THE UNIVERSITY OF CHICAGOHigher Education

Finding 2025 001: Unallowable Costs Charged to the Research and Development Cluster Program Federal Agency: The Corporation for National and Community Service U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of Transportation (USDOT) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) Federal Communications Commission (FCC) Japan-U.S. Friendship Commission (JUSFC) Social Security Administration (SSA) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development (R&D) Cluster ALN and Program Expenditures: Various ($553,917,123) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: $6,922 Compliance Requirement: Allowable Costs/Cost Principles Condition Found: The University charged unallowable expenditures to the R&D Cluster program. During our testing of 25 cost transfer expenditures (totaling $177,937) charged to the R&D Cluster program during the year ended June 30, 2025, we noted one cost transfer expenditure (totaling $3,461) that was not appropriately reallocated from one R&D Cluster program grant award to another R&D Cluster program grant award. As a result, the cost transfer expenditure was erroneously recorded two times to the R&D Cluster program when it should have been recorded once, resulting in $6,922 of unallowable costs charged to the R&D Cluster program. Additionally, we noted the review procedures to authorize the cost transfer was not performed at a level of precision to ensure the cost transfer was recorded accurately. Total cost transfer expenditures charged to the R&D Cluster program during the year ended June 30, 2025 were $34,996,306. Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements. To be allowable under federal awards, costs must meet certain general criteria. Those criteria require, among other things, that each expenditure must be necessary, reasonable, and supported by adequate documentation. In addition, 2 CFR 200.303, requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that cost transfer expenditures are charged accurately to federal awards. Cause: In discussing these conditions with University officials, they stated the implementation of a new financial system, effective July 1, 2024, contributed to the erroneous duplication of the questioned cost correction expense. Possible Asserted Effect: Failure to accurately record cost transfer expenditures results in noncompliance and unallowable costs. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University implement procedures to properly review cost transfer expenditures at the appropriate level of precision to ensure that cost transfer expenditures charged to the program are allowable. Views of University Officials: The University concurs with the finding and has proactively implemented systematic enhancements to address the identified concern. While the clerical duplication of the questioned cost was unintentional, the planned cost correction was allowable and compliant. See separate report for planned corrective action.

Finding 2025 002: Inaccurate Property Management Records Federal Agency: The Corporation for National and Community Service U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of Transportation (USDOT) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) Federal Communications Commission (FCC) Japan-U.S. Friendship Commission (JUSFC) Social Security Administration (SSA) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development (R&D) Cluster ALN and Program Expenditures: Various ($553,917,123) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Condition Found: The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment on a biennial basis. During our physical observation of 40 pieces of equipment from the University’s property management records (with an original cost value of $5,748,205 and a net book value (NBV) of $4,434,588) purchased with federal R&D Cluster awards, we noted the following: - Two items (with an original cost value of $902,876 and a NBV of $859,222) did not have an asset tag affixed to them in accordance with University policy at the time of our observation. - The asset tag assigned asset number affixed to three items (with an original cost value of $163,347 and a NBV of $122,787) did not agree to the asset tag assigned asset number in the University’s property management records. - One item (with an original cost value of $6,696 and NBV of $0) was not able to be located for our testing. University management noted this item was disposed of but not appropriately removed from the property records and federal equipment listing in a timely manner. Further, we noted adequate management review controls have not been established to ensure property management records were accurately updated and equipment was properly tagged in accordance with University policy. The NBV of equipment related to the R&D Cluster program totaled $83,855,473 at June 30, 2025. Criteria: According to 2 CFR 200.313(d)(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, 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 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause: In discussing these conditions with University officials, they stated the decentralized nature of equipment record keeping process can result in delayed reporting of asset tagging and disposal. Possible Asserted Effect: Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2024-001. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. We also recommend the University properly tag equipment in accordance with its policy. Views of University Officials: The University concurs with the finding. The University will continue to address these concerns with departments by implementing required annual training for equipment coordinators and implementing escalation procedures for untagged equipment. See separate report for planned corrective action.

Finding 2025 003: Failure to Notify Recipients of Title IV Program Award Information Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.268 ($93,650,934) 84.063 ($8,865,505) 84.033 ($1,054,652) 84.007 ($1,450,692) 84.038 ($3,966,650) Federal Award Numbers: P268K241389 P063P241389 P033A251305 P007A251305 Federal Award Year: July 1, 2024 to June 30, 2025 Questioned Costs: None Compliance Requirement: Special Tests and Provisions - Disbursements to or on Behalf of Students Condition Found: The University did not notify students of the amount and type of Title IV funds the student or his or her parent was expected to receive prior to making a disbursement to the students under the SFA program. During our testing of 40 student disbursements under the Federal Direct Loan (FDL) program totaling $545,043 and 4 student disbursements under the Federal Pell Grant (Pell) totaling $8,998, we noted the University did not notify one student (with a FDL disbursement of $17,655) of the amount and type of Title IV funds they were expected to receive prior to making the disbursement to the student. Upon further review, the University identified an additional 10 students who received total FDL, Pell, and Federal Supplemental Educational Opportunity Grant (FSEOG) disbursements of $478,398, $21,578, and $2,000, respectively, that were not notified of the amount and type of Title IV funds they were expected to receive prior to making the disbursement to the students. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure University sent required notifications to students prior to the disbursement of Title IV funds. Total disbursements for the SFA program was $108,988,434 during the year ended June 30, 2025. Criteria: According to 34 CFR 668.165(a)(1), before an institution disburses Title IV, Higher Education Act (HEA) program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each Title IV, HEA program, and how and when those funds will be disbursed. In addition, 2 CFR 200.303, requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that required notifications are sent to students prior to the disbursement of Title IV funds. Cause: In discussing these conditions with University officials, they stated that an additional code was needed in the automated notification process to ensure all required steps were completed systematically if staff missed one of the multiple steps during review. Possible Asserted Effect: Failure to notify students of the amount and type of Title IV funds the student or his or her parent are expected to receive prior to making a disbursement results in noncompliance with SFA program requirements. Repeat Finding: A similar finding was reported in prior year audit as finding number 2024-005. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its internal control procedures to ensure notifications are made to students of the amount and type of Title IV funds the student or his or her parent are expected to receive prior to making the disbursement under the SFA program. Views of University Officials: The University concurs with the finding and has mitigated the issue.

Finding 2024-001: Inaccurate Property Management Records Federal Agency: The Corporation for National and Community Service U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Homeland Security (USDHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) Social Security Administration (SSA) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development (R&D) Cluster ALN and Program Expenditures: Various ($539,302,615) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Condition Found: The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment on a biennial basis. During our physical observation of 60 pieces of equipment from the University’s property management records (with an original cost value of $4,672,419 and a net book value (NBV) of $1,635,234) purchased with federal R&D Cluster awards, we noted the following: - Three items (with an original cost value of $33,141 and a NBV of $1,309) did not have an asset tag affixed to them in accordance with University policy at the time of our observation. - One item (with an original cost value of $14,500 and a NBV of $0) was not able to be located for our testing. University management believes this item was disposed of but not appropriately removed from the property records and federal equipment listing. Additionally, during our physical observation of six pieces of equipment from multiple locations throughout the University’s campus, we observed that the items had asset tags affixed to them but were not included in the University’s property management records. As such, we were unable to determine the original cost value and NBV of these items. Further, we noted adequate management review controls have not been established to ensure property management records were accurately updated and equipment was properly tagged in accordance with University policy. The NBV of equipment related to the R&D Cluster program totaled $64,136,745 at June 30, 2024. Criteria: According to 2 CFR 200.313(d)(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, 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. In addition, 2 CFR 200.303, requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause: In discussing these conditions with University officials, they stated the decentralized nature of equipment record keeping process can result in delayed reporting of asset tagging and disposal. Possible Asserted Effect: Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding: A similar finding was reported in the prior year audit as finding number 2023-002. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. We also recommend the University properly tag equipment in accordance with its policy. Views of University Officials: The University concurs with the finding. The testing period for FY2024 fell within the remediation period from FY2023. The University will continue to address these concerns with departments by conducting equipment training and addressing untagged assets.

