Clarkson University

Finding No.: 2025-003 – Disbursements Reporting Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Pell Grant Program and Federal Direct Loan (FDL) Program ALN Number: 84.063, 84.268 Federal Award Year: July 1, 2024 – June 30, 2025 Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. An institution follows up with a disbursement record for that student no earlier than (1) seven calendar days prior to the disbursement date under the Advance or Heightened Cash Monitoring 1 payment methods, or (2) the date of the disbursement under the Reimbursement or Heightened Cash Monitoring 2 Payment Method. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. In testing the origination and disbursement data, the auditor should be most concerned with the data ED has categorized as accepted or accepted with corrections. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. Institutions may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For two (2) out of 69 Pell COD Reports selected for test work, the required Pell student payment data was reported to the Common Origination and Disbursement (COD) website 52 days after disbursement, which exceeds the 15-day timeframe required by federal regulations. For one (1) out of 69 Pell COD Reports selected for test work, the required Pell student payment data was reported to the Common Origination and Disbursement (COD) website 261 days after disbursement, which exceeds the 15-day timeframe required by federal regulations. For four (4) out of 69 Pell COD Reports and three (3) out of 113 FDL COD Reports selected for test work, the Cost of Attendance was misreported to the COD website. There was no follow-up by the University to correct the discrepancies. For ten (10) out of 69 Pell and ten (10) out of 113 FDL COD Reports selected for test work, the transaction number did not agree between the FASFA Submission Summary Form and the COD website. Cause The cause of the conditions found is insufficient review to ensure that accurate disbursement reporting is occurring on a timely basis, all records submitted to COD were accepted, and, for those that were rejected, that corrected data is submitted within the required timeframe. Possible Asserted Effect The possible effect of the condition found is that the University may not be reporting Pell and FDL disbursements to COD completely, accurately, and in a timely manner. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Yes; 2024-002 Views of Responsible Officials Management accepts this finding and notes several issues that affected the submissions including staffing onboarding and training, submission review, and deadline controls. Management continues to fill positions experiencing unexpected turnover and to improve training for current and newly hired staff in order to restore adequate staffing levels and ensure continuity of COD reporting responsibilities. From May through September 2025, management retained Blue Icon Advisors (BIA) to provide dedicated coaching and support for improved onboarding and compliance knowledge, including providing specialized training to the Loan Manager relative to federal regulations and proper loan record management. Management is implementing processes to improve the weekly review and update of Cost of Attendance (COA) information and CPS transaction numbers to further ensure institutional records are aligned with COD data and to reduce the risk of mismatched records. Management has also strengthened internal controls with improvements to processes which enhance the monitoring of submission deadlines, review of file acceptance reports, and identification and correction of electronic records issues prior to submission. These improvements include the increased and more effective utilization of COD-delivered reports (including Pell Reconciliation and Anticipated Disbursement Reports) and institutional and PeopleSoft reports and queries, with reviews conducted on a weekly basis to promptly identify record discrepancies requiring resolution.

Finding No.: 2024 002 – Disbursements Reporting Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Pell Grant Program ALN Number: 84.063 Federal Award Year: July 1, 2023 – June 30, 2024 Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and IASG origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. An institution follows up with a disbursement record for that student no earlier than (1) seven calendar days prior to the disbursement date under the Advance or Heightened Cash Monitoring 1 payment methods, or (2) the date of the disbursement under the Reimbursement or Heightened Cash Monitoring 2 Payment Method. The disbursement record reports the actual disbursement date and the amount of the disbursement. ED processes origination and/or disbursement records and returns acknowledgments to the institution. The acknowledgments identify the processing status of each record: Rejected, Accepted with Corrections, or Accepted. In testing the origination and disbursement data, the auditor should be most concerned with the data ED has categorized as accepted or accepted with corrections. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. Institutions may do this by reporting once every 15 calendar days, bi-weekly or weekly, or may set up their own system to ensure that changes are reported in a timely manner. Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For six (6) out of 40 students selected for test work, the required Pell student payment data was reported to the Common Origination and Disbursement (COD) website 17 days after disbursement, which exceeds the 15-day timeframe required by federal regulations. For one (1) out of 40 student sample selections, the Cost of Attendance was misreported to the COD website. There was no follow-up by the University to correct the discrepancy. For three (3) out of 40 student sample selections, the transaction number did not agree between the Student Aid Report (SAR) and the COD website. Cause The cause of the condition found is insufficient review to ensure that disbursement reporting is occurring on a timely basis, all records submitted to COD were accepted, and, for those that were rejected, that corrected data is submitted within the required timeframe. Possible Asserted Effect The possible effect of the condition found is that the University may not be reporting Pell disbursements to COD completely, accurately, and in a timely manner. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Views of Responsible Officials Management accepts this finding and notes there were issues with the disbursement records that prevented them from being sent to COD. Unexpected turnover in the workforce resulted in 25% normal processing capacity during the timeframe in question. Staffing levels in that area have been fully restored with appropriate training to the employees. A formal schedule has been developed whereby records are reconciled and sent to COD on a weekly basis to reduce the risk of late filings. In addition, the University is considering methods of improved redundancy and backup to prevent systemic issues going forward.

