The OIG also reported on internal control structure and compliance with laws and regulations for the FFEL Program. The report contained five new internal control recommendations. Of the 21 recommendations previously reported, eight were completely implemented, nine have actions in process, two have an action planned and one is not planned for specific actions due to the revised role of the guaranty agencies in the student loan process caused by the phase in of the Direct Loan Program. One other recommendation, calling for a legislative change, has been subsequently implemented by publishing a new regulation. No instance of noncompliance with laws and regulations was reported.
The William D. Ford Federal Direct Loan Program for FY '94 was audited by a contractor to OIG. The audit contractor issued an unqualified opinion on the principal financial statements taken as a whole. The auditors noted certain matters involving controls within the loan origination, servicing and reporting systems which were considered to be reportable conditions. Reportable conditions involve matters relating to significant deficiencies in the design or operation of the internal control structure which could adversely affect the program's ability to record, process, summarize and report financial data. None of the reportable conditions were considered to be material weaknesses. ED has developed corrective action plans for the audit recommendations. No instance of noncompliance with laws and regulations was reported.
ED has produced audited department-wide financial statements for FY '95. Supplemental Financial and Management Information within this statement will disclose the relevant account balances and activity of the FFEL and Direct Loan Programs.