California State UniversityHigher Education

Compliance Requirement: Enrollment Reporting Campus: Sacramento, Los Angeles Cluster name/program: Student Financial Assistance Cluster Federal Assistance Listing Numbers: 84.063 Federal Pell Grant Program and 84.268 Federal Direct Loans Federal Award Identification Number: None Federal Agency: U.S. Department of Education Passed through Entity: None Award Year: July 1, 2024 - June 30, 2025 Criteria: The U.S. Code of Federal Regulations 34 CFR 690.83(b)(2), 34 CFR 682.610, 34 CFR 685.309, and 34 CFR 674.19 require institutions review, update, and certify student enrollment reporting roster in a timely and accurate basis at both the campus and program level. Enrollment roster should be certified every 60 days or every other month. In addition, 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. Condition and Context: The Sacramento and Los Angeles campuses did not accurately report student status changes and enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS) and the control to ensure the student status changes and enrollment status changes was not operating effectively. The Sacramento and Los Angeles campus also did not report student status changes timely to NSLDS. During our testing of 60 student 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 at the Sacramento and Los Angeles Campuses: • At the Sacramento campus, the status changes for two graduates were reported late to NSLDS by up to 62 days, which is greater than the allowed 60 days after the change was known by the campus. We noted that although corrective actions were taken in response to the prior year’s finding, the events causing the findings noted above occurred prior to the implementation of the corrective action in the latter part of the fiscal year. • At the Los Angeles campus, the status change for one student was reported incorrectly to NSLDS as full-time status rather than Graduated (G) status. The campus-level enrollment status and the program-level enrollment status reported to NSLDS did not agree to campus records for this student. Further, the status change for this student was reported late to NSLDS by up to 87 days, which is greater than the allowed 60 days after the change was known by the campus. Cause and Effect: The Sacramento campus experienced personnel changes in the registrar's office and did not have adequate staffing in place to monitor the required procedures for a portion of the year. The events causing findings this year occurred prior to the implementation of the corrective action in the latter part of the fiscal year. The Los Angeles campus did not have a process in place to report graduations that occur later than the submission of the final semester file to NSLDS. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Repeat Finding: Yes – Sacramento, No – Los Angeles Recommendation: We recommend the University provide proper training on the enrollment reporting procedures and apply its existing policies and procedures. Views of Responsible Officials: The University concurs with the recommendation. The University will review and enhance its procedures to ensure timely and accurate reporting to NSLDS.

Compliance Requirement: Disbursements to or on Behalf of Students Campus: Fullerton and Los Angeles Cluster name/program: Student Financial Assistance Cluster Federal Assistance Listing Numbers: 84.063 Federal Pell Grant Program and 84.268 Federal Direct Loans Federal Award Identification Number: None Federal Agency: U.S. Department of Education Passed through Entity: None Award Year: July 1, 2024 – June 30, 2025 Criteria: The U.S. Code of Federal Regulations 34 CFR 668.165 requires that institutions must notify the student, or parent, in writing of (1) the date and amount of the disbursement; (2) the student’s right, or parent’s right, to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to ED; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. Institutions that implement an affirmative confirmation process (as described in 34 CFR 668.165 (a)(6)(i)) must make this notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student’s account at the institution with Direct Loan or TEACH Grants. In addition, 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. Condition and Context: The Los Angeles and Fullerton campuses did not notify students within 30 days of crediting the students' account as the controls to ensure students received disbursement notifications were not operating effectively. During the eligibility & disbursement testwork over 40 students that received loans under Title IV, we noted the following at the Fullerton and Los Angeles Campuses: • At the Fullerton campus, post award disbursement notifications were sent after the 30-day requirement for 3 sampled students. • At the Los Angeles campus, post award disbursement notifications were not sent to any of the 6 sampled students for the entire academic year. Cause and Effect: The Fullerton campus experienced personnel changes resulting in a gap in responsibility and understanding of the process, leading to missed or late notifications. The Los Angeles campus experienced personnel changes which led to a lack of awareness of who was responsible for completing the federal disbursement notification requirements. The financial aid team was not aware that they had historically been responsible for the requirement, hence there was no processes in place to send out disbursement notifications. Questioned Costs: No Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No Recommendation: We recommend the University provide proper training on the disbursement notification requirements and apply its existing policies and procedures. Views of Responsible Officials: The University concurs with the recommendation. The University will review and enhance its procedures to ensure timely disbursement notification.

Compliance Requirement: Procurement, Suspension and Debarment Campus:Sacramento Cluster name/program: Supplemental Nutrition Assistance Program Cluster Federal Assistance Listing Numbers: 10.561 Federal Award Identification Number: 21-3068 and 24-3069 Federal Agency: U.S. Department of Agriculture Passed through Entity: State of California Department of Social Services Award Year: July 1, 2024 – June 30, 2025 Criteria: According to 2 CFR 200.214, recipients and subrecipients are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Additionally, 2 CFR 180.300 requires non-federal entities (including state agencies administering federal programs like SNAP) to verify that contractors and subrecipients are not suspended or debarred from receiving federal funds CFR 200.303 also 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. Condition and Context: During our testing of 2 procurement samples, it was noted that the program personnel did not check if the vendors were suspended or debarred from receiving federal funds before entering into a covered transaction, nor was a certification from the vendor about verification of suspension and debarment collected from the vendor. We noted the vendors were not suspended or debarred and there were no other exceptions noted in the procurement, suspension and debarment testing. Cause and Effect: The control over the verification that vendors are not suspended or debarred prior to entering into a covered transaction was not designed effectively. As such, the suspension and debarment check requirements were not implemented for all procurement methods for this program. Questioned Costs: None Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding: No Recommendations: We recommend the University implement controls to verify the suspension and debarment status of all vendors prior to entering covered transactions, as well as maintaining evidence of the suspension and debarment check in the procurement file of each vendor. Views of Responsible Officials: The University concurs with the recommendations. The University will review and enhance its procedures and internal controls to verify the suspension and debarment status of all vendors prior to entering covered transactions, as well as maintaining evidence of the suspension and debarment check in the procurement file of each vendor.

Compliance Requirement: Other – Inaccurate reporting of the Schedule of Expenditures of Federal Awards Campus: Sacramento, Sonoma Cluster name/program: Supplemental Nutrition Assistance Program Cluster and Reserach and Development Programs Cluster Listing Numbers: 10.561, 47.076, and 84.411 Federal Agency: U.S. Department of Agriculture National Science Foundation U.S. Department of Education Passed through Entity: 10.561 - State of California Department of Social Services Federal Award Identification Numbers: 10.561: 21-3068 and 24-3069, 47.076: 1953472, and 84.411: S411B230042 Award Year: July 1, 2024 – June 30, 2025 Criteria: According to 2 CFR 200.502(a), the determination when a Federal award is expended must be based on when the activity related to the Federal award occurs. Generally, the activity related to the Federal award pertains to events that require the non-Federal entity to comply with Federal statutes, regulations, and the terms and conditions of Federal awards, such as: (1) Expenditure/expense transactions associated with grants, cooperative agreements, cost-reimbursement contracts under the FAR, compacts with Indian Tribes, and direct appropriations; (2) The disbursement of funds to subrecipients; Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws and regulations. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the Schedule of Expenditures of Federal Awards (SEFA). Condition and Context: ALN 10.561: We noted the Sacramento campus incorrectly recorded $712,979 of subrecipient expenditures which were not disbursed during FY2025. This resulted in an overstatement of expenditures on the FY2025 SEFA which management adjusted the SEFA accordingly. ALN 10.561: During our testing of nonpayroll expenditures for the Sacramento campus, we noted $25,605 related to a period outside of FY2025. The total out of period expense including the indirect cost was $32,006. This resulted in an overstatement of expenditures on the SEFA for FY2025. ALN 84.411: During our testing of indirect cost for the Sonoma campus, we noted $29,495 of expenditures related to a period outside of FY2025 resulting from management correcting the indirect cost rate for a grant that began in the prior year and recording all of the adjustment in FY2025. This resulted in an overstatement of expenditures on the FY2025 SEFA. ALN 47.076: During our payroll testing for the Sonoma campus, we noted $13,980 of expenditures related to a period outside of FY2025. The total out of period expense including the indirect cost was $21,110. This results in an overstatement of FY2025 Schedule of Expenditures of Federal Awards (SEFA). Cause and Effect: While the University’s policy is to record subrecipient expenditures on the SEFA upon the disbursement of funds to recipients, the Sacramento campus’ SEFA preparation process did not adequately consider whether amounts recorded in the SEFA had been disbursed to the subrecipient. At the Sonoma campus, the error was the results of an indirect cost rate being utilized from a previous grant versus the updated rate in the new grant. There was also a lack of internal controls over the accruals of summer payroll impacting federal awards. Failure to establish effective internal controls regarding financial reporting for the preparation of the SEFA resulted in an overstatement of expenditures. Questioned Costs: Not applicable Statistical Sampling: Not applicable Repeat Finding: Yes for 10.561 and No for 47.076 and 84.411 Recommendation: We recommend the University implement a system of internal control that is designed and operating effectively to ensure the SEFA is complete and accurate. Views of Responsible Officials: The University concurs with the recommendation. The University will review and enhance its procedures and internal controls to ensure the SEFA is complete and accurate.

