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Audit Report: The Department of Energy's Small Business Innovation Research and Small Business Technology Transfer Programs
"The Department of Energy's Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs award grants to encourage scientific effort leading to the application of new ideas and technology. The combined annual funding available for these two programs grew from $116.8 million in Fiscal Year (FY) 2006 to $175.5 million in FY 2012. In addition, the programs received $92 million in American Recovery and Reinvestment Act of 2009 funding. The Office of Science's SBIR/STTR Office is responsible for managing funds from 12 of the 13 Department offices that contribute funding to the programs, with acquisition assistance from the Office of Science's Chicago Office. In FY 2012, the Advanced Research Projects Agency�'Energy started an SBIR/STTR program that was not included in our audit because of its brief period of operation. In FY 2010, which was the focus of our review, the Department received approximately 1,800 applications for SBIR and STTR for regular funding announcements, and approximately 1,000 applications for the Recovery Act funding announcements. The Department established a merit-based process for scoring grant applications to determine which were to be approved. In our previous report on SBIR grants, 'Management Controls over Monitoring and Closeout of Small Business Innovation Research Phase II Grants' (OAS-M-08-09, July 2008), we pointed out that there had been no resolution of questioned costs associated with the grants and that the grants had not been closed out in a timely manner. Due to the issues identified in our prior audit and the growth of the programs in recent years, we initiated this audit to determine whether the Department had effectively managed the SBIR and STTR programs. Additionally, we reviewed circumstances surrounding an allegation involving a potential conflict of interest."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-11
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Inspection Report: Allegations of Organizational Conflicts of Interest at Portsmouth and Oak Ridge
From the U.S. Department of Energy webpage: "The integrity of the Federal acquisition process is protected, in part, by Organizational Conflicts of Interest (OCI) rules. These rules are designed to help the Government in identifying and addressing circumstances in which a Government contractor may be unable to render impartial assistance or advice. This report focuses on primary contractors and subcontractors at the Portsmouth Gaseous Diffusion Plant and the Oak Ridge Reservation. In June 2011, the OIG [Office of Inspector General] Hotline received a complaint alleging that there was potential OCI involving contractors Restoration Services, Inc. (RSI) and VETCO, LLC-Technical Services Company (VETCO) at Portsmouth. The complainant further alleged that potential OCI also existed between contractors URS | CH2M Hill Oak Ridge, LLC, (UCOR) and RSI at Oak Ridge. We substantiated the allegation that OCI existed at Portsmouth and that potential OCI existed between contractors at Oak Ridge. Specifically, we confirmed that an OCI existed at Portsmouth involving a continuing financial interest between RSI and VETCO. We also confirmed that potential OCI at Oak Ridge existed between UCOR and RSI based on impaired objectivity concerning the review of work performed by RSI. We found that the actual and potential conflicts outlined in our report either had not been properly mitigated or identified by either the contractors or the federal officials involved. Management comments were generally responsive at both locations and concurred with the recommendations and took corrective actions to address the OCI issues by accepting mitigation plans submitted by the contractors."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-11
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Inspection Report: Tactical Response Force Pursuit Operations at Idaho National Laboratory
"In support of the Department of Energy's mission, several national laboratories, to include Idaho National Laboratory (Idaho), work with Special Nuclear Material. Idaho protects such materials with an armed protective force comprised of specially trained and equipped contractor personnel. Idaho is managed and operated by Battelle Energy Alliance (Battelle). The Department's Idaho Operations Office oversees the activities of Idaho and Battelle. Because of the presence of nuclear materials, Federal regulations require Idaho's contractor to maintain a highly trained Tactical Response Force to protect nuclear weapons, weapon components and Special Nuclear Material. As part of Idaho's protection strategy, the Tactical Response Force is equipped with vehicles to respond to attacks and pursue adversaries. It is possible for adversaries to cross jurisdictional lines and enter into a jurisdiction where several different Federal, state and local law enforcement agencies reside. Because such activities have the potential to endanger members of the public, we initiated this inspection to determine whether Idaho's Tactical Response Force was properly prepared, trained and equipped to execute its mission related to pursuit of suspects across jurisdictional lines."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-11
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Audit Report: Department's Implementation of Financial Incentive Programs Under the Energy Efficiency and Conservation Block Grant Program
