Grambling State Universityapp1.lla.state.la.us/PublicReports.nsf/7DAE4AB511D... · An audit also...

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GRAMBLING STATE UNIVERSITY

SINGLE AUDIT REPORT

FOR THE YEAR ENDED JUNE 30,2006

Under provisions of state law, this report is a publicdocument Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

Release Date 3- 3-1 -o 1

^Bruno& TervalonPublic Accountants

TABLE OF CONTENTS

PAGE

INDEPENDENT AUDITORS' REPORT ON THE SCHEDULE OFEXPENDITURES OF FEDERAL AWARDS ; 1

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFOR THE YEAR ENDED JUNE 30,2006 3

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERALAWARDS 9

SUPPLEMENTARY DATA:I — Schedule of Disclosures for Federally

Assisted Loans for the Year Ended June 30,2006 18II - Schedule of Fixed Price Contracts '

For the Year Ended June 30,2006 19"III — Schedule of Secondary Sub-recipients of Major Federal

Programs for the Year Ended June 30,2006 20IV -- Schedule of State Agency/University Sub-recipients

of Federal Programs for the Year Ended June 30,2006 21V — Schedule of Inter-Agency Expenditures of Federal Awards

For the Year Ended June 30, 2006 22

TABLE OF CONTENTS, CONTINUED

PAGE

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ONINTERNAL CONTROL OVER FINANCIAL REPORTINGBASED ON AN AUDIT OF THE SCHEDULE OFEXPENDITURES OF FEDERAL AWARDS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS . 24

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITHREQUIREMENTS APPLICABLE TO EACH MAJORPROGRAM AND INTERNAL CONTROL OVER COMPLIANCEIN ACCORDANCE WITH OMB CIRCULAR A-133 27

SCHEDULE OF FINDINGS AND QUESTIONED COSTS:Schedule I - Summary of the Independent Auditors 'ResultsSchedule II - Financial Statement Findings for the Year

Ended June 30, 2006Schedule El - Federal Award Findings and Questioned Costs

for the Year Ended June 30, 2006

30

32

33

AUDIT INFORMATION SCHEDULE 34

jBruno& Tervalon LLP^Certified Public Accountants

MemberASWil!?lll2?SSltôf , , Michael B. Bruno, CPACertified Public Accountants .. ., . . .

Society of Louisiana **** J" Tervalon. Jr., CPACertified Public Accountants Waldo J. Moret, Jr., CPA

Paul K. Andoh, Sr., CPA

INDEPENDENT AUDITORS' REPORT ON THESCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Dr. Horace A. Judson, PresidentGrambling State UniversityGrambling, Louisiana 71245

We have audited the accompanying Schedule of Expenditures of Federal Awards ofGrambling State University (the University) for the year ended June 30, 2006. TheSchedule of Expenditures of Federal Awards is the responsibility of the management of theUniversity. Our responsibility is to express an opinion on the Schedule of Expendituresof Federal Awards based on our audit. The accompanying Schedule of Expenditures ofFederal Awards is not apart of the University's component unit financial statements for theyear ended June 30, 2006. The component unit financial statements were audited by theState of Louisiana's Legislative Auditor whose report had not been issued as of this reportissuance date.

We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America, and the standards applicable to Government Auditing Standards,issued by the Comptroller General of the United States and the provisions of OMB CircularA-133. Those standards and the provisions of OMB Circular A-133 require that we planand perform the audit to obtain reasonable assurance about whether the Schedule ofExpenditures of Federal Awards are free of material misstatement An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the Scheduleof Expenditures of Federal Awards. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating theoverall presentation of the Schedule of Expenditures of Federal Awards. We believe thatour audit provides a reasonable basis for our opinion.

4298 ELYSIAN FIELDS AVENUE, NEW ORLEANS, LA 70122(504) 284-8733 FAX (504) 284-8296

E-MAIL: [email protected]

INDEPENDENT AUDITORS' REPORT ON THESCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

(CONTINUED)

Dr. Horace A. Judson, PresidentGrambling State UniversityGrambling, Louisiana 71245Page 2

In our opinion, the accompanying Schedule of Expenditures of Federal Awards ofGrambling State University presents fairly, in all material respects, the expenditures offederal awards for the year ended June 30, 2006 in conformity with accounting principlesgenerally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report datedFebruary 21, 2007 on our consideration of the University's internal control over financialreporting and our tests of its 'compliance with certain provisions of laws, regulations,contracts and grants. That report is an integral part of an audit performed in accordance withGovernment Auditing Standards, and should be read in conjunction with this report inconsidering the results of our audit. Also, that report disclosed instances of noncompliancethat may be material to the Schedule of Expenditures of Federal Awards, but for which theultimate resolution cannot presently be determined.

