EIN: 941160950
UEI: SRG2J1WS9X63
Data as of August 26, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on June 3, 2024. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by December 3, 2024 (631 days ago).
What is a management decision? →SRI does have a control in place whereby its requests for reimbursements are pre-approved by a reviewer and evidence of that approval is maintained. However, in our sample of 40 requests for reimbursement, we noted 3 instances where SRI could not provide evidence of this pre-approval. Cause: Those responsible for the cash management process did not maintain record of proof of approval. Effect: Without proper review procedures in place cash could inadvertently be requested in advance of incurring the underlying contract cost. Questioned Costs: $0 Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend management consistently follow its policy for pre-approval of requests for reimbursements along with retaining documentation of that pre-approval on file. Views of Responsible Official: Management agrees with the finding.
Show full finding ▾Hide full finding ▴Criteria: 2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards and the Federal Acquisition Regulations require federal award recipients/contractors such as SRI to have internal controls in place to ensure requests for reimbursement for contract work in process are made either after the incurring the underlying contract costs or, if advanced, within a specified period of time before incurring those costs. The purpose of these requirements is to minimize the time between release of Federal funds and their use by the recipient/contractor. Condition: SRI does have a control in place whereby its requests for reimbursements are pre-approved by a reviewer and evidence of that approval is maintained. However, in our sample of 40 requests for reimbursement, we noted 3 instances where SRI could not provide evidence of this pre-approval. Cause: Those responsible for the cash management process did not maintain record of proof of approval. Effect: Without proper review procedures in place cash could inadvertently be requested in advance of incurring the underlying contract cost. Questioned Costs: $0 Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend management consistently follow its policy for pre-approval of requests for reimbursements along with retaining documentation of that pre-approval on file. Views of Responsible Official: Management agrees with the finding.
The Sr. Accounting Manager who oversees the requests for reimbursement process will discuss the finding with the team and emphasize the importance of retaining evidence of approval consistently. All requests for reimbursement from FY2024 will be reviewed to ensure they were approved and that the evidence of approval is properly retained. The target completion date of this correction action is September 30, 2024. The contact person for the corrective action is Debra St. Onge, Sr. Accounting Manager.
FAC accepted this audit on July 4, 2022 — management decision was due January 4, 2023.
Finding 2021-001: Equipment Assistant Listing #: 12.RD (R&D Cluster) Contract number: Client Private Award year: 2021 Federal Agency: Department of Army Pass Through Entity: N/A Criteria OMB requirements state: ?A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated? (2 CFR section 200.313(d)(3)). Condition The audit team was unable to access and physically inspect 1 out of 25 of the equipment selections. The equipment selection was in a restricted/classified portion of SRI?s facilities. As such, the audit team was unable to physically inspect the equipment selection and thus unable to conclude that compliance requirements were met. Questioned Costs None identified. Cause The federal funding agency and/or pass through entity has categorized certain contracts as Classified which precludes us from having the necessary access to equipment to evidence compliance with the OMB Uniform Guidance. SRI was unable to provide the selected equipment for physical inspection. This was a repeat of finding 2020-001 in the prior year?s audit. Effect Due to the lack of access to the restricted/classified facilities, we are unable to obtain appropriate evidence over certain compliance requirements as a result of this limitation. Recommendation We recommend that SRI work with the DoD Inspector General and its funding agencies to resolve this matter and develop an audit plan to ensure compliance with audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report.
Show full finding ▾Hide full finding ▴Finding 2021-001: Equipment Assistant Listing #: 12.RD (R&D Cluster) Contract number: Client Private Award year: 2021 Federal Agency: Department of Army Pass Through Entity: N/A Criteria OMB requirements state: ?A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated? (2 CFR section 200.313(d)(3)). Condition The audit team was unable to access and physically inspect 1 out of 25 of the equipment selections. The equipment selection was in a restricted/classified portion of SRI?s facilities. As such, the audit team was unable to physically inspect the equipment selection and thus unable to conclude that compliance requirements were met. Questioned Costs None identified. Cause The federal funding agency and/or pass through entity has categorized certain contracts as Classified which precludes us from having the necessary access to equipment to evidence compliance with the OMB Uniform Guidance. SRI was unable to provide the selected equipment for physical inspection. This was a repeat of finding 2020-001 in the prior year?s audit. Effect Due to the lack of access to the restricted/classified facilities, we are unable to obtain appropriate evidence over certain compliance requirements as a result of this limitation. Recommendation We recommend that SRI work with the DoD Inspector General and its funding agencies to resolve this matter and develop an audit plan to ensure compliance with audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report.