"The Department of Energy's (Department) Energy Efficiency and Conservation Block Grant (EECBG) Program, funded for the first time by the American Recovery and Reinvestment Act of 2009, was intended to help US cities, counties and states develop, promote, implement and manage energy efficiency and conservation projects. The EECBG Program received $3.2 billion in Recovery Act funding for competitive and formula grants. Of the $3.2 billion, approximately $284 million was designated by EECBG recipients for financial incentive programs. Financial incentive programs include both lending and credit enhancement initiatives. Lending programs provide financing to borrowers, commonly through revolving loan funds. Credit enhancement programs use loan loss reserves, interest rate buy-downs or loan loss insurance to reduce a lender's risk. Both types of programs can be administered by the recipient or by a third-party contractor, e.g., a bank, credit union or community development financial institution. Since the inception of the Recovery Act, the Office of Inspector General has conducted a series of reviews on the EECBG Program which have identified various weaknesses. In particular, as noted in our report 'The Status of Energy Efficiency and Conservation Block Grant Recipient's Obligations', (OAS-RA-11-16, September 2011), $879 million of the $2.7 billion in formula-based grant funding provided by the Department, or nearly one-third, remained unobligated by recipients at the time of our review. The Department has since focused aggressively on encouraging recipient spending and recipient obligations through phone calls and in-person outreach efforts. In light of the identified weaknesses and the risks inherent in establishing a large new program of national significance, we initiated this audit to determine whether the Department had managed its EECBG financial incentive programs efficiently and effectively."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-12
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Audit Report: Southwestern Federal Power System's Fiscal Year 2011 Financial Statement Audit
"The attached report presents the results of the independent certified public accountants' audit of the Southwestern Federal Power System's (SWFPS) combined balance sheets, as of September 30, 2011 and 2010, and the related combined statements of changes in capitalization, revenues and expenses, and cash flows for the years then ended. To fulfill the Office of Inspector General's (OIG) audit responsibilities, we contracted with the independent public accounting firm of KPMG, LLP (KPMG) to conduct the audit, subject to our review. KPMG is responsible for expressing an opinion on the SWFPS's financial statements and reporting on applicable internal controls and compliance with laws and regulations. The OIG monitored audit progress and reviewed the audit report and related documentation. This review disclosed no instances where KPMG did not comply, in all material respects, with generally accepted Government auditing standards. The OIG did not express an independent opinion on the SWFPS's financial statements. KPMG concluded that the combined financial statements present fairly, in all material respects, the respective financial position of SWFPS as of September 30, 2011 and 2010, and the results of its operations and its cash flow for the years then ended, in conformity with United States generally accepted accounting principles."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-11
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Audit Report: Department of Energy's Nuclear Waste Fund's Fiscal Year 2012 Financial Statements
"The attached report presents the results of the independent certified public accountants' audit of the Department of Energy's Nuclear Waste Fund's (Fund) Fiscal Year 2012 balance sheet and the related statements of net cost, changes in net position and budgetary resources. To fulfill the Office of Inspector General's (OIG) audit responsibilities, we contracted with the independent public accounting firm of KPMG, LLP (KPMG) to conduct the audit, subject to our review. KPMG is responsible for expressing an opinion on the Fund's financial statements and reporting on applicable internal controls and compliance with laws and regulations. The OIG monitored audit progress and reviewed the audit report and related documentation. This review disclosed no instances where KPMG did not comply, in all material respects, with generally accepted Government auditing standards. The OIG did not express an independent opinion on the Fund's financial statements. KPMG concluded that the financial statements present fairly, in all material respects, the financial position of the Fund as of September 30, 2012 and 2011, and its net costs, changes in net position, and budgetary resources for the years then ended, in conformity with United States generally accepted accounting principles. The auditors' review of the Fund's internal control structure and compliance with certain laws and regulations disclosed no material weaknesses or instances of noncompliance required to be reported under generally accepted Government auditing standards or applicable Office of Management and Budget guidance."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-11
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Audit Report: Department of Energy's Fiscal Year 2012 Consolidated Financial Statements
"Pursuant to requirements established by the 'Government Management Reform Act of 1994', the Office of Inspector General (OIG) engaged the independent public accounting firm of KPMG, LLP (KPMG) to perform the audit of the Department of Energy's (Department) Fiscal Year 2012 Consolidated Financial Statements. KPMG audited the Department's consolidated balance sheets as of September 30, 2012 and 2011, and the related consolidated statements of net cost, changes in net position, and custodial activity, and combined statement of budgetary resources, for the years then ended. KPMG concluded that these consolidated financial statements are presented fairly, in all material respects, and in conformity with U.S. generally accepted accounting principles and has issued an unqualified opinion based on its audits and the reports of other auditors for the years ended September 30, 2012 and 2011. As part of this review, auditors also considered the Department's internal controls over financial reporting and tested for compliance with certain provisions of applicable laws, regulations, contracts and grant agreements that could have a direct and material effect on the consolidated financial statements. The audit revealed certain deficiencies in internal control over financial reporting related to unclassified network and information systems security that were considered to be a significant deficiency."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-11
