Submitted by / Extension Amrita Singh 213-356-6476 Partner / Manager Schultz / Garvey Charge Code 0.0198217.001 Date / Time In Date / Time Needed Inserts sent to In Box? Return this changed copy? Special Instructions: C:\Users\smijares001\Documents\Engagements\USC\USC HRA A133\FY13\USC FY13 A133 Report_FINAL.docx University of Southern California Report on Audit of Consolidated Financial Statements and on Federal Awards Programs in Accordance with OMB Circular A-133 For the Location EIN University Park, Los Angeles 95-1642394 Health Research Association, Los Angeles 95-1683862
Table of Contents Page(s) Independent Auditor s Report on Consolidated Financial Statements and Supplementary Schedule of Expenditures of Federal Awards... 1-2 Consolidated Financial Statements... 3-21 Schedule of Expenditures of Federal Awards... 22-51 Notes to Schedule of Expenditures of Federal Awards... 52-57 Independent Auditor s 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... 58-59 Independent Auditor s Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133... 60-62 Independent Auditor s Schedule of Findings and Questioned Costs... 63-64 Summary of Status of Prior Year Findings... 65 Management s Views and Corrective Action Plan... 66
Independent Auditor s Report on Consolidated Financial Statements and Supplementary Schedule Expenditures of Awards To: The Board of Trustees of the University of Southern California Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statement, of the University of Southern California (the university ) and its subsidiaries, which comprise the consolidated balance sheet as of June 30, 2013, related consolidated statement of activities, and cash flows for the year then ended, and the related notes to the financial statements. Management s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on the consolidated financial statements based on our audit. 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the University of Southern California and its subsidiaries as of June 30, 2013, and the changes in its net assets and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. PricewaterhouseCoopers LLP, 601 South Figueroa Street, Los Angeles, CA 90017 T: (213) 356 6000, F: (813) 637 4444, www.pwc.com
Other Matters The prior year summarized comparative information has been derived from the university s 2012 financial statements, and in our report dated October 11, 2012, we expressed an unqualified opinion on those financial statements. Other Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying schedule of expenditures of federal awards for the year ended June 30, 2013 is presented for purposes of additional analysis as required by 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 consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 9, 2013 on our consideration of University of Southern California 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 internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the University of Southern California's internal control over financial reporting and compliance. October 9, 2013
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT CONSOLIDATED BALANCE SHEET (in thousands) a b June 30 June 30 2013 2012 Assets: 1 Cash and cash equivalents $451,625 $906,400 1 2 Accounts receivable, net 325,558 298,759 2 Notes receivable, net of allowance for doubtful 3 accounts, $6,081 (2013), $6,289 (2012) 84,914 84,122 3 4 Pledges receivable, net 519,922 474,051 4 5 Investments 4,708,535 3,865,127 5 6 Inventories, prepaid expenses and other assets 161,801 153,579 6 7 Property, plant and equipment, net 2,537,902 2,309,206 7 8 Total Assets $8,790,257 $8,091,244 8 Liabilities: 9 Accounts payable $228,326 $163,497 9 10 Accrued liabilities 342,460 325,093 10 11 Refundable advances 17,365 18,959 11 12 Current portion of long-term debt 10,855 5,495 12 13 Deposits and deferred revenue 159,713 153,258 13 14 Actuarial liability for annuities payable 148,346 145,355 14 15 Federal student loan funds 67,706 67,410 15 16 Asset retirement obligations 104,841 101,437 16 17 Capital lease obligation 59,102 59,944 17 18 Long-term debt 1,262,251 1,243,705 18 19 Other liabilities 4,433 9,915 19 20 Total Liabilities 2,405,398 2,294,068 20 Net Assets: 21 Unrestricted 2,908,437 2,636,597 21 22 Temporarily restricted 1,586,567 1,386,818 22 23 Permanently restricted 1,889,855 1,773,761 23 24 Total Net Assets 6,384,859 5,797,176 24 The accompanying notes are an integral part of this statement. 25 Total Liabilities and Net Assets $8,790,257 $8,091,244 25 3
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT CONSOLIDATED STATEMENT OF ACTIVITIES (in thousands) Year Ended Year Ended June 30, 2013 June 30, 2012 a b c d e Temporarily Permanently Unrestricted Restricted Restricted Total Total Net Assets Net Assets Net Assets Net Assets Net Assets Revenues: 1 Student tuition and fees $1,488,276 $1,488,276 $1,365,963 1 2 Less: financial aid (413,465) (413,465) (388,803) 2 3 Net student tuition and fees 1,074,811 1,074,811 977,160 3 4 Endowment income 65,707 $540 66,247 56,582 4 5 Investment and other income 11,747 179 11,926 12,028 5 6 Net appreciation (depreciation) in fair value of investments 108,170 $234,622 7,770 350,562 (60,394) 6 7 Government contracts and grants 313,725 313,725 323,789 7 8 Recovery of indirect costs 132,920 132,920 132,012 8 9 Gifts and pledges 332,891 106,660 110,600 550,151 527,910 9 10 Sales and service 28,201 28,201 28,902 10 11 Auxiliary enterprises 273,224 273,224 254,857 11 12 Health Care Services 961,616 961,616 882,133 12 13 Other 105,999 105,999 101,280 13 14 Present value adjustment to annuities payable (1,355) (6,560) (7,915) (2,545) 14 15 Net assets released from restrictions / redesignations 136,613 (140,178) 3,565 15 16 Total Revenues 3,545,624 199,749 116,094 3,861,467 3,233,714 16 Expenses: 17 Educational and general activities 2,144,565 2,144,565 2,078,848 17 18 Health care services 904,627 904,627 864,536 18 19 Depreciation and amortization 161,285 161,285 159,238 19 20 Interest on indebtedness 63,307 63,307 62,774 20 21 Total Expenses 3,273,784 3,273,784 3,165,396 21 22 Increase in Net Assets 271,840 199,749 116,094 587,683 68,318 22 23 Beginning Net Assets 2,636,597 1,386,818 1,773,761 5,797,176 5,728,858 23 24 Ending Net Assets $2,908,437 $1,586,567 $1,889,855 $6,384,859 $5,797,176 24 Nature of specific net assets: 25 Internally designated $37,355 $37,355 $58,434 25 26 Gift and departmental 602,051 602,051 476,750 26 27 Externally restricted $64,799 $35,242 100,041 106,859 27 28 Pledges 280,789 239,133 519,922 474,051 28 29 Unexpended endowment income 189,050 189,050 191,901 29 30 Annuity and living trusts 43,653 78,814 122,467 118,582 30 31 True endowment and net appreciation 1,197,326 1,536,666 2,733,992 2,461,087 31 32 Funds functioning as endowment 1,134,363 1,134,363 1,027,846 32 33 Debt service funds 70,329 70,329 74,825 33 34 Invested in plant 875,289 875,289 806,841 34 35 $2,908,437 $1,586,567 $1,889,855 $6,384,859 $5,797,176 35 The accompanying notes are an integral part of this statement. 4
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) a b Year Ended Year Ended June 30, 2013 June 30, 2012 Cash Flows from Operating Activities: 1 Change in Net Assets $587,683 $68,318 1 Adjustments to reconcile change in net assets to net cash provided by operating activities: 2 Depreciation and amortization 161,285 159,238 2 3 Loss on the disposal/sale of plant assets 452 2,101 3 4 In-kind receipt of securities, property, plant and equipment (39,652) (38,587) 4 5 Present value adjustment to annuities payable 7,273 2,476 5 6 Increase in accounts receivable (26,799) (24,771) 6 7 Increase in pledges receivable (156,652) (109,466) 7 8 Increase in inventories, prepaid expenses and other assets (7,560) (27,386) 8 9 Increase in accounts payable 49,950 5,342 9 10 Increase in accrued liabilities 5,548 86,953 10 11 (Decrease) increase in refundable advances (1,594) 458 11 12 Increase in deposits and deferred revenue 6,455 21,585 12 13 Decrease in other liabilities (5,482) (2,462) 13 14 Contributions restricted for property, plant and equipment and permanent investment (145,140) (125,882) 14 15 Net realized gain on sale of investments (183,851) (111,804) 15 16 Net unrealized (appreciation) depreciation in investments (166,784) 172,187 16 17 Net cash provided by operating activities 85,132 78,300 17 Cash Flows from Investing Activities: 18 Proceeds from note collections 12,193 12,264 18 19 Notes issued (12,777) (11,688) 19 20 Proceeds from sale and maturity of investments 2,760,563 2,257,116 20 21 Purchase of investments (3,194,592) (2,524,284) 21 22 Purchase of property, plant and equipment (371,979) (279,457) 22 23 Net cash used in investing activities (806,592) (546,049) 23 Cash Flows from Financing Activities: Contributions restricted for permanent investment: 24 Endowment 152,168 116,271 24 25 Plant 100,577 78,885 25 26 Trusts and other 3,175 498 26 27 Repayment of long-term debt (56,344) (4,140) 27 28 Proceeds from issuance of long-term debt 71,095 294,228 28 29 Increase (decrease) in federal student loan funds 296 (402) 29 30 Investment gain on annuities payable 2,633 5,820 30 31 Payments on annuities payable (13,145) (13,108) 31 32 Increase to annuities payable resulting from new gifts 6,230 6,864 32 33 Net cash provided by financing activities 266,685 484,916 33 34 Net (decrease) increase in cash and cash equivalents (454,775) 17,167 34 35 Cash and cash equivalents at beginning of year 906,400 889,233 35 36 Cash and cash equivalents at end of year $451,625 $906,400 36 The accompanying notes are an integral part of this statement. 5
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Notes to Consolidated Financial Statements Note 1. Significant accounting policies followed by the University of Southern California are set forth below: The University of Southern California is a not-for-profit, major private research university. The consolidated financial statements have been prepared on the accrual basis of accounting, in accordance with accounting principles generally accepted in the United States of America and with the provisions of the Financial Accounting Standards Board ( FASB ) Accounting Standards Codification ( ASC ) 958, Not-for-Profit Entities, which requires the university to classify its net assets into three categories according to donor-imposed restrictions or provisions of law: unrestricted, temporarily restricted, or permanently restricted. All material transactions between the university and its subsidiaries have been eliminated. The university is generally exempt from federal income taxes under the provisions of Internal Revenue Code Section 501 (c) (3). The university is also generally exempt from payment of California state income, gift, estate and inheritance taxes. Unrestricted net assets: Education and general: Education and general include the revenues and expenses associated with the principal educational mission of the university. Health care services: Health care services are reflective of the revenues and expenses associated with Keck Hospital of USC, USC Norris Cancer Hospital, the Professional Services Agreement with Los Angeles County and USC Care Medical Group, Inc., a primary care and multi-specialty physician practice corporation. Sponsored research and departmental activities: Sponsored research agreements recognize revenue as it is earned through expenditure in accordance with the agreement. Any funding received in advance of expenditure is recorded as refundable advances. Departmental net assets include gifts to the university and its various schools and departments. The university has determined that any donor-imposed restrictions of gifts for current or developing programs and activities are generally met within the operating cycle of the university and, therefore, the university s policy is to record these net assets as unrestricted. Internally designated net assets are those which have been appropriated by the Board of Trustees or designated by management. Unexpended plant and debt service funds: Unexpended plant and debt service net assets include gifts and income earned on unexpended balances for capital projects which are currently under construction and transfers from the operating budget to fund the debt service requirements for outstanding bonds, notes and mortgages payable. The university follows the policy of lifting the restrictions on contributions of cash or other assets received for the acquisition of long-lived assets when the restrictions are fulfilled or the assets are placed in service. Invested in plant: Invested in plant assets, including collections of works of art and historical treasures, are stated at cost or fair value at the date of gift, plus the estimated value of any associated legal retirement obligations, less accumulated depreciation, computed on a straight-line basis over the estimated useful or component lives of the assets (equipment and library books useful lives ranging from 4 to 10 years and buildings component lives ranging from 5 to 50 years). Equipment is removed from the records at the time of disposal. The university follows the policy of recording contributions of long-lived assets directly in invested in plant assets when the purpose or time restriction is met instead of recognizing the gift over the useful life of the asset. Long-term investment: Long-term investments include gifts and Board of Trustee designations to funds functioning as endowment, realized and unrealized gains and reinvested income (income earned in excess of the spending rule) on all endowment funds. Student loan: Student loan net assets include lending activity to students utilizing university resources designated for that purpose. Temporarily restricted net assets: Gifts for which donor imposed restrictions have not been met (primarily future capital projects), charitable remainder unitrusts, pooled income funds, gift annuities and pledges receivable for which the ultimate purpose of the proceeds is not permanently restricted are included in temporarily restricted net assets. Permanently restricted net assets: Gifts, charitable remainder unitrusts, pooled income funds, gift annuities and pledges receivable which require by donor restriction the investment of the corpus in perpetuity, net appreciation on true endowment and only the income be made available for program operations in accordance with donor restrictions and gifts which have been donor stipulated to provide loans to students are included in permanently restricted net assets. 6
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 1 (continued). Other accounting policies: Cash equivalents consist of highly liquid investments with original maturities of three months or less. The university has classified all cash and cash equivalents as Level I financial instruments. Investments are stated at fair value. Net appreciation (depreciation) in the fair value of investments, which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments, is shown in the Consolidated Statement of Activities. Realized gains and losses upon the sale of investments are calculated using the specific identification method and trade date. Alternative investment holdings and certain other limited partnership interests are invested in both publicly traded and privately owned securities. The fair values of private investments are based on estimates and assumptions of the general partners or partnership valuation committees in the absence of readily determinable market values. Such valuations generally reflect discounts for illiquidity and consider variables such as financial performance of investments, recent sales prices of investments and other pertinent information. Inventories are valued at the lower of cost (first-in, first-out) or market. The university receives federal reimbursement for a portion of the costs of its facilities and equipment used in organized sponsored research. The Office of Management and Budget, Circular A-21, establishes principles for determining such reimbursable costs, requires conformity of the lives and methods used for federal cost reimbursement accounting and financial reporting purposes. The university s policies and procedures are in conformity with these principles. Student tuition and fees are recorded as revenues during the year the related academic services are rendered. Student tuition and fees received in advance of services to be rendered are recorded as deferred revenue. The university s split interest agreements with donors consist primarily of gift annuities, unitrusts, pooled income funds and life estates. For irrevocable agreements, assets contributed are included in the university s investments and stated at fair value. Contribution revenue is recognized at the date each trust is established after recording liabilities for the actuarially-determined present value of the estimated future payments to be made to the beneficiaries. The actuarial liability is discounted at an appropriate risk-adjusted rate at the inception of each agreement and the applicable actuarial mortality tables. Discount rates on split-interest agreements range from 3.0% to 9.5%. The liabilities are adjusted during the terms of the trusts for changes in the fair value of the assets, accretion of discounts, and other changes in the estimates of future benefits. The valuation followed generally accepted actuarial methods and was based on the requirements of FASB ASC 958. The Annuity 2000 Mortality Table and 1983 Individual Annuity Mortality Table for males and females were used in the valuations. For split interest agreements related to the State of Washington, the university holds a Certificate of Exemption issued by the State of Washington's Office of Insurance Commissioner to issue charitable gift annuities. The university has been in compliance with Revised Code of Washington 48.38.010(6) throughout the time period covered by the financial statements. The university has recorded conditional asset retirement obligations associated with the legally required removal and disposal of certain hazardous materials, primarily asbestos, present in our facilities. When an asset retirement obligation is identified, the university records the fair value of the obligation as a liability. The fair value of the obligation is also capitalized as property, plant and equipment and then amortized over the estimated remaining useful life of the associated asset. The fair value of the conditional asset retirement obligations was estimated using a probability weighted, discounted cash flow model. The present value of future estimated cash flows was calculated using the credit adjusted, interest rate applicable to the university in order to determine the fair value of the conditional asset retirement obligations. For the year ended June 30, 2013, the university recognized accretion expense related to the conditional asset retirement obligation of approximately $5,269,000. For the year ended June 30, 2013, the university settled asset retirement obligations of approximately $1,317,000. As of June 30, 2013, included in the Consolidated Balance Sheet is an asset retirement obligation of $104,841,000. Gifts from donors, including contributions receivable (unconditional promises to give), are recorded as revenues in the year received. Gifts are valued using quoted market prices, market prices for similar assets, independent appraisals, or by university management. Contributions receivable are reported at their discounted value using credit-adjusted borrowing rates and an allowance for amounts estimated to be uncollectible is provided. Donor-restricted gifts, which are received and either spent, or deemed spent, within the same year, are reported as unrestricted revenue. Gifts of long-lived assets with no donor-imposed time restrictions are reported as unrestricted revenue in the year received. Gifts restricted to the acquisition or construction of long-lived assets or subject to other time or purpose restrictions are reported as temporarily restricted revenue. The temporarily restricted net assets resulting from these gifts are released to unrestricted net assets when the donor-imposed restrictions are fulfilled or the assets are placed in service. Gifts received for endowment investment are held in perpetuity and recorded as permanently restricted revenue. 7
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 1 (continued). Health care services revenues included the net patient service revenues associated with the Keck Hospital of USC, USC Norris Cancer Hospital and USC Care Medical Group, Inc.. Net patient service revenue is reported as estimated net realizable amounts from patients, third party payors, government programs and other in the period in which services are provided. The majority of the healthcare services are rendered to patients with commercial or managed care insurance, or under the federal Medicare and California State Medi-Cal programs. Reimbursement from these various payors is based on a combination of prospectively determined rates, discounts from charges and historical costs. Amounts received under the Medicare program are subject to retroactive settlements based on review and final determination by program intermediaries or their agents. Provisions for contractual adjustments and retroactive settlements related to those payors are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods as additional information becomes known or as final settlements are determined. Health care services revenues also includes the revenues associated with the professional services agreement with the County of Los Angeles. Allowances for doubtful accounts are based upon management s assessment of historical and expected net collections considering historical business and economic conditions. Periodically throughout the year management assesses the adequacy of the allowances for doubtful accounts based upon historical write-off experience. The results of this review are then used to make any modifications to the allowance for doubtful accounts. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. The financial statements include certain prior-year summarized comparative information in total but not by net asset category. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the university s financial statements for the year ended June 30, 2012 from which the summarized financial information was derived. Certain reclassifications have been made to summarized financial information for comparative purposes. The university applies the provision of FASB ASC 820, Fair Value Measurements, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement data. The following describes the hierarchy of inputs used to measure fair value and the primary valuation methodologies used by the university for financial instruments measured at fair value on a recurring basis. The three levels of inputs are as follows: Level I - Quoted prices in active markets for identical assets or liabilities. Level II - Inputs other than Level I that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the same term of the assets or liabilities. Level III - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. A financial instrument s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. 8
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 1 (continued). The university applies the authoritative guidance contained in FASB ASC 820-10, Fair Value Measurements and Disclosures, for estimating the fair value of investments in investment funds that have calculated Net Asset Value ( NAV ) per share in accordance with FASB ASC 946-10, Financial Services-Investment Companies (formerly the American Institute of Certified Public Accountants Audit and Accounting Guide, Investment Companies). According to this guidance, in circumstances in which NAV per share of an investment is not determinative of fair value, a reporting entity is permitted, to estimate the fair value of an investment in an investment fund using the NAV per share of the investment (or its equivalent) without further adjustment, if the NAV per share of the investment is determined in accordance with FASB ASC 946-10 as of the reporting entity s measurement date. Accordingly, the university uses the NAV as reported by the money managers as a practical expedient, to determine the fair value of investments in investment funds which (a) do not have a readily determinable fair value and (b) either have the attributes of an investment fund or prepare their financial statements consistent with the measurement principles of an investment fund. At June 30, 2013, the fair value of all such investments in investment funds has been determined by using NAV as a practical expedient. Additionally, in accordance with Accounting Standards Update ( ASU ) 2009-12, the university considers several additional factors in appropriately classifying the investment funds in the fair value hierarchy. An investment is generally classified as Level II if the university has the ability to withdraw its investment with the investment fund at NAV at the measurement date. An investment is generally classified as Level III if the university does not have the ability to withdraw its investment with the investment fund at NAV, such as investments in closed-end funds, side pockets, or funds with suspended withdrawals imposed. If the university cannot withdraw its investment with the investment funds at NAV when such investment is subject to lock-up or gate, or its withdrawal period does not coincide with the university s measurement date, the university considers the length of time until the investment will become redeemable in determining whether the fair value measurement of the investment should be classified as a Level II or Level III fair value measurement. In May 2011, the FASB issued ASU 2011-04, which amends ASC Topic 820, Fair Value Measurement. The amended guidance changes the wording used to describe many requirements under GAAP for measuring fair value and for disclosing information about fair value measurements. Additionally, the amendments clarify the FASB s intent about the application of existing fair value measurement requirements. The guidance provided in ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011, and is applied prospectively. The university adopted ASU 2011-04, effective July 1, 2012, and such adoption did not have a material effect on the university's financial statements. In October 2012, the FASB issued ASU 2012-05, Statement of Cash Flows (Topic 230): Not-for-Profit Entities: Classification of the Sale Proceeds of Donated Financial Assets in the Statement of Cash Flows (a consensus of the FASB Emerging Issues Task Force), which amends the standards for preparing the statement of cash flows. The ASU requires a not-for-profit ( NFP ) to classify cash receipts from the sale of donated financial assets consistently with cash donations received if those cash receipts were from the sale of donated financial assets that upon receipt were directed without any NFP-imposed limitations for sale and were converted nearly immediately to cash. The guidance provided in ASU 2012-05 is effective for interim and annual reporting periods beginning after June 15, 2013. The university has decided not to early adopt ASU 2013-02. 9
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 2. Accounts receivable (in thousands): U.S. Government $30,901 Student and other, net of allowance for doubtful accounts of $7,982 91,082 Patient care, net of allowance for doubtful accounts of $34,365 203,575 $325,558 Note 3. Investments (in thousands): Cost Fair Value Equities $1,184,678 $1,351,190 Fixed income securities 1,218,308 1,198,070 Alternative investments: Hedge funds 517,182 702,348 Private capital 1,139,317 1,105,164 Real estate and other 284,514 216,421 Assets held by other trustees 121,370 135,342 Total $4,465,369 $4,708,535 The following table summarizes the financial instruments carried at fair value as of June 30, 2013, by the ASC 820 valuation hierarchy defined above: Level I Level II Level III Total Investments: Equities $1,020,167 $267,542 $63,481 $1,351,190 Fixed income securities 214,151 973,660 10,259 1,198,070 Hedge funds 702,348 702,348 Private capital 1,105,164 1,105,164 Real estate and other 216,421 216,421 Assets held by other trustees 135,342 135,342 Total investments $1,234,318 $1,241,202 $2,233,015 $4,708,535 The following table summarizes the university s Level III reconciliation of investments for the year ended June 30, 2013: Balance at July 1, 2012 $2,053,036 Net realized gains 145,014 Net unrealized gains 77,932 Transfers in * 3 Purchases 329,768 Sales and settlements (372,738) Balance at June 30, 2013 $2,233,015 * Transfers were due to an increase or decrease in price transparency or the availability of dealer quotations at the end of each month. 10
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 3 (continued). The university uses the NAV to determine the fair value of all the underlying investments which (a) do not have a readily determinable fair value and (b) prepare their financial statements consistent with the measurement principles of an investment company or have the attributes of an investment company. The following table lists investments in other investment companies (in partnership format) by major category: Category of Investment Investment Strategy Fair Value Determined Using NAV Unfunded Commitments Remaining Life Redemption Terms Redemption Restrictions and Terms Redemption Restrictions and Terms in Place at Year End Assets Held By Other Funds Miscellaneous investments held outside USC where USC has no authority over the fund $135,342,000 Not Applicable Not Applicable Redemptions are not permitted during the life of the fund. Not Applicable Not Applicable Distressed Obligation Partnerships US and Non-US Distressed Debt Securities $63,550,000 $14,380,000 Approximately 4 Years Redemptions are not permitted during the life of the fund. Not Applicable Not Applicable Equity Funds US and Non-US Equity Securities $267,542,000 Not Applicable Open Ended Minimum Monthly None None Hedge Funds US and Non-US Investments in Relative Value, Event Driven, Long/Short, and Directional Strategies $702,348,000 $13,500,000 98.4% of NAV has an open ended life, 1.4% of NAV will be liquidated on 1/31/14, and 0.2% of NAV will be liquidated on an undetermined basis. Ranges between monthly redemption with 90 days notice, quarterly redemption with up to 90 days notice, semiannual redemption with 60 days notice, and annual redemption with up to 180 days notice. 20% of NAV is locked up for 3 months, 47% of NAV is locked-up for 1 year, and 33% of NAV is locked-up for more than 1 year. None Natural Resources Partnerships US and Non-US Investments in Upstream, Midstream, and Downstream Natural Resources Investments $381,568,000 $96,428,000 Approximately 6 Years Redemptions are not permitted during the life of the fund. Not Applicable Not Applicable Other Funds US and Non-US Investments in Securities Other than Equity and Fixed Income $1,261,000 Not Applicable Open Ended Monthly None None Private Capital Partnerships US and Non-US Private Equity and Venture Capital Investments $660,046,000 $176,349,000 Approximately 4 Years Redemptions are not permitted during the life of the fund. Not Applicable Not Applicable Private Real Estate Partnerships US and Non-US Real Estate $180,052,000 $75,560,000 Approximately 4 Years Redemptions are not permitted during the life of the fund. Not Applicable Not Applicable Total $2,391,709,000 $376,217,000 11
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 4. Property, plant and equipment (in thousands): Land and improvements $145,295 Buildings and improvements 2,869,242 Buildings under capital leases 60,696 Equipment 541,954 Library books and collections 274,425 Construction-in-progress 310,432 4,202,044 Less: Accumulated depreciation 1,664,142 $2,537,902 Note 5. Bonds and note payable (in thousands): California Educational Facilities Authority (CEFA) Revenue Bonds and Notes: Interest % Maturity Series 2003B 5.00 2014-2016 3,590 Premium 227 Series 2005 4.25-5.00 2014-2029 62,100 Premium 2,030 Series 2007A 4.50-4.75 2014-2038 257,085 Premium 2,114 Series 2009A 5.00-5.25 2039-2040 217,605 Discount (836) Series 2009B 5.00-5.25 2039-2040 197,900 Premium 2,904 Series 2009C 5.25 2025 82,305 Premium 6,712 Series 2012A 5.00 2024 41,595 Premium 10,361 University of Southern California Bonds Series 1998 5.87-6.26 2014-2019 8,585 Discount (17) Series 2011 5.25 2112 300,000 Discount (2,639) California Infrastructure Revenue Bonds USC (USC Soto Street Health Sciences) Series 2010 3.00-5.00 2014-2032 34,670 Premium 2,322 Note Payable 4.00-5.50 2014-2016 44,493 1,273,106 Less: current portion of long-term debt 10,855 $1,262,251 Principal payment requirements relating to bonds and note payable, after giving effect to refunding, for the next five fiscal years are approximately: 2014 $10,855,000; 2015 $22,120,000; 2016 $8,515,000; 2017 $26,333,000; 2018 $1,400,000. Interest payments for fiscal year 2013 were $61,137,000. On April 6, 2009, a $100,000,000 revolving line of credit agreement was implemented with a bank. The credit agreement was amended on June 24, 2010 to increase the revolving line of credit to $200,000,000. On April 19, 2013, a third amendment was agreed to extend the maturity date to November 30, 2016. The line of credit accrues interest based on LIBOR and contains a fee on the unused portion of the line of credit. During the years ended June 30, 2013 and 2012, the university did not draw down on the line of credit. The line of credit contains certain restrictive covenants required in the agreement. 12
