Audit 42187

FY End
2022-06-30
Total Expended
$131.08M
Findings
2
Programs
13
Organization: Johnson & Wales University (RI)
Year: 2022 Accepted: 2023-03-16
Auditor: Rsm US LLP

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
49644 2022-001 Significant Deficiency - L
626086 2022-001 Significant Deficiency - L

Contacts

Name Title Type
PD97FDSYSTH6 Denise Zervas Auditee
4015985093 Dan Bonnette Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances 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: Y Rate Explanation: The University has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The amount of loans advanced during the year to students and parents under the Federal Direct Loan Program was $83,368,589. The University is responsible for the performance of certain administrative duties with respect to the Federal Direct Student Loan Program. These distributions and the related funding sources are not included in the Universitys financial statements.The Federal Perkins Loan Program is administered directly by the University and balances and transactions related to this program are included in the Universitys basic financial statements. Loans outstanding at the beginning of the year, loans made during the year and the administrative cost allowance are included in the federal expenditures presented in the Schedule. Loans outstanding at June 30, 2022 under the revolving Federal Perkins Loan Program under Federal Assistance Listing number 84.038 totaled $5,489,624. There were no new loans awarded and no administrative cost allowance during the year ended June 30, 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: Y Rate Explanation: The University has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards and North Carolina State Awards (the Schedule) includes the federal award activity, as well as the award activity with the State of North Carolina, of Johnson & Wales University (the University) under programs of the federal government and the State of North Carolina for the year ended June 30, 2022. The information in this 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 North Carolina Needs-Based Scholarship Program. 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 assets, or cash flows of the University.For purposes of the Schedule, federal awards include all grants, contracts and similar agreements entered into directly between the University, and agencies and departments of the federal government and all subawards to the University by nonfederal organizations pursuant to federal grants, contracts, and similar agreements.
Title: Reconciliation to Financial Statements - HEERF 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: Y Rate Explanation: The University has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Higher Educational Emergency Relief Fund: Institutional Portion (ALN 84.425F): Revenue recognized in the financial statements for the year ended June 30, 2022 $18,241,787 2021 lost revenue which was recorded as revenue for the year ended June 30, 2022, however included in the Schedule for the year ended June 30, 2021. (18,241,787) Amount recognized in the Schedule $- Higher Educational Emergency Relief Fund: Strengthening Intuitions Program (ALN 84.425M): Revenue recognized in the financial statements for the year ended June 30, 2022 $1,619,565 2021 lost revenue which was recorded as revenue for the year ended June 30, 2022, however included in the Schedule for the year ended June 30, 2021. (1,619,565) Amount recognized in the Schedule $-
Title: Reconciliation to Financial Statements - COVID-19 Disaster Grants - Public 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: Y Rate Explanation: The University has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures totaling $898,335 were incurred during the year ended June 30, 2021. The federal agency approved the Universitys application for reimbursement of these expenditures during the year ended June 30, 2022. As such the expenditures are included in the Schedule for the year ended June 30, 2022.
Title: Sub-recipients 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: Y Rate Explanation: The University has elected to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The University did not pass federal funds through to sub-recipients during the year ended June 30, 2022.

Finding Details

Finding No. 2022-001 ? Higher Education Emergency Relief Fund (HEERF) Reporting Federal Agency: U.S. Department of Education (DOE) Program: COVID-19 Education Stabilization Fund: ALN: 84.425 Criteria: Reporting requirements to the DOE state that the institutional portion of HEERF is reported by quarter in the quarter the funds are drawn from the G5 system and reported for the allowable categories under the grant. The reports filed should include all information about expenditures incurred or lost revenues claimed under the grant. Condition: Amounts reported for the institutional portion by the University were originally reported in the incorrect column for the Strengthening Institutions Program. Certain amounts were also reported in the wrong category (misclassified). Questioned Costs: None. Prevalence: Identified in 1 out of 2 institutional quarterly reports tested. The sample was not intended to be, and was not, a statistically valid sample. Effect: Incorrect amounts by program and improper classifications were reported to the DOE. Improper reporting could result in the DOE withholding payments to the University. Cause: Changes to the program rules, regulations, and reporting for the HEERF programs were evolving throughout the different phases of the program. This issue is the result of improper tracking of those changes as they were occurring which resulted in errors in classification in the original filing. The reporting of certain costs in the incorrect column for the Strengthening Institutions Program was an oversight. Recommendation: We recommend the University amend the incorrect reports. The Federal funding for this program has ended. If the DOE should add additional funding or create new or similar programs, we recommend that management implement a control to regularly monitor and manage changes to rules and regulations promulgated by the DOE. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding, and corrective measures have been taken.
Finding No. 2022-001 ? Higher Education Emergency Relief Fund (HEERF) Reporting Federal Agency: U.S. Department of Education (DOE) Program: COVID-19 Education Stabilization Fund: ALN: 84.425 Criteria: Reporting requirements to the DOE state that the institutional portion of HEERF is reported by quarter in the quarter the funds are drawn from the G5 system and reported for the allowable categories under the grant. The reports filed should include all information about expenditures incurred or lost revenues claimed under the grant. Condition: Amounts reported for the institutional portion by the University were originally reported in the incorrect column for the Strengthening Institutions Program. Certain amounts were also reported in the wrong category (misclassified). Questioned Costs: None. Prevalence: Identified in 1 out of 2 institutional quarterly reports tested. The sample was not intended to be, and was not, a statistically valid sample. Effect: Incorrect amounts by program and improper classifications were reported to the DOE. Improper reporting could result in the DOE withholding payments to the University. Cause: Changes to the program rules, regulations, and reporting for the HEERF programs were evolving throughout the different phases of the program. This issue is the result of improper tracking of those changes as they were occurring which resulted in errors in classification in the original filing. The reporting of certain costs in the incorrect column for the Strengthening Institutions Program was an oversight. Recommendation: We recommend the University amend the incorrect reports. The Federal funding for this program has ended. If the DOE should add additional funding or create new or similar programs, we recommend that management implement a control to regularly monitor and manage changes to rules and regulations promulgated by the DOE. View of Responsible Officials and Planned Corrective Actions: Management agrees with the finding, and corrective measures have been taken.