(GENERAL-26-18) Enforcement priorities related to audited financial statement requirements under §668.23(d)(1)
March 20, 2026
On Oct. 31, 2023, the U.S. Department of Education (ED) published Federal Register notice 88 FR 74568 that amended regulations related to financial responsibility, administrative capability, certification procedures, and Ability-to-Benefit. Through this Electronic Announcement, ED is providing notice regarding its enforcement priorities under § 668.23(d)(1) which discusses audited financial statements which, in collaboration with other regulatory requirements, enables ED to make a determination of an institution’s financial responsibility.
ED has discretion regarding the use of its enforcement authority and believes that taking enforcement action against institutions for failure to comply with certain aspects of § 668.23(d)(1) would not be appropriate due to our limited resources nor would taking action advance the national interest or the policy priorities of ED. We also note that institutions of higher education have raised practical challenges associated with transitioning their fiscal year to the new standard and implementing other changes to their financial statements by the originally established effective date. Accordingly, as discussed below, ED has no plans to take enforcement actions under certain specific provisions in § 668.23(d)(1) that went into effect July 1, 2024. ED may also take action to amend § 668.23(d)(1) in a future rulemaking.