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 6. Financial aid is awarded to students based on need and merit. Financial aid does not include payments made to students for services rendered to the university. Financial aid for the year ended June 30, 2013 consists of the following (in thousands): Undergraduate Graduate Total Institutional scholarships $242,165 $106,953 $349,118 Endowed scholarships 24,195 10,686 34,881 External financial aid 20,439 9,027 29,466 $286,799 $126,666 $413,465 Note 7. Endowment net assets are subject to the restrictions of gift instruments requiring that the principal be invested in perpetuity and only the income and realized gains be utilized for current and future needs. Long-term investment net assets (funds functioning as endowment) have been established from restricted gifts whose restrictions have been met and unrestricted gifts which have been designated by the Board of Trustees or management for the same purpose as endowment. The university also has a beneficial interest in the net income earned from assets which are held and managed by other trustees. Endowment and long-term investment net assets functioning as endowment are summarized as follows (in thousands): Funds functioning Endowment as endowment Total Pooled $2,638,032 $1,058,686 $3,696,718 Non-pooled 95,960 75,677 171,637 $2,733,992 $1,134,363 $3,868,355 Pooled investments represent endowment and long-term investment net assets which have been commingled in a unitized pool (unit market value basis) for purposes of investment. The pool is comprised of cash and cash equivalents (4.09%), equities (42.32%), fixed income securities (7.74%), alternative investments (41.02%) and real estate and other investments (4.83%). Access to or liquidation from the pool is on the basis of the market value per unit on the preceding monthly valuation date. The unit market value at June 30, 2013 was $570.41. The Board of Trustees has interpreted the Uniform Prudent Management of Institutional Funds Act ( UPMIFA ) as requiring the preservation of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the university classifies as permanently restricted net assets, (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure in a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, the university considers various factors in making a determination to appropriate or accumulate endowment funds including: duration and preservation of the fund, economic conditions, effects of inflation or deflation, expected return on the funds and other economic resources of the university. Endowment net asset composition by type of fund as of June 30, 2013 (in thousands): Unrestricted Temporarily Restricted Permanently Restricted Total Donor-restricted endowment funds $1,197,326 $1,536,666 $2,733,992 Board-designated endowment funds $1,134,363 1,134,363 $1,134,363 $1,197,326 $1,536,666 $3,868,355 13
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 7 (continued). Changes in endowment net assets for the year ended June 30, 2013 (in thousands): Unrestricted Temporarily Restricted Permanently Restricted Total Endowment net assets at July 1, 2012 $1,027,846 $1,038,314 $1,422,773 $3,488,933 Investment return: Investment income 65,707 540 66,247 Net appreciation 110,415 228,246 338,661 Total investment return 176,122 228,246 540 404,908 Gifts and transfers 26,139 113,353 139,492 Appropriation of endowment assets for expenditure (95,744) (69,234) (164,978) Endowment net assets at June 30, 2013 $1,134,363 $1,197,326 $1,536,666 $3,868,355 Endowments classified as permanently restricted net assets and temporarily restricted net assets are to be utilized for the following purposes: Permanently restricted net assets (in thousands): The portion of perpetual endowment funds that is required to be retained permanently either by explicit donor stipulation or by UPMIFA: Restricted for scholarship support $370,669 Restricted for faculty support 367,292 Restricted for program support 798,705 Total endowment assets classified as permanently restricted net assets $1,536,666 Temporarily restricted net assets (in thousands): The portion of permanent endowment funds subject to a time restriction under UPMIFA: Restricted for scholarship support $288,334 Restricted for faculty support 402,348 Restricted for program support 506,644 Total endowment assets classified as temporarily restricted net assets $1,197,326 From time to time, the fair value of assets associated with individual donor-restricted endowment funds may fall below the value of the initial and subsequent donor gift amounts (deficit). When donor endowment deficits exist, they are classified as a reduction of unrestricted net assets. Deficits of this nature reported in unrestricted net assets were $11,520,000 as of June 30, 2013. These deficits resulted from unfavorable market fluctuations that occurred shortly after the investment of newly established endowments, and authorized appropriation that was deemed prudent. The university has adopted endowment investment and spending policies that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of endowment assets. Under these policies, the return objective for the endowment assets, measured over a full market cycle, shall be to maximize the return against a blended index, based on the endowment s target allocation applied to the appropriate individual benchmarks. The university expects its endowment funds over time, to provide an average rate of return of approximately 8.0 % annually. Actual returns in any given year may vary from this amount. 14
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 7 (continued). To achieve its long-term rate of return objectives, the university relies on a total return strategy in which investment returns are achieved through both capital appreciation (realized and unrealized gains) and current yield (interest and dividends). The university targets a diversified asset allocation that places greater emphasis on equity-based investments to achieve its long-term objectives within prudent risk constraints. The university utilizes a spending rule for its pooled endowment. The spending rule determines the endowment income and realized gains to be distributed currently for spending with the provision that any amounts remaining after the distribution be transferred and reinvested in the endowment pool as funds functioning as endowment. For the 2013 fiscal year, the Board of Trustees approved current distribution of 100% of the prior year s payout, within a minimum of 4% and a maximum of 6% of the average market value for the previous 12 calendar quarters. Under the provisions of the spending rule, $25.42 was distributed to each time-weighted unit for a total spending rule allocation of $164,181,000. Investment income amounting to $10.05 per time-weighted unit was earned, totaling $64,910,000, and $99,271,000 was appropriated for current operations from cumulative gains of pooled investments. Endowment pool earnings allocated for spending in fiscal year 2013 represent 4.44% of the market value of the endowment pool at June 30, 2013. Note 8. At June 30, 2013, the university has adopted the required disclosures under ASU 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. According to this guidance, the university is required to disclose the nature of credit risk inherent in the portfolio of financing receivables, its analysis and assessment in arriving at the allowance for credit losses (doubtful accounts), and the changes and reasons for those changes in the allowance for credit losses. Long-term financing receivables as of June 30, 2013 consist of the following (in thousands): Financing Receivables, at Gross June 30, 2013 Allowance for Doubtful Accounts Perkins loans $53,448 $ 53,448 University student loans 22,735 ($6,081) 16,654 Other student loans 14,812 14,812 Total student loans 90,995 ($6,081) 84,914 Faculty and other student loans 30,536 30,536 Total $ 121,531 ($6,081) $ 115,450 Management regularly assesses the adequacy of the allowance for credit losses by performing ongoing evaluations of the student loan portfolio, including such factors as the differing economic risks associated with each loan category, the financial condition of specific borrowers, the economic environment in which the borrowers operate, the level of delinquent loans, the value of any collateral and, where applicable, the existence of any guarantees or indemnifications. The university's Perkins receivable represents the amounts due from current and former students under the Federal Perkins Loan Program. Loans disbursed under the Federal Perkins Loan program are able to be assigned to the Federal Government in certain non-repayment situations. In these situations the Federal portion of the loan balance is guaranteed. Included in other loans are loans related to the Federal Health Professional Student Loan Program ( HPSL ) and Loans for Disadvantaged Students ( LDS ). Factors also considered by management when performing its assessment, in addition to general economic conditions and the other factors described above, included, but were not limited to, a detailed review of the aging of the student loan receivable detail and a review of the default rate by loan category in comparison to prior years. The level of the allowance is adjusted based on the results of management s analysis. It is the university's policy to write off a loan only when they are deemed to be uncollectible. The following table illustrates the aging analysis of receivables as of June 30, 2013 (in thousands): Net 1-60 Days Past Due 61-90 Days Past Due > 91 Days Past Due Current Total Financing Receivables Perkins loans $1,784 $386 $6,789 $44,489 $ 53,448 University student loans 667 185 10,027 11,856 22,735 Other student loans 915 509 13,388 14,812 Total student loans 3,366 571 17,325 69,733 90,995 Faculty and other loans 30,536 30,536 Total $ 3,366 $ 571 $ 17,325 $ 100,269 $ 121,531 15
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 8 (continued). Considering the other factors already discussed herein, management considers the allowance for credit losses to be prudent and reasonable. Furthermore, the university s allowance is general in nature and is available to absorb losses from any loan category. Management believes that the allowance for credit losses at June 30, 2013 is adequate to absorb credit losses inherent in the portfolio as of that date. As part of the program to attract and retain exemplary faculty and senior staff, the university provides home mortgage financing assistance. Notes receivable amounting to $30,536,000 were outstanding as of June 30, 2013 and are collateralized by deeds of trust. No allowance for doubtful accounts has been recorded against these loans based on their collateralization and prior collection history. At June 30, 2013, there were no amounts past due under the faculty and staff loan program. Note 9. Unconditional promises are included in the consolidated financial statements as pledges receivable and revenue of the appropriate net asset category. Pledges are recorded after discounting using rates ranging from 1% to 6% to the present value of the future cash flows. Unconditional promises are expected to be realized in the following periods (in thousands): In one year or less $123,293 Between one year and five years 286,837 More than five years 249,675 Less: discount of $121,076 and allowance of $18,807 (139,883) $519,922 Pledges receivable at June 30, 2013 have the following restrictions (in thousands): Endowment for departmental programs and activities $234,467 Endowment for scholarship 4,623 Building construction 136,074 Departmental programs and activities 144,758 $519,922 Note 10. Executed contracts, grants, subcontracts and cooperative agreements for future sponsored research activity which are not reflected in the consolidated financial statements at June 30, 2013 are summarized as follows (in thousands): Current sponsored awards $450,181 Executed grants and contracts for future periods 525,117 $975,298 16
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 11. At June 30, 2013, the university had remaining commitments of approximately $376,217,000 with alternative investment managers and/or limited partnerships. Contractual commitments for educational plant amounted to approximately $146,328,000 at June 30, 2013. It is expected that the resources to satisfy these commitments will be provided from certain unexpended plant net assets, anticipated gifts and/or debt proceeds. During the year ended June 30, 2007, the university entered into an agreement with the County of Los Angeles to provide professional services at LAC+USC Medical Center. Under the terms of the agreement the contract automatically renews on an annual basis unless either party gives four years notice of the termination. No such notice has been provided by either party. Note 12. Retirement benefits for eligible employees are provided through the Teachers Insurance and Annuity Association and the College Retirement Equities Fund, The Vanguard Group, AIG SunAmerica, Fidelity Investments and Prudential Financial. Under these defined contribution plans, the university and plan participants make contributions to purchase individual, fixed or variable annuities equivalent to retirement benefits earned or to participate in a variety of mutual funds or commingled funds. The university makes a 5% non-elective contribution to all eligible employees and also matches dollar for dollar the first 5% of the employees contributions. Newly hired employees on or after January 1, 2012, will have the university non-elective contribution subject to a four year vesting schedule. Benefits commence upon termination or retirement and pre-retirement survivor death benefits are also provided. Charges to education and general activities expenses for the university s share of costs were approximately $122,129,000 during the year ended June 30, 2013. Retirement benefits for hospital employees covered under a collective bargaining agreement with the National Union of Healthcare Workers (NUHW) are provided by a defined contribution 401(k) plan through Fidelity investments. Until August 2011, the hospital employees covered under a collective bargaining agreement with CNA were also covered under this 401(k) plan. Under the defined contribution plan, participants make contributions to purchase a variety of mutual funds. The university makes its contribution following the end of the calendar year and matches 100% of the participants contributions up to 3% of eligible earnings providing the participant was employed on the last day of the calendar year. Effective May 2012, the university match contribution was increased to 4% for NUHW participants. In addition, the university makes a 1% retiree medical benefit contribution to all NUHW participants who were both employed on the last day of the calendar year and worked 1,500 hours in that calendar year. Effective July 2013, all employees of the USC Verdugo Hills Hospital are eligible to participate in the 401(k) plan. They will receive a discretionary employer match of up to 4% of eligible earnings. The university contribution is subject to a five year vesting schedule although previously credited years from before the acquisition have been carried over. Benefits commence at age 59 1/2, termination of employment, or retirement and pre-retirement survivor death benefits are also provided. Charges to education and general activities expenses for the university s share of costs were approximately $1,144,000 during the year ended June 30, 2013. Retirement benefits for non-exempt employees are provided through a noncontributory defined benefit pension plan. The following table sets forth the plan s funded status at June 30, 2013 (in thousands): Obligations and Plan Assets Change in Projected Benefit Obligation Benefit obligation at end of prior year $224,106 Interest cost 9,700 Actuarial loss (14,813) Benefits paid (6,762) Benefit obligation at end of year $212,231 Change in Plan Assets Fair value of plan assets at end of prior year $146,260 Actual return on plan assets 12,766 Benefits paid (6,762) Fair value of plan assets at end of year $152,264 Reconciliation of Funded Status Accumulated benefit obligation at end of year $212,231 Projected benefit obligation at end of year ($212,231) Fair value of plan assets at end of year 152,264 Funded status ($59,967) Components of Net Periodic Benefit Cost Interest cost $9,700 Expected return on plan assets (10,698) Amortization of net loss 7,766 Total benefit cost $6,768 Amounts recognized in the Statement of Financial Position Noncurrent liabilities ($59,967) Amounts not yet recognized as components of Net Periodic Benefit Cost Net loss $86,374 Changes in the net reduction to Unrestricted Net Assets Net gain ($16,882) Amortization of net loss (7,766) Total ($24,648) 17
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 12 (continued). The estimated net loss/(gain) and prior service cost for the USC Support Staff Retirement Plan that will be recognized as components of net periodic benefit cost over the next fiscal year are $5,822,000 and $0, respectively. The plan was amended to freeze benefit accruals for all remaining active union participants effective December 23, 2009, and to provide full vesting for those participants. No special accounting for curtailments, settlements or termination benefits was required during the year ended June 30, 2013. Assumptions Weighted-average assumptions used to determine net periodic benefit cost for year ended June 30: Discount rate 4.40% Expected return on plan assets 7.50% Rate of compensation increase N/A Weighted-average assumption used to determine net year-end benefit obligations at June 30: Discount rate 4.90% Rate of compensation increase N/A Plan Assets In managing the plan assets, our objective is to be a responsible fiduciary while minimizing financial risk. Plan assets include a diversified mix of fixed income securities and equity securities across a range of sectors and levels of capitalization to maximize the long term return for a prudent level of risk. In addition to producing a reasonable return, the investment strategy seeks to minimize the volatility in our expense and cash flow. The target allocation for pension benefit plan assets is 75% equity securities and 25% fixed income securities. As described in Note 1, the university uses a hierarchy to report invested assets, including the invested assets of the Plan. Following is a description of the valuation methodologies used for assets measured at fair value. Fair Value The Plan s interest in collective trusts is valued based on the net asset value information reported by the investment advisor. The fund is valued at the normal close of trading on the New York Stock Exchange every day the Exchange is open (a Business Day ). Equity securities are valued at the official closing price of, or the last reported sales price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or at the last available bid price. In cases where equity securities are traded on more than one exchange, the securities are valued on the exchange or market determined to be the most representative market, which may be either a securities exchange or the over-the-counter market. Short term investments are carried at market value. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. A summary of fair value measurements by level for investments measured at fair value on a recurring basis is as follows (in thousands): Collective Trust Funds: Level I Level II Level III Total Short-term investment fund $546 $546 Equity securities 113,081 113,081 Fixed income securities 38,637 38,637 Total $152,264 $152,264 18
