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00-16

Procurement Information Circular


August 16, 2000

DHHS AUDIT SUPPORT TO NASA

PURPOSE: To provide guidance to all NASA centers when requesting audit support from the Department of Health and Human Services, Office of the Inspector General (DHHS-OIG).

BACKGROUND: As a result of a review by the NASA Inspector General of the DHHS audit support provided to NASA, it was concluded that no guidance is currently available in requesting DHHS support. Therefore, the NASA IG recommended that the Office of Procurement provide such guidance to all NASA center procurement offices.

GUIDANCE: The Department of Health and Human Services (DHHS) Inspector General's Office provides audit services to NASA under the provisions of an MOA dated July 27, 2000 (Enclosure 1). These services include self-initiated audits and direct request audits by NASA. Self-initiated audits are those audits that are common to all government agencies which DHHS includes within their annual plan, e.g., CAS Disclosure Statement reviews, Cash Management reviews, etc. The charges for these audits are pro-rated by DHHS among the agencies that have contracts/grants with the organization being audited. Direct request audits are those audits that NASA center procurement offices request from DHHS, e.g., proposal reviews, contract closeout reviews, etc. The charges for these audits are made directly to NASA.

DHHS conducts audits on universities and nonprofit organizations. The organizations that fall under the DHHS cognizance are determined by the provisions of OMB Circular A-133, "Audits of Institutions of Higher Education and Other Non-Profit Institutions." DHHS is responsible for all universities and nonprofits except for those that come under DOD cognizance as shown in the enclosed list (Enclosure 2). The list will be updated as appropriate.

All Center Procurement Officers will submit their fiscal year requirements for DHHS audit support by July 15 of each year to Code HK/Jack Horvath. The following information should be provided for each audit request:

1. type of audit (e.g., proposal review)
2. the number of labor hours to perform the audit
3. organization being audited (name of contractor/grantee)
4. contract number, if applicable

In developing your requirements, the following hourly estimates may be used for:

Discussions with DHHS audit personnel would also be appropriate in determining the number of hours for a specific audit.

This submittal is separate from that sent to the NASA Contract Administration and Audit Policy Group (NCAASPG).

When requesting audit support from DHHS, NASA personnel will tailor their requests for audits, and be specific in the type of audit being requested. NASA contracting personnel will request audit services directly from the DHHS Regional Inspectors General for Audit Services at the addresses listed in the MOA. As a result of the NASA request, the DHHS will provide the NASA contracting personnel with the maximum number of man-hours to complete the audit, and the schedule for completion. Both parties must agree on the man-hours and completion dates before initiation of the audit by DHHS. Further, any increases in audit man-hours must be approved by NASA contracting personnel before DHHS commences additional work.

At the conclusion of the audit, the DHHS is required to provide a copy of the final audit report to the NASA office that requested the audit, and to Code HK.

DHHS will submit monthly billings to NASA for services provided. NASA center procurement offices will be required to review these bills (for NASA requested audits) and verify the audit(s) performed and the man-hours associated with the audit(s).

Other agencies, e.g., ONR, DCMA, do not have the authority to make direct requests to DHHS for audit services as representatives of NASA as a result of NASA delegations. Should these agencies require audit services for some reason in performing their delegation functions for NASA, they are required to notify the NASA Headquarters/Code HK/Jack Horvath and obtain approval to initiate the audit.

For monitoring purposes, all centers are to notify Code HK/Jack Horvath via email of all audits initiated with DHHS. Notification should be immediate and include the information required in Nos. 1, 2, 3, and 4 above. However, if the audit was included in the annual fiscal year requirement, the notification need only identify that specific audit.

Any issues involving DHHS delegations that may require Headquarters attention should be submitted to Code HK/Jack Horvath for review and resolution.

Rate Agreements for "not-for-profit" type organizations can be found at the Program Support Center, Financial Management Service, Division of Cost Allocation web-site at http://rates.psc.gov/.

EFFECTIVE DATE: This PIC is effective as dated and shall remain in effect until cancelled or superseded.