Finding 2024-002: Untimely Review of Subrecipient Single Audit Reports Federal Agency: The Corporation for National and Community Service U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Homeland Security (USDHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) Social Security Administration (SSA) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development (R&D) Cluster ALN and Program Expenditures: Various ($539,302,615) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Subrecipient Monitoring Condition Found: The University did not review single audit reports received from its subrecipients for the R&D Cluster program on a timely basis. The University’s policy requires review of the single audit reports received from its subrecipients within six months of the date of acceptance of the single audit report by the Federal Audit Clearinghouse (FAC). During our testing of a sample of single audit report reviews for 40 subrecipients (with expenditures of $31,826,626), we noted the University did not review the single audit reports for nine subrecipients (with expenditures of $4,812,867) within six months of the date of acceptance of the single audit report by the FAC. Upon further review, management evaluated all the single audit report reviews performed during fiscal year 2024 for its subrecipients of the R&D Cluster program (195 single audit reviews for subrecipients with expenditures of $81,358,862) and determined that the single audit reports for 70 subrecipients (with expenditures of $48,019,701) were not reviewed within six months of the date of acceptance of the single audit report by the FAC. Specifically, these single audit reports were reviewed 181-392 days after acceptance by the FAC. The University’s subrecipient expenditures under the R&D Cluster program for the year ended June 30, 2024 were $81,358,862. Criteria: According to 2 CFR 200.332(e), a pass-through entity is required to monitor the activities of a subrecipient as necessary to ensure that the subrecipient complies with Federal statutes, regulations, and the terms and conditions of the subaward. Further, 2 CFR 200.332(e)(3) and 2 CFR 200.521 state that a pass-through entity is required to issue a management decision for audit findings pertaining to the Federal Award provided to the subrecipient from the pass-through entity within six months of acceptance of the audit report by the Federal Audit Clearinghouse (FAC) and ensure that the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure single audit reports are reviewed in a timely manner in accordance with University policy. Cause: In discussing these conditions with University officials, they stated this delay was an oversight due in part to limited staffing resources to review the single audits while the University was implementing a new financial system. Possible Asserted Effect: Failure to complete and document reviews of subrecipient single audit reports in a timely manner may result in federal funds being expended for unallowable purposes and subrecipients not administering the federal programs in accordance with laws, regulations, and grant agreements. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University establish procedures to ensure subrecipient single audit report reviews are completed and documented in a timely manner. Views of University Officials The University concurs with the finding and has already begun to address these concerns. Although there was a delay in the review of single audit reports, the University did not miss or delay any required action with said subrecipients as a result. See separate report for planned corrective action.

Finding 2024-003: Failure to Determine Eligibility in Accordance with SFA Regulations Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.007 ($861,540) 84.033 ($1,550,626) 84.063 ($6,966,346) 84.268 ($94,400,556) Federal Award Numbers: P007A2311305, P007A221305 P033A221305, P033A151305 P063P20231389, P063Q231389, P063Q201389, P063Q221389, P063P221389 P268K241389 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: $52,604 Compliance Requirement: Eligibility Condition Found: The University disbursed federal aid to an ineligible student. An institution must establish a reasonable satisfactory academic progress (SAP) policy for determining whether an otherwise eligible student is making satisfactory academic progress in their educational program and may receive assistance under Title IV programs. The University’s SAP policy states a student must maintain a cumulative grade point average (GPA) of at least 2.0, complete a minimum of at least 66% of all attempted cumulative units, and successfully complete degree-required coursework within 150% of the normal timeframe. During our testwork over a sample of 55 students who were disbursed student financial aid totaling $2,469,633, we noted one student was disbursed $20,284 of unsubsidized Federal Direct Loans and $32,320 of PLUS Federal Direct Loans (totaling $52,604) for the 2023-2024 academic year although the student did not meet the University’s SAP policy requirements. Specifically, we noted the student had completed 57% of all attempted cumulative units which is below the required minimum of 66%. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure the University disbursed funds to students who met SAP requirements. Total student financial aid disbursements for the SFA Cluster were $110,068,708 during the year ended June 30, 2024. Criteria: According to 34 CFR 668.34(a)(7), a student who has not achieved the required GPA, or who is not successfully completing his or her educational program at the required pace, is no longer eligible to receive assistance under the Title IV, Higher Education Act (HEA) programs. In addition, 2 CFR 200.303, requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure student awards are packaged and disbursed to eligible students in accordance with program regulations. Cause: In discussing these conditions with University officials, they stated that a manual edit for this one student was incorrectly made by a staff member. Possible Asserted Effect: Failure to properly determine student eligibility in accordance with SFA program regulations may result in students receiving Title IV funds for which they are not eligible, resulting in unallowable costs. Repeat Finding: A similar finding was not reported in prior years. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its internal control procedures to ensure that student eligibility is determined in accordance with SFA program regulations. Views of University Officials: The University concurs with the finding and will increase staff training.

Finding 2024-004: Failure to Properly Complete Required Verification Procedures Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.007 ($861,540) 84.033 ($1,550,626) 84.063 ($6,966,346) 84.268 ($94,400,556) Federal Award Numbers: P007A2311305, P007A221305 P033A221305, P033A151305 P063P20231389, P063Q231389, P063Q201389, P063Q221389, P063P221389 P268K241389 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: $100 Compliance Requirement: Verification Condition Found: The University did not properly complete verification procedures as required by SFA program regulations. In order to validate the accuracy of information reported by applicants for financial aid, the U.S. Department of Education (USDE) requires schools participating in federal student financial assistance programs to perform procedures to verify the accuracy of student financial and household information used to compute the expected family contribution (EFC) of each applicant. USDE selects students for verification and schools are required to establish and follow a verification policy that complies with SFA program regulations. The University verifies the Institutional Student Information Records (ISIR) for all students selected for verification by USDE. During our testing over 40 students who were disbursed student financial aid totaling $770,615 (from a total population of 299 students) who were selected for verification by USDE, we noted the following exceptions: - For one student (who received student financial aid awards totaling $12,645), the documentation provided by the student to verify the student’s adjusted gross income (AGI) was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the ISIR was understated by $72 between the supporting documentation provided and the ISIR data. The student’s EFC was not affected by this error. - For one student (who received student financial aid awards totaling $5,645), the documentation provided by the student to support the family size was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the family size was one person higher on the documentation provided compared to the ISIR data. The student’s EFC was overstated by $1,367 but did not impact the amount of Title IV funds awarded. - For one student (who received student financial aid awards totaling $7,425), the documentation provided by the student to verify the student’s earned income was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the ISIR was understated by $113 between the supporting documentation provided and the ISIR data. The student’s EFC was not affected by this error. - For one student (who received student financial aid awards totaling $9,945), the documentation provided by the student to support the parent’s income tax paid was not consistent with the amount reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the income tax paid per the parent’s tax return was $1,902 greater than what was reported on the ISIR. The student’s EFC was understated by $164 and as a result, the student was over-awarded Federal Pell Grant by $100. - For one student (who received student financial aid awards totaling $9,745), the documentation provided by the student to support the number of individuals enrolled in college within the household was not consistent with the number reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the number enrolled in college was one person higher on the documentation provided compared to the ISIR data. The student’s EFC was understated by $59 but did not impact the amount of Title IV funds awarded. - For one student (who received student financial aid awards totaling $10,395), the documentation provided by the student to support the parent education tax credit was not consistent with the number reported on the ISIR used to package the student’s financial aid award. Specifically, we noted the parent tax education credit per the parent’s tax return was $90 greater than what was reported on the ISIR. The student’s EFC was not affected by this error. - For one student (who received student financial aid awards totaling $7,421), the tax return maintained by the University to support the ISIR data was unsigned. Further, we noted management review controls implemented by the University failed to ensure verification procedures were properly performed in accordance with SFA program regulations. Total student financial aid disbursements for the SFA Cluster were $110,068,708 during the year ended June 30, 2024. Criteria: According to 34 CFR 668.57, a University must verify: a student and/or parent’s AGI, income earned from work, U.S. income tax paid, number of family members in the household, number of family household members enrolled in eligible postsecondary institutions, and other information that may be specified in the annual federal register notice. Additionally, 34 CFR 668.57(a)(1)(i) states that tax returns must include the signature of the filer of the return or of one of the filers of a joint return. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure verification procedures are performed and corrections are made as required by SFA program regulations. Cause: In discussing these conditions with University officials, they stated that manual errors were made during the verification process. Possible Asserted Effect: Failure to properly perform verification procedures and correct ISIR information in accordance with SFA program regulations may result in students receiving awards for which they are not eligible and an unallowable cost being charged to the federal program Repeat Finding: A similar finding was not reported in prior years. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its policies and procedures to ensure the verification process is performed in accordance with SFA program regulations to ensure all corrections required as the result of the verification procedures are properly reported to USDE and awards are adjusted for changes in EFC as appropriate. Views of University Officials: The University concurs with the finding and will increase staff training.

