Financial Statements and Report of Independent Certified Public Accountants and Independent Certified Public Accountants Reports Required by OMB Circular A-133 OCCIDENTAL COLLEGE June 30, 2010 and 2009
Contents Report of Independent Certified Public Accountants 1-2 Balance sheets 3 Statement of activities 4-5 Statement of cash flows 6 Notes to financial statements 7-26 Schedule of expenditures of federal awards 27-30 Notes to schedule of expenditures of federal awards 31 Page Report of independent certified public accountants 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 32-33 Report of independent certified public accountants on compliance with requirements applicable to each major program and on internal control over compliance in accordance with OMB circular A-133 34-36 Summary of findings and questioned costs 37 Summary schedule of prior year findings 38
Report of Independent Certified Public Accountants Board of Trustees Occidental College Audit Tax Advisory Grant Thornton LLP 1000 Wilshire Boulevard, Suite 300 Los Angeles, CA 90017-1728 T 213.627.1717 F 213.624.6793 www.grantthornton.com We have audited the accompanying balance sheets of Occidental College (the College ) as of June 30, 2010 and 2009 and the related statements of activities and cash flows for the years then ended. These financial statements are the responsibility of the College s management. 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 as established by the American Institute of Certified Public Accountants 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the College s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 Occidental College as of June 30, 2010 and 2009 and the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd
2 In accordance with Government Auditing Standards, we have also issued our report dated November 15, 2010 on our consideration of the College s internal control over financial reporting and on 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 effectiveness of the College s 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 considered in assessing the results of our audit. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying Schedule of Expenditures of Federal Awards, for the year ended June 30, 2010 is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. Los Angeles, California November 15, 2010 Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd
Occidental College SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2010 Federal Grantor/Pass-Through Pass-Through Grantor/Program Title Award Number CFDA No. Expenditures Student Financial Aid Direct Funding Department of Education Academic Competitiveness Grant 84.375 $ 205,200 National SMART Grant 84.376 132,000 Federal Pell Grant 84.063 1,719,349 Federal Work Study Program 84.033 271,210 Federal Supplemental Educational Opportunity Grant 84.007 277,696 2,605,455 ARRA Programs Direct Funding Department of Education ARRA 84.033 57,387 Federal Work Study Program Total Student Financial Aid- Cluster 2,662,842 Pass-Through Funding Department of Education GEAR UP Project Higher Learning Program 600618 84.334 168,183 GEAR-UP Project Higher Learning Program 0700493 84.334 47,888 Total Department of Education (Pass Through Funding) 216,071 TRIO Cluster Direct Funding Department of Education Upward Bound (TRIO Cluster) 84.047 583,679 Total Upward Bound 583,679 See Accompanying Notes to Schedule of Expenditures of Federal Awards 27
Occidental College SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - Continued Year Ended June 30, 2010 and 2009 Federal Grantor/Pass-Through Pass-Through Grantor/Program Title Award Number CFDA No. Expenditures Research and Development Direct Funding National Science Foundation Thermochronologic Modeling-Mesozoic 47.078 $ 29,168 RUI: Borocarbides 47.049 34,248 Interfacial Chemistry of the Bacterial Predator 47.049 4,620 Dark Matter Drift-II 47.049 35,908 RUI Contractile Roots 47.074 8,345 RUI/Collabor Batholiths Gen & Evolution of Crust 47.050 16,254 Magnetic Stratigraphy 47.050 891 USA & Costa Rica Research Experience for Students 47.079 439 RUI: Microtubule Regulation 47.074 70,105 Surface and Analytical Chemistry to Elucidate Fundamental Biofilm Properties and Mechanisms of Biofilm Control 47.049 22,085 The Drift Directional Search for Dark Matter with Spin-Dependent Couplings 47.049 145,403 Total National Science Foundation 367,466 Department of Energy Axial Trapping 81.049 20,474 Total Department of Energy 20,474 ARRA Programs Direct Funding National Science Foundation US-Costa Rica Tropical Ecology Mentorship Program ARRA 47.082 14,660 Cone Snail Venom peptides that modulate zebrafish spinal motor activity ARRA 93.701 49,278 Topological Symmetries and Intrinsic Properties of Graphs embedded in 3-space ARRA 47.082 4,517 RUI: MSB: Collaborative: Symbiont Seperation and Investigation of Novel Heterotrophic Osedax symiosis using comparative genomics ARRA 47.082 45,013 MRI-R2: Instrumentation for the Measure of Genes and Gene Products ARRA 47.082 106,205 Total National Science Foundation 219,673 Total Research and Development (Direct Funding) 607,613 See Accompanying Notes to Schedule of Expenditures of Federal Awards 28
Occidental College SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - Continued Year Ended June 30, 2010 and 2009 Federal Grantor/Pass-Through Pass-Through Grantor/Program Title Award Number CFDA No. Expenditures Pass-Through Funding Department of the Interior Water and Nanofiltration 99473 15.530 4,042 Total Department of the Interior 4,042 Total Research and Development (Pass Through Funding) 4,042 Total Research and Development 611,655 Other Awards Direct Funding National Endowment for the Humanities Links to the Past: A Digital Connection to Spain's Literary History 45.160 21,000 Total National Endowment for the Humanities 21,000 National Endowment for the Arts NEA: The Big Read 45.024 20,000 Total National Endowment for the Arts 20,000 National Security Agency Arabic Teacher Program 12.901 42,712 Integrating Language, Culture, and Content in Arabic Foreign and Heritage Classrooms 12.901 86,525 Putting Arabic Standards Front and Center 12.901 32,809 Total National Security Agency 162,046 National Science Foundation OxyMS Teaching Scholars 47.076 9,744 Total National Science Foundation 9,744 Total Other Programs - Direct Funding 212,790 See Accompanying Notes to Schedule of Expenditures of Federal Awards 29