Our audit was performed for the purpose of forming an opinion on the Schedule ofExpenditures of Federal Awards taken as a whole. The supplementary data included in thisreport is presented for the purpose of additional analysis and is not a required part of theSchedule of Expenditures of Federal Awards. Such information has been subjected to theauditing procedures applied in the audit of the Schedule of Expenditures of Federal Awardsand, in our opinion is fairly stated in all material respects in relation to the Schedule ofExpenditures of Federal Awards taken as a whole.

BRUNO & TERVALON LLPCERTIFIED PUBLIC ACCOUNTANTS

February 2 1,2007

tyuno& Tervalon LLP^Certified Public Accountants

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GRAMBLING STATE UNIVERSITYNOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

NOTE 1 - General:

Grambling State University (GSU) located in Gxambling, Louisiana is aninstitution of higher education founded in 1901.

The University is a multi-purpose state supported co-education institution withdegree-granting academic units which include the following:

~ College of Business;- College of Education;- School of Social Work;— School of Nursing;-- College of Science Technology; and-- College of Liberal Arts.

As defined by Government Accounting Standards Board Statement Number 14,the University is a component unit of the State of Louisiana (the FinancialReporting Entity) within the executive branch of government and is governedby the Board of Supervisors for the University of Louisiana System.

The University has an enrollment of approximately 5,166 students and isaccredited by the Commission on Colleges of the Southern Association ofColleges and Schools.

Grambling State University is the recipient of various Federal grants,subgrants and awards from the U.S. Department of Education, the Departmentof Health and Human Services, the State of Louisiana and other agencies toassist in achieving a higher level of learning for its student body. Total directfederal and federal awards passed through other agencies amounted to morethan $49,189,485 for the fiscal year July 1, 2005 through June 30, 2006.Included in this amount is funding for the Student Financial Aid ProgramCluster which totaled $43,747,394 and includes loans to students under theFederal Family Education Loan Program which totals $32,464,322.


(CONTINUED)

NOTE 1 - General. Continued:

Student Financial Aid

Grambling State University was approved during January, 1959 by the thenOffice of Education for participation in the Student Financial Aid Programs.These programs include the Federal Perkins Program, Nursing Student LoanProgram, Federal Work Study Program (FWS), Federal SupplementalEducation Opportunity Grant Program (FSEOG), Federal PELL Grant and theFederal Family Education Student Loan Program (FFEL). Listed below is abrief description of the Student Aid Programs administered by the University.

o Federal Perkins Loan Program

The University entered into an agreement to establish a NDSL programunder the National Defense Education Act of 195 8, which was transferredin 1972 to Title IV Part 674 of the Higher Education Act of 1965.Beginning with the 1987-88 award year, the NDSL Program was renamedthe Perkins Loan Program in honor of the late Carl D. Perkins, formerchairman of the House Education and Labor Committee. The Universityterminated the Perkins Loan Program and has repaid the remainingoutstanding balance to the Federal Government during the year endedJune 30, 3006.

o Nursing Student Loan Program fNSL)

The University entered into an agreement with the U.S. Department ofHealth and Human Services to establish a Nursing Student Loan Program.The records of the institution indicate that loans aggregating $364,849have been made to students. The University's participation in theNursing Student Loan Program was terminated due to the high defaultrate.

10


(CONTINUED)

NOTE 1- General, Continued:

o Federal Work-Study Program fFWSl

The University established the FWS Program pursuant to Title IV, PartC of the Higher Education Act of 1965, as amended. During the yearended June 30, 2006, federal expenditures totaled $639,204, of which$30,438 was for administrative costs and $608,766 for wages.