Finding 2024-005: Failure to Notify Recipients of Federal Direct Loan and Federal Pell Grant Disbursements Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.268 ($94,400,556) 84.063 ($6,966,346) Federal Award Numbers: P268K241389 P063P241389 Federal Award Year: July 1, 2023 to June 30, 2024 Questioned Costs: None Compliance Requirement: Disbursements to or on Behalf of Students Condition Found: The University did not notify students of the amount and type of Title IV funds the student or his or her parent was expected to receive prior to making a disbursement to the students under the SFA program. During our testing of 47 student disbursements under the Federal Direct Loan (FDL) program totaling $527,494 and eight student disbursements under the Federal Pell Grant (Pell) totaling $17,354, we noted the following exceptions: - The University did not notify one student (with a FDL disbursement of $6,834) of the amount of FDL funds they were expected to receive prior to making the disbursement to the student. - The University did not notify one student (with a Pell disbursement of $2,465) of the amount of Pell funds they were expected to receive prior to making the disbursement to the student. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure University sent required notifications to students prior to the disbursement of Title IV funds. Total disbursements for the FDL program and Pell were $94,400,556 and $6,966,346, respectively, during the year ended June 30, 2024. Criteria: According to 34 CFR 668.165(a)(1), before an institution disburses Title IV, Higher Education Act (HEA) program funds for any award year, the institution must notify a student of the amount of funds that the student or his or her parent can expect to receive under each Title IV, HEA program, and how and when those funds will be disbursed. In addition, 2 CFR 200.303, requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that required notifications are sent to students prior to the disbursement of Title IV funds. Cause: In discussing these conditions with University officials, they stated that at the time of the findings, University financial aid notifications were not on an automated schedule. Possible Asserted Effect: Failure to notify students of the amount and type of Title IV funds the student or his or her parent are expected to receive prior to making a disbursement results in noncompliance with SFA program requirements. Repeat Finding: A similar finding was reported in prior year audit as finding number 2023-003. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its internal control procedures to ensure notifications are made to students of the amount and type of Title IV funds the student or his or her parent are expected to receive prior to making the disbursement under the SFA program. Views of University Officials: The University concurs with the finding and have mitigated the issue.

Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.

Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.

Finding 2023-003 – Failure to Notify Recipients of Federal Direct Loan Disbursement Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) CFDA # and Program Expenditures: 84.268 ($91,771,529) Federal Award Numbers: P268K231389 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Disbursements to or on Behalf of Students Type of Finding: Noncompliance and material weakness Condition Found The University did not notify parents or students of the anticipated date and amount of certain Federal Direct Loan (FDL) disbursements under the SFA program. During our testing of 36 student disbursements under the Federal Direct Loan (FDL) program totaling $409,645, we noted the University did not notify one student (with a loan disbursement of $6,864) of the anticipated date and amount of the disbursement of loan proceeds. Upon further review by the University, an additional 312 students who received disbursements of loan proceeds (totaling $3,706,642) on the same date as the exception discussed in the previous sentence were not notified of the anticipated date and amount of the disbursement of the loan proceeds within required timeframes. The University noted notifications for disbursements for the Booth School of Business were not sent for loans disbursed on September 16, 2022 due to a system error. The University disbursed 10,732 FDL loans (totaling $91,798,461) to 2,408 students during the year ended June 30, 2023. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure the University sent required FDL notifications to students within required timeframes. Criteria According to 34 CFR 668.165(a)(2), if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan or TEACH Grant program funds, the institution must notify the parent or student of the anticipated date and amount of disbursement. According to 34 CFR 668.165(a)(3) an institution must make this 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 Loan or TEACH Grants. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that required notifications are prepared and sent to students (or parents) within required timeframes. Cause In discussing these conditions with University officials, they stated a system issue failed to send the communications on September 16, 2022. Possible Asserted Effect Failure to notify a parent or student of the anticipated date and amount of disbursement results in noncompliance with FDL program requirements. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its system internal control to ensure notifications of disbursements are made as required by FDL program regulations. Views of University Officials The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2023-003 – Failure to Notify Recipients of Federal Direct Loan Disbursement Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.268 ($91,771,529) Federal Award Numbers: P268K231389 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Disbursements to or on Behalf of Students Type of Finding: Noncompliance and material weakness Condition Found The University did not notify parents or students of the anticipated date and amount of certain Federal Direct Loan (FDL) disbursements under the SFA program. During our testing of 36 student disbursements under the Federal Direct Loan (FDL) program totaling $409,645, we noted the University did not notify one student (with a loan disbursement of $6,864) of the anticipated date and amount of the disbursement of loan proceeds. Upon further review by the University, an additional 312 students who received disbursements of loan proceeds (totaling $3,706,642) on the same date as the exception discussed in the previous sentence were not notified of the anticipated date and amount of the disbursement of the loan proceeds within required timeframes. The University noted notifications for disbursements for the Booth School of Business were not sent for loans disbursed on September 16, 2022 due to a system error. The University disbursed 10,732 FDL loans (totaling $91,798,461) to 2,408 students during the year ended June 30, 2023. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure the University sent required FDL notifications to students within required timeframes. Criteria According to 34 CFR 668.165(a)(2), if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan or TEACH Grant program funds, the institution must notify the parent or student of the anticipated date and amount of disbursement. According to 34 CFR 668.165(a)(3) an institution must make this 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 Loan or TEACH Grants. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that required notifications are prepared and sent to students (or parents) within required timeframes. Cause In discussing these conditions with University officials, they stated a system issue failed to send the communications on September 16, 2022. Possible Asserted Effect Failure to notify a parent or student of the anticipated date and amount of disbursement results in noncompliance with FDL program requirements. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its system internal control to ensure notifications of disbursements are made as required by FDL program regulations. Views of University Officials The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2023-004 – Untimely and Inaccurate Reporting of Pell and FDL Data Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster CFDA # and Program Expenditures: 84.268 ($91,771,529); 84.063 ($5,969,524) Federal Award Numbers: P268K231389; P063Q221389; P063P221389; P063Q201389 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Reporting Type of Finding: Noncompliance and material weakness Condition Found The University did not accurately report Federal Direct Loan (FDL) program data to the Common Origination and Disbursement (COD) system within required timeframes. During our testing of 36 students under the FDL program totaling $409,645, we noted the following: - The academic start date reported to COD for FDL disbursements (totaling $162,518) to 10 students was not accurate. Specifically, the date reported was 144 days earlier than the actual academic start date. Upon further review by the University, an additional 1,919 disbursements totaling $23,202,079 were reported with the incorrect academic start date. The University disbursed Pell grants and FDL loans to 3,459 students during the year ended June 30, 2023. - A FDL disbursement sampled (totaling $16,602) for one student was not reported to the COD within 15 days as required. The delay in reporting the FDL disbursement was 16 days. Upon further review by the University, an additional 77 disbursements (totaling $905,149) to 38 students were reported to the COD ranging from 2 to 114 days late. The University disbursed 14,066 Pell grants and FDL loans to 3,459 students subject to COD reporting during the year ended June 30, 2023. Further, we noted the University did not have adequate review or monitoring controls in place to ensure that Pell and FDL disbursement data was accurately reported to the COD within required timeframes. Criteria According to Federal Register Vol. 85 No. 135, Institutions must report student disbursement data, including the academic start date of the term, 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. Additionally, according to the Student Financial Assistance (SFA) Handbook GEN-13-13, institutions must accurately report academic start dates for all types of FDL disbursements to the COD system. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award is compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include maintaining adequate controls to ensure Pell and FDL data is accurately and timely reported to the COD. Cause In discussing these conditions with University officials, they stated a system issue and training issue contributed to the finding. Possible Asserted Effect Failure to report Pell and FDL data to the COD accurately and within required timeframes results in noncompliance with program requirements and inhibits the ability of the USDE to monitor Pell and FDL program requirements impacted by this data. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its internal control procedures and implement additional management review procedures to ensure data is accurately reported to the COD within required timeframes. Views of University Officials The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2023-004 – Untimely and Inaccurate Reporting of Pell and FDL Data Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN and Program Expenditures: 84.268 ($91,771,529); 84.063 ($5,969,524) Federal Award Numbers: P268K231389; P063Q221389; P063P221389; P063Q201389 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Reporting Type of Finding: Noncompliance and material weakness Condition Found The University did not accurately report Federal Direct Loan (FDL) program data to the Common Origination and Disbursement (COD) system within required timeframes. During our testing of 36 students under the FDL program totaling $409,645, we noted the following: - The academic start date reported to COD for FDL disbursements (totaling $162,518) to 10 students was not accurate. Specifically, the date reported was 144 days earlier than the actual academic start date. Upon further review by the University, an additional 1,919 disbursements totaling $23,202,079 were reported with the incorrect academic start date. The University disbursed Pell grants and FDL loans to 3,459 students during the year ended June 30, 2023. - A FDL disbursement sampled (totaling $16,602) for one student was not reported to the COD within 15 days as required. The delay in reporting the FDL disbursement was 16 days. Upon further review by the University, an additional 77 disbursements (totaling $905,149) to 38 students were reported to the COD ranging from 2 to 114 days late. The University disbursed 14,066 Pell grants and FDL loans to 3,459 students subject to COD reporting during the year ended June 30, 2023. Further, we noted the University did not have adequate review or monitoring controls in place to ensure that Pell and FDL disbursement data was accurately reported to the COD within required timeframes. Criteria According to Federal Register Vol. 85 No. 135, Institutions must report student disbursement data, including the academic start date of the term, 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. Additionally, according to the Student Financial Assistance (SFA) Handbook GEN-13-13, institutions must accurately report academic start dates for all types of FDL disbursements to the COD system. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award is compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include maintaining adequate controls to ensure Pell and FDL data is accurately and timely reported to the COD. Cause In discussing these conditions with University officials, they stated a system issue and training issue contributed to the finding. Possible Asserted Effect Failure to report Pell and FDL data to the COD accurately and within required timeframes results in noncompliance with program requirements and inhibits the ability of the USDE to monitor Pell and FDL program requirements impacted by this data. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its internal control procedures and implement additional management review procedures to ensure data is accurately reported to the COD within required timeframes. Views of University Officials The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2023-005 – Inaccurate Reporting of Higher Education Emergency Relief Fund (HEERF) Quarterly Data Federal Agency: U.S. Department of Education (USDE) Program Name: Higher Education Emergency Relief Fund CFDA # and Program Expenditures: 84.425 ($1,816,217) Federal Award Numbers: P425E204996; P425E204996 – 20B; P425F204056; P425F204056 – 20B Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Reporting Type of Finding: Material Weakness and Noncompliance Condition Found The University did not report HEERF expenditure data in the appropriate period to the United States Department of Education (USDE) through the HEERF Quarterly Report. During our testing of two HEERF Quarterly Reports, we noted the University did not appropriately report the institutional expenditures for the period ending September 30, 2022. Specifically, we noted that the following differences: See the Schedule of Findings and Questioned Costs for chart/table. Upon further review, we noted these errors related to expenditures incurred in a prior quarter and that the report from the quarter to which the expenditures pertained should have been revised. The University corrected the impacted reports after these errors were identified by our audit procedures. Additionally, we noted the University did not have adequate review or monitoring controls in place to ensure that the quarterly expenditure data was accurately reported within the appropriate quarterly report. Criteria According to the Office of Management and Budget (OMB) Control Number 1840-0849, Institutions must report quarterly HEERF budget and expenditure data to the USDE. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award is compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include maintaining adequate controls to ensure HEERF data is accurately reported to the USDE. Cause In discussing these conditions with University officials, they stated the preparer and reviewer of the HEERF Quarterly Report did not understand the requirements for reporting corrections in the quarterly report in which the expenditures occurred. Possible Asserted Effect Failure to report accurate HEERF data results in noncompliance with program requirements and inhibits the ability of the USDE to monitor HEERF expenditures. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its internal control procedures and implement additional management review procedures to ensure data is accurately reported to the USDE in the appropriate quarterly report. Views of University Officials The University concurs with the finding.

