OMB Circular A-133 Reporting Package. Saginaw Valley State University. Year ended June 30, 2009

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "OMB Circular A-133 Reporting Package. Saginaw Valley State University. Year ended June 30, 2009"

Transcription

1 OMB Circular A-133 Reporting Package Saginaw Valley State University Year ended June 30, 2009

2 Saginaw Valley State University OMB Circular A-133 Reporting Package Year ended June 30, 2009 Audited Financial Statements and Other Financial Information (Including the Schedule of Expenditures of Federal Awards)... i Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditors Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings... 33

3 Audited Financial Statements and Other Financial Information Saginaw Valley State University Years ended June 30, 2009 and 2008 with Report of Independent Auditors

4 Saginaw Valley State University Audited Financial Statements and Other Financial Information Years ended June 30, 2009 and 2008 Table of Contents Required Supplementary Information Management s Discussion and Analysis... i Report of Independent Auditors... 1 Financial Statements Statements of Net Assets... 2 Statements of Revenues, Expenses, and Changes in Net Assets... 3 Statements of Cash Flows... 4 Notes to Financial Statements... 6 Other Financial Information Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards... 26

5 i

6 ii

7 Total Net Assets Unrestricted 17.8 Restricted - Expendable 1% Invested in Capital Assets, Net of Related Debt 81.2 iii

8 iv

9 Total Revenue Other Revenue.3% Nonoperating Revenue 31.3% Operating Revenue 68.4% v

10 vi

11 vii

12 Report of Independent Auditors Board of Control Saginaw Valley State University We have audited the accompanying financial statements of Saginaw Valley State University, a component unit of the State of Michigan as of and for the years ended June 30, 2009 and 2008 and Saginaw Valley State University Foundation, a discretely presented component unit of the University, as of and for the years ended June 30, 2009 and These financial statements are the responsibility of the University s administration. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the administration, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Saginaw Valley State University and its discretely presented component unit, Saginaw Valley State University Foundation as of June 30, 2009 and 2008, and the changes in their financial position and Saginaw Valley State University s cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated August 20, 2009 on our consideration of Saginaw Valley State University s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report when considering the results of our audits Gratiot Saginaw, Michigan ph fx

13 The Management s Discussion and Analysis (MD&A) on pages i to viii is not a required part of the basic financial statements but is supplemental information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of this supplemental information. However, we did not audit the information and express no opinion on it. Our audit was performed for the purpose of forming an opinion on the financial statements of Saginaw Valley State University and its discretely presented component unit, Saginaw Valley State University Foundation, taken as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole. Saginaw, Michigan August 20, 2009 (continued)

14 SAGINAW VALLEY STATE UNIVERSITY STATEMENTS OF NET ASSETS June 30, 2009 June 30, 2008 Component Unit Component Unit SVSU SVSU Foundation SVSU SVSU Foundation ASSETS Current Assets Cash and cash equivalents $ 34,699,345 $ 3,002,304 $ 40,373,274 $ 1,735,459 Short-term investments 52,385 50,598 Accounts receivable, net 2,271,811 1,755,331 2,639,927 2,383,245 State appropriations receivable - operations 5,207,236 5,155,672 State appropriations receivable - charter schools 8,516,517 11,996,113 Inventories and prepaid expenses 2,941,462 2,459,148 Notes receivable, net 6,527 11,818 Total current assets 53,642,898 4,810,020 62,635,952 4,169,302 Noncurrent Assets Cash and cash equivalents, restricted 60,295 2,805,428 Notes receivable, net 13,252 23,994 Accounts receivable, net 2,829,776 3,919,340 Endowment investments 29,945,211 31,926,733 Other long-term investments 7,372,663 4,969,368 Capital assets, net 266,157, ,064,899 Total noncurrent assets 273,543,047 32,835, ,058,261 38,651,501 Total assets 327,185,945 37,645, ,694,213 42,820,803 LIABILITIES Current Liabilities Accounts payable and accrued liabilities 7,284, ,159 5,623, ,977 Deferred revenues 5,272,200 5,288,791 Deposits 7,317,323 11,412,415 Long-term liabilities - current portion 2,761,757 2,289,076 Total current liabilities 22,635,674, 245,159 24,613,858, 480,977 Noncurrent Liabilities Long-term liabilities, net of current portion 124,304, ,987,536 Total noncurrent liabilities 124,304, ,987,536 - Total liabilities 146,940, , ,601, ,977 NET ASSETS Invested in capital assets, net of related debt 146,346, ,079,405 Nonexpendable Restricted Scholarships 11,771,553 11,827,292 Endowed chairs 11,423,099 11,422,453 Other 12,673,750 11,544,495 Expendable Restricted Capital 87, ,851 Scholarships and fellowships 688, , , ,920 Research 65,355 55,162 Instructional department use 210, ,767 Loans 4,089 6,489 Other 811, , ,285 2,662,851 Unrestricted 32,119, ,151 30,267,510 4,489,964 Total net assets $ 180,245,463 $ 37,400,143 $ 180,092,819 $ 42,339,826 See notes to financial statements 2