Criteria: The Code of Federal Regulations 34 CFR 690.83(b)(2), 34 CFR 682.610, 34 CFR 685.309, and 34 CFR 674.19 require institutes review, update, and certify student enrollment reporting roster on timely and accurate basis at both the campus and program level. Enrollment roster should be certified every 60 days or every other month. Condition and Context: The Sacramento and San Jose campuses did not accurately report student status changes and enrollment status changes at both the campus-level and program-level to the National Student Loan Data System (NSLDS). The Sacramento campus also did not report student status changes timely to NSLDS. During our testing of 40 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 at the Sacramento and San Jose Campuses: - At the Sacramento campus, the status changes for five graduates were reported incorrectly to the NSLDS as a Full-time, Withdrawn or Half-time status rather than Graduated (G) status. The campus-level enrollment and the program-level enrollment status reported to the NSLDS also did not agree to campus records for these five students. Additionally, for three of these students, the student status was reported to NSLDS late by up to 189 days, which is greater than the allowed 60 days after the change was known by the campus. Condition and Context: We reviewed 6 in-scope campuses and a sample of 40 students who graduated, withdrew, or had a change in enrollment during the fiscal year. Out of the 7 sample students selected from California State University, Sacramento (the Campus), 5 students’ enrollment information was not uploaded correctly or certified on a timely basis. Out of the 6 sample students selected from San Jose State University (the Campus), 6 students’ enrollment information was not uploaded correctly. - At the San Jose campus, the status changes for six students were reported incorrectly to the NSLDS as Withdrawn or Three-quarters time status rather than Graduated (G) or Withdrawn (W) status. The campus-level enrollment status reported to NSLDS did not agree to campus records for these six students and the program-level enrollment status reported to NSLDS did not agree to campus records for four of these students. Cause and Effect: The campus experienced major personnel changes in the registrar office and did not have adequate staffing in place to monitor the required procedures.

Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws and regulations. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Condition and Context: The University did not have adequate controls relating to the reporting of expenditures on the SEFA for the Supplemental Nutrition Assistance Program Cluster (SNAP). The Sacramento campus confirmed with the Chancellor’s office that the final federal expenditures for the SNAP program in the current fiscal year were $6,206,313. It was determined subsequent to this notification that the actual federal expenditures for the SNAP program were $3,806,804. The University’s overall SEFA is compiled by the Chancellor’s office and relies on each campus to have internal controls that ensure completeness and accuracy of the SEFA. Cause and Effect: In discussing these conditions with the University, they stated the error was primarily due to not completing a final reconciliation and review of the SNAP federal expenditures before being provided to the Chancellor’s office. Additionally, management review controls at the campus over the completeness and accuracy of SEFA were not designed to detect the error. The inadequate review procedures over the SNAP federal expenditures resulted in an error on the SEFA for SNAP program expenditures in the amount of $2,399,509. Failure to establish effective internal controls regarding financial reporting for the preparation of the SEFA may prevent the University from completing an audit in accordance with the timelines of Uniform Guidance.

Criteria: In accordance with 2 CFR 200 Subpart E, the University is required to conform to allowability of cost provisions, and 2 CFR 200.303 requires the organization to establish and maintain effective controls over federal awards. Allowable costs charged to federal programs, whether direct or indirect, must be allowable and be determined in accordance with Subpart E – Cost Principles of the Uniform Guidance. Effective internal controls should include procedures to ensure federal expenditures and amounts are for activities allowed or unallowed and allowable costs/cost principles, as well as accurately and completely reported on the SEFA. The Sacramento campus confirmed with the Chancellor’s office that the final federal expenditures for the SNAP Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws and regulations. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. According to 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i)Be supported by a system of internal control that providesreasonable assurance that the charges are accurate, allowable,and properly allocated; (ii)Be incorporated into the official records of the recipient orsubrecipient; (iii)Reasonably reflect the total activity for which the employee iscompensated by the recipient or subrecipient, not exceeding 100percent of compensated activities; (iv)Encompass federally-assisted and all other activities compensatedby the recipient or subrecipient on an integrated basis but mayinclude the use of subsidiary records as defined in the recipient's orsubrecipient's written policy; (v)Comply with the established accounting policies and procedures ofthe recipient or subrecipient and (vi)Support the distribution of the employee's salary or wages amongspecific activities or cost objectives if the employee works on morethan one Federal award; a Federal award and non-Federal award;an indirect cost activity and a direct cost activity; two or moreindirect activities allocated using different allocation bases; or anunallowable activity and a direct or indirect cost activity. Cause and Effect: The University receives Supplemental Nutrition Assistance Program (SNAP) Cluster program funding at its Sacramento campus to perform nutrition outreach and education services to residents of the State of California. The Sacramento campus administers the SNAP Cluster nutrition education programs through its College of Continuing Education (CCE) and Population Research Center (PRC) offices. SNAP Cluster program expenditures are primarily comprised of payroll for program personnel performing various program activities and related fringe benefits and indirect costs. During our testing of 2 payroll expenditures for CCE employees (totaling $7,101) and 4 payroll expenditures for PRC employees (totaling $6,285), we noted effort reports detailing 100% of the employee's activities were not prepared for certain employees. Upon further investigation and discussion with CCE and PRC program management, we noted effort reports were not prepared for any employees whose payroll expenditures were charged to the SNAP Cluster program. The payroll expenditures and related costs impacted by the inadequate effort reports, are described in the table below: Expenditure category Questioned costs Excerpt of total SNAP Cluster program expenditures by impacted expenditure category Payroll $1,544,086 $1,544,086 Fringe benefits $708,935 $708,935 Indirect costs $563,225 $735,693 Total $2,816,276 $2,988,714 Total SNAP Cluster program expenditures were $4,267,405 for the year ended June 30, 2024. We noted additional instances of noncompliance as follows: • In our testing of 6 payroll expenditures, the hourly payroll ratesused to prepare the quarterly payroll remittances submitted to theState of California exceeded the actual payroll rates paid for 2employees resulting in an overcharge of payroll, fringe benefits,and indirect costs to the SNAP program of $2,880, $1,152 and$1,008, respectively. As these 2 employees did not have effortreports as discussed above, payroll, fringe benefits, and indirectcosts associated with these 2 employees has already beenincluded in the table above. In addition, we noted the Sacramento campus has not established adequate internal controls to ensure: (1) payroll expenditures charged to the SNAP Cluster program are properly determined and supported in accordance with the requirements of the Uniform Guidance and (2) fringe benefit and indirect costs are properly calculated by applying the approved fringe or indirect cost rate to a base that includes only allowable costs. Cause and Effect: The errors noted above were primarily due to insufficient controls over the establishment and tracking of SNAP Cluster program activities as federal funding within Sacramento’s general ledger. As a result, a portion of SNAP program expenditures and activities were not processed in accordance with applicable federal guidelines. Additional errors noted above relate to insufficient controls over the accuracy of the payroll, fringe benefits, and indirect cost charged to the SNAP Cluster program. The inadequate review procedures over payroll, fringe benefits, and indirect cost expenditures resulted in unallowable charges to the SNAP Cluster program in the amount of $2,816,276.