Finding 2023-005 – Inaccurate Reporting of Higher Education Emergency Relief Fund (HEERF) Quarterly Data Federal Agency: U.S. Department of Education (USDE) Program Name: Higher Education Emergency Relief Fund ALN and Program Expenditures: 84.425 ($1,816,217) Federal Award Numbers: P425E204996; P425E204996 – 20B; P425F204056; P425F204056 – 20B Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Reporting Type of Finding: Material Weakness and Noncompliance Condition Found The University did not report HEERF expenditure data in the appropriate period to the United States Department of Education (USDE) through the HEERF Quarterly Report. During our testing of two HEERF Quarterly Reports, we noted the University did not appropriately report the institutional expenditures for the period ending September 30, 2022. Specifically, we noted that the following differences: See the Schedule of Findings and Questioned Costs for chart/table. Upon further review, we noted these errors related to expenditures incurred in a prior quarter and that the report from the quarter to which the expenditures pertained should have been revised. The University corrected the impacted reports after these errors were identified by our audit procedures. Additionally, we noted the University did not have adequate review or monitoring controls in place to ensure that the quarterly expenditure data was accurately reported within the appropriate quarterly report. Criteria According to the Office of Management and Budget (OMB) Control Number 1840-0849, Institutions must report quarterly HEERF budget and expenditure data to the USDE. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award is compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include maintaining adequate controls to ensure HEERF data is accurately reported to the USDE. Cause In discussing these conditions with University officials, they stated the preparer and reviewer of the HEERF Quarterly Report did not understand the requirements for reporting corrections in the quarterly report in which the expenditures occurred. Possible Asserted Effect Failure to report accurate HEERF data results in noncompliance with program requirements and inhibits the ability of the USDE to monitor HEERF expenditures. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its internal control procedures and implement additional management review procedures to ensure data is accurately reported to the USDE in the appropriate quarterly report. Views of University Officials The University concurs with the finding.

Finding 2023-006 – Inaccurate Reporting on the Schedule of Expenditures of Federal Awards Federal Agency: U.S. Department of Homeland Security (DHS) Pass-through Entity: Illinois Emergency Management Agency Program Name: Disaster Grants – Public Assistance (Presidentially Declared Disasters) ALN and Program Expenditures: 97.036 ($5,258,177) Federal Award Numbers: PA-05-IL-4489-PW-01677 Federal Award Year: October 1, 2022 to September 30, 2023 Questioned Costs: None Compliance Requirement: Other – Inaccurate reporting on the Schedule of Expenditures of Federal Awards Type of Finding: Material weakness Condition Found The University of Chicago (the University) did not have adequate internal controls related to the reporting of expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) (Disaster Grants) program on the schedule of expenditures of federal awards (SEFA). Specifically, the University’s control to review federal expenditures reported by the University of Chicago Medical Center was not designed at an appropriate level of precision to ensure federal expenditures are completely and accurately reported on the SEFA. As a result, the amounts previously reported on the SEFA for the year ended June 30, 2023 did not include $5,258,177 of expenditures related to the Disaster Grants program. Criteria or Requirement According to 2 CFR 200.303, non-federal entities receiving federal awards are required 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 and amounts provided to subrecipients are accurately and completely reported on the SEFA in accordance with 2 CFR 200.510(b). Cause In discussing these conditions with University officials, they stated the error was due to the manual nature of the consolidation of SEFA data from its components, as well as a misunderstanding by UCMC of the reporting requirements for the FEMA Disaster Grant awards. Possible Asserted Effect Failure to establish effective internal controls over the preparation of the SEFA for all components may prevent the University from reporting accurate federal expenditures and properly completing an audit in accordance with the Uniform Guidance. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University implement additional internal controls to ensure that federal expenditures are accurately and completely reported on the SEFA from all components. Views of University Officials The University concurs with the finding and has begun to address these concerns.

Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.

Finding 2023-002 – Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Department of Education (USDE) U.S. Department of Energy (USDOE) U.S. Department of Health and Human Services (USDHHS) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of State (USDOS) U.S. Department of Transportation (USDOT) U.S. Director of National Intelligence (USDNI) U.S. Environmental Protection Agency (USEPA) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($508,850,558) Federal Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Type of Finding: Noncompliance and material weakness Condition Found The University did not consistently follow its property management policies and procedures related to maintaining accurate property management records for equipment purchased with federal R&D Cluster program awards. The University conducts research at multiple locations throughout its campus where equipment purchased with federal awards is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. The University is required to safeguard equipment purchased with federal awards, maintain current property records, and to perform a physical inventory of equipment purchased with federal awards on a biennial basis. During our physical observation of 60 pieces of equipment (with a net book value (NBV) of $224,269) purchased with federal R&D Cluster awards, we noted eight items (with a NBV totaling $0) selected for physical observation were not able to be located for our testing. In response to the exceptions identified in our audit procedures, the University performed a physical inventory of all of its federally funded equipment in January 2024, which identified an additional 1,006 equipment items (with a NBV of $1,726,897) that could not be located, of which 839 were fully depreciated. University management believes these items were disposed of but not appropriately removed from the property records and federal equipment listing. As of June 30, 2023, the University’s federal equipment listing included 6,270 assets (with a NBV of $61,390,724) purchased with R&D Cluster program awards. We also noted the University’s controls for equipment dispositions are not operating at an appropriate level of precision to ensure equipment dispositions are properly authorized and property management records are updated on a timely basis. Criteria According to 2 CFR 200.313(d)(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, 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. Per 2 CFR 200.313(d)(3) and (4), a control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of property and adequate maintenance procedures must be developed to keep the property in good condition. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause In discussing these conditions with University officials, they stated the decentralized nature of the equipment recordkeeping process can result in delayed reporting of asset disposals. Possible Asserted Effect Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding A similar finding was reported in the prior year audit as finding number 2022-002. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. Views of University Officials The University concurs with the finding and has begun to address these concerns. As noted in the finding, the University conducted a full federal equipment inventory in January 2024 and updated property records to ensure accuracy of federally funded equipment.