15 SAGINAW VALLEY STATE UNIVERSITY STATEMENTS OF REVENUES, EXPENSES, AND CHANGE IN NET ASSETS For the year ended June 30, 2009 For the year ended June 30, 2008 Component Unit Component Unit REVENUES SVSU SVSU Foundation SVSU SVSU Foundation Operating revenues Student tuition and fees $ 62,340,054 $ 57,786,314 Less: Scholarship allowances (9,474,709) (8,770,575) 52,865,345 49,015,739 Federal grants and contracts 5,313,983 4,020,227 State and local grants and contracts 1,090, ,050 Gifts $ 2,827,886 $ 2,852,304 Sales and services of educational departments 3,692,711 3,441,692 Auxiliary enterprises 18,630,057 16,665,629 Less: Scholarship allowances (2,236,312) (1,981,191) 16,393,745 14,684,438 Other operating revenues 2,264,439 2,090,758 Total operating revenues 81,620,676 2,827,886 74,195,904 2,852,304 EXPENSES Operating expenses Educational and general Instruction 37,333,093 34,835,772 Research 687, ,585 Public service 2,407,537 2,535,156 Academic support 14,041,945 12,863,655 Student services 5,701,201 5,285,616 Institutional support 11,878, ,182 11,897, ,805 Operations and maintenance of plant 11,574,500 12,266,169 Depreciation 11,322,924 11,548,142 Student aid 6,346,089 5,390,890 Auxiliary enterprises 12,347,458 11,344,924 Total operating expenses 113,641, , ,538, ,805 Operating income (loss) (32,020,534) 1,996,704 (34,342,118) 2,100,499 NONOPERATING REVENUES (EXPENSES) State appropriations 28,639,800 30,981,000 Federal Pell Grant Program 7,788,071 6,796,426 Gifts 1,263,805 (1,263,805) 2,303,662 (2,303,662) Investment income, net (427,961) (6,645,916) 1,489,338 (1,979,384) Interest on capital asset-related debt (5,458,607) (6,951,757) Net nonoperating revenues (expenses) 31,805,108 (7,909,721) 34,618,669 (4,283,046) Income (loss) before other revenues (expenses) (215,426) (5,913,017) 276,551 (2,182,547) Capital appropriations 267,242 1,682,447 Additions to permanent endowments 1,074, ,432 Capital grants and gifts 100,828 (100,828) 260,145 (260,145) Total other revenues (expenses) 368, ,334 1,942, ,287 Increase (decrease) in net assets 152,644 (4,939,683) 2,219,143 (1,482,260) Net assets - beginning of year 180,092,819 42,339, ,873,676 43,822,086 Net assets - end of year $ 180,245,463 $ 37,400,143 $ 180,092,819 $ 42,339,826 See notes to financial statements 3