Finding 2021-001: Equipment CFDA #: 12.300 (R&D Cluster) Contract number: Client Private Award year: 2021 Federal Agency: Department of Army Pass Through Entity: N/A Summary of Finding The audit team was unable to access and physically inspect 1 out of 25 of equipment selections. The equipment selection was in a restricted/classified portion of the SRI?s facilities. As such, the audit team was unable to physically inspect the equipment selection and thus unable to conclude that compliance requirements were met. SRI?s Response SRI manages property in its control, in accordance with contractual requirements and SRI?s established property control system with a goal of continuous improvement. SRI performs regular self-assessments and conducts periodic inventories that ensures SRI is a responsible contracting party who provides the customer with the best value while avoiding undue risk. One of the equipment selections was in a restricted/classified portion of SRI's facilities. As such, PwC was unable to physically inspect the equipment selections and thus unable to conclude that compliance requirements were met. Corrective Action This issue does not reflect a process issue on the part of SRI rather it is a security issue of the United States Government that does not allow PwC employees to access classified equipment without proper clearance. Prepared by: Mark Reinhart Director, Logistics 23 June 2022
2020-001
FAC accepted this audit on July 7, 2021 — management decision was due January 7, 2022.
Finding 2020-001: Equipment CFDA #: 12.RD (R&D Cluster) Contract number: SC001-1168 Award year: 2020 Federal Agency: Air Force Pass Through Entity: Draper Laboratory Criteria OMB requirements state: ?A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated? (2 CFR section 200.313(d)(3)) Condition The audit team was unable to access and physically inspect 1 out of 25 of equipment selections. The equipment selection was in a restricted/classified portion of the SRI?s facilities. As such, the audit team was unable to physically inspect the equipment selection and thus unable to conclude that compliance requirements were met. Questioned Costs None identified. Cause The federal funding agency and/or pass through entity has categorized certain contracts as Classified which precludes us from having the necessary access to equipment to evidence compliance with the OMB Uniform Guidance. SRI was unable to provide the selected equipment for physical inspection. This was a repeat of finding 2019-003 in the immediately prior audit. Effect We were unable to conclude that the above noted equipment was appropriately safeguarded and maintained. Due to the lack of access to the equipment in the classified area, there is no way of ensuring the requirements of the OMB Uniform Guidance are being met for the noted selection. Note, we did replace the one selected classified item to ensure appropriate sample sizes for testing with no exceptions noted. Recommendation For selections in classified areas, we recommend that SRI work with its cognizant agency to develop a plan to ensure satisfactory assurance is obtained related to compliance with OMB Uniform Guidance. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report
Show full finding ▾Hide full finding ▴Finding 2020-001: Equipment CFDA #: 12.RD (R&D Cluster) Contract number: SC001-1168 Award year: 2020 Federal Agency: Air Force Pass Through Entity: Draper Laboratory Criteria OMB requirements state: ?A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated? (2 CFR section 200.313(d)(3)) Condition The audit team was unable to access and physically inspect 1 out of 25 of equipment selections. The equipment selection was in a restricted/classified portion of the SRI?s facilities. As such, the audit team was unable to physically inspect the equipment selection and thus unable to conclude that compliance requirements were met. Questioned Costs None identified. Cause The federal funding agency and/or pass through entity has categorized certain contracts as Classified which precludes us from having the necessary access to equipment to evidence compliance with the OMB Uniform Guidance. SRI was unable to provide the selected equipment for physical inspection. This was a repeat of finding 2019-003 in the immediately prior audit. Effect We were unable to conclude that the above noted equipment was appropriately safeguarded and maintained. Due to the lack of access to the equipment in the classified area, there is no way of ensuring the requirements of the OMB Uniform Guidance are being met for the noted selection. Note, we did replace the one selected classified item to ensure appropriate sample sizes for testing with no exceptions noted. Recommendation For selections in classified areas, we recommend that SRI work with its cognizant agency to develop a plan to ensure satisfactory assurance is obtained related to compliance with OMB Uniform Guidance. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report
Finding 2020-001: Equipment CFDA #: 12.RD (R&D Cluster) Contract number: SC001-1168 Award year: 2020 Federal Agency: Air Force Pass Through Entity: Draper Laboratory Summary of Finding The audit team was unable to access and physically inspect 1 out of 25 of equipment selections. The equipment selection was in a restricted/classified portion of the SRI?s facilities. As such, the audit team was unable to physically inspect the equipment selection and thus unable to conclude that compliance requirements were met. SRI?s Response SRI manages property in its control, in accordance with contractual requirements and SRI?s established property control system with a goal of continuous improvement. SRI performs regular self-assessments and conducts periodic inventories that ensures SRI is a responsible contracting party who provides the customer with the best value while avoiding undue risk. One of the equipment selections was in a restricted/classified portion of SRI's facilities. As such, PwC was unable to physically inspect the equipment selections and thus unable to conclude that compliance requirements were met. Corrective Action This issue does not reflect a process issue on the part of SRI rather it is a security issue of the United States Government that does not allow PwC employees to access classified equipment without proper clearance. Prepared by: Mark Reinhart Director, Logistics 17 June 2021
2019-003
FAC accepted this audit on August 5, 2020 — management decision was due February 5, 2021.
