V PRO^4-0
U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
May 25, 2006
Why We Did This Review
In a September 21, 2005 report
on Environmental Protection
Agency (EPA) assistance
agreements issued to the Natural
Resources Defense Council, Inc.
(NRDC), we identified
significant questioned costs due
to inadequate support for cost
claimed. Because of these issues
we performed a quality control
review of the single audit to
determine whether it met single
audit requirements.
Under Office of Management and
Budget Circular A-133, entities
that expend Federal funds of
$300,000 in a year are required to
have a single audit conducted.
For the year ended June 30, 2003,
PricewaterhouseCoopers, LLP
conducted the NRDC audit.
NRDC incurred $608,099 in
expenditures under EPA
assistance agreements during this
fiscal period.
Catalyst for Improving the Environment
Quality Control Review of PricewaterhouseCoopers,
LLP Single Audit of Natural Resources Defense
Council, Inc., for Year Ended June 30, 2003
What We Found
PricewaterhouseCoopers, LLP did not adequately test and document the
auditee's compliance with Federal procurement regulations, and did not
properly report the auditee's lack of compliance with indirect cost proposal
requirements. These issues should have resulted in reported noncompliances in
the single audit report. Because the Office of the Inspector General has already
reported these matters to EPA for audit resolution, there will be no added
benefit for PricewaterhouseCoopers, LLP to retract and reissue its single audit
We also identified two technical deficiencies. The single auditor did not
correctly determine major and non-major programs, as required. Further, the
single auditor did not adequately document its basis of materiality for
compliance testing, in accordance with standards.
What We Recommend
We recommend that for future single audits, PricewaterhouseCoopers, LLP
ensure that appropriate testing of procurements is performed and the results
documented in its working papers. We also recommend that the single auditor
sufficiently document its analysis and conclusions in future audits. For the
technical deficiencies, we recommend that for future single audit work, the
single auditor should ensure that appropriate steps are taken to address these
deficiencies. The single auditor generally agreed with these recommendations.
For further information, contact
our Office of Congressional and
Public Liaison at (202) 566-2391.
To view the full report,
click on the following link: