FAC Explorer

Audit 303962

FY End
2023-07-31
Total Expended
$244.09M
Findings
2
Programs
19
Organization: Pepperdine University (CA)
Year: 2023 Accepted: 2024-04-18
Auditor: Pricewaterhousecoopers LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
393769 2023-001 - - N
970211 2023-001 - - N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $230.34M Yes 1
84.038 Federal Perkins Loans As of August 1, 2022 $5.69M Yes 0
84.063 Federal Pell Grant Program $4.01M Yes 0
84.033 Federal Work-Study Program $1.21M Yes 0
84.007 Federal Supplemental Educational Opportunity Grants $762,265 Yes 0
94.006 Americorps $197,911 - 0
94.011 Foster Grandparent Program $100,791 - 0
47.076 Education and Human Resources $90,489 - 0
12.420 Military Medical Research and Development $83,669 - 0
93.855 Allergy, Immunology and Transplantation Research $82,107 - 0
16.320 Services for Trafficking Victims $65,889 - 0
21.008 Low Income Taxpayer Clinics $56,842 - 0
93.866 Aging Research $26,848 - 0
93.307 Minority Health and Health Disparities Research $23,627 - 0
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $12,689 - 0
47.074 Biological Sciences $4,384 - 0
45.129 Promotion of the Humanities_federal/state Partnership $3,196 - 0
84.038 New Loans Issued During 2023 $0 Yes 0
84.038 Administrative Cost Allowance $0 Yes 0

Contacts

Name Title Type
NHBMUW819YE7 Greg G. Ramirez Auditee
3105064324 Will Cobb Auditor
No contacts on file

Notes to SEFA

Title: Federal Direct Loan Program Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal award activity of Pepperdine University and its subsidiaries (the “University”) and is presented on the accrual basis of accounting. The Schedule presents only a selected portion of the operations of the University, and because of this, it is not intended to and does not present the financial position, changes in net assets, and cash flows of the University. 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 (Uniform Guidance); therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in, the preparation of the consolidated financial statements. Negative amounts represent adjustments to awards reported in prior years in the normal course of business. For the purposes of the Schedule, federal awards include all grants, contracts, and similar agreements entered into directly and indirectly between the University and agencies and departments of the federal government. Assistance Listing Numbers and pass-through grant numbers are provided in the Schedule. De Minimis Rate Used: N Rate Explanation: The University has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The University has an approved predetermined indirect cost rate at 64.0% of total direct costs on campus and 22.0% of total direct costs off campus, and a separate fringe benefit rate of 30% of salaries and wages for both on and off campus effective through July 31, 2023. The University processed $230,342,737 in new loans under the Federal Direct Loan Program, Assistance Listing Number 84.268. Loan amounts include Federal Stafford Loans, Federal Direct Parent PLUS Loans for Undergraduate Students, and Federal Direct PLUS Loans for Graduate Students. The University is responsible only for the performance of certain administrative duties with respect to the Federal Direct Loan Program. Accordingly, balances and transactions relating to these loan programs are not included in the University’s consolidated financial statements. Therefore, it is not practical to determine the balance of loans outstanding to students and former students of the University at July 31, 2023.
Title: Perkins Loan Program Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal award activity of Pepperdine University and its subsidiaries (the “University”) and is presented on the accrual basis of accounting. The Schedule presents only a selected portion of the operations of the University, and because of this, it is not intended to and does not present the financial position, changes in net assets, and cash flows of the University. 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 (Uniform Guidance); therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in, the preparation of the consolidated financial statements. Negative amounts represent adjustments to awards reported in prior years in the normal course of business. For the purposes of the Schedule, federal awards include all grants, contracts, and similar agreements entered into directly and indirectly between the University and agencies and departments of the federal government. Assistance Listing Numbers and pass-through grant numbers are provided in the Schedule. De Minimis Rate Used: N Rate Explanation: The University has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The University has an approved predetermined indirect cost rate at 64.0% of total direct costs on campus and 22.0% of total direct costs off campus, and a separate fringe benefit rate of 30% of salaries and wages for both on and off campus effective through July 31, 2023. The Federal Perkins Loan Program is administered directly by the University and balances and transactions relating to these programs are included on the University’s consolidated financial statements. For the year ended July 31, 2023, the University did not advance any loans for the Federal Perkins Loan Program, Assistance Listing Number 84.038. The Perkins Loan Program had an outstanding balance at July 31, 2023 of $3,991,231. For the year ended July 31, 2023, the University cancelled $38,942 Perkins Loans, which will not be reimbursed by the program but instead will be offset against future repayment if the program were to be suspended. The Federal Capital Contribution to the Perkins Loan Program for the year ended July 31, 2023 was $0.
Title: Commingled Assistance Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal award activity of Pepperdine University and its subsidiaries (the “University”) and is presented on the accrual basis of accounting. The Schedule presents only a selected portion of the operations of the University, and because of this, it is not intended to and does not present the financial position, changes in net assets, and cash flows of the University. 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 (Uniform Guidance); therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in, the preparation of the consolidated financial statements. Negative amounts represent adjustments to awards reported in prior years in the normal course of business. For the purposes of the Schedule, federal awards include all grants, contracts, and similar agreements entered into directly and indirectly between the University and agencies and departments of the federal government. Assistance Listing Numbers and pass-through grant numbers are provided in the Schedule. De Minimis Rate Used: N Rate Explanation: The University has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The University has an approved predetermined indirect cost rate at 64.0% of total direct costs on campus and 22.0% of total direct costs off campus, and a separate fringe benefit rate of 30% of salaries and wages for both on and off campus effective through July 31, 2023. The California Student Aid Commission (CSAC) administers the State Cal Grants A and B Programs, selects the student recipients of these grant awards, and provides funds to participating institutions for disbursement. Federal Temporary Assistance for Needy Families (TANF) funds, Assistance Listing Number 93.558, from the United States Department of Health and Human Services may comprise up to approximately 12% of the total funding for these Cal Grant awards. In fiscal year 2023, the University received Cal Grants A and B funds in the amount of $4,155,576. However, CSAC is unable to determine the exact amount of TANF funds, if any, represented in those awards. Therefore, the Schedule does not include State Cal Grants A and B awards.

