Finding Text
Criteria: Per the terms of the Natrium Project Advanced Reactor Demonstration Program (ARDP)
Subrecipient Services Agreement between Terra Power, LLC (the Company), and Energy Northwest
(Subrecipient) Dated as of May 6, 2022, Section 5.2.1 states: Promptly after each Subrecipient Fiscal
Year End, subrecipient shall provide to Company, annually not later than the date that is 90 days after
such Subrecipient Fiscal Year End, an annual indirect cost rate proposal, reconciled to the
Subrecipient's financial statements and costs incurred for items included in the indirect cost rate (with
respect to each year an "Annual Indirect Rate Proposal").
Condition: For the fiscal year-ending June 30, 2023, Energy Northwest did not submit an annual
indirect cost rate proposal reconciled their financial statements within 90 days of year-end.
Cause: Energy Northwest did not have a process in place to identify and track all special terms and
provisions of the subrecipient agreement, resulting in the indirect cost rate proposal not being
provided to TerraPower, LLC, within the specified deadline.
Effect: Non-compliance with the contract provisions could result in a delay in the audit of the annual
indirect cost rate proposal as well as a delay in application of the updated indirect cost rate.
Questioned Costs: None noted
Recommendation: Energy Northwest should develop a compliance checklist for each federal grant
agreement that outlines the various requirements and the applicable deadlines. The compliance
checklist should be reviewed by a second individual for accuracy.
Management Response: Energy Northwest Management understands it is our responsibility to have
adequate controls to ensure we comply with all provisions of federal grant contracts. We agree with
the auditor’s recommendation and subsequently EN will create a compliance checklist for each
federal grant contract to ensure all requirements are complied with according to the specified
timelines. This will strengthen our existing controls related to federal grant contracts. To ensure we
have the right picture we will also confirm on subrecipient grants our understanding of the
requirements.