Finding 16238 (2022-002)

Significant Deficiency

Requirement

Questioned Costs

Year

2022

Accepted

2023-04-18

Audit: 19698

Organization: Associated Universities, Inc. (DC)

Auditor: Bdo USA LLP

AI Summary

Core Issue: AUI experienced a theft of copper mesh at the ALMA site due to inadequate internal controls during the COVID pandemic.
Impacted Requirements: Compliance with 2 CFR Section 200.313(d)(3) was not met, as AUI failed to maintain effective safeguards for federally funded property.
Recommended Follow-Up: AUI should enhance internal controls and ensure compliance with equipment management requirements to prevent future losses.

Finding Text

2022-002 Equipment and Real Property Management Information on Federal Program: National Science Foundation (NSF) Cooperative Agreement Management and Operations of the National Radio Astronomy Observatory, Long Baseline Array and Atacama Large Millimeter Array (ALMA) ALN #: 47.049 Award #: AST-1519126 Award Year: 10/01/2016 ? 09/30/2026 Criteria ? 2 CFR Section 200.313(d)(3), Equipment, requires that recipients of federal awards develop and maintain an internal control system to ensure adequate safeguards to prevent loss, damage or theft of property acquired with federal funds. In addition, any loss, damage, or theft must be investigated. Condition ? During the year ended September 30, 2022, AUI identified an incident of theft of copper mesh at the ALMA construction site. AUI did not have adequate internal controls to prevent theft of property acquired with federal funds. AUI had implemented a limited system of internal control during a period of time due to the COVID pandemic but these controls failed to prevent property theft. In addition, it took several months for AUI to discover the theft due to the limited number of personnel onsite during the pandemic. Questioned Costs ? Below reporting threshold. Context ? This is a condition identified through AUI?s internal review and audit processes and was reported during our internal control assessment for the year ended September 30, 2022. Effect or Potential Effect ? This condition could result in unallowable expenses being charged to the federal award. Repeat Finding ? This is not a repeat finding. Cause ? Due to the shutdown caused by the COVID pandemic, limited internal controls were implemented by AUI to secure the federal property. Recommendation ? We recommend AUI comply with the Equipment compliance requirement at all times and enhance its policies and procedures to ensure adequate safeguards to prevent loss, damage or theft of property acquired with federal funds. Views of Responsible Officials ? As noted above in the Condition section, the theft of the copper mesh (which had an approximate cost of around $3,200) occurred at the height of the COVID pandemic. Despite the reduced staff and remote location of the site, controls were in place during this time period that prevented any additional losses from occurring. Despite the theft being an isolated incident, AUI put additional internal controls in place to mitigate the risk of this type of occurrence from happening in the future. These controls are described in detail in the Management?s Corrective Action Plan included as Appendix A of the attached Management Prepared Document Section.

Corrective Action Plan

2022-002 Equipment and Real Property Management Contact/s: Luther Lau, CFO (202) 462-5282 Mark Mackey, Controller (202) 298-5942 Completion Date: February 2023 Corrective Action: AUI maintains systems of internal controls of physical property to safeguard government assets from the risk of theft or loss. During the height of the COVID pandemic, the ALMA Observatory was necessarily staffed with a reduced number of personnel as a result of heightened restrictions on travel and cohabitation. The reduced staff ? in combination with the remote location of the Observatory ? resulted in the theft of a box of copper mesh at the Multicancha construction site. This copper mesh had a purchase price of approximately $3,200. Despite the theft being an isolated incident, AUI immediately reviewed its physical controls in place and took action to further improve monitoring and security at the site. Additional measures put in place include the following: ? During holidays and in-between shifts, valuable material was stored in a local locked warehouse. ? It was requested to ALMA to increase the frequency of guards patrolling. This is particularly important during the time the construction site is unoccupied for holidays or in-between shifts and nights. ? In Chile, the transportation of good requires an official paper called "Guia de despacho", which is a Chilean-IRS-certified document that demonstrates ownership of goods. Failing to show this paper to a local police officer may result in the detention of the driver under the alleged crime of theft. Since the incident, the Observatory is requesting this paper for all vehicles leaving the site carrying visible items. A visual inspection is performed to corroborate the paper and the cargo. ? A project to install CCTV cameras at the entrance and common areas is being developed. This is expected to mitigate risk of theft as well as having available records of events, if needed. The above internal controls over physical property, in combination with the controls already in place prior to the incident, have mitigated the risk of this type of occurrence from happening in the future.

Other Findings in this Audit

592680 2022-002

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
47.049	Management and Operations of the National Radio Astronomy Observatory, Long Baseline Array and Atacama Large Millimeter Array	$96.63M
47.049	Ngvla Antenna Prototyping and Early Science	$3.74M
47.049	Mid-Scale Fi-I(mi:dp) Next Generation Radar Designs	$2.98M
47.076	Big Astronomy in Chile Through Dome	$196,721
47.049	Wide Band Digital Technology	$158,013
43.001	Network for Exploration and Space Sciences (ness)	$152,452
47.049	Research Experiences for Undergraduates (reu)	$147,044
47.049	Sii-Center: Spectrum X-An Nsf Spectrum Innovation Center	$126,151
47.076	Exploring the Impact of Robotic Telescope-Based Observing Experience on Students' Learning and Engagement in Stem	$114,957
47.049	Research Supporting Multisensory Engagement by Blink, Visually Impaired, and Sighted Students to Advance Integrated Learning of Astronomy and Computer Science	$106,699
47.076	Engaging Blind, Visually Impaired, and Sighted Students in Stem with Storytelling Through Podcasts	$88,193
47.076	Expanding First Stem	$78,691
47.049	Nanograv Physics Frontier Center	$73,589
47.049	Management and Operations of the Green Bank Observatory	$57,736
47.049	Hera: Unveiling the Cosmic Dawn	$56,575
47.049	Reu Site: Nrao Summer Research	$55,171
12.300	Remote Sensing Data Collection Using the Vlba	$46,557
47.049	Advanced Cryogenic L-Band Phased Arrary Camera (alpaca)	$41,456
47.078	Consortium Proposal for Smb-S4 Design Development	$39,393
47.046	On the Spot Assessment	$37,721
47.049	K-12 Stem Experiences	$33,494
47.049	Astronomy in Chile Educator Ambassadors Program (aceap) Network Growth Initiative	$22,355
47.046	Project Radio Astronomy Data Imaging and Analysis Lab (radial)	$22,059
47.049	Nanograv Pfc Graduate Student Funding	$14,218
47.041	Pfi-Tt Reflectionless Filters	$12,469
43.001	Stratospherice Observatory for Infrared Astronomy (sofia) Outflow Energetics	$9,120
12.300	Enhancing the Expanded Vlite	$8,392
43.008	West Virginia Science Public Outreach Team (spot) 2022	$4,411
43.008	Mission to Mars Stipends	$4,302
47.076	Virginia-North Carolina Louis Stokes Alliance for Minority Participation	$3,200
43.001	Radar Tracking Cis-Lunar	$2,123
43.001	Hubble Drift and Shift (dash) Study	$1,721
47.049	Whispers Planning	$1,553
43.001	West Virginia Science Public Outreach Team (spot)	$1,330
43.001	Spiderweb Galaxy Study	$1,130
12.RD	To Collect Bi-Static Reflected Signals From Satellites and Space Debris	$539