <<= 8CT! :endnote textendnote text            88T ,toc 1toc 1   (#        >4X` hp x (#>  8;T ,toc 2toc 2  ` (#        >4X` hp x (#>  8>T ,toc 3toc 3  ` (#        >4X` hp x (#>  8>T ,toc 4toc 4   (#        >4X` hp x (#>  8>T ,toc 5toc 5  h(#        >4X` hp x (#>  88T ,toc 6toc 6   (#        >4X` hp x (#>  8! ,toc 7toc 7            88T ,toc 8toc 8   (#        >4X` hp x (#>  88T ,toc 9toc 9   (#        >4X` hp x (#>  @;T 0index 1index 1  ` (#        >4X` hp x (#>  @;T 0index 2index 2  ` (#        >4X` hp x (#>  P5T 8toa headingtoa heading   (#        >4X` hp x (#>  @! 0captioncaption            ^:_Equation Ca_Equation Caption        ԫ\  `*Times New RomanTTC\  P6QP\  `*Times New RomanTTXXP\  P6QXP\  `*Times New RomanTTZ\  P6QP\  `*Times New RomanTT<\  P6QP @Times New RomanBold ItalicTTXX)0XhX<6X9`("Courier NewTTTTItalicTTXXx6X@DQX@<6X9`("Courier NewTTTTItalicTTZ6X@DQ@' dxd  T!   ݛ_+         XXZ            1  w    XX ZXLXXX  7'XXL&'7TheauditorshouldusetheportionsofExamplesA2andA3thatapplytoaspecificsituation.Forexample,iftheauditorwill H begivinganunqualifiedopiniononcompliancebuthasidentifiedreportableconditionsoninternalcontrol,#XX&#&XX#7'&#&'7Ԁthecompliancesection  ofExampleA2wouldbeusedalongwithinternalcontrolsectionofthisreport.Alternatively,iftheauditorwillbegivingaqualifiedopiniononcompliancebuthasnotidentifiedreportableconditions,theinternalcontrolsectionofExampleA2wouldbeusedalongwiththecompliancesectionofthisreport.#XX&##XLXXX4#XXXXLi., ii., iii.,Level 1Level 2Level 3Level 4Level 5  T!   ݛ_+         XXZ            2  w    XX ZXLXXX  7'XXL&'7Describeanydeparturefromthestandardreport(forexample,aqualifiedopinion,amodificationastoconsistencybecauseofa H changeinaccountingprinciple,orareferencetothereportofotherauditors).#XX&##XLXXX#XXXXL  T!   ݛ_+         XXZ            3  w    XX ZXLXXX  7'XXL&'7Thestandardsapplicabletofinancialauditsincludethegeneral,fieldwork,andreportingstandardsdescribedinchapters3,4, H and5ofGovernmentAuditingStandards.#XX&##XLXXX#XXXXL* `(CG TimesScalable  T!   ݛ_+         XXZ            4  w    XX ZXLXXX  7'XXL&'7Seeparagraphs5.18and5.19ofGovernmentAuditingStandardsforthecriteriaforreporting.#XX&##XLXXX#XXXXL6#;r4Quick i. J  .0 J M T!   ݛ_+         XXZ            5  ڀw    XX ZXLXXX  7'XXL&'7Ifconditionsbelievedtobematerialweaknessesaredisclosed,thereportshouldidentifythematerialweaknessesthathavecome H totheauditor#XX&#&XX#7'&#p*'7#X+X*p#p*+XX#7'*p#&'7sattention.Thelastsentenceofthisparagraphshouldbereplacedwithlanguagesuchasthefollowing:#XX&#&XX#7'&_#p*'7Ԁ#X+X*p #p*+XX#7'*pM#&'7However,  ofthereportableconditionsdescribedabove,weconsideritems[listthereferencenumbersoftherelatedfindings,forexample, l 971and978]tobematerialweaknesses.#XX&##XLXXX#XXXXL l$  y T!   ݛ_+         XXZ            6  ڀw    XX ZXLXXX  7'XXLIftheauditorhasissuedaseparatelettertomanagementtocommunicateothermattersinvolvingthedesignandoperationof H internalcontroloverfinancialreporting,thisparagraphshouldbemodifiedtoincludeastatementsuchasthefollowing:̀Wealsonotedothermattersinvolvinginternalcontroloverfinancialreporting,whichwehavereportedtomanagementof[nameof_ԢServicer_]inaseparateletterdatedAugust15,19xx.Thisreferenceisnotintendedtoprecludetheauditorfromincludingothermattersintheseparatelettertomanagement.Furthermore,thereferencetomanagementisintendedtobeconsistentwithparagraph5.28ofGovernmentAuditingStandardswhichindicatesthatcommunicationstotop&'7Ԁmanagementshouldbereferred  to.#XX&##XLXXX#XXXXL\  `*Times New RomanTT  T!   ݛ_+        V0XXWt%0          4  w    WX޷X%tVXKXXX޷  V4(XXKW;'(4Seeparagraphs5.18and5.19ofGovernmentAuditingStandardsforthecriteriaforreporting.#WX޷X';##VXKXXX޷#WX޷XXXK* `(CG TimesScalable\  `*Times New RomanTT M T!   ݛ_+        Y0XXZt%0          5  ڀw    ZX޷X%tYXKXXX޷  Y4(XXKZ;'(4Ifconditionsbelievedtobematerialweaknessesaredisclosed,thereportshouldidentifythematerialweaknessesthathavecome H totheauditor#ZX޷X';#Z;'XX޷#Y4(';#[w,(4#[X-X,w#[w,-XX#Y4(,w#Z;'(4sattention.Thelastsentenceofthisparagraphshouldbereplacedwithlanguagesuchasthefollowing:#ZX޷X';#Z;'XX޷#Y4(';_#[w,(4Ԁ#[X-X,w #[w,-XX#Y4(,wM#Z;'(4However,  ofthereportableconditionsdescribedabove,weconsideritems[listthereferencenumbersoftherelatedfindings,forexample,971 h and978]tobematerialweaknesses.#ZX޷X';##YXKXXX޷#ZX޷XXXK d * `(CG TimesScalable\  `*Times New RomanTT<6X9`("Courier NewTT e T!   ݛ_+        ]0XX^t%0          6  ڀw    ^X޷X%t]XKXXX޷  ]4(XXKIftheauditorhasissuedaseparatelettertomanagementtocommunicateothermattersinvolvingthedesignandoperationof H internalcontroloverfinancialreporting,thisparagraphshouldbemodifiedtoincludeastatementsuchasthefollowing:̀Wealsonotedothermattersinvolvinginternalcontroloverfinancialreporting,whichwehavereportedtomanagementof[nameof_ԢServicer_]inaseparateletterdatedAugust15,19xx.Thisreferenceisnotintendedtoprecludetheauditorfromincludingothermattersintheseparatelettertomanagement.Furthermore,thereferencetomanagementisintendedtobeconsistentwithparagraph5.28ofGovernmentAuditingStandardswhichindicatesthatcommunicationstotop^;'(4Ԁmanagementshouldbereferredto.#^X޷X';##]XKXXX޷#^X޷XXXK* `(CG TimesScalable\  `*Times New RomanTT J N$    ݛ_`4(XX1TheIPAshouldlisttheassertionsapplicabletotheguarantyagency_Ԣservicer_.Likewise,assertionsnotapplicableshouldbe  deleted.#`XKX(4J#* `(CG TimesScalable  T!   ݛ_XXo[X,XF` hp x (#%'0*,.8135@8:<H?Xob4(XX  2TheIPAshouldmodifythestandardreportifanyofthefollowingconditionsexists:     F 0  Thereisamaterialnoncompliancewithspecifiedrequirements(_ԢSSAE_Ԁ#3asamendedbyparagraphs58through65of_ԢSSAE_Ԁ d #9); %%    F 0  Thereisamatterinvolvingamaterialuncertainty(_ԢSSAE_Ԁ#3asamendedbyparagraph66of_ԢSSAE_Ԁ#9);%%    F #bXKX(4#b4(XXK0  Thereisarestrictiononthescopeoftheengagement(paragraphs5558of_ԢSSAE_Ԁ#2,asamendedby_ԢSSAE_Ԁ#9);#bXKX(4#%%    F 0  b4(XXKTheIPAdecidestorefertothereport(excluding_Ԣservicer_Ԁauditreport)ofanotherIPAasthebasis,inpart,fortheIPA's 4 report(paragraph59and60of_ԢSSAE_Ԁ#2,asamendedby_ԢSSAE_Ԁ#9);or %% #bXKX(4#   F 0  b4(XXKIfmanagementdisclosesthenoncomplianceandappropriatelymodifiesitsassertionordisagreeswiththeIPAoverthe  ( existenceofmaterialnoncomplianceanddoesnotincludeinitsassertionadescriptionofsuchnoncompliance,theIPAshouldrefertotheguidancein_ԢSSAE_Ԁ#3,asamendedbyparagraphs5864of#bXKX(4#b4(XXK_ԢSSAE_Ԁ#9.#bXKX(4J#* `(CG TimesScalable  N$    ݛ_d XX1Ifthereportableconditionslistedintheaboveparagraphareconsideredtobematerialweaknesses,changethe  lastsentenceinthisparagraphtoread:However,ofthereportableconditionsdescribedabove,weconsideritems[identifythefindingnumberswhicharematerielweaknesses]tobematerialweaknesses.* `(CG TimesScalable U T!   ݛo[X` hp x (#%'0*,.8135@8:<H?AXoXXfL=XXԀlXX,XF` hp x (#%'0*,.8135@8:<H?Xl0  1TheservicerisrequiredtohavetheIPAprovideastatementthatthenecessarydocumentswerelocated/obtainedand/orthattheactionsweretakeneither  withthecorrectiveactionplan(CAP)orduringtheauditresolutionprocess.* `(CG TimesScalable / T!   ݛo[X` hp x (#%'0*,.8135@8:<H?AXoXXhL=XXԀlXX,XF` hp x (#%'0*,.8135@8:<H?Xl0  2EDmayhaveissuedaFADforaprioraudit/examination.AFADdescribesanycorrectiveactionstheservicerisrequiredtotakewithin45daysof  receipt(unlessotherwisestated)oftheFAD.* `(CG TimesScalable )   ݛ_j^i _XXԀOURMISSIONISTOENSUREEQUALACCESSTOEDUCATIONANDPROMOTEEDUCATIONEXCELLENCETHROUGHOUTTHENATION#jXLX _^i;#* `(CG TimesScalable r p'   ݛ_*wqrddd Xdd Xdd X(#(#w, dd ,dd ,( dd +  3" X Px3tXXGuarantyAgency_ԢServicer_ԀAuditGuide 2!x 2PageI  2  ;*x" ;March2000:0.x3 x P  :mc:\office\wpwin\graphics\edlogo.wpgWPC513aa C`a}K5& %%$?##" " ! !  ?   ?|?|??<<88??888?8??0?0??0?0?p?`?p???????????x?~?`??????????? ?  > ?   8!?? ?  ~ σ ? σ ? ?ǃ "?ǃ?##??#?#p>#?< ?? | ? x ??  ??  ?  @? ?? x? ? ?|?  |?  ~  |?? ? ?? ?&?'??'???'???'?'??'?'?0'??1<'?g?x(~Ͼ~(?| ?x?~  |?;㟀~?  px?~? *?ǟ *~ $< %?||?? %?<?? %?? %?? + +?wx| +??p?x@? +~!p<? ,?p<<? ,?xp?? -?>? -?09? 8 ! 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Y25 2X 2 2 2 2 2S 2 2 2 2 S2@ #2W 1b 1f 1] Y1D (1' 71 c1' 11 15 1+ #2 ^2 2f 2 2 2 2 {2p J2R 2N 1N 1a 1 @1 1& 0z 0 1 1 71 (1' x2 2 F2 3 3 3 3 3p 3 3 3 3 3 2 4 4 m3^3"T36b3NO3]3 3-3 63O3c4;2,1 ,  @ F w O ^  @ w ", 3N3h3O4OK44O25O44NK4xuTABLE ALevel 1Level 2Level 3Level 4Level 5* `(CG TimesScalable r N$    ݛ_1xXXXXԀManagementsrefusaltoprovidethepractitionerwiththerequiredcomplianceandinternal X controlassertionsrelatedtothecomplianceauditmaysubjecttheentitytoadministrativeactionsbyED.#yXLXXXQ#ԄLevel 1Level 2Level 3Level 4Level 5Level 1Level 2Level 3Level 4Level 5(hH  Z 6Times New Roman Regular* `(CG TimesScalable x N$    ݛ_2ThepractitionershoulddiscusswiththeED/_ԢOIG_/ISwhetherornotthereportshouldbe X providedtothe_Ԣauditee_Ԁinordernottointerferewithpotentialfutureinvestigations,legalproceedings,orboth.̀  p'   ݛ_|XXA')xdExA#|XLX8#*w}~ddd Xdd Xdd X(#(#w, dd ,dd ,( dd +  3" X Px3|XXLGuarantyAgency_ԢServicer_ԀAuditGuide 2!x 2PageI  17  ;*x" ;March2000:0.x3 x P  :* `(CG TimesScalableDTABLE D { p'   ݛ_XXGuarantyAgency_ԢServicer_ԀAuditGuide@&PageII  2  ڈA(#March2000#XLX8#Ԉ X A') xdExA   * `(CG TimesScalable L T!   ݛ_XXX"XXX$X` XX$ N    ݀#XLX"XT#  H     X N    1Theopinionparagraphshouldbemodifiedasnecessaryunderthecircumstances,e.g.,ifqualifiedopinion,adverseopinion,ordisclaimerofopinionistobeissued.  <6X9`("Courier 10cpi* `(CG TimesScalable s T!   ݛ_ XXZ  +        Z  ZZ  Z          1      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7TheauditorshouldusetheportionsofexamplesA2andA3thatapplytoaspecificsituation.Forexample,iftheauditorwill H begivinganunqualifiedopiniononcompliancebuthasidentifiedreportableconditionsoninternalcontrol,thecompliancesectionofthisreportwouldbeusedalongwithinternalcontrolsectionofexampleA3.Alternatively,iftheauditorwillbegivingaqualifiedopiniononcompliancebuthasnotidentifiedreportableconditions,theinternalcontrolsectionofthisreportwouldbeusedalongwiththecompliancesectionofexampleA3.+v        ݀#XX&#Gw(XX#(Gw2#Gw(* `(CG TimesScalable\  `*Times New RomanTT  T!   ݛ_ XXZ  +        Z  ZZ  Z          2      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7Describeanydeparturefromthestandardreport(forexample,aqualifiedopinion,amodificationastoconsistencybecauseofa H changeinaccountingprinciple,orareferencetothereportofotherauditors).#XX&#Gw(XX#(Gw2#Gw(* `(CG TimesScalable\  `*Times New RomanTT  T!   ݛ_ XXZ  +        Z  ZZ  Z          3      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7Thestandardsapplicabletofinancialauditsincludethegeneral,fieldwork,andreportingstandardsdescribedinchapters3,4, H and5ofGovernmentAuditingStandards.  #XX&#Gw(XX#(Gw2#Gw( * `(CG TimesScalable\  `*Times New RomanTT M T!   ݛ_ XXZ  +        Z  ZZ  Z          4      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7Seeparagraphs5.18and5.19ofGovernmentAuditingStandardsforthecriteriaforreporting. H #XX&#Gw(XX#(Gw2#Gw(* `(CG TimesScalable\  `*Times New RomanTT , T!   ݛ_ XXZ  +        Z  ZZ  Z          5      Z  ZZ  Z  #XX Z8#&XX#7'&W#&'7ԀIftheauditorhasissuedaseparatelettertomanagementtocommunicateothermattersinvolvingthedesignandoperationof H internalcontroloverfinancialreporting,thisparagraphshouldbemodifiedtoincludeastatementsuchasthefollowing: However,wenotedothermattersinvolvinginternalcontrolover[listcompliancearea],whichwehavereportedtomanagementof[_ԢServicer_]inaseparateletterdatedAugust15,19xx.Thisreferenceisnotintendedtoprecludetheauditorfromincludingothermattersintheseparatelettertomanagement.Furthermore,thereferencetomanagementisintendedtobeconsistentwithparagraph5.28ofGovernmentAuditingStandards,whichindicatesthatcommunicationsto topmanagementshouldbereferredto.  #XX&#Gw(XX#(Gw2#Gw(* `(CG TimesScalable\  `*Times New RomanTT  T!   ݛ_+         XXZ            1  w    XX ZXLXXX  7'XXL&'7TheauditorshouldusetheportionsofExamplesA2andA3thatapplytoaspecificsituation.Forexample,iftheauditorwill H begivinganunqualifiedopiniononcompliancebuthasidentifiedreportableconditionsoninternalcontrol,#XX&#&XX#7'&#&'7Ԁthecompliancesection  ofExampleA2wouldbeusedalongwithinternalcontrolsectionofthisreport.Alternatively,iftheauditorwillbegivingaqualifiedopiniononcompliancebuthasnotidentifiedreportableconditions,theinternalcontrolsectionofExampleA2wouldbeusedalongwiththecompliancesectionofthisreport.#XX&##XLXXX4#XXXXL* `(CG TimesScalable\  `*Times New RomanTT  T!   ݛ_+         XXZ            2  w    XX ZXLXXX  7'XXL&'7Describeanydeparturefromthestandardreport(forexample,aqualifiedopinion,amodificationastoconsistencybecauseofa H changeinaccountingprinciple,orareferencetothereportofotherauditors).#XX&##XLXXX#XXXXL* `(CG TimesScalable\  `*Times New RomanTT  T!   ݛ_+         XXZ            3  w    XX ZXLXXX  7'XXL&'7Thestandardsapplicabletofinancialauditsincludethegeneral,fieldwork,andreportingstandardsdescribedinchapters3,4, H and5ofGovernmentAuditingStandards.#XX&##XLXXX#XXXXL* `(CG TimesScalable\  `*Times New RomanTT  T!   ݛ_+         XXZ            4  w    XX ZXLXXX  7'XXL&'7Seeparagraphs5.18and5.19ofGovernmentAuditingStandardsforthecriteriaforreporting.#XX&##XLXXX#XXXXL* `(CG TimesScalable\  `*Times New RomanTT M T!   ݛ_+         XXZ            5  ڀw    XX ZXLXXX  7'XXL&'7Ifconditionsbelievedtobematerialweaknessesaredisclosed,thereportshouldidentifythematerialweaknessesthathavecome H totheauditor#XX&#&XX#7'&#p*'7#X+X*p#p*+XX#7'*p#&'7sattention.Thelastsentenceofthisparagraphshouldbereplacedwithlanguagesuchasthefollowing:#XX&#&XX#7'&_#p*'7Ԁ#X+X*p #p*+XX#7'*pM#&'7However,  ofthereportableconditionsdescribedabove,weconsideritems[listthereferencenumbersoftherelatedfindings,forexample, l 971and978]tobematerialweaknesses.#XX&##XLXXX#XXXXL l$ * `(CG TimesScalable\  `*Times New RomanTT<6X9`("Courier NewTT y T!   ݛ_+         XXZ            6  ڀw    XX ZXLXXX  7'XXLIftheauditorhasissuedaseparatelettertomanagementtocommunicateothermattersinvolvingthedesignandoperationof H internalcontroloverfinancialreporting,thisparagraphshouldbemodifiedtoincludeastatementsuchasthefollowing:̀Wealsonotedothermattersinvolvinginternalcontroloverfinancialreporting,whichwehavereportedtomanagementof[nameof_ԢServicer_]inaseparateletterdatedAugust15,19xx.Thisreferenceisnotintendedtoprecludetheauditorfromincludingothermattersintheseparatelettertomanagement.Furthermore,thereferencetomanagementisintendedtobeconsistentwithparagraph5.28ofGovernmentAuditingStandardswhichindicatesthatcommunicationstotop&'7Ԁmanagementshouldbereferred  to.#XX&##XLXXX#XXXXL* `(CG TimesScalable\  `*Times New RomanTT J N$    ݛ_7'XX1TheIPAshouldlisttheassertionsapplicabletotheguarantyagency_Ԣservicer_.Likewise,assertionsnotapplicableshouldbe  deleted.#XLX'7J#* `(CG TimesScalable  T!   ݛ_XXo[X,XF` hp x (#%'0*,.8135@8:<H?Xo7'XX  2TheIPAshouldmodifythestandardreportifanyofthefollowingconditionsexists:     F 0  Thereisamaterialnoncompliancewithspecifiedrequirements(_ԢSSAE_Ԁ#3asamendedbyparagraphs58through65of_ԢSSAE_Ԁ h #9); %%    F 0  Thereisamatterinvolvingamaterialuncertainty(_ԢSSAE_Ԁ#3asamendedbyparagraph66of_ԢSSAE_Ԁ#9);(%%    F #XLX'7#7'XXL0  Thereisarestrictiononthescopeoftheengagement(paragraphs5558of_ԢSSAE_Ԁ#2,asamendedby_ԢSSAE_Ԁ#9);#XLX'7#%%    F 0  7'XXLTheIPAdecidestorefertothereport(excluding_Ԣservicer_Ԁauditreport)ofanotherIPAasthebasis,inpart,fortheIPA's H report(paragraph59and60of_ԢSSAE_Ԁ#2,asamendedby_ԢSSAE_Ԁ#9);or %% #XLX'7#   F 0  7'XXLIfmanagementdisclosesthenoncomplianceandappropriatelymodifiesitsassertionordisagreeswiththeIPAoverthe  @ existenceofmaterialnoncomplianceanddoesnotincludeinitsassertionadescriptionofsuchnoncompliance,theIPAshouldrefertotheguidancein_ԢSSAE_Ԁ#3,asamendedbyparagraphs5864of#XLX'7#7'XXL_ԢSSAE_Ԁ#9.#XLX'7J#* `(CG TimesScalable  N$    ݛ_XX1Ifthereportableconditionslistedintheaboveparagraphareconsideredtobematerialweaknesses,changethe  lastsentenceinthisparagraphtoread:However,ofthereportableconditionsdescribedabove,weconsideritems[identifythefindingnumberswhicharematerielweaknesses]tobematerialweaknesses.* `(CG TimesScalable U T!   ݛo[X` hp x (#%'0*,.8135@8:<H?AXoXX{;XXԀlXX,XF` hp x (#%'0*,.8135@8:<H?Xl0  1TheservicerisrequiredtohavetheIPAprovideastatementthatthenecessarydocumentswerelocated/obtainedand/orthattheactionsweretaken  eitherwiththecorrectiveactionplan(CAP)orduringtheauditresolutionprocess.* `(CG TimesScalable / T!   