16 SAGINAW VALLEY STATE UNIVERSITY STATEMENTS OF CASH FLOWS For the years ended June 30, Cash Flows from Operating Activities Student tuition and fees $ 52,743,269 $ 49,247,770 Grants and contracts 6,257,770 5,588,163 Payments to suppliers (24,922,651) (24,761,764) Payments for utilities (3,799,741) (3,483,575) Payments to employees (51,191,039) (48,779,536) Payments for benefits (15,598,212) (14,648,462) Payments for scholarships and fellowships (6,482,211) (5,548,992) Federal share of Perkins loans (16,343) (11,136) Collection of loans to students 16,033 8,843 Auxiliary enterprises charges 15,937,099 15,186,520 Sales and services 3,893,304 3,550,592 Other receipts 2,264,439 2,090,758 Net cash used by operating activities (20,898,283) (21,560,819) Cash Flows from Noncapital Financing Activities State appropriations 28,588,236 27,628,036 Federal Pell Grant Program 7,813,855 6,802,074 Federal Direct Lending receipts 42,577,827 32,801,014 Federal Direct Lending disbursements (42,577,827) (32,801,014) Gifts 1,449,560 2,369,034 Net cash provided by noncapital financing activities 37,851,651 36,799,144 Cash Flows from Capital Financing Activities t Capital appropriations 337,537 11,456,485 Capital grants and gifts received 100, ,145 Principal paid on capital debt (2,235,000) (26,550,000) Proceeds from capital debt 12,555,000 26,845,000 Interest paid on capital debt and related costs (5,330,724) (7,115,891) Purchase of capital assets (25,223,682) (19,204,972) Net cash used by capital financing activities (19,796,041) (14,309,233) Cash Flows from Investing Activities Interest on investments 266,952 1,585,298 Purchase of investments (6,368,926) Proceeds from redemption of investments 3,270,718 Net cash provided (used) by investing activities (2,831,256) 1,585,298 Net increase (decrease) in cash and cash equivalents (5,673,929) 2,514,390 Cash and cash equivalents - beginning of year 40,373,274 37,858,884 Cash and cash equivalents - end of year $ 34,699,345 $ 40,373,274 See notes to financial statements 4

17 SAGINAW VALLEY STATE UNIVERSITY STATEMENTS OF CASH FLOWS - CONTINUED Reconciliation of operating loss to net cash used by operating activities For the years ended June 30, Operating loss $ (32,020,534) $ (34,342,118) Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation 11,322,924 11,548,142 Changes in assets and liabilities: Accounts receivable, net 3,565, ,266 Inventories and prepaid expenses (52,318) (190,290) Notes receivable, net 16,033 8,843 Accounts payable and accrued liabilities (50,657) (164,344) Deferred revenues 4, ,680 Deposits (4,095,092) 895,953 Compensated absences 427, ,185 Student loans - federal (16,343) (11,136) Net cash used by operating activities $ (20,898,283) $ (21,560,819) See notes to financial statements 5

18 6

19 7

20 8

21 9

22 10

23 11

24 12

25 13

26 14

27 15

28 16

29 17

30 18

31 19

32 20

33 21

34 22

35 23

36 Saginaw Valley State University Schedule of Expenditures of Federal Awards Year ended June 30, 2009 Federal Agency Or Federal / Pass Through Grantor CFDA Pass Through Federal Program Title Number Grant Number Expenditures U.S. Department of Education Title IV Student Financial Assistance (Notes 1 and 5) : Federal Supplemental Educational Opportunity Grant Program E-P007A $ 153,074 Federal Work-Study Program E-P033A ,841 Federal Pell Grant Program (Note 3) E-P063P ,788,071 Federal Academic Competitiveness Grant P375A ,301 Federal SMART Grant P376S ,426 TEACH Grant P379T ,658 Loans and Loan Guarantees-Federal Direct Loan Program (Note 2) ,577,827 Total Student Financial Assistance 51,338,198 Direct Programs: SVSU's Strengthening Institutions Project Year A P031A ,701 Global Business Initiative Year A P153A ,396 SVSU Special Education Preservice Reform & Induction T H325T ,583 Transition to Teaching Year A S350A ,140 Total Direct Programs 357,820 Passed Through National Council On Economic Education: Economic And Financial Literacy Research B GR ,800 Total Passed Through National Council on Economic Education 8,800 Passed Through Michigan Department of Education Michigan Gear Up/College Day Program 07/ S Michigan Gear Up/College Day Program 08/ S ,121 Gear Up Scholarship S P334S ,965 MSP Teacher Leadership Collaborative B MSPF2006 2,762,796 Includes amounts passed through to the following subrecipients: Grand Valley State University $335,162 The Regents of The University of Michigan - Ann Arbor $664,456 The Regents of The University of Michigan - Dearborn $177,476 Improving Teacher Quality - Principal & Teacher Leadership ,090 Improving Math Teacher Quality ,675 Preparing Teachers for the Michigan Merit Social Studies Curriculum B ,917 Middle School Mathematics Partnership for Algebra B ,080 Improving Teacher Quality, Title II Part A(3) B ,374 Total Passed Through Michigan Department of Education 3,121,021 Passed Through University of California: Saginaw Bay Writing Project A 94-MI05 3,740 Saginaw Bay Writing Project A 94-MI05 41,337 Total Passed Through University of California 45,077 U.S. Department of Commerce Passed Through Industrial Technology Institute: SVMA/MMTC (Note 4) NANB5H CMI/MMTC Admin NANB5H ,750 Total Passed Through Industrial Technology Institute 158,759 U.S. Department of Defense Passed Through Office of Naval Research: Solidification Based Grain Refinement in Steels N ,343 Total Passed Through Office of Naval Research 69,343 24

