FAC Explorer

Audit 8642

FY End
2023-06-30
Total Expended
$36.40M
Findings
4
Programs
12
Organization: The Art Institute of Chicago (IL)
Year: 2023 Accepted: 2023-12-28
Auditor: Mitchell Titus

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
6667 2023-001 Significant Deficiency - N
6668 2023-001 Significant Deficiency - N
583109 2023-001 Significant Deficiency - N
583110 2023-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $31.07M Yes 1
84.063 Federal Pell Grant Program $2.85M Yes 1
84.038 Federal Perkins Loan Program - Federal Capital Contributions $1.05M Yes 0
84.033 Federal Work-Study Program $545,549 Yes 0
84.425 Covid-19 - Education Stabilization Fund $394,181 - 0
84.007 Federal Supplemental Educational Opportunity Grants $278,210 Yes 0
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $76,039 - 0
47.079 Office of International Science and Engineering $69,252 - 0
45.149 Promotion of the Humanities_division of Preservation and Access $38,434 - 0
45.024 Promotion of the Arts_grants to Organizations and Individuals $20,000 - 0
94.007 Program Development and Innovation Grants $3,600 - 0
43.001 Science $282 - 0

Contacts

Name Title Type
R3T3SZHLYJY7 Chris Murray Auditee
3124994063 Uzma Malik Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activities of The Art Institute of Chicago (the Institute) under programs of the federal government for the year ended June 30, 2023. 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 the Institute, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Institute. Basis of Accounting: The Schedule includes all federal grants to the Institute which had activity during the year ended June 30, 2023. This Schedule has been prepared on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: De Minimis Indirect Cost Rate: The Institute has a federally approved indirect cost rate. Therefore, the 10% de minimis indirect cost rate as allowed under the Uniform Guidance is not applicable for fiscal year 2023. The Institute did not charge any indirect costs to any of its federal programs for the year ended June 30, 2023. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activities of The Art Institute of Chicago (the Institute) under programs of the federal government for the year ended June 30, 2023. 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 the Institute, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Institute. The U.S. Department of Education has been designated as the Institute’s oversight agency for the Single Audit. The Schedule of Expenditures of Federal Awards includes programs related to the following Federal agencies: U.S. Department of Education - Student Financial Assistance Cluster and Education Stabilization Fund; National Endowment for the Arts - Promotion of the Arts Grants to Organizations and Individuals; National Endowment for the Humanities - Promotion of the Humanities Division of Preservations and Access; Corporation for National and Community Services - Program Development and Innovation Grants; Department of Health and Human Services - Substance Abuse and Mental Health Services Projects of Regional and National Significance; National Aeronautics and Space Administration - Science; and National Science Foundation - Office of International Science and Engineering.
Title: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activities of The Art Institute of Chicago (the Institute) under programs of the federal government for the year ended June 30, 2023. 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 the Institute, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Institute. Basis of Accounting: The Schedule includes all federal grants to the Institute which had activity during the year ended June 30, 2023. This Schedule has been prepared on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: De Minimis Indirect Cost Rate: The Institute has a federally approved indirect cost rate. Therefore, the 10% de minimis indirect cost rate as allowed under the Uniform Guidance is not applicable for fiscal year 2023. The Institute did not charge any indirect costs to any of its federal programs for the year ended June 30, 2023. (a) Basis of Accounting: The Schedule includes all federal grants to the Institute which had activity during the year ended June 30, 2023. This Schedule has been prepared on the accrual basis of accounting. (b) De Minimis Indirect Cost Rate: The Institute has a federally approved indirect cost rate. Therefore, the 10% de minimis indirect cost rate as allowed under the Uniform Guidance is not applicable for fiscal year 2023. The Institute did not charge any indirect costs to any of its federal programs for the year ended June 30, 2023.
Title: NOTE 3 LOANS OUTSTANDING Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activities of The Art Institute of Chicago (the Institute) under programs of the federal government for the year ended June 30, 2023. 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 the Institute, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Institute. Basis of Accounting: The Schedule includes all federal grants to the Institute which had activity during the year ended June 30, 2023. This Schedule has been prepared on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: De Minimis Indirect Cost Rate: The Institute has a federally approved indirect cost rate. Therefore, the 10% de minimis indirect cost rate as allowed under the Uniform Guidance is not applicable for fiscal year 2023. The Institute did not charge any indirect costs to any of its federal programs for the year ended June 30, 2023. The federal student loan programs are administered directly by the Institute, and balances and transactions relating to these programs are included in the Institute’s basic financial statements. The Federal Perkins Loans outstanding at the beginning of the year which amounted to $1,050,181 are included in the federal expenditures presented in the Schedule, in accordance with the Uniform Guidance. There were no additional loans made in fiscal year 2023. The balance of loans outstanding at June 30, 2023, consists of $616,298 for the Federal Perkins Loan Program, Federal Assistance Listing #84.038.
Title: NOTE 4 SUBSEQUENT EVENTS Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activities of The Art Institute of Chicago (the Institute) under programs of the federal government for the year ended June 30, 2023. 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 the Institute, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Institute. Basis of Accounting: The Schedule includes all federal grants to the Institute which had activity during the year ended June 30, 2023. This Schedule has been prepared on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: De Minimis Indirect Cost Rate: The Institute has a federally approved indirect cost rate. Therefore, the 10% de minimis indirect cost rate as allowed under the Uniform Guidance is not applicable for fiscal year 2023. The Institute did not charge any indirect costs to any of its federal programs for the year ended June 30, 2023. Subsequent events have been evaluated through November 8, 2023, which is the date the schedule was available for issuance.