Finding 2019-001: Cost Transfers CFDA #: 12.RD (R&D Cluster) Contract number: N00014-18-C-1010 Award Year: 2018 Federal Agency: Office of Naval Research Criteria OMB guidance states: ?Cost transfers should be tested for allowability. A cost transfer from one project to another project may appear to be an unallowable charge to the second project. However, these costs may be allowable costs of the second project because of the closely linked nature of the research, and the costs would be allowable charges to either project. Alternatively, the transfers would not be allowable under the second project if the costs are not allowable under the terms and conditions of that project. Auditors should note that a significant number of cost transfers between unrelated projects could be an indication of poor internal control and might result in a noncompliance finding? (2 CFR sections 215 and 220) Condition For 1 of 25 cost transfers tested, the cost transfer form was filled out, but no approval was obtained. And, for 1 of 25 cost transfers tested, the cost transfer form was not obtained. Questioned Costs None identified. Cause As part of the cost transfer process, SRI was not able to provide support that the selected cost transfers had been approved or reviewed for allowability. This was not a repeat of a finding in the immediately prior audit. Effect Absence of approval presents a risk of noncompliance where a cost transfer could be unallowable or unrelated to the project. Recommendation Management?s process for cost transfers reflects Uniform Guidance requirements for testing for allowability. To ensure that procedures are followed, we recommend that SRI continue to train Finance and Accounting employees regarding cost transfer compliance requirements and SRI processes and procedures. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report.
Show full finding ▾Hide full finding ▴Finding 2019-001: Cost Transfers CFDA #: 12.RD (R&D Cluster) Contract number: N00014-18-C-1010 Award Year: 2018 Federal Agency: Office of Naval Research Criteria OMB guidance states: ?Cost transfers should be tested for allowability. A cost transfer from one project to another project may appear to be an unallowable charge to the second project. However, these costs may be allowable costs of the second project because of the closely linked nature of the research, and the costs would be allowable charges to either project. Alternatively, the transfers would not be allowable under the second project if the costs are not allowable under the terms and conditions of that project. Auditors should note that a significant number of cost transfers between unrelated projects could be an indication of poor internal control and might result in a noncompliance finding? (2 CFR sections 215 and 220) Condition For 1 of 25 cost transfers tested, the cost transfer form was filled out, but no approval was obtained. And, for 1 of 25 cost transfers tested, the cost transfer form was not obtained. Questioned Costs None identified. Cause As part of the cost transfer process, SRI was not able to provide support that the selected cost transfers had been approved or reviewed for allowability. This was not a repeat of a finding in the immediately prior audit. Effect Absence of approval presents a risk of noncompliance where a cost transfer could be unallowable or unrelated to the project. Recommendation Management?s process for cost transfers reflects Uniform Guidance requirements for testing for allowability. To ensure that procedures are followed, we recommend that SRI continue to train Finance and Accounting employees regarding cost transfer compliance requirements and SRI processes and procedures. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report.