Finding Details

Finding 2023-001
Enrollment Reporting Cluster: Student Financial Assistance Cluster Sponsoring Agency: Department of Education (ED) Award Names: Federal Pell Grant Program; Federal Direct Student Loans Assistance Listing Title: Federal Pell Grant Program; Federal Direct Student Loans ALN Number: 84.063 and 84.268 Award Period: 2022-2023 Pass-through Entity: Not applicable Criteria: 34 CFR section 690.83(b)(2); 34 CFR section 674.19; 34 CFR 685.309 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. (2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, an institution must notify the Secretary within 30 days after the date the school discovers that— (i) A loan under title IV of the HEA or the Act was made to a student who was enrolled or accepted for enrollment at the institution, and the student has 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 (ii) A student who is enrolled at the institution and who received a loan under title IV of the HEA or the Act has changed his or her permanent address. Condition: In testing the University’s conformity with compliance requirements for enrollment reporting, 5 of the 25 students sampled had a status of “withdrawn” instead of “graduated” on the National Student Loan Data System (NSLDS) site. Cause: The University utilizes the services of National Student Clearinghouse (NSC) to assist in the reporting of enrollment status changes to the NSLDS. For students that had a gap in enrollment and subsequently graduated, the University reported the students to NSC as graduated. However, the NSC system recognized these students as withdrawn regardless of whether they withdrew or graduated. When the reporting from NSC to NSLDS occurred, it was based on the information recognized by NSC, and as such these students were reported as withdrawn rather than graduated. The University did not have controls in place to identify that the incorrect status was reported by NSC. Effect: Changes in student statuses may not be updated accurately. As the student status determines loan eligibility and repayment status, the student loan limits and repayment status may not be updated accurately. Questioned Costs: None. Recommendation: We recommend the University implement a control to confirm that the information included on the NSLDS site is both accurate and timely when submitted by their third party servicer. 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.
Finding 2023-001
Enrollment Reporting Cluster: Student Financial Assistance Cluster Sponsoring Agency: Department of Education (ED) Award Names: Federal Pell Grant Program; Federal Direct Student Loans Assistance Listing Title: Federal Pell Grant Program; Federal Direct Student Loans ALN Number: 84.063 and 84.268 Award Period: 2022-2023 Pass-through Entity: Not applicable Criteria: 34 CFR section 690.83(b)(2); 34 CFR section 674.19; 34 CFR 685.309 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. (2) Unless it expects to submit its next updated enrollment report to the Secretary within the next 60 days, an institution must notify the Secretary within 30 days after the date the school discovers that— (i) A loan under title IV of the HEA or the Act was made to a student who was enrolled or accepted for enrollment at the institution, and the student has 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 (ii) A student who is enrolled at the institution and who received a loan under title IV of the HEA or the Act has changed his or her permanent address. Condition: In testing the University’s conformity with compliance requirements for enrollment reporting, 5 of the 25 students sampled had a status of “withdrawn” instead of “graduated” on the National Student Loan Data System (NSLDS) site. Cause: The University utilizes the services of National Student Clearinghouse (NSC) to assist in the reporting of enrollment status changes to the NSLDS. For students that had a gap in enrollment and subsequently graduated, the University reported the students to NSC as graduated. However, the NSC system recognized these students as withdrawn regardless of whether they withdrew or graduated. When the reporting from NSC to NSLDS occurred, it was based on the information recognized by NSC, and as such these students were reported as withdrawn rather than graduated. The University did not have controls in place to identify that the incorrect status was reported by NSC. Effect: Changes in student statuses may not be updated accurately. As the student status determines loan eligibility and repayment status, the student loan limits and repayment status may not be updated accurately. Questioned Costs: None. Recommendation: We recommend the University implement a control to confirm that the information included on the NSLDS site is both accurate and timely when submitted by their third party servicer. 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.