University of San Francisco

“The number of voting members listed under Part VI, Section A, Line 1a is less than the number of Trustees listed under Part VII, Section A because the Trustees begin and end terms in June. Some Trustees listed under Part VII only served for a short period of time during the current reporting fiscal year.”

“In order to ensure continuity in the Board of Trustees' leadership during the unprecedented COVID-19 pandemic, the University's Bylaws were amended to allow the current Board Chair to serve one additional year term (concluding on June 7, 2022).”

“THE Associate Vice President for Tax Compliance, Internal Audit, and Payroll Services (the "AVP," WHO REPORTS TO THE University's Vice President for Business and Finance) IS RESPONSIBLE FOR OVERSEEING ALL TAX COMPLIANCE MATTERS FOR THE UNIVERSITY OF SAN FRANCISCO, INCLUDING THE PREPARATION OF THE UNIVERSITY'S IRS FORM 990; ACCORDINGLY, UNDER HIS DIRECTION (AND WITH THE ASSISTANCE OF THE UNIVERSITY'S EXTERNAL TAX ADVISORS AT PRICEWATERHOUSECOOPERS, LLP), THE UNIVERSITY'S IRS FORM 990 IS PREPARED BY THE SENIOR TAX ACCOUNTANT IN THE UNIVERSITY'S OFFICE OF TAX COMPLIANCE, Internal Audit, and Payroll Services. THEREAFTER, THE UNIVERSITY'S IRS FORM 990 IS REVIEWED BY THE SENIOR TAX ACCOUNTANT'S SUPERVISOR, THE DIRECTOR OF TAX COMPLIANCE. NEXT, THE UNIVERSITY'S VICE PRESIDENT FOR BUSINESS AND FINANCE AND the AVP CONCURRENTLY REVIEW THE UNIVERSITY'S IRS FORM 990 WITH THE UNIVERSITY'S EXTERNAL TAX ADVISORS (PRICEWATERHOUSECOOPERS, LLP) WHO REVIEW IT ONE FINAL TIME BEFORE THE FULL IRS FORM 990 IS PROVIDED TO THE UNIVERSITY'S AUDIT COMMITTEE OF ITS BOARD OF TRUSTEES, WHICH HAS BEEN DELEGATED APPROPRIATE AUTHORITY TO REVIEW THE RETURN ON BEHALF OF THE BOARD OF TRUSTEES. SUBSEQUENT TO ITS REVIEW, THE AUDIT COMMITTEE REPORTS BACK TO THE FULL BOARD OF TRUSTEES REGARDING ITS OVERSIGHT OF IRS FORM 990, AND THE FINAL DRAFT OF THE UNIVERSITY'S IRS FORM 990 (INCLUDING ALL REQUIRED SCHEDULES THERETO) IS PROVIDED TO THE ENTIRE BOARD OF TRUSTEES SO IT IS ABLE TO MAKE ANY APPROPRIATE INQUIRIES REGARDING THE DATA CONTAINED IN THE UNIVERSITY'S IRS FORM 990 BEFORE THE RETURN IS FILED.”

“UNDER THE TERMS OF ITS CHARTER, THE AUDIT COMMITTEE OF THE UNIVERSITY'S BOARD OF TRUSTEES IS CHARGED WITH MONITORING PROPOSED OR ONGOING TRANSACTIONS FOR CONFLICTS OF INTEREST AND ADDRESSING ANY POTENTIAL OR ACTUAL CONFLICTS of interest. PURSUANT TO THE UNIVERSITY'S CONFLICT OF INTEREST POLICY, AN ANNUAL CONFLICT OF INTEREST QUESTIONNAIRE, AIMED AT DETERMINING ANY FAMILY AND BUSINESS RELATIONSHIPS AND TRANSACTIONS OR OTHER TRANSACTIONS THAT MAY POSE A POTENTIAL CONFLICT of interest, IS DISTRIBUTED TO ALL NECESSARY PARTIES (I.E., BOARD MEMBERS, OFFICERS AND EXECUTIVE LEADERSHIP, AND KEY EMPLOYEES). COVERED PERSONS ARE REQUIRED TO DISCLOSE ACTUAL OR POTENTIAL CONFLICTS of interest AT THE TIME WHEN SUCH CONFLICTS ARISE. WHEN SOMEONE BECOMES A COVERED PERSON AND ANNUALLY THEREAFTER, EACH COVERED PERSON IS REQUIRED TO SIGN A STATEMENT AFFIRMING THAT they: (1) have RECEIVED A COPY OF THE CONFLICT OF INTEREST POLICY; (2) have READ THE POLICY AND UNDERSTAND SAID POLICY; AND (3) AGREE TO COMPLY WITH ALL REQUIREMENTS OF THE POLICY, INCLUDING COMPLETING THE ANNUAL CONFLICT OF INTEREST QUESTIONNAIRE. THE COMPLETED QUESTIONNAIRES FOR MEMBERS OF THE UNIVERSITY'S BOARD OF TRUSTEES ARE REVIEWED BY THE Associate Vice President for Tax Compliance, Internal Audit, and Payroll Services (the "AVP"). THEREAFTER, THE UNIVERSITY'S GENERAL COUNSEL AND the AVP REVIEW THE COMPLETED QUESTIONNAIRES FOR ANY PERSONS WITH ACTUAL OR POTENTIAL CONFLICTS, AND THESE INDIVIDUALS ARE NOTIFIED VIA WRITTEN COMMUNICATION. MOREOVER, THE AVP REPORTS ANY ACTUAL OR POTENTIAL CONFLICTS of interest TO THE Vice President for Business and Finance AND THE AUDIT COMMITTEE OF THE BOARD OF TRUSTEES (as well as the University President, where appropriate). THE COMPLETED QUESTIONNAIRES FOR OFFICERS AND EXECUTIVE LEADERSHIP OR KEY EMPLOYEES ARE REVIEWED BY THE AVP. THEREAFTER, THE UNIVERSITY'S GENERAL COUNSEL AND the AVP REVIEW THE COMPLETED QUESTIONNAIRES FOR ANY PERSONS WITH ACTUAL OR POTENTIAL CONFLICTS of interest, AND THESE INDIVIDUALS ARE NOTIFIED VIA WRITTEN COMMUNICATION. FURTHERMORE, THE AVP REPORTS ANY ACTUAL OR POTENTIAL CONFLICTS of interest TO THE Vice President for Business and Finance AND THE AUDIT COMMITTEE OF THE BOARD OF TRUSTEES (as well as the University President, where appropriate). THE PROCEDURES FOR ADDRESSING ANY CONFLICT OF INTEREST INCLUDE, BUT ARE NOT LIMITED TO, THE FOLLOWING: (1) THE CONFLICTING INTEREST IS FULLY DISCLOSED TO THE BOARD OF TRUSTEES; (2) THE INTERESTED PERSON RESPONDS TO FACTUAL QUESTIONS RELATED TO THE SUBSTANCE OF THE TRANSACTION OR ARRANGEMENT BEING CONSIDERED, AFTER WHICH they SHALL LEAVE THE MEETING; (3) THE PERSON WITH THE CONFLICT OF INTEREST IS EXCLUDED FROM THE DISCUSSION AND APPROVAL OF ANY PROPOSED TRANSACTION; (4) ALTERNATIVES TO THE PROPOSED TRANSACTION ARE INVESTIGATED, COMPETITIVE BIDS OR COMPARABLE VALUATIONS ARE OBTAINED (where feasible); (5) ANY CONFLICTING ISSUES ARISING DURING THE COURSE OF A BOARD OF TRUSTEES' MEETING WHICH CANNOT BE RESOLVED ARE REFERRED TO THE EXECUTIVE COMMITTEE OF THE BOARD OF TRUSTEES; AND (6) THE TRANSACTION OR ACTION MUST BE APPROVED BY A MAJORITY OF DISINTERESTED PERSONS.”

