Saying it found “material weakness” in the Education Department’s financial statements for the last year, an outside auditor declined to issue an opinion on the documents.
KPMG, the independent auditor hired by the department’s inspector general, said the department wasn’t able to provide the necessary evidence to support its estimate of how much student loan forgiveness will cost, which was based in a large part on how many people would apply for debt relief. As a result, KPMG was “unable to determine whether any adjustments to the balance sheet might have been necessary” for fiscal year 2022.
The auditor’s report was included in the Education Department’s annual financial report released this week. The department partially concurred with the auditor’s finding, noting that the model used to develop the estimates has been in place since 1998 and that the agency has received a clean audit for 20 consecutive years.
The estimate was based on a review of relevant literature and historical data on how many borrowers participated in debt-relief programs.
“The department does acknowledge that controls may not have operated as intended due to the lack of strictly comparable other federal benefit programs,” the agency wrote in response to the audit.
The Education Department has said the one-time debt relief would cost $300 billion over the next 10 years. The Congressional Budget Office, Congress’s nonpartisan research arm, has estimated it could cost the federal government $400 billion over 30 years.
North Carolina representative Virginia Foxx, who chairs the House Education and Workforce Committee, called attention to the auditor’s findings in a news release.
“The department is blatantly lying about how much taxpayer money it is giving away,” Foxx said in a statement.