The University elected and received approval from the Department ofEducation to waive the institutional matching requirement for the FederalWork Study program's approved funding level for the fiscal year endedJune 30,2006. The University was entitled to this waiver because of itsparticipation in the Strengthening Historically Black Colleges Title IIIProgram.

o FSEOG Program

The FSEOG Program was established at the University in 1965 underTitle IV, Part A of the Higher Education Act of 1965, as amended.During the year ended June 30, 2006, awards made from Federal fundsaggregated $587,010 and the University recorded indirect costs of$29,350, which was allocated through Federal Work Study.

The University received approval from the Department of Education towaive the institutional matching requirement for the FSEOG program.

o Federal Pell Grant Program

The Institution entered into an agreement with the Office of Education toparticipate in the Federal Pell Grant Program. This program provideseligible students with a foundation of financial aid to help defray the costsof post secondary education. During the year $10,027,508 was expendedfor Federal Pell Grant awards to full-time and part-time students. TheUniversity received an administrative cost reimbursement of $16,720.

11


(CONTINUED)

NOTE 1 - General Continued:

o Federal Family Education Loan Program

The Federal Family Education Loan Program enables eligibleundergraduate students to borrow directly from a bank or other lendinginstitution. During the current year, approximately $32,464,322 wasdisbursed to students under the Federal Family Education Loan Program.The Federal Family Education Loan Program's Cohort default rate is 9,9percent.

The Student Financial Aid programs are administered by the University'sFinancial Aid Department. All accounting for the Student Financial Aidprograms is performed by the University's Accounting Department.Accounting is under the control of the Vice-President for Finance and FinancialAid reports to the Vice-President for Enrollment Management and AcademicServices.

NOTE 2- Basis of Presentation and Accounting:

The information in the Schedule of Expenditures of Federal Awards ispresented in accordance with the requirements of OMB Circular A-l33,Auditsof State, Local Governments, and Non-Profit Organizations. Therefore, someamounts presented in this schedule may differ from amounts presented in, orused in the preparation of, the basic financial statements.

12


(CONTINUED)

NOTE 2 - Basis of Presentation and Accounting. Continued:

The purpose of the Schedule of Expenditures of Federal Awards is to presenta summary of those activities of Grambling State University for the yearended June 30, 2006 which have been financed principally by the U. S.Government (federal awards). For purposes of the schedule, federal awardsinclude all Federal assistance and procurement relationships entered intodirectly between the University and the federal government and sub-awardsfrom non-federal organizations made under federally sponsored agreements.Because the Schedule presents only a selected portion of the activities of theUniversity, it is not intended to and does not present either the financialposition, changes in net assets or the current fund's revenues, expenditures, andother changes of the University.

The Schedule of Expenditures of Federal Awards is presented .on the modifiedaccrual basis. The preparation of financial statements in conformity withgenerally accepted accounting principles requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenses duringthe reporting period. Actual results could differ from those estimates.

13


(CONTINUED)

NOTE 3 - Program Organization and Financing-fNursing Student Loan Programs):

The Nursing Student Loan Program is operated by the Institution under anagreement with the Department of Health and Human Services. The accountsof the program are included among the Loan Funds of the University.

The University did not make any loans to students for the year ended June 30,2006.

The program was financed by contributions from the U.S. Department ofHealth and Human Services, which were matched, at a ratio of one-to-nine bycontributions from the University. However, during the year ended June 30,1997, the University was notified by the Department of Health and HumanServices that the program was terminated due to the high default rate. Thecontributions made to the program, repayments to the federal government andloans receivables are as follows:

Analysis of Nursing Student Loan Contributions

Period from For theInception to Year Ended

Funding Source June 30.2006 June 30.2006

Federal $318,176 $-0-University 35.353 ^0-

Total $353.529 $^

Analysis of Repayments

Funding Source

Federal $287,608 $4,795University 7.835 332

Total S295.443 $5.127

14

GRAMBLING STATE UNIVERSITYNOTES TO THE SCHEDULE OF EXPENDITURES OF.FEDERAL AWARDS

(CONTINUED)

NOTE 3 - Program Organization and FinancingfNursing Student Loan Programs'). Continued:

Analysis of Nursing Student Loan Receivable

Period fromInception toJune 30.2006

Balance, beginningof period/year

Funds advanced/adjustments

Total

Less: CollectionsAdjustmentsCancellations

Total credits

Balance, June 30,2006

$ -0-364.849

364.849

253,44924-Q-

FortheYear EndedJune 30.2006

$116,389

116.389

5,013-0-:&_

5.013

S 111.376

NOTE 4- Department of Education Loan:

The University of Louisiana System Board of Trustees has signed a loanagreement, on behalf of the University, with the U.S. Secretary of Educationin the amount of $3,500,000. These funds are to be used for financing theconstruction of four new dormitories pursuant to Title IV of the Housing Actof 1950. The loan shall bear interest at the rate of 3% per annum on the unpaidbalance. The principal and interest shall be payable in semi-annual installmentsof $88,877 over a term of 30 years.