Finding Details

Finding 2023-001
Finding: 2023-001 Inadequate Control over Return of Title IV Funds Finding Type: Noncompliance, Significant Deficiency in Internal Control Identification of the Federal Program(s): U.S. Department of Education: #84.063 – Federal Pell Grant Program #84.268 – Federal Direct Student Loans (both part of the Student Financial Assistance Cluster) Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with paragraph 34 CFR 668.22(e). Per 34 CFR 668.22(j)(1), an institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section. Condition: The institution did not accurately calculate the return of Title IV funds and return the funds in a timely manner, as required by the federal regulations. Cause: The Institute did not consistently implement its internal controls to ensure that the return of Title IV funds was correctly calculated and reported in a timely manner. Effect: The inaccurate calculation and late return of the Title IV funds is a violation of the federal regulations and could result in potential questioned costs. Questioned Costs: None. Context: The R2T4 refers to the calculation required when a recipient of Title IV aid withdraws from an institution during a payment period/period of enrollment in which the recipient began attendance. Of a sample of 11 students who withdrew from the Institute during the fiscal year under audit, we noted four exceptions, as follows: In two instances, the amounts per R2T4 did not agree with the amounts returned to the grantor and resulted in both an overpayment and underpayment of $1,000 by the Institute. In two instances, the R2T4 process was completed late based on the student withdrawal dates of 2/27/23 and 3/29/23, respectively. In both instances, the R2T4 forms were not completed until 6/27/23, which was 75 days and 45 days late, respectively. Identification of repeated finding: None. Recommendation: We recommend that the Institute adheres to the federal guidance as required per 34 CFR 668.22(e) and (j) relating to student withdrawals to ensure accurate calculation and timely return of Title IV funds to the U.S. Department of Education. View of Responsible Officials and Corrective Action Plan: Client agreed with the finding and recommendation. See management’s corrective action plan on page 14.
Finding 2023-001
Finding: 2023-001 Inadequate Control over Return of Title IV Funds Finding Type: Noncompliance, Significant Deficiency in Internal Control Identification of the Federal Program(s): U.S. Department of Education: #84.063 – Federal Pell Grant Program #84.268 – Federal Direct Student Loans (both part of the Student Financial Assistance Cluster) Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with paragraph 34 CFR 668.22(e). Per 34 CFR 668.22(j)(1), an institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section. Condition: The institution did not accurately calculate the return of Title IV funds and return the funds in a timely manner, as required by the federal regulations. Cause: The Institute did not consistently implement its internal controls to ensure that the return of Title IV funds was correctly calculated and reported in a timely manner. Effect: The inaccurate calculation and late return of the Title IV funds is a violation of the federal regulations and could result in potential questioned costs. Questioned Costs: None. Context: The R2T4 refers to the calculation required when a recipient of Title IV aid withdraws from an institution during a payment period/period of enrollment in which the recipient began attendance. Of a sample of 11 students who withdrew from the Institute during the fiscal year under audit, we noted four exceptions, as follows: In two instances, the amounts per R2T4 did not agree with the amounts returned to the grantor and resulted in both an overpayment and underpayment of $1,000 by the Institute. In two instances, the R2T4 process was completed late based on the student withdrawal dates of 2/27/23 and 3/29/23, respectively. In both instances, the R2T4 forms were not completed until 6/27/23, which was 75 days and 45 days late, respectively. Identification of repeated finding: None. Recommendation: We recommend that the Institute adheres to the federal guidance as required per 34 CFR 668.22(e) and (j) relating to student withdrawals to ensure accurate calculation and timely return of Title IV funds to the U.S. Department of Education. View of Responsible Officials and Corrective Action Plan: Client agreed with the finding and recommendation. See management’s corrective action plan on page 14.
Finding 2023-001
