Successful Office of Management and Budget (OMB) Audit
Samuel Merritt University's (SMU) external auditors completed an audit of the University's 2011 federal grants without any findings, the best possible outcome and the second consecutive year with successful results. As a result, the University now qualifies for status as a low-risk auditee and lowers the proportion of federal grants that now require scrutiny. This new audit status positions the University as a top-tier performer in federal grants compliance and sends a message to all potential donors and grantors that their funds will be well entrusted with Samuel Merritt. Congratulations to all staff in the Enrollment and Student Services and Finance and Administration Divisions for these great results.
The University received more than $53 million in federal grants in 2011, most of them granted by the Department of Education (DOE). SMU was required to perform the compliance audit, known as the "A-133 Audit," because its federal grant total exceeded $500,000. It was part of a system-wide audit performed for all Sutter affiliates by Ernst & Young. It is important to note that although the University is a small affiliate within the Sutter system, it is responsible for the majority of federal grants. Based on 2011 audited figures, Samuel Merritt generates only 0.6 percent of all net operating revenue but has responsibility for over 71 percent of all federal grants in the Sutter system.
An outcome of no findings means that SMU has no faults that must be corrected. There can be serious consequences for audit findings, especially when they are not corrected promptly. The DOE scrutinizes the University's A-133 audit results and reserves the right to invoke administrative penalties for repeated findings. These penalties could range from increased scrutiny all the way to the elimination of the University's participation in federal financial aid programs. This latter penalty would be devastating for the University, but has been avoided by our audit's successful outcome.