[Federal Register Volume 63, Number 16 (Monday, January 26, 1998)]
[Rules and Regulations]
[Pages 3652-3653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1753]


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NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 1842


Miscellaneous Revisions to the NASA FAR Supplement Coverage on 
Contract Administration

AGENCY: National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: This is a final rule amending the NASA FAR Supplement (NFS) 
contract administration policy to update references to OMB Circulars 
and NASA internal guidance documents and to provide revised guidance on 
audit followup procedures.

EFFECTIVE DATE: January 26, 1998.

FOR FURTHER INFORMATION CONTACT:
Jack Horvath, NASA, Office of Procurement, Analysis Division (Code HC), 
(202) 358-0456.

SUPPLEMENTARY INFORMATION:

Background

    NFS sections 1842.101 and 1842.7301 reference OMB Circulars A-88 
and A-128. Both of these have been cancelled and replaced by OMB 
Circular A-133, and the NFS references are updated accordingly. Section 
1842.102-70(b) provides guidance for NASA Centers on advising NASA 
Headquarters of changes in contract administration activity. This 
section is further clarified to indicate that NASA Center reports to 
Headquarters are required semiannually. Finally, changes are made to 
section 1842.7301 to include references to new NASA guidance documents 
and to clarify audit followup activities.

Impact

    NASA certifies that this regulation will not have a significant 
economic impact on a substantial number of small business entities 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). This final 
rule does not impose any reporting or recordkeeping requirements 
subject to the Paperwork Reduction Act.

List of Subjects in 48 CFR Part 1842

    Government procurement.
Tom Luedtke,
Deputy Associate Administrator for Procurement.

    Accordingly, 48 CFR part 1842 is amended as follows:
    1. The authority citation for 48 CFR part 1842 continues to read as 
follows:

    Authority: 42 U.S.C. 2473(c)(1).

PART 1842--CONTRACT ADMINISTRATION


1842.101  [Amended]

    2. In paragraph (a)(i) to section 1842.101, the phrase ``OMB 
Circular No. 88'' is revised to read ``OMB Circular No. A-133''.
    3. In paragraph (a)(ii) to section 1842.101, ``(Code HS)'' is 
revised to read ``(Code HK)''.


1842.102-70   [Amended]

    4. In section 1842.102-70, paragraph (b) introductory text is 
revised to read as follows:


1842.102-70  Review of administration and audit services.

* * * * *
    (b) A summary, including a negative summary, of the Center's 
assessment shall be submitted by the procurement officer to the 
Headquarters Office of Procurement (Code HK) by not later than January 
15 and June 15 of the fiscal year. The summary shall include--
* * * * *


1842.7301  [Amended]

    5. Section 1842.7301 is revised to read as follows:


1842.7301  NASA external audit follow-up system.

    (a) This section implements OMB Circular No. A-50, NASA Policy 
Directive (NPD) 1200.1, and NASA Procedures and Guidelines (NPG) 
1200.1, ``Management Accountability and Control, Audit Liaison, and 
Audit Follow-up'', which provide more detailed guidance. 
Recommendations for external audits (OMB Circular No. A-133, Audits of 
States, Local Governments, and Non-Profit Institutions) shall be 
resolved by formal review and approval procedures analogous to those at 
1815.406-171.
    (b) The external audit followup system tracks up contract and OMB 
Circular No. A-133 audits where NASA has resolution and disposition 
authority. The objective of the tracking system is to ensure that audit 
recommendations are resolved as expeditiously as possible, but at a

[[Page 3653]]

maximum, within 6 months of the date of the audit report.
    (c)(1) The identification and tracking of contract audit reports 
under NASA cognizance are accomplished in cooperation with the DCAA.
    (2) Identification and tracking of OMB Circular No. A-133 audit 
reports are accomplished in cooperation with the NASA Office of the 
Inspector General (OIG) by means of a transmittal memorandum. A 
transmittal memorandum is sent by the OIG to the procurement officer of 
each NASA Center having an award (contract, grant, or other agreement) 
covered by the audit report. The transmittal memorandum will identify 
any significant audit findings.
    (d)(1) All reportable contract audit reports are defined by Part 
15, Section 6, of the DCAA Contract Audit Manual (CAM) shall be 
reported quarterly to the Headquarters Office of Procurement (Code HC); 
and
    (2) Only OMB Circular No. A-133 audit reports involving the 
following shall be reported quarterly to Code HC:
    (i) A significant management control issue; or
    (ii) Questioned costs of $10,000 or more due to an audit finding 
(see Subpart E-Auditor, paragraph 510 of OMB Circular No. A-133).
    (3) NASA contracting officers will maintain a dialogue with DOD 
Administrative Contracting Officers (ACO) who have been delegated 
activities on NASA contracts. A review will be conducted no less 
frequently than semiannually, and the status and disposition of 
significant audit findings will be documented in the contract file.
    (e)(1) The terms ``resolution'' and ``disposition'' are defined in 
Appendix A of NPG 1200.1.
    (2) The resolution and disposition of OMB Circular No. A-133 audits 
are handled as follows:
    (i) Audit findings pertaining to an individual NASA award are the 
responsibility of the procurement officer administering that award.
    (ii) Audit findings having a Governmentwide impact are the 
responsibility of the cognizant Federal agency responsible for 
oversight. For organizations subject to OMB Circular No. A-133, there 
is either a cognizant agency or an oversight agency. The cognizant 
agency is the Federal agency that provides the predominant amount of 
direct funding to the recipient organization unless OMB makes a 
specific cognizant agency for audit assignment. To provide for the 
continuity of cognizance, the determination of the predominant amount 
of direct funding will be based on the direct Federal awards expended 
in the recipient's fiscal years ending in 1995, 2000, 2005, and every 
fifth year thereafter. When there is no direct funding, the Federal 
agency with the predominant indirect funding is to assume the oversight 
responsibilities. In cases where NASA is the cognizant or oversight 
Federal agency, audit resolution and disposition is the responsibility 
of the procurement officer for the Center having the largest amount of 
direct funding, or, if there is no direct funding, the largest amount 
of indirect funding for the audited period. A copy of the memorandum 
dispositioning the findings shall be provided by each Center having 
resolution responsibility for the particular report to the Headquarters 
OIG office and Code HC.

[FR Doc. 98-1753 Filed 1-23-98; 8:45 am]
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