Finding 2023-003 – Failure to Notify Recipients of Federal Direct Loan Disbursement Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) CFDA # and Program Expenditures: 84.268 ($91,771,529) Federal Award Numbers: P268K231389 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Disbursements to or on Behalf of Students Type of Finding: Noncompliance and material weakness Condition Found The University did not notify parents or students of the anticipated date and amount of certain Federal Direct Loan (FDL) disbursements under the SFA program. During our testing of 36 student disbursements under the Federal Direct Loan (FDL) program totaling $409,645, we noted the University did not notify one student (with a loan disbursement of $6,864) of the anticipated date and amount of the disbursement of loan proceeds. Upon further review by the University, an additional 312 students who received disbursements of loan proceeds (totaling $3,706,642) on the same date as the exception discussed in the previous sentence were not notified of the anticipated date and amount of the disbursement of the loan proceeds within required timeframes. The University noted notifications for disbursements for the Booth School of Business were not sent for loans disbursed on September 16, 2022 due to a system error. The University disbursed 10,732 FDL loans (totaling $91,798,461) to 2,408 students during the year ended June 30, 2023. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure the University sent required FDL notifications to students within required timeframes. Criteria According to 34 CFR 668.165(a)(2), if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan or TEACH Grant program funds, the institution must notify the parent or student of the anticipated date and amount of disbursement. According to 34 CFR 668.165(a)(3) an institution must make this 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 Loan or TEACH Grants. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that required notifications are prepared and sent to students (or parents) within required timeframes. Cause In discussing these conditions with University officials, they stated a system issue failed to send the communications on September 16, 2022. Possible Asserted Effect Failure to notify a parent or student of the anticipated date and amount of disbursement results in noncompliance with FDL program requirements. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its system internal control to ensure notifications of disbursements are made as required by FDL program regulations. Views of University Officials The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2023-003 – Failure to Notify Recipients of Federal Direct Loan Disbursement Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster (SFA) ALN and Program Expenditures: 84.268 ($91,771,529) Federal Award Numbers: P268K231389 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Disbursements to or on Behalf of Students Type of Finding: Noncompliance and material weakness Condition Found The University did not notify parents or students of the anticipated date and amount of certain Federal Direct Loan (FDL) disbursements under the SFA program. During our testing of 36 student disbursements under the Federal Direct Loan (FDL) program totaling $409,645, we noted the University did not notify one student (with a loan disbursement of $6,864) of the anticipated date and amount of the disbursement of loan proceeds. Upon further review by the University, an additional 312 students who received disbursements of loan proceeds (totaling $3,706,642) on the same date as the exception discussed in the previous sentence were not notified of the anticipated date and amount of the disbursement of the loan proceeds within required timeframes. The University noted notifications for disbursements for the Booth School of Business were not sent for loans disbursed on September 16, 2022 due to a system error. The University disbursed 10,732 FDL loans (totaling $91,798,461) to 2,408 students during the year ended June 30, 2023. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure the University sent required FDL notifications to students within required timeframes. Criteria According to 34 CFR 668.165(a)(2), if an institution credits a student ledger account with Direct Loan, Federal Perkins Loan or TEACH Grant program funds, the institution must notify the parent or student of the anticipated date and amount of disbursement. According to 34 CFR 668.165(a)(3) an institution must make this 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 Loan or TEACH Grants. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that required notifications are prepared and sent to students (or parents) within required timeframes. Cause In discussing these conditions with University officials, they stated a system issue failed to send the communications on September 16, 2022. Possible Asserted Effect Failure to notify a parent or student of the anticipated date and amount of disbursement results in noncompliance with FDL program requirements. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its system internal control to ensure notifications of disbursements are made as required by FDL program regulations. Views of University Officials The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2023-004 – Untimely and Inaccurate Reporting of Pell and FDL Data Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster CFDA # and Program Expenditures: 84.268 ($91,771,529); 84.063 ($5,969,524) Federal Award Numbers: P268K231389; P063Q221389; P063P221389; P063Q201389 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Reporting Type of Finding: Noncompliance and material weakness Condition Found The University did not accurately report Federal Direct Loan (FDL) program data to the Common Origination and Disbursement (COD) system within required timeframes. During our testing of 36 students under the FDL program totaling $409,645, we noted the following: - The academic start date reported to COD for FDL disbursements (totaling $162,518) to 10 students was not accurate. Specifically, the date reported was 144 days earlier than the actual academic start date. Upon further review by the University, an additional 1,919 disbursements totaling $23,202,079 were reported with the incorrect academic start date. The University disbursed Pell grants and FDL loans to 3,459 students during the year ended June 30, 2023. - A FDL disbursement sampled (totaling $16,602) for one student was not reported to the COD within 15 days as required. The delay in reporting the FDL disbursement was 16 days. Upon further review by the University, an additional 77 disbursements (totaling $905,149) to 38 students were reported to the COD ranging from 2 to 114 days late. The University disbursed 14,066 Pell grants and FDL loans to 3,459 students subject to COD reporting during the year ended June 30, 2023. Further, we noted the University did not have adequate review or monitoring controls in place to ensure that Pell and FDL disbursement data was accurately reported to the COD within required timeframes. Criteria According to Federal Register Vol. 85 No. 135, Institutions must report student disbursement data, including the academic start date of the term, 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. Additionally, according to the Student Financial Assistance (SFA) Handbook GEN-13-13, institutions must accurately report academic start dates for all types of FDL disbursements to the COD system. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award is compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include maintaining adequate controls to ensure Pell and FDL data is accurately and timely reported to the COD. Cause In discussing these conditions with University officials, they stated a system issue and training issue contributed to the finding. Possible Asserted Effect Failure to report Pell and FDL data to the COD accurately and within required timeframes results in noncompliance with program requirements and inhibits the ability of the USDE to monitor Pell and FDL program requirements impacted by this data. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its internal control procedures and implement additional management review procedures to ensure data is accurately reported to the COD within required timeframes. Views of University Officials The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2023-004 – Untimely and Inaccurate Reporting of Pell and FDL Data Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN and Program Expenditures: 84.268 ($91,771,529); 84.063 ($5,969,524) Federal Award Numbers: P268K231389; P063Q221389; P063P221389; P063Q201389 Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Reporting Type of Finding: Noncompliance and material weakness Condition Found The University did not accurately report Federal Direct Loan (FDL) program data to the Common Origination and Disbursement (COD) system within required timeframes. During our testing of 36 students under the FDL program totaling $409,645, we noted the following: - The academic start date reported to COD for FDL disbursements (totaling $162,518) to 10 students was not accurate. Specifically, the date reported was 144 days earlier than the actual academic start date. Upon further review by the University, an additional 1,919 disbursements totaling $23,202,079 were reported with the incorrect academic start date. The University disbursed Pell grants and FDL loans to 3,459 students during the year ended June 30, 2023. - A FDL disbursement sampled (totaling $16,602) for one student was not reported to the COD within 15 days as required. The delay in reporting the FDL disbursement was 16 days. Upon further review by the University, an additional 77 disbursements (totaling $905,149) to 38 students were reported to the COD ranging from 2 to 114 days late. The University disbursed 14,066 Pell grants and FDL loans to 3,459 students subject to COD reporting during the year ended June 30, 2023. Further, we noted the University did not have adequate review or monitoring controls in place to ensure that Pell and FDL disbursement data was accurately reported to the COD within required timeframes. Criteria According to Federal Register Vol. 85 No. 135, Institutions must report student disbursement data, including the academic start date of the term, 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. Additionally, according to the Student Financial Assistance (SFA) Handbook GEN-13-13, institutions must accurately report academic start dates for all types of FDL disbursements to the COD system. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award is compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include maintaining adequate controls to ensure Pell and FDL data is accurately and timely reported to the COD. Cause In discussing these conditions with University officials, they stated a system issue and training issue contributed to the finding. Possible Asserted Effect Failure to report Pell and FDL data to the COD accurately and within required timeframes results in noncompliance with program requirements and inhibits the ability of the USDE to monitor Pell and FDL program requirements impacted by this data. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its internal control procedures and implement additional management review procedures to ensure data is accurately reported to the COD within required timeframes. Views of University Officials The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2023-005 – Inaccurate Reporting of Higher Education Emergency Relief Fund (HEERF) Quarterly Data Federal Agency: U.S. Department of Education (USDE) Program Name: Higher Education Emergency Relief Fund CFDA # and Program Expenditures: 84.425 ($1,816,217) Federal Award Numbers: P425E204996; P425E204996 – 20B; P425F204056; P425F204056 – 20B Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Reporting Type of Finding: Material Weakness and Noncompliance Condition Found The University did not report HEERF expenditure data in the appropriate period to the United States Department of Education (USDE) through the HEERF Quarterly Report. During our testing of two HEERF Quarterly Reports, we noted the University did not appropriately report the institutional expenditures for the period ending September 30, 2022. Specifically, we noted that the following differences: See the Schedule of Findings and Questioned Costs for chart/table. Upon further review, we noted these errors related to expenditures incurred in a prior quarter and that the report from the quarter to which the expenditures pertained should have been revised. The University corrected the impacted reports after these errors were identified by our audit procedures. Additionally, we noted the University did not have adequate review or monitoring controls in place to ensure that the quarterly expenditure data was accurately reported within the appropriate quarterly report. Criteria According to the Office of Management and Budget (OMB) Control Number 1840-0849, Institutions must report quarterly HEERF budget and expenditure data to the USDE. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award is compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include maintaining adequate controls to ensure HEERF data is accurately reported to the USDE. Cause In discussing these conditions with University officials, they stated the preparer and reviewer of the HEERF Quarterly Report did not understand the requirements for reporting corrections in the quarterly report in which the expenditures occurred. Possible Asserted Effect Failure to report accurate HEERF data results in noncompliance with program requirements and inhibits the ability of the USDE to monitor HEERF expenditures. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its internal control procedures and implement additional management review procedures to ensure data is accurately reported to the USDE in the appropriate quarterly report. Views of University Officials The University concurs with the finding.

