If you weren’t scrolling through the Education Department’s (ED) recent financial statement—you missed a doozy! On page 116, KPMG says it can’t audit 2022 because ED can’t support its forgiveness estimates. The financial report released by the Department is a sham.
Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) said: "The Department is blatantly lying about how much taxpayer money it is giving away. Two years and a half a trillion dollars later, it appears nothing has changed. This auditor said it wouldn’t touch the Department’s shoddy guesses with a ten-foot pole let alone sign off on them. This is absolutely ridiculous."
Essentially, ED made up numbers and can’t defend them to its auditor, KPMG.
Here’s the damning paragraph:
Basis for Disclaimer of Opinion on Fiscal Year 2022 Consolidated Financial Statements
During fiscal year 2022, the Department announced broad-based debt relief for certain of its student loan borrowers under the Direct Loan and Federal Family Education Loan (FFEL) programs. Management estimated the subsidy costs stemming from the broad-based debt relief as of September 30, 2022. However, management was unable to provide adequate evidential matter to support certain key assumptions used to estimate the subsidy costs. As a result of this matter, we were unable to determine whether any adjustments to the balance sheet might have been necessary with respect to the fiscal year 2022 Loans Receivable, Net – Direct Loan Program; Loans Receivable, Net – FFEL Program; Subsidy Due to Treasury; Loan Guarantee Liabilities; the related balances in the consolidated statements of net cost and changes in net position; and related notes to the consolidated financial statements.