Criteria: The Code of Federal Regulations 34 CFR 690.83(b)(2), 34 CFR 682.610, 34 CFR 685.309, and 34 CFR 674.19 require institutes review, update, and certify student enrollment reporting roster on timely and accurate basis at both the campus and program level. Enrollment roster should be certified every 60 days or every other month. Condition and Context: We reviewed 6 in-scope campuses and a sample of 40 students who graduated, withdrew, or had a change in enrollment during the fiscal year. Of the 40 students tested, 6 students’ enrollment were not certified within the required 60 days period. Cause and Effect: The campus experienced major personnel changes in the registrar office and did not have adequate staffing in place to monitor the required procedures.

Criteria: The Code of Federal Regulations 34 CFR 690.83(b)(2), 34 CFR 682.610, 34 CFR 685.309, and 34 CFR 674.19 require institutes review, update, and certify student enrollment reporting roster on timely and accurate basis at both the campus and program level. Enrollment roster should be certified every 60 days or every other month. Condition and Context: We reviewed 6 in-scope campuses and a sample of 40 students who graduated, withdrew, or had a change in enrollment during the fiscal year. Of the 40 students tested, 6 students’ enrollment were not certified within the required 60 days period. Cause and Effect: The campus experienced major personnel changes in the registrar office and did not have adequate staffing in place to monitor the required procedures.

Criteria: According to 86 FR 26213 (Document Number: 2021-10196), the quarterly report must appear in a format and location that is easily accessible to the public. The information must also be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Condition and Context: During the single audit, two reports were untimely reported in accordance with the HEERF reporting requirements. CSU San Bernardino failed to report the required information within the 10 days required period for the quarters ending December 31, 2022 and June 30, 2023; information on the student reports was accurate but not reported on a timely basis, per the requirement. Cause and Effect: Management failed to report in a timely manner.

Criteria: According to 86 FR 26213 (Document Number: 2021-10196), the quarterly report must appear in a format and location that is easily accessible to the public. The information must also be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Condition and Context: During the single audit, two reports were untimely reported in accordance with the HEERF reporting requirements. CSU San Bernardino failed to report the required information within the 10 days required period for the quarters ending December 31, 2022 and June 30, 2023; information on the student reports was accurate but not reported on a timely basis, per the requirement. Cause and Effect: Management failed to report in a timely manner.

Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Condition and Context: Confition and Context: The University did not have adequate controls relating to the reporting of expenditures on the SEFA for the Supplemental Nutrition Assistance Program Cluster (SNAP). Both the College of Continuing Education (CCE) and the Population Research Center (PRC) which is part of the Sacramento campus incurred SNAP expenditures that were not reported on the fiscal year 2023 SEFA. The SNAP agreement was entered into between the California Department of Social Services and California State University-Sacramento on behalf of CCE. PRC was listed as a sub awardee within the SNAP agreement. Written policies and procedures require each unit/department within the Sacramento campus to send all external grants and contracts to the Sacramento campus Office of Research, Innovation and Economic Development (ORIED). ORIED performs a review of each applicable agreement received to determine that separate general ledger accounts have been established and whether the funding source has been accurately identified in the general ledger (i.e. federal). The CCE did not send the SNAP contract to ORIED and as a result, the review control did not operate as designed. Separate accounts, to track federal funding, were not established in the general ledger and instead, SNAP activity was accounted for within the tuition and fees general ledger accounts which resulted in SNAP activity being managed via manual spreadsheets. While performing budget control reviews during the year ended June 30, 2024, the CCE determined that certain SNAP expenditures had not been reported on the fiscal year 2023 SEFA. The University’s overall SEFA is compiled by the Chancellor’s office and relies on each campus to have internal controls that ensure completeness and accuracy of the SEFA. Cause & Effect: In discussing these conditions with the University, they stated the error was primarily due to significant turnover during fiscal year 2023 in the CCE and as a result the required policies and procedures for identifying, tracking, and communicating federal expenditures were not adhered to. Additionally, management review controls at the campus over the completeness and accuracy of the SEFA were not designed to detect the error. Failure to establish effective internal controls regarding financial reporting for the preparation of the SEFA may prevent the University from completing an audit in accordance with the timelines of Uniform Guidance.