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Special Report: Questioned, Unresolved and Potentially Unallowable Costs Incurred by Los Alamos National Laboratory During Fiscal Year 2010
"Since June 2006, Los Alamos National Security, LLC, has operated the National Nuclear Security Administration's Los Alamos National Laboratory (Los Alamos) for the Department of Energy. Los Alamos is a multi-program laboratory with critical national security responsibilities, including research and a limited production mission that help to ensure the safety, security and reliability of the nation's nuclear weapons stockpile. During Fiscal Year (FY) 2010, Los Alamos incurred and claimed costs of $2.2 billion. As an integrated management and operating contractor, Los Alamos' financial accounts are integrated with those of the Department, and the results of financial transactions are reported monthly according to a uniform set of accounts. Los Alamos is required by its contract to account for all funds advanced by the Department, safeguard assets in its care, and claim only allowable costs. Further, Los Alamos is required to account for costs incurred annually on its Statement of Costs Incurred and Claimed (SCIC). On November 19, 2012, we issued a separate contract report on the 'Assessment of Audit Coverage of Cost Allowability for Los Alamos National Laboratory during Fiscal Year 2010 under Department of Energy Contract No. DE-AC52-06NA25396' (OAS-V-13-01, November 2012). The objectives of the assessment were to determine whether questioned costs and internal control weaknesses impacting allowable costs identified in prior audits and reviews had been adequately resolved, and whether Los Alamos conducted or arranged for audits of its subcontractors when costs incurred were a factor in determining the amount payable to a subcontractor. Among other observations, the assessment identified specific costs and internal control issues that had yet to be resolved under the contract."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-11
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Inspection Report: Continuity of Operations Planning and Intelligence Readiness
"National Security Presidential Directive-20, 'National Continuity Policy', establishes continuity requirements for all executive departments and agencies. The Department of Energy developed Department Order 150.1, 'Continuity Programs', which establishes requirements to assist the Department with effectively responding to a wide range of events that may disrupt normal operations. The Office of Intelligence and Counterintelligence (IN), a critical partner within the Department and the Intelligence Community, is responsible for providing timely intelligence to the Secretary of Energy and other executive branch agencies on threats to energy and nuclear information. IN also provides support to the Director of National Intelligence and serves as liaison to the National Joint Terrorism Task Force. In our report on 'Improvements Needed in the Department's Emergency Preparedness and Continuity of Operations Planning' (DOE/IG-0845, January 2011), we identified significant weaknesses in the Department's emergency preparedness and Continuity of Operations Planning (COOP) programs. Because of the importance of carrying out the Department's key intelligence functions during a continuity event, we initiated this inspection to assess IN's COOP and intelligence readiness."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-11
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Audit Report: Federal Energy Regulatory Commission's Fiscal Year 2012 Financial Statement Audit
"The attached report presents the results of the independent certified public accountants' audit of the Federal Energy Regulatory Commission's (Commission) balance sheets as of September 30, 2012 and 2011, and the related statements of net costs, changes in net position, budgetary resources and custodial activity. To fulfill the Office of Inspector General's (OIG) audit responsibilities, we contracted with the independent public accounting firm of KPMG, LLP (KPMG) to conduct the audit, subject to our review. KPMG is responsible for expressing an opinion on the Commission's financial statements and reporting on applicable internal controls and compliance with laws and regulations. The OIG monitored audit progress and reviewed the audit report and related documentation. This review disclosed no instances where KPMG did not comply, in all material respects, with generally accepted Government auditing standards. The OIG did not express an independent opinion on the Commission's financial statements. KPMG concluded that the financial statements present fairly, in all material respects, the financial position of the Commission as of and for the years ended September 30, 2012 and 2011, and its net costs, changes in net position, budgetary resources and custodial activities for the years then ended, in conformity with United States generally accepted accounting principles."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-11
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Audit Report: National Nuclear Security Administration Contractor Governance
