ML20317A150
| ML20317A150 | |
| Person / Time | |
|---|---|
| Issue date: | 11/13/2020 |
| From: | Clay Johnson NRC/OCFO |
| To: | Baker B NRC/OIG/AIGA |
| TAW | |
| References | |
| Download: ML20317A150 (4) | |
Text
UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 November 13, 2020 MEMORANDUM TO: Brett M. Baker Assistant Inspector General for Audits Office of the Inspector General FROM: Cherish K. Johnson Cherish K. Digitally signed by Cherish K. Johnson Chief Financial Officer Johnson Date: 2020.11.13 15:02:38
-05'00'
SUBJECT:
AUDIT OF THE FISCAL YEARS 2020 and 2019 FINANCIAL STATEMENTS This memorandum responds to the draft report on the audit of the Nuclear Regulatory Commissions (NRC) fiscal years 2020 and 2019 financial statements, provided on November 12, 2020. The audit was conducted by the firm CliftonLarsonAllen LLP (CLA) under contract to the NRC Office of the Inspector General (OIG).
We concur that we have deficiencies in the areas of leases/leasehold improvements and deobligating aged unliquidated orders timely. We strive to continuously improve, and we have more improvements to make. We will implement corrective actions to eliminate these deficiencies. However, we do not believe that the leases/leasehold improvement deficiency rises to the level of a material weakness.
The recommendations and NRCs response are outlined below. We appreciate the collaborative relationship between the Office of the Inspector General, the auditors, and the Office of the Chief Financial Officer in supporting our continuing effort to improve financial reporting.
Recommendation No. 1:
Perform a more robust review of the future lease payments schedule to ensure it reflects all changes and updates to occupancy agreements. This review should include a documented review by the group responsible for negotiating and signing occupancy agreements since they would be most familiar with all current occupancy agreements.
NRC Response:
Agree. The Office of the Chief Financial Officer will improve the review of future lease payments, including coordinating with the Office of Administration.
Recommendation No. 2:
Perform a more robust review of leasehold improvements and require accurate communication from accountable property managers to ensure that as occupancy agreements change, projects begin, or projects are completed, any impact to leasehold improvements in the financial statements is recorded timely and accurately. This review should also include timely and completely documenting the status of leasehold improvements in process.
NRC Response:
Agree. The Office of the Chief Financial Officer will improve the review of leasehold improvements. This includes improving communication with the Office of Administration and other program offices that have responsibility for leasehold improvements.
Recommendation No. 3:
Strengthen internal control to ensure funds are de-obligated timely including identifying amounts to be de-obligated and posting the de-obligation to the accounting system.
NRC Response:
Agree. The Office of Administration has implemented a focused effort to eliminate the contract close out backlog.
Recommendation No. 4:
Maintain adequate documentation, including correspondence, for the reasons why an aged unliquidated obligation should not be de-obligated.
NRC Response:
Agree. Documentation will be maintained if reasons that unliquidated obligation should not be deobligated are identified.
Recommendation No. 5:
Review the process for generating the unliquidated obligation subsidiary details report (management report); ensure that amounts that are not ULOs are not included in the management report; and reconcile the management report to the general ledger.
NRC Response:
Agree. The Office of the Chief Financial Officer will review the unliquidated obligations management report.
cc: M. Doane EDO C. Haney AO/OEDO J. Jolicoeur, OEDO C. Cook, OEDO
ML20317A150 OFFICE OCFO/DOC/FRB OCFO/DOC/FRB OCFO/DOC NAME SJones PWilliams-Johnson DDAbate DATE 11/12/20 11/12/20 11/ /20 OFFICE OCFO/DOC DCFO CFO NAME KADarling BFicks CKJohnson DATE 11/13 /20 11/13/20 11/13/20