Finding 2023-005 – Inaccurate Reporting of Higher Education Emergency Relief Fund (HEERF) Quarterly Data Federal Agency: U.S. Department of Education (USDE) Program Name: Higher Education Emergency Relief Fund ALN and Program Expenditures: 84.425 ($1,816,217) Federal Award Numbers: P425E204996; P425E204996 – 20B; P425F204056; P425F204056 – 20B Federal Award Year: July 1, 2022 to June 30, 2023 Questioned Costs: None Compliance Requirement: Reporting Type of Finding: Material Weakness and Noncompliance Condition Found The University did not report HEERF expenditure data in the appropriate period to the United States Department of Education (USDE) through the HEERF Quarterly Report. During our testing of two HEERF Quarterly Reports, we noted the University did not appropriately report the institutional expenditures for the period ending September 30, 2022. Specifically, we noted that the following differences: See the Schedule of Findings and Questioned Costs for chart/table. Upon further review, we noted these errors related to expenditures incurred in a prior quarter and that the report from the quarter to which the expenditures pertained should have been revised. The University corrected the impacted reports after these errors were identified by our audit procedures. Additionally, we noted the University did not have adequate review or monitoring controls in place to ensure that the quarterly expenditure data was accurately reported within the appropriate quarterly report. Criteria According to the Office of Management and Budget (OMB) Control Number 1840-0849, Institutions must report quarterly HEERF budget and expenditure data to the USDE. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award is compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include maintaining adequate controls to ensure HEERF data is accurately reported to the USDE. Cause In discussing these conditions with University officials, they stated the preparer and reviewer of the HEERF Quarterly Report did not understand the requirements for reporting corrections in the quarterly report in which the expenditures occurred. Possible Asserted Effect Failure to report accurate HEERF data results in noncompliance with program requirements and inhibits the ability of the USDE to monitor HEERF expenditures. Repeat Finding A similar finding was not reported in prior years. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its internal control procedures and implement additional management review procedures to ensure data is accurately reported to the USDE in the appropriate quarterly report. Views of University Officials The University concurs with the finding.

Finding 2023-006 – Inaccurate Reporting on the Schedule of Expenditures of Federal Awards Federal Agency: U.S. Department of Homeland Security (DHS) Pass-through Entity: Illinois Emergency Management Agency Program Name: Disaster Grants – Public Assistance (Presidentially Declared Disasters) ALN and Program Expenditures: 97.036 ($5,258,177) Federal Award Numbers: PA-05-IL-4489-PW-01677 Federal Award Year: October 1, 2022 to September 30, 2023 Questioned Costs: None Compliance Requirement: Other – Inaccurate reporting on the Schedule of Expenditures of Federal Awards Type of Finding: Material weakness Condition Found The University of Chicago (the University) did not have adequate internal controls related to the reporting of expenditures for the Disaster Grants – Public Assistance (Presidentially Declared Disasters) (Disaster Grants) program on the schedule of expenditures of federal awards (SEFA). Specifically, the University’s control to review federal expenditures reported by the University of Chicago Medical Center was not designed at an appropriate level of precision to ensure federal expenditures are completely and accurately reported on the SEFA. As a result, the amounts previously reported on the SEFA for the year ended June 30, 2023 did not include $5,258,177 of expenditures related to the Disaster Grants program. Criteria or Requirement According to 2 CFR 200.303, non-federal entities receiving federal awards are required 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 and amounts provided to subrecipients are accurately and completely reported on the SEFA in accordance with 2 CFR 200.510(b). Cause In discussing these conditions with University officials, they stated the error was due to the manual nature of the consolidation of SEFA data from its components, as well as a misunderstanding by UCMC of the reporting requirements for the FEMA Disaster Grant awards. Possible Asserted Effect Failure to establish effective internal controls over the preparation of the SEFA for all components may prevent the University from reporting accurate federal expenditures and properly completing an audit in accordance with the Uniform Guidance. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University implement additional internal controls to ensure that federal expenditures are accurately and completely reported on the SEFA from all components. Views of University Officials The University concurs with the finding and has begun to address these concerns.

Finding 2022 001: Inaccurate Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN # and Program Expenditures: 84.063 ($5,001,353), 84.268 ($96,834,902) Federal Award Numbers: P063P20211389, P268K221389 Federal Award Year: July 1, 2021 to June 30, 2022 Questioned Costs: None Compliance Requirement: Enrollment Reporting Condition Found: The University did not accurately and/or timely report student address changes and enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS). The U.S. Department of Education (USDE) uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in-school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. Additionally, changes in a student?s permanent address are used by USDE to service loans. During our testing of 60 borrowers under the Federal Direct Loan Program and/or Federal Pell Grant recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the following: - The status changes for two graduated students were reported incorrectly to the NSLDS as a Full-time (F) status rather than Graduated (G) status. Specifically, the enrollment statuses for these students were not reported as graduated to the NSLDS because the students had conferral dates outside established reporting dates, resulting in the student system incorrectly categorizing these students as full-time students instead of graduated. Upon further review, management evaluated and determined this error potentially impacted 103 public policy graduates who received Federal Direct Loans. - An address change was reported to NSLDS late (greater than 60 days after the change was known by the University for one student tested). In reviewing this exception with management, we noted the University?s third-party servicer (National Student Loan Clearinghouse) identified that this student potentially had been reported by another institution. As a result, the address change for this student was not reported to NSLDS until the University researched and validated the student?s information, which resulted in the address change being reported 62 days late. The University identified 73 additional students who had similar reporting delays. - The campus-level enrollment and the program-level enrollment status reported to the NSLDS did not agree for one student tested. The enrollment status was reported to the NSLDS as Full-time (F) for the campus-level and Withdrawn (W) for the program-level. The University identified an additional 27 students with inconsistent campus-level and program-level enrollment status reporting. We further noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment and student data submitted to NSLDS was accurate and reported within required timeframes. The University disbursed Federal Direct loans to 2,568 students during the year ended June 30, 2022. Criteria: According to 34 CFR Sections 690.83(b)(2) and 685.309, under the Pell grant and Federal Direct Loan programs, institutions must complete and return the Enrollment Reporting Roster File via NSLDS within 15 days of receipt. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster File. Unless an institution expects to submit its next updated enrollment report to the USDE within the next 60 days, an institution must notify NSLDS within 30 days after the date that the institution discovers that (1) a Direct loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or (2) a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address. The November 2020 NSLDS Enrollment Reporting Guide states ?a student?s Program-Level enrollment status should be reported with the same enrollment status as that student?s Campus-Level enrollment status for all programs the student is enrolled in as that location, even if the student is not currently taking coursework that applies to a particular program.? In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include establishing procedures to ensure student campus and program-level enrollment status changes are timely and accurately reported to the NSLDS. Cause: In discussing these conditions with University officials, they stated that the specific issues were caused by inadequate reporting policies, processes, and technology. Possible Asserted Effect: Inaccurate submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules, as well as the federal government?s payment of interest subsidies. Repeat Finding: A similar finding was reported in the prior year audit as finding 2021-001. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review and revise its procedures to ensure accurate and timely reporting of student information and enrollment status information to the NSLDS. Views of University Officials: The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2022 002: Inaccurate Property Management Records Federal Agency: U.S. Department of Agriculture (USDA) U.S. Department of Commerce (USDOC) U.S. Department of Defense (USDOD) U.S. Director of National Intelligence (USDNI) U.S. Department of Housing and Urban Development (USHUD) U.S. Department of Interior (USDOI) U.S. Department of Justice (USDOJ) U.S. Department of Transportation (USDOT) National Aeronautics and Space Administration (NASA) National Endowment for the Humanities (NEH) National Science Foundation (NSF) U.S. Department of Veteran Affairs (USDVA) U.S. Environmental Protection Agency (USEPA) U.S. Department of Energy (USDOE) U.S. Department of Education (USDE) Smithsonian Institution U.S. Department of Health and Human Services (USDHHS) Corporation for National and Community Service All Pass-Through Entities Program Name: Research and Development Cluster ALN # and Program Expenditures: Various ($482,298,931) Federal Award Numbers: Various ? See schedule of award numbers Federal Award Year: Various ? See schedule of award numbers Questioned Costs: None Compliance Requirement: Equipment Condition Found: The University did not consistently follow its property management policies and procedures related to equipment purchased with federal funding from the Research and Development (R&D) Cluster program. The University conducts research at multiple locations throughout their campus, where equipment purchased with federal funds is utilized and maintained. The University identifies all equipment in its property management records with individually assigned asset numbers and each individual asset record includes the specific location of the asset, the federal award general ledger account number that funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with University policy. During our physical observation of 60 pieces of equipment purchased with R&D Cluster funds (with a total cost value of $1,542,384), we noted the following: - Nine items (with a total cost value of $200,035) did not have property management tags affixed at the time of our observation. - Eight items (with a total cost value of $103,583) had property management tags with asset numbers that were inconsistent with the equipment listing. Upon further review, we noted the property management records contained a temporary asset tag number that had not been updated for the permanent tag subsequently affixed by department personnel. Further, we noted adequate management review controls had not been established to ensure property management records were accurately updated and equipment was properly tagged. The net book value of equipment related to the R&D Cluster program totaled $217,101,257 at June 30, 2022. Criteria: According to 2 CFR 200.313(d)(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, 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. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that accurate property records are maintained and equipment items are properly tagged. Cause: In discussing these conditions with University officials, they stated the University?s procedures for tagging equipment were delayed because the University?s personnel operated in a remote environment during fiscal years 2021 and 2022. Additionally, physical inventory procedures, which are designed detect differences between perpetual and actual information, were waived during fiscal years 2020 and 2021 as a result of the pandemic. Possible Asserted Effect: Failure to maintain accurate property records may prohibit the University from properly safeguarding and maintaining equipment and may result in federal programs not receiving the appropriate share of proceeds from the disposals of equipment purchased with federal funds. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its procedures for updating property records to ensure they accurately reflect equipment information. We also recommend the University properly tag equipment in accordance with its policy. Views of University Officials: The University agrees with the finding. All departments of the University will be reminded that tagging is an integral part of the internal control process for capital assets and training will be made available before June 30, 2023.

