August 25, 1999

M E M O R A N D U M SAD 00-17
 
TO: University Vice Chancellors
Community College Business Managers
FROM: Don F. Waugh
Assistant State Controller
SUBJECT: 1999 Federal Reporting Package – Form FED 13

Representatives of various universities and community colleges have contacted the Office of the State Controller (OSC) expressing concern regarding changes made to Form FED 13 for the 1999 Federal Reporting Package, and have requested additional guidance for its completion.

Previously, federal capital contributions received by a school during the fiscal year for revolving student loan programs (i.e. Perkins Loan Program, Health Professions Student Loans, and Nursing Student Loans) were included on the Schedule of Expenditures of Federal Awards. Additional data (i.e. changes in prior year cash balances for loan program funds, and outstanding loan balances as of fiscal year-end) were collected for note disclosure purposes.

During the audit of data collected for the June 30, 1998 Single Audit Report, it was determined that amounts reported as Federal awards expended (on the Schedule of Expenditures of Federal Awards, and in the Notes to the Schedule of Expenditures of Federal Awards) for revolving loan programs were not consistent with guidance provided by OMB Circular No. A-133. Section 205 (b) of the Attachment to OMB Circular No. A-133, Basis for determining Federal awards expended, states:

Since the federal government is at risk for loans until the debt is repaid, the following guidelines shall be used to calculate the value of Federal awards expended under loan programs . . . :
    1. Value of new loans made or received during the fiscal year; plus
    2. Balance of loans from previous years for which the Federal Government imposes continuing compliance requirements; plus
    3. Any interest subsidy, cash, or administrative cost allowance received.
Due to the inconsistency between prior reporting practices and guidance provided by Section 205(b) of the Attachment to OMB Circular No. A-133, Form FED 13 was modified for the 1999 Federal Reporting Package.

Inquiries have been made about whether to include student loan payments received during fiscal year 1999 on Form FED 13. Based on discussions with representatives of the United States Department of Education, the beginning balance of loans receivable for revolving student loan programs at July 1, 1998 should be reduced by payments received during fiscal year 1999 for student loans made prior to July 1, 1998 to determine the "balance of loans from previous years for which the Federal Government imposes continuing compliance requirements." As this information is not clearly requested on Form FED 13 included in the 1999 Federal Reporting Package, we have revised Form FED 13 and attached it to this correspondence.

Please complete the Revised Form FED 13 attached to this correspondence, instead of the Form FED 13 included in the 1999 Federal Reporting Package. Even if you have already submitted the 1999 Federal Reporting Package for your university or community college, please complete the Revised Form FED 13 and forward it to OSC so that the superceded Form FED 13 can be replaced (Note that Form FED 3 will not need to be adjusted and resubmitted).

Thank you for your patience and cooperation. If you have any questions regarding the preceding information, please contact Tammy Aycock at (919) 981-5426.

DW/ABY/TA
 
FED 13
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