HEADQUARTERS CONTACT: Jack Horvath, Code HK, (202) 358-0456, email: Jhorvath@hq.nasa.gov

 

 R. Scott Thompson
Director, Contract Management Division

Enclosures:
1. NASA/DHHS Agreement
2. DOD List of Cognizant Organizations

 


ENCLOSURE 1

Agreement Between
the National Aeronautics and Space Administration
and the Department of Health and Human Services,
Office of the Inspector General (DHHS-OIG)
for the Performance and Reimbursement of Audit Services
in Support of NASA Contracts, Grants and
Other Agreements

 1. Purpose. This interagency agreement establishes the basis for audit services to be provided to the National Aeronautics and Space Administration (NASA), by the Department of Health and Human Services, Office of Inspector General (DHHS-OIG). The agreement will set forth policies and procedures that will cover reimbursement of services performed (a) pursuant to letters of delegation or other formal written requests including electronic requests issued by NASA Headquarters, Centers or the NASA Inspector General to DHHS and its Components and (b) that are initiated by DHHS in accordance with OMB circulars covering cross serving audit agreements.

2. Authority.

(A.) Economy Act, 31 U.S.C. 1535.
(B.) Federal Acquisition Regulation (FAR) 42.101.
(C.) OMB Circular A-133, Audits of State, Local Governments, and Non-profit Organizations.
(D.) OMB Circular A-122, Cost Principles for Non-Profit Organizations.
(E.) OMB Circular A-21 Cost Principles for Educational Institutions.

3. Scope. The purpose of this agreement is to arrange for NASA to request audits (financial, performance, contract closeout, contract proposal, and special requests) at institutions under DHHS cognizance, and also be billed for self-initiated audits (indirect cost proposal, cross cutting management information system, selected costs charged to federal awards, cost accounting standard (CAS) disclosure statement, changes to CAS disclosure statement, and special requests) performed in accordance with OMB Circulars.

4. Audit Planning/Forecast. Not later than 90 days prior to the end of each fiscal year, DHHS shall provide to NASA an initial estimate of billable direct labor hours and the reimbursement rate for the following fiscal year. The estimate is generally based upon the prior year effort and NASA may revise estimates based upon projected audit needs for the current year. If DHHS submits changes to the initial estimate of billable direct labor hours then it shall be accompanied by appropriate support information to facilitate NASA review. NASA and DHHS shall mutually agree upon the final estimated billable direct labor hours and the reimbursable rate that will be set forth in Appendix A, which will be signed by the respective authorized representatives. Appendix A shall be annually amended for continuation of these services.

5. Process for Requesting Services.

A. Request for audit services (NASA requested) will be made by NASA contracting personnel and NASA Inspector General (IG) personnel directly to the DHHS Regional Inspectors General for Audit Services at the addresses listed in Appendix B. Requests involving multiple institutions requiring significant commitment of resources will be made by NASA Headquarters, Contract Management Division, and will be sent to the Assistant Inspector General for Public Health Service Audits. Any requests for audit services by other government agencies representing NASA shall not be initiated without approval of the NASA Headquarters Contract Management Division.

B. DHHS will provide NASA's Contract Management Division with a copy of planned self initiated audit work for the upcoming fiscal year no later than 30 days prior to the start of that year. Upon receipt NASA may contact DHHS to obtain an understanding of the scope of work and NASA's estimated share of the audit cost. For those audits which are required to be performed by DHHS, the NASA Headquarters, Contract Management Division, will be advised as soon as possible of Office of Audit Services' (OAS) initiation of the type of audit, institution being audited, the audit Contract Identification Number (CIN), the projected total man-hours for completing the audit, including NASA's pro-rata share and how that share was developed.

C. For those audits which are requested directly by NASA contracting personnel and/or NASA IG, DHHS will contact the designated NASA personnel, before initiating the assignment, to obtain an understanding of any specific audit concerns relating to the NASA award, anticipated scope of the audit , and the estimated hours of the audit effort to complete the assignment.

D. At the completion of audits requested by NASA contracting personnel and/or NASA IG, copies of audit reports shall be submitted to the requesting office and to the NASA Headquarters, Contract Management Division. At the completion of any required or self-initiated audits by DHHS , copies of the audit reports shall be submitted to the NASA Headquarters, Contract Management Division.