Finding 2019-001: Cost Transfers CFDA #: 12.RD (R&D Cluster) Contract number: N00014-18-C-1010 Award Year: 2018 Federal Agency: Office of Naval Research Summary of Finding For 1 of 25 cost transfers tested, the cost transfer form was filled out, but no approval was obtained. And, for 1 of 25 cost transfers tested, the cost transfer form was not obtained. SRI?s Response SRI recognizes the importance of reviewing cost transfers for allowability and obtaining appropriate approvals. SRI made several attempts to locate the approved cost transfer forms; however, due to restrictions in place associated with the COVID-19 pandemic, the appropriate personnel were not approved to be onsite as they were not deemed ?essential?. Employees who were not familiar with the cost transfer process but were deemed ?essential? and as such were approved to be onsite attempted to locate the cost transfers but were unable to do so. Corrective Action It is currently SRI?s policy to retain a hard copy of approved cost transfers; however, employees have recently been instructed to retain an electronic (soft) copy in a shared file so that documents can be more readily located. Prepared by: Stephanie DeFino CFO 3 August 2020
Finding 2019-002: Key Personnel CFDA #: 12.RD (R&D Cluster) Contract number: 2018-18050400004 Award year: 2018 Federal Agency: Intelligence Advanced Research Projects Activity Criteria OMB requirements state: ?The non-Federal entity may change the staffing mix and level of involvement within limits specified by agency policy or in the award, but may be required to obtain Federal awarding agency approval of changes in key personnel (as identified in the award, which may differ from the non- Federal entity?s designation in the application/proposal) and changes in the principal investigator?s/project director?s time commitment/level of participation in the project. For grants and cooperative agreements, this may include not only a change in the principal investigator or project director but also the disengagement from the project for more than 3 months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator?(OMB Circular A-110 ??_.25(c)(2) and (3)/2 CFR sections 200.308(c)(1) (ii) and (iii)) Condition For 1 out of 25 selections, the entity failed to notify the awarding agency of a change in key personnel. For this award, if one or more of the key personnel for whatever reason becomes, or is expected to become unavailable for work under this contract for a continuous period exceeding 30-calendar days, or is expected to devote substantially less effort to the work than indicated in the proposal as initially anticipated, the contractor shall promptly notify the Contracting Officer. The entity failed to meet the compliance requirement of notifying the awarding agency in a timely manner, as defined by the contract terms noted above. Note that the awarding agency was since notified prior to the issuance of this report. Questioned Costs None identified. Cause As part of the key personnel process, SRI was unable to provide support that the awarding agency was notified of a change in key personnel. This was not a repeat of a finding in the immediately prior audit. Effect The lack of controls around changes in key personnel could lead to additional noncompliance issues for other contracts. Recommendation We recommend that SRI develop a standardized process to notify awarding agencies if changes in key personnel occur. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report
Show full finding ▾Hide full finding ▴Finding 2019-002: Key Personnel CFDA #: 12.RD (R&D Cluster) Contract number: 2018-18050400004 Award year: 2018 Federal Agency: Intelligence Advanced Research Projects Activity Criteria OMB requirements state: ?The non-Federal entity may change the staffing mix and level of involvement within limits specified by agency policy or in the award, but may be required to obtain Federal awarding agency approval of changes in key personnel (as identified in the award, which may differ from the non- Federal entity?s designation in the application/proposal) and changes in the principal investigator?s/project director?s time commitment/level of participation in the project. For grants and cooperative agreements, this may include not only a change in the principal investigator or project director but also the disengagement from the project for more than 3 months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator?(OMB Circular A-110 ??_.25(c)(2) and (3)/2 CFR sections 200.308(c)(1) (ii) and (iii)) Condition For 1 out of 25 selections, the entity failed to notify the awarding agency of a change in key personnel. For this award, if one or more of the key personnel for whatever reason becomes, or is expected to become unavailable for work under this contract for a continuous period exceeding 30-calendar days, or is expected to devote substantially less effort to the work than indicated in the proposal as initially anticipated, the contractor shall promptly notify the Contracting Officer. The entity failed to meet the compliance requirement of notifying the awarding agency in a timely manner, as defined by the contract terms noted above. Note that the awarding agency was since notified prior to the issuance of this report. Questioned Costs None identified. Cause As part of the key personnel process, SRI was unable to provide support that the awarding agency was notified of a change in key personnel. This was not a repeat of a finding in the immediately prior audit. Effect The lack of controls around changes in key personnel could lead to additional noncompliance issues for other contracts. Recommendation We recommend that SRI develop a standardized process to notify awarding agencies if changes in key personnel occur. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report