Finding No.: 2024 003 – Verification Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster – Federal Pell Grant Program and Federal Direct Loan Program ALN Number: 84.063 and 84.268 Federal Award Year: July 1, 2023 – June 30, 2024 Criteria An institution is required to establish written policies and procedures that incorporate the provisions of 34 CFR 668.51 through 668.61 for verifying applicant information for those applicants selected for verification by ED. The institution shall require each applicant whose application is selected by ED to verify the information required for the Verification Tracking Group to which the applicant is assigned. For students who are assigned to the Standard Verification Group (V1), the institution must verify the following: adjusted gross income; U.S. income tax paid; untaxed portions of IRA distributions; untaxed portions of pensions; IRA deductions and payments; tax-exempt interest income; education credits; household size; number in college. For students who are assigned to the Custom Verification Group (V4), the institution must verify identity/statement of educational purpose (SEP). For students who are assigned to the Aggregate Verification Group (V5), the institution must verify identity/SEP in addition to the items in the Standard Verification Group. If any discrepancies are identified, the institution is required to submit a correction and obtain an updated SAR. Additionally, Title 2 U.S. Code of Federal Regulations Part 200 (2CFR 200) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, section 303(a) states, the non Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found For one (1) out of 2140 students selected for testwork, one (1) of the ten (10) required verification elements, specifically the student's income earned from work, was not verified by the University. Cause The condition resulted from the University’s internal control processes not operating consistently to ensure that each specified data element was appropriately verified. Specifically, the University’s control of completely reviewing all specified data elements was not operating at a level of precision that would cover all specified data elements. Possible Asserted Effect Failure to perform verification procedures over all required data elements could result in awarding students more or less aid than they would otherwise qualify for. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Views of Responsible Officials Management accepts this finding. The error on the verification (1 student) was made by a former staff that did not verify the student wages. Clarkson’s procedure clearly states the income is required to be verified, however the former staff member made an error in processing this verification. Improvements to the training process have been implemented including emphasis on the requirement that staff verify income as part of the review process. A multi-tier review system has been implemented whereby after the initial review process has been completed, verification documents are submitted to the Director who then performs a second review to ensure that the initial review process was correctly followed and that the data is reliable.

Finding 2023-001, Financial Reporting During the past two fiscal year-end audits we disclosed a significant deficiency in internal controls over financial reporting. During the fiscal year-end 2023 audit we did not observe substantial improvement in the internal control environment over financial reporting. We continued to identify financial statement adjustments as a result of our audit procedures. Management continued to have significant difficulty in preparing the statement of cash flows specifically as it relates to investing activities. Additionally, we continued to observe management not performing adequate net asset analysis or monitoring restricted net asset balances at the project level. We noted management does not have a robust and systematic process in place whereby the financial statements are prepared and reconciled to supporting documentation. As a result, management was not able to timely provide complete and accurate supporting documentation for various significant accounts, including investing cash flows and net assets. We also continued to note a number of correcting journal entries as a result of the lack of a secondary review and approval process at a sufficient level of precision. The lack of specific, repeatable formalized policies and procedures over internal controls in financial reporting creates a risk that the consolidated financial statements could be misstated. We recommend that management perform a review of the University’s policies and procedures for account analysis and reconciliation, review existing internal controls for opportunities to strengthen, and add specific policies and procedures to, on a periodic basis throughout the year, prepare the financial statements in accordance with Generally Accepted Accounting Principles (GAAP) vs. solely preparing them on an annual basis. Further, we recommend the University consider additional training for its staff and/or obtaining additional GAAP accounting or auditing expertise. Finally, we recommend the University investigate better reporting through internal systems or through service providers, such as the outsourced investment provider, to aid in efficiently and effectively analyzing and reporting on key transactions.

