高等教育和医疗保健行业的更新.pdf

Higher education and healthcare industry update webcast,part IAugust 17,20232 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP489810-1AAdministrative KPMG is approved by NASBA to deliver CPE-worthy trainingIn order to receive CPE credit:attend for entire sessionparticipate in interactivity checksInteractivity checks will appear in your media player and may or may not be verbally addressed by presenters.Participation is tracked,and failure to actively participate will result in denial of CPE credits.If you have any technical issues,please submit a question through the Questions&Answers panel and our producers will respond to you directly.Content questionsTechnical issuesCPE regulations Submit all content questions through the Questions&Answers panel.3 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP489810-1A1:00 PMWelcome and opening1:05 PMHigher education industry update1:45 PMSingle audit update2:30 PMSOC reports and cybersecurity update3:00 PMClosingAgendaTimes in EDTHigher education industry updateDavid Gagnon,Partner,National Industry Leader,Higher Education,KPMG LLPGina Devine,Senior Manager,KPMG LLP6 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1A6TopicsNational industry developmentsThe state of cybersecurity in higher educationHigher education fundraising in 2022 and risks in the current environmentHigher education audit committee and internal audit focus areas in 20232022 NACUBO-TIAA Study of Endowments Cryptocurrency in higher educationChanges in accounting for credit lossesNational industry developments018 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1ANational industry developments Industry developments Higher Education Price Index(HEPI)Department of Education(ED)activity9 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1AIndustry developments 2023 what a year so far Financial results in 2023 and outlook:Operating results(including federal COVID funding)Endowment returns and fundraising Tuition pricing Industry costs Inflation and workforce disruption Economy Washington,DC:new Congress,federal funding Debt forgiveness 10 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1A 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1AHEPI-2022 Update HEPI increase for FY2022 of 5.2%Relationship to Consumer Price Index(CPI)Categories of costs covered HEPI data by region and institution-typeThe CommonfundHigher Education Price Index(HEPI)-2022 Update was issued in late 2022.The HEPI is an inflation index designed specifically for use by colleges and universities.11 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1ADepartment of Education(ED)activity Financial Responsibility Standards/eZ-Audit Federal notice for proposed rulemaking(CFR)in June:Comment period,possible issuance and effective dates Potential changes:FRS triggering events Additional disclosures on recruiting,advertising and other pre-enrollment expenditures;gainful employment,foreign-owned institutions Related-party disclosures(tightened language in proposed rule):GAAP vs.ED regulations Other activitiesHigher education audit committee and internal audit focus areas in 20230213 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1AHigher education audit committee focus areas in 2023Beyond its core responsibilities regarding oversight of financial reporting and internal controls,the audit committee is dealing with long-standing and emerging industry risks,as well as risks specific to the institution.Weve highlighted several potential areas of focus in 2023.Workforce disruption:leadership and talentCybersecurity and data governance risksEnvironmental,social,and governance(ESG)risks and reportingIRS focus areas and changesResearch compliance and conflict managementIntegrity and consistency of nonfinancial dataInstitutions posture and policies regarding cryptocurrencyName,Image,Likeness(NIL):evolving regulations and practices Institutions focus on ethics,compliance,and cultureScope and risks of affiliations and international activities Internal audit:optimizing risk and advisory focus areasEvaluation of committee agenda,workload,and capabilities14 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1ACollege and university internal audit(IA)functions can challenge the status quo to reduce risk,improve controls,and identify efficiencies and cost benefits across the institution.Weve highlighted several risks and other focus areas to help maximize IAs value to the institution in 2023.Higher education internal audit focus areas in 2023Cybersecurity and data governancePrivacy and security regulatory complianceAdequacy of cloud data protectionsImpact of changes to workforce modesDigitization of risk assessment and testingIntegrity and consistency of nonfinancial dataKPIs to measure training and other initiativesCompliance with gift policiesEndowment and treasury protocolsResearch compliance and conflict managementCapital project managementName,Image,Likeness(NIL)complianceWays to add value to the institutionThe state of cybersecurity in higher education0316 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1AThe state of cybersecurity in higher educationFrequency of cyber attacksData recoveryOther impacts and costs of cyber attacksThird-party providersCyber insuranceHigher education fundraising in fiscal 2022 and risks in the current environment0418 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1AHigher education sector fundraising in fiscal 2022In February 2023,the Council for Advancement and Support of Education(CASE)published its annual Voluntary Support of Education(United States)survey.The survey gathered responses from 826 U.S.institutions.Estimated voluntary support of higher education by source1(Dollars