ML25336A290

Enclosure 2 - Management Representation Letter on Financial Statements

ML25336A290
Person / Time
Issue date:	12/17/2025
From:	Carroll C, David Wright NRC/OCFO, NRC/Chairman
To:	Feitel R, Wagoner J NRC/OIG, Sikich CPA LLC
Shared Package
ML25337A068, ML25338A204	List: ML25336A290
References
SRM-OMB910910B, CORR-95-0097
Download: ML25336A290 (0)

Text

UNITED STATES NUCLEAR REGULATORY COMMISSION WASHINGTON, D.C. 20555-0001 December 17, 2025 Mr. Robert J. Feitel Inspector General U.S. Nuclear Regulatory Commission 11555 Rockville Pike Rockville, MD 20852-2738 Mr. Jason Wagoner, Principal Sikich CPA LLC 333 John Carlyle Street, Suite 500 Alexandria, Virginia 22314

Dear Mr. Feitel and Mr. Wagoner:

We are providing this representation letter in connection with your integrated audit of the balance sheet of the U.S. Nuclear Regulatory Commission (NRC) as of September 30, 2025, and the related statements of net cost, changes in net position, and budgetary resources for the year then ended, and the related notes to the financial statements (collectively, the financial statements).

Certain representations in this letter are described as limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in the light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement.

Except where otherwise stated below, immaterial matters less than $360,000 (collectively) are not considered to be exceptions that require disclosure for purposes of the following representations. This amount is not necessarily indicative of amounts that would require adjustment to or disclosure in the financial statements. Such quantitative materiality considerations do not apply to representations that are not directly related to amounts included in the financial statements required supplementary information (RSl)1, and other information (01)2.

We confirm, as of December 17, 2025, the following representations made to you during your integrated audit.

1 RSI consist of Management's Discussion and Analysis 2 OI consists of the Inspector General's Assessment of the Most Serious Management and Performance Challenges Facing the NRC, Summary of Financial Statement Audit and Management Assurances, Payment Integrity, Real Property, Civil Monetary Penalty Adjustment for Inflation, Grants Oversight and New Efficiency Act Requirements, Climate-Related Financial Risk, and Acronyms and Abbreviations

2 Financial Statements, RSI, and Other Information

1. We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated May 23, 2025, for the preparation and fair presentation of the financial statements, including related notes, in accordance with U.S. generally accepted accounting principles (U.S. GAAP), issued by the Federal Accounting Standards Advisory Board. The financial statements are fairly presented in accordance with U.S.

GAAP.

2. We have fulfilled our responsibilities for the measurement, preparation, and presentation of the RSI (including Management's Discussion and Analysis [MD&A]) in accordance with prescribed guidelines in U.S. GAAP.

a. The RSI is measured and presented in accordance with prescribed guidelines in U.S. GAAP, is consistent with the financial statements, and contains no material misstatement of fact.

b. There are no changes in the methods of measurement or presentation of the RSI from the prior year.

c. There are no significant assumptions or interpretations underlying the measurement or presentation of the RSI.

3. We have fulfilled our responsibilities for the preparation and presentation of the 01 included in the NRC's Agency Financial Report (AFR), and for ensuring the consistency of that information with the audited financial statements and RSI.

a. The 01 included in the NRC's AFR is consistent with the financial statements and RSI and contains no material misstatement of fact.

b. There are no changes in methods of measurement or presentation of the 01 from the prior year.

c. There are no significant assumptions or interpretations underlying the measurement or presentation of the 01.

4. The methods, data, and significant assumptions that we used in making accounting estimates and their related note disclosures are appropriate to achieve recognition, measurement, or disclosure that is reasonable in the context of U.S. GAAP.

5. We have provided you with all relevant information and access, as agreed upon in the terms of the audit engagement letter, including the following:

a. Access to all information that is relevant to the preparation and fair presentation of the financial statements, such as records, documentation, and other matters.

b. Additional information that you have requested from us for the purpose of the audit, including:

i. Minutes of meetings, or summaries of actions of recent meetings for which minutes have not been prepared, of the Board.

3 ii. Any communications from the Office of Management and Budget or the Department of the Treasury's Bureau of the Fiscal Service concerning noncompliance with, or deficiencies in, financial reporting practices.

c. Unrestricted access to and full cooperation of personnel within the entity from whom you determined it necessary to obtain audit evidence.

d. All reports obtained from the NRC's service organizations.