15


(CONTINUED)

NOTE 4 - Department of Education Loan, Continued:

As of June 30, 2006, the outstanding loan balance is $2,406,397. Paymentstotaling $103,234 were made during the year. This balance is disclosed in theSchedule of Disclosures for Federally Assisted Loans.

NOTE 5 - Supplementary Financial Information:

The Schedule of Disclosures for federally assisted loans summarizes theamount of loans made or disbursed during the year for the Federal FamilyEducation Student Loan Program, College Housing Facilities Loans, thePerkins Loan, the NSL Programs and the Department of Education.Additionally, the Schedule summarizes the amount of principal and interestcancelled (military and teacher) for the National Defense/Perkins LoanProgram.

The Schedule of Fixed Price Contracts summarizes the total amount ofrevenues received under fixed-price contracts.

The Schedule of Secondary Sub-recipients of major Federal Programs representdisbursements of major program funds to non-state of Louisiana sub-recipients.

The Schedule of State Agency/University sub-recipients of Federal programsrepresent disbursement of federal funds to State of Louisiana agencies.

The Schedule of Inter-Agency Expenditures of Federal Awards summarizesfederal expenditures financed by the State of Louisiana with funds receivedfrom the federal government.

16


(CONTINUED)

NOTE 6 - Contingencies:

Participation in Grant Programs

The University administers and participates in certain federal and stateprograms as disclosed in the Schedule of Expenditures of Federal Awards. Inconnection with the administration and operations of these grants, theUniversity is to expend grant funds and allocations in accordance with programguidelines and regulations. However, should the University haveoperated/administered the programs and/or grants in a manner which would bein non-compliance with the guidelines and regulations, the University may berequired by the funding sources to repay some portion or all of the grant award.

NOTE 7 - Major Federal Financial Assistance Programs:

Grambling State University major federal financial assistance programs forthe year ended June 30, 2006 were determined on a State level based uponprogram activity. Such programs are the Student Financial Assistance Cluster,the Workforce Investment Act Grant, the Research and Development Cluster,and the Temporary Assistance for Needy Families Grant

17

SUPPLEMENTAL DATA

SCHEDULE I

GRAMBLING STATE UNIVERSITYSCHEDULE OF DISCLOSURES FOR FEDERALLY ASSISTED LOANS


ProgramName/Title

Loans PrincipalMade or Outstanding and

Federal Disbursed Loan InterestCFDANO. During Year Balance Cancelled

Federal Family EducationLoan Program 84.032 $32.464322

Perkins LoanProgram

Nursing StudentLoan Program

College Housingand OtherFacilitiesLoans

Department ofEducation -Housing Actof 1950

84.038 $_

93364 $_

84.142

-0- $_

N/A

-0-

-0- S 111376

N/A S 286.000

N/A N/A $2.406397

N/A

N/A

N/A

N/A

N/A

See the Independent Auditors1 Report on Supplementary Information.

18

SCHEDULE II

GRAMBLING STATE UNIVERSITYSCHEDULE OF FIXED PRICE CONTRACTS


Program Name CFDA No. Grantor Period Revenues

(1) (1) .(1) (1) (1)

(1) Grambling State University did not receive any revenues under the terms of fixed-priced contracts during the year ended June 30, 2006.

See the Independent Auditors' Report on Supplementary Information.

19

SCHEDULE HI

GRAMBLING STATE UNIVERSITYSCHEDULE OF SECONDARY SUB-RECIPIENTS

OF MAJOR FEDERAL PROGRAMSFOR THE YEAR ENDED JUNE 30,2006

CFDA or Program SecondaryFederal Grantor Other Number Name Activity Subrecipient

(1) (1) (1) (1) (1)

(1) Grambling State University did not receive any revenues from secondary sub-recipients of major federal programs during the year ended June 30, 2006.