Finding: 2023-001 Inadequate Control over Return of Title IV Funds Finding Type: Noncompliance, Significant Deficiency in Internal Control Identification of the Federal Program(s): U.S. Department of Education: #84.063 – Federal Pell Grant Program #84.268 – Federal Direct Student Loans (both part of the Student Financial Assistance Cluster) Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with paragraph 34 CFR 668.22(e). Per 34 CFR 668.22(j)(1), an institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section. Condition: The institution did not accurately calculate the return of Title IV funds and return the funds in a timely manner, as required by the federal regulations. Cause: The Institute did not consistently implement its internal controls to ensure that the return of Title IV funds was correctly calculated and reported in a timely manner. Effect: The inaccurate calculation and late return of the Title IV funds is a violation of the federal regulations and could result in potential questioned costs. Questioned Costs: None. Context: The R2T4 refers to the calculation required when a recipient of Title IV aid withdraws from an institution during a payment period/period of enrollment in which the recipient began attendance. Of a sample of 11 students who withdrew from the Institute during the fiscal year under audit, we noted four exceptions, as follows: In two instances, the amounts per R2T4 did not agree with the amounts returned to the grantor and resulted in both an overpayment and underpayment of $1,000 by the Institute. In two instances, the R2T4 process was completed late based on the student withdrawal dates of 2/27/23 and 3/29/23, respectively. In both instances, the R2T4 forms were not completed until 6/27/23, which was 75 days and 45 days late, respectively. Identification of repeated finding: None. Recommendation: We recommend that the Institute adheres to the federal guidance as required per 34 CFR 668.22(e) and (j) relating to student withdrawals to ensure accurate calculation and timely return of Title IV funds to the U.S. Department of Education. View of Responsible Officials and Corrective Action Plan: Client agreed with the finding and recommendation. See management’s corrective action plan on page 14.
Finding 2023-001
Finding: 2023-001 Inadequate Control over Return of Title IV Funds Finding Type: Noncompliance, Significant Deficiency in Internal Control Identification of the Federal Program(s): U.S. Department of Education: #84.063 – Federal Pell Grant Program #84.268 – Federal Direct Student Loans (both part of the Student Financial Assistance Cluster) Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV grant or loan assistance that the student earned as of the student's withdrawal date in accordance with paragraph 34 CFR 668.22(e). Per 34 CFR 668.22(j)(1), an institution must return the amount of Title IV funds for which it is responsible under paragraph (g) of this section as soon as possible but no later than 45 days after the date of the institution's determination that the student withdrew as defined in paragraph (l)(3) of this section. Condition: The institution did not accurately calculate the return of Title IV funds and return the funds in a timely manner, as required by the federal regulations. Cause: The Institute did not consistently implement its internal controls to ensure that the return of Title IV funds was correctly calculated and reported in a timely manner. Effect: The inaccurate calculation and late return of the Title IV funds is a violation of the federal regulations and could result in potential questioned costs. Questioned Costs: None. Context: The R2T4 refers to the calculation required when a recipient of Title IV aid withdraws from an institution during a payment period/period of enrollment in which the recipient began attendance. Of a sample of 11 students who withdrew from the Institute during the fiscal year under audit, we noted four exceptions, as follows: In two instances, the amounts per R2T4 did not agree with the amounts returned to the grantor and resulted in both an overpayment and underpayment of $1,000 by the Institute. In two instances, the R2T4 process was completed late based on the student withdrawal dates of 2/27/23 and 3/29/23, respectively. In both instances, the R2T4 forms were not completed until 6/27/23, which was 75 days and 45 days late, respectively. Identification of repeated finding: None. Recommendation: We recommend that the Institute adheres to the federal guidance as required per 34 CFR 668.22(e) and (j) relating to student withdrawals to ensure accurate calculation and timely return of Title IV funds to the U.S. Department of Education. View of Responsible Officials and Corrective Action Plan: Client agreed with the finding and recommendation. See management’s corrective action plan on page 14.