Criteria: In accordance with 2 CFR 200 Subpart E, the University is required to conform to allowability of cost provisions, and 2 CFR 200.303 requires the organization to establish and maintain effective controls over federal awards. Allowable costs charged to federal programs, whether direct or indirect, must be allowable and be determined in accordance with Subpart E – Cost Principles of the Uniform Guidance. Effective internal controls should include procedures to ensure federal expenditures and amounts are for activities allowed or unallowed and allowable costs/cost principles, as well as accurately and completely reported on the SEFA. According to 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition and Context: The University receives Supplemental Nutrition Assistance Program (SNAP) Cluster program funding at its Sacramento campus to perform nutrition outreach and education services to residents of the State of California. The Sacramento campus administers the SNAP Cluster nutrition education programs through its College of Continuing Education (CCE) and Population Research Center (PRC) offices. SNAP Cluster program expenditures are primarily comprised of payroll for program personnel performing various program activities and related fringe benefits and indirect costs. During our testing of 18 payroll expenditures for CCE employees (totaling $90,946) and 40 payroll expenditures for PRC employees (totaling $66,458), we noted effort reports detailing 100% of the employee's activities were not prepared for certain employees. Upon further investigation and discussion with CCE and PRC program management, we noted effort reports were not prepared for any employees whose payroll expenditures were charged to the SNAP Cluster program, except for student workers who solely worked on SNAP Cluster program activities. The payroll expenditures and related costs impacted by the inadequate effort reports, are described in the table below: Expenditure category Questioned costs Excerpt of total SNAP Cluster program expenditures by impacted expenditure category Payroll $1,151,941 $1,354,046 Fringe benefits $641,501 $641,501 Indirect costs $448,286 $660,709 Total $2,241,728 $2,656,257 Total SNAP Cluster program expenditures were $3,688,927 for the year ended June 30, 2023. We noted additional instances of noncompliance as follows: • In our testing of 58 payroll expenditures, the hourly payroll rates used to prepare the quarterly payroll remittances submitted to the State of California exceeded the actual payroll rates paid for 15 employees resulting in an overcharge of payroll, fringe benefits, and indirect costs to the SNAP program of $11,710, $9,684, and $5,348, respectively. As these 15 employees did not have effort reports as discussed above, payroll, fringe benefits, and indirect costs associated with these 15 employees has already been included in the table above. • One individually significant payroll expenditure that was associated with one employee was double counted in the quarterly State of California remittance billing resulting in an overcharge to the SNAP Cluster program of $27,004, $10,801, and $9,451, respectively. As the employee did not have an effort report as discussed above, payroll, fringe benefits, and indirect costs associated with this employee has already been included in the table above. • In our testing of 7 indirect cost charges, we identified 4 indirect cost charges that utilized higher than the allowed hourly rates within the calculation. These 4 indirect cost charges related to CCE employees in which the hourly rate listed in the program agreement was billed versus the employee’s actual hourly pay rate and fringe benefit costs. As a result, the total payroll charges used to bill the indirect cost rate of 25% utilized unallowable payroll expenditures, which resulted in the SNAP Cluster program being overcharged by $46,922. As these employees also did not have effort reports as discussed above, payroll, fringe benefits, and indirect costs associated with these CCE employees has already been included in the table above. In addition, we noted the Sacramento campus has not established adequate internal controls to ensure: (1) payroll expenditures charged to the SNAP Cluster program are properly determined and supported in accordance with the requirements of the Uniform Guidance and (2) fringe benefit and indirect costs are properly calculated by applying the approved fringe or indirect cost rate to a base that includes only allowable costs. Cause & Effect: The errors noted above were primarily due to insufficient controls over the establishment and tracking of SNAP Cluster program activities as federal funding within Sacramento’s general ledger. As a result, a portion of SNAP program expenditures and activities were not processed in accordance with applicable federal guidelines. Additional errors noted above relate to insufficient controls over the accuracy of the payroll, fringe benefits, and indirect cost charged to the SNAP Cluster program. The inadequate review procedures over payroll, fringe benefits, and indirect cost expenditures resulted in unallowable charges to the SNAP Cluster program in the amount of $2,241,728.

Criteria: The Code of Federal Regulations 34 CFR 690.83(b)(2), 34 CFR 682.610, 34 CFR 685.309, and 34 CFR 674.19 require institutes review, update, and certify student enrollment reporting roster on timely and accurate basis at both the campus and program level. Enrollment roster should be certified every 60 days or every other month. Condition and Context: We reviewed 6 in-scope campuses and a sample of 40 students who graduated, withdrew, or had a change in enrollment during the fiscal year. Of the 40 students tested, 6 students’ enrollment were not certified within the required 60 days period. Cause and Effect: The campus experienced major personnel changes in the registrar office and did not have adequate staffing in place to monitor the required procedures.

