With a $49B Budget, Education Dept. Can’t Pass Audit
The Department of Education recently received an unusual audit opinion, thanks to poor data quality and uncertainty in the cost of subsidy programs, according to an Inspector General report.
After conducting their yearly audit, auditors at KPMG issued a “Disclaimer of Opinion.” This means auditors felt they did not have enough information to issue an opinion on whether the Department of Education was fairly representing their financial statements.
This opinion was largely a result of President Joe Biden’s student loan forgiveness program, which created a large amount of uncertainty in calculating how much the forgiveness would cost.
Auditors state, “[Department of Education] management was unable to provide adequate evidential matter to support certain key assumptions used to estimate the [student loan forgiveness] subsidy costs.”
Because of this, auditors were unable to determine if adjustments had to be made to the balance sheet. Specifically, there was uncertainty with the “take up rate,” or how many people would opt into the debt forgiveness program, making it impossible to calculate how much debt the department would actually be forgiving and taking as a loss.
Auditors also found a material weakness in the department’s internal controls that led to imprecise data collection, with KPMG commenting, “controls were not properly designed at an appropriate level of precision to address the relevance and reliability of the underlying data.”
The Department of Education has a budget of $48.8 billion, but taxpayers can’t be sure where that money is going or if its financial statements are accurate thanks to poor data and lack of basic accounting controls.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
This article was originally published by RealClearInvestigations and made available via RealClearWire.