20

SCHEDULE IV

GRAMBLING STATE UNIVERSITYSCHEDULE OF STATE AGENCY/UNIVERSITY SUBRECIPIENTS

FOR FEDERAL PROGRAMSFOR THE YEAR ENDED JUNE 30,2006

Federal Grantor

U.S. Departmentof Health andHuman Services-National InstituteofHealth

CFDA orOther Number

93.859

ProgramName

Partnershipfor MinorityAccess toBaccalaureateDegrees

ActivitySecondarySubrecipient

LouisianaStateUniversity

$ 26,082

U.S. DepartmentofHealth and HumanServices NationalInstitute of Health

93.859

Total

Partnershipfor MinorityAccess toBaccalaureateDegrees 50.211

$76223

SouthernUniversity AtShreveport/Bossier


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mrunp& Tervalon m>lifted Public Accountants

Member

^^S 'S3^6*0* * . Michael B. Bruno, CPACertified Public AccountantsSociety of Louisiana ***** J- Tervalon. Jr., CPACertified Public Accountants Waldo J. Moret, Jr., CPA


INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ONINTERNAL CONTROL OVER FINANCIAL REPORTING

BASED ON AN AUDIT OF THE SCHEDULE OFEXPENDITURES OF FEDERAL AWARDS PERFORMED IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS


We have audited the Schedule of Expenditures of Federal Awards of Grambling StateUniversity (the University) as of and for the year ended June 30,2006, and have issued ourreport thereon dated February 21, 2007. We conducted our audit in accordance withauditing standards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards issued by theComptroller General of the United States. The component unit financial statements wereaudited by the State of Louisiana's Legislative Auditor whose report had not been issued asof this report issuance date.

Compliance

As part of obtaining reasonable assurance about whether the University's Schedule ofExpenditures of Federal Awards is free of material misstatement, we performed tests of itscompliance with certain provisions of laws, regulations, contracts and grants, noncompliancewith which could have a direct and material effect on the determination of financial statementamounts. However, providing an opinion on compliance with those provisions was not anobjective of our audit and, accordingly, we do not express such an opinion. The results ofour tests of compliance disclosed no instances of non-compliance that are required to bereported under Government Auditing Standards.

24


E-MAIL: brunterv© btcpas.com



WITH GOVERNMENT AUDITING STANDARDS(CONTINUED)

Internal Control Over Financial Reporting

In planning and performing our audit, except for the functions performed at the University'sService Bureau in connection with processing transactions for the NDSL/Perkins programand Nursing Student Loan Program, we considered the University's internal control overfinancial reporting in order to determine our auditing procedures for the purpose ofexpressing our opinion on the Schedule of Expenditures of Federal Awards and not toprovide assurance on the internal control over financial reporting.

For the information system internal control categories at the Service Bureau, anotheraccountant performed procedures to obtain reasonable assurance about whether (1) thedescription of controls related to the System III Loan Servicing System application ofCampus Partners' present fairly, in all material respects, the aspects of Campus Partners'controls that may be relevant to a user organization's internal control structure as it relatesto an audit of the financial statements, (2) the controls included in the description weresuitably designed to achieve the control objectives specified in the description, if thosecontrols were complied with satisfactorily, and (3) such controls had been placed in operationas of June 30,2006. The other accountants5 report has been furnished to us as of our reportissuance date in which an unqualified opinion was expressed regarding the previous notedcontrols.

25



WITH GOVERNMENT AUDITING STANDARDS(CONTINUED)

Internal Control Over Financial Reporting. Continued

A material weakness is a condition in which the design or operation of one or more of theinternal control components does not reduce to a relatively low level the risk thatmisstatements in amounts that would be material in relation to the Schedule of Expendituresof Federal Awards being audited may occur and not be detected within a timely period byemployees in the normal course of performing their assigned functions. Our considerationof the internal control over financial reporting would not necessarily disclose all matters inthe internal control that might be reportable conditions and, accordingly would notnecessarily disclose all reportable conditions that are also considered to be materialweaknesses. We noted no matters involving the internal control over financial reporting andits operation that we consider to be material weaknesses.

Also, we noted that other accountants for the Service Bureau expressed an unqualifiedopinion on specific controls tested.

