NEW JERSEY MANUFACTURING EXTENSION PROGRAM INC

Finding Type: Noncompliance Federal Program ALN: 11.611 Federal Program Name: Manufacturing Extension Program Compliance Area: Reporting Criteria: In accordance with 2 CFR 200.344 and the related grant agreement in place, a recipient must submit afinal report no later than 120 days after the conclusion of the period of performance. In accordance with 2 CFR170 and the related grant agreement in place, a recipient must report each subaward to the Federal FundingAccountability and Transparancy Act Subaward Reporting System no later than the end of the month follow themonth in which the subaward was issued. Condition and Context: The Program was unable to provide SF-425 reports for the period under audit for one of thethree programs under the ALN (SCOIN) for the final report. The Program did not report subawards under thecontract in the required timeframe. Cause: Improper record keeping or missing filing deadline as a result of the grant being concluded. Effect or Potential Effect: None Questioned Costs: None Repeat Finding: No Recommendation: We recommend that the Program establish a stronger record keeping system and implement asystem whereby all reports are filed by their required due dates. Views of Responsible Officials: Responsible Officials agree and will file the report late and report the subawards. Planned Implementation Date of Corrective Action: June 2026 Person Responsible for Corrective Action: CEO

Finding 2021-002: Program Income Information on the Federal Program: 11.611 Manufacturing Extension Program Finding Type: Significant Deficiency Criteria: Under Uniform Guidance 2 CFR 200.307 program income must be deducted from total allowable costs to determine the net allowable costs. Program income must be used for current costs unless the Federal awarding agency authorizes otherwise. Program income that the non-Federal entity did not anticipate at the time of the Federal award must be used to reduce the Federal award and non-Federal entity contributions rather than to increase the funds committed to the project. Condition and Context: Based on testing performed over the 2020 CARES Act National Emergency grant under CFDA # 11.611, it was noted that program income of $51,707 was earned however was not deducted from the overall expenditures incurred. Cause: The Program has an existing MEP award which allows for the authorization and carryover of the funds through the term of the grant. The Program was not aware that the 2020 CARES Act National Emergency closed out and should be considered separately. Effect or Potential Effect: The resulting effect are funds due back to the funding source in the amount of $51,707. Questioned Costs: $51,707 Recommendation: We recommend the Program contact the funding source to appropriately return the unexpended funds. Additionally, the Program should put in place an internal control whereby the program income leftover at the end of the year is reviewed in accordance with 2 CFR 200.307 and the grant contract and appropriate funds are claimed on the SF-425 or authorization is requested from the funding source to carry these funds over in accordance with Federal guidelines and 2CFR 200.307. Management?s Response: Management will implement a process and internal control to address this issue and will contact the funding source to determine how to appropriately pay these funds back. Planned Implementation Date of Corrective Action: December 2022 Person Responsible for Corrective Action: Sr. Director of Finance