Audit 32554

Title: Federal Student Loan Programs 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 University has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. At May 31, 2022, Graceland University had $390,438 outstanding under the Federal Perkins Loan Program (ALN 84.038). The Federal Perkins Loan Program did not include a federal capital contribution or match in the current year. There were no Federal Perkins loans issued during the year. In addition to normal repayments from students, the outstanding loans under the Federal Perkins Loan Program were reduced by approximately $929,000 due to loans that were assigned to the U.S. Department of Education by the University in the year ended May 31, 2022. During the fiscal year ended May 31, 2022, Graceland University issued new loans to students under the Federal Direct Loan Program (FDLP). The loan program includes subsidized and unsubsidized direct loans, Parent PLUS loans, and PLUS loans for graduate and professional students. The value of loans issued for the FDLP is based on disbursed amounts. The loan amounts issued during the year are disclosed on the Schedule. Graceland University is responsible only for the performance of certain administrative duties with respect to the federally guaranteed student loan programs and, accordingly, balances and transactions relating to these loan programs are not included in Graceland Universitys basic consolidated financial statements. Therefore, it is not practicable to determine the balance of loans outstanding to students and former students of Graceland University at May 31, 2022.

Title: Basis of Presentation 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 University has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Graceland University and Subsidiary's consolidated financial statements include Graceland College Center for Professional Development and Lifelong Learning, Inc. Center). The schedule of expenditures of federal awards does not include the Center, which is not subject to compliance requirements described in the OMB Compliance Supplement. The accompanying schedule of expenditures of federal awards (Schedule) includes the federal grant activity of Graceland University (the University) under programs of the federal government for the year ended May 31, 2022. 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). Because the schedule presents only a selected portion of the operations of Graceland University, it is not intended to and does not present the financial position, changes in net assets, or cash flows of Graceland University.

Title: Subrecipients 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 University has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Of the federal expenditures presented in this schedule, the University provided no federal awards to subrecipients.