Finding Number: 2023-002 Program: Student Financial Assistance Cluster – Federal Direct Loan Program Federal Agency Name: United Statement Department of Education Federal Award Year: July 1, 2022 – June 30, 2023 Federal Assistance Listing Number: 84.268 Finding Type: Significant deficiency and non-compliance Compliance requirement: Special test: Disbursements Criteria The institution must notify the student, or parent, in writing of (1) the date and amount of the disbursement, and (2) the student’s right, or parent’s right to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan payments returned to ED; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan. Institutions that implement an affirmative confirmation process (as described in 34 CFR 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution with Direct Loans. Institutions that do not implement an affirmative confirmation process must notify a student no earlier than 30 days before, but no later than seven days after, crediting the student’s account and must give the student 30 days to cancel all or part of the loan. Per 2 CFR Part 200.303, non-Federal entities receiving Federal awards must establish and maintain effective internal controls over Federal awards that provide reasonable assurance that they are managing Federal awards in compliance with Federal statutes, regulations and the provisions of contracts or grant agreements that could have a material effect on each of its Federal programs. One of the University’s many responsibilities includes establishing a system of internal controls in determining disbursement notifications for student aid. Condition For 3 of 40 students selected for test work, the University was unable to provide evidence that the student was notified that the Federal Direct loan funds were disbursed to the student’s account. Cause The cause of the condition found was due to a system error that prevented the disbursement notification from being sent. Effect The effect of the condition found is that students may not have been properly notified of the disbursement to their accounts or their right to cancel the loans. Questioned Costs None. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Identification of Whether the Audit Finding was a Repeat Finding This is not a repeat finding. Recommendation We recommend the University review its processes and controls over disbursement notifications to ensure that all notifications are sent timely to students and parents and that evidence is maintained to support compliance with the above noted requirements.

Finding Number: 2023-003 Program: Research and Development Cluster – Geographic Programs-Great Lakes Restoration Initiative Federal Agency Name: Environmental Protection Agency Federal Award Year: July 1, 2022 – June 30, 2023 Federal Assistance Listing Numbers: 66.469 Finding Type: Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria The Uniform Guidance Section 200.430, states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity and (vi) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition The University performs certain manual calculations when a faculty or graduate assistant has multiple appointments in order to determine the appropriate percentage allocation to each federal award or non-federal activity. During our testing internal controls and compliance over allowable costs/cost principles specific to payroll we noted that the University did not have internal controls designed at a sufficient level of precision to detect errors in manual calculations when the employee has more than one supplemental pay authorization. As a result we noted that, 2 out of 62 payroll transactions tested the amount allocated and charged to the grant was incorrect. We noted that the 2 transactions were for the same employee and impacted the same award. Cause In discussing this with the University, this employee had submitted two separate payroll authorizations for his summer research salary at different times and a manual calculation error was made in the allocation to the appropriate grant. The University’s internal controls over review of supplemental pay authorizations did not include a secondary review of the calculation by someone other than the preparer before the allocation was input into the payroll system. Effect The lack of internal controls at a sufficient level of precision and in particular where there are manual calculations can result in incorrect allocations and charges to federal awards and ultimately unallowable costs. Questioned Costs None. Statistical Sampling Our sample was not and was not intended to be statistically valid. Identification of Whether the Audit Finding was a Repeat Finding This finding is a repeat finding in the immediately prior audit finding 2022-003 Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant, including a review by someone other than the preparer.