ݛo[X` hp x (#%'0*,.8135@8:<H?AXoXX{;XXԀlXX,XF` hp x (#%'0*,.8135@8:<H?Xl0  2EDmayhaveissuedaFADforaprioraudit/examination.AFADdescribesanycorrectiveactionstheservicerisrequiredtotakewithin45daysof  receipt(unlessotherwisestated)oftheFAD.* `(CG TimesScalable T!   ݛ_T_X XXlL<8`|0X `ff4EXX  FF S(#S(#(#(#}oI95`| XX`> ?E X FF} S S S(#S(# S S S S @< <  #XLX i# XXLUNITEDSTATESDEPARTMENTOFEDUCATION#XLX # XXL  p  S S S S #XLX v# S S S S @ &%XXL OFFICEOFINSPECTORGENERAL #XLX%&#Ԉ x   S S S S XXL@*#XLX㵮#Ԉ S S S S @* (#(#S S    `     h TTT  TT  TTTMarch2000DearColleague:ThislettertransmitstheU.S.DepartmentofEducations(ED)AuditGuide,Auditsof   GuarantyAgency_ԢServicers_ԀParticipatingintheFederalFamilyEducationLoan(_ԢFFEL_)Program.XXXXLSection682.416(e)ofTitle34oftheCodeofFederalRegulations(_ԢCFR_)requiresannual L complianceauditsof_Ԣservicers_ԀthatcontractwitheligibleguarantyagenciestoadministerorserviceanyaspectoftheStudentFinancialAssistanceprograms.However,anexemptionappliestothiscomplianceauditrequirementifthe_Ԣservicer_Ԁcontractswithonlyoneguarantyagencyand h theauditofthatGuarantyagencys_ԢFFEL_ԀProgramincludeseveryaspectofthe_Ԣservicer_sadministrationofthe_ԢFFEL_ԀProgram.#XLXXX#Section668.23(d)(5)ofTitle34ofthe_ԢCFR_Ԁalsorequires_Ԣservicers_Ԁtoannuallysubmitauditedfinancialstatements.Thefinancialstatementsmustbepreparedonanaccrualbasisinaccordancewithgenerallyacceptedaccountingprinciples.XXXXLFor_Ԣservicers_Ԁthatarenotnonprofit  orgovernmentalorganizations,allfinancialstatementandcomplianceauditsconductedtosatisfytheannualauditrequirementsmustbeperformedinaccordancewiththisGuide.Guarantyagency_Ԣservicers_ԀthatarenonprofitorgovernmentalorganizationsaresubjecttotheauditrequirementsofOfficeofManagementandBudgetCircularA133,AuditsofStates,LocalGovernments,and X NonProfitOrganizationsinstead.#XLXXXi # D ApplicationofthisGuideiseffectiveforfiscalyearsendingJune30,2000,andthereafter.EarlierapplicationoftheGuideisencouraged.XXXXLT#XLXXX #XXXXLhisGuideisavailableontheInternetatthis h   ТURL:http://home.gvi.net/~edoig.QuestionspertainingtotheGuideshouldbefaxedtotheOfficeofInspectorGeneralat(215)6568628.Wehopethisguidewillassistyouinfulfillingyourresponsibilitiesforcompletingandsubmittingtherequiredaudit.  0 ` 0 ` (#` (#0 (# (#0h(#(#  Sincerely, h(#h(# T T T Ti TTTT0   ` 0 (#(#0 (# (#0h(#(#  LorraineLewis h(#h(# 0  0` (#(# 0` (#` (#0h(#(#  InspectorGeneral h(#h(#   р#XLXXX #TT  *8(+ T@% [ XXLAUDITGUIDE#XLX [#  >!XXL &!! >Ԉ X @ :! &::AUDITSOFGUARANTYAGENCY h @SERVICERSPARTICIPATINGINTHEFEDERAL@FAMILYEDUCATIONLOANPROGRAM &!: &!! &vaQMz| Upm_@@@E UU# @*:! &::@*@U.S.DEPARTMENTOFEDUCATION@h h OFFICEOFINSPECTORGENERAL@BB$March2000Xn X:XLX XXnԈ  *P( *q ddd Xdd Xdd X(#(#q,N dd ,dd ,( dd +  3" X Px3XXL~GuarantyAgency_ԢServicer_ԀAuditGuide ;*x" ;_Ԣi_ ;*x" ;March2000:0.x3 x P  :~XLX~@" TABLEOFCONTENTS  p  ACRONYMSANDTERMS ""I(#.44iv P  SECTIONI0 ` 0 ` (#` (#AUDITPLANNINGANDOTHERCONSIDERATIONS(#(#K(# (# (# 0  BACKGROUND<"<"H(#.0 0 I1    PURPOSEOFGUIDE<"<"H(#.  I2   0  Audit/AttestationObjectives#<"<"H(#.+(#(##I2     LayoutoftheGuide<"<"H(#.x x "I3  x    ENGAGEMENTPERIODANDREPORTDUEDATES<"<"H(#.0I3 X  MANAGEMENTRESPONSIBILITIES<"<"H(#.||%I4 8 0  CorrectiveActionPlan#<"<"H(#.``%(#(##I5 (   IRREGULARITIESORILLEGALACTS<"<"H(#.44(I5 ` DUECAREANDPROFESSIONALSKEPTICISM<"<"H(#.ll.I6 @ AUDITORQUALIFICATIONS<"<"H(#.   I6   GENERALPLANNINGCONSIDERATIONS<"<"H(#.)I7  0  EngagementLetter#<"<"H(#.  (#(##I7    FollowuponPriorAuditFindings<"<"H(#.000I7    WorkingPapers<"<"H(#., , I8 x AUDITSUBMISSION/REPORTINGPACKAGE<"<"H(#.,I9 X    FinancialStatementReporting<"<"H(#.,I9 H!   ComplianceAttestationReporting<"<"H(#./I9  8" AUDITOFFINANCIALSTATEMENTS!!G(#.DD'I10 p" $ 0  ConsiderationofInternalControl#!!G(#.0(#(##I10 `#!% 0  Materiality#!!G(#. (#(##I_Ԅ11_Ԉ P$!&   CompliancewithLawsandRegulations!!G(#.3I12 @%"'   ManagementandLegalCounselRepresentationLetters!!G(#.BI12 0&#( COMPLIANCEATTESTATIONENGAGEMENT!!G(#.,,+I12 (%* 0  ContractingWithMoreThanOneGuarantyAgency#!!G(#.=(#(##I13 )&+ 0  InherentRisk#!!G(#.P P (#(##I13 )', *q ddN dd dd ( dd (#(#q, dd ,ldd ,( dd +  3" ,h*/ Px3~X~XLGuarantyAgencyServicerAuditGuide 2!8-*0 2ii ;*8-*1" ;March2000:0.8-*23 x P  :#~XLX~"# .+2 0  ConsiderationoftheInternalControlOverCompliance#!!G(#.D(#(##I14 X   Materiality!!G(#. I15 H 0  ObtainingSufficientEvidenceandSampling#!!G(#.009(#(##I15 8   ReportingNoncompliance!!G(#.\\&I1T6TT5T ( FUTUREREVISIONS!!G(#.  I17   SECTIONII0 `  REQUIRED_ԢSERVICER_ԀMANAGEMENTASSERTIONS,` (#` (#    `  COMPLIANCEREQUIREMENTS,ANDSUGGESTED       `  PROCEDURES INTRODUCTION!!G(#. II1  P  1.EDFORMS1189and1130!!F(#.$II3 0  2.FEDERALREINSURANCE!!G(#.  !II5 h 3.DEATH,DISABILITY,CLOSEDSCHOOL,̀FALSECERTIFICATIONANDBANKRUPTCYCLAIMS!!G(#.,,8II9 8 4.DEFAULTAVERSION!!F(#. II11  5.COLLECTIONS!!F(#.4 4 II12  6.FEDERALSHAREOFBORROWERPAYMENTS!!F(#.0II18  7.ASSIGNMENTOFDEFAULTEDLOANSTOED!!F(#.xx1II19 ` 8.COLLECTIONCHARGES!!F(#. II20 @ 9.ENFORCEMENTACTION!!F(#. II21 x   SECTIONIII0 ILLUSTRATIVEREPORTSANDAPPENDICES XLXX~XLԀ#~XLXXXL*#XLXX~XLX   (# (# #~XLXXXL+#XLXX~XL#~XLXXXLv+# FINANCIALSTATEMENT  8"" ReportontheAuditoftheBasicFinancialStatements@(#.?ExampleA1 $!$ ReportonComplianceandonInternalControlOverFinancialReportingрBased̀onanAuditofFinancialStatementsPerformedinAccordanceWithGovernment &$' ЀAuditingStandards(NoReportableInstancesofNoncomplianceandNo '%( ЀMaterialWeaknesses[NoReportableConditionsIdentified])@(#.<<EXLXX~XLExample#~XLXXXL-#A2 (p&)   )`'* *wdd dd ldd ( dd (#(#w, dd ,ldd ,( dd +  3" X Px3~X~XLGuarantyAgency_ԢServicer_ԀAuditGuide 2!x 2 iii ;*x" ; March2000 :0.x3 x P  :#~XLX~G/# XLXX~XLReportonComplianceandonInternalControlOverFinancialReporting @ #~XLXXXL0#XLXX~XLԀBasedonanAuditofFinancialStatementsPerformedinAccordance 0 ЀWithGovernmentAuditingStandards(ReportableInstancesofNoncompliance x  #~XLXXXL31#XLXX~XLԀandReportableConditionsIdentified)@(#.0#~XLXXXL42#XLXX~XLExampleA3 h #~XLXXXL2#XLXX~XL #~XLXXXL3#COMPLIANCEATTESTATION  H   ReportPackageCoverPageB(#. #ExampleB (   ReportonComplianceWithSpecified̀RequirementsApplicabletothe_ԢFFEL_ԀProgramB(#.  6ExampleC   XLXX~XLReportonInternalControlOverCompliance(NoReportableConditions)@(#.O#~XLXXXL4#XLXX~XLExampleD#~XLXXXL15#Ԅ1   XLXX~XLReportonInternalControlOverCompliance(ReportableConditions   ЀIdentified[NoMaterialWeaknesses])@(#./#~XLXXXL5#XLXX~XLExampleD#~XLXXXLm6#Ԅ2   InformationSheetB(#.h h ExampleE p ScheduleofFindingsandQuestionedCostsB(#.3ExampleF ` AuditorsCommentsonResolutionMatters̀Relatingtothe_ԢFFEL_ԀProgramB(#.'ExampleG @ CorrectiveActionPlanB(#.  ExampleH  0 APPENDICES  h U.S.DepartmentofEducationOffices  @(#..AppendixA H Definitions  @(#.88AppendixB 8   ( *q dd dd ldd ( dd (#(#q, dd ,dd ,( dd +  3" X Px3~X~XLԀGuarantyAgency_ԢServicer_ԀAuditGuide 2!x 2iv ;*x" ;March2000:0.x3 x P  :#~XLX~U:#XLXX~XL@! XXLACRONYMSANDTERMS @ #XLX;# Acronym/Term    h   Name/Meaning󀀀 H AICPA `  AmericanInstituteofCertifiedPublicAccountants ( AT0  0` (#(#0 ` (#` (#AttestationStandardsp   (# (# AU0  0` (#(#0 ` (#` (#AuditingStandardsissuedbytheAmericanInstituteof_ԢCPAs_`   (# (# CAP0  0` (#(#0 ` (#` (#CorrectiveActionPlanP   (# (# _ԢCFR_   `  CodeofFederalRegulations @  _ԢCOSO_0  0` (#(#0 ` (#` (#CommitteeofSponsoringOrganizationsofthe_ԢTreadway_ԀCommission0  (# (# _ԢDCL_0  0` (#(#0 ` (#` (#DearColleagueLetter   (# (# ED   `  U.S.DepartmentofEducation   _ԢEDOIG_0 ` 0 ` (#` (#U.S.Departmentof#~XLXXXL;#XLXX~XLEducation,OfficeofInspectorGeneral  (# (# _ԢFFEL_   `  FederalFamilyEducationLoan  _ԢFOIA_0  0` (#(#0 ` (#` (#FreedomofInformationAct (# (# GAO0  0` (#(#0 ` (#` (#GeneralAccountingOfficex (# (# _ԢGAAS_0  0` (#(#0 ` (#` (#GenerallyAcceptedAuditingStandardsh (# (# GAS0  0` (#(#0 ` (#` (#GovernmentAuditingStandardsX (# (# _ԢGAAP_ `  GenerallyAcceptedAccountingPrinciples H _ԢHEA_   `  HigherEducationActof1965,asamended 8 IPA   `  IndependentPublicAccountant ( _ԢNSLDS_0 `  NationalStudentLoanDataSystemp` (#` (# _ԢOIG_   `  OfficeofInspectorGeneral ` OMB   `  OfficeofManagementandBudget P PDL   `  ProgramDeterminationLetter @ RIGA0  0` (#(#0 ` (#` (#RegionalInspectorGeneralforAudit0 (# (# SAS   `  StatementonAuditingStandards   _ԢServicer_ `  ThirdParty_ԢServicer_  _ԢSFA_   `  StudentFinancialAssistance   _ԢSLS_0  0` (#(#0 ` (#` (#SupplementalLoansforStudents! (# (# SPA0  0` (#(#0 ` (#` (#Supplemental_ԢPreclaims_ԀAssistance " (# (# _ԢSSAE_   `  StatementonStandardsforAttestationEngagements !x# _ԢSSCR_   `  StudentStatusConfirmation#~XLXXXLtA#XLXX~XLReport "h $ #~XLXXXLK#~ X~XL ~    #X!% +@&SECTIONI@AUDITPLANNINGANDOTHERCONSIDERATIONS H  XhX BACKGROUND XLXXXh x   Guarantyagenciesfrequentlyhire_Ԣservicers_ԀtoadministerFederalFamilyEducationLoan(_ԢFFEL_)Programfunctions.The_ԢFFEL_ԀProgram(formerlytheGuaranteedStudentLoanProgram)includestheFederalStaffordLoanProgram,bothsubsidizedandunsubsidized,theFederalSupplementalLoansforStudents(_ԢSLS_)Program,theFederalPLUSProgram,andtheFederalConsolidationLoanProgram.Section668.23(d)(5)ofTitle34oftheCodeofFederalRegulations(_ԢCFR_)requires_Ԣservicers_Ԁtoannuallysubmitauditedfinancialstatements.Thefinancialstatementsmustbepreparedonanaccrualbasisinaccordancewithgenerallyacceptedaccountingprinciples(_ԢGAAP_).Section682.416(e)ofTitle34ofthe_ԢCFR_Ԁalsorequiresannualcomplianceauditsof_Ԣservicers_Ԁthatcontractwitheligibleguarantyagenciestoadministerorserviceanyaspectofthe_ԢFFEL_Ԁprogram.Theauditmustexaminethe_Ԣservicer_scompliancewiththeActandapplicableregulationsandexaminethe_Ԣservicer_sfinancialmanagementofits_ԢFFEL_Ԁprogramactivities.Thecomplianceauditisrequiredunlessthe_Ԣservicer_Ԁcontractswithonlyoneguarantyagency, and theauditofthat  guarantyagencys_ԢFFEL_ԀPrograminvolveseveryaspectofthe_Ԣservicer_'sadministrationofthe_ԢFFEL_ԀProgram.Tosatisfythecomplianceauditrequirement,thisGuiderequiresanexaminationlevelattestationengagementrelatingtothe_Ԣservicer_Ԁmanagement'sassertionsaboutcertaincomplianceaspectsrelatedtothe_ԢFFEL_Ԁprogram.TheGuideincorporatesStatementsonStandardsforAttestationEngagements(_ԢSSAE_)#9issuedinApril1999whichamended_ԢSSAE_s#1,#2and#3.Asaresult,thisguideprovidesforthepractitionertoobtainmanagementsassertionswithinarepresentationletterandtoopineonthe_Ԣservicer_scompliancewithspecifiedrequirements,notonmanagementsassertionsaboutcompliance.However,_ԢSSAE_Ԁ#9permitsopinionsonmanagementsassertionsoncompliance,ifsuchassertionsareprovidedbymanagementinaseparatereportattachedtotheauditorsreport.Suchwillbeacceptedprovidingtheauditorsreportmeetsallrequirementsinaccordancewithparagraph54of_ԢSSAE_Ԁ#3,asamendedby_ԢSSAE_Ԁ#9._ԢSSAE_Ԁ#3asamendedby_ԢSSAE_Ԁ#9iscodifiedintheStatementsonStandardsforAttestationEngagements(_ԢSSAE_)AttestationStandards(ATsection500).Theauditsmustbeperformedbyaqualified,independentauditorinaccordancewiththeGovernmentAuditingStandards(GAS),issuedbytheComptrollerGeneraloftheUnitedStates. &h$& Also,theStatementsonStandardsforAttestationEngagements(_ԢSSAEs_),asamendedby_ԢSSAE_#9,issuedbytheAmericanInstituteofCertifiedPublicAccountants(AICPA)applytothecomplianceattestationengagement.  )8')   p+)+ +    ]PURPOSEOFGUIDE  8 ThisGuideistoassistIPAsinperformingrequiredfinancialstatementandcomplianceauditsof_Ԣservicers_Ԁresponsibleforadministeringorservicinganyaspectofthe_ԢFFEL_ԀProgramonbehalfoftheirguarantyagencyclients.ThisGuidewillalsoassist_Ԣservicer_Ԁmanagementinpreparingwrittenassertionsabouttheentityscompliancewiththespecified_ԢFFEL_ԀProgramrequirements.ThisGuideiseffectiveforfinancialandcomplianceaudits(attestationengagements)forfiscalyearsendingonorafterTJune30,2000TTDecember31,1999T.EarlierapplicationoftheGuideisencouraged.ThisGuideistobeusedbyall_Ԣservicers_Ԁ(exceptfor_Ԣservicers_Ԁexemptedasdescribedinthebackgroundsection).However,~XLXXXL_Ԣservicers_ԀthatareeitheraState,local,ornonprofitorganization `  aresubjecttotheauditrequirementsofOfficeofManagementandBudget(OMB)CircularA133inlieuoftherequirementssetforthinthisGuide.#XLXX~XL`#~XLXXXLԀ#XLXX~XL b#[Note:ThisGuidemustbeusedifaprogram x@  specificauditisbeingperformedtosatisfytheA133auditrequirements.Also,o~XLXXXLrganizationsthat h0  aresubjecttoOMBCircularA133requirementsbutarebelowthefundingthresholdforrequiredaudits(currently$300,000perfiscalyear)#XLXX~XLb#~XLXXXLԀareexemptfromtheauditrequirementsofthisGuide. H However,theseorganizationsmaybeaskedtosubmittoEDcopiesofanyfinancialstatementorcomplianceauditsthatareotherwisepreparedfortheorganization.]#XLXX~XLc#Ԁ (  Audit/AttestationObjectives   Theaudit/attestationobjectivesareto:1.0  Determineandreportwhether:(#(# 0  0` (#(#The_Ԣservicer_'sbasicfinancialstatementsarefairlypresented,inallmaterial p respects,inaccordancewithgenerallyacceptedaccountingprinciples_[GAAP]_; ` (#` (# 0  0` (#(#The_Ԣservicer_Ԁmaintainedeffectiveinternalcontrolandcompliedwithlaws, x@ regulations,andtheprovisionsofcontractsorgrantagreementswhichcouldhaveadirectandmaterialeffecton_Ԣ T T T Tk T T T T_Ԁthefinancialstatements;and ` (#` (# Ѐ0  0` (#(#The_Ԣservicer_Ԁmaintainedinternalcontrolandcomplied,inallmaterialrespects, 8#  withspecifiedcompliancerequirementsinSectionIIofthisGuide(EDForms1189and1130;Federalreinsurance;death,disabilityandbankruptcyclaims;defaultaversion;collections;Federalshareofborrowerpayments;assignmentofdefaultedloanstoED;collectioncharges;enforcementaction). ` (#` (# 2.0  AssisttheU.S.DepartmentofEducation(ED)inmeetingitsstewardshipresponsibilities (#& byEDsactinguponnoncomplianceandinternalcontrolweaknessesnotedintheindependentpublicaccountants(IPA's)reports.Ifapplicable,theIPA'sauditreportfindingsmustcontainadequateinformationtogivereportedmattersperspectiveandtoallowEDtotakenecessarycorrectiveaction(SeeExampleF). (#(#  LayoutoftheGuide  x.@), ЇThisGuideisdividedintothreesections: SectionI 0 ` 0 ` (#` (#Providesgeneralinformationaboutengagementplanningandother  considerations.  (# (#  SectionII 0 ` 0 ` (#` (#Identifiesthecompliancerequirementsandmanagementsassertionsthat   mustbereportedonbytheIPA.  (# (#  SectionIII  ` 0 Providesthereportingrequirementsandillustrativereports.  (# (# ThisGuideisnotintendedtobeacompletemanualofprocedures,norisitintendedtosupplanttheIPA'sjudgmentoftheworkrequired.Suggestedproceduresdescribedmaynotcoverallcircumstancesorconditionsencounteredataparticular_Ԣservicer_.TheIPAshoulduseprofessionaljudgmentandduecaretotailortheproceduressothatthefinancialstatementauditandcomplianceattestationengagementobjectivesareachieved.However,allapplicablemanagementassertionscontainedinthisGuidemustbeaddressedbytheIPA.TheIPAmaywishtocontacttheNonFederalAuditsAdvisoryandAssistanceTeam(SeeAppendixA)fortechnicalassistancerelatedtoperformingtheengagementrequiredbythisguide. ENGAGEMENTPERIODANDREPORTDUEDATES   Theauditisbasedonthe_Ԣservicer_sfiscalyearfor:0  The_Ԣservicer_'sbasic_ԢGAAP_Ԁfinancialstatements,inaccordancewithGASandgenerally  acceptedauditingstandards(_ԢGAAS_);and (#(# 0  Compliancebyexaminingandreportingonthe_Ԣservicer_scompliancewithspecified_ԢFFEL_ ` lawsandregulations,inaccordancewith_ԢSSAEs_ԀandGAS.P(#(# _ԢServicers_Ԁmayengagedifferent_ԢIPAs_Ԁtoperformtheauditofthefinancialstatementsandthecomplianceattestationengagement.However,thefinancialstatementauditandthecomplianceauditmustbeforthesamefiscalyearandmustbesubmittedbythe_Ԣservicer_ԀtoEDasonereportingpackage.  AuditsmustbesubmittedtoEDwithinsixmonthsoftheendofthe_Ԣservicer_sfiscalyearor,ifapplicable,inaccordancewiththedeadlinesestablishedintheSingleAuditAct,andOMBCircularA133.A_Ԣservicer_sfailuretomeetreportduedatesmayresultinadministrativesanctionsdescribedin34_ԢCFR_Ԁ668,SubpartG.  )$'  v  MANAGEMENTRESPONSIBILITIES tx   ,`'*  x -P(+ AmongothermanagementresponsibilitiesdiscussedinthisGuide,managementisresponsiblefor thefollowing:a.0  Preparingtherequiredfinancialstatementsinaccordancewith_ԢGAAP_Ԁ(Thefinancial  statementsmustreflectthe_Ԣservicer_sfinancialposition,resultsofoperations,and,whereappropriate,cashflowsforthefiscalyearaudited.Thefinancialstatementsmustbeforthesameorganizationalunitandfiscalyearthatisrequiredtomeettheauditrequirementsidentifiedinthissectionandmustincludenotesthatdescribethesignificantaccountingpoliciesusedinpreparingthestatements.); (#(# b.0  Identifyingtheapplicablelawsandregulationsandcompliancerequirements;` (#(# c.0  ComplyingXXXXLwithlaws,regulations,andprovisionsofcontractsorgrantagreements;x@ (#(# #XLXXX|#XXXXLd.0  Establishingandmaintainingeffectiveinternalcontrolovercompliancerelatedtoits T  administrationofthe_ԢFFEL_ԀProgramonbehalfofitsguarantyagencyclients; (#(# e.0  Evaluatingandmonitoringcomplianceandtheeffectivenessofinternalcontrolover  compliance; (#(# f.0  Ensuringthat#XLXXX+}#XXXXLԀtherequiredauditsareproperlyperformedandsubmittedwhendue;(#(# #XLXXX!