“THE COMPENSATION COMMITTEE OF THE BOARD OF TRUSTEES IS RESPONSIBLE FOR oversight of ALL compensation MATTERS. THE COMPENSATION COMMITTEE IS COMPRISED SOLELY OF INDEPENDENT TRUSTEES, NONE OF WHOM HAVE A CONFLICT OF INTEREST WITH RESPECT TO any COMPENSATION ARRANGEMENT; THE COMPENSATION COMMITTEE IS ACCOUNTABLE FOR SETTING REASONABLE COMPENSATION PACKAGES FOR THE UNIVERSITY'S CEO - THE UNIVERSITY PRESIDENT. THE COMPENSATION COMMITTEE DEVELOPS, CONSISTENT WITH THE UNIVERSITY'S VISION, MISSION, AND VALUES, THE ANNUAL PERFORMANCE GOALS AND CRITERIA TO BE USED IN DETERMINING MERIT INCREASES AND VARIABLE COMPENSATION CRITERIA FOR THE UNIVERSITY PRESIDENT. THE COMPENSATION COMMITTEE (IN COORDINATION WITH THE UNIVERSITY'S HUMAN RESOURCES DEPARTMENT) ALSO REVIEWS COMPARABLE COMPENSATION AND BENEFITS INFORMATION TO ANALYZE AND PROVIDE BENCHMARKING DATA FOR THE TOTAL COMPENSATION AND BENEFITS PACKAGE OF THE UNIVERSITY PRESIDENT. APPROPRIATE COMPARABILITY DATA IS OBTAINED FROM INDEPENDENT EXPERTS, INCLUDING TOTAL ECONOMIC BENEFITS PAID BY SIMILARLY SITUATED ORGANIZATIONS (BOTH TAXABLE AND TAX-EXEMPT) FOR SIMILAR JOB RESPONSIBILITIES. KEY DELIBERATIONS OF THE COMPENSATION COMMITTEE ARE contemporaneously DOCUMENTED IN MINUTES WHICH ARE APPROVED AT THE NEXT COMPENSATION COMMITTEE MEETING. Contemporaneous written minutes of all Board of Trustee meetings are maintained by the Office of the President. WHEREAS THE UNIVERSITY PRESIDENT IS A JESUIT PRIEST WHO HAS TAKEN A VOW OF POVERTY, ALL OF HIS EARNINGS ARE PAID DIRECTLY TO THE SOCIETY OF JESUS (THE JESUIT ORDER).”

“THE COMPENSATION COMMITTEE OF THE BOARD OF TRUSTEES IS RESPONSIBLE FOR oversight of ALL executive compensation matters. THE COMPENSATION COMMITTEE IS COMPRISED SOLELY OF INDEPENDENT TRUSTEES, NONE OF WHOM HAVE A CONFLICT OF INTEREST WITH RESPECT TO ANY COMPENSATION ARRANGEMENT; THE COMPENSATION COMMITTEE IS ACCOUNTABLE FOR SETTING REASONABLE COMPENSATION PACKAGES FOR OFFICERS, Disqualified individuals (DEFINED UNDER SECTION 4958 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED), AND KEY EMPLOYEES (INCLUDING THE UNIVERSITY PRESIDENT). THE COMPENSATION COMMITTEE DEVELOPS, CONSISTENT WITH THE UNIVERSITY'S VISION, MISSION, AND VALUES, THE ANNUAL PERFORMANCE GOALS AND CRITERIA TO BE USED IN DETERMINING MERIT INCREASES AND VARIABLE COMPENSATION CRITERIA FOR OFFICERS AND KEY EMPLOYEES. THE COMPENSATION COMMITTEE (IN COORDINATION WITH THE UNIVERSITY'S HUMAN RESOURCES DEPARTMENT) ALSO REVIEWS COMPARABLE COMPENSATION AND BENEFITS INFORMATION TO ANALYZE AND PROVIDE BENCHMARKING DATA FOR THE TOTAL COMPENSATION AND BENEFITS PACKAGES OF OFFICERS AND KEY EMPLOYEES. APPROPRIATE COMPARABILITY DATA IS OBTAINED FROM INDEPENDENT EXPERTS, INCLUDING TOTAL ECONOMIC BENEFITS PAID BY SIMILARLY SITUATED ORGANIZATIONS (BOTH TAXABLE AND TAX-EXEMPT) FOR SIMILAR JOB RESPONSIBILITIES. KEY DELIBERATIONS OF THE COMPENSATION COMMITTEE ARE contemporaneously DOCUMENTED IN MINUTES WHICH ARE APPROVED AT THE NEXT COMPENSATION COMMITTEE MEETING. Contemporaneous written minutes of all Board of Trustee meetings are maintained by the Office of the President.”

“While applicable federal tax laws do not mandate that the university's governing documents, conflict of interest policy, and financial statements be made available for public inspection, the university voluntarily makes each of the foregoing available on its website www.usfca.edu and upon request.”

“The compensation paid to Devcon Construction Inc. was part of a $140 million residential hall construction project to build the new Lone Mountain East dormitory on the University's campus. The residence hall provides approximately 606 beds in 155 dwelling units, along with a below ground garage providing 156 vehicle parking spaces and 194 bicycle parking spaces.”

“The University previously reported Fitness Center Dues as a source of Program Service Revenue. On March 13, 2020, a national emergency was declared in the United States concerning the novel coronavirus (COVID-19) global pandemic. The San Francisco Department of Public Health issued a Shelter-in-Place Order on March 16, 2020, which, among other things, ordered all gyms and recreation facilities closed. As a result, the University had no revenue from its Koret Fitness Center during fiscal year 2021 to report or allocate between Exempt Function and Unrelated Business Revenue.”