6. Billing.

A. Monthly bills shall be paid by NASA upon submission and acceptance. Adjustments agreed to by NASA and DHHS-OIG shall be promptly processed. If DHHS-OIG does not provide NASA with billings in a timely Manner (within 60 days of cost incurred), NASA will notify DHHS-OIG. DHHS-OIG will take appropriate action to resolve the problem and provide NASA with status updates every two weeks until the problem has been resolved.

B. Bills shall be submitted monthly to NASA Marshall Space Flight Center, Code BF20, Huntsville, AL, 35812-0001 and to NASA Headquarters, Contract Management Division, Code HK, attn: Jack Horvath. Billing data shall be available upon request. The data shall contain the following information:

(1.) The period of performance covered by the bill.
(2.) DHHS requester code.
(3.) DHHS audit CIN.
(4.) Institution audited.
(5.) Total audit hours worked.
(6.) Description of the type of audit.
(7.) NASA identification, e.g., grant no. contract no. RFP no.
(8.) Reimbursable hourly rate and total dollars billed.
(9.) Number of auditors performing the audit.
(10.) NASA requester name and center location.

C. DHHS/OIG/OAS shall maintain auditable records as required by generally accepted government auditing standards (GAGAS).

7. Responsibilities. The following offices are responsible for coordinating matters affecting this agreement:

DHHS-OIG

NASA

Director, Human Financial Resources
Office of Audit Services-OIG
330 Independence Ave, SW
Washington, DC 20201
(202) 619-1159

Stephen Varholy
Director, Financial Management Div.
NASA HQ.
Washington, DC 20546
(202)358-2290

Scott Thompson
Director, Contract
Management Div.
NASA HQ.
Washington, DC 20546
(202)358-0422

8. Funds. Audit services will be provided by DHHS-OIG on a reimbursable basis. Reimbursement will be based on actual audit hours at the billing rate established by DHHS-OIG and agreed to by NASA, which includes travel and per diem expenses. NASA and DHHS-OIG will mutually agree upon any revised number of hours required for the reimbursable support services in a letter signed by the respected authorized representatives.

9. Changes. This agreement and appendices may be revised at any time upon mutual assent of NASA and DHHS-OIG in accordance with their respective procedures affecting interagency agreements. Appendix A shall be amended at least annually to establish the DHHS-OIG billing rate and hours required for the fiscal year. Appendix B will list the contact information with the Assistant Inspector General for Public Health Service Audits and the Regional Inspector General for Audit Services. Additional appendices may be added to provide for unique relationships between NASA and DHHS-OIG required in the performance of audit services.

10. Termination. Either party to this agreement may terminate this agreement by providing a written notification to the other party with a minimum of six (6)months advance notice. Any audit work already started during the notice would be allowed to continue to completion. It would not allow any new audit to be initiated.

11. Duration. This agreement is effective upon the latest date of signature below and shall remain in effect until terminated.

/s/ Roslewicz 7/27/00

Department of Health and Human Services Date
Office of Inspector General
Thomas D. Roslewicz,
Deputy Inspector General
for Audit Services

/s/ Holz 7/19/00
The National Aeronautics and Space Administration Date
Office of the Chief Financial Officer
Arnold G. Holz
Chief Financial Officer


ENCLOSURE 1: Appendix A

Agreement Between
the National Aeronautics and Space Administration
and the Department of Health and Human Services,
Office of the Inspector General (DHHS-OIG)
for the Performance and Reimbursement of Audit Services
in Support of NASA Contracts, Grants and
Other Agreements

Composite hourly rate and personnel-hour estimates for audit support services to be provided by DHHS to NASA in fiscal year 2000 are as follows:

DHHS Audits

FY Hourly
Rate

Approved
Estimated Hours

Total
Estimated Funds

1. NASA Requested
Audits

$70.31

1,630

$114,605.30

2. DHHS Self-Initiated
Audits

$70.31

1,113

$ 78,255.03

 

 

TOTAL

$192,860.33

The two funds will be kept separately for tracking proposes. In the event that funds in one account are consumed and further audit work needs to be conducted for that account, then the funds in the other account can be acquired to offset reimbursement work.