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 12 (continued). Allocation of Assets The year-end asset allocation, which approximates the weighted-average allocation for the Plan assets as of June 30, 2013 and in comparison to target percentages for each asset category, is as follows: Target Asset Category June 30, 2013 at June 30, 2013 Short-term investment fund 0.3% 0% Equity securities 74.3% 75.0% Fixed income securities 25.4% 25.0% Total 100.0% 100.0% The portfolio is evaluated annually, or when the actual allocation percentages are plus or minus 2% of the stated target allocation percentages. Changes in policy may be indicated as a result of changing market conditions or anticipated changes in the pension plan s needs. Prohibited transactions include investment transactions prohibited by the Employee Retirement Income Security Act of 1974 and speculative investments including commodities or unregistered stock without specific prior approval by the Investment Committee. Contributions No contribution to the pension plan was required during the year ended June 30, 2013. The university may make discretionary contributions to its pension plan during the next fiscal year. This will be reassessed during the year. Estimated Future Benefit Payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands): Fiscal Year Ending June 30, 2014 $7,970 2015 $8,585 2016 $9,161 2017 $9,800 2018 $10,401 2019 2023 $58,486 Note 13. The university is the lessee of various equipment and space under noncancelable operating and capital leases. Operating lease rental expense for the year ended June 30, 2013 was approximately $31,510,000. Space leases contained customary escalation clauses, which are included in annual aggregate minimum rentals. Future aggregate minimum rental payments under operating and capital leases are as follows (in thousands): Future minimum rental payments: Operating Capital 2014 $23,279 $3,769 2015 20,177 3,825 2016 17,524 3,883 2017 17,023 3,941 2018 16,735 4,000 Thereafter 138,243 81,850 232,981 101,268 Less: Interest on capital leases (42,166) Total $232,981 $59,102 19
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 14. Expenses are presented by functional classification in accordance with the overall service mission of the university. Each functional classification displays all expenses related to the underlying operations by natural classification. Depreciation expense is allocated based on square footage occupancy. Interest expense on external debt is allocated to the functional categories which have benefited from the proceeds of the external debt. Plant operations and maintenance represents space related costs which are allocated to the functional categories directly and/or based on the square footage occupancy. Functional expense consists of the following (in thousands): Academic, Health Care and Student Services Support Services Fund Raising Activities Year Ended June 30, 2013 Compensation $1,296,003 $251,036 $25,028 $1,572,067 Fringe benefits 316,856 79,929 8,258 405,043 Operating expenses 651,797 266,738 13,224 931,759 Cost of goods sold 30,784 55,541 86,325 Travel 43,877 9,293 828 53,998 Allocations: Depreciation 121,356 39,789 140 161,285 Interest 17,364 45,943 63,307 Plant operations and maintenance 146,143 (147,050) 907 $2,624,180 $601,219 $48,385 $3,273,784 Note 15. The university is contingently liable as guarantor on certain obligations relating to equipment loans, student and parent loans, and various campus organizations. The university receives funding or reimbursement from governmental agencies for various activities, which are subject to audit. In addition, certain litigation has been filed against the university and in the opinion of university management, after consultation with legal counsel, the liability, if any, for the aforementioned matters will not have a material effect on the university s financial position. Note 16. The estimated fair value of the university s bonds, notes and mortgages payable was $1,339,872,000 at June 30, 2013. This fair value was estimated based upon the discounted amount of future cash outflows using the rates offered to the university for debt of the same remaining maturities. Determination of the fair value of notes receivable, which are primarily federally sponsored student loans with U.S. Government mandated interest rates and repayment terms and subject to significant restrictions as to their transfer or disposition, could not be made without incurring excessive costs. Note 17. Members of the Board of Trustees and senior management may, from time to time, be associated, either directly or indirectly, with companies doing business with the university. For senior management, the university requires annual disclosure of significant financial interest in entities doing business with the university. These annual disclosures cover both senior management and their immediate family members. When such relationships exist, measures are taken to appropriately manage the actual or perceived conflict in the best interests of the university. The university has a written conflict of interest policy that requires, among other things, that no member of the Board of Trustees can participate in any decision in which he or she or an immediate family member has a material financial interest. Each trustee is required to certify compliance with the conflict of interest policy on an annual basis and indicate whether the university does business with an entity in which a trustee has a material financial interest. When such relationships exist, measures are taken to mitigate any actual or perceived conflict, including requiring the recusal of the conflicted trustee and that such transactions be conducted at arm s length, for good and sufficient consideration, based on terms that are fair and reasonable to and for the benefit of the university, and in accordance with applicable conflict of interest laws. 20
UNIVERSITY OF SOUTHERN CALIFORNIA 2013 FINANCIAL REPORT Note 18. The university has performed an evaluation of subsequent events through October 9, 2013, which is the date the financial statements were issued. Subsequent to the fiscal year ended June 30, 2013, the university acquired USC Verdugo Hills Hospital (USC VHH) through its subsidiary, USC Verdugo Hills Hospital, LLC (USC VHH LLC). The primary operation of USC VHH IS a 158-bed acute care hospital located in Glendale, California. USC VHH LLC acquired certain assets and assumed certain liabilities in consideration of the USC VHH LLC discharging the outstanding indebtedness of USC VHH in an amount not to exceed $10,000,000. In addition USC VHH LLC has committed to making capital improvements to USC VHH in the amount of at least $30,000,000 over the next five years. The operations of USC Verdugo Hills Hospital, LLC will be included in the consolidated results of operations for the university for the year ended June 30, 2014. Subsequent to the fiscal year ended June 30, 2013, the university entered into a lease agreement with the Los Angeles Memorial Coliseum Commission (LAMCC) to assume the operations of the Los Angeles Memorial Coliseum and Los Angeles Memorial Sports Arena. The lease agreement with the LAMCC expires in 2033, or in 2054, if all options are exercised, at which time a second lease agreement with the California Science Center (CSC), an institution of the State of California, commences. The lease with the California Science Center expires in 2111, assuming all options are exercised. Under the terms of both lease agreements the university is required to make significant capital improvements to the property. 21
Schedule of Expenditures of Federal Awards Sponsor Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Expenditures DIRECT AWARDS Agency For International Development Agency For International Development 98.RDG $ 659,487 Total - Agency For International Development 659,487 Department of Agriculture National Institute of Food and Agriculture 10.206 254,542 National Institute of Food and Agriculture 10.310 213,827 Total - Department of Agriculture 468,369 Department of Commerce Department of Commerce 11.RDG 317,487 Economic Development Administration 11.313 702,684 Minority Business Development Agency 11.800 15,061 Minority Business Development Agency 11.805 287,107 National Institute of Standards and Technology (NIST) 11.609 4,550 National Oceanic and Atmospheric Administration (NOAA) 11.417 1,033,206 National Oceanic and Atmospheric Administration (NOAA) 11.478 232,552 Total - Department of Commerce 2,592,647 Department of Defense Advanced Research Projects Agency 12.910 5,110,745 Department of Defense 12.RDC 53,360,748 Department of Defense 12.RDG 3,084,629 Department of the Air Force, Materiel Command 12.800 4,598,817 Department of the Navy, Office of the Chief of Naval Researc12.300 8,523,972 National Security Agency 12.901 44,143 National Security Agency 12.902 22,100 Office of the Secretary of Defense 12.351 1,507,378 Office of the Secretary of Defense 12.630 593,123 U.S. Army Materiel Command 12.431 3,068,488 U.S. Army Medical Command 12.420 5,096,335 Total - Department of Defense 85,010,478 *See footnote 2. The accompanying notes are as integral part of this Schedule. 22
Schedule of Expenditures of Federal Awards Sponsor Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Expenditures DIRECT AWARDS (Continued) Department of Education Bilingual Education Professional Development 84.195 128,404 Department of Education 84.RDG 758,807 Institute of Education Sciences 84.305 491,911 Jacob K. Javits Gifted and Talented 84.206 43,303 Office of Postsecondary Education 84.015 579,063 Office of Postsecondary Education 84.220 157,272 Office of Special Education and Rehabilitative Services 84.133 966,543 Office of Special Education and Rehabilitative Services 84.325 128,330 Total - Department of Education 3,253,633 Department of Energy Advanced Research Projects Agency - Energy 81.135 82,635 Advanced Research Projects Agency - Energy - ARRA 81.135 490,186 Conservation Research and Development - ARRA 81.086 160,464 Defense Nuclear Nonproliferation Research 81.113 202,332 Fossil Energy Research and Development 81.089 463,843 Office of Science Financial Assistance Program 81.049 2,613,963 Office of Science Financial Assistance Program - ARRA 81.049 2,203,459 Office of Scientific and Technical Information 81.064 156,738 Renewable Energy Research and Development - ARRA 81.087 197,301 Total - Department of Energy 6,570,921 Department of Health and Human Services Agency for Healthcare Research and Quality 93.226 201,752 Agency for Healthcare Research and Quality - ARRA 93.715 482,591 Centers for Disease Control and Prevention 93.070 5,070 Centers for Disease Control and Prevention 93.283 569,804 Centers for Disease Control and Prevention 93.941 421,430 Centers for Medicare and Medicaid Services 93.610 1,716,384 Department Of Health And Human Services 93.RDC 4,480,801 Health Resources and Services Administration 93.124 13,485 Health Resources and Services Administration 93.153 873,844 Health Resources and Services Administration 93.514 176,000 Health Resources and Services Administration 93.884 550,470 *See footnote 2. The accompanying notes are as integral part of this Schedule. 23
Schedule of Expenditures of Federal Awards Sponsor Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Expenditures DIRECT AWARDS (Continued) Health Resources and Services Administration 93.918 309,494 Health Resources and Services Administration 93.924 584,759 Health Resources and Services Administration - ARRA 93.403 2,163 National Insitute of Diabetes and Digestive and Kidney Diseases 93.848 (435) National Institute of Health 93.894 (82) National Institute of Health 93.999 (40) National Institute on Alcohol Abuse and Alcoholism 93.891 12,719 National Institutes of Health 93.113 7,931,006 National Institutes of Health 93.121 7,488,879 National Institutes of Health 93.172 4,541,297 National Institutes of Health 93.173 1,914,797 National Institutes of Health 93.213 690,118 National Institutes of Health 93.242 9,671,512 National Institutes of Health 93.272 54,227 National Institutes of Health 93.273 6,120,650 National Institutes of Health 93.277 175,618 National Institutes of Health 93.279 4,960,441 National Institutes of Health 93.282 28,803 National Institutes of Health 93.286 3,427,098 National Institutes of Health 93.307 586,823 National Institutes of Health 93.310 1,904,027 National Institutes of Health 93.350 11,306,005 National Institutes of Health 93.351 382,460 National Institutes of Health 93.389 5,739,082 National Institutes of Health 93.393 20,088,312 National Institutes of Health 93.394 4,575,625 National Institutes of Health 93.395 2,250,712 National Institutes of Health 93.396 3,477,890 National Institutes of Health 93.397 9,850,171 National Institutes of Health 93.398 1,357,044 National Institutes of Health 93.399 540,364 National Institutes of Health 93.701 436,050 National Institutes of Health 93.837 3,672,396 National Institutes of Health 93.838 3,469,626 National Institutes of Health 93.839 1,540,290 National Institutes of Health 93.846 3,384,736 National Institutes of Health 93.847 9,578,122 National Institutes of Health 93.853 8,640,518 *See footnote 2. The accompanying notes are as integral part of this Schedule. 24
Schedule of Expenditures of Federal Awards Sponsor Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Expenditures DIRECT AWARDS (Continued) National Institutes of Health 93.855 7,060,222 National Institutes of Health 93.859 7,961,108 National Institutes of Health 93.865 6,931,175 National Institutes of Health 93.866 17,460,475 National Institutes of Health 93.867 7,941,142 National Institutes of Health 93.989 31,949 National Institutes of Health - ARRA 93.113 (101) National Institutes of Health - ARRA 93.701 9,204,551 Office of the Secretary 93.297 877,076 Office of the Secretary - ARRA 93.726 1,017,396 Substance Abuse and Mental Health Services Administration 93.243 869,717 Total - Department of Health and Human Services 209,539,618 Department of Homeland Security Centers for Homeland Security 97.061 3,716,094 Department Of Homeland Security 97.RDC 968,125 Earthquake Consortium 97.082 75,859 Homeland Security-related Science, Technology, Engineering and Mathematics (HS STEM) Career Development Program 97.104 248,622 Total - Department of Homeland Security 5,008,700 Department of the Interior Bureau of Reclamation 15.508 70,862 Department Of The Interior 15.RDC 689,977 Department Of The Interior 15.RDG 51,574 U.S. Geological Survey 15.807 193,894 U.S. Geological Survey 15.808 1,430,288 U.S. Geological Survey 15.810 11,981 Total - Department of the Interior 2,448,576 Department of Justice Civil Rights Division 16.101 42,895 Department of Justice 16.RDG 710,265 National Institute of Justice 16.560 113,613 Violence Against Women Office 16.525 641 Total - Department of Justice 867,414 Department of State Bureau of Educational and Cultural Affairs 19.415 599,459 *See footnote 2. The accompanying notes are as integral part of this Schedule. 25
Schedule of Expenditures of Federal Awards Sponsor Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Expenditures DIRECT AWARDS (Continued) Bureau of Near Eastern Affairs 19.021 18,750 Office of the Coord. of U.S. Assistance to Europe and Eurasia 19.900 1,193 Total - Department of State 619,402 Department of Transportation Department of Transportation 20.RDC 355,825 Department of Transportation 20.RDG 445,545 Federal Transit Administration (FTA) 20.514 107,933 Rita Hydrogen 20.704 223,401 Total - Department of Transportation 1,132,704 Department of Veterans Affairs Department Of Veterans Affairs 64.RDC 210,326 Department Of Veterans Affairs 64.RDG 74,058 VA Health Administration Center 64.009 3,928 VA Health Administration Center 64.018 (8,872) Total - Department of Veterans Affairs 279,440 Environmental Protection Agency Office of Research and Development (ORD) 66.509 878,783 Total - Environmental Protection Agency 878,783 Federal Communications Commission Federal Communications Commission 32.RDC 48,637 Total - Federal Communications Commission 48,637 Institute For Museum and Library Conservation Project Support (IMLS) 45.303 27,767 Total - Institute For Museum and Library 27,767 Institute of Museum and Library Services Laura Bush 21st Century Librarian Program 45.313 152,779 Total - Institute of Museum and Library Services 152,779 Library of Congress Library of Congress 42.RDC 3,552 Total - Library Of Congress 3,552 *See footnote 2. The accompanying notes are as integral part of this Schedule. 26
Schedule of Expenditures of Federal Awards Sponsor Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Expenditures DIRECT AWARDS (Continued) National Aeronautics and Space Administration Cross Agency Support 43.009 54,912 Exploration 43.003 100,007 National Aeronautics And Space Administration 43.103 69,871 National Aeronautics And Space Administration 43.RDC 868,118 National Aeronautics And Space Administration 43.RDG 375,050 Science 43.001 660,450 Space Operations 43.007 67,431 Total - National Aeronautics and Space Administration 2,195,839 National Archives and Records Administration National Historical Publications and Records Grants 89.003 39,430 Total - National Archives and Records Administration 39,430 National Endowment for the Arts Promotion of the Arts-Grants to Organizations and Individuals 45.024 19,123 Total - National Endowment for the Arts 19,123 National Endowment for the Humanities Promotion of the Humanities-Division of Preservation and Access 45.149 308,368 Promotion of the Humanities-Office of Digital Humanities 45.169 39,626 Promotion of the Humanities-Professional Development 45.163 1,760 Promotion of the Humanities-Research 45.161 9,257 Total - National Endowment for the Humanities 359,011 National Science Foundation Biological Sciences 47.074 1,692,936 Computer and Information Science and Engineering 47.070 7,598,567 Education and Human Resources 47.076 2,172,956 Engineering Grants 47.041 5,682,681 Geosciences 47.047 83,264 Geosciences 47.050 11,568,605 Mathematical and Physical Sciences 47.049 3,851,900 National Science Foundation 47.RDG (4,296) Office of Cyberinfrastructure 47.080 1,788,087 Office of International and Integrative Activities 47.079 49,423 Polar Programs 47.078 404,822 Social, Behavioral, and Economic Sciences 47.075 755,803 *See footnote 2. The accompanying notes are as integral part of this Schedule. 27
Schedule of Expenditures of Federal Awards RESEARCH & DEVELOPMENT CLUSTER CFDA* Expenditures DIRECT AWARDS (Continued) Trans-NSF Recovery Act Reasearch Support - ARRA 47.082 2,464,450 Total - National Science Foundation 38,109,198 Nuclear Regulatory Commission Nuclear Regulatory Commission 77.RDG 90,554 Total - Nuclear Regulatory Commission 90,554 Total Research & Development Cluster - Direct Awards $ 360,376,062 *See footnote 2. The accompanying notes are as integral part of this Schedule. 28
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS Agency For International Development Yale University 98.837 R01 HL081153 $ 6,448 Total - Agency For International Development 6,448 Corporation for National and Community Service Aids United 94.019 10A1HDC001 14,900 Total - Corporation for National and Community Service 14,900 Department of Agriculture BAE Systems Info. and Electronics Systems Int. Inc. 10.001 FA8650-12-C-7211 35,096 California Cut Flower Commission 10.RDG 0348-0004 24 University of Wisconsin, Madison 10.303 2011-51130-31148 21,671 Total - Department of Agriculture 56,791 Department of Commerce California Emergency Management Agency 11.467 NA09NWS4670009 19,084 California Emergency Management Agency 11.RDG 2009-0019 36,279 Oregon State University 11.417 NA10OAR4170059 84,571 University of California, San Diego 11.473 NA08OAR4320894 14,971 University of California, San Diego 11.RDG NA17RJ1231 24 University of California, San Diego 11.417 NA10OAR4170060 116,958 University of California, San Diego 11.012 NA11NOS0120029 98,315 Total - Department of Commerce 370,202 Department Of Defense Advanced Cooling Technologies, Inc. 12.RDC W15P7T-12-C-A127 17,079 Aerospace Corporation 12.RDC FA8802-04-C-0001 136 Agilent Technologies 12.910 MDA 972-02-3-0005 49 Anthrotronix, Inc. 12.RDC W81XWH-11-C-0476 647 Anthrotronix, Inc. 12.RDC W31O4Q-12-C-0190 18,576 Army Research Laboratory 12.RDC W911NF-09-2-0053 599,234 BAE Systems Info. and Electronics Systems Int. Inc 12.RDC FA8650-12-C-7211 241,951 BAE Systems Info. and Electronics Systems Int. Inc 12.RDC N00014-12-C-0381 2,094 BAE Systems, Advanced Information 12.RDC HM1582-07-C-0016 106 BBN Technologies 12.RDC W611NF-09-D-0006 45,079 BBN Technologies 12.RDC N66001-11-C-4006 153,362 BBN Technologies 12.RDC HR0011-12-C-0014 1,184,733 *See footnote 2. The accompanying notes are as integral part of this Schedule. 29
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) BBN Technologies 12.RDC FA9750-09-C-0179 155,240 BBNT Solutions, LLC 12.RDC HR0011-06-C-002 450 California Institute of Technology 12.RDC N66001-10-C-2009 35,410 California Institute of Technology 12.630 HM1582-09-BAA-0001 178 California Institute of Technology 12.RDC N66001-10-C-4056 8,996 Cancer Prevention Institute of 12.RDG W81XWH-10-1-0374 16,653 CaridianBCT Biotechnologies, LLC 12.RDG W81XWH-09-2-0100 362,195 Carnegie Mellon University 12.431 W911NF-10-1-0533 370,363 Carnegie Mellon University 12.RDC W911NF-08-1-0301 167,604 Carnegie Mellon University 12.800 FA8750-12-2-0342 132,619 Children's Institute Inc. 12.RDC 5U79SM059940-02 5,602 Children's Oncology Group 12.420 W81XWH-10-1-1019 35,838 CODEX BioSolutions 12.RDC W81XWH-12-C-0046 16,252 Cogent Systems, Inc. 12.RDC W911NF-07-R-0001-02 29,258 Cornell University 12.420 W81XWH-09-1-0596 (16) Cornell University 12.420 W81XWH-10-1-1045 657,708 Dartmouth College/Neukom Institute 12.300 N00014-08-1-0693 135,034 ERC Incorporated 12.800 FA9300-06-C-0023 59,941 Exogi, LLC 12.RDC W91CRB-10-C-0129 47,781 Fallbrook Union Elementary School 12.557 HE1254-10-1-0041 1,920,987 Fetch Technologies, Inc. 12.800 F49620-01-1-0053 1,007 General Dynamics Information Technology 12.RDC N000178-04-D-4012 4,914 General Technical Services, L.L.C. 12.RDC GS02T10CJC0511 152,908 Geneva Foundation 12.RDC USAMRMC GENEVA 7,609 Georgia Institute of Technology 12.800 W911NF-11-1-0046 200,610 Geosemble Technologies 12.RDC W31P4Q-09-C-0313 (1) Henry M. Jackson Foundation 12.420 W81XWH-04-2-0025 57,075 House Ear Institute 12.420 W81XWH-12-1-0116 9,784 HRL Laboratories, LLC 12.RDC HR001106C0052 77,051 IBM Foundation 12.RDC HR0011-12-C-0015 233,075 Indiana University 12.RDC N66001-12-C-0137 272,480 Indiana University 12.431 W911NF-10-1-0444 194,921 Inferlink Corporation 12.RDC W31P4Q-12-C-0209 58,018 Intelligent Automation Inc 12.RDC W81XWH-09-C-0134 79,969 International Business Machines 12.RDC W911NF-12-C-0012 519,931 International Business Machines 12.RDC W911NF-11-C-0200 405,643 International Business Machines 12.RDC FA8750-09-0172 496,373 International Computer Science Institute 12.RDC W911NF-12-C-0022 104,454 *See footnote 2. The accompanying notes are as integral part of this Schedule. 30
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) Iris Technology 12.RDC N00014-12-M-0169 23,370 Johns Hopkins University 12.420 W81XWH1020090 85,995 Kitware, Inc. 12.910 HR0011-08-C-0135 189 Language Weaver 12.RDC HR0011-11-C-0150 23,561 Lawrence Berkeley Laboratory 12.RDC DE-AC02-05CH11231 277,627 Lockheed Martin Corporation 12.RDC HSHQDC-10-C-00042 (299) Loma Linda University 12.RDC W81XWH-11-2-0151 58,043 Mahlet Consulting 12.RDC H98230-12-C-0673 402,450 Massachusetts Institute of Technology 12.300 N00014-11-1-0397 43,606 Massachusetts Institute of Technology 12.800 FA8721-05-C-0002 150,608 MDA Information Systems, Inc. 12.910 FA8750-13-C-0016 56,408 Micro Analysis and Design 12.RDC W31P4Q-04-C-R203 522 Muscular Dystrophy Association 12.RDC DARPA TTO 117,436 Neuralgenix, LLC 12.RDC N00014-12-C-0379 119,751 OptiSwitch Technology Corporation 12.RDC FA8650-07-M2762 118 Pennsylvania State University 12.RDC W911NF-09-2-0053 797 Perceptronics Solutions, Inc. 12.RDC FA8750-12-C-0185 10,063 Perceptronics Solutions, Inc. 12.RDC W91WAW-09-C-0151 (1,983) Precision Therapeutics 12.420 W81XWH-06-2-0021 2,445 Quanterion Solutions Incorporated 12.RDC FA8075-12-D-0001 46,657 Quanterion Solutions Incorporated 12.RDC FA1500-10-D-0010 25,944 Raytheon BBN Technologies 12.RDC N66001-11-C-4006 294,707 Raytheon BBN Technologies 12.RDC HR0011-12-C-0014 6,709 Raytheon Company 12.RDC N65236-12-C-3884 92,585 Rensselaer Polytechnic Institute 12.300 N00014-09-1-1029 57,498 Science Applications International 12.RDC AG-3142-C-10-0029 81,296 Science Applications International 12.RDC N66001-11-C-4159 226,304 Shared Spectrum Corporation 12.RDC FA8750-11-C-0160 643,424 Soar Technology, Inc. 12.RDC N00014-10-C-052670 85,574 Soar Technology, Inc. 12.RDC N00014-11-M-0362 24,026 Soar Technology, Inc. 12.RDC N00014-12-M-0011 6 Soar Technology, Inc. 12.RDC N00014-12-M-0248 31,992 Soar Technology, Inc. 12.420 W81XWH-09-C-0070 86,333 Soar Technology, Incorporated 12.RDC N00025-13-C-0156 13,678 Sparta Inc. (Aerospace Vehicle Systems) 12.RDC HR0011-09-C-0039 158 SRI International 12.910 FA8650-10-C-7058 497,477 SRI International 12.910 FA8750-07-D-0185 492 SRI International 12.RDC NBCHD030010 77 *See footnote 2. The accompanying notes are as integral part of this Schedule. 31
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) SRI International 12.910 NBCHD030010 7,256 Stanford University 12.910 FA9550-12-1-0411 91,757 Stanford University 12.800 FA9550-12-1-0215 180,015 Stevens Institute of Technology 12.RDG H98230-08-D-0171 82,993 Stevens Institute of Technology 12.RDC H982390-08-D-0171 24,371 Stevens Institute of Technology 12.RDC H98230-08-D-0171 231,418 TASC 12.RDC 10-C-0163 74,774 Texas A&M University 12.300 N00014-11-1-0217 131,535 Toyon Research Corporation 12.RDC HQ0147-13-C-7415 3,534 Trideum Corporation 12.RDC W91ZLK-10-C-0007 (407) United Technologies Research Center 12.RDC N00014-09-C-0211 9,235 University of California, Berkeley 12.431 W911NF-12-1-0541 5,005 University of California, Los Angeles 12.300 N00014-10-1-0978 20,605 University of California, Los Angeles 12.300 N00014-09-C-0813 (1,336) University of California, Los Angeles 12.RDC N00014-08-C-0563 29,746 University of California, Los Angeles 12.300 FA9550-10-1-0569 569,394 University of Illinois at Urbana 12.431 1130156-291577 38,014 University of Michigan 12.RDC W15P7T-08-C-P409 (953) University of Michigan 12.420 W81XWH-10-1-0730 233,480 University of Pennsylvania 12.910 FA-8750-13-2-0045 16,043 University of Pittsburgh 12.RDC N66001-11-C-4171 121,541 University of Texas 12.RDC F33615-01-C-1892 158 University of Utah 12.800 FA9550-08-1-0400 216,720 University of Washington 12.300 N00014-05-1-0388 72 Vanderbilt University 12.300 N00014-12-1-0987 48,344 Virginia Tech 12.RDC FA86SO-13-C-7319 37,347 Wright State University 12.800 FA8650-09-2-1649 48,728 Total - Department of Defense 15,101,993 Department Of Education Florida State University 84.305 R305A090169 40,806 LA Community College District 84.031 P031C110092 97,288 Los Amigos Research & Education 84.133 H133B970011 826 Los Angeles Unified School District 84.165 U165A100057 76,676 Los Angeles Unified School District - ARRA 84.396 U396C100336 239,587 University of California, Davis 84.RDC CN088622 130 University of California, Los Angeles 84.305 R305C080015 114,588 *See footnote 2. The accompanying notes are as integral part of this Schedule. 32
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) University of Texas 84.305 R305A100995 160,118 University of Wisconsin, Madison 84.305 R305A090301 (10,122) University of Wisconsin, Milwaukee 84.325 10880794 19,435 View Park Preparatory Accelerated 84.RDC 1964733-6117048 (325) Total - Department of Education 739,007 Department Of Energy Argonne National Laboratory 81.RDC DE-AC02-06CH11357 56,289 Caterpillar, Inc. 81.003 DE-FC26-01CH11079 83,382 Lawrence Berkeley Laboratory 81.RDC DE-AC02-05CH11231 83,870 Lawrence Livermore National Laboratory 81.RDC DE-AC52-07NA27344 51 Los Alamos National Laboratory 81.RDC W-7405-ENG-36 265 Los Angeles Department of Water & Power - ARRA 81.122 DE-OE0000192 4,286,036 Media and Process Technology, Inc. 81.RDC DE-FG36-08GO18129 628 Media and Process Technology, Inc. 81.RDC DE-FG36-05-GO15092 17 National Council On Radiation Protection 81.049 DE-SC0008944 26,519 National Renewable Energy Laboratory 81.RDC DE-AC36-08GO28308 40,703 Princeton University 81.049 DE-SC0001198 367,772 Sandia National Laboratories 81.RDC DE-AC04-94AL85000 5,521,832 Southern California Edison - ARRA 81.122 DE-OE0000199 109,772 Texas A&M University 81.049 DE-SC0004965 5,000 University of Texas 81.000 DE-FC52-08-NA28615 83,038 University of Wisconsin, Madison 81.049 DE-SC0008713 90,437 URS Group, Inc. 81.RDC DE-FE0004000 53,591 US-Pacific Northwest National Lab 81.RDC DE-AC05-76RL01830 36,784 Total - Department of Energy 10,845,986 Department of Health and Human Services Advanced Medical Electronis Corporation 93.866 9R44AG033522-02 (4,731) AgeneBio 93.866 1U01AG041140-01 274,059 Albert Einstein College of Medicine 93.847 1R21DK089447-01A1 139,366 Albert Einstein College of Medicine 93.866 5R01AG035114-04 17,183 American Cancer Society, Inc. 93.393 5 U01 CA098710-07 44,018 American College of Radiology 93.395 U01 CA080098 73,007 American College of Radiology 93.395 U01 CA80098 56,512 American College of Radiology Imaging 93.395 CA80098 20,307 American College of Radiology Imaging 93.395 U01CA80098 2,404 American Institutes for Research 93.RDC 200-2007-20026 TO 13 50,757 *See footnote 2. The accompanying notes are as integral part of this Schedule. 33
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) Anergix, LLC 93.853 1 R43 NS064618-01A1 (1,290) Applied Integrin Sciences, Inc. 93.395 1R41CA168228-01A1 103,175 Arizona State University 93.847 5R01DK093653-04 2,861 Association of American Medical Colleges 93.283 U36/CCU319276 30 Banner Sun Health Research Institute 93.866 1 R01 AG036400-01 237,435 Battelle Memorial Institute 93.RDC HHSD2002002005731 (2,143) Baylor College of Medicine 93.395 1 R01 CA148748-01A1 17,922 Baylor College of Medicine 93.393 7R01CA139020-03 130,852 Beckman Research Institute of the City of Hope 93.395 5U01CA062505-19 101,305 Beckman Research Institute of the City of Hope 93.395 U01 CA062505 122 Beckman Research Institute of the City of Hope 93.395 5 U01 CA062505-18 (394) Beckman Research Institute of the City of Hope 93.121 5 R01 DE010742-20 28,018 Beckman Research Institute of the City of Hope 93.393 5R01CA077398-14 616,274 Beckman Research Institute of the City of Hope 93.393 1R01CA166219-01 75,325 Beckman Research Institute of the City of Hope 93.393 1UM1CA164917-01A1 20,518 Beckman Research Institute of the City of Hope 93.393 2 R01 CA077398-12A2 432,396 Beckman Research Institute of the City of Hope 93.121 5 R01 DE010742-019 110 Beckman Research Institute of the City of Hope 93.395 5U01CA062505-19S1 143 BioReliance 93.RDC N02-CP-55502 (605) Boston University 93.121 7 R01 DE019156-03 (30,082) Brigham & Women's Hospital, Inc. 93.859 1 P01 GM095467-01 236,582 Brigham & Women's Hospital, Inc. 93.121 1 P50 DE-16191-01 19 Brigham & Women's Hospital, Inc. 93.855 7UM1AI068636-07 94,076 Brigham & Women's Hospital, Inc. - ARRA 93.701 5 RC2 HL101543-02 249,539 California Department of Public Health 93.283 1U58DP003810-01 1,145,984 California Department of Public Health 93.283 1U58DP000807-05 276,989 California Department of Public Health 93.RDC 07-65025 1,812 California Institute of Technology 93.395 1P01CA132681-01A2 312,226 California Institute of Technology 93.865 R01HD075605A 127,808 California State University Fullerton 93.397 5 U54 CA153458-02 9,315 California State University Fullerton 93.397 5U54CA153458-03 43,876 Cancer Prevention Institute of California 93.393 1R01CA170394-01 15,894 Cancer Prevention Institute of California 93.393 R01CA154644 13,740 Case Western Reserve University 93.394 R01 CA136726-02 3,223 Case Western Reserve University 93.394 R01CA136726-04 57,025 Cedars-Sinai Medical Center 93.121 3R01DE019902-04S1 38,808 Children's Hospital of Boston 93.855 7R01AI065617-12 31,787 Children's Hospital of Los Angeles 93.395 1 R01 CA139060-01A1 8,617 *See footnote 2. The accompanying notes are as integral part of this Schedule. 34
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) Children's Hospital of Los Angeles 93.847 1R03DK094513-01 7,149 Children's Hospital of Los Angeles 93.853 1R21NS77288-01 24,525 Children's Hospital of Los Angeles 93.395 2P01CA081403-13 130,822 Children's Hospital of Los Angeles 93.847 2R25DK078385-06 1,585 Children's Hospital of Los Angeles 93.865 5 K12 HD052954-05 4,602 Children's Hospital of Los Angeles 93.839 5 U54 HL090511-02 67,332 Children's Hospital of Los Angeles 93.395 5P01CA081403-12 (7,373) Children's Hospital of Los Angeles 93.865 7R01HD053893-05 44,010 Children's Hospital of Los Angeles 93.RDG 8ULTR000130-03 40,000 Children's Hospital of Los Angeles - ARRA 93.701 5RC2CA148216 12,599 Children's Hospital of Philadelphia 93.393 5R01CA133881 6,709 Children's Hospital of Philadelphia 93.395 1R01CA165277-01A1 9,873 Children's Hospital of Philadelphia 93.393 1 R01 CA133881-01A2 4,525 Children's Institute Inc. 93.243 2U79SM058241-05 10,955 Children's Institute Inc. 93.RDC MH120846 286,349 Cincinnati Children's Hospital Medical 93.RDC R01 HL079312-04 16 Claremont Graduate School 93.837 1U01HL097839-04 13,716 Claremont Graduate University 93.847 1 R21 DK088313-01 (3,098) Claremont Graduate University 93.279 2 R01 DA016310-06A1 (18,240) Claremont Graduate University 93.837 5U01HL097839-02 (3,609) Cleveland Clinic Foundation 93.853 NS018146 7 Cleveland Clinic Lerner College of Medicine 93.853 5P01NS069432-04 174,151 Cleveland Clinic Lerner College of Medicine 93.853 5 P01 NA064932-02 42,711 Cold Spring Harbor Laboratory - ARRA 93.701 1RC2CA148507-01 9,565 Cold Spring Harbor Laboratory - ARRA 93.701 1RC2HD064459-01 2,572 Columbia University 93.867 1 R01 EY21529-01 113,771 Community Health Councils, Inc. 93.737 1H75DP004354-01 31,261 Community Health Councils, Inc. 93.118 1U58DP001056-01 (2) Community Health Councils, Inc. 93.RDC 1U58DP004732-01 50,799 Community Health Councils, Inc. 93.118 5U58DP001056-03 6,623 Cooper Institute 93.393 R01CA140367 89 Cornell University 93.397 5U54CA143876-03 1,203 County of Los Angeles 93.940 40858 (62) Dana-Farber Cancer Institute/HCC 93.397 5P50CA100707-09 44,304 Dana-Farber Cancer Institute/HCC 93.397 5P50CA100707-10 113,952 Doheny Eye Institute 93.864 R01EY018827 20,000 Downtown Women's Center 93.137 5 CPIMP101063-02-00 48,839 Duke University 93.847 2 U01 DK065176 2,338 *See footnote 2. The accompanying notes are as integral part of this Schedule. 35