“On March 13, 2020, a national emergency was declared in the United States concerning the novel coronavirus (COVID-19) global pandemic. The San Francisco Department of Public Health issued a Shelter-in-Place Order on March 16, 2020, which prompted the University to close its physical campus and suspend face-to-face instruction. The University's residence halls were closed and dining and other auxiliary services were suspended or significantly limited throughout the 2020-21 academic year. As a result, revenue reported from the University's auxiliary services (Form 990, Part III, Line 4c) declined significantly.”

“(Expenses $ 1,596,632 including grants of $ 0)(Revenue $ 22) Other Program Services include SPONSORED RESEARCH and EXPENDITURES FOR RESEARCH AND TRAINING. Per the instructions for Part III, Lines 4(a) - (d), charitable contributions and grants reported on Part VIII, line 1, are not considered revenue derived from program services.”

“On March 13, 2020, a national emergency was declared in the United States concerning the novel coronavirus (COVID-19) global pandemic. The pandemic caused major disruption to the University's business operations. The United States Congress passed several legislative acts that resulted in substantial funds allocated to institutions of higher education under the Education Stabilization Fund, through the Higher Education Emergency Relief Fund ("HEERF"). A portion of these relief funds were required to go directly to students in the form of emergency aid and the remaining funds were meant to cover expenses related to the disruption of campus operations due to COVID-19 or to replace lost revenue because of the COVID-19 pandemic. The University received and recognized approximately $11,056,000 and $6,998,000 in emergency funds during the years ended May 31, 2021 and 2020, respectively, whereby approximately $3,935,000 and $3,351,000 in 2021 and 2020, respectively were earmarked to go directly to students. Additionally, approximately $67,000 and $0 was received for minority institutions support during the years ended May 31, 2021 and 2020, respectively. As of May 31, 2021, approximately an additional $19,000,000 has been awarded to the University for use in future fiscal years of which $9,500,000 is earmarked for grants to be made to students.”

“NOTES AND LOANS RECEIVABLE, NET - AS DETAILED IN Note 1 of THE UNIVERSITY'S AUDITED FINANCIAL STATEMENTS, OTHER RECEIVABLES CONSIST OF FEDERAL DIRECT LOANS THAT WERE DISBURSED TO STUDENTS BUT HAVE NOT BEEN RECEIVED FROM THE U.S. DEPARTMENT OF EDUCATION, GRANTS RECEIVABLE, RENT RECEIVABLE, EMPLOYEE NOTES RECEIVABLE AND OTHER MISCELLANEOUS RECEIVABLES. THE UNIVERSITY BELIEVES THESE AMOUNTS ARE FULLY COLLECTIBLE. THE MOST SIGNIFICANT PORTION OF OTHER RECEIVABLES IS THE FEDERAL DIRECT LOAN AMOUNT, TOTALING $10,902,000 and $10,482,000 AS OF MAY 31, 2021 AND 2020, RESPECTIVELY.”

“On November 21, 2018, the CEFA Series 2018A tax-exempt bonds were issued totaling $140,000,000. The proceeds from these bonds were used for the construction of the University's new Lone Mountain East dormitory. Bond proceeds were held in trust by BNY Mellon and were invested at durations intended to match the cash needs for the project. Simultaneously with the 2018A Bonds, the CEFA Series 2018B taxable bonds were issued totaling $35,880,000. The proceeds from these bonds were used to advance refund the CEFA Series 2011 taxable fixed rate bonds, which carried a higher coupon rate.”

“Effective June 1, 2019, the University adopted the new lease accounting guidance in FASB ASU No. 2016-02, Leases (Topic 842). The University elected the package of practical expedients permitted in ASC Topic 842, which among other things, allowed the University to carryforward the historical lease classification. In addition, the University made an accounting policy election to keep leases with an initial term of 12 months or less off the consolidated statements of financial position. The University will continue to recognize those lease payments for short-term leases in the consolidated statements of activities and changes in net assets on a straight-line basis over the lease term. As a result of the adoption of the new lease accounting guidance, the University recognized on June 1, 2019 (the beginning of the earliest period presented) (a) an operating lease liability of $13,176,000, which represents the present value of the remaining lease payments, discounted using risk-free rate, and (b) an operating lease right-of-use asset of $12,714,000, which represents the lease liability adjusted for accrued rent.”

“The University hereby elects to capitalize repair and maintenance costs under Treas. Reg. Sec. 1.263(a)-3(n). The costs were incurred during the taxable year in the University's trade or business, and the University treats such costs as capital expenditures on its books and records.”