Notes to SEFA
Title: Note 1 – General
Accounting Policies: Note 2 – Basis of Presentation and Summary of Significant Accounting Policies:
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: The University has elected not to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance.
The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the activity for all federal award programs of Charles R. Drew University of Medicine and Science (the “University”) for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the
requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (“Uniform Guidance”). Because it presents only a selected portion of the consolidated operations of the University, it is not intended to and does not present the consolidated financial position, activities, or cash flows of the University.
Title: Note 3 – Federal Student Loan Programs
Accounting Policies: Note 2 – Basis of Presentation and Summary of Significant Accounting Policies:
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: The University has elected not to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance.
The federal student loan programs listed subsequently are administered directly by the University and balances and transactions relating to these programs are included in the University’s consolidated financial statements. Loans outstanding at the beginning of the year and loans made during the year are
included in the federal expenditures presented in the Schedule. The balance of loans outstanding at June 30, 2023, consists of: (See Notes to SEFA - Note 3 for included table)
Title: Note 4 – Endowment Award
Accounting Policies: Note 2 – Basis of Presentation and Summary of Significant Accounting Policies:
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance wherein certain types of expenditures are not allowable or are limited as to reimbursement.
De Minimis Rate Used: N
Rate Explanation: The University has elected not to use the 10 percent de minimis indirect cost rate as allowed under Uniform Guidance.
The accompanying Schedule includes $74,944,561 in grants, which consist of $73,675,000 in corpus and $1,269,561 of interest earned on the cumulative endowment corpus, which is considered program income in accordance with the grant award terms from the National Institutes of Health (Federal Assistance Listing Number No. 93.307) to establish an endowment fund.
Of the $75,675,000 corpus, $29,000,000 is to be maintained in perpetuity and the investment income will be used to support: (1) the construction of a learning conference center, computer classroom, and two new seminar rooms; (2) faculty and professional development, including creation of a faculty Research and Teaching Resource Center, and a comprehensive instructional program for faculty that will optimize
the effectiveness of faculty as research mentors; and (3) enhancement of the University’s research infrastructure through modernization of the existing learning resource center for students.
The remaining $46,675,000 consists of term endowment funds, which allow for the use of the corpus 20 years after the end of the grant period. The investment income on these term endowment funds will be used to build the University’s research infrastructure and capacity but may not be used to directly support the research itself.