in millions)Donor type2022 amount%of2022 total%increase2021 to 2022Organizations2$36,50061.3%14.6%Alumni13,50022.710.2 Non-alumni individuals9,50016.08.0Total$59,500100.0%12.5%Purpose of contributionsCurrent operations$34,25057.6%6.0%Capital purposes25,25042.422.61 Source:CASE Voluntary Support of Education(United States),2022 survey.2Category includes foundations,donor-advised funds(DAFs),corporations,and other organizations.19 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1A Fundraising by U.S.higher education entities was$59.5 billion in 2022 Increasingly complex,high-profile agreements The National Council of Nonprofits and the Council for Advancement and Support of Education(CASE)vs.GASB reportingFundraising risks in the current environment Gift acceptance policiesThe starting point for sound fundraising practicesRisks around gift and donor administrationCriticality of administrative processes and controls Other common challenges and risksFrom donor administration to conflict management 2022 NACUBO-TIAA Study of Endowments 0521 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1A2022 NACUBO-TIAA Study of Endowments ReturnsRespondent dataSpendingFundraisingESG considerations Cryptocurrency in higher education0623 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1AWhat is cryptocurrency?Cryptocurrency is a digital asset(i.e.,property)designed to work as a medium of exchangeCommon cryptocurrenciesBitcoinEthereumRippleLitecoinStellarIOTADashBitcoinBitcoinand thousands more.Anyone can create their own form of cryptocurrency with a modified blockchain code.Blockchain is a digital ledger that keeps record of transactions in code24 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1ARisks and challengesRisk of lossReputational risksOther challenges Have we engaged an outside advisor?What approvals should occur?How are we staying current?What information will be required for identification?How do we assess risk of loss?Will we make crypto investments directly or indirectly?How will crypto payments or investments be administered?Are internal controls appropriate?Questions to askChanges in accounting for credit losses0726 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1AChanges in accounting for credit lossesOverviewThe Financial Accounting Standards Boards(FASBs)Accounting Standards Update(ASU)2016-13,Financial Instruments Credit Losses(Topic 326):Measurement of Credit Losses on Financial Instruments,as amended,is effective for private entitiesincluding higher education institutions and other not-for-profits(NFPs)applying FASB guidancefor fiscal years beginning after December 15,2022.The ASU requires credit losses to be recognized on most financial assets carried at amortized cost(such as accounts and loans receivable from students)and certain other instruments.The allowance is deducted from the amortized cost basis of a financial asset so that the balance sheet reflects the net amount an entity expects to collect.Under CECL,credit losses are estimated over the entire contractual term of the instrument(adjusted for prepayment)from the date of initial recognition.Importantly,whereas current standards require recognition of those losses when it is“probable”a loss has been incurred,CECL requires recognition when losses are expected.Accounting considerationExisting guidance(incurred loss model)ASU 2016-13(CECL model)Examples of CECL application When to recognize credit lossesWhen it is probable a loss has been incurred(generally subsequent to initial recognition of the asset).Lifetime losses-No recognition threshold.When losses are expected(in nearly all cases,this is upon initial recognition of the asset).Expected credit losses are established for student accounts receivable,even those that are current(i.e.,not past due),as of the entitys reporting date.Period of time consideredNot an explicit input to the incurred loss model.Contractual term,adjusted for prepayment.Expected credit losses for a programmatic loan with a contractual term of 10 years are estimated over the contractual term(adjusted for prepayments).Information consideredHistorical losses and economic conditions.Historical losses,current economic conditions,reasonable and supportable forecasts about future conditions(with reversion to historical loss information for future periods beyond those that can be reasonably forecast).While losses are currently consistent with historical trends at the reporting date,management increases expected loss rates for all aging categories in the allowance for student loan receivables due to forecasting at that date of deteriorating economic conditions and higher unemployment over the contractual term.Unit of account for assessmentPooling of individual assets generally not required,but permitted.Pooling required when assets share similar risk characteristics.A college pools its student accounts receivable to estimate the related allowance for doubtful accounts.27 2023 KPMG LLP,a Delaware limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.NDP421957-1AChanges in accounting for credit losses(continued)Other key points CECL requires determining expected losses from day one and generally requires an allowance(even if the risk of loss is remote).An entitys process for determining expected credit losses cannot consider only historical information.An entity is not required to consider all sources of available information when estimating expected losses.However,it should consider relevant information that is reasonably available and which can be obtained without undue cost and effort.In addition,it should not ignore available information relevant to the estimated collectability of the reported amount.Adoption of the