Audit 299853

Title: Basis of Presentation Accounting Policies: Expenditures for direct costs are recognized as incurred using the accrual method of accounting and the cost accounting principles in OMB's Uniform Guidance or Federal Acquisition Regulations. Moreover, expenditures include a portion of costs associated with general Institute activities (facilities and administrative costs) which are allocated to awards under negotiated formulas commonly referred to as facilities and administrative rates. The Institute applies its predetermined 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 Institute receives funding from federal government agencies for sponsored research under government grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the Office of Naval Research (“ONR”), the Institute's cognizant federal agency. The Institute's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The Defense Contract Audit Agency (“DCAA”) is responsible for auditing indirect charges to grants and contracts. The Institute has final audited rates through 2021 and negotiated fixed rates for indirect costs through the 2024 fiscal year. De Minimis Rate Used: N Rate Explanation: The Institute applies its predetermined 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 accompanying schedule of expenditures of federal awards including appendices A, B and C (the "Schedule") summarize the expenditures of the Massachusetts Institute of Technology (the "Institute") under programs of the federal government for the year ended June 30, 2023. Because the Schedule presents only a selected portion of the activities of the Institute, it is not intended to and does not present the financial position, changes in net assets and cash flows of the Institute. The accompanying appendices A, B, and C provide detail on the federal awards expended by the Institute. For purposes of the Schedule, federal awards include all grants, contracts and similar agreements entered into directly between the Institute and agencies and departments of the federal government and all subawards to the Institute by nonfederal organizations pursuant to federal grants, contracts and similar agreements. The information in this Schedule is presented in accordance with the provisions of the Office of Management and Budget's Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”). Therefore, certain amounts presented in the Schedule may differ from amounts presented in, or used in preparation of, the consolidated financial statements. Assistance Listing Numbers (“AL”) and pass-through numbers are provided when available. Negative amounts represent adjustments to amounts reported in prior years in the normal course of business.

Title: Federal Student Loan Programs Accounting Policies: Expenditures for direct costs are recognized as incurred using the accrual method of accounting and the cost accounting principles in OMB's Uniform Guidance or Federal Acquisition Regulations. Moreover, expenditures include a portion of costs associated with general Institute activities (facilities and administrative costs) which are allocated to awards under negotiated formulas commonly referred to as facilities and administrative rates. The Institute applies its predetermined 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 Institute receives funding from federal government agencies for sponsored research under government grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the Office of Naval Research (“ONR”), the Institute's cognizant federal agency. The Institute's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The Defense Contract Audit Agency (“DCAA”) is responsible for auditing indirect charges to grants and contracts. The Institute has final audited rates through 2021 and negotiated fixed rates for indirect costs through the 2024 fiscal year. De Minimis Rate Used: N Rate Explanation: The Institute applies its predetermined 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 Federal Perkins Loan Program (AL #84.038) is administered directly by the Institute and balances and transactions relating to this program are included in the Institute's consolidated financial statements. The balance of loans outstanding for this program at June 30, 2023 is $5,719,494. The William D. Ford Federal Direct Loan Programs (AL #84.268) are not administered by the Institute and balances and transactions relating to these programs are not included in the Institute's consolidated financial statements.

Title: Lincoln Laboratory Accounting Policies: Expenditures for direct costs are recognized as incurred using the accrual method of accounting and the cost accounting principles in OMB's Uniform Guidance or Federal Acquisition Regulations. Moreover, expenditures include a portion of costs associated with general Institute activities (facilities and administrative costs) which are allocated to awards under negotiated formulas commonly referred to as facilities and administrative rates. The Institute applies its predetermined 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 Institute receives funding from federal government agencies for sponsored research under government grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the Office of Naval Research (“ONR”), the Institute's cognizant federal agency. The Institute's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The Defense Contract Audit Agency (“DCAA”) is responsible for auditing indirect charges to grants and contracts. The Institute has final audited rates through 2021 and negotiated fixed rates for indirect costs through the 2024 fiscal year. De Minimis Rate Used: N Rate Explanation: The Institute applies its predetermined 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. Lincoln Laboratory (“the Laboratory”), designated as a Federally Funded Research and Development Center (“FFRDC”), is a mission oriented, multidisciplinary laboratory. The Director of Lincoln Laboratory reports to MIT’s Vice President of Research. The Laboratory is directly integrated into the Institute as part of its research laboratory system and the Laboratory’s reporting relationship with the Institute is like that of any other MIT research laboratory. The Laboratory is charged with responsibility for producing contractual research products and services. MIT establishes policy for, and provides guidance to, the Laboratory and performs administrative and service functions in support of the operations of the Laboratory.

Title: Northeast Radio Observatory Corporation Accounting Policies: Expenditures for direct costs are recognized as incurred using the accrual method of accounting and the cost accounting principles in OMB's Uniform Guidance or Federal Acquisition Regulations. Moreover, expenditures include a portion of costs associated with general Institute activities (facilities and administrative costs) which are allocated to awards under negotiated formulas commonly referred to as facilities and administrative rates. The Institute applies its predetermined 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 Institute receives funding from federal government agencies for sponsored research under government grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the Office of Naval Research (“ONR”), the Institute's cognizant federal agency. The Institute's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The Defense Contract Audit Agency (“DCAA”) is responsible for auditing indirect charges to grants and contracts. The Institute has final audited rates through 2021 and negotiated fixed rates for indirect costs through the 2024 fiscal year. De Minimis Rate Used: N Rate Explanation: The Institute applies its predetermined 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. Northeast Radio Observatory Corporation (“NEROC”) is a nonprofit consortium of educational and research institutions. NEROC’s mission is to further research, education, and scientific collaboration in the field of radio science. By agreement, NEROC finances are directly integrated into the Institute to support the organization’s sponsored research; MIT establishes policy for and provides guidance to NEROC and performs administrative and service functions in support of the financial and grant-related operations of NEROC. NEROC is consolidated within MIT’s consolidated financial statements, and NEROC’s federal expenditures are reported in MIT’s Uniform Guidance report. NEROC’s Employer Identification Number (“EIN”) is 04-6156432, which is separate from MIT’s EIN. Federal expenditures for both MIT’s and NEROC’s EINs are included in MIT’s Uniform Guidance report.

Title: Department of Homeland Security - Federal Emergency Management Agency Public Assistance Accounting Policies: Expenditures for direct costs are recognized as incurred using the accrual method of accounting and the cost accounting principles in OMB's Uniform Guidance or Federal Acquisition Regulations. Moreover, expenditures include a portion of costs associated with general Institute activities (facilities and administrative costs) which are allocated to awards under negotiated formulas commonly referred to as facilities and administrative rates. The Institute applies its predetermined 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 Institute receives funding from federal government agencies for sponsored research under government grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the Office of Naval Research (“ONR”), the Institute's cognizant federal agency. The Institute's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The Defense Contract Audit Agency (“DCAA”) is responsible for auditing indirect charges to grants and contracts. The Institute has final audited rates through 2021 and negotiated fixed rates for indirect costs through the 2024 fiscal year. De Minimis Rate Used: N Rate Explanation: The Institute applies its predetermined 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 Institute applied for reimbursement of certain expenses related to the COVID-19 pandemic under Assistance Listing 97.036, Federal Emergency Management Agency (FEMA) Public Assistance through the State of Massachusetts. Expenditures are reflected in the Schedules in the year in which a project application is obligated, and expenses associated with those funds have been incurred. The Schedules thus include $789,971 of expenditures incurred in fiscal years 2020, 2021, or 2022, for projects which were obligated in fiscal year 2023.