ML20057C062
| ML20057C062 | |
| Person / Time | |
|---|---|
| Issue date: | 09/01/1992 |
| From: | Jacqwan Walker NRC OFFICE OF THE INSPECTOR GENERAL (OIG) |
| To: | Goldberg T LABOR, DEPT. OF |
| Shared Package | |
| ML20057B712 | List: |
| References | |
| FOIA-93-130 NUDOCS 9309270021 | |
| Download: ML20057C062 (3) | |
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UNITED STATES 5
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WASHINGTON D.C. 20555 SEP 01 1992 '
U.S.
Department of Labor Attn:
Theodore Goldberg, Contracting Officer Office of Inspector General 200 Constitution Ave NW Room S-5508 Washington, DC 20210
Dear Mr. Goldberg:
I would like to take this opportunity to discuss the contract we had with Cotton & Company.
Enclosed is a copy of a recent letter we sent to Cotton & Company discussing their request for payment for services they performed outside of our existing contract.
Our position is that Cotton & Company was aware of the fact that NRC never signed the task order in question.
We also go on to question what value we received from Cotton & Company because we are extremely displeased.with their services.
We were disappointed with Cotton & Company's performance in the following areas:
1.
Use of Arthur Andersen as Subcontractor 2.
Knowledge of Cotton & Company Staff
- 3. Understanding the Scope of Work 4.
Cost of the Contract 5.
Usefulness of the Report The primary reason we selected Cotton & Company was based on their assurances that they would use Arthur Andersen as a subcontractor under the existing DOL contract.
Cotton & Company invited us to meet with Arthur Andersen at their downtown offices
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where both parties gave us verbal assurances that it was possible j
to utilize Arthur Andersen under your contract.
As we now know, j
this was a promise Cotton & company couldn't keep.
We were disappointed by Cotton & Company's lack of knowledge about government accountina operations.
Cotton & Company had difficulty in three areas that we considered to be basic to understanding government accounting operations.
First, Cotton &
Company had difficulty understanding the concept of a no-year appropriation.
Second, they had never worked with a government agency on how to reconcile an agency's cash balance with the Department of Treasury.
Third, they couldn't understand how the 9309270021 930505
(//[/[(M PDR FOIA BARTNOF93-130 PDR t
_2-Prompt Pay Act applies to government and commercial payments and what the differences are becween these two types of payments.
These are just three examples of the lack of government accounting knowledge displayed by Cotton & Company.
One of the major problems we had with Cotton & Company was their failure to understand exactly what we wanted under this contract.
We told them on numerous occasions that we wanted their help in identifying all of the major problem areas that are likely to surface during the Inspector General's audit of our FY 1992 financial statements and for them to make recommendations on how to correct these problems.
Cotton & Company saw their role as independent auditors who were unwilling to deviate from their audit plan to work with us in identifying the problems with our accounting system.
This was reflected in our biweekly status report meetings.
From our perspective, we could never get Cotton
& Company to finish their " understanding of the NRC" phase of work.
At each status report meeting we were told about what new i
information Cotton & Company had been reading during the previous reporting period.
Cotton & Company read the CFO Act, OMB Bulletins, Treasury Financial Manual, NRC Inspector General reports, NRC FMFIA reports, NRC manual directives, NRC annual reports, various Public Laws affecting the NRC, and even contacted the NRC historian for a report on the history of the NRC.
In our view, a lot of this information was unnecessary for the work we wanted.
Furthermore, Cotton & Company took exception to our attempts to direct their work into the problem areas facing the Division of Accounting and Finance (DAF).
In fact, Cotton & Company felt they needed to contact various program offices directly to gain an understanding of their work.
We specifically instructed them not to contact anyone outside of DAF without our approval.
Cotton L Company refused to comply with this request.
When we again raised this issue at the next status report meeting with Mr. Cotton, we were disappointed and angeied by his response.
Mr. Cotton said that it was a fair questi' for us to ask Cotton & Company why they wanted to contact a Offlee outside of DAF.
However, he said that it was also fair for Cotton & Company not to tell us why.
We said that we didn't understand this statement.
Mr. Cotton then offered to withdraw from the engagement if we were going to impose scope limitations on his work.
It seemed clear to us that Cotton & Company wasn't s
interested in hearing what we wanted.
Another major problem we had with Cotton & Company was monitoring i
the cost of the contract.
When we received the first invoice it I
was incorrect.
When I pointed it out to Cotton & Company, they sent me a revised invoice.
The revised invoice was also incorrect.
At virtually every status report meeting the focus was not on what had been accomplished but how much more funds would be needed by Cotton & Company to finish the work.
Another example of Cotton & Company's cavalier attitude toward this engagement was a statement made by their partner in charge, who stated to me that he didn't feel constrained to live within any given budget and that budgets were just estimates for his work.
\\
The final irony to this whole situation was the recent discovery that Cotton & Company had sent DOL a billing number 004 for the remainder of funds under the cask order.
Cotton & Company never sent a copy of this billing to the NRC for review and approval.
The last major problem we had with Cotton & Company was the lack of usefulness of their report.
The Cotton & Company report is mainly based on their reading of IG and NRC related reports.
Cotton & Company did sit down and interview the various branch chiefs within DAF.
However, the report fails to mention what positive actions NRC took to correct these deficiencies.
First and most importantly, NRC never received a draft copy of the report for comment.
Therefore, many of the statements are either misleading or false.
Second, Cotton & Company never did any testing to see if the deficiencies they reported really exist.
Finally, Cotton & Company makes no mention of the corrective actions that were put in place to correct many of these weaknesses.
It is our opinion Rhat the report we received from Cotton & Company, costing $34,G57.10 to prepare, has no value to NRC management.
In conclusion, we would Dpt recommend the services of Cotton &
Company to any agency needing financial advice and assistance on government accounting matters.
If you would like a more detailed analysis of Cotton & Company's performance, please let me know.
Sincerely, ORIGINAL SIGIC BY John R. Walker Task Monitor Division of Accounting and Finance Office of the Controller Enclosure Distribution:
JWalker, OC/DAF RERakowski, OC/DAF OC RF OC CF OC/DAF OC/DAF JWalke RERakowski 9/ / /92 9/ / /92
.