U.S. CIVILIAN RESEARCH AND DEVELOPMENT FOUNDATIONNon-Profit

Late Filing of Data Collection Form – Material Weakness – Internal Control and Compliance Finding Criteria In accordance with the Uniform Guidance, the audit package and the Data Collection Form must be submitted within 30 days after receipt of the auditors’ report or nine months after the end of the fiscal year, whichever comes first. Condition There are inadequate internal controls in place to ensure that CRDF Global financial statement audit is completed in a manner to allow the Data Collection Form to be filed by the reporting deadline. Context The Data Collection Form for the year ended December 31, 2022 was not submitted to the Federal Audit Clearinghouse by the September 30, 2023 deadline. Cause There were delays in completing the 2022 audit as management needed additional time to reconcile accounts and provide the requested supporting documentation due to employee turnover. Effect Management was not in compliance with the requirements of the Uniform Guidance. Questioned Costs None. Repeat Finding Yes. Recommendation We recommend that management enhance its internal controls, policies and procedures to ensure that all filing requirements under federal awards are met.

Time Keeping – Material Weakness – Internal Control and Compliance Finding Criteria Management has identified an issue pertaining to timekeeping compliance with their proposal response to their Department of State- International Security and Non-Proliferation bureau, Office of Cooperative Threat Reduction (DOS – ISN/CTR) customer. Specifically, certain activities related to preparing or working on proposals for DOS – ISN/CTR were classified as direct payroll costs charged to DOS – ISN/CTR programs, rather than being treated as indirect costs. Context CRDF Global works closely with the DOS – ISN/CTR office year-round to provide concepts, rescopes, and new ideas on how best to use to already awarded funds to the organization to execute the DOS – ISN/CTR’s mission. The labor for such activity is charged directly to the DOS – ISN/CTR agreements these concepts, if approved, will fund. However, once the notice of funding opportunity (NOFO) is released, labor for such concept development intended to respond to the NOFO requirements should be charged as proposal costs. According to 2 CFR 200.460, proposal costs encompass the expenses incurred in preparing bids, proposals, or applications for potential federal and non-federal awards or projects. This includes the development of data necessary to support the bids or proposals. Generally, proposal costs, whether successful or unsuccessful, should be treated as indirect costs and allocated to all activities of the non-federal entity. Cause Ineffective time charging guidance was provided to program staff supporting the DOS – ISN/CTR’s NOFO response to clearly differentiate between time spent developing new concepts for a new funding opportunity versus time spent developing new concepts to be funded from active awarded agreements. Effect As a result, there is an incorrect reporting of payroll costs between direct and indirect categories for federally funded projects. Questioned Costs None. Repeat Finding No. Recommendation To address this issue, we recommend that management enhances its current policies and procedures. Specifically, there should be a focus on ensuring that effective time charging guidance is provided to program staff. Additionally, payroll and other expense allocations should be corrected to avoid any further discrepancy.

Late Filing of Data Collection FormCriteria In accordance with the Uniform Guidance, the audit package and the Data Collection Form must be submitted within 30 days after receipt of the auditors’ report or nine months after the end of the fiscal year, whichever comes first. Condition There are inadequate internal controls in place to ensure that CRDF Global financial statement audit is completed in a manner to allow the Data Collection Form to be filed by the reporting deadline. Context The Data Collection Form for the year ended December 31, 2021 was not submitted to the Federal Audit Clearinghouse by the September 30, 2022 deadline. Cause There were delays in completing the 2021 audit as management needed additional time to reconcile accounts and provide the requested supporting documentation due to employee turnover. Effect Management was not in compliance with the requirements of the Uniform Guidance. Questioned Costs None. Repeat Finding No. Recommendation We recommend that management enhance its internal controls, policies and procedures to ensure that all filing requirements under federal awards are met.

Time Keeping Criteria Management has identified an issue pertaining to timekeeping compliance. Specifically, certain activities related to preparing or working on proposals were classified as direct payroll costs charged to federal programs, rather than being treated as indirect costs. Context CRDF Global lacks proper controls to ensure that proposal activities are appropriately charged as indirect costs. According to 2 CFR 200.460, proposal costs encompass the expenses incurred in preparing bids, proposals, or applications for potential federal and non-federal awards or projects. This includes the development of data necessary to support the bids or proposals. Generally, proposal costs, whether successful or unsuccessful, should be treated as indirect costs and allocated to all activities of the non-federal entity. Cause Ineffective time charging guidance was provided to program staff. Effect As a result, there is an incorrect reporting of payroll costs between direct and indirect categories for federally funded projects. Questioned Costs None. Repeat Finding No. Recommendation To address this issue, we recommend that management enhances its current policies and procedures. Specifically, there should be a focus on ensuring that effective time charging guidance is provided to program staff. Additionally, payroll and other expense allocations should be corrected to avoid any further discrepancy.

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