Audit 397248

Criteria – Effective May 14, 2022, recipients of Federal financial assistance programs for infrastructure projects that are subject to Buy America, Build America (BABA) Act requirements must ensure that when procuring and executing contracts for the infrastructure projects that the procurement documents and contracts include language to ensure compliance with BABA requirements. The recipient must also monitor contractor’s compliance with BABA requirements. Federal agencies may, under certain circumstances, issue waivers to the Made in America laws. Condition – During our test of controls and compliance with procurement requirements, we noted one infrastructure construction contract that was subject to the BABA requirements that did not have language to ensure compliance with BABA requirements and did not have a waiver indicating the requirements were not applicable. The contract was also not monitored for compliance with BABA requirements during fiscal year 2025. Cause – NBC was not aware that the infrastructure construction project funded by the Renewable Energy Research and Development cooperative agreement was not covered by an existing Federal agency waiver. Effect – The procurement documents and contract for the infrastructure construction project selected did not include language to ensure compliance with BABA requirements and the contract was not monitored for compliance with BABA requirements during the fiscal year. Questioned Costs – None. Recommendation – We recommend that NBC carefully review Federal awards and agreements to determine whether BABA requirements apply and if a Federal agency waiver is applicable. We also recommend that NBC implement procedures to ensure contractors are properly monitored when BABA requirements apply to an infrastructure construction project. Corrective Action Plan/Auditee Views – NBC acknowledges and concurs with the finding 2025-001 in the Fiscal Year 2025 Single Audit of the Narragansett Bay Commission conducted by Bacon & Company LLC. The Bucklin Point Wastewater Treatment Facility Digester Complex Improvements “the Project”) has been funded by state revolving fund loan proceeds from the Rhode Island Infrastructure Bank (RIIB) and a Department of Energy grant. NBC’s contracting for civil projects has procedures in place to ensure the inclusion of all applicable Federal requirements as it relates to the use of RIIB funds. Although the Project followed Federal requirements as it relates to RIIB funds, NBC did not have appropriate controls in place to verify that applicable construction contracts for the Project included additional Federal requirements related to compliance with the Build America, Buy America Act as ostensibly required by the Department of Energy grant agreement. NBC has subsequently verified and received certification from the Project’s prime contractor that the Project satisfies Build America, Buy America Act requirements. Corrective Action Plan: In order to ensure that all applicable grant agreement terms are satisfied, NBC has hired a grant administrator to centralize all grant related activities within the Finance Division. NBC intends to develop additional procedures in conjunction with the acceptance and execution of a grant agreement to accomplish the following: 1) Coordinate with applicable Cost Center (as grant recipient) to verify that NBC has the ability to comply with the terms of the grant agreement, and 2) Create a comprehensive checklist of key obligations, including reporting deadlines, allowable costs, matching requirements, and special conditions and verify continued compliance on a regular interval, and 3) Limit award of contracts, expenditure of funds for grant funded projects, and reimbursement requests for grant funds until grant administrator verifies compliance with applicable terms and conditions. Anticipated Completion Date – May 31, 2026 Contact Person - Kevin McDonald, Chief Financial Officer