Audit 299022

Title: Basis of Presentation Accounting Policies: Expenditures for federal award programs are recognized as incurred using the accrual method of accounting and the cost accounting principles promulgated under applicable federal circulars. Under those cost principles, certain types of expenditures are not allowable or are limited as to reimbursement and, accordingly, are not reflected as expenditures in the accompanying Schedules. Expenditures also include a portion of costs associated with general operating activities of the respective institutions which are allocated to awards under negotiated formulas commonly referred to as facilities and administrative cost rates (note 3). De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying supplementary schedule of expenditures of federal awards (the Schedule) summarizes the expenditures of the University System of New Hampshire (USNH), which includes the University of New Hampshire (UNH), Plymouth State University (PSU), Keene State College (KSC), and Granite State College (GSC) under programs funded by the federal government 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 Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the University, it is not intended to and does not present the consolidated financial position, changes in net assets or cash flows of the University.

Title: Facilities and Administrative Costs Accounting Policies: Expenditures for federal award programs are recognized as incurred using the accrual method of accounting and the cost accounting principles promulgated under applicable federal circulars. Under those cost principles, certain types of expenditures are not allowable or are limited as to reimbursement and, accordingly, are not reflected as expenditures in the accompanying Schedules. Expenditures also include a portion of costs associated with general operating activities of the respective institutions which are allocated to awards under negotiated formulas commonly referred to as facilities and administrative cost rates (note 3). De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. UNH negotiated facilities and administrative cost rates in fiscal year 2019 with its cognizant agency, the U.S. Department of Health and Human Services (DHHS). The on‑campus facilities and administrative cost rate in place for UNH is 50.5% of modified total direct costs effective July 1, 2019 until amended. Other rates for UNH facilities and administrative cost recovery range from 26.0% to 57.5% of modified total direct costs. The on‑campus facilities and administrative cost rate in place for PSU is 63.9% of direct salaries and wages from July 1, 2020 until amended. The off-campus rate for PSU facilities and administrative cost recovery is 21.1% of direct salaries and wages. The on‑campus facilities and administrative cost rate in place for KSC is 53.4% of direct salaries and wages from July 1, 2020 until amended. The off-campus rate for KSC facilities and administrative cost recovery is 21.6% of direct salaries and wages. The on‑campus facilities and administrative cost rate in place for GSC is 57.3% of direct salaries and wages from July 1, 2020 until amended. The off-campus rate for GSC facilities and administrative cost recovery is 34.8% of direct salaries and wages.

Title: Federal Perkins Loan Program Accounting Policies: Expenditures for federal award programs are recognized as incurred using the accrual method of accounting and the cost accounting principles promulgated under applicable federal circulars. Under those cost principles, certain types of expenditures are not allowable or are limited as to reimbursement and, accordingly, are not reflected as expenditures in the accompanying Schedules. Expenditures also include a portion of costs associated with general operating activities of the respective institutions which are allocated to awards under negotiated formulas commonly referred to as facilities and administrative cost rates (note 3). De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The Perkins Loan Program listed below is administered directly by USNH, and balances and transactions relating to this program are included in USNH’s financial statements. The outstanding Perkins Notes Receivable balance as of June 30, 2023 is $4,938,955.

Title: Federal Direct Student Loans Accounting Policies: Expenditures for federal award programs are recognized as incurred using the accrual method of accounting and the cost accounting principles promulgated under applicable federal circulars. Under those cost principles, certain types of expenditures are not allowable or are limited as to reimbursement and, accordingly, are not reflected as expenditures in the accompanying Schedules. Expenditures also include a portion of costs associated with general operating activities of the respective institutions which are allocated to awards under negotiated formulas commonly referred to as facilities and administrative cost rates (note 3). De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. Federally guaranteed loans issued to USNH students through the Federal Direct Loan Program (FDL), includes Direct Subsidized and Unsubsidized Stafford Loans, and Direct Parent Loans for Undergraduate Students. These distributions and the related funding sources are not included in the System’s financial statements. Amounts distributed for the FDL program during the year ended June 30, 2023 are summarized as follows: Stafford Loans: UNH $62,121,317; PSU $20,378,127; KSC $12,507,432; GSC $3,876,704; Total Stafford Loans $98,883,580. Plus Loans: UNH $26,804,395; PSU $8,804,110; KSC $5,886,098; GSC $52,902; Total Plus Loans $41,547,505. Total Federal Direct Student Loans $140,431,085