Reporting Requirements and Audit Risks, An Introduction to the American Recovery and Reinvestment Act
19 Pages
English

Reporting Requirements and Audit Risks, An Introduction to the American Recovery and Reinvestment Act

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An Introduction to the American Recovery and Reinvestment Act of 2009:Implications for Construction ContractorsMay 26, 2009© 2009 Crowell & Moring LLP – All Rights ReservedReporting Requirements and Audit RisksTerry Albertson© 2009 Crowell & Moring LLP – All Rights ReservedReporting Requirements:General Provisions§ Applicable to primes and first-tier subs using on-line reporting tool§ Applicable to commercial and COTS items§ Implementing clauses to be included in new contracts and added to old contracts using ARRA funds§ Mitigate commingling of non-ARRA funds to allow for separate tracking§ “Exercise appropriate contractual remedies” for failures to report§ Forecast costs for implemention seem substantially understated“One-time” Reporting Requirements for Primes§ Prime contract number and “award number” for each first-tier sub§ Program or project title§ Description of purpose and expected results of the prime and each first-tier sub§ Names, amounts, and dates of first-tier subs§ NAIC code for prime contract§ Funding agency“One-time” Compensation Reporting Requirement§ Applies to prime and first tier subs§ “The Contractor shall report”– “The Contractor” undefined– Unincorporated divisions?– Wholly-owned subsidiaries?– JVs?§ “Five most highly compensated officers”– Employees who are not “officers”– For the calendar year in which the contract is awarded– Report “total compensation” for the prior year § Exemptions– Disclosure ...

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© 2009Crowell&MoringLLP– AllRightsReserv ed
AnIntroductionto theAmerican Recoveryand ReinvestmentActof 2009: Implicationsfor Construction Contractors
May 26,2009
© 2009Crowell&MoringLLP– AllRightsReserv ed
Reporting Reuirementsand AuditRiss
Terry
Alertson
ReportingReuirements: eneralrovisions
§
§
§
§
§
§
Applicabletoprimesandfirst-tiersubsusingon-linereportingtool
ApplicabletocommercialandCOTitems
Implementingclausestobeincludedinnewcontractsandadded tooldcontractsusingARRA funds
Mitigatecomminglingofnon-ARRA fundstoallowforseparate tracking
“Exerciseappropriatecontractualremedies” forfailurestoreport
Forecastcostsforimplemention seemsubstantiallyunderstated
netimeReportingReuirementsfor rimes
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§
§
§
§
§
Primecontractnumberand“awardnumber” for eachfirst-tiersub
Programorprojecttitle
Descriptionofpurposeandexpectedresultsof theprimeandeachfirst-tiersub
ames,amounts,anddatesoffirst
AICcodeforprimecontract
Fundingagency
-tiersubs
netimeCompensationReporting Reuirement
§ §
§
§
Appliestoprimeandfirsttiersubs “TheContractorshallreport” “TheContractor” undefined nincorporateddivisionsWholly-ownedsubsidiariess “Fivemosthighlycompensatedofficers” EmployeeswhoarenotofficersForthecalendaryearinwhichthecontractisawarded Report“totalcompensation” fortheprioryear Exemptions DisclosurealreadyreuiredfortopfiveofficersECorIRLessthan80ofannualgrossrevenuefromfederalcontractsand subcontracts,loans,grants,subgrants,andcooperativeagreements Lessthan$25Mingrossannualrevenuefromthosesources
ne us
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timeReportingReuirementsfor
Dnumberforsubanditsparent
Physicaladdress,nine-digitIPcodeand Congressionaldistrictguesswhy
ubcontractperformancelocation,including Congressionaldistrict
uarterlyReportingReuirementsfor rimes
§
§
§
§
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Tobefiledwithin10daysoftheendofeachuarter, startinguly10,2009
CumulativeARRA fundsfromthebeginningofthe contract
ignificantservicesorsuppliesdelivered,including construction
Progresstocompletion
arrativedescriptionofemploymentimpact:typesand numberofjobscreatedandretained
Detailedinformationaboutfirst-tiersubs,includingtop-fivecompensation
AuditRissforConstructionContractors
§ § § §
ForcompetitivelyawardedFFPcontracts,verylittleriskforthe basiccontract Forcontractswithacost-reimbursementcomponentornon-competitivelyawarded,riskofCA coverageandTIAcertification Formodifications,FARcostallowabilityrulesandTIAapplyo ver $50 Riskareas Commerciallaborchargingpracticesforexemptemployees Insurancecosts ProposalpreparationcostsandmarketingPRcosts Corporatehomeofficeallocations Transactionswithaffiliates,includingrealpropertyandeuipm ent rental
©
2009Crowell&MoringLLP
AllRightsReserv ed
uy
American rovisions
AddieCliffe
Controversialrov isions:theuy AmericanRestrictions
§
timulusActincludesBuyAmerican Restrictions:
ofundsappropriatedormadeavailableunderthe timulusActcanbeusedforaprojectforthe construction,alteration,maintenance,orrepairofa publicbuildingorpublicworkunlessalloftheiron, steel,andmanufacturedgoodsusedintheproject areproducedinthenitedtates. ” ection105a.
ulicutcry
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WashingtonPostArticle:“TradeWarsBrewinginEconomicMalaise,” May 15,2009,isanexampleofreactiontotheBuyAmericanprovisions:
Isthiswhatthefirsttradewaroftheglobal economiccrisislookslike ”
whatisemergingasthebiggestthreattoopen commerceduringtheeconomiccrisis.”