Proprietary institutions are receiving FY23 audit citation letters from the Department of Education alleging that their audits were submitted late. In many of these cases, the institutions followed ED’s own guidance during the 2024 eZ-Audit transition — submitted through COD when eZ-Audit was unavailable, then resubmitted through eZ-Audit when the platform reopened. We are aware of at least one institution that has already had its citation rescinded after demonstrating timely compliance. If you have received one of these letters, do not assume the determination is correct.
The citations carry real consequences. They are being copied to accreditors, state regulators, and other oversight bodies. Even when issued in error, they create regulatory noise that takes time and documentation to unwind. Here is what is driving these letters and what to do about them.
What’s Triggering These Citations
The root cause traces back to the eZ-Audit platform disruption in mid-2024.
On June 10, 2024, the Federal Student Aid office released Electronic Announcement GENERAL-24-70, directing proprietary institutions with fiscal years beginning on or after January 1, 2023, and audit due dates of June 30, 2024, to submit their completed financial statements and compliance audits through the Document Center on the Common Origination and Disbursement (COD) website. The reason: eZ-Audit required extensive development updates to accommodate the final regulations amending the 90/10 revenue reporting requirement and would not be available for this cohort. EA 24-70 was explicit — institutions should submit via COD “in order to meet the submission deadline.”
On July 11, 2024, FSA released Electronic Announcement GENERAL-24-85, confirming that eZ-Audit development updates were complete. Institutions that had already submitted via COD were required to resubmit through eZ-Audit within three weeks — by August 1, 2024. EA 24-85 superseded GENERAL-24-70.
When COD submissions were transferred into eZ-Audit, they could show a misleading status — “incomplete” — even when the institution had submitted on time through both platforms. The citation letters now being issued appear to be based on that eZ-Audit system status rather than on actual compliance with ED’s published interim submission instructions.
Put simply: Even though organizations followed ED the submission instructions for both COD and eZ-Audit, some submissions have been flagged as late due to a technical error.
Why This Matters
Three things make these letters more than a routine paperwork issue.
First, the citation letters are being distributed broadly. They are copied to third parties including accrediting agencies, state licensing agencies, and in at least one documented case, other federal oversight bodies. That distribution creates immediate reputational exposure and can trigger follow-on inquiries from agencies that have no context for the eZ-Audit transition.
Second, the consequences cited in the letters are serious. ED’s own rescission correspondence reiterates that future late submissions in eZ-Audit can result in Heightened Cash Monitoring (HCM1), a letter of credit requirement, and provisional Program Participation Agreement consequences. An erroneous citation that goes unchallenged could establish a compliance record that makes those consequences more likely down the road.
Third, this appears to be systemic. McClintock & Associates is aware of multiple institutions receiving similar citation letters in a short timeframe — all tied to the same FY23 submission cycle affected by the eZ-Audit outage. This is not an isolated data entry error. It is a pattern that suggests a broader system-driven misinterpretation of submission timing.
What to Do If You Receive an FY23 Audit Citation Letter
Step 1: Verify Your Submission Timeline Against ED’s Published Guidance
Before drafting a response, confirm the facts. Pull your records and establish whether your institution submitted via COD per EA 24-70 before the June 30, 2024 deadline, and then resubmitted via eZ-Audit per EA 24-85 within the three-week window (by August 1, 2024). The applicable audit submission deadline is governed by 34 C.F.R. § 668.23(a)(4): the earlier of thirty days after the date of the auditor’s report or six months after the last day of the institution’s fiscal year.
If your timeline shows compliance with both the regulatory deadline and ED’s interim platform instructions, the citation is likely issued in error.
Step 2: Assemble Your Proof Packet
Build a formal response supported by four categories of documentation:
- COD Document Center submission confirmation. Screenshots or upload receipts showing the date your audit was submitted through COD, demonstrating compliance with EA 24-70 and the June 30, 2024 deadline.
- eZ-Audit resubmission confirmation. Evidence that you resubmitted through eZ-Audit within three weeks of EA 24-85 — by August 1, 2024.
- Any ED correction trail. If ED requested technical corrections after your eZ-Audit submission and you resubmitted promptly, include that documentation as well. This is relevant because the “incomplete” eZ-Audit status may reflect a correction cycle, not a late filing.
- A regulatory timeline summary. A brief narrative tying your submission dates to the specific Electronic Announcements (GENERAL-24-70 and GENERAL-24-85) and 34 C.F.R. § 668.23(a)(4), showing that every submission was made on time and on the platform ED designated.
Step 3: Respond Formally and Make Three Specific Asks
Your written response should request three things:
- Rescind the citation as issued in error, based on the evidence that all submissions were timely under ED’s own published guidance.
- Confirm in writing that the institution’s submission was timely under 34 C.F.R. § 668.23(a)(4) and the applicable Electronic Announcements.
- Notify all third parties who received copies of the original citation letter that the citation has been withdrawn. This is critical — the broad distribution of the initial letter is part of the harm, and the correction needs to reach the same audience.
If you believe your situation is part of the broader systemic pattern, escalate promptly with ED. The institutions that have resolved these citations successfully moved quickly and escalated through senior ED contacts rather than waiting for routine processing.
What Resolution Looks Like
At least one institution that followed this approach — assembling a documented proof packet, responding formally, and escalating — received a full rescission from ED within eleven days. The Department reviewed the documentation, acknowledged that the institution had followed ED’s COD submission guidance during the eZ-Audit outage, and confirmed the submission was timely. The formal rescission letter recognized that the audit had been transferred into eZ-Audit, marked incomplete due to the system transition, and that a corrected upload was provided on time.
That resolution produced two key artifacts every institution should work toward: an appeal-approved confirmation from ED and a formal rescission letter that can be shared with accreditors and regulators who received the original citation. Preserve both.
ED also underscored in its rescission correspondence that future late submissions can still trigger HCM1, a letter of credit requirement, and provisional PPA consequences.
The fact that this round of citations was issued in error does not change the consequences for actual late filings going forward.
Frequently Asked Questions
What regulation governs the audit submission deadline for proprietary institutions?
The deadline is set by 34 C.F.R. § 668.23(a)(4). The audit is due the earlier of thirty days after the date of the auditor’s report or six months after the last day of the institution’s fiscal year. For institutions with a December 31 fiscal year end, the six-month deadline is June 30.
What should I do if I submitted via COD but did not resubmit in eZ-Audit within the three-week window?
Your situation is different from the institutions receiving erroneous citations. If you did not resubmit within the EA 24-85 window, the citation may be valid. Contact your auditor immediately to assess your options and determine whether a late resubmission or appeal is appropriate.
Can a late audit submission citation affect my institution’s Title IV participation?
Yes. ED’s rescission correspondence explicitly states that late submissions can trigger Heightened Cash Monitoring (HCM1), a letter of credit requirement, and provisional Program Participation Agreement consequences. Late or missing audit submissions are among the most common reasons institutions are placed on HCM1. Even an erroneous citation should be challenged promptly to keep your compliance record clean.
Were all FY23 citation letters issued in error?
Not necessarily. The erroneous citations appear to be linked specifically to the eZ-Audit/COD transition for institutions with audit due dates of June 30, 2024. If your institution was not affected by the eZ-Audit outage or did not submit via COD as directed by EA 24-70, the citation may be based on different facts. Review your specific submission timeline before concluding the citation is in error.
Should I contact ED directly or respond in writing?
Both. Submit a formal written response with your proof packet through the channels directed in the citation letter. If you believe the issue is systemic and your response is not being processed promptly, escalate through senior ED contacts. The institution that achieved rescission moved on both tracks simultaneously.
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