37 Saginaw Valley State University Schedule of Expenditures of Federal Awards (continued) Federal Agency Or Federal / Pass Through Grantor CFDA Pass Through Federal Program Title Number Grant Number Expenditures U.S. Department of Labor Passed Through Michigan Works: Michigan Works - H.B. Carbide * $ 2,320 Total Passed Through Michigan Works 2,320 Passed Through Michigan State University: WIRED - Workforce Innovation Regional Economic Development ,441 Total Passed Through Michigan State University 526,441 American Recovery and Reinvestment Act (ARRA) COBRA Premium Assistance Payment * 5,514 Total American Recovery and Reinvestment Act (ARRA) 5,514 National Aeronautics and Space Administration Passed Through University of Michigan: Michigan Space Grant NGT ,724 Probability Function Detecting Cracks in Aircraft 43.UNKNOWN NNG05GH68H 2,000 Modeling Secure Communication Networks 43.UNKNOWN NNG05GH68H 4,167 Math & Science for Minorities Program 43.UNKNOWN NNG05GH68H 2,594 Total Passed Through University of Michigan 11,485 National Endowment for the Arts Passed Through Michigan Council for Arts and Cultural Affairs: MFSM: Nancy Thayer Paintings/Russell Thayer Sculptures ,100 Total Passed Through Michigan Council for Arts and Cultural Affairs 1,100 National Endowment for the Humanities Passed Through Michigan Humanities Council Open House: A Community Celebration of Roethke's Centennial H08 11,930 MHC Theodore Roethke Poetry Prize Celebration Event Q Alden B. Dow/Marshall M. Fredericks Mix Media Exhibit Planning Project Q034-09P 444 Total Passed Through Michigan Humanities Council 12,874 National Science Foundation Direct Programs: MRI: Acquisition of a Transmission Electron Microscope ,236 Total Direct Programs 2,236 Corporation For National and Community Service Passed Through Michigan Campus Compact: Saginaw County Youth Leadership Institute LHHMI001 4,342 CHS/SVSU Writing Academy BF ,834 Total Passed Through Michigan Campus Compact 7,176 Total Expenditures of Federal Awards $55,668,164 * The agency or pass through grant number is not available. See Notes to Schedule of Expenditures of Federal Awards 25

38 Saginaw Valley State University Notes to Schedule of Expenditures of Federal Awards Year ended June 30, 2009 Note 1: Note 2: As defined in OMB Circular A-133, Student Financial Assistance programs are considered to be clusters of programs and, accordingly, have been classified as one program for testing purposes. Student Financial Assistance is defined as a major program. Under the William D. Ford Federal Direct Loan Program, students and parents borrow funds directly from the federal government; the University is responsible for verifying student eligibility, electronically transmitting the loan records to the federal processor and distributing the loan funds directly to the student account or parent borrower. For the year ended June 30, 2009, Direct Student Loans totaled $42,577,827 ($18,615,619 subsidized, $21,835,606 unsubsidized, $2,125,020 PLUS, and $1,582 direct graduate). These amounts were excluded from total federal expenditures when determining the dollar threshold for major programs. Note 3: The Pell grant expenditures are the actual amounts incurred through June 30, The University will process amendments subsequent to year end to finalize the award year. Amounts reported do not include an administrative cost allowance of $12,580. Note 4: Note 5: The grant expenditures disclosed include both the federal portion (60%) and State of Michigan portion (40%) of the grant. As of July 1, 1996, Saginaw Valley State University terminated participation in the Federal Perkins Loan Program (CFDA Number ). The University will retain and administer the loan portfolio until all outstanding loans are liquidated. There was $27,779 in loans outstanding as of June 30, Additionally, the University must return to the United States Department of Education annually the Federal share of cash-on-hand as of June 30. Federal cash-on-hand as of June 30, 2009 was returned in July The University utilizes the services of Campus Partners to administer the repayment of Perkins loans and perform certain due diligence procedures. The most recent available report on Campus Partners compliance and internal controls was received and reviewed. No significant items of noncompliance or control weaknesses were noted. Note 6: The accompanying Schedule of Expenditures of Federal Awards has been prepared on the accrual basis with the exception of grants, which are generally recorded when received or when billable. 26