From the web page summary: "Since July 2007, the Department of Energy (Department) and the National Nuclear Security Administration (NNSA) have required contractors to implement self-assessment systems to measure performance and help ensure effective and efficient mission accomplishment. In essence, contractors assessed and evaluated their own performance with some level of Federal oversight. Our audit found that despite at least 5 years of effort, NNSA and its support offices and site contractors had not yet implemented fully functional and effective contractor assurance systems. During recent Office of Inspector General (OIG) reviews, we identified significant implementation issues that adversely affected NNSA's ability to deploy an effective contractor governance system. For instance, contractor weaknesses identified at the site level were not effectively communicated to senior management officials and contractor self-assessments were not effective in identifying safety weaknesses subsequently identified by independent reviews. Further, we found that Federal officials had not provided effective oversight of contractor operations as part of the governance approach. To its credit, NNSA had self-identified deficiencies with contractor assurance system implementation and recognized the need to improve contractor assurance systems and its overall approach to contractor governance. NNSA plans an initiative to reform its contractor governance model. Therefore, we made several suggestions to NNSA to include establishing effective lines of communication between the sites and senior NNSA managers and mandating effective contractor self-assessments of operations. In response, NNSA management agreed with the suggestions and to address them in future efforts to re-evaluate and enhance their processes."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-02
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Audit Report: Management of Los Alamos National Laboratory's Cyber Security Program
"The Los Alamos National Laboratory (LANL) made significant improvements to its cyber security program in recent years. For instance, in response to our Special Inquiry Report on 'Selected Controls over Classified Information at the Los Alamos National Laboratory' (OAS-SR-07-01, November 2006), LANL improved the protection of systems and data through the elimination or disablement of data ports on machines containing classified information. LANL also worked to ensure that incompatible security personnel functions were segregated and related compensating controls were in place and operational. In addition to the actions taken in response to our previous report, site officials worked to reduce risk by segregating vulnerable computers and equipment no longer supported by vendors from the rest of the unclassified computing environment. Site officials also worked over the past year to remediate certain vulnerabilities identified during our Fiscal Year (FY) 2011 Federal Information Security Management Act of 2002 (FISMA) evaluation. In preliminary comments on our draft report, Los Alamos Site Office officials stated that they had taken measures to resolve weaknesses identified during the course of our audit work. However, we were unable to validate these recent corrective actions due to the timing of our audit work."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-02
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Audit Report: Department's Management of the Smart Grid Investment Grant Program
"Our review revealed several opportunities to improve certain aspects of the Department of Energy's (Department) Smart Grid Investment Grant (SGIG) program. In particular, although the initial Funding Opportunity Announcement stated that Federally sourced funds were not to be used for cost-share requirements, we determined that the Department had approved one Smart Grid project that utilized Federal funds to meet cost-share requirements. In addition, we identified one recipient that was reimbursed twice for the same costs related to transportation. Furthermore, cyber security plans developed by recipients were not always complete, and did not sufficiently describe security controls and how they were to be implemented."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2012-01
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Special Inquiry: Alleged Mismangement of the Department of Energy's Executive Protection Operations
"The Office of Inspector General (OIG) received allegations of mismanagement of the Department of Energy's Executive Protection forces. The complaints were varied but generally fell into the following categories: (1) ineffective executive protection policies and procedures; (2) compromised performance assurance tests; (3) inadequate training; (4) mismanagement of resources, such as failure to provide appropriate body armor; and (5) lack of implementation of recommendations for improvement. It was also alleged that the Department's Office of the General Counsel failed to provide clarification on legal authority and firearms policy, despite frequent requests. We initiated an inspection to review the facts and circumstances surrounding the allegations. The Chief Health, Safety and Security Officer also requested that we conduct an independent review of these matters. One element of the allegations involved reported misuse of premium class travel by the Deputy Secretary. That allegation was reviewed separately but was not substantiated. The results of our review of that matter were reported separately in January 2013."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-04
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Examination Report: Community Action Partnership of San Bernardino County �' Weatherization Assistance Program Funds Provided by the American Recovery and Reinvestment Act of 2009