Finding 2021-001: Inaccurate Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ALN # and Program Expenditures: 84.063 ($4,316,534), 84.268 ($102,768,754) Federal Award Numbers: P063P20201389, P268K211389 Federal Award Year: July 1, 2020 to June 30, 2021 Questioned Costs: None Compliance Requirement: Enrollment Reporting Condition Found: The University did not accurately report student enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS). The U.S. Department of Education (USDE) uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in-school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. Additionally, changes in a student?s permanent address are used by USDE to service loans. During our testing of 65 borrowers under the Direct Loan program and/or Pell Grant recipients that had a reduction or increase in attendance levels, graduated, withdrew, dropped out, or enrolled but never attended during the fiscal year, we noted the following: - The status change for eleven graduated students was reported incorrectly to the NSLDS as Withdrawn (W) rather than Graduated (G) status. Upon further review, it was determined that all eleven of these students had conferral dates outside of the established term end date of June 5, 2021, resulting in the student system incorrectly categorizing these students as withdrawn instead of graduated when reporting to NSLDS. As a result of the errors identified, management performed an evaluation and determined that this system error impacted all 821 business students who graduated on June 9, 2021, of which 164 received federal direct loans. On December 15, 2021, management corrected the reporting errors to the NSLDS for all students impacted. - The program start date was inaccurately reported to the NSLDS in the program-level records for 8 students tested. The program start date for these students was updated to report the start date after changing to a different curriculum with the same classification of instruction program (CIP) code. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment and student data submitted to NSLDS accurately. The University disbursed FDL loans to 2,749 students during the year ended June 30, 2021 for which enrollment reporting requirements applied. The number of undergraduate students enrolled in the University during fiscal year 2021 was 6,222. Criteria: According to 34 CFR Sections 690.83(b)(2) and 685.309, under the Pell grant and Federal Direct loan programs, institutions must complete and return the Enrollment Reporting Roster File via NSLDS within 15 days of receipt. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster File. Unless an institution expects to submit its next updated enrollment report to the USDE within the next 60 days, an institution must notify NSLDS within 30 days after the date that the institution discovers that (1) a Direct loan was made to or on behalf of a student who was enrolled or accepted for enrollment at the institution, and the student has ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended; or (2) a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address. The November 2020 NSLDS Enrollment Reporting Guide states ?a student?s Program-Level enrollment status should be reported with the same enrollment status as that student?s Campus-Level enrollment status for all programs the student is enrolled in as that location, even if the student is not currently taking coursework that applies to a particular program.? In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include establishing procedures to ensure student campus and program-level enrollment status changes are accurately reported to the NSLDS. Cause: In discussing these conditions with University officials, they stated that the specific issues are caused by reporting policies, processes and technology. Possible Asserted Effect: Inaccurate submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in-school deferments, grace periods, and repayment schedules, as well as the federal government?s payment of interest subsidies. Repeat Finding: A similar finding was reported in the prior year audit as finding 2020-001. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the University review its procedures to ensure accurate reporting of student information and enrollment status information to the NSLDS. Views of University Officials: The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2021-002: Improper Costs Reported in the PRF Reporting Portal Federal Agency: U.S. Department of Health and Human Services (USDHHS) Program Name: COVID-19 ? Public Health and Social Services Emergency Fund for Provider Relief ALN # and Program Expenditures: 93.498 ($203,389,012) Federal Award Numbers: HHS-07077570776, HHS-60821907710, HHS-24508614591, HHS- 35432403065, HHS-34399157446, HHS-99492989543, HHS- 46251478163, HHS-51964833908, HHS-95690089267, HHS-44689612101, HHS-76753589162, HHS-90638498101, HHS-14206516800 Federal Award Year: April 10, 2020 to June 30, 2021 Questioned Costs: $1,100,000 Compliance Requirement: Activities Allowed or Unallowed Condition Found: The University and Medical Center reported $203,389,012 of federal funding from the USDHHS COVID-19 ? Public Health and Social Services Emergency Fund for Provider Relief program (PRF) during the year ended June 30, 2021. The University and the Medical Center primarily used PRF funding for lost revenue and for other COVID-19 related costs incurred. These costs were reported in the PRF Reporting Portal for the period from March 20, 2020 through June 30, 2021. During our review of the expenditures claimed by the Medical Center, we noted approximately $58 million of the expenditures reported were general and administrative (G&A) costs that were allocated to PRF based upon the number of COVID individuals served. In testing expenditures included in the G&A cost pools, we identified two items totaling $1,133,000 (out of 40 totaling $2,986,000) that were actually budgetary charges for net losses derived from the provision of transplant services rather than actual expenditures related to such services. While the Medical Center provided a service line income statement to evidence that these net losses resulted from expenses exceeding revenues for the transplant service line, the nature of these two items is not consistent with the Medical Center?s reporting of them as ?costs? or with other costs reported as G&A charged to PRF. As a result, they do not meet the allowability requirements of the PRF program. In evaluating the population of expenditures included in the G&A cost pool, we identified an additional $27,077,000 of similar budgetary charges for other service lines. After applying the applicable COVID-19 allocation metrics to these costs, we noted the total amount of such charges to PRF (including the two items discussed in the previous paragraph from our sample) was approximately $1.1 million. Criteria: According to the Terms and Conditions of PRF and Public Law No. 116-139, 134 Stat. 622 and 623, funds appropriated under this Act shall be available for building or construction of temporary structures, leasing of properties, medical supplies and equipment, including personal protective equipment and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities, and surge capacity. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to verify costs reported in the PRF Reporting Portal meet the activities allowed criteria. Cause: In discussing these conditions with Medical Center officials, they noted the evolving guidance for activities allowed or unallowed under COVID-19 related funding and necessary interpretation of this guidance resulted in these items being reported in the PRF Reporting Portal. Possible Asserted Effect: Reporting costs for activities not allowed under the PRF program may result in the disallowance of costs by USDHHS. Repeat Finding: This is not a repeat finding. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend the Medical Center review its procedures to ensure only costs for activities allowed under the PRF program are claimed/reported. Views of University Officials: The University of Chicago Medical Center had a rigorous process in monitoring the guidance from the Department of Health and Human Services who disbursed the Provider Relief Funds. This reporting guidance evolved, however, and specific to the General and Administrative Expenses allowed for providers to leverage their existing cost accounting systems and allocations for accumulation of these expenses for reporting purposes. The Medical Center implemented the guidance and assured that Healthcare Expenses and G&A Expenses were reported for the Provider Relief Funds to HHS prior to lost revenues. The transplant related costs are specific to a service line and are directly allocated to that service line and were to be incurred regardless of volume and revenue, thus allocated as indirect fixed costs and identified as G&A Expenses. The Medical Center in future reporting periods will be reporting lost revenues and does not anticipate the need to report future G&A Expenses.