#XXXXLg.0  Providingthepractitionerwithassertion(s)aboutthe_Ԣservicer_scompliancewiththespecified | compliancerequirementsandtheeffectivenessofthe_Ԣservicer_sinternalcontrolstructureovercompliance T T T Tu T T T T   1      ;T(#(# #XLXXX#XXXXL#XLXXX#XXXXLh.0  Providingthepractitionerwiththeirwrittenrepresentationsabout#XLXXXA#XXXXLԀallothermattersin_ԢSSAE_ d, No.3,asamendedbyparagraph67of#XLXXXԂ#XXXXL_ԢSSAE_ԀNo.9#XLXXX#XXXXL;P(#(# #XLXXX#XXXXL_Ԣi_.0  Preparingasummaryscheduleofpriorauditfindingsandacorrectiveactionplanin (  accordancewiththisGuide;#XLXXX]#XXXXLԀand!(#(# #XLXXXT#XXXXLj.0  Followingupandtakingcorrectiveactiononauditfindings(seeCorrectiveActionPlan "  below). (#(# #XLXXX#XXXXL#XLXXX# ~XLXXXLCorrectiveActionPlan  (H#&   p)8$' ToassistEDinresolvinginstancesofreportednoncompliance,reportableconditions,andmaterial weaknessesintheinternalcontrolidentifiedbytheIPA,EDrequiresa_ԢServicer_Ԁtodevelopacorrectiveactionplan(CAP)aspartofitsauditreportpackage.TheCAPisconsideredanessentialpartoftheauditreportpackage.TheCAPmustbepreparedbythe_ԢServicer_Ԁonthe_ԢServicer_'sletterhead,andincludethename,title,andtelephonenumberofthe_ԢServicer_Ԁofficialresponsibleforitspreparation.TheCAPmustdescribethecorrectiveactiontakenorplannedinresponsetofindingsidentifiedbytheIPA.Inaddition,the_ԢServicer_Ԁmustcommentonthestatusofcorrectiveactiontakenonpriorfindings.AdditionalguidancefortheCAPisprovidedinExampleH.AuditreportpackagessubmittedwithoutanapplicableCAPareincompleteandwillbereturned P  tothe_Ԣservicer_.#XLXX~XLچ# IRREGULARITIESORILLEGALACTS  X  ThisGuiderequirespractitionerstodesignandperformprocedurestoprovidereasonableassuranceofdetectingsignificantillegalactsandtoreportdirectlytotheEDOfficeofInspectorGeneral(_ԢEDOIG_)anyfraudulentactorindicationofsuchacts.Inaddition,_ԢSSAE_Ԁ#3,asamendedby_ԢSSAE_Ԁ#9,paragraph28saysthatanexaminationlevelengagementincludes   designingtheexaminationtodetectbothintentionalandunintentionalnoncompliancethatis  materialtomanagementsassertion.Accordingly,practitionersshouldbeawareoffraudorhigh  riskareasandrecognizebasicweaknessesininternalcontrol.AsdescribedinParagraph4.16ofGAS,ifthepractitionerbecomesawareoffraudorindications  offraud,thepractitionershouldexercisedueprofessionalcareinpursuingindicationsofpossiblefraudandillegalactssoasnottointerferewithpotentialfutureinvestigations,legalproceedings,orboth.Undersomecircumstances,laws,regulations,orpoliciesmayrequirepractitionerstoreportindicationsofcertaintypesoffraudorillegalactstolawenforcementorinvestigatoryauthoritiesbeforeextendingauditstepsandprocedures.Practitionersmayalsoberequiredtowithdrawfromordeferfurtherworkontheauditoraportionoftheauditinordernottointerferewithaninvestigation.UpondiscoveryofafraudulentactorindicationofsuchanactrelatedtoTitleIVFederalprograms,regardlessofdollarvalue,thisGuiderequiresthepractitionertoimmediatelycontacttheEDOfficeofInspectorGeneral,InvestigationServices(_ԢEDOIG_/IS),byphoneorfaxatthenumbersshownbelowbeforeextendingauditstepsandprocedures(GAS4.16).Inaddition,thepractitionermustpromptlyprepareaseparatewrittenreportconcerningfraudulentactsorindicationsofsuchactsandincludeallinformationdescribedinSectionVonreportingfindings.Thisreportshouldbesubmittedtothe_ԢEDOIG_/IS,within30daysafterthedateofdiscoveryoftheactorwithinthetimeframeagreedtobythepractitionerandthe_ԢEDOIG_/IS.Thereportshouldbesubmittedto_ԢEDOIG_/ISatthefollowingaddress:   `    U.S.DepartmentofEducation   `    AssistantInspectorGeneralforInvestigations x.@),    `    400MarylandAvenue,SW   `    _ԢMES_,Room4122   `    Washington,DC202021510   `    Phone:2022058762   `    Fax:2022059449FailuretonotifytheEDOfficeofInspectorGeneral,InvestigativeServices,offraudcouldsubjecttheIPAtosanctions.Forsupplementalguidance,seeChapters4and5ofGAS.Inaddition,   practitionersmaywishtoconsultSASNo.82,ConsiderationofFraudinaFinancialStatement   Audit,andSASNo.54,IllegalActsbyClients(AICPA,ProfessionalStandards,AUSections316  p  and317,respectively). DUECAREANDPROFESSIONALSKEPTICISM  x@  Paragraph3.26ofGASstatesthatdueprofessionalcareshouldbeusedinconductingtheauditand X  inpreparingrelatedreports._ԢSSAE_Ԁ#3,asamendedby_ԢSSAE_Ԁ#9,paragraph35requiresthatthepractitioner:8  exercise(a)duecareinplanning,performing,andevaluatingtheresultsofhisor  herexaminationproceduresand(b)theproperdegreeofprofessionalskepticism  toachievereasonableassurancethatmaterialnoncompliancewillbedetected.   Practitionersarecautionedagainstignoringbasicweaknessesininternalcontrol,performingauditstepsmechanically(auditingformoversubstance),andacceptingexplanationsforauditexceptionswithoutcompetentevidence.XhXXXLAUDITORQUALIFICATIONS#XLXXXh# ` _ԢIPAs_ԀmustmeetthequalificationandindependencestandardsspecifiedinGAS,including x@ continuingeducationandpeerreviewrequirements.Internalauditorsofa_Ԣservicer_Ԁarenotindependentwhileauditingwithinit.However,_ԢIPAs_Ԁmayconsidertheworkoftheinternalauditorsinperformingthefinancialstatementauditandtheexaminationlevelcomplianceattestationengagement._ԢIPAs_ԀshouldapplytheconceptsandguidanceinSASNo.65,The 8#  Auditor'sConsiderationoftheInternalAuditFunctioninanAuditofFinancialStatements ($! (AICPA,ProfessionalStandards,vol.1,AUsec.322)whenaddressingthecompetenceand %" objectivityofinternalauditors;thenature,timing,andextentofworktobeperformed;andotherrelatedmatters.GovernmentAuditingStandardsrequire_ԢIPAs_Ԁandauditfirmstocomplywithapplicableprovisions (#& ofthepublicaccountancylawandrulesofthejurisdictioninwhichtheyarelicensedandwheretheengagementisbeingconducted.Ifthe_Ԣservicer_ԀislocatedinastateoutsideofthehomestateoftheIPA,andtheIPAperformssubstantialfieldworkinthe_Ԣservicer_'sstate,theIPAshoulddocumenthis/hercompliancewiththelicensingrequirementsofthepublicaccountancylawsofthatstate.ThisGuidedoesnotimposeadditionallicensingrequirementsbeyondthoseestablishedbytheindividualStateBoardsofAccountancy. x.@),  GENERALPLANNINGCONSIDERATIONS  (  EngagementLetter 󀀀  Anengagementletterbetweenthe_Ԣservicer_ԀandtheIPAshallbepreparedandmustincludethefollowing:b  b0    Astatementthattheengagement(financialstatementandcomplianceattestation)istobe   performedinaccordancewithGovernmentAuditingStandards,andforthecompliance  p  engagement,theAICPA'sStatementonStandardsforAttestationEngagements(_ԢSSAE_)No.3asamendedby_ԢSSAE_ԀNo.9;b݌ (#(# Ќ  0  Adescriptionofthescopeoftheengagementandtherelatedreportingthatwillmeetthe h0  requirementsofthisguide; (#(# 0  AstatementthatbothpartiesunderstandthatEDintendstousetheIPA'sreporttohelp 8 carryoutitsoversightresponsibilitiesoftheTitleIVprograms;and (#(# 0  AprovisionthattheIPAisrequiredtoprovideED,theInspectorGeneralandtheir  representativesaccesstoworkingpapers(includingmakingphotocopies,asnecessary).[_ԢIPAs_ԀshouldrefertoAUSection9339,"InterpretationsofAUSection339'WorkingPapers,'"oftheAICPAProfessionalStandardsforguidance.] (#(# ~XLXXXLAlthoughnotamandatoryrequirement,thisGuidesuggeststhatpractitionersalsoincludeastatementintheengagementletterthatdescribesthepractitionersresponsibilitytocommunicateandreportfraudulentactsorindicationsofsuchactsdirectlytotheEDOfficeofInspectorGeneral. FollowuponPriorAuditFindings  h 0 #XLXX~XL/#ThisGuiderequirespractitionersto: H" 0  followuponreportedfindingsandrecommendationsfrompreviousauditsandreviewsto ($! determinewhethertimelyandappropriatecorrectiveactionhasbeentaken;and%"(#(# 0  reportthestatusofuncorrectedreportedfindingsandrecommendations.&!$(#(# TheIPAshouldreviewpriorfindings,includingfindingsfromthepreviousIPAaudit,andrecentED_ԢOIG_Ԁaudits,EDandguarantyagencyauditsorprogramreviews,includingtheresolutionofthosefindings.InmanycasestheproceduresperformedinthecurrentauditwillprovideabasisfortheIPAtoevaluatepriorfindings.Ifpriorfindingshaveallbeencorrected,makeastatementtothateffect.AnillustrativereportforprovidingauditorscommentsonresolutionmattersisshowninExampleGofthisGuide.XXXXLj    x.@), jɰide   #XLXXX#~XLXXXL  WorkingPapers jԀ#XLXX~XLK#~XLXXXL 8 Forboththefinancialstatementauditandthecomplianceaudit,practitionersshouldfollowtheguidanceinparagraphs4.34through4.38ofGovernmentAuditingStandards(GAS),which  addressworkingpapers.Inadditiontoretainingarecordoftheworkperformedintheformofworkingpapers,paragraph4.35ofGASstatesfurtherthatthepractitionersworkingpapersshould containsufficientinformationtoenableanexperiencedauditorhavingnoprevious   connectionwiththeaudittoascertainfromthemtheevidencethatsupportstheauditorssignificantconclusionsandjudgments.Theworkingpapersshouldcontain:   #XLXX~XLȱ#~XLXXXL0  #XLXX~XL#~XLXXXLtheobjectives,scope,andmethodology,includinganysamplingcriteriaused;` (#(# #XLXX~XL6#~XLXXXL0  #XLXX~XL#~XLXXXLdocumentationoftheworkperformedtosupportsignificantconclusionsandjudgments; x@  and (#(# #XLXX~XL7#~XLXXXL0  #XLXX~XL#~XLXXXLevidenceofsupervisoryreview.H(#(# Inaddition,forthecomplianceaudit,paragraph71of_ԢSSAE_ԀNo.1,AttestationStandards ( (AICPA,ProfessionalStandards,ATsec.100.78)saysthatworkingpapers ...ordinarilyshould  indicatethat(a)theworkwasadequatelyplannedandsupervisedandthat(b)evidentialmatter  wasobtainedtoprovideareasonablebasisfortheconclusionorconclusionsexpressedinthepractitionersreport.  _ԢServicers_Ԁorpractitionerswhodeemanyoftheworkingpaperinformationtobe"confidentialcommercialinformation"shouldtakeappropriatestepstosodesignatethatinformation.Suchdesignationmayprotectitsconfidentialityif,inthefuture,arequestismadefordisclosureofthisinformationundertheFreedomofInformationAct(_ԢFOIA_)."Confidentialcommercialinformation"meansrecordsthatmaycontainmaterialprotectedfromreleaseunderExemption4ofthe_ԢFOIA_Ԁ(pertainingtotradesecretsandcommercialorfinancialinformationthatisprivilegedorconfidential)becausedisclosurecouldreasonablybeexpectedtocausesubstantialcompetitiveharm.#XLXX~XLP#ED_ԢOIG_Ԁhasimplementedproceduresforevaluatingauditsperformedbynon-Federalauditors. 8#  Aspartofthisevaluation,theIPAmustmakethesupportingauditworkingpapersavailabletoED_ԢOIG_Ԁuponrequestinaccordancewith34_ԢCFR_Ԁ668.23(e).~XLXXXLTofacilitatetheserequests,the %" managementsreportingpackageshouldincludeaninformationsheet(ExampleE)identifyingthename,address,andtelephonenumberofthepartnerontheengagement.Workingpaperreviewswillnormallytakeplaceatthepractitioner'soffice.#XLXX~XLl#Iftheworkingpapersarerequested,theIPA '"% shouldconsidertheguidanceinAUSection9339.1,ProvidingAccesstoorPhotocopiesof (#& WorkingPaperstoaRegulator.~XLXXXL )$' #XLXX~XL#~XLXXXLWheneveranevaluationofareportorworkingpapersdisclosesinadequacies,thepractitionermay +p&) beaskedtotakecorrectiveaction.CertainStateBoardsofAccountancyhaverequestedthattheED_ԢOIG_Ԁsendthemcopiesofcorrespondencedetailingdeficienciesnotedduringitsreviews.Thisincludesthelicensee'shomestateandthestate(s)wheretheengagementwasconducted,if x.@), different.Thisisforinformationonlyandisnotareferralfordisciplinaryactionatthistime.However,ifED_ԢOIG_Ԁdeterminesthatthereportandworkingpaperscontainrepetitivesubstandardperformanceorsignificantinadequacies,referraltotheAICPAandthecognizantStateBoardofAccountancywillbeconsidered.Inthisinstance,ED_ԢOIG_Ԁmayalsoinitiateactiontosuspendanddebarthepractitionerfromperforminggovernmentalauditwork.#XLXX~XL#~XLXXXL#XLXX~XL# AUDITSUBMISSION/REPORTINGPACKAGE    The_Ԣservicer_Ԁmusttransmittwocopiesoftheauditreportpackageandacorrectiveactionplanto:   `    U.S.DepartmentofEducation   `    _ԢSFA_/FinancialAnalysisandOversight   `    400MarylandAvenue,_ԢS.W._   `    ROB3  0 ` Room4616,MailStop#5138X ` (#` (#    `    Washington,D.C.202025138     H    `    2024012280 FinancialStatementReporting   A_Ԣservicer_'sfinancialstatementportionoftheauditreportpackagemustincludethefollowing:1.0  AReportontheAuditoftheBasicFinancialStatements(ExampleA1); AND (#(# 2.0  AXXXXLReportonComplianceandonInternalControlOverFinancialReporting#XLXXX#XXXXLԀBasedonan  AuditofFinancialStatementsPerformedinAccordanceWithGovernmentAuditing p Standards#XLXXX#ԀXXXXL[NoReportableInstancesofNoncomplianceandNoMaterialWeaknesses,No \ ReportableConditionsIdentified]#XLXXX[#Ԁ(ExampleA2); OR L(#(# 3.0  AReportonComplianceandonInternalControlOverFinancialReportingBasedonan d , AuditofFinancialStatementsPerformedinAccordanceWithGovernmentAuditing T! Standards[ReportableInstancesofNoncomplianceandReportableConditionsIdentified] D"  (ExampleA3). (#(#   ComplianceAttestationReporting  %" ~XLXXXLThecompliancereport,orthecompliancereportsectionifasinglecombinationfinancialand &!$ complianceauditreportpackageisissued,muststartwithapagethatclearlyidentifiestheϢservicersnameandaddress,andperiodexamined.Thereportingpackagemustincludethefollowing:1.0  ReportCoverPage(ExampleB)+l&)(#(# 2.0  AReportonCompliancewithSpecifiedRequirementsApplicabletotheFFELProgram -L(+ (ExampleC);t.<),(#(# ]    30  AReportonInternalControlOverComplianceinaccordancewith_ԢSSAE_Ԁ#3,asamended ( #XLXX~XL #~XLXXXLby_ԢSSAE_Ԁ#9,paragraph44(NoReportableConditions)(ExampleD1);#XLXX~XLS#Ԁ OR (#(# ~XLXXXL0  AReportonInternalControlOverComplianceinaccordancewith_ԢSSAE_Ԁ#3,asamended  #XLXX~XL"#~XLXXXLby_ԢSSAE_Ԁ#9,paragraph44(ReportableConditionsIdentified[NoMaterialWeaknesses])   #XLXX~XL#~XLXXXL(ExampleD2);#XLXX~XL#~XLXXXLԀ#XLXX~XL# (#(# ~XLXXXL4.  InformationSheet(ExampleE);   #XLXX~XLy#~XLXXXL5.0  ScheduleofFindingsandQuestionedCosts(ExampleF);` (#(# 6.0  Auditor'scommentsonresolutionmattersrelatingtotheFFELProgram(ExampleG);x@ (#(# 7.0  CorrectiveActionPlan(ExampleH);andX (#(# 8.0  Aseparatereportonillegalactsthatcouldresultincriminalprosecutionifonewas 8 submittedinaccordancewiththeinstructionssetforthearlierinthisGuide. T T T Tz T T T T   2      ף((#(# #XLXX~XL# AUDITOFFINANCIALSTATEMENTS   Theauditoftheservicer'sbasicGAAPfinancialstatementsmustbeperformedinaccordancewithASandgenerallyacceptedauditingstandards(GAAS).   ConsiderationofInternalControl   GuidanceontheIPA'sconsiderationofinternalcontrolinthefinancialstatementauditisprovidedinGASandSASNo.78,ConsiderationofInternalControlinaFinancialStatementAudit.The P IPA'sresponsibilitytocommunicatereportableconditionsandmaterialweaknessesininternalcontrolnotedinthefinancialstatementauditaredescribedinSASNo.60,Communicationof h 0 ̀InternalControlRelatedMattersNotedinanAuditandGASandSASNo.87,RestrictingtheUse H" ofanAuditorsReport. 8#  ~XLXXXLManagementisresponsibleforestablishingandmaintaininginternalcontrol.#XLXX~XL#ԀAuditstandards %" requirepractitionerstoobtainasufficientunderstandingofthe_Ԣservicer_sinternalcontroltoplantheaudit.Thisincludesobtaininganunderstandingofinternalcontrolrelevanttothefinancialstatementassertionsaffectedbylawsandregulations. '"% ЇPractitionersshouldfollowtheinternalcontrolguidancecontainedinparagraphs4.22through4.33ofGASconcerningthecontrolenvironment,safeguardingcontrols,controlsovercompliance ( withlawsandregulations,andcontrolriskassessmentswhenperformingthefinancialstatementauditsastheseaspectsofinternalcontrolareimportanttothejudgmentspractitionersmakeaboutauditriskandaboutevidenceneededtosupporttheiropiniononthefinancialstatements.Inadditiontoobtaininganunderstandingofthe_Ԣservicer_sinternalcontrol,practitionersengagedtoexaminea_Ԣservicer_Ԁmanagementsfinancialstatementsarerequiredtoassesscontrolrisk.ThisGuiderequiresthatpractitionersassesscontrolriskbyfinancialstatementassertion(s)foreachfinancialstatementlineitem.XXXXL#XLXXX"#Practitionersshouldreportdeficienciesininternalcontrolthattheyconsidertobe reportable L  conditions.~XLXXXLԀReportableconditionsinvolvemattersrelatingtosignificantdeficienciesinthedesign t<  oroperationofinternalcontrolthatcouldadverselyaffectthe_Ԣservicer_sabilitytorecord,process,summarize,andreportfinancialdataconsistentwiththeassertionsofmanagementinthefinancialstatements.Amaterialweaknessisareportableconditioninwhichthedesignoroperationofinternalcontroldoesnotreducetoarelativelylowleveltheriskthaterrorsorirregularitiesinamountsthatwouldbematerialinrelationtothefinancialstatementsbeingauditedcouldoccurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheirassignedfunctions.#XLXX~XL#ManagementandpractitionersshouldbeawarethatthereportingcriteriaandrequiredaccompanyingreportoninternalcontrolrequiredforthefinancialstatementauditisnotthesameasorasubstituteforthereportingcriteriaandaccompanyingreportoninternalcontrolforthecomplianceauditrequiredinthisGuide. Materiality  \ ~XLXXXLParagraph4.8ofGovernmentAuditingStandardsstatesthatmaterialityinafinancialstatement t< auditisamatterofprofessionaljudgmentandisinfluencedbythepractitionersperceptionofthe d ,  needsofareasonablepersonwhowillrelyonthefinancialstatements.EDintendstorelyon T! thefinancialdataandreportssubmittedby_Ԣservicers_Ԁtohelpmeetitsstewardshipresponsibilitiesinoverseeingthe_ԢFFEL_ԀProgram.Becauseofthis,practitionersarepermittedbutnotrequiredtosetlowermaterialitylevelswhenperformingtheexaminationofthe_Ԣservicer_sfinancialstatements.#XLXX~XL#~XLXXXL#XLXX~XL#  CompliancewithLawsandRegulations &Ԁ '"% Paragraph4.15ofGASstatesthatpractitionersarerequiredto obtainanunderstandingofthe )$' possibleeffectsonfinancialstatementsoflawsandregulationsthataregenerallyrecognizedbyauditorstohaveadirectandmaterialeffectonthedeterminationofamountsinthefinancialstatements. ,\'*   -L(+ TherequirementsidentifiedinSectionIIofthisGuidemaynotcoverallthelawsandregulations withwhichnoncompliancecouldhaveadirectandmaterialeffectonthefinancialstatementamounts.Practitioners,therefore,mayhavetousetheworkoflegalcounselindeterminingwhichlawsandregulations,inadditiontothosenotedinthisGuide,mustbeconsideredforthefinancialstatementaudit.nXLXXXLThepractitionershoulddefinewhatwouldbeconsideredmaterialin  therequesttolegalcounsel.#XLXXnXL#ԀThedeterminationofwhichlawsandregulationsmayhaveadirect   andmaterialeffectonfinancialstatementamountsshouldbeproperlydocumentedintheauditworkingpapers. ManagementandLegalCounselRepresentationLetters  p   TheIPAisrequiredtoobtainmanagement'sandlegalcounsel'swrittenrepresentationsaspart P  ofthefinancialstatementaudit.Management'swrittenrepresentationsmustalsobeobtainedformattersconcerningcompliancewith_ԢFFEL_ԀProgramlawsandregulationsthathaveadirectandmaterialeffectonthefinancialstatementamounts.AdditionalguidanceisprovidedinSASNo.85,ManagementRepresentationsandSASNo.12,InquiryofaClient'sLawyerConcerning H Litigation,Claims,andAssessments. 8  COMPLIANCEATTESTATIONENGAGEMENT   Thecomplianceattestationengagementmustbeperformedasanexaminationlevelengagementinaccordancewith_ԢSSAEs_ԀandGAS.Management'swrittenassertionsarethebasisfortheIPA's  testingandthereforeareanintegralpartoftheengagement.XXXXLThe_Ԣservicer_Ԁmanagementshould  determinewhethertheentityperformsthefunctionsaddressedinSectionIIandwhetheritcanmakeallorpartoftherequiredmanagementassertions.Ifa_Ԣservicer_Ԁdoesnotperformforanyofitsguarantyagencyclients,thefunctionsaddressedbyasingleassertion,thatassertionmaybemodifiedbutmustclearlyidentifytheresponsibilitiesofthe_Ԣservicer_Ԁsothatthe_Ԣservicer_Ԁmanagementswrittenassertionsaddressonlythefunctionsthe_Ԣservicer_Ԁperforms.#XLXXX[#~XLXXXLԀ Otherwise,managementistoprovide x@ allwrittenassertionsandrepresentationsrequiredbytheGuide.#XLXX~XLQ#_ԢSSAE_Ԁ#1,asamendedby_ԢSSAE_Ԁ#9,paragraph1definesanattestengagementas:! ,XXX!8  ...oneinwhichapractitionerisengagedtoissueordoesissueawritten (#  communicationthatexpressesaconclusionaboutthereliabilityofawrittenassertionthatistheresponsibilityofanotherparty.%"   Furthermore,_ԢSSAE_Ԁ#9,paragraph10states:8  Performingattestservicesisdifferentfrompreparingandpresentinganassertion. )$' Thelatterinvolvescollecting,classifying,summarizing,andcommunicatinginformation;thisusuallyentailsreducingamassofdetaileddatatoamanageableandunderstandableform.Ontheotherhand,performingattestservicesinvolvesgatheringevidencetosupporttheassertionandobjectivelyassessingthemeasurementsandcommunicationsofthe_Ԣasserter_.Thus,attestservicesare h.0), analytical,critical,investigative,andconcernedwiththebasisandsupportfortheassertion.(   ~XLXXXL_ԢSSAE_ԀNo.3,asamendedby_ԢSSAE_ԀNo.9,paragraph9c,states,inpart,apractitionermay  performanexaminationengagementifmanagementmakeswrittenassertionsabouttheentityscompliancewiththespecifiedrequirements.Management'swrittenassertionsarethebasisforthepractitioner'stestingand,therefore,areanintegralpartoftheengagement.Thenatureofthewrittenassertionsmadebythe_Ԣservicer_Ԁmanagement(and,thus,thescopeofthepractitionersengagement)mayvarydependingontheextenttowhichthe_Ԣservicer_Ԁperformscertaincompliancefunctionsonbehalfoftheirguarantyagencyclients.Because_Ԣservicers_ԀarenotrequiredtomakesuchspecificwrittenassertionstoED,suchassertionsshouldbeobtainedfrommanagementinarepresentationlettertothepractitioner.#XLXX~XL#~XLXXXLInadditiontothespecificassertionsidentifiedintheGuide,asapplicable,managementmustalsoprovideintheletter,writtenrepresentationsaboutthemattersin_ԢSSAE_ԀNo.3,asamendedby_ԢSSAE_ԀNo.9,paragraph67.Ifmanagementomitsanyoftherequiredassertions(exceptforassertionsrelatingtofunctionsnotperformedbythe_Ԣservicer_)orrepresentations,thepractitionershouldconsidertheguidancein_ԢSSAE_ԀNo.3,asamendedby_ԢSSAE_ԀNo.9,paragraphs57and68aboutrestrictionsonthescopeoftheengagement.#XLXX~XL#XXXXL ContractingWithMoreThanOneGuarantyAgency   Some_Ԣservicers_Ԁperformdifferentservicesfordifferentguarantyagencies.ThisGuideprovidesfora_Ԣservicer_Ԁwithmorethanoneguarantyagencyclienttosubmitasingle,organizationwidereportthatcoversthecompliancefunctionsaddressedinSectionIIforeachguarantyagency#XLXXX#~XLXXXL._ԢServicers_Ԁshould t completeExampleE,includingtheassociatedmatrix,identifyingtheirguarantyagencyclientsandthecompliancefunctionsperformedforeach.  InherentRisk Ԁ l4 _ԢSSAE_ԀNo.3,asamendedby_ԢSSAE_ԀNo.9,paragraph30,requiresthat,inassessinginherentrisk,thepractitioner shouldconsiderfactorsrelevanttocomplianceengagements,suchas...prior <" experiencewiththeentityscompliance[and]thepotentialimpactofnoncompliance.Inaddition, ,#  _ԢSSAE_ԀNo.3,asamendedby_ԢSSAE_ԀNo.9,paragraph46,states:8  Forengagementsinvolvingcompliancewithregulatoryrequirements,the % # practitionersproceduresshouldincludereviewingreportsofsignificantexaminationsandrelatedcommunicationsbetweenregulatoryagenciesandtheentityand,whenappropriate,makinginquiriesoftheregulatoryagencies,includinginquiriesaboutexaminationsinprogress.)$'   Accordingly,thisGuiderequiresthepractitionertoconsiderreportednoncomplianceidentifiedinprioraudits,guarantyagencyreviews,andEDprogramreviewsrelatedtothe_ԢFFEL_ԀProgram.(Seealsothe AuditFollowUpinprevioussectionofGuide.) |-D(+  l.4), #XLXX~XL# ConsiderationofInternalControlOverCompliance  8 OverallguidancefortheconsiderationofinternalcontrolinanexaminationlevelattestationengagementisprovidedinGASandin_ԢSSAE_Ԁ#3,asamendedby_ԢSSAE_Ԁ#9,paragraphs42through  44.Paragraph42statesthattheIPAshouldobtainanunderstandingofrelevantportionsofinternalcontrolovercompliancesufficienttoplantheexaminationengagementandtoassesscontrolriskforcompliancewiththespecifiedrequirements(thatis,compliancerequirementsspecifiedinSectionIIandSectionIV). _ԢIPAs_Ԁmustdocumenttheirunderstanding(mayinclude   flowcharts,narrative,orothermeans)andtheirassessmentofcontrolrisk .SectionIIofthis   Guideincludefootnotesforthesuggestedauditproceduresthathaverelatedinternalcontrolandriskassessmentdocumentationrequirements.Duringanexaminationlevelattestationengagement,theIPAmaybecomeawareofreportableconditionsormaterialweaknessesinthe_Ԣservicer_'sinternalcontrolovercompliance.Areportableconditionisasignificantdeficiencyinthedesignoroperationofinternalcontrolovercompliancethatcouldadverselyaffectthe_Ԣservicer_'sabilitytocomplywiththespecifiedrequirements.Amaterialweaknessisareportableconditioninwhichthedesignoroperationofinternalcontroldoesnotreducetoarelativelylowleveltheriskthatnoncompliancewithoneormoreofthespecifiedrequirementscouldoccurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheirassignedfunctions.TheIPA'sresponsibilitytocommunicatethesedeficienciesinanexaminationofmanagement'sassertionissimilartotheIPA'sresponsibilitydescribedinSASNo.60(AUsec.325).However,thisGuiderequiresallcommunicationsofreportableconditionsandmaterialweaknessesininternalcontrolovercompliancetobeinwritingandrequirestheIPAtoincludeacopyofsuchreport(s)intheIPA'sreportingpackage(SeeExampleD). The_ԢIPAs_Ԁconsiderationsonmaterialityshouldbe  properlydocumentedintheauditworkingpapers.Materiality  P _ԢSSAE_Ԁ#3,asamendedby_ԢSSAE_Ԁ#9,paragraphs33and52providesguidanceontheIPA'sconsiderationofmaterialityasitrelatestoeachseparatemanagementassertionaboutcompliance.Materialityforpurposesofcomplianceassertionsdiffersfrommaterialityforfinancialreportingpurposes.Accordingly,materialityrelatestoeachseparatemanagementassertionaboutcompliance.TheIPAshouldconsiderthematerialityofmanagement'sassertionsinrelationtoeachoftheindividualservicesperformed.TheIPAshouldissueaqualifiedoradverseopinionwhenreportinginstancesofnoncompliancethatarematerialinrelationtoeachofthespecificcompliancerequirementsThisGuidealsorequiresall_Ԣservicer_Ԁnoncompliancetobereported(exceptforcertaininstancesofimmaterialnoncompliance)intheauditors ScheduleofFindingsandQuestionedCosts(see )$'  ReportingNoncompliancelaterinthissection). *%( ~XLXXXL ObtainingSufficientEvidenceandSampling 󀀀 ,`'*   -P(+ TheexaminationproceduressuggestedinthisGuidearenotallofthosethatthepractitionermay determinearenecessarytoprovidereasonableassuranceofdetectingmaterialnoncompliance,noraretheyintendedtosupplantthepractitionersjudgmentoftheworkrequired.Suggestedproceduresdescribedmaynotcoverallcircumstancesorconditionsencountered.Further,theGuidedoesnotsuggestproceduresforperformingthefinancialstatementauditoranexaminationofa_Ԣservicer_Ԁmanagementsassertionaboutthe_Ԣservicer_sinternalcontrolovercompliancewiththespecifiedrequirements.Forthefinancialstatementaudit,practitionersshouldrefertoguidanceabout EvidentialMatterinSASNo.31(SASNo.80,AmendmenttoSASNo.31,   EvidentialMatter,forengagementsbeginningonorafterJanuary1,1997).Forthecompliance   audit,practitionersshouldrefertoguidanceabout ObtainingSufficientEvidencein_ԢSSAE_ԀNo.  p  3,asamendedby_ԢSSAE_ԀNo.9,paragraphs45and47#XLXX~XLt#~XLXXXL. `  AlthoughthisGuiderequiresnospecificorminimumsamplesizeorsamplingmethodologyforthecomplianceaudit,itdoesrequirethatsamplesbeselectedinsuchawaytoberepresentativeofthepopulationandperiodunderaudit,theguarantyagencyclientsserviced,andthefunctionsperformedbythe_Ԣservicer_Ԁforthoseguarantyagencyclientsthatarecontainedinthecompliancerequirement.PractitionersshouldconsidertheguidanceintheAICPAsProfessionalStandards, 8 vol.1,AUsec.350,AuditSampling. ThisGuiderequires#XLXX~XL#Ԁpractitionerstodocumentthe ( samplingmethodologyusedXXXXLԀintheirworkingpapers#XLXXX!#XXXXL.#XLXXXK"#Ԁ~XLXXXL   #XLXX~XL"#  WhenselectingarepresentativesampleofborrowersfromtheNationalStudentLoanDataSystem  (_ԢNSLDS_),thepractitionershouldpullthesamplefromtheguarantyagencysmostrecent_ԢNSLDS_extractthatwassenttoED.ThepractitionerisnotrequiredtocontactEDs_ԢNSLDS_Ԁcontractortoobtainarepresentativesamplefromitsdatabase.   ReportingNoncompliance  p Thisguiderequiresthatallinstancesofnoncomplianceidentifiedbythe_Ԣservicer_'smanagementinitsassertionsorbytheIPAduringhis/herengagementmustbereportedasafindingintheScheduleofFindingsandQuestionedCosts.Thisapplieseveninthosecaseswherecorrectiveactionwastakenbythe_Ԣservicer_Ԁaftertheexaminationperiod.Theonlyexceptionsarethoseinstancesofnoncompliancethatweredetectedbythe_Ԣauditee_'sinternalcontrolandforwhichcompletecorrectiveactionhasbeensatisfactorilyaccomplished. ManagementssassertionsandtheIPAsreportsissuedpursuanttothisguideareaprimarytool %" usedbyprogrammanagersinmeetingtheirstewardshipresponsibilitiesinoverseeingthe_ԢFFEL_program.Theareasofnoncompliancenotedinmanagementsassertionsand/ortheIPAsreportsmustbeacteduponbyEDprogrammanagers.Tobeofvalue,thesereportsmustcontainadequateinformationtogivereportedmattersperspectiveandtoallowthemanagerstotakenecessarycorrectiveaction.Assuch,foreachinstanceofnoncompliancereported,thefollowinginformationmustbepresentedintheSchedule,ifapplicable:0  Identifyinginformationfortheguarantyagenciesthatcomprisethepopulationfromwhich ,`'* thesamplewasselected; (#(#  x.@),  X   0  Samplingmethodology;(#(# 0  Numberofunitsanddollarvalueofthepopulation;(#(# 0  Numberofunitsanddollarvalueoftheselectedsample;(#(# 0  Numberofunitsanddollarvalueoftheinstancesofnoncompliance;and (#(# 0  Populationofapplicabletransactionsadministeredbythe_Ԣservicer_Ԁforeachguarantyagency w  inthepopulation. (#(#   W`  FUTUREREVISIONS   IXLXXXLXLXXXL  I.  Revisionstocertainauditingstandardsarecontemplated.Astheybecomeeffective,theIPAmust  modifyauditperformancetomeettherevisedauditstandards.I.y.݌̌XLXXXLXLXXXL  EDperiodicallyrevisesthe_ԢFFEL_ԀProgramcompliancerequirements,andthe_ԢOIG_ԀplanstoissuerevisionstothisGuidetoreflectchanges.TheIPAisresponsibleforassuringthathe/sheisusingthemostcurrentversionofthisGuide.Uponbeginningtheauditengagement,theIPAshouldreviewtheED_ԢOIG_ԀNonFederalAuditTeam_Ԣinternet_Ԁ_Ԣwebsite_ԀatϢhttp://www.ed.gov/offices/OIG/nonfed/sfa.htm,todeterminethemostcurrentversionofthisguidewhichshouldbeused._Ԣ T T T T{ T T T T_AnysuggestionsforimprovementtothisGuidearewelcomeandshouldbesentto:   `    U.S.DepartmentofEducation   `    OfficeofInspectorGeneral   `    Director,NonFederalAudits   `    _ԢWanamaker_ԀBuilding   `    100PennSquareEast,Suite502   `    _ԢPhiladelphia,PA_Ԁ19107   `    Fax:(215)6568628    +@%SECTIONII X   REQUIREDMANAGEMENTASSERTIONS,COMPLIANCE 8 REQUIREMENTS,ANDSUGGESTEDPROCEDURES5INTRODUCTION   Thissection:1.0  Setsforththecompliancerequirementsthatarethesubjectofmanagement'swritten  p  assertions; (#(# 2.0  Brieflydescribestherelatedregulatoryrequirements[Note:Exceptforthemanagement  @  assertions,_ԢIPAs_Ԁshouldconsidertheterm agencyor guarantyagencyreferredtointhis 0  sectionasapplyingtoa_Ԣservicer_Ԁactingonbehalfoftheguarantyagency];andx (#(# 3.0  Providesguidanceonthegeneralapproachthepractitionershouldconsiderindesigning X andcarryingoutproceduresinhisorherexaminationofmanagement'swrittenassertions. (#(# ~XLXXXLAsdiscussedinSectionI,thesuggestedproceduresinthisGuidearenotintendedtobeacomplete  manualofprocedures,maynotcoverallcircumstancesorconditionsencountered,anddonotsupplantthepractitionersjudgmentoftheworkrequired.#XLXX~XL9#XXXXL#XLXXX(;#~XLXXXL_ԢSSAE_ԀNo.3,asamendedbyparagraph37of#XLXX~XLk;#~XLXXXL_ԢSSAE_ԀNo.9,statesthatapractitionershould obtain#XLXX~XL;#XXXXL | #XLXXX<#~XLXXXLanunderstandingofthespecifiedcompliancerequirementsconsideringrelevantlaws, l regulations#XLXX~XL<#XXXXL,#XLXXX=#~XLXXXLandcontracts.Accordingly,amongothersources,thepractitionershouldhaveready \ accessto#XLXX~XL=#~XLXXXL: L |(X4 hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[,XX#XLXX~XL>#0  ~XLXXXL34_ԢCFR_ԀPart682#XLXX~XL?#XLXXXL;,(#(# #XLXXXL@#0  XLXXXLGuarantyAgencyQuarterly/AnnualReports(EDForm1130)#XLXXXL@#XLXXXL;d (#(# #XLXXXL@#0  XLXXXLGuarantyAgencyMonthlyClaimsandCollectionsReports(EDForm1189)#XLXXXLmA#XLXXXL; D!!  4  (#(# #XLXXXLA#0  XLXXXLNationalStudentLoanDataSystem;$# #(#(# #XLXXXLB#0  XLXXXLHigherEducationActof1965,asamended;%"%(#(# #XLXXXL'C#0  XLXXXLStudentStatusConfirmationReports/NotificationofChangeInformation&$'(#(# #XLXXXLC#0  XLXXXLSummaryanddetailedloanrecordsandsupportingloanrecords;(l&)(#(# #XLXXXLzD#0  XLXXXLGuarantyagencycontractswith_servicers_;*L(+(#(#   +<), +    #XLXXXL*E#0  XLXXXLDearColleagueLetter96-L-186/96-G-287SubjectClarificationandinterpretativeguidance  oncertainprovisionsinthe_FFEL_ԀProgramregulationspublishedon T T T T T T T TDecember18,1992.(#(# [Note:Tohelpensureconsistentimplementationoftheregulations,EDissuedaseriesoffollowup letterstoclarifytheanswerscontainedinthe_ԢDCL_.ThreeofthelettersweredatedMarch14,1996,April24,1996,andMay31,1996];and f #XLXXXLMF#0  ~XLXXXLDearColleagueLetter98G314SubjectRevisedGuarantyAgencyQuarterly/Annual F  Report(EDForm1130),RevisedInstructions,RevisedDueDatesandExtensionoftheGuarantyAgencyMonthlyClaimsandCollectionsReport(EDForm1189).0x(#(#& x(#x(# #XLXX~XLGI#~XLXXXL   J   `  1.  