39 Independent Auditors Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Board of Control Saginaw Valley State University We have audited the financial statements of Saginaw Valley State University (University) and its discretely presented component unit, Saginaw Valley State University Foundation, as of and for the year ended June 30, 2009, and have issued our report thereon dated August 20, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the University's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the University s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the University s internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the University's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the University s financial statements that is more than inconsequential will not be prevented or detected by the University s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the University s internal control. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above Gratiot Saginaw, Michigan ph fx

40 Compliance and Other Matters As part of obtaining reasonable assurance about whether the University s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Board of Control, management of the University, and federal awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. Saginaw, Michigan August 20,

41 Independent Auditors Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 Board of Control Saginaw Valley State University Compliance We have audited the compliance of Saginaw Valley State University (University) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, The University s major federal programs are identified in the summary of auditor s results section of the accompanying Schedule of Findings and Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the University s management. Our responsibility is to express an opinion on the University s compliance based on our audit. The University s financial statements include the operations of its discretely presented component unit, Saginaw Valley State University Foundation, which received $-0- in federal awards. An OMB Circular A-133 audit was not required for Saginaw Valley State University Foundation. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the University s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the University s compliance with those requirements. In our opinion, the University complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, We did not audit the University s compliance with the requirements governing billing, recordkeeping, payment processing, reporting and due diligence functions for the University s Federal Perkins Loan Program. Those requirements govern functions performed by Campus Partners. Campus Partners s compliance with the requirements governing the functions it performs for the University was audited by another auditor, whose report was furnished to us. Based on our review of the other auditor s report, we have determined that all of the compliance requirements that are applicable to the University s Federal Perkins Loan Program are addressed either in our report or the report of the other auditor. Based on our review of the other auditor s report, we have determined that it does not contain any reportable findings of noncompliance pertaining to the services that Campus Partners performs for the University Gratiot Saginaw, Michigan ph fx

42 Internal Control Over Compliance The management of the University is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grant agreements applicable to federal programs. In planning and performing our audit, we considered the University s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the University s internal control over compliance. A control deficiency in an entity s internal control over compliance exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity s ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity s internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity s internal control. The internal control policies and procedures relating to billing, recordkeeping, payment processing, reporting and due diligence functions for the University s Federal Perkins Loan Program are performed at Campus Partners. For these control categories, other auditors obtained an understanding of the design of relevant policies and procedures, determined whether they have been placed in operation and assessed control risk. The other auditor s report has been furnished to us; however, the scope of our work did not extend to these internal control policies and procedures established and maintained at Campus Partners. Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of the Board of Control and management of Saginaw Valley State University and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Saginaw, Michigan August 20,

43 Saginaw Valley State University Schedule of Findings and Questioned Costs Year ended June 30, 2009 Section I Summary of Auditor s Results Financial Statements Type of auditor s report issued: Unqualified Internal control over financial reporting: Material weakness identified? Yes X No Significant deficiencies identified not considered to be material weakness? Yes X None reported Noncompliance material to financial statements noted? Federal Awards Yes X No Internal control over major programs: Material weakness identified? Yes X No Significant deficiencies identified not considered to be material weakness? Yes X None reported Type of auditor s report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section.510(a)? Yes X No Identification of major programs: CFDA Number Name of Cluster and Federal Programs Student Financial Assistance: Federal Supplemental Educational Opportunity Grant Program Federal Work-Study Program Federal Perkins Loan Program Federal Pell Grant Program Federal Academic Competitiveness Grant Federal SMART Grant Federal Direct Loan Program TEACH Grant Passed through Michigan Department of Education: B MSP Teacher Leadership Collaborative Dollar threshold used to distinguish between Type A and Type B programs: $393,000 Auditee qualified as low-risk auditee? X Yes No 31

44 Saginaw Valley State University Schedule of Findings and Questioned Costs (continued) Section II Financial Statements Findings No matters were reported. Section III Federal Award Findings and Questioned Costs No matters were reported. 32

45 Saginaw Valley State University Summary Schedule of Prior Audit Findings Year ended June 30, 2009 No matters were reported. 33