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GAO-25-108149 1 (July 23, 2025)

handle is hein.gao/uscsldfnil0001 and id is 1 raw text is: c tAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 July 23, 2025 Mr. Richard J. Lucas Chief Financial Officer, Acting U.S. Department of Education 400 Maryland Avenue, S.W. Washington, D.C. 20202 U.S. Consolidated Financial Statements: Key Issues for the Department of Education Dear Mr. Lucas: As the Department of Education's acting Chief Financial Officer, you have an important role in helping to ensure that reliable and complete federal financial information is available. The purpose of this letter is to highlight important issues for your awareness related to financial management in the federal government. GAO is responsible for conducting the annual audit of the U.S. government's consolidated financial statements, or CFS.1 On January 16, 2025, we issued a disclaimer of opinion on these statements for fiscal years 2024 and 2023.2 The consolidated financial statements are compiled from federal entity financial statements and other federal entity information. As such, federal entities, including Education, have a key role in supporting financial reporting at the government-wide level. Education's strong and sustained commitment is critical to addressing the following key issues that affect the U.S. government's consolidated financial statements. Education's disclaimers of opinion and material weakness: Education was unable to obtain an opinion on its fiscal years 2022 through 2024 financial statements. The disclaimers of opinion were based on either the lack of adequate support (2022) or errors identified in underlying data (2023 and 2024) for assumptions used to estimate the cost of student loan programs. These disclaimers contributed to us being unable to express an opinion on the consolidated financial statements. Education's auditor also continued to report a material weakness in internal control in fiscal years 2022 through 2024 related to Education's controls over the data used for estimating the costs of its loan programs. This condition increases the risk that the balance sheet and related note disclosures could be materially misstated. It is important that Education address the issues causing the disclaimer of opinion and material weakness to support accurate reporting for the consolidated financial statements. 1The Secretary of the Treasury, in coordination with the Director of the Office of Management and Budget, is required to annually submit audited financial statements for the executive branch of the U.S. government to the President and Congress. These statements, as submitted, also include the legislative and judicial branches. 2GAO, Financial Audit: FY 2024 and FY 2023 Consolidated Financial Statements of the U.S. Government, GAO-25- 107421 (Washington, D.C.: Jan. 16, 2025). GAO-25-108149 CFS Issues for Education Page 1

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