Criteria: The Code of Federal Regulations 34 CFR 690.83(b)(2), 34 CFR 682.610, 34 CFR 685.309, and 34 CFR 674.19 require institutes review, update, and certify student enrollment reporting roster on timely and accurate basis at both the campus and program level. Enrollment roster should be certified every 60 days or every other month. Condition and Context: We reviewed 6 in-scope campuses and a sample of 40 students who graduated, withdrew, or had a change in enrollment during the fiscal year. Of the 40 students tested, 6 students’ enrollment were not certified within the required 60 days period. Cause and Effect: The campus experienced major personnel changes in the registrar office and did not have adequate staffing in place to monitor the required procedures.

Criteria: According to 86 FR 26213 (Document Number: 2021-10196), the quarterly report must appear in a format and location that is easily accessible to the public. The information must also be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Condition and Context: During the single audit, two reports were untimely reported in accordance with the HEERF reporting requirements. CSU San Bernardino failed to report the required information within the 10 days required period for the quarters ending December 31, 2022 and June 30, 2023; information on the student reports was accurate but not reported on a timely basis, per the requirement. Cause and Effect: Management failed to report in a timely manner.

Criteria: According to 86 FR 26213 (Document Number: 2021-10196), the quarterly report must appear in a format and location that is easily accessible to the public. The information must also be updated no later than 10 days after the end of each calendar quarter (September 30, and December 31, March 31, June 30). Condition and Context: During the single audit, two reports were untimely reported in accordance with the HEERF reporting requirements. CSU San Bernardino failed to report the required information within the 10 days required period for the quarters ending December 31, 2022 and June 30, 2023; information on the student reports was accurate but not reported on a timely basis, per the requirement. Cause and Effect: Management failed to report in a timely manner.

Criteria: According to 2 CFR 200.510(b), a recipient of federal awards is required to prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the entity’s financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designated to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Effective internal controls should include procedures to ensure federal expenditures are accurately and completely reported on the SEFA. Condition and Context: Confition and Context: The University did not have adequate controls relating to the reporting of expenditures on the SEFA for the Supplemental Nutrition Assistance Program Cluster (SNAP). Both the College of Continuing Education (CCE) and the Population Research Center (PRC) which is part of the Sacramento campus incurred SNAP expenditures that were not reported on the fiscal year 2023 SEFA. The SNAP agreement was entered into between the California Department of Social Services and California State University-Sacramento on behalf of CCE. PRC was listed as a sub awardee within the SNAP agreement. Written policies and procedures require each unit/department within the Sacramento campus to send all external grants and contracts to the Sacramento campus Office of Research, Innovation and Economic Development (ORIED). ORIED performs a review of each applicable agreement received to determine that separate general ledger accounts have been established and whether the funding source has been accurately identified in the general ledger (i.e. federal). The CCE did not send the SNAP contract to ORIED and as a result, the review control did not operate as designed. Separate accounts, to track federal funding, were not established in the general ledger and instead, SNAP activity was accounted for within the tuition and fees general ledger accounts which resulted in SNAP activity being managed via manual spreadsheets. While performing budget control reviews during the year ended June 30, 2024, the CCE determined that certain SNAP expenditures had not been reported on the fiscal year 2023 SEFA. The University’s overall SEFA is compiled by the Chancellor’s office and relies on each campus to have internal controls that ensure completeness and accuracy of the SEFA. Cause & Effect: In discussing these conditions with the University, they stated the error was primarily due to significant turnover during fiscal year 2023 in the CCE and as a result the required policies and procedures for identifying, tracking, and communicating federal expenditures were not adhered to. Additionally, management review controls at the campus over the completeness and accuracy of the SEFA were not designed to detect the error. Failure to establish effective internal controls regarding financial reporting for the preparation of the SEFA may prevent the University from completing an audit in accordance with the timelines of Uniform Guidance.

