Report | Dec. 4, 2015

Quality Control Review of the BKD, LLP FY 2014 Single Audit of MRIGlobal and Related Entities

DODIG-2016-029

Objective

As the cognizant Federal agency for MRIGlobal and Related Entities (MRIGlobal), we performed a quality control review of the BKD, LLP (BKD) single audit report and supporting audit documentation for the audit period of October 1, 2013 through September 30, 2014. Our objective was to determine whether the single audit was conducted in accordance with generally accepted government auditing standards, generally accepted auditing standards (GAAS), and the requirements of the Office of Management and Budget (OMB) Circular A-133, "Audits of States, Local Governments, and Non-Profit Organizations." Appendix A contains additional details on our scope and methodology. Appendix B lists the compliance requirements that BKD determined to be applicable to the FY 2014 audit.
 

Background

MRIGlobal and Related Entities

MRIGlobal is a not-for-profit research and development organization based in Kansas City, Missouri. MRIGlobal performs scientific research, advanced engineering, and program integration and management related to national security and defense, energy and environment, and other areas for clients in government, industry, and academia.  During F Y 2014, MRIGlobal expended approximately $66.7 million in Federal awards under one Federal program, the research and development cluster, $48.6 million of which was expended for Department of Defense awards. MRIGlobal engaged BKD to perform the F Y 2014 single audit.

BKD, LLP

BKD is a national accounting and advisory firm headquartered in Springfield, Missouri, that provides audit and assurance, tax, and advisory services to United States and international clients. BKD maintains its own system of internal quality control over its accounting and auditing practices as required by the American Institute of Certified Public Accountants (AICPA). BKD’s Kansas City, Missouri office performed the MRIGlobal FY 2014 single audit.
 

Single Audit

Public Law 98-502, "The Single Audit Act of 1984," (the Act) as amended, was enacted to promote sound financial management of Federal awards administered by non-Federal entities and to establish a uniform set of auditing and reporting requirements for Federal award recipients that are required to obtain a single audit. OMB Circular A-133 establishes policies that guide the implementation of the Act and provides an administrative foundation for uniform audit requirements of non-Federal entities administering Federal awards. Entities that expend Federal funds of $500,000 or more in a year are subject to the Act and OMB Circular A-133 requirements. Therefore, MRIGlobal must have a n annual single audit performed and submit a complete reporting package to the Federal Audit Clearinghouse in accordance with OMB Circular A-133 requirements. The single audit includes an audit of the non-Federal entity’s financial statements and Federal awards as described in OMB Circular A-133.

Review Results

MRIGlobal complied with OMB Circular A-133 reporting requirements. BKD generally met auditing standards and OMB Circular A-133 requirements, and no additional audit work is required for the FY 2014 single audit. However, we identified deficiencies in performance and documentation that need to be addressed for future single audits.

Management Comments and DoDIG Response

BKD, LLP agreed to take corrective action in response to our recommendations. Management comments were responsive and no additional comments are needed. Management comments are included in their entirety at the end of this report.