The inspector general investigation focused on an audit of Crane & Co. Inc. (referred to as Crane Currency), a subsidiary of Crane Co., which supplies banknotes and banknote security features to central banks globally, and is a significant supplier of paper for U.S. currency. This audit was prompted by a Department of Treasury Office of Inspector General request to examine Crane’s firm-fixed-price proposal. The proposal was in response to a solicitation for a ten-year contract for currency paper and security paper meeting the specifications of the U.S. Bureau of Engraving and Printing (BEP).
The audit questioned certain proposed prices by Crane based on the Federal Acquisition Regulation (FAR) criteria. The questioned costs were due to various reasons, including errors in the proposal, the contractor’s failure to provide support for proposed amounts, costs not associated with the proposal, and unreasonable methods used to estimate costs.
The report lays out the responsibilities of both the management and the auditors. Crane’s management was responsible for preparing the proposed amounts in compliance with solicitation terms, including maintaining internal controls to prevent, detect, and correct noncompliance. On the other hand, the auditors were responsible for expressing an opinion on Crane’s compliance based on the examination, which was conducted in accordance with Generally Accepted Government Auditing Standards (GAGAS). These standards required planning and performing the examination to obtain reasonable assurance about whether Crane’s proposed amounts materially complied with the criteria. The audit concluded that, except for the noncompliances described, Crane’s proposed amounts complied in all material respects with the solicitation terms related to pricing as of August 19, 2020.
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Independent Audit Report on Proposed Amounts in Crane & Co., Inc.’s Price Proposal dated February 19, 2020 (Audit Report No. 1901-2020A21000003) [82 Pages, 4.2MB]