Finding 2020 001 Inaccurate and Untimely Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster ? Federal Direct Loan Program CFDA # and Program Expenditures: 84.268 ($93,643,427) Federal Award Numbers: P268K201389 Federal Award Year: July 1, 2019 to June 30, 2020 Questioned Costs: None Condition Found The University did not accurately and/or timely report student address changes and student enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS). The U.S. Department of Education (USDE) uses enrollment data reported by the University to determine: (1) eligibility for interest subsidies, (2) loan repayment start dates, and (3) in-school loan deferments. The enrollment information is also used by USDE to measure program completion data to evaluate the effectiveness of financial aid programs. Additionally, changes in a student?s permanent address are used by USDE to service loans. During our testing of 45 borrowers under the Direct Loan program whose enrollment status changed during the fiscal year, we noted the following: ? The campus-level enrollment status and the program-level enrollment status reported to the NSLDS did not agree for 1 student tested. The enrollment status was reported to the NSLDS as full time for campus-level and withdrawn for program-level. The University identified an additional 3 students with inconsistent campus-level and program-level enrollment status reporting. ? Program start dates were inaccurately reported to the NSLDS in the program-level records for 6 students tested. The program start dates for these students were updated to report their start date after returning from a leave of absence rather than the student?s original program start date. The University identified similar inaccurate program start dates were reported for an additional 476 students. ? The program start date was inaccurately reported to the NSLDS in the program-level records for 1 student tested. The program start date for this student was updated to report the start date after changing to a different curriculum with the same classification of instruction program (CIP) code. The University identified similar inaccurate program start dates were reported to NSLDS for an additional 267 students. ? Address changes were reported late (greater than 60 days after the change was known by the University) to the NSLDS for 2 students tested. Delays in reporting these changes were 19 and 95 days after the required timeframe. These 2 errors were reported by the University as part of a reporting error identified by the University in Fall 2019. Specifically, the University determined that when address changes were being reported to NSLDS, the student system did not always select the physical address type to be included in the reported file, sometimes sending other address types instead. The University processed address changes for the impacted students in December 2019. A total of 2,369 late address changes were reported in the December 2019 Roster File, of which 226 students were enrolled students who received Title IV financial aid from the University in fiscal year 2020. The remaining 2,143 students were enrolled at the University but did not receive Title IV financial aid from the University in fiscal year 2020. ? The status change for 1 withdrawn student was not accurately reported to the NSLDS. Specifically, the enrollment status was reported as full-time rather than withdrawn as the student retroactively withdrew from all courses after the conclusion of the academic term and subsequent to the submission of the final roster for the term. As the student enrolled full-time for the next academic term, the withdrawn status was never reported. ? The University identified the status changes for 6 graduated students were not accurately reported to the NSLDS as a result of the condition reported in a prior year finding. Specifically, the program enrollment statuses for these students were not reported as graduated to the NSLDS because the student graduated in an academic term in which the student was not enrolled. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment and student data submitted to NSLDS was accurate and sent in accordance with required timeframes. The University disbursed FDL loans to 2,598 students during the year ended June 30, 2020 for which enrollment reporting requirements applied. The number of students included on the University?s Roster files ranged from 5,253 to 5,982 students during fiscal year 2020. Criteria According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via NSLDS within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended. The 2019-2020 NSLDS Enrollment Reporting Guide states ?a student?s Program-Level enrollment status should be reported with the same enrollment status as that student?s Campus-Level enrollment status for all programs the student is enrolled in as that location, even if the student is not currently taking coursework that applies to a particular program.? In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include establishing procedures to ensure student campus and program-level enrollment status changes and address changes are accurately and timely reported to the NSLDS. Cause In discussing these conditions with University officials, they stated that the specific issues are caused by reporting policies, processes and technology. Possible Asserted Effect Inaccurate and delayed submission of student enrollment status and student information affects the determinations that lenders and servicers of student loans make related to in school deferments, grace periods, and repayment schedules, as well as the federal government?s payment of interest subsidies. Repeat Finding A similar finding was reported in the prior year audit as finding 2019-001. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures to ensure timely and accurate reporting of student information and enrollment status information to the NSLDS. Views of University Officials The University concurs with the findings and have begun work on the unmitigated issues.

Finding 2019 001 Inaccurate Enrollment Reporting Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster CFDA # and Program Expenditures: 84.268 ($100,819,766) Federal Award Numbers: P268K191389 Federal Award Year: July 1, 2018 to June 30, 2019 Questioned Costs: None Condition Found The University did not accurately report student enrollment status changes to the National Student Loan Data System (NSLDS). A student?s enrollment status determines eligibility for in school status, deferment, and grace periods, as well as for the payment of interest subsidies to Federal Direct Loan Program loan holders by the U.S. Department of Education (USDE). Reporting enrollment data in a timely and accurate manner is critical for effective management of the programs. The University uses the services of the National Student Clearinghouse (NSC) to report status changes to the NSLDS. Under this arrangement, the University reports all students enrolled and their status to the NSC. The NSC completes the roster file on behalf of the University and communicates status changes to the NSLDS. Although the University uses the services of the NSC, it is still ultimately the University?s responsibility to submit timely, accurate, and complete records to the NSLDS. During our testwork of 85 borrowers under the Direct Loan program that graduated or withdrew during the fiscal year, we noted the status changes for 4 graduated students were not accurately reported to the NSLDS as of the date of our testing (February 12, 2020). The enrollment statuses were reported to the NSLDS as Withdrawn (W) status rather than Graduated (G) status. Upon further review by the University, an additional 26 students were identified as being reported as Withdrawn (W) status rather than Graduated (G) status. Further, we noted management review controls implemented by the University were not designed at a level of precision to ensure University enrollment data submitted to NSLDS was accurate and sent in accordance with required timeframes. Criteria According to 34 CFR Section 685.309, under the Federal Direct loan program, institutions must complete and return the Enrollment Reporting roster file via NSLDS within 15 days of receipt. Enrollment information must be reported within 30 days whenever attendance changes for students, unless a roster will be submitted within 60 days. An institution must notify the Secretary of Education if it discovers that a loan under Title IV of the Act was made to or on behalf of a student who was enrolled or accepted for enrollment at the school, and the student has ceased to be enrolled on at least a half time basis or failed to enroll on at least a half time basis for the period for which the loan was intended. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include establishing procedures to ensure student enrollment status changes are accurately and timely reported to the NSLDS. Cause In discussing these conditions with University officials, they stated that there were two issues causing untimely data submission to NSC/NSLDS. First, the Chicago Booth School of Business submitted their graduate student data after the University?s graduated student file was sent to NSC. Second, the data feed sending graduation information for students who were no longer enrolled sent information to the Degree profile in NSC, not the Enrollment profile from which NSLDS retrieves information. Possible Asserted Effect Inaccurate and delayed submission of student enrollment status information affects the determinations that lenders and servicers of student loans make related to in school status, deferments, grace periods, and repayment schedules, as well as the federal government?s payment of interest subsidies. Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures to ensure timely and accurate reporting of student enrollment status information to the NSLDS. Views of University Officials The University agrees with the finding. Management has reminded staff of the importance of receiving the Chicago Booth graduated student information in a timely manner. Staff will verify that Chicago Booth students are included in each graduated student file or send a separate file to NSC, as needed. The data feed to NSC will be revised to send all graduated student information to the Enrollment profile. Until the data feed is updated, files will be generated and manually sent to NSC to update graduated students in FY20.

Finding 2019 002 Untimely and Inaccurate Reporting of Pell Grant Payment Data Federal Agency: U.S. Department of Education (USDE) Program Name: Student Financial Assistance Cluster CFDA # and Program Expenditures: 84.063 ($3,477,689) Federal Award Numbers: P063P181389 Federal Award Year: July 1, 2018 to June 30, 2019 Questioned Costs: None Condition Found The University did not report Pell grant disbursement data to the Common Origination and Disbursement (COD) system accurately and within required timeframes. During our testwork of 50 students (with 141 disbursements totaling $227,140) who were awarded and disbursed funds under the Pell Grant program, we noted the following: ? 3 Pell disbursement dates for Pell disbursements (totaling $4,846) to 3 students were not reported accurately to the COD. Upon further review by the University, 1 additional disbursement for 1 student was identified as being inaccurately reported. ? 5 Pell disbursements (totaling $5,506) to 5 students were not reported to the COD within 15 days. Delays in reporting Pell disbursements ranged from 6 to 35 days, with an average delay of 22 days. Further, we noted the University did not have adequate supervisory review or monitoring controls in place to ensure that Pell disbursement data was reported accurately and in a timely manner. Criteria According to OMB No. 1845 0039, an institution must submit Pell Grant origination and disbursement records to the USDE through the COD system. Origination records may be sent in advance of any disbursements, as early as the institution chooses to submit them, for any student the institution believes will be eligible for payment. The disbursement record reports actual disbursement date and the amount of the disbursement. Institutions must report student payment data within 15 calendar days after the institution makes a payment or becomes aware of the need to make an adjustment to previously reported student payment data or expected student payment data. Institutions may do this reporting once every 15 days, biweekly, weekly, or may set up their own system to ensure changes are reported in a timely manner. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include maintaining adequate controls over Pell Grant origination and disbursements records and related documentation. Cause In discussing these conditions with University officials, they stated that staff processing errors led to inaccurate and untimely reporting of Federal Pell Grant data. Possible Asserted Effect Failure to report Pell payment data to the COD accurately and in a timely manner results in noncompliance with program requirements and inhibits the ability of the USDE to monitor Pell disbursements. Repeat Finding A similar finding was reported in the prior year audit as finding 2018-003. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its internal control procedures and implement additional management review procedures to ensure data reported to the COD is accurately reported within required timeframes. Views of University Officials The University agrees with the finding. The University Financial Aid Office made a staffing change and has a new team charged with Federal Pell Grant reporting. In addition, we have added enhanced review items to the monthly required reconciliation process.

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