6. Except as disclosed to you in writing, there have been none of the following:

a. Circumstances that have resulted in communications from the NRC's legal counsel reporting evidence of a material violation of law or breach of fiduciary duty, or similar violations by the NRC or any agent thereof.

b. Communications from regulatory or oversight agencies (such as the Office of Management and Budget [0MB] and the Government Accountability Office

[GAO]), other government entities or agencies, governmental representatives, employees, or others concerning investigations or allegations of noncompliance with laws or regulations, deficiencies in financial reporting practices, or other matters that could have a material adverse effect on the financial statements, RSI, and 01.

7. All transactions have been recorded in the accounting records and are reflected in the financial statements.

8. There are no uncorrected misstatements in the financial statements, as we have corrected the financial statements for any misstatements you have identified during the audit and communicated to us.

9. We have not identified misstatements in the fiscal year 2024 financial statements that were discovered subsequent to the issuance of such financial statements.

10. The NRC has satisfactory title to all owned assets. There are no liens or encumbrances on these assets, and no assets have been pledged. The NRC has no stewardship land or heritage assets.

11. We have no plans or intentions that may materially affect the recognition, measurement, presentation, disclosure, or classification of assets and liabilities.

12. We have disclosed to you the identities of all the NRC's disclosure entities, related parties, and public-private partnerships, and all the relationships and transactions related to them.

13. All relationships and transactions with disclosure entities, related parties, and public-private partnerships have been appropriately accounted for and disclosed in the financial statements in accordance with U.S. GAAP and do not prevent the financial statements from achieving fair presentation.

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14. There are no guarantees under which the NRC is contingently liable that require reporting or disclosure in the financial statements.

15. We have disclosed to you all known actual or possible litigation, claims, and assessments, including those related to treaties and other international agreements, whose effects should be considered when preparing the financial statements.

16. The effects of all known actual or possible litigation, claims, and assessments, including those related to treaties and other international agreements, have been accounted for and disclosed in the financial statements in accordance with U.S. GAAP.

17. All events or transactions subsequent to September 30, 2025, and for which U.S. GAAP requires adjustment or disclosure have been adjusted or disclosed in the financial statements.

18. There are no changes in accounting principle that affect the consistency of the financial statements between the current and prior year.

lntragovernmental Activities

19. There are no intra-entity transactions or balances. All intragovernmental transactions and activities have been appropriately identified, recorded, and disclosed in the financial statements. There are no material unresolved differences in intragovernmental transactions and balances with Federal entity trading partners, and appropriate adjustments have been made to address reconciling items.

Internal Control

20. We acknowledge our responsibility for designing, implementing, and maintaining effective internal control over financial reporting relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

21. We have fulfilled our responsibility for designing, implementing, and maintaining effective internal control over financial reporting relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

22. We are responsible for assessing the effectiveness of internal control over financial reporting based on the criteria established under 31 U.S.C. § 3512 (c), (d) (commonly known as the Federal Managers' Financial Integrity Act of 1982 [FMFIA]), providing our assessment of the effectiveness of internal control over financial reporting as of September 30, 2025, based on our assessment, and supporting our assessment about the effectiveness of internal control over financial reporting with sufficient evaluations and documentation.

23. We assessed the effectiveness of the NRC's internal control over financial reporting as of September 30, 2025, based on the criteria established under FMFIA. The NRC's internal control over financial reporting is a process effected by those charged with governance, management, and other personnel, the objectives of which are to provide

5 reasonable assurance that (1) transactions are properly recorded, processed, and summarized to permit the preparation of financial statements in accordance with U.S.

GAAP, and assets are safeguarded against loss from unauthorized acquisition, use, or disposition, and (2) transactions are executed in accordance with provisions of applicable laws, including those governing the use of budget authority; regulations; contracts; and grant agreements, noncompliance with which could have a material effect on the financial statements.

24. We did not use Sikich's audit procedures performed during the integrated audit of the NRC's 2025 financial statements as part of the basis for our assessment about the NRC's internal control over financial reporting as of September 30, 2025.

25. Based on the assessment in Representation No. 23, we conclude that as of September 30, 2025, the NRC's internal control over financial reporting was effective.

26. There are no deficiencies in the design or operation of internal control over financial reporting as of September 30, 2025.