EDFORMS1189and1130   KManagementAssertion   #XLXX~XLJ#~XLXXXL@*#XLXX~XLK#~XLXXXL Theloaninformation(loantypes,interestrate,beginningandendingprincipalloan f balances,andloanstatus(pastdue,ingrace,indeferment))reportedonEDForm1189andEDForm1130preparedby[nameof_ԢServicer_]andsubmittedtoEDonbehalfofourguarantyagencyclientsagreeswithsysteminformationandsupportingdocumentation.#XLXX~XLL#~XLXXXL 6   #XLXX~XLM#~XLXXXL ComplianceRequirements   p  Theguarantyagencyshallmaintaincurrentcompleterecordsforeachloanthatitholds.Therecordsshallbemaintainedinasystemthatallowsreadyidentificationofeachloanscurrentstatus,updatedatleastevery10businessdays.TheEDForm1189isthecornerstoneofthemonthlycycleusedbyEDtocarryoutfinancialactivitiesbetweeneachguarantyagencyandED.EDusestheinformationfromtheEDForm1189aswellasrelevantdatafromtheGuarantyAgencyQuarterly/AnnualReport(EDForm1130)todetermineandprocesspaymentsfromandtotheguarantyagency.AguarantyagencyusestheEDForm1189torequestpaymentsofreinsurancefor_ԢFFEL_ԀProgramclaimspaidtolendersandtorequestcertainpayments.AnagencyalsousestheformtoreportamountsdueEDforcollectionsondefaultedloansonwhichreinsurancehasbeenpaidandforrefundingamountspreviouslypaidforreinsuranceclaims.TheEDForm1189requiressummaryinformationonlyconcerningaguarantyagencysclaims,collections,andrelatedactivityoveramonthlyperiod.TheguarantyagencyshallmaintaindetailedrecordstosupporteachentryontheEDForm1189andbeabletoreconstructtheentriesbacktoindividualloan,borrowerorlenderlevels,ortospecificguarantyagencyleveltransactions.Thisincludeskeepingaccuraterecordsofreinsurancepaymentsandcollectionsondefaultedloansattheloanandborrowerlevel.TheEDForm1130GuarantyAgencyQuarterly/AnnualReportshallbesubmittedbyeachparticipatingguarantyagencyonbothaquarterlyandanannualbasis.TheinformationintheEDForm1130isusedbytheDepartmentofEducationtodeterminewhetherguarantyagenciesareproperlyadministeringthe_ԢFFEL_ԀProgram,theamounttopayeachguarantyagencyfortransitionsupport,includingadministrativecostallowanceandreinsuranceclaims.#XLXX~XLIN#~XLXXXLԀTheSecretaryusesthe v% # quarterlyreportforthepreviousSeptember30tocalculatetheamountofloansinrepaymentattheendoftheprecedingfiscalyear.#XLXX~XLgV#ԀXXXXLIndeterminingwhichamountstotest,particularattention V'"% shouldbegiventotheSeptember30amountsforcurrentyeardefaults,currentyearcollections,loansreceivableandthesourcesandusesoffundsforthereserveaccount(orequivalentlineitem(s)pertainingtotheFederal/OperatingFundsfortheSeptember30report).#XLXXX]W#~XLXXXLInadditiontotheEDForms1189and1130,guarantyagenciesarerequiredtosubmitloanlevel +P'* detailinformationtotheNationalStudentLoanDataSystem(_ԢNSLDS_).Keydataelementsonthe_ԢNSLDS_Ԁextractinclude:socialsecuritynumber,lastname,originalschoolcode,academiclevel,currentschoolcode,enrollmentstatuscode,enrollmentstatusdate,originatinglendercode,loan . *- guaranteedate,amountofguarantee,currentholderlendercode,dateenteredrepayment,loanstatuscode,loanstatusdate,amountofclaimpaidtolender,andforloanswithadefaultedstatusoutstandingprincipal,interestandfeeamounts.#XLXX~XLY#~XLXXXL SuggestedProcedures  f a.0  SelectanEDForm1189andanEDForm1130(whichcoverstheperiodSeptember30) F  #XLXX~XL(\#~XLXXXLpreparedbythe_Ԣservicer_ԀandsubmittedtoEDonbehalfofitsguarantyagencyclients#XLXX~XL]#~XLXXXLԀandtrace 6  loaninformationreportedtothe_Ԣservicers_Ԁsummarysystemrecordsorledgers.#XLXX~XL]#~XLXXXLԀ& (#(# #XLXX~XL^#~XLXXXL'b.0  ReconcileamountsreportedonEDForm1130forFederalreceivablesandreservestothe `  _Ԣservicer_saccountingsystem. (#(#    c.0  ReconcilekeyinformationreportedonEDForms1189and1130withthe_ԢNSLDS_ԀExtract 0  submittedbytheguarantyagency.#XLXX~XL^#[Note:SomedifferencesbetweentheEDForm1130   quarterlyreportandthe_ԢNSLDS_Ԁextractsmayexistduetotimingfactors](#(# ~XLXXXL   2.  FEDERALREINSURANCE    `   4 #XLXX~XLa#  ManagementAssertion     XXXXL  #XLXXXb#~XLXXXL TheloaninformationreportedinPartsA,B,andCoftheEDForm1130usedtocalculate b loansinrepaymentandsubmittedby[nameof_ԢServicer_]onbehalfofourguarantyagencyclientsduringthequarterendedSeptember30,agreeswithsummaryrecords(identifythesummaryrecords,suchasthegeneralorsubsidiaryledgers). #XLXX~XL5c#XXXXL 2  #XLXXXd# ~XLXXXLComplianceRequirements  l   TheSecretaryreimbursesguarantyagenciesforlossesondefaultclaimpaymentsmadetolenders. L  Reimbursementsaremadefordifferentpercentagesofguarantyagencylossesbasedonthepercentageofreinsuranceclaimspaidrelatedtotheloansinrepayment(reportedbytheGuarantyAgency)attheendoftheprecedingfiscalyear.Tobereimbursed,#XLXX~XL^e#~XLXXXLguarantyagenciesshallsubmit   aquarterly1130ReporttotheSecretary.Theinformationinthisreportisusedtodeterminewhetherguarantyagenciesareproperlyadministeringthe_ԢFFEL_ԀProgramandtoidentifytheamounttopayeachguarantyagency,aswellasanyamountthatshallbereturnedtoED.#XLXX~XLLg#~XLXXXLԀThe  SecretaryusesthereportforthepreviousquarterendingSeptember30containingcompleteandaccuratedatainordertocalculatetheamountofloansinrepaymentattheendoftheprecedingfiscalyear.#XLXX~XLh#TheSecretarydoesnotpayareinsuranceclaimtotheguarantyagencyafterthedate b thequarterlyreportisdueuntiltheguarantyagencysubmitsacompleteandaccuratereport(34_ԢCFR_Ԁ682.404).Section682.404(b)(3)ofTitle34oftheCodeofFederalRegulationsstatesthatthetotalofreinsuranceclaimspaidbytheSecretarytoaguarantyagencyduringanyfiscalyeardoesnotincludeamountspaidonclaimsbytheguarantyagency:(#(#(#xx9,XS XX4 X9Ӏ(#(#(# L  {S0   Onloansconsideredindefaultunder34_ԢCFR_Ԁ682.412(e);<(#(#  {S0   Underapolicyestablishedbytheagencythatisconsistentwith34CFR682.509(a)(1);orthat   werefiledbylendersatthedirectionoftheSecretary; (#(#  {S0   Onloansmadeunderaguarantyagency'sapprovedlenderoflastresortprogram.(#(#(#Ԁ#!(#(# Per34_ԢCFR_Ԁ682.404(b)(4),the amountofloansinrepaymentmeans: r% # Thesumof: {S0   Theoriginalprincipalamountofallloansguaranteedbytheagency;and(#(#(#Ԁ(#(#(#2)$'(#(#  {S0   Theoriginalprincipalamountofanyloansonwhichtheguaranteewastransferredtothe +l&) agencyfromanotheragency;(#(#(#Ԁ(#(#(# ,\'*  (#(# Minustheoriginalprincipalamountofallloansonwhich: .,*-  {S0   Theloanguaranteewascanceled;(#(#  {S0   Theloanguaranteewastransferredtoanotheragency;(#(#  {S0   Theborrowerhasnotyetreachedtherepaymentperiod;f(#(#  {S0   Paymentinfullhasbeenmadebytheborrower;F (#(#  {S0   Theborrowerwasindefermentstatusatthetimerepaymentwasscheduledtobeginand &  remainsindefermentstatus; (#(#  {S0   Reinsurancecoveragehasbeenlostandcannotberegained;andP (#(#  {S0   Theagencypaidclaims,excludingtheamountofthoseclaims:0 (#(# 0  {S0S(#(#  PaidunderSec.682.412(e);S(#S(#   {S0 S  Paidunderapolicyestablishedbytheagencythatisconsistentwith34_ԢCFR_  682.509(a)(1);or S(#S(#   {S0 S  PaidatthedirectionoftheSecretary.(#(#(#ԀfS(#S(# ~XLXXXL#XLXX~XLw#~XLXXXL   SuggestedProcedures  F a.0  ComparetheamountsofloansinrepaymentintheguarantyagencysystematSeptember30 & totheamountofloansinrepaymentderivedfromtheSeptember30thEDForm1130report.Determinetheproprietyofanydifference. (#(# b.0  Selectfromtheguarantyagencyssystem#XLXX~XL_w#~XLXXXLԀarepresentativesampleofloansin inschool, @  repaymentstatusandin repaymentstatusforover10years.Verifytheloanamountand 0 loanstatusbycontactingthecurrentholderoftheloanorschoolstoconfirmtheauthenticityandstatusoftheloans. (#(#  ManagementAssertion  #!  Duringtheyearended[mo/dy/yr],[nameof_ԢServicer_]receivedreinsuranceforonlythose v% # loansthatmettherequirementsforreinsurance. #XLXX~XL1y#XXXXL f&!$ #XLXXX{#  ~XLXXXL   B(#& ComplianceRequirements   #XLXX~XL0|#~XLXXXLAguarantyagencyisentitledtoreinsurancepaymentsonaloanonlyiftherequirementscitedin  34_ԢCFR_Ԁ682.406aremet.Aguarantyagencyshallmaintaincurrent,complete,andaccuraterecordsforeachloanthatitholdsandotherrecordsasdescribedin34_ԢCFR_Ԁ682.414.Someoftheprimarycompliancerequirementsthatmustbemetforaguarantyagencytobeentitledtoreceivereinsurancepaymentsinclude:3` X,XS X3#XLXX~XL|# {S0   XXXXL 1[Thelenderprovidedanaccuratecollectionhistoryandanaccuratepaymenthistorytothe  p  guarantyagencywiththedefaultclaimfiledontheloanshowingthatthelenderexercisedduediligenceincollectingtheloanthroughcollectioneffortsmeetingtherequirementsof34_ԢCFR_Sec.682.411,includingcollectioneffortsagainsteachendorser[34_ԢCFR_Ԁ682.406(a)(3)]; (#(# #XLXXX[# {S0   XXXXLTheloanwasindefaultbeforetheagencypaidadefaultclaimfiledthereon[34_ԢCFR_Ԁ682.406(a) x  (4)]#XLXXX#XXXXL;h (#(# #XLXXX# {S0   XXXXLThelenderfiledadefaultclaimthereonwiththeguarantyagencywithin90daysofdefault[34 N _ԢCFR_Ԁ682.406(a)(5)]#XLXXX&#XXXXL;>(#(# #XLXXX# {S0   XXXXLThelenderresubmittedaproperlydocumenteddefaultclaimtotheguarantyagencynotlaterthan ~ 60daysfromthedatetheagencyhadreturnedthatclaimduesolelytoinadequatedocumentation,exceptthatinterestaccruingbeyondthe30thdayafterthedatetheguarantyagencyreturnedtheclaimisnotreinsuredunlessthelenderfilesaclaimforlossontheloanwiththeguarantortogetherwithallrequireddocumentation,priortothe30thday[34_ԢCFR_Ԁ682.406(a)(6)]#XLXXX#XXXXL;2(#(# #XLXXX# {S0   XXXXLThelendersatisfiedallconditionsofguaranteecoveragesetbytheagency,unlesstheagency r reinstatedguaranteecoverageontheloanfollowingthelender'sfailuretosatisfysuchaconditionpursuanttowrittenpoliciesandproceduresestablishedbytheagency[34_ԢCFR_Ԁ682.406(a)(7)]#XLXXX#XXXXL;N(#(# #XLXXX# {S0   XXXXLTheagencypaidorreturnedtothelenderforadditionaldocumentationadefaultclaimthereon  filedbythelenderwithin90daysofthedatethelenderfiledtheclaimor,ifapplicable,theadditionaldocumentation,exceptthatinterestaccruingbeyondthe60thdayafterthedatethelenderoriginallyfiledtheclaimisnotreinsured[34_ԢCFR_Ԁ682.406(a)(8)]#XLXXX#XXXXL;V (#(# #XLXXX# {S0   XXXXLTheagencysubmittedarequestforthepaymentonaformrequiredbytheSecretarynolaterthan ! 45daysfollowingpaymentofadefaultclaimtothelender[34_ԢCFR_Ԁ682.406(a)(9)]#XLXXX#XXXXL;#XLXXXE#XXXXL"(#(# #XLXXX# {S0   XXXXLTheloanwaslegallyenforceablebythelenderwhentheagencypaidaclaimontheloantothe #  lender[34_ԢCFR_Ԁ682.406(a)(10)]#XLXXX#XXXXL;$ (#(# #XLXXX # {S0   XXXXLTheagencyexercisedduediligenceincollectionoftheloaninaccordancewith34_ԢCFR_ԀSec. %P!! 682.410(b)(6)or(7)[34_ԢCFR_Ԁ682.406(a)(11)];#XLXXX#XXXXL&@""(#(# Ѐ#XLXXX# {S0   XXXXLTheagencyandlendercompliedwithallotherFederalrequirementswithrespecttotheloan &(## includingthepaymentoforiginationfeesandcompliancewithall_Ԣpreclaims_Ԁassistancerequirementsin34_ԢCFR_Ԁ#XLXXXJ#XXXXLSec.682.404(a)(2)(ii)[34_ԢCFR_Ԁ682.406(a)(12)]#XLXXX#XXXXL;*\%%(#(# #XLXXXB# {S0   XXXXLTheagencyassignstheloantotheSecretary,ifsodirected,inaccordancewiththerequirements -)( of34_ԢCFR_Ԁ#XLXXXғ#XXXXLSec.682.409[34_ԢCFR_Ԁ682.406(a)(13)]#XLXXX#XXXXL;and. *)(#(# #XLXXX@# {S0   XXXXLTheguarantyagencycertifiestotheSecretarythatdiligentattemptshavebeenmadebythelender  andtheguarantyagencyunder34_ԢCFR_Ԁ#XLXXXҕ#XXXXLSec.682.411(g)tolocatetheborrowerthroughtheuse  ofreasonableskiptracingtechniques[34_ԢCFR_Ԁ682.406(a)(14)]#XLXXXҖ#XXXXL.(#(#  1[#XLXXX#~XLXXXLTheSecretaryrequiresaguarantyagencytorepayreinsurancepaymentsreceivedonaloanifthe  lenderortheagencyfailstomeettheserequirements.#XLXX~XL4#~XLXXXL   #XLXX~XL"#~XLXXXL SuggestedProcedures    #XLXX~XLy#~XLXXXL'SelectasampleofdefaultedloansfromtheEDForm1189reportsanddeterminethattheconditionsofreinsurancearemetanddocumentedforallloans.0  #XLXX~XL#~XLXXXL (#(#  #XLXX~XL#~XLXXXL  2  3.DEATH,DISABILITY,CLOSEDSCHOOL,FALSECERTIFICATIOǸANDBANKRUPTCYCLAIMS   %  ManagementAssertion #XLXX~XLR#~XLXXXL0  v(#(#  Duringtheyearended[mo/dy/yr],[nameof_ԢServicer_]a)paiddeath,disability,closed V  school,falsecertification,andbankruptcyclaimstolenderswithin45daysafterreceivingappropriatedocumentation;andb)didnotrequestpaymentfromEDpriortothelendersclaimbeingpaid.Inbankruptcyproceedings[nameof_ԢServicer_]tookspecificactionsinaccordancewith34_ԢCFR_Ԁ682.402(_Ԣi_).   p  #XLXX~XLA# ComplianceRequirements  P  IfanindividualborrowerorthestudentforwhichaparentborrowerreceivedaPLUSloandies,theobligationoftheborrowerandanyendorsertomakeanyfurtherpaymentsontheloaniscanceled,inaccordancewith34_ԢCFR_Ԁ682.402(b).Ifthelenderdeterminesthatanindividualborroweristotallyandpermanentlydisabled,theobligationofanyfurtherpaymentsontheloaniscanceledinaccordancewith34_ԢCFR_Ԁ682.402(c).Ifaborrower(orthestudentforwhomaparentreceivedaPLUSloan)couldnotcompletetheprogramofstudyforwhichtheloanwasintendedbecausetheschoolatwhichtheborrower(orstudent)wasenrolled,closed,ortheborrower(orstudent)withdrewfromtheschoolnotmorethan90dayspriortothedatetheschoolclosed,EDreimbursestheholderofaloanreceivedbyaborroweronorafterJanuary1,1986,anddischargestheborrower'sobligationwithrespecttotheloaninaccordancewiththeprovisionsof34_ԢCFR_Ԁ682.402(d)XXXXL.This90dayperiodmaybe & extendediftheSecretarydeterminesthatexceptionalcircumstancesrelatedtoaschool'sclosingwouldjustifyanextension.#XLXXX^#XXXXLIftheeligibilityofaborrowertoreceivealoan(orthestudentforwhomaparentreceivedaPLUS 4 loan)wasfalselycertifiedbyaneligibleschool,EDreimbursestheholderofaloanreceivedbyaborroweronorafterJanuary1,1986,anddischargesacurrentorformerborrower'sobligationwithrespecttotheloaninaccordancewiththeprovisionsof34_ԢCFR_Ԁ682.402(e).#XLXXXP#XXXXLForpurposesofafalse ! certificationdischarge,theterm borrower''includesallendorsersonaloan.#XLXXXD#~XLXXXLIfaborrowerfilesapetitionofreliefundertheBankruptcyCode,EDreimbursestheholderof b$" theloanforunpaidprincipalandinterestontheloan,inaccordancewith34_ԢCFR_Ԁ682.402(f).Alendershallprovidetheguarantyagencywithproperdocumentationwhenfilingadeath,disability,closedschool,falsecertification,orbankruptcyclaimasfollows:#XLXX~XL#~XLXXXL "(|#& #XLXX~XL#XXXXLE+ 4 <DL!` XESe)$)l$ =j|(` hp x (#%'0*,.8135@8:<H?ACPFHKXMOR`TVYh[]`X    #XLXXX@# {S0   XXXXLTheoriginalpromissorynote,or,ifthelendernolongerhastheoriginalpromissorynote,a e)$' copyofthenotecertifiedbythelenderasatrueandaccuratecopy;v݌ (#(# Ќ XX  #XLXXX# {S0   XXXXLTheloanapplication.+&)(#(#  #XLXXXa# {S0   XXXXLInthecaseofadeathclaim,documentsthatformedthebasisforthedeterminationofdeath;,O(*(#(# #XLXXX # {S0   XXXXLInthecaseofadisabilityclaim,acopyofthecertificationofdisabilitydescribedinparagraph   34_ԢCFR_Ԁ682.402(c)(2); (#(# #XLXXX#?+ 4 <DL!X? {S0   XXXXLInthecaseofaclosedschoolclaim,thedocumentationdescribedin34_ԢCFR_Ԁ682.402(d)(3)#XLXXXq#?+ 4 <DL!X?XXXXL = oranyotherdocumentationasEDmayrequire; (#(# #XLXXXm# {S0   XXXXLInthecaseofafalsecertificationclaim,thedocumentationdescribedin34_ԢCFR_  z 682.402#XLXXX4#?+ 4 <DL!X?XXXXL(e)(3); j(#(#  =j#XLXXXD# {S0   Inthecaseofabankruptcyclaim,evidencethatabankruptcypetitionhasbeenfiled,all ]  pertinentdocumentssenttoorreceivedfromthebankruptcycourtbythelender,andanassignmenttotheguarantyagencyofanyproofofclaimfiledbythelenderregardingtheloanandastatementofanyfactsofwhichthelenderisawarethatmayformthebasisforanobjectionorexceptiontothedischargeoftheborrower'sloanobligationinbankruptcyandalldocumentssupportingthosefacts. (#(# ~XLXXXL[34_ԢCFR_Ԁ682.402(g)]#XLXX~XL# W  XXXXL?+ 4 <DL!X?Theguarantyagencyshallreviewadeath,disability,orbankruptcyclaimpromptlyandshallpaythe 7 lenderonanapprovedclaimtheamountoflossinaccordancewithparagraph34_ԢCFR_Ԁ682.402#XLXXX#XXXXL(f), # notlaterthan45daysaftertheclaimwasfiledbythelender[34CFR682.402(h)(1)]#XLXXX#~XLXXXL.#XLXX~XL#XXXXL?+ 4 <DL!X?Inthecase  ofaclosedschoolclaimorafalsecertificationclaim,theguarantyagencyshalldocumentitsdeterminationthattheborroweriseligiblefordischargeunder34_ԢCFR_Ԁ682.402paragraphs(d)or(e)andpaytheborrowerortheholdertheamountdeterminedunder34_ԢCFR_Ԁ682.402(h)(2).#XLXXX#~XLXXXLGuarantyagenciesarerequiredtotakespecificactionsinbankruptcyproceedingsinaccordance U with34_ԢCFR_Ԁ682.402(_Ԣi_).Differentactionsarerequireddependingonwhetherthebankruptcyclaimis:(a)Anunduehardshipclaim,(b)PlanproposedunderbankruptcyChapters11,12and13,and(c)PlanproposedunderbankruptcyChapters11,12and13forloansinrepaymentlessthansevenyears#XLXX~XL#~XLXXXL. o Inaccordancewith&  34_ԢCFR_Ԁ682.402(k)(2),theguarantyagencyshallnotrequestpaymentfromEDuntilthelender'sclaimhasbeenpaid.'h#XLXX~XL#~XLXXXL SuggestedProcedures#XLXX~XLA#~XLXXXL !  Selectarepresentativesampleofdeath,disability,andbankruptcyclaimsfromtheguaranty #  agency'sEDForm1189reportsandperformthefollowing:a.0  Reviewclaimsfortheexistenceofproperdocumentationanddeterminewhethertheclaims u&!# wereeligibleforpaymentandpaidtimely. (#(# #XLXX~XL#~XLXXXL'b.0  Determinewhetherthelendersclaimwaspaidpriortothe_Ԣservicer_Ԁrequestingpayment E)$& fromED. (#(#  c.0  Foranyb#XLXX~XLd#~XLXXXLankruptcyclaims,determinewhetherthe_Ԣservicer_Ԁtookappropriateactions .,o')(#(#   4.0  DEFAULTAVERSION-O)+(#(#  P#XLXX~XL# .?