Audit 370219

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, 2025. 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 Texas Grant Management Standards (“TxGMS”). 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 $1,216,455, respectively, as of May 31, 2025. The University has followed the procedures outlined in the Department of Education Federal Student Aid Assignment and Liquidation Guide. The audit of Perkins assignment and liquidation processes were included in the University's Single Audit as of May 31, 2024. The completion of Perkins close out was covered in the University’s Single Audit as of May 31, 2025. 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. The University is currently unaware of significant contingent liabilities related to regulations governing the respective grants.