Center for the Advancement of Science in Space, Inc.Non-Profit

Interest Earned on Federal Funds. Criteria: 2 CFR 200.303 provides that non-federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with Uniform Guidance. 2 CFR Section 200.305 sets forth the requirements for the return of interest earned on federal funds. Recipients of federal grants are required to establish internal controls to minimize the time that elapses between the receipt of federal funds from the grantor, and the payment of those funds to vendors who provide goods or services. Interest earnings that exceed $500 per year from excess cash balances must be paid to the federal grantor. Condition: CASIS did not calculate interest earnings on the federal cash balance to determine if any earnings should be repaid to the grantor. Cause: CASIS does not have a policy to monitor federal cash balances for cash management requirements, including the calculation of interest earnings. Effect: CASIS did not take steps to reduce the time elapsing from the date it received federal funds to the date it spent the funds on program costs. The lapse resulted in interest earned on federal funds. Questioned Costs: Fontana calculated that CASIS earned approximately $17,000 of interest on the federal funds balance for the fiscal year ended September 30, 2025. Interest earnings on federal funds of more than $500 must be returned to the grantor. Perspective: Interest was not calculated or returned to the grantor for fiscal year ended September 30, 2025. Recommendation: Fontana recommends that CASIS: o Implement controls to minimize the time between receipt of funds from the granting agency and disbursement of those funds. o Compute interest earned on advance funds and remit amounts in excess of $500 to the grantor when required.

2024-002 Procurement Space Operations Assistance Listing Number: 43.007 Federal Award ID Number: 80JSC018M0005 National Aeronautics and Space Administration 2024 Funding, Repeat Finding Criteria: 2 CFR 200.303 provides that non-Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with Uniform Guidance. 2 CFR Section 200.320 and 48 CFR section 52.244-5 sets forth the requirements for acquisition contracts awarded to vendors including the requirement to obtain price or rate quotations from an adequate number of qualified sources and the circumstances in which noncompetitive procurement methods can be used. Also, CASIS’s procurement policy states that it is in both CASIS and NASA’s interest to compete when it makes sense regardless of the threshold and can be achieved by obtaining three quotes, i.e., comparative shopping. A minimum of 3 vendors are required to demonstrate competition. CASIS may solicit a proposal from only one source in circumstances where one or more of the following conditions apply (FAR Subpart 6.3): (i) The item or service is available only from a single source. supplies or services to be procured immediately. (iii) NASA specifically authorizes the use of noncompetitive proposals (directed source). (iv) After consultation with a number of sources, competition is determined inadequate. (v) The vendor is listed as a sole source provider under the Cooperative Agreement. Condition: Sole source determination was not documented for two vendors. Cause: For two legal expenses tested in the sample, no documentation of this being a sole source purchase prior to expending the funds. Effect: If CASIS cannot demonstrate that procurement of services were properly sole sourced, this may result in questioned costs and funds being returned to NASA. Questioned Costs: Known questioned costs of $41,762 and likely questioned costs of $90,024. Perspective: There were 2 out of 60 expenses selected for which the control failed. Recommendation: Non-competitive procurement should be documented and approved prior to incurring expenses. Management Response: CASIS acknowledges the error documenting these procurements. The two legal service vendors had been discussed internally and the selections rationalized based on the specialty of the professional services required for leasing and employment matters. Unfortunately, the documentation was not completed and stored as required by our internal policies. We consider these costs to be both necessary and reasonable, as we were negotiating a new office space lease and the rates were consistent with other legal service providers that CASIS has procured. CASIS plans on reinforcing the procurement documentation requirements with our personnel through additional training and reminding that engagement letters need to go through our document review software.

