University of CaliforniaHigher Education

2025-001 – Federal Equipment Inventory Cluster: Research and development Sponsoring Agency: Various Award Name: All awards for 3 campuses with federal equipment expenditures in the Schedules of Expenditures of Federal Awards (SEFA) Award Number: Various Assistance Listing Title: All awards for 3 campuses with federal equipment expenditures in the SEFA Assistance Listing Number: All awards for 3 campuses with federal equipment expenditures in the SEFA Award Year: 2024-2025 Pass-through entity: All pass-through awards for 3 campuses with equipment expenditures in the SEFA Criteria 2 CFR 200.313(d) requires that a physical inventory of equipment acquired in whole or in part under a Federal award must be conducted and the results reconciled with the property records at least once every two years and the recipient is responsible for maintaining and updating property records when there is a change in the status of the property. Condition Through our testing of federal equipment and real property management across four campuses, we identified deficiencies related to (1) the timeliness of required physical inventory procedures and (2) the completeness and accuracy of federal equipment listings. More specifically, our testing identified the following: Campus 1 This campus has a control by which all custodians are responsible for the completion of their federal equipment inventory on a 2-year rolling basis. Through discussion with the campus, the last equipment inventory observation for federal equipment was performed in July 2022 and covered half of the campus assets acquired through December 2021. As such, a physical inventory at this campus has not been completed over existing or newly acquired equipment in approximately 3.5 years, which is outside the two-year requirement. Through our federal equipment observation procedures, we selected 25 assets from the federal equipment listing to observe and also selected 25 pieces of equipment from the floor to trace back to the equipment listing. We noted the following: • For 2 equipment selections from the federal equipment listing, we were unable to verify the asset we selected was the asset viewed, as there was no tag, serial # or other identifying information we could validate to the equipment listing. • 1 equipment selection from the federal equipment listing was located but not in working condition and should have been disposed of. • 3 equipment selections were on the federal equipment listing, but were unable to be located or were previously disposed of and incorrectly on the equipment listing. • 1 equipment selection from the “floor” was federally funded, but not included in the list of federal assets. Campus 2 In order to comply with the federal biennial inventory requirement, this campus has a policy that every two years by 10/31, Equipment Certification Forms for each custodial code need to be submitted verifying the existence of the assets assigned to the custodian. We selected 25 custodial codes to review the two most recent Equipment Certification Forms to verify a physical inventory of federal assets was performed within two years. Through our testing, we noted the following: • 5 Equipment Inventory Certification Forms due by 10/31/25 were completed timely, however, the previous inventories for these custodial codes were each completed in October or November 2019 and thus 2 cycles elapsed between inventories, which is not in compliance with the federal biennial inventory requirement. • 5 Equipment Inventory Certification Forms due 10/31/25 were late (14 days, 10 days, 1 day, 81 days, and 3 days late, respectively). For 2 of the 5, the previous inventory was last completed in October 2019 and thus 2 cycles elapsed between inventories. Campus 3 This campus completes a full equipment inventory of the campus every 2 years. Based on the current cycle, all federal equipment was required to be inventoried between 7/1/22 and 6/30/24. Any inventories completed by 6/30/24 are considered timely and within the 2-year period, assuming the financial unit appropriately completed an inventory in the previous period covering 7/1/20 to 6/30/22. Each individual asset is "validated" in the equipment management system and dates of validation are noted upon inventory completion. In order to test the equipment validation control, 25 individual federal assets were selected for testing to 1) determine whether the asset was verified between 7/1/22 and 6/30/24; and 2) to review the date of the previous inventory to confirm the asset was inventoried within a two-year period. Through our testing, we noted the following: • 3 federal equipment selections were not validated during the most recent inventory cycle with the last validation being completed during the FY18 cycle (2 selections) and the FY22 cycle (1 selection) • 3 federal equipment selections were validated in the current cycle, however, they were not validated during the previous cycle and as such, more than two years elapsed between inventories. • 1 federal equipment selection was not validated in either the current or previous inventory cycle Additionally, through our federal equipment observation procedures, 2 out of 25 federal equipment selections were unable to be located. Cause • Campus 1 – Through discussion with the campus, no federal equipment inventory counts were performed since July 2022 due to lack of personnel. The equipment inventories not being performed timely were also the cause of the federal equipment listing not being complete and accurate. • Campus 2 - The 2019 inventories were due in 2021 (during COVID-19) and the University received a letter dated March 17, 2021 from the Department of Health and Human Services that stated: “We fully acknowledge the concerns detailed in your letter and hereby approve your request to delay the physical inventory of property for one fiscal year. The University of California should plan to resume the biennial physical inventory process in Fiscal Year 2022.” Those not completed in the subsequent inventory were overlooked. These custodial codes continued with no Equipment Certification Forms being submitted as the next due date overlapped with a significant system implementation, and the campus was not as diligent in following up with the custodians. Three of the four late submissions in 2025 were due to oversight of the deadline and the submission that was 81 days late was due to a new asset representative not realizing a certification had to be submitted until a follow-up notification was received. • Campus 3 - Assets not validated in the most recent cycle were missed due to resource constraints. Assets not inventoried in the previous cycle (and thus not within the two-year period) were due to being overlooked once inventories resumed after the COVID-19 pandemic period and not revisited timely due to resource constraints. The assets not located during the federal equipment observations procedures were assumed to have been disposed and the asset listing not appropriately updated. Effect Failure to complete physical inventories within the required two-year timeframe increases the risk that federal equipment records are incomplete or inaccurate and that discrepancies are not identified and corrected in a timely manner. Questioned Costs None noted. Recommendation We recommend that each campus review and, where necessary, update its federal equipment inventory policies and procedures to help ensure that (1) physical inventories are completed within the required two-year timeframe and (2) federal equipment listings are maintained in a complete and accurate manner in accordance with 2 CFR 200.313. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2025-002 – Subrecipient Monitoring Cluster: Research and Development Cluster (“R&D”) Sponsoring Agency: Various – All R&D awards with subrecipients from 1 campus Award Name: Various - All R&D awards with subrecipients from 1 campus Award Number: Various Assistance Listing Title: Various – All R&D awards with subrecipients from 1 campus Assistance Listing Number: Various - All R&D awards with subrecipients from 1 campus Award Year: 2024-2025 Pass-through entity: All pass-through awards for 1 campuses with subrecipients Criteria 2 CFR 200.332(e) notes that pass-through entity monitoring of the subrecipient must include: • Reviewing financial and performance reports required by the pass-through entity. • Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. • Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521. Additionally, 2 CFR 200.332(g) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition Through testing of subrecipient monitoring activities across four campuses, we identified that one campus does not have a documented process to determine whether subrecipients obtained a Uniform Guidance audit, as required, nor a process to follow up on audit findings or issue management decisions when applicable, in accordance with 2 CFR 200.233(e) and (g). While the campus performs a detailed pre-award risk assessment prior to executing subaward agreements — which includes review of available Uniform Guidance audit reports — ongoing monitoring procedures do not consistently include a review of the most recent Uniform Guidance audit report during the period of performance. Subaward agreements at this campus are generally limited to one year; however, when agreements are continued without a formal renewal or monetary amendment, a subsequent risk assessment is not required. As a result, updated Uniform Guidance audit reports are not consistently obtained or reviewed to determine whether (1) the subrecipient met audit requirements, (2) findings exist that impact the federal program, and (3) a management decision is required. Specifically, of 25 subawards tested at this campus, 9 did not have evidence that the most recent Uniform Guidance audit report was obtained and reviewed during the award period. In instances where audit reports were reviewed, documentation indicates the review was performed for risk assessment purposes rather than to satisfy the ongoing monitoring and management decision requirements under 2 CFR 200.232(e) and (g). Cause The campus’ monitoring procedures rely on subrecipients to communicate applicable audit findings rather than requiring the campus to independently obtain and review the most recent Uniform Guidance audit reports on an annual basis. Although review of Uniform Guidance reports is incorporated into the prescribed subrecipient risk assessment process, the risk assessment is not consistently required throughout the period of performance. As a result, procedures do not ensure that updated audit reports are obtained, evaluated, and documented in accordance with the requirements of 2 CFR 200.233(e) and (g). Effect As a result of not performing and documenting an annual review of subrecipients’ Uniform Guidance audit reports, the campus may not identify audit findings that impact its federal programs or ensure that appropriate follow-up and management decisions are issued within the required timeframe. This increases the risk of noncompliance with 2 CFR 200.233(e) and (g) and may result in unaddressed deficiencies or questioned costs related to federal awards. Questioned Costs There are no questioned costs associated with this finding. Recommendation We recommend the campus revise its subrecipient monitoring policies and procedures to require the timely review of subrecipients’ Uniform Guidance audit reports throughout the period of performance. Procedures should ensure that audit reports are reviewed at least annually to (1) determine whether the subrecipient met audit requirements, (2) identify findings that impact the campus’ federal programs, and (3) document follow-up actions and issuance of management decisions, as required by 2 CFR 200.233(e) and (g). Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2025-003 – Procurement, Suspension and Debarment Cluster: Research and development Sponsoring Agency: Department of Energy, Department of Education, Department of Defense and National Aeronautics and Space Administration Award Name: A New Approach to Discerning Transport of Gases in MOFs, Citizen Diplomacy I, High Fidelity 2D Noise Resilient Superconducting, The Compton Spectrometer and Imager COSI, and solar Polarization and Directivity XRay Experiment PAD Award Number: DE-SC0025524, P021A240012, W911NF-22-1-0258, 80GSFC21C0059, and 80NSSC22M0098 Assistance Listing Title: Office of Science Financial Assistance Program, Overseas Programs - Group Projects Abroad, Basic Scientific Research, Science Assistance Listing Number: 81.049. 84.021, 12.431, 43.RD, and 43.001 Award Year: 2024-2025 Pass-through entity: N/A Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). 2 CFR 200.318(i) also notes that non-Federal entities must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition Through testing of procurement, suspension and debarment across four campuses, exceptions were noted at one campus where 25 selections were made, as follows: • This campus requires a SAM screenprint or Debarment and Anti-Lobbying Form to be attached to their Federal Funds Checklist in their procurement system for grants and cooperative agreement purchases over $10,000 and for federal contracts over $35,000. This documentation is required to be completed prior to entering into the procurement transaction. For 1 selection over $10,000, the SAM screenprint was not part of the initial procurement file and in 2 other instances the SAM screenprint was not completed timely; 12 months and 9 months, respectively, after the purchase order. • We noted 1 instance ($51k) where a purchase was initiated using non-federal funds and subsequently transferred onto a federal award. No Federal Funds Checklist or Source Selection and Price Reasonableness forms were completed, as required by campus policy. • For 2 selections, the Source Selection and Price Reasonableness form was not signed, as required by campus policy and in 1 instance the form was not completed, however, we were able to see appropriate vendor selection support outside of the form. Cause The buyers executing these transactions did not provide the required support when executing these transactions due to lack of understanding of how the order of operations that documentation must be provided impacts federal compliance. Additionally, there are no additional levels of reviews required to enable missing documentation to be identified prior to executing federal purchases. Effect The University lacks support showing that vendors undergo proper screening for debarment and suspension prior to execution of the purchase order. Questioned Costs None noted. Recommendation We recommend the campus provide additional training in this area and determine if there is a more effective way to identify federal transactions for buyers and when identified, guidance is readily made available as to what documentation is required prior to executing the transaction. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2025-004 – Subrecipient Monitoring: Lack of Supporting Documentation for Subrecipient Monitoring Activities Cluster: Not applicable Sponsoring Agency: United States Agency for International Development (USAID) Award Name: USAID Foreign Assistance for Programs Overseas Award Number: 7200AA19CA00018, 7200AA21LE00003 Assistance Listing Title: USAID Foreign Assistance for Programs Overseas Assistance Listing Number: ALN 98.001 Award Year: 2024-2025 Pass-through entity: Not applicable Compliance Requirement: Subrecipient Monitoring Criteria or Specific Requirement Under 2 CFR 200.332, pass-through entities are required to monitor subrecipients to ensure federal funds are used for authorized purposes, comply with award terms, and meet performance objectives. Required monitoring activities include reviewing financial and performance reports, ensuring corrective actions are taken, resolving audit findings, and issuing management decisions when applicable. Pass-through entities must also verify that subrecipients obtain audits in accordance with 2 CFR Part 200, Subpart F. Identified Condition For subrecipient monitoring testwork across two campuses, one campus was unable to provide evidence of subrecipient monitoring activities for the sample of nine (9) subrecipients selected for testwork. Specifically, formal supporting documentation of monitoring procedures conducted by the campus, such as reviews of subrecipient annual work plans, activity reports, performance indicator reporting, progress reports, technical reports, expenditure reports, and site visit reviews, were not available. Cause The grant awards for this program were terminated by the federal agency during February 2025. Following program termination, key program personnel separated from the campus, including the program investigators responsible for subrecipient monitoring activities. The campus did not have a formal document maintenance system in place to ensure the program investigators’ records were properly maintained by the campus. Consequently, supporting documentation related to subrecipient monitoring activities could not be located. Effect Lack of supporting documentation for subrecipient monitoring activities prevents the campus from demonstrating compliance with subrecipient monitoring requirements under the program. As a result, this increases the risk of deficiencies in subrecipient performance and/or the potential for unallowable expenditures. Questioned Costs None. Recommendation We recommend that the campus strengthen its record retention policies and access controls to ensure continuity and accessibility of supporting documentation and records in the event of employee turnover. Additionally, we also recommend that a formal process is established to ensure all required records and documentation are properly maintained when key personnel (program investigators and others) separate from the campus. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2025-005 – Allowable Costs/ Cost Principles: Lack of Time and Effort Report Certification and Lack of Timesheets Cluster: Not applicable Sponsoring Agency: United States Agency for International Development (USAID) Award Name: USAID Foreign Assistance for Programs Overseas Award Number: 7200AA19CA00018 Assistance Listing Title: USAID Foreign Assistance for Programs Overseas Assistance Listing Number: ALN 98.001 Award Year: 2024-2025 Pass-through entity: Not applicable Compliance Requirement: Allowable Costs/Cost Principles Criteria or Specific Requirement A. Lack of Time and Effort Report Certification Under 2 CFR 200.430, charges to federal awards for salaries and wages must be supported by records that accurately reflect the work performed, are backed by effective internal controls, and are certified by the employee or an authorized official with knowledge of the work. University policy further requires timely certification of effort reports for all personnel paid in whole or in part from federal awards, with reports issued approximately 45 days after the close of the October 1–September 30 reporting period and required to be certified within 120 days. B. Lack of Timesheets for Hourly Employees Under 2 CFR 200.430(i), charges to federal awards for salaries and wages must be supported by records that accurately reflect the work performed. These charges must also be reasonable, allocable, and adequately documented, including the retention of signed or approved timesheets or equivalent effort documentation to support payroll costs charged to sponsored awards. Identified Condition A. Lack of Time and Effort Report Certification For allowable costs testwork across two (2) campuses, we noted the following at one (1) campus: • Of the 40 employee time and effort reports selected for testwork, we noted one (1) time and effort report for the period October 1, 2023 to September 30, 2024 was not certified in accordance with the University’s established policies and procedures. Note that the audit team was able to substantiate the allowability of the payroll charges through review of alternative supporting documentation, such as the distribution of payroll expense report. B. Lack of Timesheets for Hourly Employees For allowable costs testwork across two (2) campuses, we noted the following at one (1) campus: • Of the 14 hourly employee timesheets selected for testwork, the campus was unable to provide timesheets or other equivalent effort documentation. Therefore, we were unable to verify whether the related payroll costs were accurately charged to the program in accordance with the University’s policies and federal requirements. Cause A. Lack of Time and Effort Report Certification Certain time and effort reports require multiple levels of certification, particularly when employees allocate effort across multiple federally sponsored awards. Responsibilities distributed among departments and program investigators, combined with staff turnover and workflow or routing delays, contributed to the uncompleted certification of the time and effort report. In addition, the campus converted to a new financial system effective January 1, 2024, which does not have a similar key tracking function as the old system. This resulted in certain time and effort reports not being flagged for review and being inadvertently overlooked. B. Lack of Timesheets for Hourly Employees The employee timesheets for the program were maintained at the departmental level. Following the termination of this program, the campus was unable to obtain the relevant records because the personnel responsible for maintaining them were no longer available. The campus also attempted to retrieve the documentation through its central time-reporting system; however, the system did not permit extraction of the required historical data. Consequently, the campus was unable to provide supporting documentation for the reported hours. Effect The lack of proper time and effort certification and evidence of employee timesheets can lead to inaccurate allocation of payroll expense charged to federal awards. This also increases the potential for program noncompliance as personnel costs charged to federal awards may be unsupported or unallowable. Questioned Costs A. Lack of Time and Effort Report Certification Questioned costs for salary charges related to the one (1) time and effort report lacking certification for the sample selected (1 of 40 time and effort reports) totaled $1,179. B. Lack of Timesheets for Hourly Employees Questioned costs for the 14 employee timesheets that were not provided for the sample selected (14 of 14 employee timesheets) totaled $29,775. Recommendation A. Lack of Time and Effort Report Certification We recommend that management strengthen controls over the time and effort reporting process by enforcing timely certification in accordance with University policy, including implementing additional reminder and escalation procedures with assigned follow-up responsibilities, and active monitoring of overdue certifications to ensure timely resolution and processing. B. Lack of Timesheets for Hourly Employees We recommend that the campus implement procedures to ensure timesheet records are centrally retained and accessible regardless of staffing changes or program closures. This should include maintaining a reliable central repository and ensuring time-reporting data can be extracted when needed. Management’s Views and Corrective Action Plan A. Lack of Time and Effort Report Certification Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings. B. Lack of Timesheets for Hourly Employees Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

Finding 2025-006 – Internal Control Deficiency in Financial Reporting – Untimely Recording of Grant Program Expenditures Cluster: Not applicable Sponsoring Agency: United States Agency for International Development (USAID) Award Name: USAID Foreign Assistance for Programs Overseas Award Number: 7200AA19CA00018, 7200AA21LE00003 Assistance Listing Title: USAID Foreign Assistance for Programs Overseas Assistance Listing Number: ALN 98.001 Award Year: 2024-2025 Pass-through entity: Not applicable Compliance Requirement: Schedule of Expenditure of Federal Awards Reporting and Period of Performance Criteria or Specific Requirement Under 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) for the same reporting period as its audited financial statements. The SEFA must present the total federal awards expended during that period, as defined in 2 CFR 200.502. The auditee is responsible for ensuring that the SEFA is accurate, complete, and prepared in accordance with all applicable Uniform Guidance requirements. Identified Condition Across three campuses, we noted that one (1) campus converted to a new financial system effective January 1, 2024. As a result of the conversion, subaward advance balances were migrated into new system project codes using expenditure type 140200 – Subaward Advances, and recording the related advance liquidations (i.e., payment for certain expenditure invoices) were delayed. We noted delays in recording ranging from 4 to 12 months. As a result, certain fiscal year (FY) 2024 expenditures were not properly recorded in the FY 2024 SEFA, but instead recorded and reported in the FY 2025 SEFA as follows: Award Numbers: 7200AA19CA00018; 7200AA21LE00003 | Campus-FY2024 Expenditures: $3,498,905 | Campus-Portion Related to Subawardees: $3,477,528 | Campus-% of Total Program FY2025 Expenditures: 41% | % of Total Program FY2025 Expenditures: 32% Cause This condition resulted from delays in processing liquidations of migrated subaward advance balances in the new system until reconciliation of the individual projects set-up for each sub awardee was completed. As a result, there was a significant backlog in processing. Effect The delay in recording the expenditures and liquidating the advances resulted in FY2024 expenditures being incorrectly recorded in fiscal year 2025 for SEFA reporting purposes. Lack of timely recording increases the risk that that expenditures are charged beyond the awards’ authorized periods of performance. Questioned Costs None. Recommendation We recommend that the campus strengthen internal controls over financial reporting to ensure timely reconciliations of subaward account balances and recording such that amounts are allocated, liquidated, and reported in the proper period. This will help ensure timely and accurate financial reporting. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2024-001 – Verification status code within the Common Origination and Disbursement System Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Name: Federal Pell Grants Award Number: Various Assistance Listing Title: Federal Pell Grant Program Assistance Listing Number: 84.063 Award Year: 2023-2024 Pass-through entity: Not applicable Criteria: For each Federal Pell Grant award disbursed to a student selected for verification, a school must report the student’s verification status to the Department of Education via the Common Origination and Disbursement (COD) System. To do this, the school includes a verification status code (“W,” “V,” or “S”) in the Common Record document it submits to the COD System via batch processing or when it creates the award online via the COD website. Condition: Through testing of 100 students selected for verification by the ED across four campuses, we noted at one campus the verification status code was incorrectly reported for all students selected who received federal Pell Grant awards (21 out of 25 selections at this campus). For these selections, status code “S” was incorrectly reported instead of status code “V”. Status code “S” indicates the student was not verified because the student met certain exclusions, whereas status code “V” indicates the student has been verified. In each instance, we saw evidence the campus performed verification procedures, but did not update the status code appropriately. Cause: Through discussion with campus student financial aid personnel, the campus uses a Population Selection feature (Popsel) within Banner that allows users to select groups of people for various processes and upon looking into the cause of the condition identified above, the campus identified an error in this configuration for the 2023-2024 award year. The system was pulling an “S” based on configurations appropriate for the 2021-2022 and 2022-2023 award years when certain waivers were in place and the campus failed to revert the Popsel back to its standard configuration after the waivers were lifted for the 2023-2024 award year. Effect: As a result of this misconfiguration, the verification status code was incorrectly aligned to a given student group and the system was feeding incorrect information to the COD. As such, the Department of Education was not made aware that these students were indeed verified, as required. Questioned Costs: None noted. Recommendation: We recommend the campus establish a process to annually review guidance changes and to assess the related impact from an automated system perspective. To the extent there are changes impacting certain automated processes or other configurations, the campus should have change management procedures that are followed, including new configurations and testing of those configurations (or other changes) prior to the new award year. Management’s Views and Corrective Action Plan: Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2024-002 – Disbursement notifications and E-Sign Act Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program, Federal Direct Student Loans Award Numbers: Various Assistance Listing Titles: Federal Pell Grant Program, Federal Direct Student Loans Assistance Listing Numbers: 84.063, 84.268 Award Year: 2023-2024 Pass-through entity: Not applicable Criteria Prior to making a disbursement, the school must notify students of the amount and type of Title IV funds they are expected to receive, and how and when those disbursements will be made (often referred to as an award letter or college financing plan) (34 CFR 668.165(a)(1)). The Electronic Signatures in Global and National Commerce Act (“E-Sign Act”) states that a school must obtain a student’s voluntary consent to participate in electronic transactions. Condition Through testing of 100 individual federal student financial aid award disbursements across four campuses, we noted the following at one campus: • For three out of 25 student disbursements selected for testing, the students did not receive an award letter and thus were not made aware of the amount and type of Title IV funds they were to receive and how and when those disbursements would be made. • We noted annually each student signs off on certain terms and conditions before they accept federal student assistance, however, a statement prompting the student to voluntarily consent to participate in electronic transactions was not included in the list of terms and conditions. Cause Campus personnel noted that an award letter (or other communication of award disbursements to be made) was not sent to these students due to a Population Selection feature (Popsel) within Banner that did not correctly select a certain subgroup of students. Additionally, while the campus has a Financial Responsibility Agreement that was intended to be provided annually to students when they sign-off on other Terms of Service, when looking into the matter above, campus personnel identified that this agreement has not been displayed to students since 2020. It was in the “test” system, but never moved to “production” due to management oversight. Effect If a student is not provided with notifications of disbursement prior to the disbursement, they may not be able to decline the funding, if they so choose, in a timely manner. Additionally, while there is no evidence of such events occurring with regard to the aid year under audit, a lack of student consent to participate in electronic transactions may result in the transactions being denied legal effect, validity, or enforceability solely because it is in electronic form or because an electronic signature or electronic record was used in its formation. Questioned Costs None noted. Recommendation We recommend the campus implement controls to annually review automated processes or other configurations for completeness and accuracy. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2024-003 – Late return of Title IV funds and reviews of calculations, Cluster: Student Financial Assistance, Sponsoring Agency: Department of Education, Award Names: Federal Supplemental Educational Opportunity Grants, Federal Work-Study Program, Federal Pell Grant Program, Federal Direct Student Loans, Award Numbers: Various, Assistance Listing Titles: Federal Supplemental Educational Opportunity Grants, Federal Work-Study Program, Federal Pell Grant Program, Federal Direct Student Loans, Assistance Listing Numbers: 84.007, 84.033, 84.063, 84.268, Award Year: 2023-2024, Pass-through entity: Not applicable, Criteria: Returns of Title IV funds are required to be deposited or transferred into the SFA account or, alternatively, electronic fund transfers are required to be initiated to the Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Additionally, 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition: Through testing of 100 students with Title IV awards who withdrew or otherwise left the University across four campuses, we noted the following at two campuses: • 16 of 25 student selections tested at one campus required a Title IV refund to be submitted to the Department of Education. In three of the 16 instances, the refund was not submitted to the Department of Education within 45 days. On average, they were submitted 61 days late. • One campus has a control by which an individual reviews a report of all withdrawn students to determine if a return of Title IV calculation is required and performs the refund calculation, if applicable. This individual signs off on the withdrawn students report to indicate that all students have been reviewed and calculations completed, if necessary, and a secondary review is performed by a Compliance Officer to ensure accuracy and compliance of refunds. Through testing of 25 students and tracing them to the withdrawn students report applicable for the date of their status change, while the report and refund calculation were prepared timely, the secondary review for 14 out of the 25 selections occurred on average 115 days after the initial report was prepared. Cause: • Management at the first campus indicated that the late returns of Title IV funds were due to competing priorities and lack of training on the implications of late returns. • Management at the second campus indicated that due to staffing changes, the secondary reviews did not happen in a timely manner. Effect: The lack of timeliness in the return of Title IV aid could result in the University accruing additional interest that will need to be assessed and paid back and lack of reviews of the calculation could result in an error being undetected. Questioned Costs: None noted. Recommendation: We recommend both campuses review their staffing and training protocols to ensure that in the event of turnover there are no gaps in the management of Title IV refund requirements and controls. Management’s Views and Corrective Action Plan: Management’s response is included in 'Management’s Views and Corrective Action Plan' included at the end of this report after the summary schedule of status of prior audit findings.

2024-004 – Enrollment reporting Cluster: Not applicable Sponsoring Agency: Department of Education Award Name: Pell Grant Program and Federal Direct Student Loans Award Number: Various Assistance Listing Title: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.033 and 84.268 Award Year: 2023-2024 Pass-through entity: Not applicable Criteria Institutions must review, update, and certify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDS). There are two categories of enrollment information, “Campus Level” and “Program Level,” both of which need to be reported accurately and have separate record types. (34 CFR 685.309) Additionally, when 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 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 a student who is enrolled at the institution and who received a loan under Title IV has changed his or her permanent address, the institution must report the change in its next updated Enrollment Reporting Roster file (due within 60 days of the change). (34 CFR 685.309) Condition Through testing of 100 students across four campuses of enrollment status changes, we noted the following: • Campus 1 o Five out of 25 student selections were not reported to NSLDS within 60 days of the effective change date. On average, they were reported 6 days late. o 11 out of 25 student selections had a graduation effective date that was not reported accurately in the program level information. o Three out of 25 student selections had status change effective dates per the student file that did not match with either program level information, campus level information, or both. • Campus 2 - Two out of 25 student selections were not reported to NSLDS within 60 days of the effective change date. On average, they were reported 80 days late. • Campus 3 o 3 out of 25 student selections were not reported to NSLDS within 60 days of the effective change date. On average, they were reported 73 days late. o Three out of 25 student selections had a graduation effective date that was not reported accurately in the program level or campus level information. Two of these students were also never reported as “graduated” to NSLDS, but rather remained noted as “withdrawn”. Additionally, one out of 25 student selections had a change in status that was not reflected correctly in the program level of information (the status date was 15 days prior to the actual status change date). • Campus 4 o Four out of 25 student selections were not reported to NSLDS within 60 days of the effective change date. On average, they were reported 23 days late. o For 24 out of 25 student enrollment status change selections, the effective date of the status change date did not agree to the program level information. Additionally, for two out of 25 selections, the status change date did not agree to the campus level information. Cause • Campus 1 o The Campus takes approximately four weeks to confer degrees to graduated students, but instead of reporting the student first as withdrawn and then switching the student status to graduated upon degree conferral, the campus waited until the degree conferral process was complete to report. As such, more than 60 days had elapsed before either a withdrawn or graduation status was reported to NSLDS. o Campus personnel noted that they report the actual graduation date at the campus level, but the date reported at the program level is the last day of instruction for the term. This cadence in reporting results in the different dates being captured versus the actual graduation date being consistent in both the program level and campus level information. o Campus personnel noted that the date inconsistencies are due to data

2023-002 – Transfer of costs from HEERF to FEMA not reported in HEERF quarterly report Cluster: Not applicable Sponsoring Agency: Department of Education Award Name: COVID-19 Higher Education Emergency Relief Fund (HEERF) – Institutional Portion Award Number: P425F202631 - 20B Assistance Listing Title: COVID-19 - Education Stabilization Fund Assistance Listing Number: 84.425F Award Year: 2020-2021 Pass-through entity: Not applicable Criteria The Department of Education provided the following guidance on their institutional quarterly HEERF forms: “Any changes or updates after initial posting must be conspicuously noted after initial posting and the date of the change must be noted in the 'Date of Report' line.” Condition Through our testing of Federal Emergency Management Agency (“FEMA”) submissions across three campuses, we compared costs in the FEMA transaction detail to those in quarterly HEERF submissions to understand whether there might be any duplication of costs. Through our review of the March 31, 2021, HEERF institutional report and our testing of HEERF in FY2021, we identified $3.4 million related to COVID-19 testing purchased from a vendor that was included in the FEMA submission selected for testing at one campus. The campus was transparent in its application with FEMA that the cost was being transferred from HEERF and we obtained evidence of the cost transfer in the general ledger, however, the March 31, 2021, HEERF quarterly institutional report was not revised to reflect this change and subsequent replacement of this amount with lost revenue. Cause Management was not aware of the reporting requirement for changes and updates to HEERF uses of funding. Effect While FEMA was aware of the change to be made by this campus via the FEMA application, the Department of Education was not notified via the posting of a revised report and thus was not made aware of this change. Questioned Costs None noted. Recommendation We recommend the campus modify its March 31, 2021 quarterly HEERF institutional report to prominently identify the changes and post a revised report on the campus website along with the other completed quarterly HEERF reports. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-003 – Equipment and real property management Cluster: Research and Development Sponsoring Agency: Various Award Names: All awards for 3 campuses with federal equipment expenditures in the Schedules of Expenditures of Federal Awards (“SEFA”) Award Numbers: Various Assistance Listing Titles: Various Assistance Listing Numbers: All awards for 3 campuses with equipment expenditures in the SEFA Award Year: 2022-2023 Pass-through entity: All pass-through awards for 3 campuses with equipment expenditures in the SEFA Criteria 2 CFR 200.313(d) requires that a physical inventory of equipment acquired in whole or in part under a Federal award must be taken and the results reconciled with the property records at least once every two years. Condition Through our testing of federal equipment and real property management across three campuses, we noted the following: • One campus has a control by which all custodians are responsible for the completion of their federal equipment inventory on a 2-year rolling basis, which includes timely review and approval of the Physical Inventory Certification Form. Through our testing of 12 custodians, out of a population of 120, we noted that 11 custodians did not complete the Physical Inventory Certification Form within the two-year timeframe. On average these certifications were completed 263 days late. • At a second campus, we noted a similar control in which a Department Inventorial Equipment Certification form is periodically required to be signed and submitted by each custodian. Through our testing of timeliness and approval of equipment inventories being performed by custodian, we selected 15 custodians, out of a population of 153, to ensure timely submission and approval of this form and noted the following: o Three of the sampled custodians submitted forms in early FY2022 and the next form was not due based on campus policy until FY2024; due dates for which were all beyond the two-year requirement. On average, using the scheduled due dates based on campus policy, these inventories would be 63 days late. o Eleven of the sampled custodians submitted the latest certifications during FY2022, FY2023 or FY2024, however, when compared to the date of the previous submission, the submissions were on average 274 days late when compared to the Uniform Guidance biennial requirement. • At a third campus, we selected seven custodians for equipment observation procedures and for those seven custodians also obtained their annual inventory certification form, which was completed on a timely basis. One of the certifications that is attested to on this form is that the last inventory date on the equipment for which the custodian is responsible has been inventoried within the last two years. Through review of the underlying detail for these seven custodians, we noted two custodians with equipment that had not been inventoried within the two-year timeframe. For context, one custodian had 261 out of 972 pieces of equipment that had not been inventoried within the two year-period; a second custodian had 542 out of 569 assets that had not been inventoried within the two-year period, including 473 pieces having last inventory dates during calendar years 2012-2019. Cause • In the case of the first campus, we understand that many of the custodians continue to work remotely and adhering to the required timeframe has been difficult to enforce. • In the case of the second campus, federal equipment inventory dates are assigned based on a system algorithm, which allocates due dates ratably across the custodians. This algorithm does not, however, take into account when the last inventory was completed and the biennial requirement. Additionally, we understand this campus has custodians working remotely and request extensions on their inventory requirement, however, when granting such extensions, the biennial requirement is not considered. • In the case of the third campus, the custodians indicated that they completed the inventories as certified, however, due to the volume of assets they either do not update the dates in the equipment management system or update them well after-the-fact due to a manual process. There is no central review of the underlying equipment management system detail to validate “last inventory dates” and thus no monitoring to ensure inventory dates are updated by custodians in the equipment management system. Effect Federal equipment inventories that are not completed in a timely manner, could result in assets purchased with federal funds not being appropriately safeguarded. Questioned Costs None noted. Recommendation We recommend the campuses review their federal equipment policies and procedures and implement controls to ensure federal equipment inventories are completed on a timely basis in accordance with the Uniform Guidance requirements and that underlying details in the equipment management systems get updated timely, as applicable. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-004 – Procurement, Suspension and Debarment Cluster: Research and Development Sponsoring Agency: NASA, National Science Foundation, Department of Energy, National Institutes of Health, Department of Health and Human Services Award Names: Various Award Numbers: NNX17AB45G, 2137984, 2230861, DE-SC0010064, DE-SC0022559, R01MH115979-05, 1R01DA054967-01A1, 1R01DK132735-01, 3UM1AI068636-15S3, 5R01HL155905-03, 5R01GM143536-03, 2RF1AG048120-06R, 5UM1AI106701-10R2 Assistance Listing Titles: Science, Mathematical and Physical Sciences, Biological Sciences, Office of Science Financial Assistance Program, Mental Health Research Grants, Drug Abuse and Addiction Research Programs, COVID-19 - Trans-NIH Research Support, COVID-19 - Allergy and Infectious Diseases Research, Allergy and Infectious Diseases Research, Biomedical Research and Training, Aging Research Assistance Listing Numbers: 43.001, 47.049, 47.074, 81.049, 93.242, 93.279, 93.310, 93.855, 93.859, 93.866 Award Year: 2022-2023 Pass-through entity: N/A all are direct awards Criteria 2 CFR 200.318(i) notes that non-Federal entities must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Non-federal entities are also prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition Through our testing of 88 procurement transactions greater than the micro-purchase threshold across four campuses and 83 transactions related to suspension and debarment across four campuses, we noted the following at one campus: • For four out of 25 procurement selections totaling $964,259, the source selection and price reasonableness justification form was not completed and as such, we were unable to obtain documentation for how these vendors were selected. • Seven SAM.gov checks of the 25 selected for testing, totaling $900,152, were not dated and as such, we were unable to confirm these checks were completed in a timely manner. For two selections, totaling $47,521, we were unable to obtain support that these vendors were either checked for suspension and debarment against SAM.gov or if the vendor was not listed on SAM.gov, evidence that the purchasing staff issued the Debarment Certification to the vendor to complete prior to the posting of the purchase order, as required by campus policy. Additionally, one Debarment and Certification form was dated after the posting of the purchase order on a transaction totaling $249,850. This is a repeat finding of 2021-003, which continued to remain open during FY2022. Cause The buyers executing these transactions did not provide the required support when executing these transactions due to lack of understanding of what is required for a federal purchase. Additionally, there are no additional levels of reviews required, such that missing documentation would be identified prior to executing federal purchases. Effect The University may not select a vendor in the most efficient manner without following proper federal procurement procedures and additionally, they may do business with a vendor that is suspended or debarred if checks are not performed. Questioned Costs None noted. Recommendation We recommend the campus provide additional training in this area and determine if there is a more effective way to flag federal transactions for buyers and when flagged, guidance is readily made available as to what documentation is required prior to executing the transaction. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-005 – HEERF lack of compliance at one campus - (Significant deficiency) Cluster: Not applicable Sponsoring Agency: Department of Education (ED) Award Names: COVID-19 Education Stabilization Fund Award Numbers: P425E200430 and P425F201596 Assistance Listing Titles: COVID-19 Higher Education Emergency Relief Fund (HEERF) Student Aid Portion and Institutional Aid Portion Assistance Listing Numbers: 84.425E and 84.425F Award Year: 2022-2023 Pass-through entity: Not applicable Criteria 2 CFR 200.303 Internal Controls - The non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The OMB Uniform Guidance Compliance Supplement further notes that: Policies, procedures should provide for segregation of duties within and among processes and controls. For CRRSAA HEERF II and ARP HEERF III, the Certification and Agreement and/or Supplemental Agreement indicate that Student Aid (ALN 84.425E) should be disbursed within 15 calendar days of the drawdown from ED’s grant management system (G5), while Institutional Aid Portion, (a)(2), and (a)(3) funds (all other ALNs) should be disbursed within three calendar days of the drawdown from G5. Regarding HEERF reporting, the Certification and Agreements notes that recipients must promptly and timely provide a detailed accounting of the use of funds provided by this award in such manner and with such subsequent frequency as the Secretary may require. 2 CFR 200.305(b)(9) - Interest earned amounts up to $500 per year may be retained by the non-Federal entity for administrative expense. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the Department of Health and Human Services Payment Management System (PMS) through an electronic medium using either Automated Clearing House (ACH) network or a Fedwire Funds Service payment. Condition Through our testing of the HEERF student portion at one campus, we noted the following issues related to various compliance requirements: • Cash management - During the COVID-19 pandemic state of emergency, the Student Financial Aid HEERF draws at the campus were made based on anticipated student aid disbursements rather than actual disbursements. Based on our understanding of management’s drawdown process, we noted that in 2020, $237,699 more was drawn down than was awarded to students and in 2022, $7,262,247 more was drawn down at fiscal year-end than was awarded to students. The excess funds were awarded to students during FY2023; however, these awards were all made long after the required15 calendar days from the date of the drawdown, with many of these disbursements not occurring until the Spring 2023 semester. Additionally, as a result of having excess federal cash on hand, an interest calculation should have been completed to determine the amount of interest due back to the federal government and any amount due remitted to the government. The amount of interest that should have been remitted is estimated to be approximately $173,000. • Eligibility - There were no controls identified that could be tested relative to awarding funds to students. A policy was implemented explaining how HEERF funds were to be awarded to students under each tranche of HEERF and no exceptions were noted relative to this policy through our FY2023 detailed testing; however, there were no secondary reviews documented to validate the amounts being awarded to students were complete and accurate and consistent with the policy. • Reporting - We selected the March 31, 2023 and June 30, 2023 quarterly HEERF reports for testing and we were unable to obtain support in an auditable format to agree the student information in question 2(b) within these reports to underlying detail. Additionally, through our review of support in the June 30, 2023 report, in question 3(b) for the following sub-question: “Purchasing, leasing, or renting additional equipment or software to enable distance learning, or upgrading campus wi-fi access or extending open networks to parking lots or public spaces, etc.” it was noted $127,450 was allocated to this purpose. Through review of the underlying detail, we noted $19,250 related to paying 50% of a subscription renewal for the period March 31, 2023 through March 31, 2024. Three of the six months paid at this time towards the subscription, totaling $9,625 are outside of the period of performance and should not have been charged to HEERF. Cause We understand the campus had turnover during FY2021 and FY2022 and as such, individuals managing the cash management aspect of the program were not familiar with the HEERF guidelines. As it pertains to the student eligibility controls, the financial aid office at this campus is small and with a detailed awarding policy, system reports tailored to identify eligible students and an urgency to get out funds to students in need, they did not believe a second review of the student awards was necessary. In terms of the quarterly reports, support was not retained to support how the numbers in the reports selected were generated and it was unable to be reproduced in an auditable format. Finally, regarding the invoice that should not have been charged to HEERF, 50% of the subscription for the period March 31, 2023-March 31, 2024 was paid in FY2023 and when compiling HEERF eligible costs the period this invoice pertained to was not considered. Effect Lack of controls specific to cash management can lead to not managing federal cash appropriately, including incurring interest that was not remitted. The lack of eligibility reviews could lead to students being incorrectly awarded and lack of support for reports submitted could result in the information within the reports not being complete and accurate. Questioned Costs $173,000 in interest that should have been remitted to the federal government for draw downs in advance and $9,625 for costs related to a period outside of the period of performance. Recommendation While the campus spent the remainder of its HEERF funding as of June 30, 2023, we recommend policies and procedures be reviewed related to administering an “ad hoc” emergency financial aid program to the extent one were to arise in the future. Additionally, the campus should revisit controls around the student aid awarding process more broadly and determine if there are any gaps relevant to these observations. Regarding the reporting, we recommend management recreate support for the quarterly reports in an auditable format to the extent they need to be reproduced for the Department of Education and/or for other audit purposes and enhance their policies and procedures around support required when submitting federal or other required reports. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2023-006 – Completeness and accuracy of certain programs on the Prior Year Schedules of Expenditures of Federal Awards (SEFA) - (Significant Deficiency) Cluster: Not applicable Sponsoring Agency: Department of Health and Human Services (DHHS) - Health Resources and Services Administration (HRSA), Department of Education (ED) and Federal Emergency Management Agency (FEMA) Award Names: COVID-19 Provider Relief Fund and ARP (ARP) Rural Distribution (PRF), COVID-19 Higher Education Emergency Relief Fund (HEERF) Student Portion, COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) and Maternal and Child Health Federal Consolidated Programs Award Numbers: Various Assistance Listing Titles: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution, COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters), COVID-19 Higher Education Emergency Relief Fund (HEERF) Student Aid Portion, COVID-19 HEERF Institutional Aid Portion, COVID-19 HEERF Minority Serving Institutions and Maternal and Child Health Federal Consolidated Programs Assistance Listing Number: 93.498, 97.036, 84.425E, 84.425F, 84.425L, 93.110 Award Year: 2020-2021, 2021-2022, 2019-2020, 2021-2023 Pass-through entity: Not applicable Criteria 2 CFR 200.510 Financial statements requires auditees to prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. The information presented should be consistent with the accounting records and other federal guidance. Condition The following errors were identified related to COVID-19 funding that was improperly excluded from prior year SEFAs and is being included in the FY2023 SEFA along with two issues related to current year activity that has been adjusted in the FY2023 SEFA: • FEMA o One campus and two medical centers had FEMA funding obligated and expended in FY2021 totaling $7.0 million, which was incorrectly excluded from the FY2021 SEFA. Management has included this amount on the FY2023 SEFA, and onethis of these medical centerscampus was selected for audit testing in FY2023. o Three campuses and one medical center had FEMA funding obligated and expended in FY2022 totaling $1.3 million, which was incorrectly excluded from the FY2022 SEFA. o One campus duplicated a project of $6.2 million in the SEFA during the preparation process and subsequently removed it to properly state the FY2023 SEFA. • PRF - Management at the University Office of the President brought to our attention that in the prior year, the PRF Period Two expenditures for a faculty practice group that is part of one campus, were not included on the FY2022 SEFA. This error totaled $13.4 million and represented 4% of total Period Two PRF expenditures included on the FY2022 SEFA and 0.2% of the total FY2022 SEFA. Management has included this amount on the 2023 SEFA and the campus was selected for audit testing in FY2023. • HEERF – One campus understated its HEERF funding by $286 thousand in 2020, two campuses understated their HEERF funding by $767 thousand in 2021 and four campuses understated their HEERF funding by $3.4 million in FY 2022. As such, the University recorded an adjustment of $4.4 million related to prior periods that increased the expenditures in the FY2023 SEFA for these previous omissions. These were identified by management through final HEERF reconciliations. In addition to the COVID-19 errors above, we identified that assistance listing 93.110 at one campus included $29 million of spending against accumulated program income in the FY2023 SEFA, which should have been excluded. This amount has been appropriately removed but was not identified by management through the SEFA review process. These errors did not impact the major program determination in 2021, 2022 or 2023 when considering programs across the University as a whole but has been determined to be a significant deficiency and is considered a repeat finding of 2022-008. Cause The COVID-19 pandemic resulted in the receipt and expenditure of federal funds across certain University medical centers where there has previously been limited to no federal funding and also resulted in a different nature of funding at certain of the campuses. The preparation of the SEFA requires information from each campus be provided to the University Office of the President for compilation, and the aggregation of the COVID-19 PRF and FEMA funding was manual. In addition, there was limited knowledge of the federal funding at the medical centers and thus a reliance on the part of management that each campus was reporting complete and accurate information. A final reconciliation of all portal submissions compared to the amounts on the SEFA also failed to detect the omitted PRF and FEMA expenditures in 2021 and 2022. Additionally, regarding the omitted HEERF amounts, the campuses did not discover the errors until reconciling FY2023 amounts to the GL and total award spending. Lastly, the campus used a federal general ledger code to track spending on accumulated program income and did not identify this as a code that should be excluded by the University Office of the President when accumulating the SEFA. Effect A SEFA that is not complete and accurate could impact the scoping of an entity’s major programs and result in incomplete information being provided to the federal government. Questioned Costs None noted. Recommendation We recommend updates on nonrecurring federal programs (e.g., FEMA, HEERF and PRF) at each campus (including the medical centers) be periodically provided to the team at the University Office of the President that is responsible for the compilation of the SEFA. This will allow for a more comprehensive understanding of the campus grant activity for these programs and the ability to better review and assess the completeness and accuracy reported for these programs on the University’s year-end SEFA, inclusive of these programs. One means by which this might be accomplished is to develop a checklist of anticipated awards by campus in advance of the year and also complete an interim SEFA to identify inconsistencies earlier in the fiscal year. We recommend the campuses review the interim SEFA for completeness and accuracy and provide a formal sign-off/approval to the University Office of the President. Management’s Views and Corrective Action Plan Management’s response is included in “Management’s Views and Corrective Action Plan” included at the end of this report after the summary schedule of status of prior audit findings.

2022-002 ? Reporting into the Common Origination and Disbursement (COD) System Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2021-2022 Pass-through entity: Not applicable Criteria Institutions submit Direct Loan, Pell Grant, TEACH Grant, and Iraq and Afghanistan Service Grant origination records and disbursement records to the COD system. Origination records can be sent well in advance of any disbursements, as early as the institution chooses to submit them for any student the institution reasonably believes will be eligible for a payment. An institution on the advance method follows up with a disbursement record for that student no earlier than 7 calendar days prior to the disbursement date under the advance or heightened cash monitoring payment methods. The disbursement record reports the actual disbursement date and the amount of the disbursement. Institutions must report student disbursement data within 15 calendar days after the institution makes a disbursement or becomes aware of the need to make an adjustment to previously reported student disbursement data or expected student disbursement data. The Compliance Supplement notes that the key items for an auditor to test on origination records, if applicable, are: Social Security number, award amount, enrollment date, verification status code (when applicable), transaction number, cost of attendance, and academic calendar. Key items to test on disbursement records are disbursement date and amount. Condition Through our testing of 100 selections across 4 campuses, we noted at one campus that the date of disbursement per the COD did not match the date per the student account detail for 12 out of 25 selections. Additionally, 5 of the 25 selections were not reported to the COD within 15 calendar days of the disbursement to the student. On average, the 5 disbursements were reported 9 calendar days late. Lastly, for one selection, a student was reported into the COD 8 days before the disbursement, which is 1 day earlier than permitted by the regulation . Cause Through discussions with management, they noted that the errors and late/early reporting were due to staffing and training issues, as they continue to be challenged with staff retention and recruitment. Effect Inaccurate information within the COD system could lead to inaccurate information in reports utilized by the Department of Education. Questioned Costs None noted. Recommendation We recommend the campus provide additional training on COD reporting requirements, including on the disbursement dates that should be reported and the timeline for reporting and that additional reviews be considered to identify potential errors prior to submission into the COD. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2022-003 ? Return of Title IV Funds Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.007, 84.063 and 84.268 Award Year: 2021-2022 Pass-through entity: Not applicable Criteria Returns of Title IV funds are required to be deposited or transferred into the SFA account or alternatively, electronic fund transfers are required to be initiated to the Department of Education as soon as possible, but no later than 45 days after the date the institution determines that the student withdrew. Returns by check are late if the check is issued more than 45 days after the institution determined the student withdrew or the date on the canceled check shows the check was endorsed more than 60 days after the date the institution determined that the student withdrew (34 CFR 668.173(b)). Condition Through our testing of 100 students with Title IV awards who withdrew or otherwise left the University across 4 campuses, we noted the following at 2 campuses: ? 25 students were selected for testing at 1 campus and 6 of those 25 selections required a Title IV refund be submitted to the Department of Education. In 5 out of 6 of these instances, the refund was not submitted to the Department of Education within 45 days. On average, they were submitted 61 days late . ? 25 students were selected for testing at 1 campus and 15 of those 25 selections required a Title IV refund be submitted to the Department of Education. In 2 out of 15 of these instances, the refund was not submitted to the Department of Education within 45 days. On average, they were submitted 17 days late . Cause ? Management at the first campus indicated there were staffing transitions in the unit responsible for the return of Title IV calculations, which resulted in processing delays. ? Management at the second campus, indicated that due to staffing changes and training, the October COD file was submitted outside of the expected timeframe, resulting in the late returns of Title IV funds. Effect The lack of timeliness in the return of Title IV aid could result in the University accruing additional interest that will need to be assessed and paid back. Questioned Costs None noted. Recommendation We recommend both campuses review their staffing and training protocols to ensure in the event of turnover that there are no gaps in the management Title IV refund requirements. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2022-004 ? Enrollment Reporting Cluster: Student Financial Assistance Sponsoring Agency: Department of Education Award Names: Federal Pell Grant Program and Federal Direct Student Loans Award Numbers: Not applicable Assistance Listing Titles: Federal Pell Grant Program and Federal Direct Student Loans Assistance Listing Numbers: 84.063 and 84.268 Award Year: 2021-2022 Pass-through entity: Not applicable Criteria Institutions are required to report enrollment information under the Pell grant and the Direct loan programs via the NSLDS (OMB No. 1845-0035), (Pell, 34 CFR 690.83(b)(2); Direct Loan, 34 CFR 685.309). The administration of the Title IV programs depends heavily on the accuracy and timeliness of the enrollment information reported by institutions. Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. The data on the institution?s Enrollment Reporting Roster, or Enrollment Maintenance page, is what NSLDS has as the most recently certified enrollment information. There are two categories of enrollment information, ?Campus Level? and ?Program Level,? both of which need to be reported accurately and have separate record types. Under the Direct Loan programs, schools must complete and return within 15 days the Enrollment Reporting roster file placed in their Student Aid Internet Gateway (SAIG) mailboxes sent by the Department of Education via the National Student Loan Data System (NSLDS). The institution determines how often it receives the Enrollment Reporting roster file with the default set at every two months, but the minimum is twice a year. Once received, the institution must update for changes in student status, report the date the enrollment status was effective, enter the new anticipated completion date, and submit the changes electronically through the batch method or the NSLDS website. Unless the school expects to complete its next roster within 60 days, the school must notify the lender or the guaranty agency within 30 days, if it discovers that a student who received a loan either did not enroll or ceased to be enrolled on at least a half-time basis Direct Loan, 34 CFR section 685.309. Condition Through our testing of 100 enrollment reporting selections across 4 campuses, we noted the following at 2 campuses: ? For 3 of 25 selections at one campus, we noted that the effective date of the change per NSLDS did not agree to the effective date of the actual status change per the student file. In each of these instances, the student was changing from part-time to full-time . ? For 4 of 25 selections at a third campus, we noted that the students were reported as withdrawn when they should have been reported as graduated . Our understanding in each of the scenarios above, is that there would be no impact on repayment dates for students with loans, and thus these errors do not result in questioned costs or have an impact to the student or federal government. Cause ? The cause of the reporting finding at the first campus is that there was a system error that was backdating the campus-level enrollment effective date to the first date of the term when a student increased attendance, which is why the effective date per NSLDS did not agree to the effective date in the student file. ? Regarding the second campus, this finding relates to the sequence of reporting enrollment changes during the summer, and ultimately has a broader impact going back several years. During the summer, management noted they correctly reported graduated status more than once. However, in their final summer enrollment file, the status for these students was noted to be full-time status, which was true, but this full-time status overwrote their previously reported graduated status. Under standard practice, when these students did not appear in the fall enrollment file, the National Student Clearinghouse derived a withdrawn status, which was reported to NSLDS. There were also various error reports for which this campus was behind on fully resolving, resulting in this issue not being identified by management Effect The effective administration of Title IV loans could be impacted when changes in students? status are not reported timely and accurately. The accuracy of enrollment information is important as the student?s enrollment status determines eligibility for the in-school status, deferment, grace periods, and repayments, as well as the Government?s payment of interest subsidies. Questioned Costs None noted. Recommendation We recommend management implement controls to identify inconsistencies in enrollment reporting information and to ensure COD error reports are resolved in a timely manner. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2022-005 ? HEERF Institutional portion unallowable costs Cluster: Not applicable Sponsoring Agency: Department of Education Award Names: COVID-19 Higher Education Emergency Relief Fund (HEERF) II and III Institutional Portions Award Numbers: P425F202269 and P425F201852 - 20A Assistance Listing Title: COVID-19 HEERF Institutional Portion Assistance Listing Number: 84.425F Award Year: 2020-2022 Pass-through entity: Not applicable Criteria The Department of Education Certification and Agreement for both HEERF II and HEERF III notes that recipients may use these grant funds for Institutional costs to defray expenses associated with COVID-19 (including lost revenue, reimbursement for expenses already incurred, technology costs associated with a transition to distance education, faculty and staff trainings, and payroll), and make additional emergency financial grants to students, which may be used for any component of the student?s cost of attendance or for emergency costs that arise due to coronavirus, such as tuition, food, housing, health care (including mental health care), or child care. Cost of attendance, as defined under section 472 of the Higher Education Act, includes food, housing, course materials, technology, health care, and child-care. Condition Through our testing of 75 institutional portion costs across 3 campuses, we noted the following at 2 campuses: ? 1 out of 25 selections tested at one campus related to $250 scholarships awarded to 19 students totaling $4,750 for summer 2021. These scholarships were awarded to students participating in an early start academy to help the student prepare for future academic success. Criteria to qualify for the scholarships included earning a 2.5 GPA or higher, passing HESA 001, completing/turning in an education plan and attending 4 academic support sessions at the Academic Resource Center. This scholarship program was not related to awarding funds to students for emergency costs arising due to COVID-19 or for elements of the cost of attendance, as defined in the criteria above. In total, $58,000 in awards were made to students under this scholarship program in fiscal year 2022, which were not allowable costs per HEERF guidelines . ? At a second campus, we performed testing over $21,803,672 claimed in lost revenue, which was supported in part by $6,103,672 of lost rental revenue. Through our testing of individual leases making up the lost rental revenue, we noted : o 1 lease arrangement totaling $1,345,330 was selected for testing and management noted that this lease should have been excluded from the analysis. It was included in an initial analysis as reflecting potential lost revenue, but lost revenue was not ultimately realized and this lease was not appropriately removed in the final lost revenue analysis. o 1 lease in which the supporting spreadsheet calculation of lost revenue was incorrect. This lease had different terms than others in the spreadsheet, but lost revenue was calculated as if the terms were consistent with the other leases, resulting in an overstatement of lost revenue of $39,000. ? Additionally, at the second campus, for each of our 7 fringe benefit selections, totaling $19,581 we were unable to obtain support for the 52% fringe benefits rate used to derive the amount charged to the award. We were able to see approved hours worked on the award and support for the employee pay rates, however, the 52% rate used to derive the fringe benefits charged could not be provided by management. Cause ? In the first instance, the use of these funds went through all appropriate approval levels, including the Provost and Chancellor, however, there was a lack of understanding that this scholarship program did not meet the HEERF III criteria noted above. ? In the second instance, the impacted campus has a significant amount of leases and the process for tracking the leases, lease amendments due to COVID-19 and the associated lost revenue analysis was manual. There also was no formal evidence of review of this analysis prior to it being provided to central campus finance management. ? In the third instance, management could not locate the support for the rate used due to not maintaining complete internal records. Effect Given the nature of the expenses above, they were not eligible for reimbursement under HEERF and resulted in questioned costs. Questioned Costs $1,461,911 Recommendation We recommend management at the first campus review any future scholarship programs being funded with HEERF institutional funds to ensure they meet the criteria laid out in the HEERF certification and agreement. We recommend that management at the second campus review their lease tracking and management process and formalize controls over the review of future lost revenue analyses. Additionally, they should ensure support for all costs charged to the HEERF award can be fully supported, including support for the fringe benefits rate being charged. Additionally, in both of these scenarios, management should reverse these transactions, update quarterly HEERF reports, as needed, and determine if the funds can be used for other allowable purposes and/or return the funds to the federal government. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings. ay rates, however, the 52% rate used to derive the fringe benefits charged could not be provided by management.

2022-006 ? Quarterly Higher Education Emergency Relief Fund (HEERF) Reporting Cluster: Not applicable Sponsoring Agency: Department of Education Award Names: COVID-19 Higher Education Emergency Relief Fund (HEERF) Student Portion and COVID-19 HEERF Supplemental Assistance to Institutions of Higher Education (SAIHE) Program Award Numbers: P425F202269 and P425S210019 Assistance Listing Titles: COVID-19 HEERF Student Portion and COVID-19 HEERF SAIHE Program Assistance Listing Number: 84.425E and 84.425S Award Year: 2020-2022 Pass-through entity: Not applicable Criteria The quarterly HEERF reporting format requires institutions to report the total amount of HEERF (a)(1) Student Aid disbursed directly to students as Emergency Financial Aid Grants along with other information. (a)(1) is equivalent to funds disbursed under Assistance Listing #84.425E. SAIHE funds are considered (a)(3) funds and are required to be reported in a separate section of the quarterly HEERF report. Reports are required to be posted to an institution's website 10 days after each calendar quarter end. Condition Through our testing of 14 quarterly student and institutional reports across 4 campuses, we noted the following at 1 campus : ? Through our testing, we reconciled the total cumulative student spending as reported on the June 30, 2022 quarterly report to the total cumulative spending of the student portion at this campus and noted that total student funds reported were $1,505,755 in excess of the cumulative awards actually spent. This variance represented 50% of this campus?s award under 84.425S, which was awarded to students, however, this should not have been included in the 84.425E totals. ? The June 30, 2022 quarterly report was also submitted 2 days late. Cause Management did not realize that 84.425S funds awarded to students should not be commingled in the quarterly reports with the 84.425E student portion spending. Additionally, the due date of the report was a Sunday and instead of recognizing the report should be submitted the next business day or prior, it was submitted 2 days late. Effect The lack of timely and accurate reports could impact decision making of report users, including the Department of Education and the general public, among others. Questioned Costs None noted. Recommendation We recommend management amend their June 30, 2022 report to include the correct amounts and assess whether any other quarters are impacted. Additionally, they should implement a control to review proper classification of funds in future quarterly reports and to ensure timely submission. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2022-007 ? HEERF Procurement, Suspension and Debarment Cluster: Not applicable Sponsoring Agency: Department of Education Award Names: COVID-19 Higher Education Emergency Relief Fund (HEERF) Institutional Portion Award Numbers: P425F202269 Assistance Listing Title: COVID-19 HEERF Institutional Portion Assistance Listing Number: 84.425F Award Year: 2020-2022 Pass-through entity: Not applicable Criteria A non-Federal entity must have and use documented procurement procedures and is prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition Through our testing of 12 selections across 3 campuses (out of a population of 54 across all 3 campuses) for both procurement and suspension and debarment, we noted the following for 2 out of 3 transactions selected for testing at 1 campus : ? Missing original Source Selection & Price Reasonableness justification forms demonstrating appropriate procurement decisions and approval took place prior to the transactions, which are required at this campus for transactions greater than $10,000. ? Management could not provide evidence that suspension and debarment checks were performed prior to purchase. We received evidence of the checks after the purchase. Cause Management indicated that the Source Selection & Price Reasonableness justification forms and the suspension and debarment checks were performed, however, they misplaced the original documentation. Effect The University may not follow appropriate procurement policies and procedures and may inappropriately do business with a vendor that is suspended or debarred if timely checks are not performed. Questioned Costs None noted. Recommendation We recommend that management reassess their document retention protocols and ensure controls are in place to ensure complete and accurate files, inclusive of timely suspension and debarment checks. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2022-008 ? Completeness and accuracy of certain COVID-19 programs on the Prior Year Schedule of Expenditures of Federal Awards (SEFA) - (Significant Deficiency) Cluster: Not applicable Sponsoring Agency: Department of Health and Human Services (HHS) - Health Resources and Services Administration (HRSA) and Department of Education Award Names: COVID-19 Provider Relief Fund (PRF) and COVID-19 Higher Education Emergency Relief Fund (HEERF) Institutional Portion Award Numbers: Not applicable and P425F202269 Assistance Listing Titles: COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution and COVID-19 HEERF Institutional Portion Assistance Listing Number: 93.498 and 84.425F Award Year: 2020-2021 and 2020-2022 Pass-through entity: Not applicable Criteria 2 CFR 200.510 Financial statements requires auditees to prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with 2 CFR 200.502. The information presented should be consistent with the accounting records and other federal guidance. Condition The following errors were identified in the University?s 2021 SEFA: ? Management at the University Office of the President brought to our attention that in the prior year, the PRF Period 1 expenditures at 1 hospital that was part of a certain medical center with multiple portal submissions, was not included on the University?s SEFA. This error totaled $26,358,874 and represented 6% of total Period 1 PRF expenditures included on the SEFA and 0.4% of the University?s total SEFA. Exclusion of this amount did not impact the major program determination in 2021 or our scoping of the PRF major program across the University as a whole. Management has included this amount on the 2022 SEFA. ? Through our discussions with management at a second campus, we identified 2 additional PRF portal submissions were excluded from the 2021 SEFA, as follows: Period 1 $473,339 and Period 1 $11,962. These submissions have also been included in the 2022 SEFA. ? Through our current year testing at a third campus, we noted that the 2021 HEERF institutional funds expended per management?s analysis did not agree to the amount reported on the 2021 SEFA. The amount reported in the prior year was understated by $1,296,498. This amount was not material to HEERF or to the 2021 SEFA as a whole. This amount has also been included in the 2022 SEFA. Cause The COVID-19 pandemic resulted in the receipt and expenditure of federal funds across certain University medical centers where there has previously been limited to no federal funding and a different nature of funding at certain of the campuses. The preparation of the SEFA requires information from each campus be provided to the University Office of the President for compilation, and the aggregation of the COVID-19 PRF funding was manual. In addition, there was limited knowledge of the federal funding at the medical centers and thus a reliance on the part of management that each campus was reporting complete and accurate information. A final reconciliation of all portal submissions compared to the amounts on the SEFA also failed to detect the missing PRF expenditures at this one medical center. Additionally, regarding the HEERF missing amounts, the correct amount was communicated by the campus to the University Office of the President, however, this communication was overlooked by the preparer of the SEFA, since a manual adjustment was required. Effect A SEFA that is not complete and accurate could impact the scoping of an entity?s major programs and result in incomplete information being provided to the federal government. Questioned Costs None noted. Recommendation We recommend updates on atypical federal programs (e.g., HEERF and PRF) at each campus (including the medical centers) be periodically provided to the team at the University Office of the President that is responsible for the compilation of the SEFA. This will allow for a more comprehensive understanding of the campus grant activity for these programs and the ability to better review and assess the completeness and accuracy reported for these programs on the University?s year-end SEFA, inclusive of these programs. One means by which this might be accomplished is to develop a checklist of anticipated awards by campus in advance of the year and also complete an interim SEFA to identify inconsistencies earlier in the fiscal year. We recommend the campuses review the interim SEFA for completeness and accuracy and provide a formal sign-off/approval to the University Office of the President. We also recommend formal review of the final year-end SEFA be evidenced by the Systemwide Controller or other appropriate personnel. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2021-002 ? Subrecipient Monitoring Cluster: Research and Development Sponsoring Agency: Various across 2 campuses Award Names: Various across 2 campuses Award Numbers: Various across 2 campuses Assistance Listing Title: Various across 2 campuses Assistance Listing Number: Various across 2 campuses Award Year: 2020 - 2021 Criteria 2 CFR 200.332 notes that pass-through entity monitoring of the subrecipient must include: 1. Reviewing financial and performance reports required by the pass-through entity. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. 3. Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521. Condition Through our testing, we noted the following: ? Through our testing of 25 subrecipients at one campus, we noted one instance where the subrecipient Uniform Guidance report we reviewed had findings associated with an award passed-through from this University campus. When inquiring as to what follow-up procedures were performed, the campus noted that they do not perform follow-up procedures if the subrecipient has been identified as low-risk within the subrecipient?s Uniform Guidance report. This is not consistent with the guidance above, which requires follow-up and the issuance of a management decision when there are subrecipient findings pertaining to the award provided by the campus. This is an over-arching policy issue at the campus and thus additional reviews may have not been performed across the subrecipient population at this campus . ? Through our testing of 25 subrecipients at a second campus, we noted that there was no evidence as to when subrecipient Uniform Guidance reports were reviewed. We were able to obtain a checklist completed for each subrecipient by management, however: o The checklists were not dated and thus it was unclear when the checklists were completed o The checklists noted the Uniform Guidance report of the subrecipient was reviewed, but it was unclear which fiscal year report management reviewed o There was no documentation on the checklist as to whether there were findings or issues noted through review of the subrecipient Uniform Guidance report that need further consideration or documentation . Cause In the first instance, the campus indicated it has many subrecipients and was attempting to streamline the process, not recognizing that its policy was not consistent with the Uniform Guidance. In the second instance, management has a manual checklist to document review of Uniform Guidance reports, but that checklist does not contain fields for dates or explanations to elicit additional details to more clearly evidence the results of the review. Effect As a result of the first instance above, lack of appropriate follow-up procedures may result in subrecipient findings not being fully remediated. In the second instance, lack of sufficient documentation may not allow for the demonstration of appropriate monitoring procedures being performed. Questioned Costs None noted. Recommendation We recommend the first campus reassess their subrecipient monitoring policy to ensure that any Uniform Guidance reports with relevant subrecipient findings have appropriate follow-up procedures performed. We recommend the second campus, enhance their subrecipient monitoring checklist to explicitly include a date the checklist was prepared and reviewed and that additional detail be added to document the nature of the information in the Uniform Guidance report that was reviewed (i.e. type of opinion, were there any applicable findings, follow-up action taken, etc.). Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2021-003 ? Suspension and debarment Cluster: Research and Development Sponsoring Agency: Various across 3 campuses Award Names: Various across 3 campuses Award Numbers: Various across 3 campuses Assistance Listing Title: Various across 3 campuses Assistance Listing Number: Various across 3 campuses Award Year: 2020 - 2021 Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-federal entity enters into a covered transaction with an entity at a lower tier, the nonfederal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification may be accomplished by (1) checking the System for Award Management (SAM) Exclusions maintained by the General Services Administration, (2) collecting a certification from the entity, or (3) adding a clause or condition to the covered transaction with that entity (2 CFR section 180.300). Condition Through our testing, we noted the following: ? When testing of 25 transactions greater than $10,000 at one campus, we noted 9 instances where a suspension and debarment check was not performed prior to payment of the vendor. On average, these checks were 330 days late . ? Through our testing at a second campus, campus policy requires SAM.gov support be attached as part of the purchasing package. However, if the vendor cannot be located on SAM.gov, the UCOP Debarment/Anti-Lobby form will be sent to the vendor for them to certify that they were not suspended or debarred. For 2 out of 25 selections, the Purchasing department was unable to provide either form of support . ? Through our testing at a third campus, there is a policy that a SAM.gov check be attached to each purchase order. Through our testing of 25 selections, we noted 11 instances where the SAM.gov check was performed after the execution of the purchase order and 8 instances where no SAM.gov support could be provided . Cause The causes were as follows: ? In the first instance, management noted this requirement was overlooked due to turnover. ? In the second instance, management noted that this process is manual and was overlooked in the instances noted. ? In the third instance, management in purchasing noted that turnover and loss of staff resulted in this requirement being overlooked by remaining personnel. Additionally, there was a misunderstanding that the use of a third-party servicer to check suspension and debarment status resulted in this requirement no longer being applicable. Effect The University may do business with a vendor that is suspended or debarred if timely checks are not performed. Questioned Costs None noted. Recommendation The University should revisit existing internal control procedures to ensure expenditures are paid in compliance with Federal reimbursement requirements. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2021-004 ? Cash management Cluster: Research and Development Sponsoring Agency: Various across 1 campus Award Names: Various across 1 campus Award Numbers: Various across 1 campus Assistance Listing Title: Various across 1 campus Assistance Listing Number: Various across 1 campus Award Year: 2020 - 2021 Criteria In accordance with 2 CFR 200.305 (b), for non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Reimbursement is the preferred method when the requirements in paragraph (b) cannot be met, when the Federal awarding agency sets a specific condition per 2 CFR 200.208, or when the non-Federal entity requests payment by reimbursement. Per the OMB Compliance Supplement, the non-Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass-through entity. Condition In testing compliance with the cash management compliance requirement in accordance with the OMB Compliance Supplement, specifically the reimbursement method, 25 individual expenditures at 1 campus (100 collectively across four campuses) were tested to compare the date the University paid the vendor to the date the University requested sponsor reimbursement. We noted 6 out of 25 instances at one campus in which reimbursement was requested from the sponsor before the University paid the vendor. Cause Management?s current process when requesting reimbursement from sponsors is to ensure that expenditures are incurred rather than to ensure payments have been made. Effect The University requested and received Federal reimbursement prior to paying vendors for the selected expenses. Questioned Costs None noted. Recommendation The University should revisit existing internal control procedures to ensure expenditures are paid in compliance with Federal reimbursement requirements. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2020-002 ? Federal Equipment Listing Completeness and Accuracy Cluster: Research & Development Sponsoring Agency: Various Award Name: Various Award Number: Various CFDA Title: Various CFDA Number: Various Award Year: 2019 - 2020 Criteria 2 CFR 200.313 (d)(1-2) indicates that a physical inventory of federal equipment must be taken and the results reconciled with property records at least once every two years. Additionally, accurate property records must be maintained which include various identifying information, such as the location, use and condition of the property and any ultimate disposition data, including the date of disposal and sale of the property. Condition In testing the University?s conformity with the compliance requirements for equipment management, we selected 50 pieces of equipment across two campuses from the detailed listings provided to physically inspect. Additionally, in order to test the completeness of the detailed listings, we selected 51 pieces of equipment from the ?floor? and traced these to the detailed listings provided. Through our testing, we noted the following: ? Two pieces of equipment out of the 50 selections made from the detailed listings for physical inspection were incorrectly included in the listings. One piece of equipment was disposed of prior to the end of the fiscal year but was not updated in the equipment management system and the other piece of equipment was transferred to another university and was not updated in the equipment management system. ? Three pieces of equipment out of the 51 selections made during our completeness testing procedures, were incorrectly excluded from the listings, as they were marked as inactive in the equipment management system in error. Cause The two items that were improperly included in the detailed listings were the result of the disposals not being properly communicated to the equipment management team. The three items that were improperly excluded from the detailed listings were excluded as they were mistakenly marked as `inactive? within the system. More specifically: ? One selection was to be disposed of as surplus and was thus marked as inactive. This item did not end up going to surplus, but the status was not changed back to active. ? One selection was tagged incorrectly as the wrong type of equipment and was mistakenly marked inactive. ? One selection was marked as inactive in 2014 and was reactivated in 2018, but the status was not updated in the equipment management system to reflect this. Effect The listings of federally funded equipment were not complete and accurate. Questioned Costs None noted. Recommendation We recommend that the University provide training to the principal investigators and other grant personnel focusing on the policies and procedures around federal equipment management. This should include emphasizing the importance of timely communication of disposals and other changes to the equipment inventory listing to ensure the listing is complete and accurate. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2020-003 - Subrecipient Risk Assessment and Ongoing Monitoring Cluster: Research & Development Sponsoring Agency: Defense Advance Research Projects Agency (DARPA) Award Name: NTERfering and Co-Evolving Prevention and Therapy (INTERCEPT) Award Number: HR0011-17-2-0027 CFDA Title: Research and Technology Development CFDA Number: 12.910 Award Year: 2019 - 2020 Criteria 2 CFR 200.332(b) indicates that each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward should be evaluated for purposes of determining the appropriate subrecipient monitoring and may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Additionally, 2CFR 200.332(d), indicates that Single Audit reports should also be obtained and reviewed as part of ongoing subrecipient monitoring. Condition In testing the University?s conformity with the compliance requirements for subrecipient monitoring, we selected 40 subrecipients from the detailed listing provided. We noted two subrecipients out of the 40 selections at one campus in which the audit report was not obtained for purposes of ongoing monitoring as required by University policy and the Uniform Guidance. Additionally, the risk assessment on these subrecipients had not been reassessed since 2017 when this is required to be completed annually under University policy. Both of these subrecipients did not have Uniform Guidance reports available and thus alternative procedures should have been completed by the University, which would have included obtaining a questionnaire from the subrecipient. Questioned Costs None noted. Cause These two subrecipients were not subjected to proper risk assessment or certain ongoing monitoring procedures due to lack of training of new employees and lack of communication, stemming from management transitions to those employees that would have been required to conduct these reviews after department turnover. Effect Lack of review of risk assessments and certain ongoing monitoring procedures could impact the level of subrecipient monitoring completed by the University. Recommendation We recommend management implement trainings on subrecipient monitoring for all employees and implement a review to ensure that risk assessment and monitoring procedures are appropriately performed. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2020-004 - Section 18004(a)(1) Student Aid Portion Quarterly Public Reporting Cluster: Not applicable Sponsoring Agency: US Department of Education Award Name: CARES Act Emergency Relief Funds - Student Awards Award Number: P425E200169 CFDA Title: COVID-19 - Education Stabilization Fund CFDA Number: 84.425E Award Year: 2019 - 2020 Criteria Section 18004(e) of the CARES Act requires recipients to report to the Secretary of Education thirty (30) days from the date the Certification and Agreement was signed by the institution and every forty-five (45) days thereafter in accordance with 2 CFR 200.333 through 2 CFR 200.337, or in such other additional form as the Secretary of Education may specify, how grants were distributed to students, the amount of each grant awarded to each student, how the amount of each grant was calculated, and any instructions or directions given to students about the grants. The requirements in the Certification and Agreement were further clarified and indicated that beginning on May 6, 2020, institutions that received a Higher Education Emergency Relief Fund (?HEERF?) 18004(a)(1) Student Aid Portion award were required to publicly post certain information on their website no later than 30 days after award, and update that information every 45 days thereafter (by posting a new report). Condition In testing the University?s conformity with the compliance requirements for the HEERF Student Aid Portion Quarterly Public Reporting, we selected 5 Student Aid Portion Quarterly Reports across 5 campuses for testing. Each campus selected had one Student Aid Quarterly Public Report due in fiscal year 2020. We noted that for one campus, the University was unable to provide support that the report was completed and posted publicly to its campus website. As a result,, we were unable to determine if posting was timely and we were unable to agree key line items to underlying documentation. Cause The campus impacted experienced turnover in their Financial Aid & Scholarships Office during fiscal year 2020 and the new personnel, along with information technology personnel at the campus, were unable to determine if this report was posted after reviewing the records and archives currently available. Effect The absence of public reporting of student aid funding data results in reduced transparency as to how the University has spent CARES Act funding. Questioned Costs None noted. Recommendation We recommend management implement a control whereby reporting dates as directed by the sponsoring agency are monitored by management so that appropriate personnel can ensure the reporting is performed and completed in a timely manner. Additionally, support should be maintained to evidence the website posting of each Student Aid Portion Quarterly Public Report. Management?s Views and Corrective Action Plan Management?s response is included in ?Management?s Views and Corrective Action Plan? included at the end of this report after the summary schedule of status of prior audit findings.

2019-002: Return of Title IV Funds - Refund to the Department of Education Program: Student Financial Assistance Cluster CFDA Title: Federal Pell Program; Federal Direct Loans CFDA Number: 84.063 - Federal Pell Grants, 84.268 - Federal Direct Loans Sponsoring Agency: Department of Education Award Year: 2018 - 2019 Condition: We selected 100 students across four campuses who received Title IV assistance but then dropped out, withdrew or never began attendance to test the University?s conformity with the compliance requirements around the return of Title IV funds. Through our testing, we noted the following: ? We identified 5 students whose return to the Department of Education (?ED?) was not completed timely. These selections ranged from 1 to 27 days late. ? We identified 1 student in which the calculation of the refund was inaccurate causing the ED to be underfunded by $149. ? We identified 1 student whose funds were not returned correctly causing the ED to be underfunded by $9. Citation: 34 CFR 668.21; 34 CFR 668.22 Criteria: When a recipient of title IV grant or loan assistance withdraws from a University before or during a payment period or period of enrollment in which the recipient began attendance, the University must determine the amount of title IV grant or loan assistance that the student earned as of the student's withdrawal date. For students that did not begin attendance in a payment period or period of enrollment, the institution must return the funds no later than 30 days after the date that the institution becomes aware that the student will not or has not begun attendance. For students that began attendance in a payment period or period of enrollment, the institution must return the funds no later than 45 days after the date of the institution's determination that the student withdrew. Questioned Cost: $158 Cause: Financial Aid advisors perform the return of Title IV calculations. As the calculations are done manually, both errors to the refund amounts were clerical errors, resulting from lack of secondary review. Effect: The receipt of inaccurately calculated or late Title IV refunds can impact the ED?s ability to completely and accurately manage federal student financial assistance funds. Recommendation: We recommend management implement policies and procedures that require a secondary review of Title IV refund calculations to ensure they are complete and accurate. In addition, we recommend management provide further training to the financial aid advisors completing the calculations and reemphasize the importance of completing the returns both accurately and timely. Management?s Views and Corrective Action Plan: Management?s response is reported in ?Management?s Views and Corrective Action Plan? included at the end of this report.

2019-003 Enrollment Reporting Program: Student Financial Assistance Cluster CFDA Title: Federal Pell Program; Federal Direct Loans, Federal Perkins Loans CFDA Number: 84.063 - Federal Pell Grants, 84.268 - Federal Direct Loans, 84.038 - Federal Perkins Loans Sponsoring Agency: Department of Education Award Year: 2018 - 2019 Condition: In testing the University?s conformity with the compliance requirements for enrollment reporting, we sampled 100 students across four campuses. Through our testing, we noted the following: ? 5 of the students were not reported timely to the National Student Loan Data Systems (NSLDS). These selections ranged from 4 to 96 to days late and pertained to one campus. ? For 8 out of the 100 students sampled (including the 5 above), their change in status was not reported to the National Student Loan Data Systems (NSLDS) correctly or at all. The additional 3 selections related to two campuses. Citation: 34 CFR 690.83(b)(2); 34 CFR 674.19(f); 34 CFR 685.309(b) Criteria: An institution shall submit, in accordance with deadline dates established by the Secretary, through publication in the Federal Register, other reports and information the Secretary requires and shall comply with the procedures the Secretary finds necessary to ensure that the reports are correct. Enrollment reporting process. (1) Upon receipt of an enrollment report from the Secretary, an institution must update all information included in the report and return the report to the Secretary? (i) In the manner and format prescribed by the Secretary; and (ii) Within the timeframe specified by the Secretary. Questioned Cost: None Cause: At the first campus, the Registrar?s Office electronically submitted the five incorrect status changes to National Student Clearinghouse (NSC), as the students had multiple degrees and the campus incorrectly reflected that enrollment status. Once updated to the correct enrollment status, they were submitted untimely due to the amount of time lapsed. While the enrollment and degree information was reported timely to NSC at the second campus, NSLDS did not receive the update for two instances because these students completed multiple majors and minors. This combination prevented these student from having their NSC enrollment status updated through the automated processes. Typically all graduated students, regardless of their enrollment status, would be updated as graduated once the Registrar sends a Degree Verify file students to NSC. This file lists all graduated students that NSC uses to update the enrollment status from their current state to graduated. However, in this one unreported instance at the third campus the status of this student didn't change to graduated. Effect: The effective administration of Title IV loans could be impacted when changes in student status are not reported timely and accurately. The accuracy of enrollment information is important as a student's enrollment status determines eligibility for in-school status, deferment, grace periods, and repayments, as well as the Government's payment of interest subsidies. Recommendation: We recommend that the campuses review the data included on the NSLDS website periodically to confirm that the information is both accurate. Correct these students to make sure proper status is redflected. Management?s Views and Corrective Action Plan: Management?s response is reported in ?Management?s Views and Corrective Action Plan? included at the end of this report.

2019-004 ?Disbursements to and on Behalf of Students - Notifications Program: Student Financial Assistance Cluster CFDA Title: Federal Direct Loans, TEACH Grant Program CFDA Number: 84.268- Federal Direct Loans; 84.379 - TEACH Grant Program Sponsoring Agency: Department of Education Award Period: 2018 ? 2019 Condition: In testing the University?s conformity with the compliance requirements for Federal Loan disbursements, we selected 100 students across four campuses who received Federal Loan disbursements during the year. For each student we tested that the student received the notification of the loan and the borrower?s right to cancel all or part of the disbursement for each disbursement made during the year. While reviewing the notifications sent at one of the campuses, it was determined that no notifications were sent for any student for the summer term at that one campus. All students received the notification in a timely manner for other terms. Citation: 34 CFR 668.165 (a) Criteria: The institution must notify the parent or student of the student's or parent's right to cancel all or a portion of that loan, loan disbursement, TEACH Grant, or TEACH Grant disbursement and have the loan proceeds or TEACH Grant proceeds returned to the Secretary. The institution must provide the notice described 1) no earlier than 30 days before, and no later than 30 days after, crediting the student's ledger account at the institution, if the institution obtains affirmative confirmation from the student; or 2) no earlier than 30 days before, and no later than seven days after, crediting the student's ledger account at the institution, if the institution does not obtain affirmative confirmation from the student. Questioned Cost: None Cause: A system implementation occurred in the current year at the campus in which the notifications were not sent for the summer term. During this system implementation, the financial aid types were not correctly linked to the batches that send out the right to cancel notifications, and consequently, the notices were not sent for summer. Effect: Students were not notified of the borrower?s right to cancel all or part of the disbursement in the time required. Recommendation: We recommend the University implement a secondary review on the setup of batch notifications during a system implementation to ensure they are configured to send out all required information/notifications. Additionally, during the first year of implementation, , the University should review to ensure notifications were sent as expected after each batch is released. Management?s Views and Corrective Action Plan: Management?s response is reported in ?Management?s Response and Corrective Action Plan? included at the end of this report.

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