*, ManagementAssertion    Fortheyearended~XLXXXLԀ[mo/dy/yr],[nameof_ԢServicer_]#XLXX~XL5#performeddefaultaversionactivitiesin  accordancewithEDrequirements.[Nameof_ԢServicer_]didnotcollectonthesameloansforwhichtheyperformeddefaultaversionactivities_Ԣwihin_Ԁ3yearsofthedatesdefaultclaimswerepaid. 򀀀 V  ~XLXXXL#XLXX~XL#~XLXXXL ComplianceRequirements#XLXX~XL^#~XLXXXL #XLXX~XL#?+ 4 <DL!X?~XLXXXL 6  [ForguidancerelatingtoDefaultAversion,consultthe GuarantyAgencyPartnerLetter,dated  p  November15,1999,Subject:Sections422A,422B,428(c)(6),and428(l)oftheHigherEducationAct.]Uponreceiptofacompleterequestfromthelenderreceivednotearlierthanthe60thdayandno 0  laterthanthe120thdayofdelinquency,aguarantyagencyshallengageindefaultaversion   activitiesdesignedtopreventthedefaultbyaborrower.[Defaultaversionactivitiesareactivitiesofaguarantyagencythataredesignedtopreventadefaultbyaborrowerwhoisatleast60daysdelinquentandthataredirectlyrelatedtoprovidingcollectionassistancetothelender.]#XLXX~XLL#  Ifaguarantyagencycontractswithanotherpartytoperformdefaultaversionassistanceandcollectdefaultedloans,thepartythatprovidesdefaultaversionassistanceonaloanmaynotcollectonthatloanwithin3yearsofthedatethedefaultclaimispaid. ~XLXXXLSuggestedProcedures  6 (1  '#XLXX~XL#(1'a  .0    Forasampleofloans,reviewdocumentationsupportingthatthe_Ԣservicer_Ԁperformedthe p necessarydefaultaversionactivities.(1h'ی (#(# Ќ  )b.0  Verifythatifacontractorisusedtoperformdefaultaversionassistance,thesame @ contractordoesnotperformdefaultcollectionactivityonthesameloanswithinthe3yearperiod. (#(# ~XLXXXL#XLXX~XL#~XLXXXL   $" 5.  COLLECTIONS   +ManagementAssertion#XLXX~XL#~XLXXXL  Duringtheyearended[mo/dy/yr],[nameof_ԢServicer_]compliedwiththetermsofthecontractswithourguarantyagenciesandperformedprescribedcollectionprocedureswithinrequiredtimeframes.  F   #XLXX~XL#ComplianceRequirements  &  AguarantyagencyshallengageinatleastthecollectionactivitiesdescribedinsubsectionsAthroughCbelowonaloanonwhichitpaysadefaultclaimfiledbyalender,andshallattemptanannualInternalRevenueService(IRS)offsetoneacheligibleloan,exceptthattheagencymayengageinthe AlternativeCollectionProceduresdescribedinthissectioninlieuoftheactivities 0  describedinsubsectionsAandBbelow[34_ԢCFR_Ԁ682.410(b)(6)(_Ԣi_)].TheagencymayinstituteacivilsuitagainsttheborrowerearlierthanthefirstdayoftheperioddescribedinsubsectionCbelow.Uponinstitutingthesuit,theagencyisnotrequiredthereaftertofollowtheproceduresinsubsectionA,ortheAlternativeCollectionProceduresofthissection.[34_ԢCFR_Ԁ682.410(b)(6)(ii)(B)].UponreceiptofapaymentfromaborrowerduringaperioddescribedinsubsectionsAorBofthissection,or,inthecaseofaborrowerwhomtheagencylocatesthroughtheuseofskiptracing(seeC.7below),theagencyisnotrequiredtofollowthespecificcollectioneffortsdescribedinsubsectionsAthroughCofthissectionifthewrittennoticedescribedin34_ԢCFR_Ԁ682.410(b)(5)(ii)hasbeensent.However,theagencyshalldiligentlyattempttocollecttheloanfor60daysfollowingreceiptofthepaymentorreceiptofconfirmationoftheborrower'saddress,asapplicable.Iftheagencyreceivesnopaymentsduringthe60dayperiod,theagencyshallresumeitsuseofthecollectioneffortsdescribedinsubsectionsBthroughC.5below,treatingthefirstdayaftertheendofthe60dayperiodasthefirstdayoftheperioddescribedinsubsectionBbelow.[34_ԢCFR_Ԁ682.410(b)(6)(ii)(C)].XXXXL LapseDays  "  Theperiodsoftimesetforthinthissectionrefertothenumberofdaysthatelapsefromthedatethe_Ԣservicer_Ԁpaysadefaultclaimonaloanoronmultipleloansforaborrower.Theseperiodsoftimedonotincludeanyperiodsduringwhichtheagencyisengagedinactivitiesrelatedtoadministrativewagegarnishment,orisreceivingapaymentthroughgarnishmentatleastonceevery60daysduringtheperiodspecifiedin34_ԢCFR_Ԁ682.410(b)(5)(iv)(B),orduringwhichtheagencyisengagedinanadministrativereviewoftheborrower'sindebtednessontheloanpursuanttoarequestbytheborrowerassetforthin34_ԢCFR_Ԁ682.410(b)(5)(iv)#XLXXX#XXXXL.Referencestotheborrowerinthissectionand )t$' intheAlternativeCollectionProceduressubsectionincludeallendorsersonaloan#XLXXX#[34_ԢCFR_ *`%( 682.410(b)(6)(ii)(A)].XXXXL *P&) #XLXXXN#XXXXL  ,,(+ GapinCollectionActivity   AtnopointduringtheperiodsdescribedinpartsAandB(orDthroughFifAlternativeCollectionProceduresareused)ofthissectionmaytheagencypermittheoccurrenceofagapincollectionactivityofmorethan60days#XLXXX#34_ԢCFR_Ԁ682.410(b)(6)(v)].XXXXLԀ V Theterm gapincollectionactivitymeans,withrespecttoaloan,anyperiod:̀$` XX$#XLXXXQ# {S0   XXXXLBeginningonthedatethatisthedayafter: x(#(# Ѐ9 ,X4 hX` X9  #XLXXXR# {S0   XXXXLThedatetheagency#XLXXXQ#XXXXLpaidadefaultclaimtothelenderthereon; T (#(# Ѐ  #XLXXX# {S0   XXXXLThedayonwhichtheagency#XLXXXl#XXXXLreceivesthecorrectaddressforaborrowerwhohasmadeno 0  paymentinthepreceding60days;or (#(# Ѐ'  #XLXXX# {S0   XXXXLThedayonwhichtheagency#XLXXX#XXXXLcompletesacollectionactivityasdefinedin34_ԢCFR_Ԁ   682.411(k)(1)through(3);and (#(# Ѐ#XLXXXJ# {S0   XXXXLEndingonthedateoftheearliestof:f(#(# Ѐ  #XLXXXZ# {S0   XXXXLThedayonwhichtheagency#XLXXX#XXXXLreceivesthefirstsubsequentpayment;B(#(# Ѐ  #XLXXXx# {S0   XXXXLThedayonwhichtheagency#XLXXX8#XXXXLbeginsthefirstsubsequentcollectionactivityasdefinedin34 x _ԢCFR_Ԁ682.411(k)(1)through(3)(withreferencestothe lenderunderstoodtomean theagency);or (#(# Ѐ  #XLXXX# {S0   XXXXLThelastdayoftheperioddescribedinsubsectionBbelow.,(#(# #XLXXX#[34_ԢCFR_Ԁ682.410(b)(6)(vi)].XLXXXL  #XLXXXL# ~XLXXXLRegularCollection#XLXX~XLE#~XLXXXL#XLXX~XL#~XLXXXLProcedures#XLXX~XL#~XLXXXLԀ  #XLXX~XL2#XLXXXLA.1to45LapseDays    The#XLXXXL#XXXXLagency#XLXXX#XLXXXLduringthisperiodshall: b"  1.0  Diligentlyattempttocontacttheborrower#XLXXXLH#XXXXLbytelephone#XLXXX#XLXXXLtodemandrepaymentoftheloan.B$"(#(# 2.0  Sendtotheborrowerawrittennoticemeetingtherequirementsof34_ԢCFR_Ԁ684.410(b)(5)(vi)."&|!$(#(# 3.0  #XLXXXLA#XXXXLSendtotheborrowerawrittennoticestatingthattheagency#XLXXX~#XXXXLeitherwillinitiateproceduresto (\#& garnishtheborrower'swages,orinstituteacivilsuittocompelrepaymentoftheamountthattheborrowerowesplusrelatedcollectioncosts#XLXXX#[34_ԢCFR_Ԁ682.410(b)(6)(iii)].)8%((#(# XLXXXL  +'* B.%  46to180LapseDays   The#XLXXXLc#XXXXLagency#XLXXX#XLXXXLduringthisperiodshall:  #XLXXXLH#XXXXL1.0  Engageinatleasttwodiligentattemptstocontacttheborrowerbytelephonetodemand f repaymentoftheloan;and (#(# Ѐ2.0  Sendatleastthreewrittennoticestotheborrowerforcefullydemandingthattheborrower *  immediatelycommencerepaymentoftheloan,andinformingtheborrowerthatthedefaulthasbeenreportedtoallnationalcreditbureaus(ifthatisthecase)andthattheborrower'screditratingmaytherebyhavebeendamaged.Thefinalnoticealsoshallindicatethatitisthefinalnoticetheborrowerwillreceivebeforetheagency#XLXXX#XXXXLwilltakemoreforcefulaction,includingtheinitiation 4  ofprocedurestogarnishtheborrower'swages,ortooffsettheborrower'sstateandfederalincometaxrefunds,orinstitutingacivilsuittocompelrepaymentoftheamountthattheborrowerowesplusrelatedcollectioncosts.#XLXXXv#XLXXXL (#(# #XLXXXL#[34_ԢCFR_Ԁ682.410(b)(6)(iv)]   XLXXXL C.After181Days  j #XLXXXL#XLXXXL1.0  E#XLXXXL#XXXXLxceptasprovidedinparagraphC.2.below,duringthisperiodbutnosoonerthan30daysafter J sendingthenotice(requiredin34_ԢCFR_Ԁ682.410(b)(5)(vi)),theagency#XLXXXb#XXXXLshallinitiateproceedings : tooffsettheborrower'sStateandFederalincometaxrefundsandotherpaymentsmadebytheFederalgovernmenttoaborrower,andshallinitiateadministrativewagegarnishmentproceedingsagainsttheborrowerbythe225thday.Iftheagency#XLXXX#XXXXLdeterminesthattheborrowerhasinsufficient X incometosatisfythedebtthroughwagegarnishment,buthasassetsfromwhichthedebtcanbesatisfied,theagency#XLXXX#XXXXLshallassigntheloantoED.Theagency#XLXXX#XXXXLmustnotfilesuittocollectaloan 0 fromaborrowerunlessdirectedtodosobyED[#XLXXXJ#34_ԢCFR_Ԁ682.410(b)(6)(vii)(A)].XXXXL(#(# #XLXXX5#XXXXLԀ   'K" ,X4 hX ,X4 hXK0  #XLXXX#If,afterinitiatingwagegarnishmentprocedures,theagencyterminatesthoseproceduresfor  aparticularborrower,theagencyshall,within30days,commencecollectioneffortsatleastasforcefulasthosedescribedpreviouslyinsubsectionsAandB,andinthissubsection.Theagencyscollectioneffortsshallbeginwiththesamecollectionactivitiesasthosethatimmediatelyprecededtheinitiationofgarnishmentprocedures,or,ifnocollectionactivitieswereperformed,theagencyshallbeginwiththeactivitiesdescribedpreviouslyinsubsectionA,exceptthattheagencymayengageinthecollectionproceduresdescribedunderthe >$"  AlternativeCollectionProcedureslaterinthissection,inlieuoftheactivitiesdescribedin .% # subsectionsAandBXXXXLԀ#XLXXX#[34_ԢCFR_Ԁ682.410(b)(6)(_Ԣi_)].XXXXL&x!$(#(# #XLXXXC#O ,X4 hX ,X4 hXOXXXXL2.0  Theagencyneedn#XLXXX#XXXXLotinitiateadministrativewagegarnishmentiftheagency#XLXXXU#XXXXLdeterminesand 'T#& documentsintheborrowersfilethattheborrowerdoesnothavesufficientincometosatisfythedebtorasubstantialportionthereof#XLXXX#[34_ԢCFR_Ԁ682.410(b)(6)(vii)(B)].XXXXL),%((#(# 3.0  IfasaresultofadeterminationmadeperC.2above,theagencydoesnotinitiateadministrative +'* wagegarnishmentagainsttheborrowerforrepaymentoftheloanandtheloanhasnotbeenassignedtotheDepartmentforacivilsuittobefiled,#XLXXX#XXXXLtheagency#XLXXX}#XXXXLshallconductdiligent -(, semi-annualinquiriestodetermineiftheborrowerhassinceacquiredthemeanstosatisfythe r.)- debtorasubstantialportionthereofthroughadministrativewagegarnishment#XLXXX#XLXXXLԀ#XLXXXL#[34_ԢCFR_  682.410(b)(6)(viii)(A)].XLXXXLԀ#XLXXXL#XXXXL[Note:Theagency#XLXXX#XXXXLmaydiscontinueconductingthesemi-annual  inquiriesconcerningaborrower'smeansonlyinaccordancewithcriteriaandproceduresapprovedbytheSecretary.#XLXXX+#XXXXL(34_ԢCFR_Ԁ682.410(b)(6)(x))#XLXXX#XXXXL]#XLXXX#.r(#(# 4.0  Iftheagencydeterminesthattheborrowerhasacquiredthemeans(SeeC.3above)tosatisfy R  atleastasubstantialportionofthedebtandthen,ifsubsequentcollectioneffortsarenotsuccessful,theagency,nolaterthan60daysafterthedetermination,[must]instituteadministrativewagegarnishmentagainsttheborrowerforrepaymentoftheloanz.0 (#(#  z B." | (# (#   ݀[34_ԢCFR_Ԁ682.410(b)(6)(viii)(B)].5.0  Theagencyshallattemptdiligentlytoenforceanadministrativewagegarnishmentorderor L  ajudgmentobtainedagainstaborroweronaloanandshallensurethattheadministrativewagegarnishmentorderorjudgmentisrenewedaspermittedbyapplicablelaw.If,despitediligentattempts,theagencyXXXXLcannotrecoverthefullamountofthedebtbecausetheborrowerlacks   sufficientassetsorincomeattachableunderapplicablelawtofullysatisfytheadministrativewagegarnishmentorderorthejudgment,theagency#XLXXX #mustconductdiligentsemi-annualinquiriesto  determineiftheborrowerhassinceacquiredsufficientattachableassetsorincometosatisfyanadministrativewagegarnishmentorderorajudgment_ԢCFR_Ԁ682.410(b)(6)(ix)(A)].XXXXLԀ#XLXXX #XLXXXL[NOTE: ~ #XLXXXL#XXXXLTheagency#XLXXXy#XXXXLmaydiscontinueconductingthesemi-annualinquiriesconcerningaborrower's n meansonlyinaccordancewithcriteriaandproceduresapprovedbytheSecretary,#XLXXX#XXXXL34_ԢCFR_ Z 682.410(b)(6)(x)#XLXXX#XXXXL];#XLXXXI#XXXXLF(#(# 0  Iftheagency#XLXXX#determinesthattheborrowerhasacquiredsufficientincomeorattachableassets x tosatisfytheremainderofthedebt,theagency,notlaterthan60daysthereafter,shallnotifytheborrowerinwritingofitsintentiontoinitiateadministrativewagegarnishmentorresumeenforcementeffortsunlesstheborrowermakespaymentinfullofalloutstandingamounts.[34_ԢCFR_Ԁ682.410(b)(6)(ix)(B)]; (#(# Ѐ0  Iftheborrowerdoesnotmakepaymentinfullwithin30daysofthedatetheagencyXXXXLsendsthe  notice,theagency#XLXXXE#XXXXL,within30daysthereafter,shallproceedtoenforcetheadministrativewage   garnishmentorremainderofthejudgment#XLXXX#[34_ԢCFR_Ԁ682.410(b)(6)(ix)(C)].XXXXL!(#(# Ѐ#XLXXX#XLXXXL "  #XLXXXL&#XXXXL 1[9` X ,X4 hX96.0  Notlaterthan10daysafteritsreceiptofinformationindicatingthatitdoesnotknowthecurrent v#! addressofaborroweronaloanonwhichtheagencyhasneitherdeclinedtoinitiateadministrativewagegarnishmentnordiscontinuedsemiannualinquiries(SeeC.2.above),orthe60thdayafteritspaymentofadefaultclaimontheloan,whicheverislater,theagencyshallattemptdiligentlytolocatetheborrowerthroughtheuseofallavailableskiptracingtechniques,including,butnotlimitedto,anyskiptracingassistanceavailablefromtheIRS,creditbureaus,andstatemotorvehicledepartments.Aguarantyagencyshalluseanyinformationprovidedbyaschoolaboutaborrower'slocationinconductingskiptracingactivities.#XLXXX}#[34_ԢCFR_Ԁ682.410(b)(6)(xii)].XXXXLԀ)D%((#(#  1[#XLXXXU# ~XLXXXLSuggestedProcedures /+&)  - X` X-a.0  Testarepresentativesampleofdefaultedloanaccountsanddeterminewhethertheprocedures -i(+ describedabovewerefollowed. (#(#  .I*- b.0  Ifthe_Ԣservicer_Ԁusedacollectioncontractor,ascertainwhetherthecontractspecifiedthe  requiredcollectionprocedurestobefollowedfordefaultedloans. (#(# c.0  Ascertainwhetherthe_Ԣservicer_ԀfollowedcriteriaandproceduresapprovedbytheSecretary v whendiscontinuingcollectionactivitiesonaloan. (#(# #XLXX~XL# ~XLXXXLAlternativeCollection#XLXX~XL #~XLXXXL#XLXX~XLx#~XLXXXLProcedures(Ifapplicable)#XLXX~XL#~XLXXXLԀ F  #XLXX~XL!# XXXXLAGuarantyAgencymayengageincollectionactivitiesbelowinlieuoftheactivitiesdescribedinpartsAandBoftheprevioussubsection.The LapseDaysasdescribedearlier,applytotheperiodsoftimesetforthfortheAlternativeCollectionProcedures.Uponreceiptofapaymentfromaborrower,theagency#XLXXX|#XXXXLisnotrequiredtofollowthespecific ,  collectioneffortsdescribedbelow,butmustdiligentlyattempttocollecttheloanfor60daysfollowingreceiptofthepayment.Iftheagency#XLXXX #XXXXLreceivesnopaymentsduringthe60-dayperiod,the   agencymustresumeitsuseofthecollectioneffortsdescribedinthissubsection,treatingthefirstdayaftertheendofthe60-dayperiodasthefirstdayoftheperioddescribedinsubsectionEbelow. #XLXXX!#XLXXXLD.1to30LapseDays  Z The#XLXXXLi"#XXXXLagency#XLXXX"#XLXXXLduringthisperiodmust#XLXXXL&##XXXXLsendtotheborrowerawrittennoticethatmeetsthe : requirementsof34_ԢCFR_Ԁ682.410(b)(5)(vi).[34_ԢCFR_Ԁ682.410(b)(7)(iii)]#XLXXX## XLXXXLE.31to180Days  ` #XLXXXL$#XXXXLDuringthisperiodtheagency#XLXXX%#XXXXLshall: @ 1.0  Attemptdiligentlytocollecttheloanusingsuchcollectiontoolsandactivitiesasitdeems  appropriate,provided,however,thattheagencymustmakeatleastonediligentefforttocontacttheborrowerbytelephone,and (#(# 2.0  Sendatleasttwoforcefulcollectionletterstotheborrower.n!(#(# Ѐ3.0  Bytheendofthisperiod,theagencymustrefertheloantoacollectioncontractorwho#XLXXXf%#XXXXLmust:F#!(#(# -,` X X-#XLXXX'#XXXXL  a.0  Becompensatedforitsservicesonall_ԢFFEL_Ԁloansreferredbytheagency#XLXXXE(#XXXXLsolelyona %x # contingencyfeebasis; (#(#   b.0  Beoneofatleasttwocollectioncontractorssimultaneouslyprovidingcollectionservicesto '<#& theagencyon_ԢFFEL_Ԁloansunderacompetitivesystemthattheagencyhasestablishedandthatincludestheperiodicassessmentbytheagency#XLXXX )#XXXXLoftheperformanceofthecompeting )%( contractorsandperiodicadjustmentsinthevolumeofloansreferredbytheagencytoeachcompetingcontractorbasedonthoseassessments;and (#(# Ѐ  c.0  Notreceivereferralofmorethan70percentoftheagency'sreferredloansinanycalendar j-(, year.#XLXXX*#XLXXXLԀ#XLXXXL,#XXXXL[34_ԢCFR_Ԁ682.410(b)(7)(vi)] V.)-(#(# Ї#XLXXX,#SuggestedProceduresforAlternativeCollectionProcedures(Ifapplicable)   a.0  Reviewarepresentativesampleofdefaultedloanaccountsanddeterminewhethertheagency  performedtheactivitiesdescribedabove. (#(# b.0  Review_ԢServicer_Ԁcontractsandrecordstodeterminethatthe_Ԣservicer_;(1)didnotrefermore V  than70percentofitsreferredloanstoasinglecollectioncontractor,and(2)compensatedthecontractorsonlyonacontingencyfeebasis. (#(# c.0  Ascertainthatthe_Ԣservicer_Ԁperiodicallyassessedtheperformanceofthecompetingcontractors,  p  andifnecessary,madeadjustmentsinthevolumeofloansreferredtoeachcompetingcontractor. (#(#     6.FEDERALSHAREOFBORROWERPAYMENTS    ManagementAssertion    Fortheyearended~XLXXXLԀ[mo/dy/yr],[nameof_ԢServicer_]#XLXX~XL1#properlycomputedandremitted p borrowerpaymentstotheDepartmentinatimelymanner.ComplianceRequirements @   Iftheguarantyagencyreceivesapaymentonaloanafterdefaultbutbeforereinsurancehasbeen  p  received,100percentofthepaymentispaidtoED.IftheborrowermakespaymentsonaloanaftertheSecretaryhaspaidareinsuranceclaimonthatloan,the_ԢServicer_ԀmustpaytheSecretaryanequitableshareofthosepayments.TheSecretary'sequitableshareistheportionofpaymentsthatremainsafterdeducting:   0   (#(#  {S0   Thecomplementofthereinsurancepercentageineffectwhenreinsurancewaspaidontheloan  (See2.FederalReinsuranceRateabovefortheapplicablereinsurancerate.Thecomplementofthereinsurancepercentageequals100minustheFederalReinsurancerate),and (#(#  {S0   27percentofborrowerpaymentsreceivedbeforeOctober1,1998and24percentofborrower p paymentsreceivedafterOctober1,1998[34_ԢCFR_Ԁ682.405(g)(2),asamendedby20_ԢUSC_1078(c)(6)]. (#(# Loansthathavebeenrehabilitatedorpaidby_ԢFFEL_Ԁprogramconsolidationloansarenotcoveredbythisrequirementbecausethese_Ԣtranactions_Ԁdonotinclude paymentsmadebytheborrower.  