Finding Number: 2023-004 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2022 – June 30, 2023 Federal Assistance Listing Numbers: various Finding Type: Significant Deficiency Compliance Requirement: Cash Management Criteria In accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testing of cash management, we noted that University has not effectively segregated drawdown preparation, approval, and submission duties. Specifically, the Research Accountant prepares, submits, and certifies drawdowns without a secondary review or approval. Cause The University did not have adequately designed internal controls in the cash management process. Effect Cash draws could be incorrectly calculated and the incorrect amount drawn down on federal grants. Questioned Costs None Statistical Sampling Our sample was not and was not intended to be statistically valid. Identification of Whether the Audit Finding was a Repeat Finding This was not a repeat finding Recommendation We recommend that the University implement an additional step in the cash drawdown process to include a review by someone other than the preparer of the drawdown and segregation of duties between the person preparing the drawdown request and the person performing the actual cash draw through the federal systems.

Finding Number: 2023-005 Program: Research and Development Cluster Federal Agency Name: Department of Agriculture, National Science Foundation, Environmental Protection Agency, Department of Homeland Security, Department of Commerce,Department of Defense and Department of Health and Human Services. Federal Award Year: July 1, 2022 – June 30, 2023 Federal Assistance Listing Numbers: 10.310, 47.041, 47.070, 66.469, 97.077, 11.609, 12.901, 93.913 Finding Type: Significant deficiency and non-compliance Compliance Requirement: Period of Performance Criteria Unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award not later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the federal award (2 CFR section 200.344(b)) In accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testing of period of performance, we noted that 8 out of 20 transactions tested for grants closed out in FY23 had transactions posted to the grant more than 120 days after the close out of the award or the end of the period of performance. After reviewing the full population of grants that ended during FY23 we noted a total of 8 grants and 47 transactions that were posted to the grant more than 120 days after the close out of the award or the end of the period of performance. Specifically, we noted for 38 of the 47 transactions posted late were to move costs off the grants for a total of ($39,006) and 9 transactions were to add expenses to the grants for a total of $27,266. Cause In discussing this with the University, there was not adequately designed internal controls to ensure grants are closed out timely in accordance with the federal regulations, primarily in times of turnover in staff in the office of sponsored research. Effect Unsupported costs could be charged to a grant after the close out period. Questioned Costs ALN Amount 10.310 $ 1,092 47.041 3 47.070 628 66.469 543 97.077 25,000 Total $ 27,266 Statistical Sampling Our sample was not and was not intended to be statistically valid. Identification of Whether the Audit Finding was a Repeat Finding This was not a repeat finding Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to ensure that grants are closed out timely.

Finding 2022-001, Financial Reporting During the fiscal 2021 audit we disclosed a significant deficiency in internal controls over financial reporting and during the fiscal 2022 audit we did not observe substantial improvement in financial reporting controls and oversight. We continued to see a number of financial statement adjustments that were identified as part of the audit process. In addition, in fiscal 2022 we noted a number of journal entries that required reversal and reposting due to the initial errors in the original journal entry. This occurred as the journal entries were not reviewed by someone other than the preparer prior to posting to the general ledger. This breakdown in internal control creates a risk that the consolidated financial statements are materially misstated. We recommend that management perform a review of the University’s policies and procedures for journal entry review, strengthen controls or add monitoring controls to ensure periodic reconciliation of all balance sheet accounts and the University’s process for timely compiling and reviewing the financial statements.

Finding Number: 2022-002 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Criteria According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (Schedule) for the period covered by the auditee’s financial statements which must include the total federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately reported on the Schedule and information provided for audit purposes is complete and accurate. Conditions Found The University did not have adequate controls relating to the reporting of expenditures on the Schedule for the Research and Development Cluster. Specifically, the University did not have documented procedures on how to query and analyze expenditure data from the Peoplesoft system and the management review controls over the preparation of the Schedule were not designed to operate at an appropriate level of precision. As a result, during 2023 the University determined that $1,552,891 related to the Research and Development Cluster were inadvertently omitted from the June 30, 2022 Schedule. Additionally, expenditures in the amount of $14,289 related to the National Endowment for the Humanities – Promotion of the Humanities Teaching and Learning Resources (ALN 45.162) had been incorrectly included as part of the Research and Development Cluster. The combination of these errors resulted in a total of $1,538,602 of Research and Development Cluster expenditures being added to the June 30, 2022 Schedule. The University also had incorrectly reported encumbrances, which represent future expenditures that have been obligated but not incurred. Cause In discussing these conditions with the University, they stated the errors were primarily due to turnover in staff responsible for preparation of the Schedule as well as a lack of documented procedures. Additionally, the management review controls in place were not operating at a sufficient level of precision to detect the errors. Effect Failure to establish effective internal controls regarding financial reporting for the preparation of the Schedule may prevent the University from completing an audit in accordance with the timelines of Uniform Guidance. Questioned Costs Not applicable. Statistical Sample Not applicable. Repeat Finding This finding is not a repeat finding in the immediately prior audit. Recommendation We recommend the University implement a system of internal control that is designed and operating at a level of precision to ensure the Schedule is complete and accurate

