Audit 313529

Title: NOTE 3 FEDERAL STUDENT LOAN PROGRAMS Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR EXPENDITURES OF FEDERAL AWARDS Expenditures in the Schedule are determined using the cost accounting principles and procedures set forth in OMB Circular A-21, Cost Principles for Educational Institutions or in Uniform Guidance, as applicable, wherein, certain expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Expenditures for student financial aid programs include the federal share of students Federal Supplemental Educational Opportunity Grant (FSEOG) program grants and Federal Work Study (FWS) program earnings, certain other federal financial aid for students and administrative cost allowances, where applicable. Expenditures for nonfinancial aid awards include indirect costs, related primarily to facilities operation and maintenance and general, divisional and departmental administrative services, which are allocated to direct cost objectives (including federal awards) based on negotiated formulas commonly referred to as facilities and administrative cost rates. Facilities and administrative costs allocated to such awards for the year ended June 30, 2022, were based on predetermined fixed rates negotiated with the University's cognizant federal agency. The University has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The federal student loan programs listed subsequently are administered directly by the University and the balances and transactions relating to the programs are included in the University's financial statements. Federal expenditures reported on the face of the Schedule include loans outstanding at the beginning of the year, loans made during the year, loan cancellations, interest subsidies and administrative expenses. The balance of loans outstanding at June 30, 2022, consists of: Number/Program Name/Outstanding Balance at June 30, 2022: 84.038/Federal Perkins Loan/$4,935,037; 93.364/Nursing Student Loans/$931,695; 93.342/Health Profession Student Loans/$759,711; 93.264/Nurse Faculty Loan Programs/$973,304 Due to the expiration of the Federal Perkins Loan Program on September 30, 2017, the University did not disburse any Perkins loans to students during the year ended June 30, 2022. Schools have the option of continuing to collect on outstanding loan balance or can voluntarily liquidate the program. The University has no current plans to begin the Perkins liquidation process. However, the University is required to periodically return excess cash on hand from the program to the Department of Education. The University also participates in the Federal Direct Student Loans (Direct Loans) Program (CFDA Number 84.268) of the Department of Education, which includes subsidized and unsubsidized Federal Stafford Loans and Federal PLUS Loans. Under the Direct Loans Program, the University is responsible only for certain administrative duties; accordingly, the disbursements under the Direct Loans Program and the outstanding loan balances are excluded from the financial statements of the University.

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR EXPENDITURES OF FEDERAL AWARDS Expenditures in the Schedule are determined using the cost accounting principles and procedures set forth in OMB Circular A-21, Cost Principles for Educational Institutions or in Uniform Guidance, as applicable, wherein, certain expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Expenditures for student financial aid programs include the federal share of students Federal Supplemental Educational Opportunity Grant (FSEOG) program grants and Federal Work Study (FWS) program earnings, certain other federal financial aid for students and administrative cost allowances, where applicable. Expenditures for nonfinancial aid awards include indirect costs, related primarily to facilities operation and maintenance and general, divisional and departmental administrative services, which are allocated to direct cost objectives (including federal awards) based on negotiated formulas commonly referred to as facilities and administrative cost rates. Facilities and administrative costs allocated to such awards for the year ended June 30, 2022, were based on predetermined fixed rates negotiated with the University's cognizant federal agency. The University has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal award activity of the University of South Carolina (the University) under programs of the federal government for the year ended June 30, 2022, and is presented on the cash 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). Because the Schedule presents only a selected portion of the operations of the University, it is not intended to and does not present the financial position, changes in net position, or cash flows of the University.

Title: NOTE 4 CONTINGENCIES Accounting Policies: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOR EXPENDITURES OF FEDERAL AWARDS Expenditures in the Schedule are determined using the cost accounting principles and procedures set forth in OMB Circular A-21, Cost Principles for Educational Institutions or in Uniform Guidance, as applicable, wherein, certain expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Expenditures for student financial aid programs include the federal share of students Federal Supplemental Educational Opportunity Grant (FSEOG) program grants and Federal Work Study (FWS) program earnings, certain other federal financial aid for students and administrative cost allowances, where applicable. Expenditures for nonfinancial aid awards include indirect costs, related primarily to facilities operation and maintenance and general, divisional and departmental administrative services, which are allocated to direct cost objectives (including federal awards) based on negotiated formulas commonly referred to as facilities and administrative cost rates. Facilities and administrative costs allocated to such awards for the year ended June 30, 2022, were based on predetermined fixed rates negotiated with the University's cognizant federal agency. The University has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The auditee did not use the de minimis cost rate. The University receives funds under various federal grant programs, and such awards are to be expended in accordance with the provisions of the various grants. Compliance with the grants is subject to audit by various government agencies which may impose sanctions in the event of noncompliance. Management believes that they have complied with all aspects of the various grant provisions, and the results of adjustments, if any, relating to such audits would not have any material financial impact.