Reference Number 2022-001 / Compliance and IC over Compliance CFDA 66.202 Environmental Protection Agency Endowment Criteria: Per Endowment agreement and the related law establishing the Organization, the Organization was to obtain a one-to-one match from sources within Mexico for any contributions made by U.S. government agencies. Condition Found: On September 26, 2011, the Organization obtained a match from the Instituto Mexicano de la Propiedad Industrial ?IMPI? on behalf of the Mexican government. The match was in Mexican Peso equivalent of $5 million US Dollars based on that day?s exchange rates published on the date of the agreement by the Banco de Mexico in the Diario Oficial de la Federacion. During April 2020 IMPI notified the Organization that they will no longer provide the matching funds due to economic hardship related to covid 19. Context: The condition noted was identified as part of our review of federal awards. Effect: The Organization is in non-compliance with match requirements. Cause: IMPI will no longer match the funds due to economic hardship related to covid 19. Recommendation: It is recommended the Organization seek additional contributions sourced within Mexico. In addition, the Organization should contact the federal awarding agency to discuss possible alternative resolutions to this finding. Corrective Action: The Foundation pursued legal action as the way IMPI withdrew from our agreement was found illegal. The court in Mexico agreed with our position and by the end of 2021 the Foundation was notified with a favorable resolution on the lawsuit submitted in 2020, which led to initial meetings with IMPI?s renewed top management about restructuring the support programs that their contribution to our endowment would allow to fund, and with that to reestablish the agreement?s functionality. In June 2022 the Foundation submitted a formal request to IMPI to reset the funds to continue the functioning of the agreement since an addendum was legally developed to be added to the original agreement. Hectic changes in top management at the Ministry of Economy of Mexico and IMPI occurred in 2022, which has resulted in unproductive efforts from previous negotiations. Due to the latter, in July 2023, the Foundation has submitted a second lawsuit, accepted by the court, to enforce the previous one, won in 2021. IMPI has to respond with its official position to the court by the end of August 2023; the Foundation is expecting, based on its lawyer?s opinion, a positive outcome on the evidence analysis and final resolution of this lawsuit. Legal actions will be ending soon, and the Foundation and its Board of Governors would know what the next course of action and a concrete timeframe will be if the Foundation?s obtains a favorable result. Proposed completion date ? By the end of 2023 or 1Q2024. Contact person ? Eugenio Marin, Executive Director