Program: Research and Development Cluster Federal Agency Name: U.S. Environmental Protection Agency Federal Award Number: OOEO2957 Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: 66.469 Criteria Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart F ? Audit Requirements ? 200.510 requires the auditee to prepare a schedule of expenditures of Federal awards for the period covered by the auditee?s financial statements which must include the total Federal awards expended as determined in accordance with ? 200.502. The Uniform Guidance requires the auditor to determine whether the auditee?s schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the entity's audited financial statements as a whole. In addition, the Uniform Guidance places the responsibility for identifying major programs on the auditor and the schedule of expenditures of federal awards serves as the primary basis for the auditor?s major program determination. Therefore, appropriate major program determination by the auditor is dependent on the accuracy and completeness of the information in the schedule of expenditures of federal awards. Condition In preparation of the schedule of expenditures of federal awards (SEFA) management adjusted the total federal awards in the R&D Cluster to reduce expenditures recorded in the general ledger by ?encumbrances? which are not recorded as expenditures for the period covered by the SEFA. These ?encumbrances? represented future expenditures that were obligated but not yet accrued in the accounting records. The adjustment inadvertently reduced actual expenditures for one award in the amount of $408,822 and resulted in the SEFA being understated. As a result of the audit, the adjustment was reversed and as such the award is properly stated in the SEFA for the year ended June 30, 2022. We deemed this to be a material weakness in internal controls This finding is not a repeat finding in the immediately prior audit. Our sample was not and was not intended to be statistically valid. Questioned Costs No questioned costs Cause The University did not have an adequately designed internal control to identify the error to federal awards expended and as such, the amount of the errors could have been greater and not detected by the University?s control environment. Effect Potential misstatement to the schedule of expenditures of federal awards. Recommendation We recommend that the University implement a more thorough and detailed process for preparing and reviewing the SEFA to identify adjustments that could result in a misstatement of the SEFA. This should include a formalized and detailed review of the SEFA and its reconciliation to the general ledger and financial statements by someone other than the preparer.

Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.

Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2021 ? June 30, 2022 Federal Assistance Listing Numbers: Various Criteria The Uniform Guidance Section 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testing of payroll allowability we noted 4 out of 71 payroll transactions tested were paid and charged to the grant incorrectly. Additionally, for 3 out of 71 payroll transactions the amount allocated to the grant was incorrect. The incorrect payments and allocations to grants were due to manual errors when processing payroll and related after the fact allocations to federal grants. We deemed this to be a material weakness in internal controls and noncompiance with the allowable costs compliance requirement. Our sample was not, and was not intended to be statistically valid. This finding is a repeat finding in the immediately prior audit finding 2021-003 Questioned Costs Unallowable payroll costs charged to the grants below FALN 12.300 $ 170 FALN 12.300 170 FALN 47.041 5,744 FALN 47.076 7 Total $ 6,091 Cause Manual calculations or clerical errors of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer.The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the University?s control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant.