This report is intended for the information and use of the President, management and federalawarding agencies and pass-through entities and is not intended to be and should not be usedby anyone other than these specified parties.


February 21,2007

26

IBrunp & Tervalon LLP7Certified Public Accountants

ip & Tervalon LLP^Certified Public Accountants

MemberAmerican Institute of Mir-haoi R Rnmn PDACertified Public Accountants Michael B> Bruno'CPA

Society of Louisiana Mclde J- Tervalon, Jr., CPACertified Public Accountants Waldo J. Moret, Jr., CPA


INDEPENDENT AUDITORS' REPORT ON COMPLIANCEWITH REQUIREMENTS APPLICABLE

TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVERCOMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133


Compliance

We have audited the compliance of Grambling State University (the University) with thetypes of compliance requirements described in the U.S. Office of Management and Budget(OMB) Circular A-133 Compliance Supplement that are applicable to each of its majorfederal programs for the year ended June 3 0,2006. The component unit financial statementswere audited by the State of Louisiana's Legislative Auditor whose report had not beenissued as of our report issuance date. The University's major federal programs areidentified in the summary of independent auditors' results section of the accompanyingschedule of findings and questioned costs. Compliance with the requirements of laws,regulations, contracts and grants applicable to each of its major federal programs is theresponsibility of the University's management. Our responsibility is to express an opinionon the University's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generallyaccepted in the United States of America, the standards applicable to financial auditscontained in Government Auditing Standards, issued by the Comptroller General of theUnited 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 andperform the audit to obtain reasonable assurance about whether noncompliance with the typesof compliance requirements referred to could have a direct and material effect on a majorfederal program occurred. An audit includes examining, on a test basis, evidence about theUniversity's compliance with those requirements and performing such other procedures aswe considered necessary in the circumstances. We believe that our audit provides areasonable basis for our opinion. Our audit does not provide a legal determination on theUniversity's compliance with those requirements.

27


E-MAIL: [email protected]

INDEPENDENT AUDITORS' REPORT ON COMPLIANCEWITH REQUIREMENTS APPLICABLE


(CONTINUED)

Compliance, Continued

In our opinion, the University complied, in all material respects, with the requirementsreferred to above that are applicable to each of its major federal programs for the year endedJune 30,2006.

We did not audit the University's compliance with certain regulations governing theprocessing of student loans fortheNDSL/Perkins and Nursing Student Loan Programs as setforth therein relative to participation in the Federal Student Financial Assistance Program.Those administrative requirements govern functions performed by the Service Bureau. Sincewe did not apply auditing procedures to satisfy ourselves regarding compliance with thoserequirements, the scope of our work was not sufficient to enable us to express, and we do notexpress, an opinion on compliance with those requirements.

The Service Bureau's compliance assertions with respect to its servicing of the FederalPerkins Loan and Nursing Student Loan Programs for the University was examined byanother accountant, whose report was furnished to us as of our report issuance date. Basedon our review of the other accountants' report, we have determined that all of the compliancerequirements included in the OMB Circular A-133 Compliance Supplement that areapplicable to the programs in which the University participates are addressed in either ourreport or the report of the other accountant. The independent accountant indicated that nofindings or questioned costs were noted as a result of the compliance attestation examinationon the service bureau.

Internal Control Over Compliance

The management of the University is responsible for establishing and maintaining effectiveinternal control over compliance with requirements of laws, regulations, contracts and grantsapplicable to federal programs. In planning and performing our audit, except for thefunctions performed at the University's Service Bureau in connection with processingtransactions for the NDSL/Perkins and Nursing Student Loan Programs, we considered theUniversity's internal control over compliance with requirements that could have a direct andmaterial effect on a major federal program in order to determine our auditing procedures forthe purpose of expressing our opinion on compliance and to test and report on internalcontrol over compliance in accordance with OMB Circular A-133.

28

INDEPENDENT AUDITORS1 REPORT ON COMPLIANCEWITH REQUIREMENTS APPLICABLE


(CONTINUED)

Internal Control Over Compliance. Continued

For the internal control over compliance categories at the Service Bureau, another accountantexamined management's assertions with respect to establishing internal control systems thatassured compliance with reporting, Perkins and Nursing Student Loan collections and duediligence, and servicer eligibility. The other accountants' report has been furnished to us asof our report issuance date,

Our consideration of the internal control over compliance would not necessarily disclose allmatters in the internal control that might be material weaknesses.