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) Duke University 93.855 2 U19 AI056363-06 (60,581) Duke University 93.853 R01 NS050506 32,401 Duke University Medical Center - ARRA 93.701 2 R01 CA076016-11A1 (167) Emmes Corporation 93.865 2 U01 CA121947-04 (62) Emory University 93.853 2U01NS038455-11A1 157 Evanston Northwestern Healthcare 93.363 HHSN260200600007C (30,393) Excell Therapeutic, Inc. 93.855 1R43AI084359-01A2 19,774 Florida State University 93.865 5U0HD060292-04 65,088 Florida State University 93.865 5U0HD060292-05 49,653 Fred Hutchinson Cancer Center 93.394 1R21CA164545-01 9,852 Fred Hutchinson Cancer Center 93.394 1R21CA161894-01A1 14,293 Fred Hutchinson Cancer Center 93.394 2R01CA114563-06 13,180 Fred Hutchinson Cancer Center 93.393 5R01CA136725-03 160,909 Fred Hutchinson Cancer Center 93.394 5R01CA160872-02 1,543 Fred Hutchinson Cancer Center 93.394 5R21CA164545-02 1,227 Fred Hutchinson Cancer Center 93.397 1R01CA160872-01A1 30,210 Fred Hutchinson Cancer Center 93.394 1 R21 CA1139256-02 427 Georgetown University - ARRA 93.701 3U01AI034994-17S1 40,201 Georgia Health Sciences University 93.855 5U01A1083005-04 100,528 Geospace Research Inc. 93.394 R44CA110214 143 Harvard Medical School 93.173 1 R01 DC009837-01A1 51,339 Harvard Medical School - ARRA 93.728 90TR0001/01 143,820 Harvard School of Public Health 93.865 5 U01 HD052102-07 73,816 Harvard School of Public Health 93.172 1 U01 HG005922-01 1,954 Harvard School of Public Health 93.393 U19 CA1148065-02 117 Harvard School of Public Health 93.393 5U19CA148065-03 178,780 Harvard School of Public Health 93.393 U19CA148065-02 133,409 Harvard School of Public Health 93.172 3U01HG004802-04S1 320,328 Harvard School of Public Health 93.172 5U01HG004802-04 7,778 Haskins Laboratories 93.173 R01 DC008780 66,031 Health Research, Inc. 93.393 1 R01 CA139426-01A2 (13,460) Health Research, Inc. 93.393 5R01CA139426-02 161,376 Howard University - Washington, DC 93.279 P20 AA014643 73 Indiana Latino Institute 93.283 5 U85 DP001515-03 181 Indiana Latino Institute 93.283 U58DP001515-04 405 Indiana University 93.837 5 R01 HL095149-02 12,908 Infinite Biomedical Technologies, LLC 93.865 1R43HD072668-01 25,495 InnoScion LLC 93.837 1R41HL093879-01A2 6,871 *See footnote 2. The accompanying notes are as integral part of this Schedule. 36
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) Institute for Community Research 93.279 1 R01 DA031594-01 30,591 Institute for Community Research 93.279 R01 DA021865 10,743 Intelligent Automation Inc 93.RDG 1R43LM011326-01 6,792 Johns Hopkins University 93.867 U10 EY014660 3,228 Johns Hopkins University 93.242 7UM1AI068632-07 168,040 Johns Hopkins University 93.393 5U01CA089600-09 39,242 Johns Hopkins University 93.393 1R01CA140311-01A2 67,492 Johns Hopkins University 93.242 1 R01 AG031348-01A1 153,813 Johns Hopkins University 93.393 5R01CA140636-03 6,210 Johns Hopkins University 93.393 5 R01 CA126895-03 201,245 Johns Hopkins University 93.393 5 R37 CA054281-18 (246) Johns Hopkins University 93.393 5R37CA54281-20 609,081 Johns Hopkins University - ARRA 93.701 3 R01 AG0313448-02S1 (3,050) Kaiser Foundation Hospitals, Inc. 93.866 R01 AG014745 1,726 LA County Community and Senior Services 93.RDC AP-1112-19 94,149 LA County Community and Senior Services 93.RDC FCSP-0913-015 166,422 Legacy For Health 93.393 1R01CA155369-01A1 16,456 L-Nutra Inc. 93.RDC HHSN261120120051C 80,296 Los Angeles Biomedical Research 93.127 H34MC08510-01-02 1 Lovelace Respiratory Research Institute 93.394 2 R01 CA097356-06A1 11,761 Lovelace Respiratory Research Institute 93.113 R01 ES015262 50,274 Loyola Marymount University 93.865 1R03HD071334-01A1 48,457 Massachusetts General Hospital 93.839 5 U54 HL081030-03 455 Massachusetts General Hospital 93.286 5 R01 EB009408-02 165,564 Massachusetts General Hospital 93.286 2R01EB009048-05 21,608 Massachusetts General Hospital 93.286 1R01EB013293-01A1 97,797 Massachusetts General Hospital 93.242 2 R01 MH085542-02 819,070 Mayo Clinic 93.213 5R01AT006515-02 201,661 Memorial Sloan Kettering 93.393 5R01CA129639 7,760 Memorial Sloan Kettering 93.393 5R01CA129639-04 300,678 Memorial Sloan Kettering 93.393 R01 CA097397 (8,724) Memorial Sloan Kettering 93.393 5 R01 CA129639-03 (45,842) Michigan State University 93.393 5R01CA136861-02 1,110,518 Moffitt Cancer Center 93.393 1 R01 CA149429-01 19,384 Moffitt Cancer Center 93.393 5 U19 CA148112-02 925 Moffitt Cancer Center 93.393 5U19CA148112-03 450,706 MRI Research Inc. 93.867 2R44EY015655-02 29,875 Mt. Sinai School of Medicine 93.837 7 U01 HL088942 42,362 *See footnote 2. The accompanying notes are as integral part of this Schedule. 37
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) National Institute of Arthritis & - ARRA 93.701 5 RC1 HL101881-02 (663) National Institutes of Health 93.242 1U01MH097435-01A1 6,868 Nationwide Children's Hospital 93.173 1R01DC011818-01 51,387 Neumedicines, LLC 93.RDC HHSO100201100037C 37,596 North American Assn. of Central Cancer 93.RDC HHSN261200900015C 4,776 North Carolina State University 93.286 1R01EB015508-01 84,245 Northeastern University 93.837 1R21HL108018 36,975 Northeastern University 93.837 1R21HL108018-01A1 52,190 Northwestern University 93.242 1P20MH090318-01A1 145,674 Northwestern University 93.121 2 R01 DE015920-06 (5,968) Northwestern University 93.121 2R01DE015920 205,102 Northwestern University 93.395 R01CA128641 64,074 Northwestern University - ARRA 93.701 1 RC1 EY021357-01 5,546 NUVIEW Radiopharmaceuticals Incorp. 93.837 R41HL102891 160,287 Ohio State University 93.262 5R21OH009907-02 2,158 Oklahoma Medical Research Foundation 93.855 5 P01 AI083194-03 6,907 Oklahoma Medical Research Foundation 93.855 5P01AI083194-04 70,370 Oregon Health Science University 93.867 5 R01 EY013516-07 70,254 Oregon Health Science University 93.867 5R01EY013516-08 239,601 Oregon Health Science University 93.837 5R01HL067647 29 Oregon Health Science University 93.859 R01 GM032741-29 9,558 Oregon Health Science University 93.859 R01GM032741-30 22,371 Outcome Sciences, Inc. 93.715 HHSA290200500351 31,576 Park Nicollet Institute 93.393 1R21CA149934-01A1 8 Premitec, Inc. - ARRA 93.701 1 RC3 EY020790-01 138,429 President and Fellows of Harvard College 93.847 5F32DK085959-03 41,275 President and Fellows of Harvard College 93.865 5U01HD052102-08 553,826 President and Fellows of Harvard College 93.847 5P01DK056246-12 313,119 Public Health Institute 93.283 1 U58 DP000807-03 10 Public Health Institute 93.283 1U58DP000807-04 (543) Public Health Institute 93.283 1U58DP000807-05 (912) Rady Children's Hospital Research Center 93.242 P30MH074678 109,421 Rand Corporation 93.361 R01NR013372 79,417 Rand Corporation 93.226 R01 HS018541 48,456 Rand Corporation 93.RDC HHSA290200600017 TO#4 (296) Rand Corporation 93.866 R01AG035010 20,104 Rand Corporation 93.866 R03AG043052 5,294 *See footnote 2. The accompanying notes are as integral part of this Schedule. 38
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) Research Corporation - University of Hawaii - ARRA 93.701 3 U01 HG004802-02S1 (2,813) Research Corporation - University of Hawaii - ARRA 93.701 5 P01 CA033619-22 13,366 Research Corporation - University of Hawaii- ARRA 93.701 3R01CA126895-02S1 22,575 Research Triangle Institute 93.865 1 U01 HD051276-01 35,593 Research Triangle Institute 93.779 HHSM-500-2005-0029I 23,053 Research Triangle Institute 93.RDC HHSP23320095651WC 9,696 Rockefeller University 93.RDG 5U54RR022220-07 7,582 Rockefeller University 93.310 8U54GM103511-08 108,200 Roswell Park Cancer Institute 93.839 1 R01 HL102278-01A1 25,728 Roswell Park Cancer Institute 93.839 5R01HL102278-03 499,161 Roswell Park Cancer Institute 93.393 5P01CA151135-02 132,068 Roswell Park Cancer Institute 93.393 5901CA151135-02 14,422 Roswell Park Cancer Institute 93.393 1P01CA151135-01A1 54,869 Rutgers, The State University of New Jersey 93.242 U24 MH068457 12,683 Rutgers, The State University of New Jersey 93.242 5U24MH068457-10 789,401 Rutgers, The State University of New Jersey 93.242 5U24MH068457-09 3,791 Rutgers, The State University of New Jersey 93.172 5U24MH068457 326,197 Rutgers, The State University of New Jersey 93.172 5 U01 HG004801-04 (6,843) Rutgers, The State University of New Jersey 93.242 2U24MH068457-11 11,283 Salk Institute For Biological Studies 93.173 R01DC011538-01A1 33,511 Science Applications International 93.RDC HHSN261200800001E 90,415 Social & Scientific Systems, Inc. 93.855 UM1AI069428 491 Social & Scientific Systems, Inc. 93.855 HHSN272200900001/2/3I 43,443 Social & Scientific Systems, Inc. 93.837 5 R01 HL095149-02 (2,312) Social & Scientific Systems, Inc. 93.855 1UM1AI068636-06 33,962 Social & Scientific Systems, Inc. 93.242 1 U01 AI068632-01 103 Social & Scientific Systems, Inc. 93.837 1 R01 HL095132-01 78,750 Social & Scientific Systems, Inc. 93.855 UM1AI068636-06 105 Social & Scientific Systems, Inc. 93.855 699793 2,759 Social & Scientific Systems, Inc. 93.855 U01AI068636 4,695 Southwest Oncology Group 93.395 1PO1 CA116676 (1,534) Southwest Oncology Group 93.395 5U10CA058882-20 169,755 Southwest Oncology Group 93.395 U10CA032102 22,030 Southwest Oncology Group 93.395 U10CA32102 48,429 Southwest Oncology Group 93.399 UNKNOWN 205 St. Jude Children's Research Hospital 93.395 5 U24 CA055727-15 (114,670) St. Luke's-Roosevelt Institute for Health Sciences 93.867 1 U10 EY017281-01A1 2,906 Stanford University 93.172 1U54HG006996-01 119,804 *See footnote 2. The accompanying notes are as integral part of this Schedule. 39
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) Stanford University 93.172 3U54HG004558-05S1 71,123 Stanford University 93.399 5 U54 CA119367-05 (459) State University of New York at Buffalo 93.121 R01 DE003223 1,405 State University of New York at Buffalo 93.113 1 R01 ES018846 78,541 The Forsyth Institute 93.121 1 R01 DE019117-01A2 37,778 The Forsyth Institute 93.121 1R34DE022272-01 7,885 The Forsyth Institute 93.121 1R34DE022272-02 23,389 The Jackson Laboratory 93.172 2U41HG002273-12 409,622 The Jackson Laboratory 93.172 5P41HG002273-11 24 The Jackson Laboratory 93.172 5U41HG002273-13 132,873 The Scripps Research Institute 93.RDG 5 U54 CA143906-03 41,356 The Scripps Research Institute 93.RDG 5U54CA143906-04 89,032 Therapeutic Systems Research 93.855 1R43AI091216-01 1,285 Therapeutic Systems Research 93.855 1R43AI100401-01A1 81,447 Trustees of Columbia University in the city of NY - ARRA 93.701 1 RC2 DE020767-01 (19) University of Alabama 93.853 5U01NS042685-07 10,135 University of Alabama at Birmingham 93.855 N01-AI-30025 21,893 University of California, Berkeley 93.113 5R01ES009137-14 70,727 University of California, Berkeley 93.113 1R01ES020409-01 189,201 University of California, Berkeley 93.113 5 R01 ES009137-12 4,678 University of California, Berkeley 93.393 5R01CA154643-02 23,541 University of California, Davis 93.239 1H79AE000100-01 19,693 University of California, Davis 93.397 U54CA153499-01S1 35,916 University of California, Davis 93.RDC HHSN261201100038C 4,049 University of California, Davis 93.RDC HHSN261000622009C (1,196) University of California, Davis 93.113 1R21ES021330-01 16,363 University of California, Davis - ARRA 93.701 1R21MH085904-01 32 University of California, Irvine 93.113 2 R01 ES012243-06A2 77,234 University of California, Irvine 93.866 R01AG023173 (878) University of California, Irvine 93.865 HD057884 (1,200) University of California, Irvine 93.855 U54 AI065359 265,434 University of California, Irvine 93.173 2R01DC003681-11 93,544 University of California, Irvine 93.173 2 R01 DC003681-06A2 (38,276) University of California, Irvine 93.286 EB010090-01 50,879 University of California, Irvine 93.399 U01 CA072294 2 University of California, Los Angeles 93.121 5P01DA019085 268,887 University of California, Los Angeles 93.242 5 P30 MH082760 (1,166) University of California, Los Angeles 93.848 5 P50 DK064539 11,252 *See footnote 2. The accompanying notes are as integral part of this Schedule. 40
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) University of California, Los Angeles 93.866 P30 AG021684 75 University of California, Los Angeles 93.837 P50 HL105188 4,305 University of California, Los Angeles 93.848 P50 DK064539 (471) University of California, Los Angeles 93.242 P30 MH068639 3 University of California, Los Angeles 93.242 5 U01 MH083500-04 31,798 University of California, Los Angeles 93.286 9P41EB015922-15 88,899 University of California, Los Angeles 93.135 5U48DP001934 167,514 University of California, Los Angeles 93.837 5P50HL105188-04 230,740 University of California, Los Angeles 93.837 5P50HL105188-03 401,984 University of California, Los Angeles 93.837 5P50HL105188 54,917 University of California, Los Angeles 93.121 5 P01 DE019085 (42) University of California, Los Angeles 93.242 P30 MH082760 61,608 University of California, Los Angeles 93.839 5 P01 HL073104-08 543,545 University of California, Los Angeles 93.837 1 P50 HL105188-01 13 University of California, Los Angeles 93.853 1U01NS059821 169,311 University of California, Los Angeles 93.389 3 P41 RR013642-1253 4,610 University of California, Los Angeles 93.853 2U01NS044364-09 16,240 University of California, Los Angeles 93.847 2P50DK064539-11 45,556 University of California, Los Angeles 93.389 2 P41 RR013642. 16 University of California, Los Angeles 93.853 1U54NS081764-01 9,871 University of California, Los Angeles 93.839 5 P01 HL073104-07 (356) University of California, Los Angeles 93.279 1R03DA032542-01A1 63,565 University of California, Los Angeles 93.852 1R01NS074980-01 115,725 University of California, Los Angeles 93.242 1R01MH094360 26,240 University of California, Los Angeles 93.855 1 U19 AI070453 8 University of California, Los Angeles 93.853 1 U01 NS059821-01A2 (4) University of California, Los Angeles 93.273 1 R01 AA021301-01 37,207 University of California, Los Angeles 93.389 2 P41 RR013642 33,582 University of California, Merced 93.113 5 R01 ES005511 (3,521) University of California, Riverside 93.866 5 R01 AG028555-03 (290) University of California, San Diego 93.866 U01 AG024904 110,045 University of California, San Diego 93.242 R24 MH059745 5 University of California, San Diego 93.866 5U01AG024904-07 6,930 University of California, San Diego 93.867 5R01EY007366-26 5,939 University of California, San Diego 93.136 5R01CE001556-03 16,903 University of California, San Diego 93.242 5P30MH080002-05 9,256 University of California, San Diego 93.867 2R01EY016323-06 52,054 University of California, San Diego 93.867 2 R01 EY007366-23 17,084 *See footnote 2. The accompanying notes are as integral part of this Schedule. 41
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) University of California, San Diego 93.242 1R01MH092950-01A1 112,403 University of California, San Diego 93.273 1R01MH087054-01A1 52,722 University of California, San Diego 93.865 1R01HD069305-01 50,609 University of California, San Diego 93.866 5U01AG10483-21 26,836 University of California, San Diego - ARRA 93.715 1R01HS019913 201,788 University of California, San Francisco 93.136 1 R01 CE001589-01 2,573 University of California, San Francisco 93.242 1R01MH097274-01 73,384 University of California, San Francisco 93.145 2 H4AHA00058-09-00 (1) University of California, San Francisco 93.399 5 R01 CA088164-10 109,527 University of California, San Francisco 93.847 5 R01 DK058214-08 2,650 University of California, San Francisco 93.113 5U01ES017154-04 200,827 University of California, San Francisco 93.145 H4 AHA00058 743,183 University of California, San Francisco 93.145 H4 AHA00058-10-00 5,231 University of California, San Francisco 93.RDC N01-AI-15416 32,749 University of California, San Francisco 93.853 U01 NS058634 53,524 University of California, San Francisco 93.853 U01NS058634 78,997 University of Chicago - ARRA 93.701 RC2 HL101651 34,644 University of Cincinnati 93.853 5U01NS069763-03 303,303 University of Cincinnati 93.847 2 R56 DK062809-05A2 40 University of Cincinnati 93.853 5 U01 NS069763-02 (455) University of Cincinnati 93.853 5U01NS069763-02 26,300 University of Florida 93.859 1R01GM102227-01 51,372 University of Hawaii at Honolulu 93.393 5P01CA138338-03 113,504 University of Hawaii at Honolulu 93.393 R01 CA104132 11 University of Hawaii at Honolulu 93.393 5 P01 CA138338-02 (537) University of Hawaii at Honolulu 93.393 1UM1CA164973-01A1 1,300,384 University of Hawaii at Honolulu 93.393 1P01CA168530-01 238,464 University of Hawaii at Honolulu 93.393 1 P01 CA168530-01 4,074 University of Hawaii at Manoa 93.393 1R01CA154644-01 21,225 University of Illinois at Chicago 93.867 5U10EY017337-04 38,170 University of Illinois at Chicago 93.867 5U10EY011753-14 16,203 University of Illinois at Chicago 93.242 5 R01 MH089830-02 15,243 University of Kansas 93.859 7 P01 GM084077-02 200,537 University of Massachusetts 93.393 1 R03 CA153078-01 1,075 University of Medicine & Dentistry 93.853 5R01NS038384-08 944 University of Medicine & Dentistry 93.113 1R01ES020382-01A1 30,109 University of Miami 93.279 3 R01 DA025694-02S2 134,441 University of Miami 93.279 3P30DA027828-02 61,017 *See footnote 2. The accompanying notes are as integral part of this Schedule. 42
