Title: BASIS OF PRESENTATION
Accounting Policies: Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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 receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant and contract activity of Polytechnic University of Puerto Rico, Inc. (the University) for the year ended July 31, 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 (the Uniform Guidance). Therefore, some amounts presented in the Schedule may differ from amounts presented in the financial statements of the University.
The Schedule presents only a selected portion of the fiscal activities of the University. Therefore, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the University.
Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES OF THE SCHEDULE
Accounting Policies: Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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 receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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.
Title: INDIRECT COSTS
Accounting Policies: Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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 receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
The University receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: CLUSTER PROGRAMS
Accounting Policies: Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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 receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
The Uniform Guidance defines a cluster of programs as a group of closely related programs that share common compliance requirements. According to this definition, the Federal Student Financial Assistance Programs (SFA), Research and Development Programs (R&D), and TRIO Student Support Services Programs were deemed to be cluster programs.
Title: FEDERAL STUDENT LOAN PROGRAM AND LOAN GUARANTEES
Accounting Policies: Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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 receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
The University participates in the Federal Direct Student Loan Program (Direct Loan) of the USDE. The federal student loan program is not administered directly by the University, and balances and transactions relating to this program are not included in the University's basic financial statements. Loans granted during the year are included as federal expenditures within the Schedule.
However, Direct Loans are considered a component of the student financial assistance programs of the University, as such, new loans processed during the year ended July 31, 2023, were included in the Schedule. Federal expenditures for Direct Loans are determined when loans are expended to students; accordingly, the balance of Direct Loans from previous years is not considered federal expenditures of the current year.
Title: RELATIONSHIP TO FEDERAL FINANCIAL REPORTS
Accounting Policies: Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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 receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
The regulations and guidelines governing the preparation of federal financial reports vary by federal agency and among programs administered by the same agency. Accordingly, the amounts reported in the federal financial reports do not necessarily agree with the amounts reported in the Schedule, which is prepared on the basis of accounting explained in Note 2.
The Uniform Guidance requires that federal financial reports for claims for advances and reimbursements contain information that is supported by the books and records from which the basic financial statements have been prepared. The University prepares the federal financial reports and claims for reimbursements primarily based on information from the internal accounting records of the University.
Title: ENDOWMENT FUND
Accounting Policies: Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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 receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
The University budgeted $250,000 for an endowment to support the continuation of stipends for Hispanic and low-income students' participation in undergraduate research in science, technology, engineering, and mathematics (STEM) fields. The Endowment Fund's balance as of July 31, 2023, was $1,754,730, including $250,000 in University contributions that were transferred from the programs' inception through July 31, 2021, the last year the University made the required matching contribution. As of the date the Schedule was issued, the University has not used said funds.
Title: CONTINGENCIES
Accounting Policies: Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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 receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
The University receives funds under various federal grant programs and contracts, and such awards are to be expended in accordance with the provisions of each grant. Compliance with each grant is subject to audit by various government agencies, which may impose sanctions in the event of non-compliance. Management believes that it has complied with all aspects of grants provisions and the results of adjustments, if any, relating to such audits would not have a material impact on the programs nor the accompanying Schedule.
Title: SUBSEQUENT EVENTS
Accounting Policies: Expenditures as presented on the Schedule are reported using the accrual basis of accounting. The financial transactions are recorded by the University in accordance with the terms and conditions of the grants, which are consistent with accounting principles generally accepted in the United States of America. 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 receives funding from federal government agencies for sponsored research under federal grants and contracts. These grants and contracts provide for reimbursement of indirect costs based on rates negotiated with the U.S. Department of Education (USDE), the University's cognizant federal agency. The University's indirect cost reimbursements are based on fixed rates with carryforward of under or over recoveries. The University has negotiated fixed rates for indirect costs through July 31, 2023. Accordingly, the University has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance.
Subsequent to July 31, 2023, the University:
1. Received a no-cost extension for the Higher Education Emergency Relief Funds through the fiscal year ending June 30, 2024. As of July 31, 2023, the outstanding balance in the extension amounted to $4,245,424.
2. Received from the National Security Agency (NSA) a cyber scholarship grant amounting to $213,055 effective from September 12, 2023, through December 11, 2024.
3. Received an NSA program as a subawardee from the Rochester Institute of Technology amounting to $175,495 effective from July 17, 2023, through June 30, 2025.