Open Recommendations

FHFA should update the Examination Manual’s Credit Risk Management module and Advances and Collateral module to include guidance on the review of topics and issues related to the Spring 2023 bank failures and otherwise incorporate lessons learned from the 2023 examinations of member credit risk management.

The Division of Federal Home Loan Bank Regulation should adopt a process to ensure the appropriate examination coverage of all topics within its Examination Manual guidance.

Consider developing a TECU workstream for taxpayers that potentially have multiple delinquencies.

Issue clear and consistent procedural guidance for TECU examiners to follow when conducting compliance checks.

Revise the initial contact letters to provide taxpayers the option to submit the requested returns electronically.

The Commissioner, TE/GE Division, should better align procedural guidance for TECU examination referrals with CP&C criteria for assigning cases to the Examination functions.

Direct Brown to provide documentation supporting that it has repaid or otherwise credited the $47,384 in questioned publication, materials and supplies, and long-term visa costs for which it has agreed to reimburse NSF.

Direct Brown to implement additional procedures which require it to verify that a publication acknowledges the NSF funding source(s) that supported the published research prior to the expense being charged to the NSF award(s).

Direct Brown to establish additional guidance regarding how to review invoices and receipts that include materials and supplies charged to NSF awards. This guidance should address how to ensure materials and supplies expenses are allowable and properly allocated to the funding sources that directly benefit from the purchase.

Direct Brown to create additional resources that provide guidance regarding the allowable charging of visa fees on NSF awards. This guidance should address how Brown will ensure it does not charge unallowable long-term visa fees to NSF awards.

Resolve the $17,059 in questioned inappropriately allocated publication costs and direct Brown to repay or otherwise remove the sustained questioned costs from its NSF awards.

Direct Brown to provide documentation supporting it has repaid or otherwise credited the $7,204 in questioned materials and supplies expenses for which it has agreed to reimburse NSF.

Direct Brown to produce formal written guidance and provide training on how to assess and document the methodology used to allocate publication costs consistent with the benefits received by acknowledged funding sources.

Direct Brown to update its processes and procedures to require Principal Investigators or other designated staff to both document and justify the allocation methodologies used when charging expenses to NSF awards near grant expiration dates.

Direct Brown to provide documentation supporting that it has repaid or otherwise credited the $6,671 in questioned indirect costs for which it has agreed to reimburse NSF.

Direct Brown to update its current award set-up practices to: (1) ensure that it sets up accounts for NSF awards, such that each account applies indirect costs using the appropriate rates established in the Negotiated Indirect Cost Rate Agreement in effect as of the date of grant award; and/or (2) document its decision to apply indirect costs using lower rates.

Direct Brown to strengthen its policies, procedures, or internal controls for how to verify—and how to document its verification of—its subawardees’ election to use proposed indirect cost rates. This should address how Brown will ensure that the decision to use proposed indirect cost rates will not result in NSF being overcharged for indirect costs in cases when negotiated rates decrease between the date a subaward is proposed and the date a subaward is awarded, within a single Negotiated Indirect Cost Rate Agreement.

Direct Brown to strengthen its policies, procedures, and internal control processes for applying its federally negotiated indirect cost rates to NSF awards. These updated policies, procedures, and internal control processes should ensure Brown is: • Appropriately applying its indirect cost rates to all direct costs that should be included in its Modified Total Direct Cost base per its negotiated indirect cost rate agreements. • Accurately classifying all costs for accounts that are included within its Modified Total Direct Cost base per its negotiated indirect cost rate agreements.

Direct Brown to strengthen its internal controls for retaining documentation to support lodging expenses. These updated internal controls could include providing annual training to ensure travelers and individuals responsible for approving travel reimbursements are aware of the documentation required for reimbursement per its institutional policies.

Direct Brown to strengthen its monitoring procedures to ensure it appropriately applies the fringe benefit rates included within its negotiated indirect cost rate agreements.

Perform a comprehensive review of E3S for K-Area to identify whether there are gaps in access controls or SRS established procedures that have led to personnel accountability exceptions

Ensure additional compensatory measures are put in place and implemented to address any gaps identified based on the review

Implement monthly reviews of E3S exception logs to ensure timely identification of trends or determine the root causes of personnel accountability exceptions and address any issues identified

Ensure compensatory measures are put in place and implemented to address any gaps identified based on the comprehensive review performed in conjunction with the Savannah River Operations Office

Implement monthly reviews of E3S exception logs to ensure timely identification of trends or determine the root causes of personnel accountability exceptions and address any issues identified