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) University of Miami 93.286 R01EB008275 21,046 University of Miami 93.279 1P30DA027828-01A1 (5,374) University of Miami - ARRA 93.701 1 R01 CA141077-01 17,145 University of Miami - ARRA 93.701 1 R01 HD060325-01 2,819 University of Michigan 93.847 1 U01 DK085584 6,082 University of Michigan 93.393 1P01CA163233-01A1 117,613 University of Michigan 93.866 2U01AG009740-23 27,041 University of Michigan 93.395 2U10CA32102-33 37,200 University of Michigan 93.847 5U01DK085584-03 8,635 University of Michigan 93.393 5U19CA148107-02 (7,133) University of Michigan 93.395 6 U10 CA32102-29 109 University of Michigan 93.846 R01AR060350 185,371 University of Michigan 93.395 U10 CA32102 1 University of Michigan - ARRA 93.701 RC4AG039029 2,073 University of Michigan - ARRA 93.701 5R01CA139014-04 13,629 University of Michigan - ARRA 93.701 1 R01 CA139014-01 125,270 University of Minnesota 93.393 R01CA151284 30,216 University of Minnesota 93.393 1 R01 CA127236-01A2 95,290 University of Minnesota 93.847 5R01DK080720-05 29,613 University of Minnesota 93.838 5P01HL091775-04 81,574 University of Minnesota 93.847 5 R01 DK080720-02 174,928 University of Minnesota 93.838 5 P01 HL091775-02 (1,330) University of Minnesota 93.853 3R21NS070955-02S1 438 University of Minnesota 93.393 1 P01 CA138338-01A1 256,735 University of Minnesota 93.394 1R21CA155524-01A1 21,693 University of North Carolina, Chapel 93.393 7 R01 CA098286-08 16,412 University of North Carolina, Chapel 93.393 5R01CA098286-10 155,674 University of North Carolina, Chapel 93.393 2 R01 CA059005-15A1 4,544 University of North Carolina, Chapel 93.393 5R01CA059005-17 49,412 University of Pennsylvania 93.279 5U01DA020830-08 13,921 University of Pennsylvania 93.172 5R01HG005854-02 37,725 University of Pennsylvania 93.393 1U01CA164947-01 28,522 University of Pennsylvania 93.121 7R01DE019932-05 62,288 University of Pennsylvania 93.279 5U01DA020830-07 (399) University of Pittsburgh 93.701 5RC1HL102429-02 2,235 University of Rochester 93.853 4 U01 NS050095-06 (1,105) University of Rochester Medical Center 93.242 1 R01 MH091452-01 46,011 University of Rochester Medical Center 93.113 1R01ES019165-01 60,669 *See footnote 2. The accompanying notes are as integral part of this Schedule. 43
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) University of South Florida 93.847 1UC4DK097835-01 19,059 University of Tennessee - ARRA 93.701 1 R21 AI084710-01 (485) University of Texas 93.865 2K12HD055929-06 174,582 University of Texas 93.866 2R13AG029767-03 39,599 University of Texas 93.999 3U01HL077863-06S2 345,286 University of Texas 93.865 5K12HD055929-05 70,284 University of Toledo 93.838 U01 HL071556 169 University of Utah 93.859 1U02GM104604-01 49,188 University of Washington 93.866 5 U01 AG016976-13 2,918 University of Washington 93.273 1 R01 AA018673-01A1 134,148 University of Washington 93.837 5 R01 HL063895-06 (21,221) University of Washington 93.837 5 R01 HL088214-02 1,720 University of Washington 93.837 5 R01 HL089504-02 3,668 University of Washington 93.866 5U01AG016976-14 23,884 University of Wisconsin, Madison 93.866 5P01AG021079-08 2,501 US BioTest 93.RDC HHSO1002011100003C 395,091 Vanderbilt University Medical Center 93.242 P50MH078028 11 Vanderbilt University Medical Center 93.242 R01 MH094604 7,489 Vanderbilt University Medical Center 93.242 P50 MH078028 91 Vanderbilt University Medical Center 93.242 1P50MH096972-01 400,548 Vanderbilt University Medical Center - ARRA 93.715 1 R01 HS019356-01 302,823 Vision y Compromiso 93.RDC HHSN268200900114U 30,915 Wake Forest University 93.847 2 R01 DK085175-11A1 263,482 Washington University 93.394 1R01CA157277-01 59,892 Westat, Inc. 93.RDC HHSN275201300003C 910,715 Westat, Inc. 93.RDC HHSN267200800001C 1,441,092 Western University of Health Sciences 93.853 7R01NS057128-05 237,599 WinProbe Corporation 93.286 1 R44 EB012429-01 6,767 Yale University 93.853 5U01NS044876-09 854 Yale University 93.286 2 R01 EB000473-06 11,238 Yale University 93.853 5U01NS044876-08 7,098 Total - Department of Health and Human Services 33,575,804 Department of Homeland Security Applied Technology Council 97.RDC HSFEHQ-08-D-0726 93,497 California Emergency Management Agency 97.082 EHRSA09-0001 171,240 Rutgers, The State University of New Jersey 97.061 2009-ST-0061-CCII0022 25,000 Rutgers, The State University of New Jersey 97.061 2009-ST-0061-CCII002 176 *See footnote 2. The accompanying notes are as integral part of this Schedule. 44
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) Rutgers, The State University of New Jersey 97.061 2009-ST-0061-CCI002-0 3,172 Rutgers, The State University of New Jersey 97.061 2009-ST-0061-CC1002 49,998 Rutgers, The State University of New Jersey 97.061 2009-ST-0061-CCI002 275,766 Systems Research and Application 97.002 BPA 674-04-03 2,446 Total - Department of Homeland Security 621,295 Department of Housing and Urban Development Los Angeles City-Community Development 14.523 C-122081 3,246 Total - Department of Housing and Urban Development 3,246 Department Of Labor Odle Management Group LLC 17.RDC DOLJ09SA00009 24 Total - Department of Labor 24 Department Of State University of California, Berkeley 19.RDC SA5376 3 Total - Department Of State 3 Department of the Interior Chemehuevi Indian Tribe 15.034 GTH51T69517 46,804 Inferlink Corporation 15.RDC D12PC00432 82,953 Santa Rosa Band of Cahuilla Indians 15.034 GTJ54T59020 95,898 SRI International 15.RDC D11PC20067 505,979 Texas A&M University 15.810 G08PC91611 76,727 Total - Department of the Interior 808,361 Department of Transportation San Jose State University 20.701 DTRT12-G-UTC21 6,158 Transportation Research Board 20.RDC DTFH61-08-H-00035 5,088 Transportation Research Board 20.200 DTFH61-08-H-00035 13,284 Total - Department of Transportation 24,530 Environmental Protection Agency California Institute of Technology 66.509 RD-83435801 86,453 Health Effects Institute 66.500 R-82811201 420,727 Metropolitan Water District of Southern 66.606 XP-97933101-0 1,488 University of California, Los Angeles 66.509 RD-83241301-0 10,777 Total - Environmental Protection Agency 519,445 *See footnote 2. The accompanying notes are as integral part of this Schedule. 45
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) National Aeronautics And Space Administration Arizona State University 43.001 1228404 20 HoneyBee Robotics Ltd. 43.RDG HHN09CE89C 27,048 Jet Propulsion Laboratory, California 43.RDC NMO711097 22,140 Jet Propulsion Laboratory, California 43.RDC NM0710973 94,475 Jet Propulsion Laboratory, California 43.RDC NMO710769 (26) Jet Propulsion Laboratory, California 43.RDC NMO710876 5,060 Jet Propulsion Laboratory, California 43.RDC NMO711027 79,521 Jet Propulsion Laboratory, California 43.RDC NMO711061 (1) Jet Propulsion Laboratory, California 43.RDC NM0710819 42,850 Jet Propulsion Laboratory, California 43.RDC NMO711239 27,563 Jet Propulsion Laboratory, California 43.RDC NMO716144 256,021 Jet Propulsion Laboratory, California 43.RDC NNN12AA01C 11,797 Jet Propulsion Laboratory, California 43.RDC NNNN13D239T 57,588 Jet Propulsion Laboratory, California 43.RDC NMO711048 205,177 Jet Propulsion Laboratory, California 43.RDC NM0716259 34,148 Jet Propulsion Laboratory, California Institute of Technology 43.RDC NNN12AA01C 410 Southwest Research Institute 43.RDG NAS5-01095 9,159 Southwest Research Institute 43.RDC NNG05EC85C 38,591 Stanford University 43.RDC NAS5-02139 82,424 The City College of New York 43.001 NNX11AQ39G 136,301 The City College of New York 43.001 NNX11A926A 23,999 University of California, San Diego 43.RDG UNKNOWN 8,778 University of Colorado 43.002 NAS5-02140 358,182 University of Michigan 43.RDC NNL11AA24C 97,889 University of Michigan 43.RDC NNX09AE91G 119,485 Washington University In St. Louis 43.001 NNX12AD88G 15,470 Total - National Aeronautics and Space Administration 1,754,069 National Endowment for the Arts University of Texas at Arlington 45.024 12-3800-7004 10,876 Total - National Endowment for the Arts 10,876 National Science Foundation Arizona State University 47.076 910115 53,592 Association for Institutional Research 47.075 W911NF-09-2-0053 36 BBN Technologies 47.070 CNS-0737890 76,122 *See footnote 2. The accompanying notes are as integral part of this Schedule. 46
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) BBN Technologies - ARRA 47.082 CNS-0940805 53,180 California Institute of Technology 47.074 1240626 7,441 Carnegie Mellon University 47.070 CNS-0930868 134,416 Chemat Technology Inc. 47.049 IIP-1026215 9,520 Civilian Research and Development 47.RDC RUC2-2638-KA-05 66 Computing Research Association 47.070 1019343 51,602 Consortium for Ocean Leadership,Inc. 47.050 OCE-0652315 47,659 Corporation Education Network 47.RDG OCI-09622931 56,453 Dartmouth College 47.050 GEO-1010280 170,318 Drexel University - ARRA 47.082 CNS-0960061 196,203 Indiana University 47.080 OCI-0910812 136,092 IQ Engines 47.041 IIP-0822713 18,810 Massachusetts Institute of Technology 47.075 BCS-1134780 65,880 National Ocean Sciences Bowl 47.RDC NA12SEC0080019 5,881 National Ocean Sciences Bowl 47.050 NA07SEC46900001 361 New York University 47.075 BCS-1053128 33,968 Northwestern University - ARRA 47.082 SES-0921869 17,921 Purdue University 47.049 CHE-1037992 110,655 The Algebra Project, Inc. 47.049 DRL-0822175 37,675 The Huntington Library 47.075 SES-0957382 19,363 University of Arizona 47.041 EEC-0812072 241,662 University of California, Berkeley 47.076 DRL-0917614 46,611 University of California, Berkeley 47.070 ANI-0335241 (91) University of California, Irvine 47.041 ECS-0609195 (51) University of California, Los Angeles 47.070 CCR-0120778 295,732 University of California, Riverside 47.050 1135455 14,153 University of Maryland 47.070 14059 26,662 University of Michigan 47.070 CCF-1111061 4,171 University of Michigan 47.049 CHE-0934098 121,111 University of Minnesota 47.041 CMMI-1100528 50,196 University of New Hampshire 47.041 CMMI-1135026 34,134 University of Rochester 47.070 IIS-1016735 1,633 University of Washington 47.050 OCE-1205233 52,967 University of Washington 47.049 DMR-0103009 4,881 University of Wisconsin, Madison 47.041 EFRI-1136903 114,048 University of Wisconsin, Madison 47.049 PHY-1148698 146,888 University of Wisconsin, Madison 47.049 621704 4,693 *See footnote 2. The accompanying notes are as integral part of this Schedule. 47
Schedule of Expenditures of Federal Awards Sponsor Pass-Through Entity Current Year RESEARCH & DEVELOPMENT CLUSTER CFDA* Identifying Number Expenditures PASS-THROUGH FUNDS (Continued) Virginia Tech 47.050 EAR-1240385 10,040 Washington University 47.050 OCE1061476 25,042 Total - National Science Foundation 2,497,696 Total Research & Development Cluster - Pass-Through Funds 66,950,676 Total Research and Development Cluster $ 427,326,738 *See footnote 2. The accompanying notes are as integral part of this Schedule. 48
Schedule of Expenditures of Federal Awards Sponsor Current Year CFDA* STUDENT FINANCIAL AID CLUSTER Expenditures Department of Education Office of Student Financial Assistance Programs Department of Education 84.376 36,459 Federal Direct Student Loans 84.268 522,322,958 Federal Pell Grant Program 84.063 18,825,193 Federal Supplemental Educational Opportunity Grants 84.007 1,709,751 Federal Work-Study Program 84.033 5,256,394 Total - Office of Student Financial Assistance Programs $ 548,150,755 Department of Health and Human Services Health Resources and Services Administration Health Professions Student Loans, Including Primary Care Loans/Loans for Disadvantaged Students 93.342 23,119 Scholarships for Health Professions Students from Disadvantaged Backgrounds 93.925 17,406 Total - Department of Health and Human Services 40,525 Total - Student Financial Aid Cluster $ 548,191,280 *See footnote 2. The accompanying notes are as integral part of this Schedule. 49
Schedule of Expenditures of Federal Awards Sponsor Current Year OTHER PROGRAMS CFDA* Expenditures Direct Awards Economic Development Cluster Department of Commerce Economic Adjustment Assistance 249,350 Total - Economic Development Cluster 249,350 11.307 Head Start Department of Health and Human Services Early Head Start - ARRA 93.709 (193) Head Start 93.600 4,662,032 Total - Head Start 4,661,839 TRIO Cluster Department of Education TRIO - McNair Post-Baccalaureate Achievement 84.217 231,894 TRIO - Talent Search 84.044 (410) TRIO - Upward Bound 84.047 2,453,394 Total - TRIO Cluster 2,684,878 Total Other Programs - Direct Awards $ 7,596,067 *See footnote 2. The accompanying notes are as integral part of this Schedule. 50
Schedule of Expenditures of Federal Awards Pass-Through Funds AmeriCorps Corporation for National and Community Service AmeriCorps - ARRA 94.006 JS-SITE#9 $ 68,395 Total - AmeriCorps 68,395 Economic Development Cluster Department of Commerce Economic Adjustment Assistance 11.307 07 79 06803 14,645 Total - Economic Development Cluster 14,645 Block Grants for Prevention and Treatment of Substance Abuse Department of Health and Human Services Block Grants for Prevention and Treatment of Substance Abuse 93.959 T1023865 295,516 Consolidated Health Centers (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) 93.224 H80CS00139 301,544 Foster Care-Title IV-E 93.658 40878 911,588 Foster Care-Title IV-E 93.658 49980 5,752 Foster Care-Title IV-E 93.658 CMS-04-024/04-025 1,489,166 Foster Care-Title IV-E 93.658 12-2011 1,387 2,407,893 Head Start 93.600 09CH0033 (342) HIV Emergency Relief Project Grants 93.914 2 H89HA00016-21-00 376,183 Total - Block Grants for Prevention and Treatment of Substance Abuse-Department of Health and Human Services 3,380,794 Homeland Security Grant Program Department of Homeland Security Homeland Security Grant Program 97.067 10-GPD-067-000-01 74,020 Total - Homeland Security Grant Program 74,020 Total Other Programs - Pass-Through Funds $ 3,537,854 Total Other Programs - Direct and Pass-Through Funds $ 11,133,921 TOTAL FEDERAL PROGRAMS $ 986,651,939 *See footnote 2. The accompanying notes are as integral part of this Schedule. 51
Notes to Schedule of Expenditures of Federal Awards 1. Summary of Significant Accounting Policies Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards (the Schedule ) includes the Federal grant transactions of the University of Southern California (the university ) and Health Research Association, a wholly owned subsidiary of the University, recorded on the accrual basis of accounting. Subrecipients and Pass-through Funding Certain funds are passed through to subgrantee organizations by the university. Expenditures incurred by the subgrantees and reimbursed by the university are presented in the Schedule. The university is also the subrecipient of federal funds which are reported as expenditures and listed as federal pass-through funds. Negative Balances Amounts reflected as negative balances represent adjustments to prior periods. 2. CFDA Numbers Research and Development ("RD") programs included in the Schedule are presented by federal agency and major subdivision within the federal agency. Pass-through and partial pass-through awards have been presented by pass-through entity and federal identification number or sponsor's award number, when available. When federal identification numbers are not available, federal awards are presented by federal agency number and either RDA (Cooperative Agreement), RDG (Grant), RDC (Contract), or RDS (Subcontract) is utilized for the federal identification number. When the federal agency number is not available, 99 is used. Pass-through entity numbers or sponsor's award numbers that are not available are identified as unknown. 3. Facilities and Administration Rates The predetermined fixed rates for the year ended June 30, 2013 were based on fiscal year 2009 financial information and were reviewed by the Department of Health and Human Services for compliance with applicable cost principles (OMB Circular A-21). For the year ended June 30, 2013, the base Facilities and Administration (Indirect Cost) Rate for oncampus research was 64% of Modified Total Direct Cost ( MTDC ). Off-campus Facilities and Administration Rates were 26% for the Information Sciences Institute ("ISI"), Institute for Creative Technologies ("ICT") and all other off-campus projects. 4. Loan Advances The following schedule represents loans advanced by the university for the year ended June 30, 2013: Federal Perkins Loan Advances (CFDA 84.038) $ 9,825,187 Health Professional Student Loan Advances (CFDA 93.342) 1,778,911 Loans for Disadvantaged Students (CFDA 93.342) 374,458 52
Notes to Schedule of Expenditures of Federal Awards 4. Loan Advances (Continued) The Federal Perkins, Health Professional Student Loan Program ( HPSL ) and Loans for Disadvantaged Students are administered directly by the university and balances and transactions relating to these programs are included in the university s consolidated financial statements. The balances of loans outstanding under the Federal Perkins, HPSL and Loans for Disadvantaged Students programs were $53,371,524, $13,279,364 and $1,532,821, respectively, as of June 30, 2013. The cancellations related to the Federal Perkins loan program as of June 30, 2013 was $1,138,869. 5. Administrative Cost Allowance Received Under Loan Program During fiscal year 2012-2013, the university claimed $0 administrative cost allowance from the Federal Supplemental Education Opportunity Grant Program, $400,000 from the Federal Work Study Program, and $125,000 from the Federal Perkins Loan Program. 6. Subrecipient Pass-Throughs Of the federal expenditures presented in the Schedule, the University provided federal awards to subrecipients from the university's research and development cluster as follows: Program Title Amount Provided to Research and Development -- Pass-Throughs CFDA Subrecipients Agency For International Development Agency For International Development 98.RDG $ 167,800 Total - Agency For International Development 167,800 Department of Agriculture National Institute of Food and Agriculture 10.206 111,900 Total - Department of Agriculture 111,900 Department of Commerce Minority Business Development Agency 11.805 50,000 National Oceanic and Atmospheric Administration (NOAA) 11.417 99,721 Total - Department of Commerce 149,721 Department Of Defense Advanced Research Projects Agency 12.910 875,069 Department Of Defense 12.RDC 9,847,498 Department Of Defense 12.RDG 1,175,463 Department of the Air Force, Materiel Command 12.800 656,733 Department of the Navy, Office of the Chief of Naval Research 12.300 1,842,417 53
Notes to Schedule of Expenditures of Federal Awards 7. Subrecipient Pass-Throughs (Continued) Program Title Amount Provided to Research and Development -- Pass-Throughs CFDA Subrecipients Invitational Grants for Military-Connected Schools 12.557 418,846 Office of the Secretary of Defense 12.351 382,995 U.S. Army Materiel Command 12.431 644,377 U.S. Army Medical Command 12.420 185,917 Total - Department Of Defense 16,029,315 Department of Education Department Of Education 84.376 20,816 Institute of Education Sciences 84.305 55,900 Office of Postsecondary Education 84.015 361,820 Office of Special Education and Rehabilitative Services 84.133 218,732 Total - Department of Education 657,268 Department of Energy Advanced Research Projects Agency - Energy - ARRA 81.135 180,510 Electricity Delivery and Energy Reliability, Research, Development and Analysis - ARRA 81.122 495,676 Office of Science Financial Assistance Program 81.049 67,838 Office of Science Financial Assistance Program - ARRA 81.049 57,292 Total - Department of Energy 801,316 Department of Health and Human Services Administration for Children and Families 93.600 12,870 Centers for Disease Control and Prevention 93.283 27,152 Centers for Disease Control and Prevention 93.941 298,468 Centers for Medicare and Medicaid Services 93.610 201,544 Department Of Health And Human Services 93.RDC 271,329 Health Resources and Services Administration 93.884 443,883 National Institute on Alcohol Abuse and Alcoholism 93.891 13,038 National Institutes of Health 93.113 724,329 National Institutes of Health 93.121 115,568 National Institutes of Health 93.172 679,770 National Institutes of Health 93.213 191,644 National Institutes of Health 93.242 1,766,840 National Institutes of Health 93.273 950,065 National Institutes of Health 93.279 476,581 National Institutes of Health 93.286 362,616 National Institutes of Health 93.307 26,000 National Institutes of Health 93.310 66,398 National Institutes of Health 93.350 1,537,664 54
Notes to Schedule of Expenditures of Federal Awards 7. Subrecipient Pass-Throughs (Continued) Program Title Amount Provided to Research and Development -- Pass-Throughs CFDA Subrecipients National Institutes of Health 93.389 4,329,752 National Institutes of Health 93.393 3,653,343 National Institutes of Health 93.394 699,851 National Institutes of Health 93.395 42,909 National Institutes of Health 93.396 369,440 National Institutes of Health 93.397 3,025,092 National Institutes of Health 93.399 186,737 National Institutes of Health 93.837 554,020 National Institutes of Health 93.838 195,968 National Institutes of Health 93.839 381,272 National Institutes of Health 93.846 67,288 National Institutes of Health 93.847 579,825 National Institutes of Health 93.853 1,572,127 National Institutes of Health 93.855 1,334,630 National Institutes of Health 93.859 901,547 National Institutes of Health 93.865 503,128 National Institutes of Health 93.866 3,234,108 National Institutes of Health 93.867 2,132,521 National Institutes of Health - ARRA 93.701 2,560,198 Office of the Secretary 93.297 58,228 Office of the Secretary - ARRA 93.726 50,327 Substance Abuse and Mental Health Services Administration 93.243 386,309 Total - Department of Health and Human Services 34,984,381 Department of Homeland Security Centers for Homeland Security 97.061 913,835 Department Of Homeland Security 97.RDC 79,901 Homeland Security Grant Program 97.067 34,200 Total - Department of Homeland Security 1,027,936 Department of State Bureau of Educational and Cultural Affairs 19.415 50,000 Total - Department of State 50,000 55
Notes to Schedule of Expenditures of Federal Awards 7. Subrecipient Pass-Throughs (Continued) Program Title Amount Provided to Research and Development -- Pass-Throughs CFDA Subrecipients Department of the Interior Department Of The Interior 15.RDC 135,675 U.S. Geological Survey 15.807 58,070 U.S. Geological Survey 15.808 858,693 Total - Department of the Interior 1,052,439 Department Of Transportation Department Of Transportation 20.RDG 142,090 Rita Hydrogen 20.704 25,004 Total - Department Of Transportation 167,093 Environmental Protection Agency Environmental Protection: Consolidated Research 66.500 30,453 Office of Research and Development (ORD) 66.509 587,695 Total - Environmental Protection Agency 618,148 Federal Communications Commission Federal Communications Commission 32.RDC 14,726 Total - Federal Communications Commission 14,726 Institute For Museum and Library Conservation Project Support (IMLS) 45.303 39,277 Total - Institute For Museum and Library 39,277 National Aeronautics And Space Administration National Aeronautics And Space Administration 43.RDC 414,640 National Aeronautics And Space Administration 43.RDG 12,000 Science 43.001 135,059 Total - National Aeronautics And Space Administration 561,700 National Endowment for the Humanities Promotion of the Humanities-Division of Preservation and Access 45.149 89,867 Total - National Endowment for the Humanities 89,867 National Science Foundation Biological Sciences 47.074 98,452 Computer and Information Science and Engineering 47.070 198,599 Education and Human Resources 47.076 72,959 Engineering Grants 47.041 1,461,078 56
Notes to Schedule of Expenditures of Federal Awards 7. Subrecipient Pass-Throughs (Continued) Program Title Amount Provided to Research and Development -- Pass-Throughs CFDA Subrecipients Geosciences 47.050 4,002,665 Office of Cyber Infrastructure 47.080 289,586 Social, Behavioral, and Economic Sciences 47.075 42,520 Trans-NSF Recovery Act Research Support - ARRA 47.082 417,565 Total - National Science Foundation 6,583,424 Total Amount Provided to Subrecipients $ 63,106,311 8. Regulatory Updates During fiscal year 2013, the university determined that it had inadvertently over awarded loans and grants for certain nonstandard term programs over the academic years ended June 30, 2011, 2012 and 2013. The university notified the Department of Education ( DOE ) and has been working with the DOE to determine the appropriate resolution. In a letter provided to the DOE on October 14, 2013, the university communicated that it estimates that the portion of overpayment to students that will be collected, based upon peer default rates, is approximately $1 million and the university has taken corrective actions to ensure no additional overpayments are made. Although this is not material to the accompanying Schedule of Expenditures and Federal awards or the Student Financial Aid cluster ($548 million of Student Financial Aid disbursed during the year), the matter remains open with the DOE and final resolution has not been determined as of the release of this report. 57
Independent Auditor s 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 To: The Board of Trustees of the University of Southern California We have audited, 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, the consolidated financial statements of the University of Southern California and its subsidiaries, which comprise the consolidated balance sheet as of June 30, 2013, and the related consolidated statement of activities and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated October 9, 2013. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered University of Southern California s internal control over financial reporting ( internal control ) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of University of Southern California's internal control. Accordingly, we do not express an opinion on the effectiveness of University of Southern California's internal control. A deficiency in internal control 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 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. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the University of Southern California s financial statements are free from 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. PricewaterhouseCoopers LLP, 601 South Figueroa Street, Los Angeles, CA 90017 T: (213) 356 6000, F: (813) 637 4444, www.pwc.com/us
Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. October 9, 2013
Independent Auditor s Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 To: The Board of Trustees of the University of Southern California Report on Compliance for Each Major Federal Program We have audited the University of Southern California and its subsidiaries compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of University of Southern California s major federal programs for the year ended June 30, 2013. University of Southern California s major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of the University of Southern California s major federal programs based on our audit of the types of compliance requirements referred to above. We did not audit the university s compliance with the requirements governing Student Loan Billing and Due Diligence in Collection compliance requirements specified by the Federal Perkins Loan Program ( Perkins Loan ), Student Status Confirmation Reports specified by the Federal Direct Loan Program ( FD Loan ) and described in the OMB Circular A-133 Compliance Supplement. Compliance with these requirements was audited by other auditors whose reports thereon have been furnished to us, and our opinion, insofar as it relates to university s compliance with those requirements, is based solely on the report of the other auditors. 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 University of Southern California 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 on compliance for each major federal program. However, our audit does not provide a legal determination of the University of Southern California s compliance. Opinion on Each Major Federal Program In our opinion, the University of Southern California complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2013. PricewaterhouseCoopers LLP, 601 South Figueroa Street, Los Angeles, CA 90017 T: (213) 356 6000, F: (813) 637 4444, www.pwc.com/us
Other Matters The results of our auditing procedures disclosed an instance of noncompliance, which is required to be reported in accordance with OMB Circular A-133 and which is described in the accompanying schedule of findings and questioned costs as item Finding 2013-001. Our opinion on each major federal program is not modified with respect to these matters. University of Southern California's response to the noncompliance finding identified in our audit is described in the accompanying management s views and corrective action plan. University of Southern California's response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. Report on Internal Control Over Compliance Management of University of Southern California is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered University of Southern California s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, 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 University of Southern California's internal control over compliance. We did not consider internal control over compliance with the Student Loan Billing and Due Diligence in Collection compliance requirements specified by the Federal Perkins Loan Program, Student Status Confirmation Reports specified by the Federal Direct Loan Program and described in the OMB Circular A- 133 Compliance Supplement. Internal control over these compliance requirements was considered by the other auditors referred to above; and our report, insofar as it relates to the university's internal control over those compliance requirements, is based solely upon the reports of the other auditors. 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 in internal control over compliance is a deficiency, or 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. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified a deficiency in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as item Finding 2013-001 that we consider to be a significant deficiency.
The university's response to the internal control over compliance findings identified in our audit is described in the accompanying management s views and corrective action plan. The university s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. February 14, 2014
Independent Auditors Schedule of Findings and Questioned Costs For the Section I Summary of Auditor s Results Financial Statements Type of auditor s report issued: Unmodified 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 the 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? x_ yes none reported Type of auditor s report issued on compliance for major programs: Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of OMB Circular A-133? Unmodified x_ yes no Identification of major programs: CFDA Number(s) Various Various Various Dollar threshold used to distinguish between type A and type B programs: Name of Federal Program or Cluster Research and Development Cluster Student Financial Aid Cluster TRIO Cluster $_3,000,000_ Auditee qualified as low-risk auditee? x_ yes no Section II Financial Statement Findings No matters are reportable. 63
Independent Auditors Schedule of Findings and Questioned Costs For the Section III Federal Award Findings and Questioned Costs - Federal Awarding Agency: Department of Education - Program names and specific award name: Federal Family Education Loan Program Stafford Loans (subsidized and unsubsidized), FFELP Graduate PLUS Loans, Direct Stafford Loans (subsidized and unsubsidized), Direct Graduate PLUS loans and TEACH Grants. - CFDA #: 84.032, 84.268, 84.379 - Award #: N/A - Award Years: Academic Years 2010-2011, 2011-2012 and 2012-2013 Citation 34 CFR section 668.4 (a-h) Questioned Cost Reference letter dated October 4, 2013 to the Department of Education. Criteria Per 34 CFR section 668.4 (a-h), an institution calculates the payment period and award amount based upon whether the program has a standard term or a non-standard term. Condition In December 2012, USC s Financial Aid Department identified overpayments of Title IV funds that affected six graduate degree programs as a result of the following: - Use of an incorrect academic calendar to award and disburse Title IV aid for four graduate programs; and - Use of a 30 week academic year for programs that were less than 30 weeks in length. Cause The overpayments were inadvertent and largely the result of inadequate communication among the relevant USC departments. Specifically: - The Financial Aid office was not involved in the curriculum approval process. - Graduate programs were set up with non-standard terms. - There were no controls in place to ensure the timely communication of non-standard terms between the respective Graduate program departments, Registrars Office and Financial Aid office. Effect Title IV funds were not calculated as required by federal guidelines. Certain Title IV funds were calculated using a standard term versus a nonstandard term resulting in an overpayment to over 1,000 students. The overpayments were communicated to the Department of Education as soon as the University identified the issues. Recommendation We recommend that management enhance controls to ensure that programs are in line with the standard terms outlined by the federal guidance. Specifically, the Financial Aid office should be involved in the curriculum approval process to ensure that the University is adhering to standard terms, or that immediate communication occurs when terms are not standard. Management s Views and Corrective Action Plan Management s response is reported in Management s Views and Corrective Action Plan and is considered part of this report. 64
Summary of Status of Prior Year Findings For the There are no findings from the prior years that require an update in this report. 65
Management s Views and Corrective Action Plan For the 66