 

Department of Health and Human Services
Office of Inspector General

 

__________/s/ Roslewicz__________ 7/27/00_
Thomas D. Roslewicz Date
Deputy Inspector General for
Audit Services

 

The National Aeronautics and Space Administration
Office of he Chief Financial Officer

___________/s/ Holz_________________ 7/19/00_
Arnold G. Holz Date
Chief Financial Officer


ENCLOSURE 1: Appendix B

Agreement Between
the National Aeronautics and Space Administration
and the Department of Health and Human Services
Office of the Inspector General (DHHS-OIG)
for the Performance and Reimbursement of Audit Services
in Support of NASA Contracts, Grants and
Other Agreements

Department Of Health and Human Services
Assistant Inspector General for
Public Health Service Audits

Joseph Green
5600 Fishers Lane
Parklawn Building
Room 1-30
Rockville, MD 20857-0001

 

Regional Inspector General for Audit Services

Region

Address

Telephone/Fax

States

I

William J. Hornby
John F. Kennedy Federal Building
Room 2425
Boston, MA 02203

(617) 565-268
(617) 565-3750 fax

CT, ME, MA,
NH, RI, VT

II

Timothy J. Horgan
26 Federal Plaza
Room 3900A
New York, NY 10278

(212) 264-4620
(212) 264-6307 fax

NJ, NY, PR,

VI

III

David M. Long
150 S. Independence Mall West
Suite 316
Philadelphia, PA 19106-3499

(215) 861-447
(215) 861-4541 fax

DE, DC, MD,
PA, VA, WV

IV

Charles J. Curtis
61 Forsyth Street, SW
Room 3T41
Atlanta, GA 30303

(404) 562-7750
(404) 562-7795 fax

AL, FL, GA,
KY, NC, SC

V

Paul P. Swanson
233 North Michigan
Room 1360
Chicago, IL 60601-5519

(312) 353-2618
(312) 353-3814 fax

IL, IN, MI,
MN, OH, WI

VI

Donald L. Dille
1100 Commerce Street
Room 6B6
Dallas, TX 75242

(214) 767-8414
(214) 767-8422 fax

AR, LA, NM,
TX, OK

VII

Barbara A. Bennett
Federal Building
601 E. 12th Street
Room 284A
Kansas City, MO 64106

(816) 426-3591
(816) 426-3655 fax

IA, KS, MO,
NE, CO, MT,
ND, SD, UT,
WY

IX

Lawrence Frelot
Federal Office Building
50 United Nations Plaza
Room 171
San Francisco, CA 94102

(415) 437-8369
(415) 437-8372 fax

AZ, CA, HI,
NV, GU, AS,
AK, ID, OR,
WA

 


ENCLOSURE 2

 

The following educational institutions are under the cognizance of DOD for audit services. All other institutions default to DHHS. Any audit services involving the following institutions should be requested from DCAA/ONR as appropriate.

Polytechnic Institute of New York

Lehigh University

Regis College

Louisiana Tech University

Spokane Research Institute

Massachusetts Institute of Technology

Stanford University

Stevens Institute

McMasters University

University of Alaska

Mercer University

University of Dayton

Michigan Technological University

University of Delaware

New Mexico Institute of Mining and Technology

University of Denver

University of Illinois, Chicago

New Mexico State University

University of Illinois, Urbana

Oklahoma State University

University of Illinois, Springfield

Oregon Graduate Institute of Science and Technology

University of New Mexico

University of Scranton

 

University of Toronto

 

Utah State University

 

Virginia Institute of Marine Sciences

 

Virginia Military Institute Research Laboratory

 

Wentworth Institute

 

Worcester Polytechnic Institute

 

California Institute of Technology

 

Carnegie Mellon University

 

College of Lake County

 

College of William & Mary

 

Colorado School of Mines

 

Emanuel College

 

George Mason University

 

Georgia Institute of Technology