"The attached report presents the results of an examination of the Community Action Partnership of San Bernardino County's (Agency) implementation of the American Recovery and Reinvestment Act of 2009 (Recovery Act) Weatherization Assistance Program (Weatherization Program). The Office of Inspector General (OIG) contracted with an independent certified public accounting firm, Lopez and Company, LLP, to express an opinion on the Agency's compliance with Federal and State laws, regulations and program guidelines applicable to the Weatherization Program. The Agency is a sub-recipient of the Department of Energy's (Department) Recovery Act Weatherization Program funding for the State of California. The Recovery Act was enacted to promote economic prosperity through job creation and encourage investment in the Nation's energy future. As part of the Recovery Act, the Weatherization Program received $5 billion to reduce energy consumption for low-income households through energy efficient upgrades. The State of California received $186 million in Recovery Act Weatherization Program funding, of which $7.7 million was allocated to the Agency to weatherize 1,931 homes. The State of California Department of Community Services and Development (State) was responsible for administering Weatherization Program grants, including funds provided to the Agency."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-03
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Audit Report: The Department of Energy's American Recovery and Reinvestment Act Energy Efficiency and Conservation Block Grant Program - State of Colorado and County of Boulder, Colorado
"Under the American Recovery and Reinvestment Act of 2009 (Recovery Act), the Department of Energy's (Department) Energy Efficiency and Conservation Block Grant (EECBG) Program received $3.2 billion in funding to help state and local entities develop, implement and manage energy efficiency and conservation projects. Of the funding provided, more than $2.7 billion was distributed to over 2,000 entities using a population driven formula, and approximately $454 million was provided for innovative energy projects through a competitive award process. The Department awarded a $9.6 million formula grant to the State of Colorado (Colorado) in September 2009, and a $25 million competitive grant to the County of Boulder, Colorado (Boulder), in May 2010. These 3-year grants provided funding for activities such as outreach and advisory services, building retrofits, rebates and loans. As of September 2012, Colorado and Boulder had spent approximately $8.9 million (93 percent) and $18.5 million (74 percent) of their grants, respectively. Colorado requested and received an extension of its grant to September 2013. Because of the risks inherent in establishing a large, new Recovery Act Program, we initiated audits to determine whether Colorado and Boulder managed these grants efficiently and effectively. The results of these audits were consolidated in this report."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-03
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Examination Reports: Selected Sub-grantees of the Department of Energy's American Recovery and Reinvestment Act of 2009 - Illinois State Energy Program
"The Department of Energy's (Department) State Energy Program (SEP) provides grants to states, territories, and the District of Columbia to support their energy priorities and fund projects that meet their unique energy needs. The American Recovery and Reinvestment Act of 2009 (Recovery Act) significantly expanded the SEP by providing an additional $3.1 billion. The Illinois Department of Commerce and Economic Opportunity (DCEO) was allocated $101.3 million in Recovery Act SEP funds. DCEO allocated the funds to 8 separate programs funding more than 138 projects. Otis and Associates, PC (Otis), an independent certified public accountant firm, selected four sub-grantees to test their compliance with Federal and State laws, regulations and program guidance. The four sub-grantees selected were Association of Illinois Electric Cooperatives (AIEC); Bley, LLC (Bley); Funk Linko, Inc. (Funk Linko); and Abengoa Bioenergy Operations, LLC (Abengoa). The attached reports present the results of examinations of the selected sub-grantees' compliance with Federal and State laws, regulations and program guidelines applicable to the SEP in the State of Illinois (Illinois). The Office of Inspector General (OIG) contracted with Otis to perform the examinations and express opinions on the sub-grantees' compliance."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-04
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Audit Report: Home Office Expenses Submitted by Fluor Federal Services, Inc., on Savannah River Nuclear Solutions, LLC's U.S. Department of Energy Management & Operating (M&O) Contract No. DE-AC09-08SR22470
"The attached report presents the results of an audit of home office expenses submitted by Fluor Federal Services, Inc. (Fluor) through invoices to Savannah River Nuclear Solutions, LLC, (SRNS) for loaned employees working on the Management and Operating (M&O) contract. The Department of Energy (Department) awarded M&O Contract No. DE-AC09-08SR22470 to SRNS, a for-profit joint venture, established between Fluor, Newport News Nuclear, Inc., and Honeywell International. SRNS commenced performance on the M&O contract on August 1, 2008. Fluor has a majority share in the joint venture. The Office of Inspector General contracted with an independent certified public accounting firm, KPMG, LLP (KPMG), to assess the accuracy and completeness of the results and conclusions reported by SRNS Internal Audit on its 'Corporate Reachback Floor Check Review' of invoices for loaned employees from Fluor. KPMG was also tasked with performing additional testing on an invoiced Fluor 'loaned employee' to determine whether home office expenses were included in the invoiced costs, and if so, quantify the amount of questioned costs. The SRNS contract, Clause H-20, entitled 'Home Office Expenses', states 'Home office expenses, whether direct or indirect, relating to activities of the Contractor are unallowable, except as otherwise specifically provided in the Contract or specifically agreed to in writing by the Contracting Officer consistent with DEAR 970.3102-3-70.'"
