FY 2022 AGENCY FINANCIAL REPORT U.S. DEPARTMENT OF EDUCATION
108
FINANCIAL SECTION (FISCAL YEAR 2022 UNAUDITED)
3
We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control related matters that
we identified during the audit.
Required Supplementary Information
U.S. generally accepted accounting principles require that the information in the Management’s Discussion and
Analysis and Required Supplementary Information sections be presented to supplement the basic consolidated
financial statements. Such information is the responsibility of management and, although not a part of the basic
consolidated financial statements, is required by the Federal Accounting Standards Advisory Board who
considers it to be an essential part of financial reporting for placing the basic consolidated financial statements
in an appropriate operational, economic, or historical context. We were unable to apply certain limited
procedures to the required supplementary information as of and for the year ended September 30, 2022 in
accordance with GAAS because of the significance of the matter described in the Basis for Disclaimer of
Opinion paragraph. We do not express an opinion or provide any assurance on the information.
We have applied certain limited procedures to the required supplementary information as of and for the year
ended September 30, 2021 in accordance with GAAS, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic consolidated financial statements, and other knowledge we obtained
during our audit of the fiscal year 2021 basic consolidated financial statements. We do not express an opinion
or provide any assurance on the information because the limited procedures do not provide us with sufficient
evidence to express an opinion or provide any assurance.
In connection with our engagement to audit the Department’s consolidated financial statements as of and for
the year ended September 30, 2022, we considered the Department’s internal control over financial reporting
(internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the
purpose of expressing an opinion on the consolidated financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the Department’s internal control. Accordingly, we do not express
an opinion on the effectiveness of the Department’s internal control. We did not test all internal controls relevant
to operating objectives as broadly defined by the Federal Managers’ Financial Integrity Act of 1982.
Our consideration of internal control was for the limited purpose described in the preceding paragraph and was
not designed to identify all deficiencies in internal control that might be material weaknesses or significant
deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified.
However, as described in the accompanying Exhibits, we identified certain deficiencies in internal control that
we consider to be a material weakness and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial
statements will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies
described in the accompanying Exhibit A, Controls over the Relevance and Reliability of Underlying Data Used
in Credit Reform Estimates Need Improvement, to be a material weakness.
The Department management did not report the material weakness in its Statement of Assurance, included in
the Management’s Discussion and Analysis section of the accompanying Agency Financial Report.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe
than a material weakness, yet important enough to merit attention by those charged with governance. We
consider the deficiencies described in the accompanying Exhibit B, Information Technology Controls Need
Improvement and Entity Level Controls Need Improvement, to be significant deficiencies.