Finding Number: 2021-002 Program: Research and Development Cluster Federal Agency Name: Various Federal Award Year: July 1, 2020 ? June 30, 2021 Federal Assistance Listing Numbers: Various Criteria Non-federal entities other than states must follow 2 CFR sections 200.313(c) through (e) which require that property records must be maintained and include various information including, but not limited to: 2 CFR section 200.313(d) Management requirements. Procedures for managing equipment (including replacement equipment), whether acquired in whole or in part under a Federal award, until disposition takes place will, at a minimum, meet the following requirements: (1) Property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of Federal participation in the project costs for the Federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. (2) A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. (3) A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated. (4) Adequate maintenance procedures must be developed to keep the property in good condition. (5) If the non-Federal entity is authorized or required to sell the property, proper sales procedures must be established to ensure the highest possible return. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition In performing our procedures over equipment, we noted that the University last performed an inventory of federal equipment in May 2018. This is outside the requirement to perform a physical inventory at least once every two years. Due to the COVID pandemic management could have requested a waiver from its cognizant agency to not perform a full inventory of federal equipment but failed to request a waiver. Additionally, the University did not appropriately tag all new federally funded equipment upon purchase or receipt during the fiscal year. We deemed this to be a significant deficiency in internal controls. This finding is not a repeat finding in the immediately prior audit. Cause The University has a policy in place to comply with the property management requirements; however due to the COVID-19 pandemic and many individuals working remotely, a full inventory in 2020 or 2021 was not completed. The University did not have sufficiently designed controls to identify that this compliance requirement was not met. Effect If appropriate safeguards are not in effect and performed as required, equipment purchased with federal funds could be lost, damaged, moved or stolen without management?s knowledge. Questioned Costs None noted. Recommendation We recommend that the University evaluate alternatives to the required biennial inventory when conditions exist that could prevent it from performing the physical inventory. Such alternatives could include requesting a waiver from their cognizant agency or using technology tools to aid in performing the physical inventory. Management?s Views The University has returned to regular operations and has initiated a full inventory of all equipment as has historically been done. As part of this process, new and recently purchased equipment is being properly tagged. Should a future event preclude the completion of a full inventory, an appropriate waiver will be requested from the cognizant agency. Anticipated Completion Date June 30, 2022

Finding Reference Number: 2021-003 Program: Research and Development Federal Agency: National Science Foundation, Department of Defence and Department of Energy Federal Award Year: July 1, 2020 ? June 30, 2021 Federal Assistance Listing Numbers: 47.076, 81.049, 47.041 Criteria The Uniform Guidance Section 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Further, in accordance with 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testing of payroll allowability we noted 5 out of 42 payroll charges tested were incorrectly applied to grants due to manual errors when processing payroll reallocations to federal grants. We deemed this to be a material weakness in internal controls Our sample was not, and was intended to be statistically valid. This finding is not a repeat finding in the immediately prior audit. Questioned Costs Cause Manual calculations of the amount to be paid/and or allocated to the grant were made before being entered into the system. There was no secondary review of the calculation by someone other than the preparer. The University did not have an adequately designed internal control to identify calculation errors in applying payroll amounts to federal awards and as such, the amount of the errors and related non-compliance could have been greater and not detected by the College control environment. Effect Payroll amounts charged to federal grants are unsupported by actual time spent on the award and are thus unallowable. Recommendation We recommend that the University implement a more thorough and detailed process and related internal controls to review payroll authorization forms and manual calculations performed before the payroll allocation is recorded to the federal grant. Management?s Views Manual calculations of the amount paid and / or allocated to the grant were made before being entered into the payroll system. While each payroll authorization goes through a thorough review and approval process, there was no secondary review of the calculation by someone other than the payroll staff entering the payroll data. Payroll authorizations will be directed through the PeopleSoft system to the Payroll Manager who will prepare and document the necessary allocation calculation. This calculation, along with a copy of the original payroll authorization for the employee and the superseding payroll authorization will be sent to the Associate Controller for review and verification. This secondary review will be marked approved and returned to the Payroll Manager for final entry in the payroll system and records archiving. Further, university-wide notifications will be issued to communicate the need for timely submission of payroll authorizations related to any employment status changes. A campus committee will be formed to further evaluate system enhancements to further streamline current processes and promote automation. Anticipated Completion Date December 31, 2022 Responsible Person Keith Rosser, Controller

During our testwork over Pell Reporting, we noted that for 13 of 40 students selected for testwork, the required Pell student payment data was not reported to the Common Origination and Disbursement (COD) website within the 15 day timeframe as required by federal regulations. For these submissions, we noted that the submissions were reported to the Common Origination and Disbursement (COD) website in 17 days. The above condition is a repeat finding noted within the June 30, 2018 audit report, Finding Number 2018-001.

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION

GSA_MIGRATION