QCR of the PricewaterhouseCoopers LLP and the DCAA OMB Circular A-133 Audits of JPL for the FY Ended Sep 30, 2007
National Aeronautics and
Space Administration
Office of Inspector General
Washington, DC 20546-0001
December 23, 2008
Mr. Michael Schini, Partner
PricewaterhouseCoopers LLP
Mr. William E. French, Branch Manager
Defense Contract Audit Agency, San Gabriel Valley Branch Office
Ms. Sharon E. Patterson, Associate Vice President for Finance and Treasurer
California Institute of Technology
Mr. Albert Battistelli, Manager, Jet Propulsion Laboratory, Audit Liaison & Subcontractor Audit and Compliance Offices
SUBJECT: Quality Control Review of the PricewaterhouseCoopers LLP and the Defense Contract Audit Agency Office of Management and Budget Circular A-133 Audits of the Jet Propulsion Laboratory for the Fiscal Year Ended September 30, 2007 (Report No. IG-09-008; Assignment No. A-08-020-00)
The audit firm PricewaterhouseCoopers LLP (PwC) and the Defense Contract Audit Agency (DCAA) jointly performed the single audit of the Jet Propulsion Laboratory (JPL) for the fiscal year (FY) ended September 30, 2007.1 Office of Management and Budget (OMB) Circular No. A-133, “Audits of States, Local Governments, and Non-Profit Organizations,” requires these audits.
Background. JPL is a federally funded research and development center operated under contract by the California Institute of Technology (Caltech). Caltech has operated JPL for NASA since December 1958 to meet specific Government research and development needs. JPL operates under a single cost-reimbursable contract with NASA (Catalog of Federal Domestic Assistance Number 43.001). JPL performs research and development for NASA in the area of science and technology of unmanned space exploration. JPL reported total Federal expenditures in FY 2007 of $1.76 billion. The Schedule of Expenditures of Federal Awards2 identifies NASA as the funding agency for all expenditures.
Quality Control Review Objectives. As the cognizant audit agency for JPL, the NASA Office of Inspector General (OIG) performed a quality control review of the PwC and the DCAA audits of JPL for FY 2007.3 The objectives of our quality control review were to determine whether PwC and DCAA had conducted their audits in accordance with the Government Accountability Office’s “Government Auditing Standards, 2003 Revision” (often referred to as generally accepted government auditing standards, or GAGAS) and the auditing and reporting requirements of OMB Circular A-133 and its related Compliance Supplement. OMB issued the Supplement to assist auditors in meeting the requirements of OMB Circular A-133. See Enclosure 1 for details of the scope and methodology of our review, requirements for single audits, and the latest peer reviews of PwC and DCAA. See Enclosure 2 for the results of the PwC audit of JPL for FY 2007 and Enclosure 3 for the results of the DCAA audit.
Review Results. PwC’s and DCAA’s audit work substantially met GAGAS and the auditing and reporting requirements of OMB Circular A-133 except that PwC did not document its low-risk auditee determination (Finding A) and DCAA did not place an audit finding in proper perspective (Finding B). We also noted that JPL did not timely submit a complete audit reporting package to the Federal Audit Clearinghouse (Finding C).
Management Comments. PwC, DCAA, and JPL provided comments in response to a draft of this report, issued November 20, 2008. Management concurred with our findings and recommendations and described actions to be taken (see Enclosure 4 for the full text of management comments). We consider the comments responsive and have closed the recommendations.
1 The specific audit responsibilities were determined through discussions between PwC and DCAA. Those responsibilities are listed in Enclosures 2 and 3.
2 The Schedule of Expenditures of Federal Awards shows the amount of annual Federal expenditures by Federal agency for each program. RESULTS 2 REPORT NO. IG-09-008