27. During the audit of the financial statements for the year ended September 30, 2024, Sikich did not communicate any significant deficiencies or material weaknesses to us.

28. We have identified to you all previous audits, attestation engagements, and other studies that relate to the objectives of this audit, including whether related recommendations have been implemented.

29. There have been no changes to internal control over financial reporting subsequent to September 30, 2025, or other conditions that might significantly affect internal control over financial reporting.

Fraud

30. We acknowledge our responsibility for designing, implementing, and maintaining effective internal control to prevent and detect fraud.

31. We have fulfilled our responsibility for designing, implementing, and maintaining effective internal control to prevent or detect fraud.

32. We have no knowledge of any fraud or suspected fraud that affects the entity and involves (1) management, (2) employees who have significant roles in internal control over financial reporting, or (3) others when the fraud could have a material effect on the financial statements.

33. We have no knowledge of any fraud or suspected fraud that resulted in a material misstatement to the NRC's financial statements or RSI.

34. We have no knowledge of any allegations of fraud or suspected fraud affecting the financial statements communicated by employees, former employees, or others.

35. We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.

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36. We have no knowledge of any officer of the NRC, or any other person acting under the direction thereof, having taken any action to fraudulently influence, coerce, manipulate, or mislead you during your audit.

Compliance of Systems with FFMIA

37. We are responsible for implementing and maintaining financial management systems that comply substantially with federal financial management systems requirements, federal accounting standards (U.S. GAAP), and application of the U.S. Standard General Ledger (USSGL) at the transaction level.

38. We have assessed the financial management systems to determine whether they comply substantially with federal financial management systems requirements, federal accounting standards, and application of the USSGL at the transaction level. Our assessment was based on 0MB guidance.

39. The NRC's financial management systems complied substantially with federal financial management systems requirements, federal accounting standards, and application of the USSGL at the transaction level as of September 30, 2025.

Compliance with Applicable Laws, Regulations, Contracts, and Grant Agreements

40. We are responsible for complying with laws, regulations, contracts, and grant agreements applicable to the NRC.

41. We have identified and disclosed to you all provisions of laws, regulations, contracts, and grant agreements applicable to the NRC, noncompliance with which could have a material effect on the financial statements.

42. There are no instances of noncompliance or suspected noncompliance with laws, regulations, contracts, and grant agreements applicable to the NRC whose effects should be considered when preparing the financial statements.

43. We are not aware of any violations, or potential violations, of the Antideficiency Act for the years ended September 30, 2025, and through the date of this letter.

Budgetary and Restricted Funds

44. The information presented in the NRC's statement of budgetary resources is reconcilable to the information submitted in its year-end Reports on Budget Execution and Budgetary Resources (SF-133). This information will be used as input for the fiscal year 2025 actual-year column of the Program and Financing Schedules reported in the fiscal year 2027 Budget of the U.S. Government. Such information is supported by the related financial records and data.

45. There are no material dedicated collections or other material restricted funds that require presentation and disclosure in the financial statements.

7 Service Organizations

46. Service organizations that we use have not reported to us, nor are we otherwise aware of, any (1) fraud; (2) noncompliance with applicable laws, regulations, contracts, or grant agreements; or (3) uncorrected misstatements affecting the financial statements that are attributable to such service organizations.

47. Service organizations that we use have not reported to us, nor are we otherwise aware of, any changes in the design, implementation, or operating effectiveness of internal controls at the service organizations subsequent to the effective dates of the service and subservice organizations' report(s) provided to you that could (1) affect the risks of material misstatement of the financial statements or (2) result in material misstatements of the financial statements arising from processing errors that would not be prevented, or detected and corrected, on a timely basis.

Other Representations

48. The NRC's AFR will include the financial statements, your auditors' report, RSI (including MD&A), and 01. We expect to issue the NRC's AFR shortly after the date of your auditors' report.

49. We acknowledge our responsibility for communicating to you the discovery of any material misstatement that would affect the fair presentation of the FY 2025 or prior fiscal years' financial statements.

I have reviewed and concur with the Fiscal Year 2025 NRC Management Representation Letter as presented and as it applies to the NRC.

Signed Effective December 17, 2025 Signature: ________________ _

David A. Wright, Chairman

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Signature: ________________ _

Christopher D. Carroll, Acting Chief Financial Officer