Space Operations Assistance Listing Number: 43.007 Federal Award ID Number: 80JSC018M0005 National Aeronautics and Space Administration 2023 Funding Criteria: Competitive Procurement: 2 CFR Section 200.320 and 48 CFR section 52.244-5 sets forth the requirements for acquisition contracts awarded to vendors including the requirement to obtain price or rate quotations from an adequate number of qualified sources and the circumstances in which noncompetitive procurement methods can be used. Also, CASIS’s procurement policy states that it is in both CASIS and NASA’s interest to compete when it makes sense regardless of the threshold and can be achieved by obtaining three quotes, i.e., comparative shopping. A minimum of 3 vendors are required to demonstrate competition. CASIS may solicit a proposal from only one source in circumstances where one or more of the following conditions apply (FAR Subpart 6.3): (i) The item or service is available only from a single source. (ii) An unanticipated exigency or emergency exists that requires the equipment, materials, supplies or services to be procured immediately. (iii) NASA specifically authorizes the use of noncompetitive proposals (directed source). (iv) After consultation with a number of sources, competition is determined inadequate. (v) The vendor is listed as a sole source provider under the Cooperative Agreement. Vendor disbursements: 2 CFR section 200.214 and 2 CFR section 180.300 require non-federal entities restrict awards, subawards, and contracts with parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Internal controls: 2 CFR 200.303 provides that non-Federal entities must establish and maintain effective internal controls to provide reasonable assurance of compliance with the Uniform Guidance. - 10 - Condition: Competitive quotes were not obtained for one expense, and sole source determination was not documented for another expense. In addition, for one vendor there was no check performed to ensure it was not debarred prior to the purchase approval. Cause: For one expense, CASIS did not obtain competitive quotes as required per their policy. CASIS had used the venue for meetings in the past, and did not obtain additional quotes for this event. This is a control and compliance deficiency. For another expense tested in the sample, no documentation of this being a sole source purchase prior to expending the funds. This expense is for a membership and essentially has a single provider. This is a control deficiency, but not a compliance issue. For one vendor, CASIS did not perform SAM check prior to approving the purchase. Vendor search at SAM.gov, subsequent to year end, revealed that the vendor is not debarred. This is a control deficiency, but not a compliance issue. Effect: If CASIS cannot demonstrate that procurements were made with full and open competition, properly sole sourced, and vendors are not debarred, it can result in questioned costs and funds being returned to NASA. Questioned Costs: Known questioned costs of $17,967, and likely questioned costs of $25,293. Perspective: For open competition there were 2 out of 60 expenses selected that the control failed. There was one vendor out of 10 selected that the debarment check was not performed. Recommendation: Competitive quotes should be obtained and retained as specified in the procurement policy. Non-competitive procurement should be documented and approved prior to incurring expenses. Vendor debarment checks should be performed and documented prior to entering into covered transactions. Management Response: The audit uncovered a non-compliance with required competitive quotes for a procurement of meeting services which did not comply with CASIS policy. The predecessor management team had previously advised the responsible purchaser that these services did not require competitive quotes. This matter is also complicated by the fact that the procurements are not just for meeting space, logistics and meals, but also includes lodging, which is not subject to the three quote rule. Management acknowledges that this was a process escapement and provides for the following corrective action. Typically lodging expenses are included in the procurement because it results in discounts that are unavailable if not included. CASIS implemented a policy of requiring competitive quotes for purchases over $1,000 in the most recent revision of the procurement policy. This change was made to assure compliance with Federal Regulations. While the amount noted is within the limits established by Federal Micro- purchase regulations, it did not comply with internal policies as noted. Meeting space is a commonly used service that is highly competitive in pricing and most facilities charge competitive rates, but most of the time those quotes are not useable given the time of year, and more importantly the occupancy rate of the facility. Starting in 2024, we are requesting quotes from three facilities in the local area that will be valid for a period of one year. These rates will be updated manually and a single additional quote will be obtained to assure the “reasonableness” of the price. This process will represent an annual price survey that will satisfy the three quote rule of our procurement policy. For rental of facilities outside of the local area, we will obtain a minimum of three quotes as required by our procurement policy. Management also acknowledges the process escapement for SAM checks on new vendors. Our normal process is that annually, Finance performs a SAM check for all approved vendors. The agreement for Trust Factory came in late during the year resulting in this deficiency. When a new vendor is setup in our system, it will automatically trigger a SAM check.

2022-001 Report Review Space Operations Assistance Listing Number: 43.007 Federal Award ID Number: 80JSC018M0005 National Aeronautics and Space Administration 2022 Funding Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls. The Cooperative Agreement includes the following requirement: the recipient shall submit an Annual Inventory Report, to be received no later than October 15 of each year, which lists all reportable non-exempt equipment and/or federally owned property in its custody as of September 30. Condition: The annual inventory report was prepared and submitted by the Finance Manager without review of someone other than the preparer. Cause: In prior periods, the Director of Finance reviewed the asset inventory report prior to submission to the grantor. The Director of Finance was no longer with CASIS at year end and no other staff performed the review. Effect: The asset inventory report may include errors or omissions. Questioned Costs: None Perspective: We tested the one asset inventory report required annually. Recommendation: Reports should be subject to review by someone other than the preparer prior to submission to the grantor. Management Response: Management will ensure that the annual inventory reports be reviewed by the Budget Manager for accuracy prior to the submission to NASA.

2021-002 Pay Rate Authorization Space Operations Assistance Listing Number: 43.007 Federal Award ID Number: 80JSC018M0005 National Aeronautics and Space Administration 2021 Funding Criteria: 2 CFR 200.303 requires non-federal entities to establish and maintain effective internal controls. Condition: Pay rate authorization for one employee tested was not documented. Cause: The employee was formerly full-time and returning to work with a limited schedule and new pay rate. After conclusion of verbal negotiations, the VP of HR activated the employee and input the new rate into the payroll processing system. A formal offer letter with pay rate was not created. Effect: Employee pay rates may be erroneous. Questioned Costs: None Perspective: Pay rate authorization was documented for all other employees tested. Recommendation: Offer letters should document authorized pay rates for all employees. Management Response: Approval to rehire was documented by email, pay rate was entered and verified in payroll on the same date. Management?s written documentation will include the pay rate for all employees.

2019-002 COMPETITIVE PROCUREMENT CFDA 43.007: Space Operations Program National Aeronautics and Space Administration 2019 Funding Criteria: 2 CFR 200.319 requires competitive procurement procedures for expenditures over $10,000. Condition: Prior to payment for marketing consulting services, it was not discovered that the sole source documentation was not approved. Cause: The consultant was anticipated to become a CASIS employee. The consulting arrangement was an interim measure until the individual could assume a full-time commitment to CASIS. Effect: The control was not operating effectively. Questioned Costs: N/A Perspective: One expense out of a sample of 60 did not have proper approval of sole source documentation. Recommendation: Management should follow competitive procurement policies including reviewing sole-source forms prior to payment for services. Management Response: According to the Organization?s Decentralized Procurement Process, Procurement Form C -- Sole-source Selection Report can be reviewed and approved by either a member of the contracts and compliance team or the Executive Director. Management will modify Procurement Form C -- Sole-source Selection Report to include the review and approval option of the Executive Director thereby reflecting the written policy.

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