Cornell University Report on Federal Awards in Accordance with the Uniform Guidance June 30, 2020 EIN: 15-0532082 Cornell University Index June 30, 2020 Page(s) Report of Independent Auditors .............................................................................................................................. 1–3 Consolidated Financial Statements .......................................................................................................................... 4–6 Notes to Consolidated Financial Statements ......................................................................................................... 7–46 Financial Responsibility Supplemental Schedule ...................................................................................................... 47 Note to Financial Responsibility Supplemental Schedule ......................................................................................... 48 Schedule of Expenditures of Federal Awards ...................................................................................................... 49–73 Notes to Schedule of Expenditures of Federal Awards ............................................................................................. 74 Report of Independent Auditors on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ................................. 75–76 Report of Independent Auditors on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control Over Compliance in Accordance with the Uniform Guidance ............................................................... 77–78 Schedule of Findings and Questioned Costs ........................................................................................................ 79–81 Summary Schedule of Prior Audit Findings and Status ...................................................................................... 82–83 Management’s Views and Corrective Action Plan .................................................................................................... 84 Report of Independent Auditors To The Board of Trustees of Cornell University Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Cornell University (the “University”), which comprise the consolidated statements of financial position as of June 30, 2020 and 2019 and the related consolidated statements of activities for the year ended June 30, 2020 and of cash flows for the years ended June 30, 2020 and 2019, and the related notes to the financial statements. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the University’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the University’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. PricewaterhouseCoopers LLP, 1200 Bausch & Lomb Place, Rochester, NY 14604-2705 T: (585) 232 4000, www.pwc.com/us Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Cornell University as of June 30, 2020 and 2019, and the changes in their net assets for the year ended June 30, 2020 and their cash flows for the years ended June 30, 2020 and 2019 in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the consolidated financial statements, the University changed the manner in which it accounts for leases in 2020. Our opinion is not modified with respect to this matter. Other Matters We previously audited the consolidated statement of financial position as of June 30, 2019, and the related consolidated statements of activities and cash flows for the year then ended (the statement of activities is not presented herein), and in our report dated October 17, 2019, we expressed an unmodified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying summarized financial information as of June 30, 2019 and for the year then ended is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived. Other Information Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying schedule of expenditures of federal awards for the year ended June 30, 2020 and financial responsibility supplemental schedule as of and for the year ended June 30, 2020 are presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and the Department of Education, respectively, and are not a required part of the consolidated financial statements. The information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures, in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards and financial responsibility supplemental schedule are fairly stated, in all material respects, in relation to the consolidated financial statements taken as a whole. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 8, 2020, except with respect to Note 16 to the consolidated financial statements and the opinion on the financial responsibility supplemental schedule, as to which the date is July 7, 2021, on our consideration of the University’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters for the year ended June 30, 2020. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the University’s internal control over financial reporting and compliance. Rochester, New York October 8, 2020, except with respect to Note 16 to the consolidated financial statements and the opinion on the financial responsibility supplemental schedule, as to which the date is July 7, 2021 3 FINANCIAL STATEMENTS CONSOLIDATED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS OF JUNE 30, 2020 AND JUNE 30, 2019 (in thousands) 2020 2019 Assets Cash and cash equivalents $ 591,483 $ 234,539 Accounts receivable, net (note 3-A) 518,153 550,060 Contributions receivable, net (note 3-B) 778,599 804,904 Prepaid expenses and other assets 134,024 141,274 Investments (note 4) 7,813,510 7,756,468