The way that the U.S. Department of Education's Office of Student Financial Assistance (OSFA) should conduct its quality assurance function of monitoring a processing contractor is described. For the following quality assurance procedures, information is provided on the goal of the procedure, activities to be measured, measures, and the role of quality assurance: production control, information receipt, data entry, data edit, computation, document production and mailing, corrections, fiscal control, software quality assurance, productivity control, telephone service, correspondence, reporting process, and corrective action process. Also included is a summary checklist of quality assurance procedures that monitors can use to assure they have completed all quality assurance tasks. Appended are: a summary of the division of responsibility between the contractor and OSFA for maintaining the quality of software; a monitor's checklist for reviewing the software developed by the processing contractor; an example of a signoff form to notify OSFA of proposed changes in the system or system software; an example of an OSFA internal reporting form that summarizes key processing measures and exceptions; and an example of OSFA internal reporting summary form (section 1) tailored to Pell Grant processing. (SW)