Finding 2019-002: Key Personnel CFDA #: 12.RD (R&D Cluster) Contract number: 2018-18050400004 Award year: 2018 Federal Agency: Intelligence Advanced Research Projects Activity Summary of Finding For 1 out of 25 selections, the entity failed to notify the awarding agency of a change in key personnel. SRI?s Response The cause of the failure to notify the awarding agency of a change in key personnel was human error. The SRI Contracts Officer who failed to make the notification confirmed that he was aware that: (1) a key person (the Co-Principal Investigator) resigned and needed to be replaced, (2) the Principal Investigator leading the project proposed a replacement who was approved by her supervisor, and (3) he knew it was his responsibility to send the key personnel change request to the Government Contracting Officer. The SRI Contracts Officer explained that he was waiting on the Principal Investigator to provide him with certain information he needed (per the terms of the contract) to draft the key personnel change notification requesting approval of the proposed replacement. The Principal Investigator did not provide the requested information and the SRI Contracts Officer admitted that he forgot to follow up with her. Therefore, the letter was never drafted or sent. Corrective Action Several years ago, SRI?s Contracts Department implemented a standard process to identify employees who were filling Key Personnel positions on one or more contracts and whose employment with SRI was being terminated. This process is managed by SRI?s Contracts Manager/Attorney and works as follows: Our Contracts Manager/Attorney is copied on termination notices sent out by our Human Resources Department when employees leave SRI. When a departing employee is vacating a position that could potentially be listed in the Key Personnel clause of one or more contracts, the Contracts Manager/Attorney notifies the departing employee?s supervisor and asks him/her to work with the cognizant SRI Contracts Officer(s) as necessary to confirm whether the employee is listed as a key person in any contract he/she was assigned to. If the employee was filling a Key Personnel position on one or more contracts, the cognizant SRI Contracts Officer sends a Key Personnel change notification to the Government Contracting Officer. While this process has generally been effective, we are augmenting it to include confirmation that the Key Personnel change notification was sent to the Government Contracting Officer when required and a response was received. Now, when the SRI Contracts Manager/Attorney contacts the departing employee?s supervisor asking whether the employee was listed as a key person on any contract, she will ask the supervisor to copy our Contract Strategic Services (CSS) team on the email response. (CSS is part of SRI?s Contracts and Procurement Department led by Diane Young, Vice President of Contracts and Procurement.) If the response indicates that the employee is listed as a key person on one or more contracts, CSS will follow up regularly with the cognizant SRI Contracts Officer until they receive confirmation that appropriate notification was provided to the Government Contracting Officer and a response was received, e.g., approval/disapproval of the proposed substitute. The SRI Contracts Officers will send copies of all outgoing and incoming Key Personnel correspondence with the Government to the CSS team, and CSS will maintain a detailed spreadsheet listing contracts that contain a Key Personnel clause, including: names of the employees filling Key Personnel positions, proposed replacements, approvals, open actions, etc. On June 17, 2020 SRI?s Senior Director of Contracts sent an email to all SRI Contracts Officers reminding them of their responsibilities related to Key Personnel changes, including the requirement to notify the Contracting Officer of proposed changes to Key Personnel and request written approval. They will be informed of the new process above and directed to follow it. Prepared by Andy Reidenbaugh, Sr. Director of Contracts Reviewed by: Diane M. Young Vice President, Contracts 3 August 2020