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-04
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Examination Report: Connecticut Department of Energy and Environmental Protection - Energy Efficiency and Conservation Block Grant Program Funds Provided by the American Recovery and Reinvestment Act of 2009
"The attached report presents the results of an examination of the Connecticut Department of Energy and Environmental Protection's (Agency) implementation of the American Recovery and Reinvestment Act of 2009 (Recovery Act) Energy Efficiency and Conservation Block Grant (EECBG) Program. [...] The Recovery Act was enacted to promote economic prosperity through job creation and encourage investment in the Nation's energy future. As part of the Recovery Act, the EECBG Program received $3.2 billion to develop, promote, implement and manage energy efficiency and conservation projects and programs designed to reduce fossil fuel emissions, reduce total energy use of the eligible entities, and improve energy efficiency in the transportation, building and other appropriate sectors. The Agency received a $9.6 million formula grant award that was to be expended over a 3-year period from September 14, 2009 through September 13, 2012."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-02
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Audit Report: The Department of Energy's Industrial Carbon Capture and Storage Program Funded by the American Recovery and Reinvestment Act
"Our review found that the Department of Energy (Department) had not always effectively managed the Industrial Carbon Capture and Storage Program (Carbon Program) and the related use of the American Recovery and Reinvestment Act of 2009 (Recovery Act) funds. Specifically, the Department had not documented significant program decisions when awarding Recovery Act funds to accelerate existing projects. In addition, recipients claimed costs that were questionable and/or unsubstantiated and the Department reimbursed such costs. The Department also awarded Recovery Act funds to recipients that had technical and/or financial issues identified during a merit review process -- issues that resulted in schedule and/or scope changes that may impact the ability of the Carbon Program to meet intended goals. Furthermore, procurement practices supporting the program were not always adequate to ensure that recipients' subcontract or vendor selections were appropriate and in accordance with relevant policies and procedures."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-03
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Inspection Report: Approval of Contractor Executive Salaries by Department of Energy Personnel
"Generally, the Department of Energy (Department) requires that a reasonableness determination be made when setting contractor executive salaries. Such requirements were established in Federal Acquisition Regulation (FAR) 31.205-6, 'Compensation for Personal Services', and FAR 31.201-3, 'Determining Reasonableness', and Department Order 350.1, 'Contractor Human Resource Management Programs'. Federal procurement officials charged with oversight of the contract must perform a market analysis and/or make a determination that contractor proposed salaries are reasonable. The Department's Acquisition Letter 2007- 02, 'Contractor Executive Compensation', published on April 3, 2007, provides guidance on the compensation of contractor senior executives under all contracts and the salary of the top contractor management official under management and operating contracts and other contracts designated by the Senior Procurement Official. Acquisition Letter 2007-02 references sections of the FAR applicable to making such reasonableness determinations. Acquisition Letter 2007-02 also sets a threshold for executive salaries to the lesser of 10 percent above the candidate's current salary or 6 percent above the prior contractor's executive reimbursed salary. Further, Acquisition Letter 2007-02 mandates that any salaries higher than the thresholds require approval from the Senior Procurement Executive. We substantiated the allegation that a former Oak Ridge Office (ORO) senior management official approved contractor executive salaries for URS|CH2M Oak Ridge, LLC, (UCOR) without proper authority. The events leading up to the UCOR salary approvals involved Headquarters and ORO officials taking a number of actions that were inconsistent with existing policy and were not well coordinated. These actions resulted in higher UCOR salaries that, if left unmodified, could cost the Department an additional $3.45 million over the life of the 5-year contract."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-03-22
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Inspection Report: Radiological Waste Operations in Area G at Los Alamos National Laboratory
"In 2011, assessments completed by the Los Alamos Field Office (Field Office) and the Department of Energy's (Department) Office of Enforcement and Oversight, Office of Health, Safety and Security identified operational problems that could adversely impact safety at Los Alamos National Laboratory (Los Alamos). These assessments found deficiencies in environmental management, operations, safety basis procedures and engineering safety system oversight. In addition to these issues, we identified opportunities for further improvements regarding: (1) training discrepancies; (2) consistency of Material Disposal Area G (Area G) operational activities with operational safety requirements; and (3) the use of safety-related documents that referenced outdated requirements."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-03
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Inspection Report: Alleged Nepotism and Wasteful Spending in the Office of Energy Efficiency and Renewable Energy
"The Department of Energy (Department) administers various hiring programs designed to generate a pipeline of talent to replenish its workforce and to maintain overall workforce vitality. One of those programs is the Student Temporary Employment Program (STEP), which provides opportunities for students in high school and college to gain work experience, while enhancing their awareness of the Department's mission and functions. In order to streamline the hiring process, STEP appointments are exempted from the usual competitive selection examining procedures; however, this streamlined process does not negate the responsibility for ensuring a fair and open competitive process during the selection of STEP participants. The Department's Office of the Chief Human Capital Officer (Human Capital) has primary oversight of the Department's hiring processes, including STEP. While Human Capital provides various hiring related services to a number of program offices, selection authority is vested in individual program offices. […] Recently, the Office of Inspector General (OIG) received allegations that a senior Office of Energy Efficiency and Renewable Energy (EERE) official had violated these regulations by: (1) engaging in nepotism by advocating for his three children to obtain STEP employment at the Department; and (2) wasting funds by enrolling two of the three children in costly training courses unrelated to their duties as STEP interns. We initiated the inspection to examine the facts and circumstances surrounding the allegations."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-06
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Audit Report: Modular Office Facilities for Recovery Act Program Activities at the Hanford Site
"The Department of Energy's Richland Operations Office (Richland) awarded a contract, effective October 1, 2008, to CH2M HILL Plateau Remediation Company (CHPRC) to remediate select portions of the Hanford Site's Central Plateau. As part of the American Recovery and Reinvestment Act of 2009 (Recovery Act), Richland designated $1.3 billion of Recovery Act funding to the Plateau Remediation Contract to accelerate CHPRC's work scope from April 2009 through September 2011. Due to the influx of Recovery Act funding in 2009 and the accelerated schedule, CHPRC hired an additional 1,757 employees, including subcontractors. To provide office space for these temporary employees, CHPRC procured a total of 176 modular facilities consisting of 114 purchased and 62 leased facilities. Modular facilities ranged from single-wide to five-wide modular structures and included space designated for work stations, lunch areas, lockers, showers and conference rooms. These facilities were acquired at an approximate total cost of $29 million. This cost included the purchase price of structures, set up costs, and related costs such as constructing sidewalks, parking lots and lighting. The Office of Inspector General received an allegation that a number of the facilities CHPRC purchased with Recovery Act funds were either never used or were underutilized. Accordingly, we initiated this audit to determine if modular facilities purchased with Recovery Act funding were fully utilized for Recovery Act mission activities."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-07
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Follow-up Inspection on Characterization Wells at Los Alamos National Laboratory
"Since the early 1940s, the Los Alamos National Laboratory (Los Alamos) has conducted experimental research on the development of nuclear weapons and explosive materials. These activities have resulted in the generation and disposal of a variety of hazardous, radioactive, and solid wastes. Los Alamos has disposed of these wastes in septic systems, pits, surface impoundments, trenches, shafts, landfills, and waste piles at the facility. Contaminants such as plutonium, americium, and tritium have been detected in soils and sediments at the facility and in groundwater beneath the facility. In 1998, Los Alamos developed a workplan that established the basis for characterizing the hydrogeologic system beneath the facility and determining whether the concentration of contaminants in groundwater exceeded regulatory limits. Implementation of the workplan required the installation of 32 regional aquifer wells, commonly referred to as characterization wells. In our September 2005 report on 'Characterization Wells at Los Alamos National Laboratory' (DOE/IG-0703), we noted that the use of mud rotary drilling methods during well construction was contrary to specific constraints established in 'Resource Conservation and Recovery Act' guidance. We also noted that muds and other drilling fluids that remained in certain wells after construction created a chemical environment that could mask the presence of radionuclide contamination and compromise the reliability of groundwater contamination data. Considering the results of our prior inspection, we initiated this review to determine if Los Alamos had taken action to improve its characterization well process."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-07
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Audit Report: Safety Aspects of Wet Storage of Spent Nuclear Fuel
From the Department of Energy webpage: "The Department of Energy (Department) is responsible for managing and storing spent nuclear fuel (SNF) generated by weapons and research programs and recovered through nonproliferation programs. The SNF consists of irradiated reactor fuel and cut up assemblies containing uranium, thorium and/or plutonium. The Department stores 34 metric tons of heavy metal SNF primarily in two wet storage basins located at the Savannah River Site and the Idaho National Laboratory. Wet storage requires operational vigilance and reliance on mechanical systems to ensure the safety of workers, the public and the environment. The risk associated with long-term wet storage of SNF is well-demonstrated by the recent disaster in Japan. While not subject to damage from tsunamis, environmental or mechanical issues are within the realm of possible damage scenarios faced by the Department's SNF storage facilities. Because it