Financial Statement Audit – Calendar Year Ended December 31, 2023

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Report Summary

Background

The Office of Auditor of Accounts (AOA) performed a financial statement audit of the State of Delaware Qualified Savings Tuition Plan Trust for Calendar Year ended December 31, 2023.

This engagement was conducted in accordance with 29 Del. C. § 2722 (e)(7). This section of the Delaware Code specifies that “The (Plans Management) Board shall arrange for an annual financial audit of each of the Plans, which shall be provided annually to the General Assembly. The Board shall enter into a memorandum of understanding with the Auditor of Accounts regarding each such audit…”

29 Del. C. §2906 charges the Auditor of Accounts with the duty of conducting audits of all the financial transactions of all state agencies.

Key Information and Findings

The Plan was created by the State of Delaware General Assembly under Delaware Title 14, Chapter 34,

pursuant to Internal Revenue Code (IRC) Section 529 to allow residents of Delaware and other states to

make contributions to accounts established for the purpose of meeting qualified education expenses designated beneficiaries of such accounts. Account owners can choose among 36 portfolios, grouped-based on strategies, including aged-based, static, individual fund portfolios, and bank deposit portfolios. The objective of the audit is to provide reasonable assurance that the statements are free from material misstatement and accurately reported.

For the year ended December 31, 2023:

• There are 10,819 account holders in the Plan.
• Contributions (subscriptions) totaled $54,650,091.
• 5,706 individuals received distributions (redemptions) totaling $90,369,032 – average $15,837.
• Exchanges between investments within the Plan (subscriptions and redemptions) totaled $43,690,191.

It is my pleasure to report this audit contains an unmodified opinion. An unmodified opinion is sometimes referred to as a “clean” opinion. It is one in which the auditor expresses an opinion that the financial statements present fairly, in all material respects, an entity’s financial position, results of operations and cash flows in conformity with generally accepted accounting principles.

The results of tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

The performance of the Plan’s investments over the past five years (average 5.9%) is shown on the following table:

The projection of the five-year average annual return on investments (5.9%) is applied to the account owner’s annual contributions to the fund for a period of 19 years, which is the expected timeframe of a beneficiary’s birth to college-age. Contributions plus projected compounded return on investments produce the estimated account balance at the college-age.

According to College Tuition Compare (collegetuitioncompare.com/statistics), the average college tuition rates for 2024 are as follows: