Title: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Policies: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Schedule of Expenditures of Federal and State Awards (the “Schedule”) includes all federal and state awards to Baylor University (the “University”) that had expenditures during the year ended May 31, 2024. This Schedule has been prepared on the accrual basis of accounting, which is described in Note 1 to the University’s financial statements. The information in the 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 (“Uniform Guidance”) and the State of Texas Uniform Grant Management Standards (“UGMS”) Single Audit Circular.
Noncash Financial Awards
The University receives noncash financial awards. The amounts reflected in the Schedule for Nursing Student Loan Programs represent loans made during the year that were funded through the repayment of existing loans. Loans outstanding at the beginning of the year in addition to loans made during the year are included in the Schedule of Expenditures of Federal Awards according to §200.502(b) of the Uniform Guidance. The U.S. Congress did not renew the Perkins program after September 30, 2017, and no new loans are permitted after June 30, 2018. As of May 31, 2024, the University has exercised the option to liquidate the loan portfolio and has assigned remaining outstanding loans to the Department of Education. Perkins and Nursing Student Loan Programs outstanding loan balances were $0 and $909,003, respectively, as of May 31,
2024.
The University utilizes a third-party servicer, Educational Computer Systems, Inc. (“ECSI”), for student loan repayment and collection services. ECSI obtained a compliance examination from an Independent Certified Public Accountant for the year ended June 30, 2024 in accordance with the U.S. Department of Education’s Audit Guide, Audits of Federal Student Financial Assistance Programs at Participating Institutions and Institution Servicers, relative to participation in the Federal Student Financial Assistance Programs. The compliance examination report indicated no findings for the compliance requirements tested.
The amount for the Direct Loan Program represents new federal educational loans made by the Department of Education to students and/or parents in the form of Subsidized, Unsubsidized, and PLUS Loans.
The College Access Loan represents new state educational loans made by the Texas Higher Education Coordinating Board (the “THECB”) to students who apply with the THECB.
Relationship to Federal and State Financial Reports
Amounts reported in the accompanying Schedule may not agree with the amounts reported in the related federal and state financial reports filed with grantor agencies because of accruals that would be included in the next report filed with the agencies.
The amounts included in the Schedule for the Tuition Equalization Grant Program are included for purposes of additional information. These expenditures are not subject to audit under the provisions of the Texas Uniform Grant Management Standards but are reported upon under the agreed-upon procedures in accordance with the THECB.
Commitments and Contingencies
The University participates in several federal and state grant programs, which are governed by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit and adjustment by the grantor agencies. In the opinion of the administration, there are no significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants.
De Minimis Rate Used: N
Rate Explanation: The University uses the applicable federally negotiated facilities and administrative cost rate and elected not to use the ten percent de minimis indirect cost rate allowed under the Uniform Guidance.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying Schedule of Expenditures of Federal and State Awards (the “Schedule”) includes all federal and state awards to Baylor University (the “University”) that had expenditures during the year ended May 31, 2024. This Schedule has been prepared on the accrual basis of accounting, which is described in Note 1 to the University’s financial statements. The information in the 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 (“Uniform Guidance”) and the State of Texas Uniform Grant Management Standards (“UGMS”) Single Audit Circular.
Noncash Financial Awards
The University receives noncash financial awards. The amounts reflected in the Schedule for Nursing Student Loan Programs represent loans made during the year that were funded through the repayment of existing loans. Loans outstanding at the beginning of the year in addition to loans made during the year are included in the Schedule of Expenditures of Federal Awards according to §200.502(b) of the Uniform Guidance. The U.S. Congress did not renew the Perkins program after September 30, 2017, and no new loans are permitted after June 30, 2018. As of May 31, 2024, the University has exercised the option to liquidate the loan portfolio and has assigned remaining outstanding loans to the Department of Education. Perkins and Nursing Student Loan Programs outstanding loan balances were $0 and $909,003, respectively, as of May 31,
2024.
The University utilizes a third-party servicer, Educational Computer Systems, Inc. (“ECSI”), for student loan repayment and collection services. ECSI obtained a compliance examination from an Independent Certified Public Accountant for the year ended June 30, 2024 in accordance with the U.S. Department of Education’s Audit Guide, Audits of Federal Student Financial Assistance Programs at Participating Institutions and Institution Servicers, relative to participation in the Federal Student Financial Assistance Programs. The compliance examination report indicated no findings for the compliance requirements tested.
The amount for the Direct Loan Program represents new federal educational loans made by the Department of Education to students and/or parents in the form of Subsidized, Unsubsidized, and PLUS Loans.
The College Access Loan represents new state educational loans made by the Texas Higher Education Coordinating Board (the “THECB”) to students who apply with the THECB.
Relationship to Federal and State Financial Reports
Amounts reported in the accompanying Schedule may not agree with the amounts reported in the related federal and state financial reports filed with grantor agencies because of accruals that would be included in the next report filed with the agencies.
The amounts included in the Schedule for the Tuition Equalization Grant Program are included for purposes of additional information. These expenditures are not subject to audit under the provisions of the Texas Uniform Grant Management Standards but are reported upon under the agreed-upon procedures in accordance with the THECB.
Commitments and Contingencies
The University participates in several federal and state grant programs, which are governed by various rules and regulations of the grantor agencies. Costs charged to the respective grant programs are subject to audit and adjustment by the grantor agencies. In the opinion of the administration, there are no significant contingent liabilities relating to compliance with the rules and regulations governing the respective grants. Facilities and Administrative Cost Rate
The University uses the applicable federally negotiated facilities and administrative cost rate and has elected not to use the ten percent de minimis indirect cost rate allowed under the Uniform Guidance.