p Fortheseloans,underseparateauthority,agenciesareallowedtoretaincollectioncostsaddedtotheborrowersbalance,nottoexceed18.5percentofthepayoff[34_ԢCFR_Ԁ682.405(b)(1)(iv)and34_ԢCFR_Ԁ682.401(b)(27)].̀UnlesstheSecretaryapprovesotherwise,theguaranty_ԢServicer_ԀmustsubmittheSecretary'sequitableshareofborrowerpaymentswithin45daysofthereceiptofthepaymentsbytheagencyorits_Ԣservicer_Ԁ(whicheverisearlier)[34_ԢCFR_Ԁ682.404(g)(3)].[NOTE:Forpaymentsreceived "  priortoFebruary1,1993,theagencymustsubmitpaymentswithin60daysofreceipt.SeealsoDearColleagueLetter95G286.] $"  SuggestedProcedures  p&!$ TestarepresentativesampleofborrowerpaymentsondefaultedloanstodetermineifEDreceiveditsequitableshareinatimelymanner.  -P(+  7.ASSIGNMENTOFDEFAULTEDLOANSTOED   0  (#(#  ManagementAssertion    AsofApril15,19xx,~XLXXXL[nameof_ԢServicer_]#XLXX~XL=#Ԁassignedallloansthatmetapplicablecriteriatothe p Secretary.  `   ComplianceRequirements  @  UnlesstheSecretarynotifiesanagencyinwritingthatotherloansmustbeassignedtothe  p  Secretary,anagencymustassignanyloanthatmeetsallofthefollowingcriteriaasofApril15ofeachyear: {S0   Theunpaidprincipalbalanceisatleast$100;0 (#(#  {S0   Theloan,andanyotherloansheldbytheagencyforthatborrower,havebeenheldbythe  agencyforatleast4years(5yearsforfiscalyearsbeginning7/1/97); (#(#  {S0   Apaymenthasnotbeenreceivedontheloaninthelastyear;and(#(#  {S0   Ajudgmenthasnotbeenenteredontheloanagainsttheborrower.p(#(# TheSecretarymayalsodirectaguarantyagencytoassigntoEDcertaincategoriesofdefaultedloansheldbytheagency[34_ԢCFR_Ԁ682.409] SuggestedProcedures  p  Reviewanagingoftheguarantyagency'sloanstodeterminewhetheritisholdingloansthatshouldbeassignedtoED,inaccordancewiththeabovecriteriaoradirectedorapprovedassignmentschedule.  0   "  8.COLLECTIONCHARGESXXXXL  #XLXXXD#~XLXXXL  ManagementAssertion0  0h(#(#Dllech(#h(#     Ellec  Fortheyearended[mo/dy/yr],[nameof_ԢServicer_]#XLXX~XLD#~XLXXXLonbehalfofourguarantyagencyclients, p chargedborrowersappropriatecollectioncostsonloansforwhichadefaulthasbeenpaid. `  #XLXX~XLkF#~XLXXXLCompliance#XLXX~XLeG#XXXXLԀ#XLXXXG#~XLXXXLRequirements @   Theguarantyagencyshallchargeadefaultedborroweranamountequaltoreasonablecosts  p  incurredbytheagencyincollectingaloanonwhichtheagencyhaspaidadefault.Theamountchargedtheborrowershouldequalthelesseroftheamountthatwouldbechargedundertheformulain34_ԢCFR_Ԁ30.60or,theamountthatwouldbechargediftheloanwasheldbyED.Costsmayinclude,butarenotlimitedto,attorneysfees,collectionagencycharges,andcourtcosts[34_ԢCFR_Ԁ682.410(b)(2)].Inaddition,aguarantyagencymayaddcollectioncostsandlatefeesondefaulted_ԢFFEL_Ԁloansbeingconsolidatedinanamountnottoexceed18.5percentoftheoutstandingprincipalandinterest[34_ԢCFR_Ԁ682.401(b)(27)]#XLXX~XLG#~XLXXXL.   SuggestedProcedures   Testarepresentativesampleofdefaultedloanaccountstodeterminewhetherthe_Ԣservicer_Ԁcharged p forreasonablecostsofcollection.Determinewhetherthemethodusedtocalculatetheamountwasappropriate.#XLXX~XLK#XXXXL   p #XLXXXrM# XXXXL9.&*m%XXԀ#XX%&*mM#ENFORCEMENTACTION   #XLXXXM# ManagementAssertion    Fortheyearended~XLXXXLԀ[mo/dy/yr],[nameof_ԢServicer_]#XLXX~XLN#~XLXXXLtookmeasurestoensureenforcementof l allFederal,stateandguarantyagencyrequirements,including#XLXX~XLNO#XXXXLԀperformingprogramreviews \  ofsuchlendersandschoolsthatmetthecriteriaspecifiedin34_ԢCFR_Ԁ682.410(c)(1).#XLXXX P#~XLXXXLԀ[Nameof L  _ԢServicer_]#XLXX~XLP#XXXXLԀtookappropriateandpromptcorrectiveactiononallfindingsidentifiedinsuch <  programreviewsinaccordancewith34CFR682.410(c).__  , | 0   (#(# #XLXXX}Q#~XLXXXL ComplianceRequirements  T  TheguarantyagencymusttakemeasurestoensureenforcementofallFederal,stateandguaranty 4  agencyrequirementsandataminimum,conductbiennialonsiteprogramreviewsofsuchlendersandschoolsthatmeetcriteriaspecifiedin34_ԢCFR_Ԁ682.410(c)(1).TheagencyisrequiredtousestatisticallyvalidtechniquestocalculateliabilitiesowedtheSecretarythatthereviewindicatesmayexist,demandpromptpaymentfromtheresponsiblepartyandrefertotheSecretaryanycaseinwhichthepaymentoffundsisnotmadewithin60days.Theguarantyagencyisrequiredtodemandpromptrepaymentbytheresponsiblepartiestolenders,borrowers,theagency,ortheSecretary,asappropriate,ofallfundsfoundinthosereviewstobeowedbytheparticipantswithregardtoloansguaranteedbytheagency,whetherornottheagencyholdstheloans,andmonitoringtheimplementationbyparticipantsofcorrectiveactions,includingtheserepayments,requiredbytheagencyasaresultofthosereviews[34CFR682.410(c)(2)].#XLXX~XLR#E+ 4 <DL!,` XE~XLXXXLAguarantyagencyshallrefertotheSecretaryforfurtherenforcementactionanycaseinwhich T repaymentoffundstotheSecretaryisnotmadeinfullwithin60daysofthedateoftheagency'swrittendemandtotheschool,lender,orotherpartyforpayment,togetherwithallsupportingdocumentation,anycorrespondence,andanyotherdocumentationsubmittedbythatpartyregardingtherepayment[34CFR682.410(c)(3)].#XLXX~XLW#~XLXXXLAguarantyagencyisalsorequiredtoadoptproceduresforidentifyingfraudulentloanapplicationsandundertakingorarrangingforthepromptandthoroughinvestigationofcriminalorotherprogrammaticmisconductbyitsprogramparticipants.Itisresponsiblealsoforpromptlyreportingalloftheallegationsandindicationshavingasubstantialbasisinfactandthescope,progressandresultsoftheagencysinvestigationstoED[34__ԀCFR682.410(c)(47)]. SuggestedProcedures D(#&  a.0  Reviewthe_Ԣservicer_sproceduresforensuringenforcementofallFederal,stateand $*t%( guarantyagencyrequirements,including#XLXX~XLY#~XLXXXLԀselectinglendersandschoolsforreviewto +d&) determineiftheymeettheregulatorycriteria. (#(#   -4), b.0  Reviewprogramreviewmethodologytodeterminethatitisuptodateandincludes,when   problemsarefound,astatisticallyvalidmethodfordeterminingliabilitiesduetheSecretary. (#(# c.0  Reviewprogramreviewreportstodetermineifamountsduetolenders,borrowers,the p agency,ortheSecretary,wereidentified.Ifso,determinewhetherappropriatedemandsforpaymentandfollowupwereconducted. (#(# '(1  (1`'d  .0    DeterminewhethertheguarantyagencymadereferralstotheSecretaryforfurther 0  enforcementactioninthoseinstanceswhererepaymentswerenotmadewithin60daysofwrittendemand.(1``'ی (#(# Ќ  e.0  Throughinquiryandreview,determinewhetherthe_Ԣservicer_Ԁadoptedproceduresfor @  identifyingfraudulentloanapplicationsandforreportingallallegationsofmisconducthavingasubstantialbasistoED.Review_Ԣservicer_ԀrecordsonthefollowupofmisconducttodeterminewhetherEDwasnotifiedwhen#XLXX~XL]#XXXXLappropriate.#XLXXX;c# (#(# HX,X@% XhXXXLSECTIONIII  H @| | ILLUSTRATIVEREPORTSANDAPPENDICES (  FinancialStatements:#XLXXXhc#   -,XXXX-ExampleA10 ReportontheAuditoftheBasicFinancialStatements (# (# ExampleA20 ReportonComplianceandonInternalControlOverFinancialReportingBased   onanAuditofFinancialStatementsPerformedinAccordanceWith  p  GovernmentAuditingStandards(NoReportableInstancesofNoncompliance  `  andNoMaterialWeaknesses[NoReportableConditionsIdentified]) OR  P  (# (# ExampleA30 ReportonComplianceandonInternalControlOverFinancialReportingBased x0  onanAuditofFinancialStatementsPerformedinAccordanceWithGovernmentAuditingStandards(ReportableInstancesofNoncomplianceand X ReportableConditionsIdentified)  (# (#  ComplianceAttestation:  ( ExampleB ReportPackageCoverPage  ExampleC0 ReportonCompliancewithSpecifiedRequirementsApplicabletothe_ԢFFEL_  Program  (# (# ExampleD10 ReportonInternalControlOverCompliance(NoReportableConditions) OR p (# (# ExampleD20 ReportonInternalControlOverCompliance(ReportableConditionsIdentified P [NoMaterialWeaknesses])  (# (# ExampleE0 InformationSheeth  (# (# ExampleF0 ScheduleofFindingsandQuestionedCostsH!  (# (# ExampleG0 Auditor'sCommentsonResolutionMatters(#" (# (#    4  Relatingtothe_ԢFFEL_ԀProgramExampleH0 CorrectiveActionPlan%"% (# (#   XXLZ  Appendices#  Zl#: #XLX {l# '$' AppendixA0 U.S.DepartmentofEducationOffices)&) (# (# AppendixB0 Definitions+x(+ (# (#   -X*-    4     h      p      x EXAMPLEA1 H (#(#K(#@f f REPORTONTHEAUDITOFTHEBASIC ( @ FINANCIALSTATEMENTS Wehaveauditedthebalancesheetof[Nameof_ԢServicer_]asof[Date]andtherelatedstatements  ofincome,retainedearnings,andcashflowsfortheyearthenended.Thesefinancialstatementsaretheresponsibilityofthe[Nameof_ԢServicer_]management.Ourresponsibilityistoexpressan   opiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithgenerallyacceptedauditingstandardsandGovernment  `  AuditingStandards,issuedbytheComptrollerGeneraloftheUnitedStates.Thosestandards  P  requirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingprinciplesusedandsignificantestimatesmadebymanagement,aswellasevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.Inouropinion,thefinancialstatementsreferredtoabovepresentfairlyinallmaterialrespects,thefinancialpositionof[Nameof_ԢServicer_]asof[mo/dy/yr]andtheresultsofitsoperationsand  itscashflowsfortheyearthenended,inconformitywithgenerallyacceptedaccountingprinciples. T T T T T T T T   1        InaccordancewithGovernmentAuditingStandards,wehavealsoissuedourreportdated  [mo/dy/yr]onourconsiderationofthe[Nameof_ԢServicer_]internalcontroloverfinancialreporting p andonourtestsofitscompliancewithcertainprovisionsoflaws,regulations,contracts,andgrants.[Signature] x0 [Date] X  XXL#XLXw# *8'* Ї,@* @(#EXAMPLEA2  8 ,,?(# Page1of2  (  ReportonComplianceandonInternalControlOverFinancialReportingBasedonanAudit  ofFinancialStatementsPerformedinAccordanceWithGovernmentAuditingStandards(No  ReportableInstancesofNoncomplianceandNoMaterialWeaknesses[NoReportableConditionsIdentified])  T T0 T T T T T T   1         [Addressee]  p  Wehaveauditedthefinancialstatementsof[nameof_ԢServicer_]asofandfortheyearendedJune  P  30,19XX,andhaveissuedourreportthereondated[mo/dy/yr]. T T1 T T T T T T   2      ׀Weconductedourauditin @  accordancewithgenerallyacceptedauditingstandardsandthestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandards, T T2 T T T T T  T   3      ׀issuedbytheComptrollerGeneralofthe h  UnitedStates.Compliance 8 Aspartofobtainingreasonableassuranceaboutwhether[nameof_ԢServicer_]financialstatements ( arefreeofmaterialmisstatement,weperformedtestsofitscompliancewithcertainprovisionsoflaws,regulations,contracts,andgrants,noncompliancewithwhichcouldhaveadirectandmaterialeffectonthedeterminationoffinancialstatementamounts.However,providinganopiniononcompliancewiththoseprovisionswasnotanobjectiveofouraudit,andaccordingly,wedonotexpresssuchanopinion.TheresultsofourtestsdisclosednoinstancesofnoncompliancethatarerequiredtobereportedunderGovernmentAuditingStandards. T T3,  T T,  T T T,  T   4      ׀  InternalControlOverFinancialReporting ` Inplanningandperformingouraudit,weconsidered[Nameof_ԢServicer_]internalcontrolover P financialreportinginordertodetermineourauditingproceduresforthepurposeofexpressingouropiniononthefinancialstatementsandnottoprovideassuranceoninternalcontroloverfinancialreporting.Ourconsiderationofinternalcontroloverfinancialreportingwouldnotnecessarilydiscloseallmattersininternalcontroloverfinancialreportingthatmightbematerialweaknesses.Amaterialweaknessisaconditioninwhichthedesignoroperationofoneormoreinternal H!  controlcomponentdoesnotreducetoarelativelylowleveltheriskthatmisstatementsinamountsthatwouldbematerialinrelationtothefinancialstatementsbeingauditedmayoccurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheirassigned @(#EXAMPLEA2   hh@(# Page2of2   functions.Wenotednomattersinvolvinginternalcontroloverfinancialreportinganditsoperationthatweconsidertobematerialweaknesses._Ԣ T T5 T T T T T T   5      ף_   Thisreportisintendedsolelyfortheinformationanduseoftheauditcommittee,management,andtheU.S.DepartmentofEducationandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.[Signature] h  [Date] X   H @(# EXAMPLEA3  H pp@(# PAGE1OF2  8  ReportonComplianceandonInternalControlOverFinancialReportingBasedonanAudit  ofFinancialStatementsPerformedinAccordanceWithGovernmentAuditingStandards  (ReportableInstancesofNoncomplianceandReportableConditionsIdentified)  T TI T T T T T$ T   1        [Addressee]   Wehaveauditedthefinancialstatementsof[nameof_ԢServicer_]asofandfortheyearendedJune  p  30,19xx,andhaveissuedourreportthereondated[mo/dy/yr]. T TK T T T T T, T   2      ׀Weconductedourauditin  `  accordancewithgenerallyacceptedauditingstandardsandthestandardsapplicabletofinancialauditscontainedinGovernmentAuditingStandards, T TL| T T| T T T4| T   3      ׀issuedbytheComptrollerGeneralofthe @  UnitedStates.Compliance X Aspartofobtainingreasonableassuranceaboutwhether[nameof_ԢServicer_]financialstatements H arefreeofmaterialmisstatement,weperformedtestsofitscompliancewithcertainprovisionsoflaws,regulations,contracts,andgrants,noncompliancewithwhichcouldhaveadirectandmaterialeffectonthedeterminationoffinancialstatementamounts.However,providinganopiniononcompliancewiththoseprovisionswasnotanobjectiveofouraudit,andaccordingly,wedonotexpresssuchanopinion.TheresultsofourtestsdisclosedinstancesofnoncompliancethatarerequiredtobereportedunderGovernmentAuditingStandards T TN T T T T TU T   4      ׀andwhicharedescribed  intheaccompanyingscheduleoffindingsandquestionedcostsasitems[listthereferencenumbers  oftherelatedfindings,forexample,992and995].  InternalControlOverFinancialReporting ` Inplanningandperformingouraudit,weconsidered[Nameof_ԢServicer_]internalcontrolover @ financialreportinginordertodetermineourauditingproceduresforthepurposeofexpressingouropiniononthefinancialstatementsandnottoprovideassuranceoninternalcontroloverfinancialreporting.However,wenotedcertainmattersinvolvinginternalcontroloverfinancialreportinganditsoperationthatweconsidertobereportableconditions.Reportableconditionsinvolvematterscomingtoourattentionrelatingtosignificantdeficienciesinthedesignoroperationofinternalcontroloverfinancialreportingthat,inourjudgment,couldadverselyaffect[Nameof (#" _ԢServicer_]abilitytorecord,process,summarize,andreportfinancialdataconsistentwiththe $ #  assertionsofmanagementinthefinancialstatements.Reportableconditionsaredescribedinthe %!$ accompanyingscheduleoffindingsandquestionedcostsasitems[listthereferencenumbersof H therelatedfindings,forexample,991,994,and998]. 8  @(#EXAMPLEA3   pp@(# ~XLXXXLPAGE2OF2   #XLXX~XLܘ#Amaterialweaknessisaconditioninwhichthedesignoroperationofoneormoreinternalcontrolcomponentdoesnotreducetoarelativelylowleveltheriskthatmisstatementsinamountsthatwouldbematerialinrelationtothefinancialstatementsbeingauditedmayoccurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheirassignedfunctions.Ourconsiderationofinternalcontroloverfinancialreportingwouldnotnecessarilydiscloseallmattersininternalcontrolthatmightbereportableconditionsand,accordingly,wouldnotnecessarilydiscloseallreportableconditionsthatarealsoconsideredtobematerialweaknesses.However,webelievethatnoneofthereportableconditionsdescribedaboveisamaterialweakness. T TP T T T T TX T   5      ׀_Ԣ T TQX T TX T T T\P T   6      ף_ h  Thisreportisintendedsolelyfortheinformationanduseoftheauditcommittee,management,andtheU.S.DepartmentofEducationandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.[Signature]  [Date]   ~XLXXXL B(#EXAMPLEB H @ REPORTPACKAGECOVERPAGE   @  "NAMEOF_ԢSERVICER_Ԉ@%CITY,STATE@ COMPLIANCEATTESTATIONEXAMINATION@OFTHETITLEIVSTUDENTFINANCIALASSISTANCEPROGRAMS@ FORTHEFISCALYEARENDING[MONTHDAY,YEAR]@&_ԢXYZ_Ԁ&Co.