Criteria: In accordance with 2 CFR 200 Subpart E, the University is required to conform to allowability of cost provisions, and 2 CFR 200.303 requires the organization to establish and maintain effective controls over federal awards. Allowable costs charged to federal programs, whether direct or indirect, must be allowable and be determined in accordance with Subpart E – Cost Principles of the Uniform Guidance. Effective internal controls should include procedures to ensure federal expenditures and amounts are for activities allowed or unallowed and allowable costs/cost principles, as well as accurately and completely reported on the SEFA. According to 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition and Context: The University receives Supplemental Nutrition Assistance Program (SNAP) Cluster program funding at its Sacramento campus to perform nutrition outreach and education services to residents of the State of California. The Sacramento campus administers the SNAP Cluster nutrition education programs through its College of Continuing Education (CCE) and Population Research Center (PRC) offices. SNAP Cluster program expenditures are primarily comprised of payroll for program personnel performing various program activities and related fringe benefits and indirect costs. During our testing of 18 payroll expenditures for CCE employees (totaling $90,946) and 40 payroll expenditures for PRC employees (totaling $66,458), we noted effort reports detailing 100% of the employee's activities were not prepared for certain employees. Upon further investigation and discussion with CCE and PRC program management, we noted effort reports were not prepared for any employees whose payroll expenditures were charged to the SNAP Cluster program, except for student workers who solely worked on SNAP Cluster program activities. The payroll expenditures and related costs impacted by the inadequate effort reports, are described in the table below: Expenditure category Questioned costs Excerpt of total SNAP Cluster program expenditures by impacted expenditure category Payroll $1,151,941 $1,354,046 Fringe benefits $641,501 $641,501 Indirect costs $448,286 $660,709 Total $2,241,728 $2,656,257 Total SNAP Cluster program expenditures were $3,688,927 for the year ended June 30, 2023. We noted additional instances of noncompliance as follows: • In our testing of 58 payroll expenditures, the hourly payroll rates used to prepare the quarterly payroll remittances submitted to the State of California exceeded the actual payroll rates paid for 15 employees resulting in an overcharge of payroll, fringe benefits, and indirect costs to the SNAP program of $11,710, $9,684, and $5,348, respectively. As these 15 employees did not have effort reports as discussed above, payroll, fringe benefits, and indirect costs associated with these 15 employees has already been included in the table above. • One individually significant payroll expenditure that was associated with one employee was double counted in the quarterly State of California remittance billing resulting in an overcharge to the SNAP Cluster program of $27,004, $10,801, and $9,451, respectively. As the employee did not have an effort report as discussed above, payroll, fringe benefits, and indirect costs associated with this employee has already been included in the table above. • In our testing of 7 indirect cost charges, we identified 4 indirect cost charges that utilized higher than the allowed hourly rates within the calculation. These 4 indirect cost charges related to CCE employees in which the hourly rate listed in the program agreement was billed versus the employee’s actual hourly pay rate and fringe benefit costs. As a result, the total payroll charges used to bill the indirect cost rate of 25% utilized unallowable payroll expenditures, which resulted in the SNAP Cluster program being overcharged by $46,922. As these employees also did not have effort reports as discussed above, payroll, fringe benefits, and indirect costs associated with these CCE employees has already been included in the table above. In addition, we noted the Sacramento campus has not established adequate internal controls to ensure: (1) payroll expenditures charged to the SNAP Cluster program are properly determined and supported in accordance with the requirements of the Uniform Guidance and (2) fringe benefit and indirect costs are properly calculated by applying the approved fringe or indirect cost rate to a base that includes only allowable costs. Cause & Effect: The errors noted above were primarily due to insufficient controls over the establishment and tracking of SNAP Cluster program activities as federal funding within Sacramento’s general ledger. As a result, a portion of SNAP program expenditures and activities were not processed in accordance with applicable federal guidelines. Additional errors noted above relate to insufficient controls over the accuracy of the payroll, fringe benefits, and indirect cost charged to the SNAP Cluster program. The inadequate review procedures over payroll, fringe benefits, and indirect cost expenditures resulted in unallowable charges to the SNAP Cluster program in the amount of $2,241,728.

Criteria: Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(3), institutions receiving funds under Section 18004 of the Act are directed to submit a report to the Secretary of Education (the Secretary) describing the use of funds distributed from the Higher Education Emergency Relief Fund (HEERF). The Department has directed each HEERF participating institution to post certain information on the institution's primary website. The information must appear in a format and a location that are easily accessible to the public 30 days after the date when the institution receives its allocation under 18004(a)(1) and must be updated every 45 days thereafter.Condition and Context: During our testwork over student and institutional reports during the year, weidentified five reports that were inaccurately reported or not submitted on a timely basis in accordance with the HEERF reporting requirements.Cause and Effect: The University's control failed in detecting that student and institutional reports were not reported timely or accurately.

Criteria: An institution must conduct a physical inventory of equipment and real property at least once every two years with results reconciled with the equipment and property records (2 CFR Section 200.313(d)(2)).Condition and Context: During our testwork over equipment and real property management, we requested support from management relating to their physical inventory of equipment and real property acquired with federal funds. We noted management was unable to produce such records, as a physical inventory of federal equipment and real property had not been conducted within the required two-year period.Cause and Effect: There was a lapse in the University's internal controls surrounding monitoring the physical inventory of equipment and real property acquired with federal funds. The University did not conduct their physical inventory of equipment and real property acquired with federal funds within the required two-year period.

Criteria: Per the Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(c), for the institutional portion, allowable expenditures incurred and liquidated prior to December 27, 2020 must have been "to cover any costs associated with significant changes to the delivery of instruction due to the coronavirus, so long as such costs do not include payment to contractors for the provision of pre-enrollment recruiting activities; endowments; or capital outlays associated with facilities related to athletics, sectarian instruction, or religious worship. Condition and Context: During our testwork over 60 institutional expenditures during the year, we identified one expenditure that was incorrectly charged twice to the CARES Act grant. Isolated or Systemic: Systemic. Cause and Effect: The University's control failed in detecting that unallowable expenses were charged to the CARES Act grant. Questioned Costs: $171.24 known error. Costs were calculated by recalculating the amount overcharged to the grant. The likely questioned costs are greater than $25,000. Repeat Finding: No Recommendation: We recommend the University enhance its internal controls so that appropriate controls are in place to ensure allowable costs are accurately charged to the CARES Act grant. Views of Responsible Officials: The University concurs with the recommendation. The Campus will review and enhance its procedures and internal controls, to ensure allowable costs are accurately charged to the CARES Act grant.