A material weakness is a condition in which the design or operation of one or more of theinternal control components does not reduce to a relatively low level the risk thatnoncompliance with applicable requirements of laws, regulations, contracts, and grants thatwould be material in relation to a major federal program being audited may occur and notbe detected within a timely period by employees in the normal course of performing theirassigned functions. We noted no matters involving the internal control over compliance andits operations that we consider to be material weaknesses.

Also, we noted that other accountants for the Service Bureau indicated that their were nofindings or questioned costs noted during the current year's attestation examination.

This report is intended solely for the information and use of the President, management,federal awarding agencies and pass-through entities, and the legislative auditors' office andis not intended to be and should not be used by anyone other than these specified parties.


February 21,2007

29Iruno & Tervalon

^Certified Public Accountants

GRAMBLING STATE UNIVERSITYSCHEDULE OF FINDINGS AND QUESTIONED COSTS


SCHEDULE I - Summary of the Independent Auditors' Results

1. Type of report issued on the Schedule of Expenditures ofFederal Awards: Unqualified

2. Did the audit disclose any reportable conditions ininternal control: No

3. Were any of the reportable conditions material weaknesses: No

4. Did the audit disclose any noncompliance which ismaterial to the financial statements of the organization: No

5. Did the audit disclose any reportable conditions ininternal control over major programs: No

6. ^ Were any of the reportable conditions in internalcontrol over major programs material weaknesses: No

7. Type of report issued on compliance for major programs: Unqualified

8. Did the audit disclose any audit findings which theindependent auditors are required to report underOMB Circular A-133, Section 510(a): No

30

GRAMBLEMG STATE UNIVERSITYSCHEDULE OF FINDINGS AND QUESTIONED COSTS, CONTINUED


SCHEDULE I - Summary of the Independent Auditors' Results, Continued

9. The following is an identification of major programs:

CFDANumber Federal Program

Various Student Financial Aid ClusterVarious Research and Development Cluster93.558 Temporary Assistance for Needy Families17.259 Workforce Investment Act Youth Activities

10. The dollar threshold used to distinguish between Type A and Type B Programs, asdescribed in OMB Circular A-133, Section 520(b) is as follows:

Program Amount

Type A Major Programs are determined on aState level.

11. Did the auditee qualify as a low-risk auditee under- OMB Circular A-133, Section 530: Yes

31

GRAMBLING STATE UNIVERSITYSCHEDULE OF FINDINGS AND QUESTIONED COSTS, CONTINUED

FOR THE YEAR ENDED JUNE 30, 2006

SCHEDULE H - Financial Statement Findings

No matters reported.

32

GRAMBLING STATE UNIVERSITYSCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED JUNE 30, 2006

SCHEDULE IE - Federal Award Findings and Questioned Costs

COMPLIANCE

No matters reported.

33

GRAMBLING STATE UNIVERSITYAUDIT INFORMATION SCHEDULE

Lead Auditor: BRUNO & TERVALON LLP, Certified Public AccountantsMichael B. Bruno, CPA, CGFM, Managing PartnerSean M. Bruno, CPA, Manager

License Number: L 1218

Telephone Number: (504) 284-8733

The audit field work was performed between October 2,2006 and February 21,2007 at the institution'sfacilities as follows:

DESCRIPTION OF FACILITY(ADMIN. OR SFA OFFICES, MAIN

LOCATION CAMPUSES. ETC)

Grambling State University Office of Student Financial(main campus) Aid and Federal Grant office

(main campus)

Institution's Accrediting Organization: Commission on Colleges of the Southern Association ofColleges and Schools.

The institution utilizes a SFA Servicer.

Campus Partners2400 Reynolda RoadWinston-Salem, North Carolina 27106

The following functions are provided by this SFA Servicer:

1. Billing Students - Perkins Loans and Nursing Student Loans2. Processing of cancellations and deferments - Perkins Loans and Nursing Student Loans

A review of the Servicer's compliance with Title IV Regulations was performed by the ServiceBureau's independent public accountant.

.Records for the accounting and administration of the SFA programs are located at:

Grambling State UniversityGrambling, Louisiana 71245Office of Student Financial Aid

34

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