@TTCertifiedPublicAccountants#XLXX~XL#Ԉ  (%( H||B(# @ 0 @4 0@ 4(#4(#0@ (# (#0@h(#(#0@h(#h(#0@(#(#0@p(#(#0@p(#p(#0@ (#(#0@x (# (# EXAMPLEC     0 4 0 4(#4(#0 (# (#0h(#(#0h(#h(#0(#(#0p(#(#0p(#p(#0 (#(#0x (# (# Page1of2 (#(#K(#x(#x(#   @d d REPORTONCOMPLIANCEWITHSPECIFIED p @: : REQUIREMENTSAPPLICABLETOTHE@@$_ԢFFEL_ԀPROGRAM  `    INDEPENDENTACCOUNTANTSREPORTWehaveexaminedmanagement'sassertions,that[Nameof_ԢServicer_]compliedwiththespecified `  compliancerequirementsregarding:EDForms1189and1130;FederalReinsurance;Death,Disability,andBankruptcyClaims;DefaultAversion;Collections;FederalShareofBorrowerPayments;AssignmentofDefaultedLoanstoED;CollectionCharges;andEnforcementActionlistedinSectionIIoftheU.S.DepartmentofEducationsAuditGuide,ComplianceAuditsof   GuarantyAgency_ԢServicers_ԀParticipatingInTheFederalFamilyEducationLoanProgram(1999  version),duringtheyearended[mo/dy/yr]_Ԣ T T T T T T T_ T   1      ף_.Managementisresponsibleforcompliancewith  thoserequirements.OurresponsibilityistoexpressanopinionontheGuarantyAgency_ԢServicer_scompliancebasedonourexamination.OurexaminationwasconductedinaccordancewithGovernmentAuditingStandards,issuedby p theComptrollerGeneraloftheUnitedStates;attestationstandardsestablishedbytheAmericanInstituteofCertifiedPublicAccountants;andthe AuditGuide,ComplianceAuditsofGuaranty P Agency_ԢServicers_ԀParticipatingInTheFederalFamilyEducationLoanProgram.Accordingly, @ weexaminedonatestbasis,evidenceaboutthe_Ԣservicer_'scompliancewiththoserequirementsandperformingsuchotherproceduresasweconsiderednecessaryinthecircumstances.Webelievethatourexaminationprovidesareasonablebasisforouropinion.Ourexaminationdoesnotprovidealegaldeterminationonthe_Ԣservicer_'scompliancewithspecifiedrequirements.Inouropinion,[Nameof_ԢServicer_]complied,inallmaterialrespects,withtheaforementioned 0 requirementsfortheyearended[mo/dy/yr]._Ԣ T T T T T T Ta T   2      ף_    ! Ї  0 4 0 4(#4(#0 (# (#0h(#(#0h(#h(#0(#(#0p(#(#0p(#p(#0 (#(#0x (# (# EXAMPLEC x(#x(#   0 4 0 4(#4(#0 (# (#0h(#(#0h(#h(#0(#(#0p(#(#0p(#p(#0 (#(#0x (# (# Page2of2 (#(#K(#x(#x(#XXXXLԈ  Thisreportisintendedsolelyfortheinformationanduseof theauditcommittee,management,and l theU.S.DepartmentofEducation#XLXXXǰ#andisnotintendedtobeandshouldnotbeusedbyanyoneother \  thanthesespecifiedparties.[Signature] , | [Date]  l     \     EXAMPLED1     REPORTONINTERNALCONTROL  ײ@#OVERCOMPLIANCE   @  [NOREPORTABLECONDITIONS]  p Inplanningandperformingourauditofthe[Nameof_ԢServicer_]compliancefortheyearended @  [mo/dy/yr],weconsidereditsinternalcontroloverspecifiedcompliancerequirementspertaining 0  totheFederalFamilyEducationLoanPrograminordertodetermineourauditingproceduresforthepurposeofexpressingouropiniononcomplianceandnottoprovideassuranceabouttheeffectivenessof[Nameof_ԢServicer_s]internalcontrol.OurconsiderationoftheinternalcontrolwouldnotnecessarilydiscloseallmattersintheinternalcontrolthatmightbematerialweaknessesunderstandardsestablishedbytheAmericanInstituteofCertifiedPublicAccountants.Amaterialweaknessisaconditioninwhichthedesignoroperationofoneormoreofinternalcontrolcomponentsdoesnotreducetoarelativelylowleveltheriskthatnoncompliancewiththeapplicablerequirementsoflaws,regulations,contracts,andgrantsthatwouldbematerialinrelationtotheFederalFamilyEducationprogrambeingauditedmayoccurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheirassignedfunctions.However,wenotednomattersinvolvingtheinternalcontrolanditsoperationthatweconsidertobematerialweaknessesasdefinedabove.Thisreportisintendedsolelyfortheinformationanduseofanauditcommittee,management,andtheU.S.DepartmentofEducationandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.[Signature] @ [Date] 0        EXAMPLED2   g  REPORTONINTERNALCONTROLOVERCOMPLIANCE  (REPORTABLECONDITIONSIDENTIFIED[NOMATERIALWEAKNESSES])   Inplanningandperformingourauditofthe[Nameof_ԢServicer_]compliancefortheyearended P  [mo/dy/yr],weconsidereditsinternalcontrolovercompliancewiththeFederalFamilyEducation @  Loanprograminordertodetermineourauditingproceduresforthepurposeofexpressingouropiniononcomplianceandnottoprovideassuranceoninternalcontrol.However,wenotedcertainmattersinvolvinginternalcontrolovercomplianceanditsoperationthatweconsidertobereportableconditions.Reportableconditionsinvolvematterscomingtoourattentionrelatingtosignificantdeficienciesinthedesignoroperationofinternalcontrolthat,inourjudgment,couldadverselyaffectthe[_ԢServicer_s]abilitytoadministertheFederalstudentfinancialaidprogramsinaccordancewiththe  applicablerequirementsoflaws,regulations,contractsandgrants.Reportableconditionsaredescribedintheaccompanyingscheduleoffindingsandquestionedcostsasitems[identifythe  findingnumberswhicharereportableconditions].Ourconsiderationofinternalcontrolover  compliancewouldnotnecessarilydiscloseallmattersininternalcontrolthatmightbereportableconditionsand,accordingly,wouldnotnecessarilydiscloseallreportableconditionsthatarealsoconsideredtobematerialweaknesses.Amaterialweaknessisaconditioninwhichthedesignoroperationofoneormoreofinternalcontrolcomponentsdoesnotreducetoarelativelylowleveltheriskthatnoncompliancewiththeapplicablerequirementsoflaws,regulations,contracts,andgrantsthatwouldbematerialinrelationtotheFederalstudentfinancialaidprogramsbeingauditedmayoccurandnotbedetectedwithinatimelyperiodbyemployeesinthenormalcourseofperformingtheirassignedfunctions.However,webelievethatnoneofthereportableconditionsdescribedaboveisamaterialweakness. T T T T T T Tc T   1       0 Thisreportisintendedsolelyfortheinformationanduseofanauditcommittee,management,andtheU.S.DepartmentofEducationandisnotintendedtobeandshouldnotbeusedbyanyoneotherthanthesespecifiedparties.[Signature] p&!$ [Date] `'"%  P(#& TRO'3 Letter Landscape3''3 Letter Landscape3'T~XLXXXL~X~XL   0 4 0 4.4.0 . .0h..  0h.h.0p..0p.p.0 ..0x . .0 x.x.0(# . .0%(#.(#.0'%.%.00*'.'.#~XLX~#EXAMPLEE~X~XL0*.0*.   0 4  04.4.0h..0h.h.0..0p..0p.p.0 ..0x . .0 x.x.0(# . .0%(#.(#.0'%.%.00*'.'.#~XLX~㵍#Page1of3~X~XL 0*.0*.     @@  INFORMATIONSHEET g 8  @..@4..4@` ..`  (PreparedbyGuarantyAgency_ԢServicer_ԀManagement)      (Note:ThisInformationSheetispreparedbythe_Ԣservicer_Ԁmanagement,fortheinformationofED.) @  ?,XX hX,XXX?@7..d.  0 4 0 4.4. #~XLX~##~X~XLAUDITFIRM 0h . .0h.h.0..0p..0p.p.0 ..0x . .0 x.x. GUARANTYAGENCY_ԢSERVICER_ #~#   . .   0 4 0 4.4.0 . .0h . .0h.h.0..0p..0p.p.0 ..ENTITYI.D.NO.: (# 򀀀`  . . @7PARTNERSNAME:0  򀀀0 . .0 ..PERIODAUDITED: (# 򀀀~@  . . CPAFIRM'SNAME:0  򀀀0 . .0 ..ENTITYSNAME:0(# . .򀀀#~b# (#.(#. ADDRESS:0 4 0 4.4.0 . .򀀀0 . .0 ..ADDRESS:0 . .0(# . .򀀀`(#.(#.    4    򀀀0  0 .. x   (# 򀀀 . .   0 4 0 4.4.0 . .򀀀  0  . .0x . .0 x.x. (# 򀀀0 . . TELEPHONE.NO.:0   򀀀0 . .0p..0p.p.TELEPHONENO.:  (# ~.. FAX.NO.:0 4 0 4.4.  򀀀0 . .0p..#~8#0p.p.FAX.NO.:0x..0 x.x. (# ~0, . .0@,0*.0*.#~XLX~##XLXX~XL#XXL~P,.,. #~N#~#~XLX~/#~X~XL X # Ї#~㵳##XLX#~XLXXXL~X~XL   0 4 0 4.4.0 . .0h . .  0h.h.0p..0p.p.0 ..0x . .0 x.x.0(# . .0%(#.(#.0'%.%.00*'.'.#~XLX~㵕#EXAMPLEE~X~XL@0*.0*.   0 4  0 4.4.0h . .0h.h.0..0p..0p.p.0 ..0x . .0 x.x.0(# . .0%(#.(#.0'%.%.00*'.'.#~XLX~#Page2of3~X~XL 00*.0*. #~v##XLX㵧#Pleasecompletethefollowingmatrixbyidentifyingtheguarantyagencies(byprovidingtheirIDnumbers)andthe_ԢFFEL_ԀProgram  ` compliancefunctionsperformedbythe_Ԣservicer_Ԁduringtheperiodcoveredbytheattestationengagement(byplacingXsintheappropriatecolumnsforeachguarantyagencyclientthecompliancefunctionisperformed).XXL*wd d dd dd ( dd ..w,dd ,dd ,edd ,edd ,dd ,dd ,edd ,edd ,dd ,dd +  *    *Guaranty  \  AgencyID ?*  ?EDForms  \  1189&1130 ?*  ?Reinsurance ?*  ?Death,  \ Disability,Bankruptcy ?*  ?_ԢPreclaims_,  \ Supplemental_ԢPreclaims_ ?*  ?Collections ?*  ?Fed.Share  \ ofBorrowerPayments ?*  ?Assignment  \ ofDefaultedLoans ?* ! ?CollectionCharges ?* $ ?EnforcementActions +! ' +  H (   H )   H *   H +   H ,   H -   H .   H /   H 0   H 1   T 2   T 3   T 4   T 5   T 6   T 7   T 8   T 9   T :   T ;   <   =   >   ?   @   A   B   C   D   E    \F    \G    \H    \I    \J    \K    \L    \M    \N    \O   hP   hQ   hR   hS   hT   hU   hV   hW   hX   hY   Z   [   \   ]   ^   _   `   a   b   c    pd    pe    pf    pg    ph    pi    pj    pk    pl    pm   |n   |o   |p   |q   |r   |s   |t   |u   |v   |w   (x   (y   (z   ({   (|   (}   (~   (   (   (   4   4   4   4   4   4   4   4   4  4  L  Ї~  @   0 4 0 4.4.0 . .0h . .0h.h.0..0p..0p.p.0 ..0x . .0 x.x.0(# . .0%(#.(#.0'%.%.00*'.'.#~XLX~#EXAMPLEE~X~XL0*.0*.   0 4 0 4.4.0 . .0h . .0h.h.0..0p..0p.p.0 ..0x . .0 x.x.0(# . .0%(#.(#.0'%.%.00*'.'.#~XLX~㵶#Page3of3~X~XL 0*.0*. @& LISTINGOFGUARANTYAGENCYCLIENTS  X   0 4 IDNUMBER0h4.4.NAMEOFGUARANTEEAGENCY0 h.h.0x . .CITY0 x.x.0(# . .STATE  (#.(#. (Example)0 4 1234560 4.4.0 . .0h . ._ԢXYZ_ԀSTATEGUARANTYAGENCY0 h.h.0x . ._ԢANWHERE_0(#x.x.XXx (#.(#.   #~#  @      #XLXT#TRX3' LetterO'3 Letter Landscape3' Letter'3 Letter LandscapeTEXAMPLEF   ;(#(#K(#@  SCHEDULEOFFINDINGSANDQUESTIONEDCOSTS  @ (MustbeAttachedtoAuditor'sReportonCompliance)   Xn XXXLIfthisscheduleisnotpreparedinaccordancewithallelementsdescribedbelow,the `  compliancereportpackagewillberejectedandthe_Ԣservicer_Ԁmaybesubjecttoadministrativesanctionspursuantto34_ԢCFR_Ԁ668SubpartG.#XLX XXn# @  Thisscheduleshouldincludethefollowing:1.0  Thenumberofloansanddollarvaluefor:@ (#(# 0  04(#(#population; 4(#4(# 0  04(#(#selectedsample;0h4(#4(#h(#h(# 0  04(#(#instancesofnoncompliance(whereapplicable);4(#4(# 2.  IPA'sdefinitionofmaterialnoncompliance.  3.0  Well-developedauditfindings.Aproperlydevelopedauditfindinggenerallycontainsthe p followingattributes: (#(# 0  statementofcondition;@(#(#   criteria; 0 0  effect; p(#(#   cause;and ` 0  recommendation.P(#(# TheIPAshouldfullydevelopeachoftheseattributesforeachfindingtoprovidesufficientinformationtoEDofficialstopermittimelyandpropercorrectiveaction.AspartofafindingtheIPAisrequiredtomakearecommendationforcorrectiveactiontothe_Ԣservicer_.Ifcorrectiveactionisnotnecessary,theIPAmuststatethereason.The_Ԣservicer_ԀmustdevelopaSEPARATEcorrectiveactionplan(seeExampleH)basedontheIPA'sfindingsandrecommendationsandmustincludethisplanwhensubmittingthereportpackage.  $" ppB(#EXAMPLEG  (#(#K(#@ AUDITOR'SCOMMENTSONRESOLUTIONMATTERS@ RELATINGTOTHE_ԢFFEL_ԀPROGRAM TheIPAshouldreviewpriorfindings,includingfindingsfromthepreviousIPAaudit,and P  recentED_ԢOIG_ԀauditsandED_and_Ԁguarantyagencyprogramreviews,includingtheresolutionofthosefindings.Foreachfindingforwhichcorrectiveactionhasnotbeencompleted,providethefindingnumber,asummaryofthefinding(includingrecommendationofcorrectiveaction,ifapplicable),andthestatusofcorrectiveaction.[Nameof_ԢServicer_]hasnottakencorrectiveactiononfindingsinpriorreport,_ԢACN_Ԁ#xx @  _Ԣxxxxx_Ԁtitled[Titleofreport]asidentifiedbelow. 0  E r` %,XX hXEFindingNo.1󀀀  Recommendation  0 r  r(#r(# Status0  0` (#(#0 ` (#` (# ` (# (# 0 r  r(#r(# 0 r 0r(#r(#0` (#(# ` (#` (#   ! _ppB(#EXAMPLEH @TT CORRECTIVEACTIONPLAN   @ZZ(MustbeonServicersLetterhead)8Brw %rw &BAuditFirm򀀀0  AuditPeriod򀀀p## A.0 r CommentsonFindingsandRecommendations:P r#r# Theservicermustprovideastatementofconcurrenceornonconcurrencewiththefindingsandrecommendations.Iftheservicerdoesnotagreewithafinding,itmustprovidespecificinformationtosupportitsposition.Iftheinformationisvoluminous,anappendixmaybeattachedtothesubmission.Iftheservicerdeterminesthatthequestionedcostsareunallowableorthatthechargescannotbesupported,theservicershouldprovideastatementtothateffectinthecorrectiveactionplan.Iftheservicerbelievesaquestionedcost,oraportionofthatcost,isallowable,theservicermustidentifytheallowableportionbyprogram.آ T T T T T T Te T   1      ף  B.0 r ActionsTakenorPlanned:r#r# Theservicermustdetailactionstakenorplannedtocorrectdeficienciesidentifiedinthereport.Forplannedactions,servicersmustprovideprojecteddatesforcompletionofmajortasks.Iftheservicerbelievesacorrectiveactionisnotrequired,astatementdescribingthereasonsmustbeincluded.C.0 r StatusofCorrectiveActionsonPriorFindings:`r#r# Forallpriorauditsandexaminations,e.g.IPAaudits,EDOIGaudits,EDprogramreviews,theservicermustcommentonallpriorfindingswhetherornotcorrectiveactionhasbeencompleted. T T T T T T Tg T   2      ף   Theservicermustprovideareportonthestatusofcorrectiveactionstakenonpriorfindingsthatremainopen.Anupdatemustbeincludedondatesforcompletionofmajortasksandresponsibleofficialsforanyactionsnotcompleted.____________________________________Brw }%rw &B r 0  0` ##0 ` #` #(Signature) `'"% # #  r 0  ServicerOfficialsName :P(#&##  r 0  0` ##0 ` #` #0 # #Title: 0}## Telephone#: }#}#   # B# APPENDIXA    @ (U.S.DEPARTMENTOFEDUCATIONOFFICES   *   d ddd dd edd edd dd dd edd edd dd dd ##,*d ,Nd +  ," `  , Forquestionsontheapplicationofthis  8 guide: ' ( ' Forcommentsonthisguide: 6, 8  6U.S.DepartmentofEducationOfficeofInspectorGeneralNonFederalAuditsAdvisorỳandAssistanceTeam10220N.W.ExectutiveHillsBlvd.2ndFloor `  KansasCity,MO64153̢Phone:816-8804024FAX:816-8910815    U.S.DepartmentofEducationOfficeofInspectorGeneralDirector,NonFederalAudits̢WanamakerBuilding100PennSquareEast,Suite502̢Philadelphia,PA19107Phone:2156566900FAX:2156568628 6,0  6 Auditreportpackageshouldbemailedto:  H  Forreportingoffraudulentactsor H indicationsofsuchacts: 6,8  6U.S.DepartmentofEducation̢SFA/FinancialAnalysisandOversight400MarylandAvenue,S.W.ROB3Room4616,MailStop#5138Washington,D.C.202025138 r Tocontactcall:2024012280   p& U.S.DepartmentofEducationAssistantInspectorGeneralforInvestigations400MarylandAvenue,SW̢MES,Room4122Washington,DC202021510Phone:2022058762Fax:2022059449$@.   $~XLXXXL  "@0  r 0  0` ##0 ` #` #0 # #0}##0}#}##XLXX~XLC# &%XXL~&%%&APPENDIXB##  r 0  0` ## 0` #` #0}##0}#}#Page1of2 ##    #~XLX%~&#~X~XL  DEFINITIONS#~XLX~c# @(#..(#~&%X~XL  X   #~XLX%~&# SERVICER  8  Theterm"thirdpartyservicer"isdefinedin34CFR682.200subpartBGeneralProvisionsasfollows:#XLXX~XL<#0 r Thirdpartyservicer.AnyStateorprivate,profitornonprofitorganizationoranyindividual  8  thatentersintoacontractwithalenderorguarantyagencytoadminister,througheithermanualorautomatedprocessing,anyaspectofthelendersorguarantyagency'sFFELProgramrequiredbyanystatutoryprovisionoforapplicabletoTitleIVoftheHEA,anyregulatoryprovisionprescribedunderthatstatutoryauthority,oranyapplicablespecialarrangement,agreement,orlimitationenteredintoundertheauthorityofstatutesapplicabletoTitleIVoftheHEAthatgovernstheFFELProgram,includinganyapplicablefunctiondescribedinthedefinitionofthirdpartyservicerin34CFRpart668;originating,guaranteeing,monitoring,processing,servicing,orcollectingloans;claimssubmission;orbillingforinterestbenefitsandspecialallowance. r#r#  NONSUBSIDIZEDSTAFFORDLOAN  (x AStaffordloanmadepriortoOctober1,1992thatdoesnotqualifyforinterestbenefitsunder34ϢCFR682.301(b)orspecialallowancepaymentsunder34CFR682.302. UNSUBSIDIZEDSTAFFORDLOAN   AloanmadeafterOctober1,1992authorizedundersection428HoftheHEAforborrowerswhodonotqualifyforinterestbenefitsunder34CFR682.301(b).XXXXL INTERNALCONTROL  x#! Internalcontrolmeansaprocess,effectedbyanentity'smanagementandotherpersonnel,designedtoprovidereasonableassuranceregardingtheachievementofobjectivesinthefollowingcategories:(1  (1 'e  .0 r   ݀Effectivenessandefficiencyofoperations;(1  'ی(d#&r#r# Ќ  b.0 r Reliabilityoffinancialreporting;and)<%(r#r# '(1  (1!'c  .0 r   ݀Compliancewithapplicablelawsandregulations.(1!"'ی+'*r#r# Ќ   d P #XLXXX#   PC  l   0 r 0r#r#0` ##0 ` #` #0 # #0}##0}#}#APPENDIXB##  r 0  0` ##0 ` #` #0 # #0}##0}#}#Page2of2 ##  INTERNALCONTROLOVERTHEFFELPROGRAM  p InternalcontrolpertainingtothecompliancerequirementsfortheFFELprogram(internalcontrolovertheFFELprogram)meansaprocess--effectedbyanentity'smanagementandotherpersonnel--designedtoprovidereasonableassuranceregardingtheachievementofthefollowingobjectives:a.0 r Transactionsareproperlyrecordedandaccountedforto:` r#r#  r (i)0  Permitthepreparationofreliablefinancialstatementsandreports;@ ## ̀ r (ii)0  Maintainaccountabilityoverassets;and ## ̀0 r (iii)0r#r#Demonstratecompliancewithlaws,regulations,andothercompliancerequirements;## b.0 r Transactionsareexecutedincompliancewithlaws,regulations,andtheprovisionsof  contractsorgrantagreementsrelatedtotheFFELProgram;and r#r# c.0 r Funds,property,andotherassetsaresafeguardedagainstlossfromunauthorizeduseor ` disposition. r#r#  QUESTIONEDCOST  0 Questionedcostmeansacostthatisquestionedbythepractitionerbecauseofanauditfinding:a.0 r Whichresultedfromapossibleviolationofaprovisionofalaw,regulation,contract,grant, @ cooperativeagreement,orotheragreementordocumentgoverningtheuseofFederalfunds,includingfundsusedtomatchFederalfunds; r#r# b.0 r Wherethecosts,atthetimeoftheaudit,arenotsupportedbyadequatedocumentation;or" r#r# c.0 r Wherethecostsincurredappearunreasonableanddonotreflecttheactionsaprudentperson $" wouldtakeinthecircumstances. r#r#   e ,`'*