2020-001 Criteria or Specific Requirement Per 34 CFR Section 685.309, institutions with direct loan programs must complete and return to the National Student Loan Data System for Students (NSLDS) within 30 days the enrollment reporting roster file provided by NSLDS, unless the school expects to complete the next roster within 60 days, then they must return it within 60 days. The institution must update changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and then submit changes electronically to the NSLDS, for the purpose of providing complete and accurate data to lenders regarding enrollment status so they may properly determine when repayment of the loans should begin. Condition Found and Context During our testwork, we selected 90 students from nine campuses with direct loans that withdrew or graduated during the year and tested the University's reporting the change of status to NSLDS and noted the following: We identified four students from four campuses where their changes in status were not reported to the NSLDS within the 30/60-day reporting period. For these students, status changes were communicated between 80-365 days late. Since this is a repeat finding and that non-compliance was identified at multiple campuses, we consider this to be a significant deficiency in internal control over the compliance requirement for enrollment status reporting. However, we do note this is a partial correction by the institution. Cause and Effect The non-compliance with the 30/60-day reporting period was caused by not having sufficient procedures, such as queries to include all graduated and credential students and not scheduling and submitting degree transmissions on a monthly basis, and controls in place to report graduated and credential students to the National Student Clearinghouse (NSC) in a timely manner. Sampling Not statistical Isolated or Systemic Systemic Questioned Costs None noted Repeat Finding Yes Recommendation We recommend the University update their procedures to verify that all graduated and credential students are included in the NSC submissions and that degree transmissions to NSC are made in a timely manner to comply with the 30/60-day reporting period to NSLDS. Views of Responsible Officials The University concurs with the recommendation. Campuses will further review and refine their policies and procedures and strengthen internal controls, to ensure the timely and accurate reporting of student status changes to NSLDS.

2020-002 Criteria or Specific Requirement Per CFR Section 668.165 (a), 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. If those funds include Direct Loan program funds, the notice must indicate which are from unsubsidized loans, and which are from Parent Loan for Undergraduate Students loans (PLUS). The institution must notify the student, or parent in writing of (1) the date and amount of the disbursement, and (2) the student?s right, or parent?s right to cancel all or a portion of that loan or loan disbursement and have the loan proceeds returned to the holder of that loan or the TEACH Grant payments returned to the Education Department; and (3) the procedure and time by which the student or parent must notify the institution that he or she wishes to cancel the loan, TEACH Grant, or TEACH Grant disbursement. The School must make disbursement notification to the student or parent no earlier than 30 days before, and no later than 30 days after, crediting the student?s account at the institution with Direct Loans, Federal Perkins Loans or TEACH grants. Institutions that do not implement an affirmative confirmation process must notify a student no earlier than 30 days before, but no later than 7 days after, crediting the student?s account and must give the student 30 days (instead of 14) to cancel all or part of the loan. Condition Found and Context During our testwork, we selected 60 students from six campuses that had disbursements where the University was required to notify the student and or parent of the loan disbursement. We noted that for 10 student samples from one campus, the University did not provide a disbursement notification to the student or parent. Cause and Effect The University?s control failed in determining it did not send the required disbursement notification to the students or parent in the required timeframe with the required information. As a result, 10 students or parents were not notified of their rights, loan date or loan amounts. Sampling Not statistical Isolated or Systemic Systemic Questioned Costs None noted Repeat Finding No Recommendation We recommend the University implement internal controls to ensure the required disbursement information is communicated to the student or parent and are sent within the required timeframe. Views of Responsible Officials The University concurs with the recommendation. The Campus will review and enhance its procedures and internal controls, to ensure the timely and accurate notification to the student or parent of their Title IV HEA disbursement and cancellation options.

During our testwork, we haphazardly selected 132 students from 12 campuses that withdrew or graduated during the year that have direct loans that we tested for reporting the change of status to NSLDS and noted the following: We identified 15 students from six campuses where their changes in status were not reported to the NSLDS within the 30/60-day reporting period. For these students, status changes were communicated between 8-239 days late. Since this is a repeat finding and that non-compliance was identified at multiple campuses, we consider this to be a significant deficiency in internal control over the compliance requirement for enrollment status reporting.

During our testwork, we haphazardly selected 66 students from 6 campuses that had Pell disbursements where we compared the COD records to the University?s records as well as verifying that the campuses reported disbursements within the 15 day reporting period. We noted the following: We identified 10 students from 1 campus where the Pell disbursement dates were not the same in the COD?s records as they were in the University?s records. We identified 2 students that did not have disbursement record reported within the 15 day reporting period. Based on the number of instances of non-compliance identified, we consider this to be a significant deficiency in internal control over the compliance requirement for Pell disbursement reporting.

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