Finding 2019-003: Equipment CFDA #: 12.RD, 12.RD, 43.RD (R&D Cluster) Contract number: DNP, FA8750-18-C-0036, 131044 Award year: 2019, 2018, 2016 Federal Agency: US Government/DNP, USAF/Air Force Research Laboratory, National Aeronautics and Space Administration Pass Through Entity: Not applicable, not applicable, John?s Hopkins University Applied Physics Laboratory Criteria OMB requirements state: ?A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated? (2 CFR section 200.313(d)(3)) Condition The audit team was unable to access and physically inspect 3 out of 25 of equipment selections. Two of the equipment selections were in a restricted/classified portion of the SRI?s facilities. As such, the audit team was unable to physically inspect the equipment selections and thus unable to conclude that compliance requirements were met. For one selection, SRI was unable to locate the equipment within their facility. As such, the compliance requirements were not met for this selection. Questioned Costs None identified. Cause The federal funding agency and/or pass through entity has categorized certain contracts as Classified which precludes us from having the necessary access to equipment to evidence compliance with the OMB Uniform Guidance. SRI was unable to provide the selected equipment for physical inspection. This was not a repeat of a finding in the immediately prior audit. Effect We were unable to conclude that the above noted equipment was appropriately safeguarded and maintained. Due to the lack of access to the equipment in the classified area, as well as SRI inability to locate one of our selections, there is no way of ensuring the requirements of the OMB Uniform Guidance are being met for the noted selections. Note, we did replace two selected classified items to ensure appropriate sample sizes for testing with no exceptions noted. Recommendation For selections in classified areas, we recommend that SRI work with its cognizant agency to develop a plan to ensure satisfactory assurance is obtained related to compliance with OMB Uniform Guidance. Management?s process for equipment reflects Uniform Guidance requirements. To ensure that procedures are followed, we recommend that SRI continue to train Fixed Asset Custodians regarding equipment compliance requirements. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report
Show full finding ▾Hide full finding ▴Finding 2019-003: Equipment CFDA #: 12.RD, 12.RD, 43.RD (R&D Cluster) Contract number: DNP, FA8750-18-C-0036, 131044 Award year: 2019, 2018, 2016 Federal Agency: US Government/DNP, USAF/Air Force Research Laboratory, National Aeronautics and Space Administration Pass Through Entity: Not applicable, not applicable, John?s Hopkins University Applied Physics Laboratory Criteria OMB requirements state: ?A control system must be developed to ensure adequate safeguards to prevent loss, damage, or theft of the property. Any loss, damage, or theft must be investigated? (2 CFR section 200.313(d)(3)) Condition The audit team was unable to access and physically inspect 3 out of 25 of equipment selections. Two of the equipment selections were in a restricted/classified portion of the SRI?s facilities. As such, the audit team was unable to physically inspect the equipment selections and thus unable to conclude that compliance requirements were met. For one selection, SRI was unable to locate the equipment within their facility. As such, the compliance requirements were not met for this selection. Questioned Costs None identified. Cause The federal funding agency and/or pass through entity has categorized certain contracts as Classified which precludes us from having the necessary access to equipment to evidence compliance with the OMB Uniform Guidance. SRI was unable to provide the selected equipment for physical inspection. This was not a repeat of a finding in the immediately prior audit. Effect We were unable to conclude that the above noted equipment was appropriately safeguarded and maintained. Due to the lack of access to the equipment in the classified area, as well as SRI inability to locate one of our selections, there is no way of ensuring the requirements of the OMB Uniform Guidance are being met for the noted selections. Note, we did replace two selected classified items to ensure appropriate sample sizes for testing with no exceptions noted. Recommendation For selections in classified areas, we recommend that SRI work with its cognizant agency to develop a plan to ensure satisfactory assurance is obtained related to compliance with OMB Uniform Guidance. Management?s process for equipment reflects Uniform Guidance requirements. To ensure that procedures are followed, we recommend that SRI continue to train Fixed Asset Custodians regarding equipment compliance requirements. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report
Finding 2019-003: Equipment CFDA #: 12.RD, 12.RD, 43.RD (R&D Cluster) Contract number: DNP, FA8750-18-C-0036, 131044 Award year: 2019, 2018, 2016 Federal Agency: US Government/DNP, USAF/Air Force Research Laboratory, National Aeronautics and Space Administration Summary of Finding The audit team was unable to access and physically inspect 3 out of 25 of equipment selections. Two of the equipment selections were in a restricted/classified portion of the SRI's facilities. As such, the engagement team was unable to physically inspect the equipment selections and thus unable to conclude that compliance requirements were met. For one selection, SRI was unable to locate the equipment within their facility. As such, the compliance requirements were not met for this selection. SRI?s Response SRI manages property in its control, in accordance with contractual requirements and SRI?s established property control system with a goal of continuous improvement. SRI performs regular self-assessments and conducts periodic inventories that ensures SRI is a responsible contracting party who provides the customer with the best value while avoiding undue risk. Two of the equipment selections were in a restricted/classified portion of SRI's facilities. As such, PwC was unable to physically inspect the equipment