Occidental College SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS - Continued Year Ended June 30, 2010 and 2009 Federal Grantor/Pass-Through Pass-Through Grantor/Program Title Award Number CFDA No. Expenditures Pass-Through Funding Department of Agriculture Farmer's Market Hub Network N/A 10.561 $ 5,938 Farm to School Nutrition Education Project 1015878 10.561 11,511 Summer - Food Service Program for Children N/A 10.559 15,823 Total Department of Agriculture 33,272 Department of Commerce Bunker Point Restoration 2008-0073-010 11.463 18,047 Total Department of Commerce 18,047 Department of Defense NSLI STARTALK Pilot Immersion Summer Camp Program Z914720A 12.901 13,732 NSLI STARTALK Pilot Immersion Summer Camp Program H98230-08-1-0241 12.901 32,375 Long Term Changes in Forage Fishes in San Diego Bay N/A 12.300 15,291 Total Department of Defense 61,398 Department of Education California State Department of Education Grants N/A 84.069A 28,343 NCLBX: LA Stars PO8050XKB644 84.367 86,248 Total Department of Education 114,591 Total Other Programs - Pass-Through Funding 227,308 Total Other Programs 440,098 Total Federal Awards $ 4,514,345 See Accompanying Notes to Schedule of Expenditures of Federal Awards 30
Occidental College NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Years Ended June 30, 2010 and 2009 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying schedule of expenditures of federal awards (the Schedule ) includes the federal grant expenditure activity of Occidental College (the College ) for the year ended June 30, 2010 and is presented using the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparations of the basic financial statements. Because this schedule presents only a selected portion of the operations of the College, it is not intended to and does not present the financial position, changes in net assets or cash flows of the College. Subrecipient The College is the subrecipient of federal funds which are reported as expenditures and listed as federal pass-through funds. NOTE 2 - LOAN ADVANCES For the year ended June 30, 2010, the College advanced loans totaling $511,524 for the Federal Perkins Loan Program (CFDA Number 84.038). As of June 30, 2010, $5,028,137 of Federal Perkins Loans advanced by the College were outstanding. NOTE 3 - FEDERAL FAMILY EDUCATION LOANS During the year ended June 30, 2010 the College processed $6,171,311 of new loans under the Federal Family Education Loan Program, CFDA Number 84.032 (which includes Federal Stafford Loans, both Subsidized and Unsubsidized and Federal Graduate PLUS Loans). NOTE 4 SUBSEQUENT EVENTS The College has evaluated subsequent events through November 15, 2010, the date this Schedule was available to be issued. The College is not aware of any subsequent events which would require recognition or disclosure in the Schedule. 31
Report of Independent Certified Public Accountants 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 Trustees Occidental College Audit Tax Advisory Grant Thornton LLP 1000 Wilshire Boulevard, Suite 300 Los Angeles, CA 90017-1728 T 213.627.1717 F 213.624.6793 www.grantthornton.com We have audited the financial statements of Occidental College (the College ) as of and for the years ended June 30, 2010, and have issued our report thereon dated November 15, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America as established by the American Institute of Certified Public Accountants 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 Occidental College s internal control over financial reporting as a basis for designing our audit procedures for the purpose of expressing an opinion on the financial statements but not for the purpose of expressing an opinion on the effectiveness of Occidental College s internal control over financial reporting. Accordingly, we express no such opinion. A deficiency in internal control over financial reporting 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 and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control would not necessarily identify all deficiencies in internal control over financial reporting that might be material weaknesses. Given these limitations, during our audit we did not identify any deficiencies in the College s internal control over financial reporting that we consider to be material weaknesses. However material weaknesses may exist that were not identified. Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd
33 Compliance and Other Matters As part of obtaining reasonable assurance about whether Occidental College 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 management, the Board of Trustees, others within the entity, and federal awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. Los Angeles, California November 15, 2010 Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd
Report of Independent Certified Public Accountants on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance In Accordance With OMB Circular A 133 Board of Trustees Occidental College Audit Tax Advisory Grant Thornton LLP 1000 Wilshire Boulevard, Suite 300 Los Angeles, CA 90017-1728 T 213.627.1717 F 213.624.6793 www.grantthornton.com Compliance We have audited the compliance of Occidental College (the College ) 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 its major federal program for the year ended June 30, 2010, except as described in the second paragraph of this report. The College s major federal program is 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 College s management. Our responsibility is to express an opinion on the College s compliance based on our audit. We did not audit Occidental College s compliance with requirements governing student loan repayments in accordance with the requirements of the Student Financial Assistance Cluster: Federal Perkins Loan program as described in the Compliance Supplement. Those requirements govern functions performed by Affiliated Computer Services, Inc. ( ACS ). Since we did not apply auditing procedures to satisfy ourselves as to compliance with those requirements, the scope of our work was not sufficient to enable us to express, and we do not express, an opinion on compliance with those requirements. ACS s compliance with the requirements governing the functions that it performs for Occidental College for the year ended June 30, 2010 was examined by other accountants 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. Our report does not include the results of the other accountants examination of ACS s compliance with such requirements. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America as established by the American Institute of Certified Public Accountants; 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 Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd
35 the College 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 of the College s compliance with those requirements. In our opinion, the College complied, in all material respects, with the requirements referred to above that are applicable to its major federal program for the year ended June 30, 2010. Internal Control Over Compliance The management of the College is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, except as noted in the following paragraph, we considered the College s internal control over compliance with the requirements that could have a direct and material effect on a major federal program as a basis for designing audit procedures for the purpose of expressing an opinion on compliance, but not for the purpose of expressing an opinion of the effectiveness of the College s internal control over compliance. Accordingly, we express no such opinion. Requirements governing student loan repayments in the Student Financial Assistance Cluster: Federal Perkins Loan program as described in the Compliance Supplement are performed by ACS. Internal control over compliance relating to such functions for the year ended June 30, 2010 was reported on by other accountants 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. Our report does not include the results of the other accountants testing of ACS s internal control over compliance related to such functions. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness is a deficiency, or a combination of deficiencies in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected on a timely basis. Our consideration of internal would not necessarily identify all deficiencies in internal control that might be material weaknesses. Given these limitations, during our audit we did not identify any deficiencies in the College s internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that were not identified. Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd
36 This report is intended solely for the information and use of the management, the Board of Trustees, others within the entity, and federal awarding agencies and is not intended to be and should not be used by anyone other than these specified parties. Los Angeles, California November 15, 2010 Grant Thornton LLP U.S. member firm of Grant Thornton International Ltd
Occidental College SUMMARY OF FINDINGS AND QUESTIONED COSTS Years Ended June 30, 2010 SECTION I SUMMARY OF AUDITORS RESULTS Financial Statements Type of auditors report issued: Unqualified Internal control over financial reporting: Material weakness(es) identified? yes X no Significant deficiency(ies) identified that are not considered to be material weaknesses? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major programs: Material weakness(es) identified? yes X no Significant deficiency(ies) identified that are not considered to be material weaknesses? yes X none reported Type of auditors report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of OMB Circular A-133? yes X no Identification of major programs: CFDA Number Various Various Name of Federal Program or Cluster Student Financial Aid Cluster Research & Development Cluster Dollar threshold used to distinguish between Type A and Type B programs: $300,000 Auditee qualified as low-risk auditee? X yes no 37
Occidental College SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS Years Ended June 30, 2010 and 2009 SECTION II FINANCIAL STATEMENT FINDINGS No matters to report. SECTION III FEDERAL AWARD FINDINGS AND QUESTIONED COSTS No matters to report. SECTION IV STATUS OF PRIOR YEAR FINDINGS Finding 2009-01: Student Status Changes (CFDA 84.032) This matter was addressed in the prior year and no further matters were identified during the current year audit. Finding 2009-02: Mathematical accuracy of time cards (CFDA 84.033) This matter was addressed in the prior year and no further matters were identified during the current year audit. Finding 2009-03: Period of Availability (CFDA 84.047) This matter was addressed in the prior year and no further matters were identified during the current year audit. Finding 2009-04: Physical Inventory of Federally Purchased Equipment (CFDA 47.049) This matter was addressed in the prior year and no further matters were identified during the current year audit. 38