Audit 13782

Title: Basis of Presentation Accounting Policies: The SEFA was prepared on the same basis of accounting as the financial statements; GAAP basis of accounting. De Minimis Rate Used: N Rate Explanation: For research and development awards, the university applies its fixed approved facilities and administrative rate when charging indirect costs to federal awards. The accompanying Supplementary Schedule of Expenditures of Federal Awards (the Schedule) includes the federal contracts and grants expenditures of Carnegie Mellon University (Carnegie Mellon or the university) for the year ended June 30, 2023 and is presented on the accrual basis of accounting. The information in the Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of the consolidated financial statements. Negative amounts represent adjustment in the normal course of business to amounts reported in a prior year. For purposes of the Schedule, federal awards include all grants, contracts, and similar agreements entered into directly between the university and agencies and departments of the federal government and all subawards to the university by nonfederal organizations.

Title: Summary of Significant Accounting Policies for Federal Award Expenditures Accounting Policies: The SEFA was prepared on the same basis of accounting as the financial statements; GAAP basis of accounting. De Minimis Rate Used: N Rate Explanation: For research and development awards, the university applies its fixed approved facilities and administrative rate when charging indirect costs to federal awards. Expenditures for federal student financial aid programs are recognized as incurred. For purposes of major program determination, these costs include Federal Pell Grant program grants to students, Federal Perkins loans, the federal share of students’ Federal Supplemental Educational Opportunity Grants (FSEOG) program grants and the federal share of Federal Work Study (FWS) program earnings, Federal direct Student Loan disbursements, and administrative cost allowances, where applicable. Expenditures for federal awards are determined using the cost principles set forth in the Uniform Guidance (2 CFR, Part 220). Under these costs principles, certain types of expenditures are not allowable or are limited to reimbursement. Direct costs are recognized as incurred using the accrual method of accounting.

Title: Assistance Listing Numbers Accounting Policies: The SEFA was prepared on the same basis of accounting as the financial statements; GAAP basis of accounting. De Minimis Rate Used: N Rate Explanation: For research and development awards, the university applies its fixed approved facilities and administrative rate when charging indirect costs to federal awards. Assistance Listing Numbers and pass-through numbers are presented for those programs for which such numbers are available. In instances where no Assistance Listing Number is available, the federal agency and the federal award number is included as well as the grantor or pass-through agency.

Title: SEI Contracts Accounting Policies: The SEFA was prepared on the same basis of accounting as the financial statements; GAAP basis of accounting. De Minimis Rate Used: N Rate Explanation: For research and development awards, the university applies its fixed approved facilities and administrative rate when charging indirect costs to federal awards. Amounts included in the Research and Development Coster, Air Force section of the Schedule, reflect one contract award to the university, including funding received from other federal agencies related to and included with the Software Engineering Institute (SEI) Department of the Air Force contract (CFDA 12.FA870115D0002) through project work plans (PWP) as required by their Air Force sponsoring agreement. The SEI is a federally funded research and development center (FFRDC) sponsored by the U.S. Department of Defense (DoD) and operated by the university. When federal agencies other than the primary sponsor contribute funds directly to the SEI's basic effort, the work is administered using a PWP.

Title: Federal Student Loan Programs Accounting Policies: The SEFA was prepared on the same basis of accounting as the financial statements; GAAP basis of accounting. De Minimis Rate Used: N Rate Explanation: For research and development awards, the university applies its fixed approved facilities and administrative rate when charging indirect costs to federal awards. The Federal Perkins Loan Program (CFDA No. 84.038) is administered directly by the university and the balances and transactions are included in the university’s basic consolidated financial statements. The amount of Federal Perkins loans outstanding at June 30, 2023 totaled $4,624,548. Loans outstanding at the beginning of the year are included in the federal expenditures presented in the Schedule. Under federal law, the authority for schools to make new Perkins Loans ended in September 30, 2017, and final disbursements were permitted through June 30, 2018. As a result, students can no longer receive Perkins Loans. Carnegie Mellon participates in the Federal Direct Loan Program (CFDA No. 84.268) which includes subsidized and unsubsidized student loans, Direct Parent Loan for Undergraduate Student (PLUS) Loans, and direct GRAD PLUS Loans. Loan disbursements under the Federal Direct Loan Program for the year ended June 30, 2023 totaled $46,275,525. These loans are not made by the university but are received by its students.

Title: Facilities and Administrative Costs Accounting Policies: The SEFA was prepared on the same basis of accounting as the financial statements; GAAP basis of accounting. De Minimis Rate Used: N Rate Explanation: For research and development awards, the university applies its fixed approved facilities and administrative rate when charging indirect costs to federal awards. For research and development awards, the university applies its fixed approved facilities and administrative rate when charging indirect costs to federal awards rather than the 10% de minimis cost rate as described in Section 200.414 of the Uniform Guidance. The fixed rates for capped and uncapped awards for the year ended June 30, 2023 are as follows: Capped Uncapped On-campus 52.20% 59.40% Off-campus 26.00% N/A National Robotics Engineering Center 25.80% 36.30% Silicon Valley 26.00% N/A Software Engineering Institute 11.90% N/A The capped rate applies to all Department of Defense (DoD) contracts and subcontracts awarded or issued before November 30, 1993, all Non-DoD instruments, and all DoD grants. The uncapped rate applies to all DoD contracts awarded or issued on or after November 30, 1993 in accordance with and under the authority of DFARS 231.303(l).