selections and thus unable to conclude that compliance requirements were met. This issue does not reflect a process issue on the part of SRI rather it is a security issue of the United States Government that does not allow PwC employees to access classified equipment without proper clearance. For one selection, SRI was unable to locate the equipment within the facility. The selection was inventoried in August of 2019 but was inadvertently discarded later in the year during the office closure where the asset was located. Corrective Action For the selection that could not be located, the relevant personnel have been counseled and will retake the custodian training module that outlines the responsibilities and duties of using government property. Prepared by: Mark Reinhart Director, Logistics 3 August 2020
Finding 2019-004: Reporting CFDA #: 12-U28 (Other Cluster) Contract number: SUB1148609-002 Award year: 2018, 2019 Federal Agency: Department of Navy Pass Through Entity: Alion Science and Technology Criteria OMB requirements state:??the auditor must: (i) Plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program; and (ii) Perform testing of internal control as planned in paragraph (c)(3)(i) of this section? (2 CFR section 200.515 (c)(3)) Condition For 3 out of 9 selections, there was no evidence of review of the monthly status reports, which are the required status reports that are provided to the awarding agency. Questioned Costs None identified. Cause As part of the reporting process, SRI was not able to provide support that the 3 selected reports were approved. This was not a repeat of a finding in the immediately prior audit. Effect Absence of approval presents a risk of noncompliance in required reporting. Recommendation Management?s process for reporting reflects Uniform Guidance requirements for reporting. To ensure that procedures are followed, we recommend that SRI continue to train Project Administrators regarding reporting compliance requirements. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report
Show full finding ▾Hide full finding ▴Finding 2019-004: Reporting CFDA #: 12-U28 (Other Cluster) Contract number: SUB1148609-002 Award year: 2018, 2019 Federal Agency: Department of Navy Pass Through Entity: Alion Science and Technology Criteria OMB requirements state:??the auditor must: (i) Plan the testing of internal control over compliance for major programs to support a low assessed level of control risk for the assertions relevant to the compliance requirements for each major program; and (ii) Perform testing of internal control as planned in paragraph (c)(3)(i) of this section? (2 CFR section 200.515 (c)(3)) Condition For 3 out of 9 selections, there was no evidence of review of the monthly status reports, which are the required status reports that are provided to the awarding agency. Questioned Costs None identified. Cause As part of the reporting process, SRI was not able to provide support that the 3 selected reports were approved. This was not a repeat of a finding in the immediately prior audit. Effect Absence of approval presents a risk of noncompliance in required reporting. Recommendation Management?s process for reporting reflects Uniform Guidance requirements for reporting. To ensure that procedures are followed, we recommend that SRI continue to train Project Administrators regarding reporting compliance requirements. Management?s Views and Corrective Action Plan Management?s views and corrective action plan are included at the end of this report
Finding 2019-004: Reporting CFDA #: 12-U28 (Other Cluster) Contract number: SUB1148609-002 Award year: 2018, 2019 Federal Agency: Department of Navy Summary of Finding For 3 out of 9 selections, there was no evidence of review of the monthly status reports, which are the required status reports that are provided to the awarding agency. SRI?s Response SRI recognizes the importance of submitting timely, accurate, and reliable financial reports to its awarding agencies and has no reason to believe that any material misstatement or misrepresentation of financial information has occurred on any of its contracts or grants. In 2014 SRI implemented a new policy requiring the preparation of a sign off form to demonstrate review and approval of financial status reports. There was no evidence of review of the monthly status reports, which are the required status reports that are provided to the awarding agency. The root cause was an administrative oversight. The project administrator responsible for the referenced contract prepared the financial report and provided it to the Project Manager but forgot to include the sign off form for both the preparer and approver to sign. Corrective Action SRI believes the finding noted is an isolated issue but will provide refresher training not only to the identified employee but to all the Project Administrators. Prepared by: Stephanie DeFino CFO 3 August 2020
FAC accepted this audit on August 14, 2018 — management decision was due February 14, 2019.
GSA_MIGRATION
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2016-002
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Show full finding ▾Hide full finding ▴FAC accepted this audit on July 9, 2017 — management decision was due January 9, 2018.
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
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