Audit 323586

Title: Federal Student Loan Programs Accounting Policies: (1) Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of The Reed Institute (the College) under programs of the federal government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 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 College, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the College. (2) Summary of Significant Accounting Policies Expenditures reported on the Schedule are reported on the accrual basis of accounting. 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 College has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The federal Perkins loan program is administered directly by the College, and balances and transactions relating to this program are included in the College’s basic financial statements. The basis used to determine Perkins loans expended shown on the Schedule is the amount of new loans made or received during the fiscal year plus the balance of loans from previous years for which the federal government imposes continuing compliance requirements, plus any interest subsidy, cash, or administrative cost allowance received. Federal direct student loans are made by the Secretary of Education through the Federal Direct Student Loan program and only the value of loans made during the period are considered federal awards expended during that period and are shown on the Schedule. The balance of loans outstanding at June 30, 2024 consists of: Perkins 84.038 Loans outstanding at the beginning of the fiscal year $773,705, total loans on the schedule of expenditures of federal awards $773,705, outstanding balance at June 30, 2024 $579,011; Federal direct student loans 84.268 Loans outstanding at the beginning of the fiscal year $0, new loans processed during the year $6,080,410, total loans on the schedule of expenditures of federal awards $6,080,410, outstanding balance at June 30, 2023 $0