lacks a clear disposition path, the Department had not developed definitive plans to dispose of its SNF. In Fiscal Year 2010, the Department withdrew its intent to develop a geological repository at Yucca Mountain, Nevada to dispose of SNF and high-level waste. Then in 2011, the Department deferred processing aluminum-clad SNF, some of which is in wet storage, until recommendations of the Blue Ribbon Commission on America's Nuclear Future were issued and evaluated. As a consequence, the Department determined it must maintain interim SNF wet storage facilities longer than planned and until disposition options become available. Given the lack of disposition paths, the Department is taking steps to manage the safety of its SNF wet storage basins, namely L-Basin and CPP-666. Our review revealed that, as required by both Federal and Department regulations, program officials had analyzed the risks related to storage, documented these analyses, and concluded that the continued use of the wet storage facilities was appropriate. While the Savannah River Site has initiated activities designed to support the prolonged storage of SNF in L-Basin, completion of these activities is being deferred due to funding constraints."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-07
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Inspection Report: Follow-up Inspection on Material Control and Accountability at Los Alamos National Laboratory
"The Department of Energy's (Department) Los Alamos National Laboratory (Los Alamos) is managed and operated under contract by Los Alamos National Security, LLC, for the National Nuclear Security Administration (NNSA). The Los Alamos Field Office is the Federal entity responsible for administering the contract. This contract requires Los Alamos to follow the contractually specified directives on Material Control and Accountability (MC&A) when maintaining certain nuclear materials in support of the Nation's nuclear weapons stockpile program. Examples of these materials include plutonium and enriched uranium, which are then subdivided into four categories of accountable nuclear material. Categories I and II materials are the most attractive for theft or diversion and include pits or other pure products containing significant quantities of nuclear material. Categories III and IV items are less attractive for theft or diversion because they contain smaller quantities of nuclear material. MC&A is part of the Department's safeguards program designed to establish and track nuclear material inventories, control access to nuclear materials and detect the loss or diversion of nuclear materials. Los Alamos tracks, manages and controls nuclear materials in 64 Material Balance Areas (MBAs). Our September 2007 report on 'Material Control and Accountability at Los Alamos National Laboratory', (DOE/IG-0774) identified weaknesses regarding the control and accountability of nuclear materials. Management committed to implementing the report recommendations and to taking appropriate corrective actions. We initiated this inspection to determine if Los Alamos implemented the planned corrective actions intended to improve the policies and procedures for inventory, transfers, characteristics and locations of nuclear materials related to the MC&A Program."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-07
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Examination Reports: Selected Sub-grantees of the Department of Energy's American Recovery and Reinvestment Act - Illinois State Energy Program
"The Department of Energy's (Department) State Energy Program (SEP) provides grants to states, territories, and the District of Columbia to support their energy priorities and fund projects that meet their unique energy needs. The American Recovery and Reinvestment Act of 2009 (Recovery Act) significantly expanded the SEP by providing an additional $3.1 billion. The Illinois Department of Commerce and Economic Opportunity (DCEO) was allocated $101.3 million in Recovery Act SEP funds. DCEO allocated the funds to 8 separate programs funding more than 138 projects. Otis and Associates, PC (Otis), an independent certified public accountant firm, selected four sub-grantees to test their compliance with Federal and State laws, regulations and program guidance. The four sub-grantees selected were Association of Illinois Electric Cooperatives (AIEC); Bley, LLC (Bley); Funk Linko, Inc. (Funk Linko); and Abengoa Bioenergy Operations, LLC (Abengoa). The attached reports present the results of examinations of the selected sub-grantees' compliance with Federal and State laws, regulations and program guidelines applicable to the SEP in the State of Illinois (Illinois). The Office of Inspector General (OIG) contracted with Otis to perform the examinations and express opinions on the sub-grantees' compliance."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-04
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Cost Incentives for the Department's Cleanup Contract in Idaho
"In Fiscal Year 2005, the Department of Energy (Department) awarded a Cost-Plus-Incentive-Fee contract to CH2M WG Idaho, LLC (CWI) to lead environmental cleanup of its Idaho National Laboratory site. The contract originally ran from May 1, 2005 through September 30, 2012, and has been extended for 3 years to September 30, 2015. The contract had a target cost of $2.7 billion and a target fee of $196 million (7.36 percent of target cost). The contract includes an additional incentive if work is completed under target cost, in which the fee will be increased by 30 cents for every dollar that the total allowable cost is less than the target cost. In addition to the target work to be completed within the contract, additional non-target work was allowed under Section B.5 of the contract. When the contract was originally approved, the contractor anticipated that the amount of additional non-target work would be approximately $89 million. However, the amount of non-target work completed ultimately increased to about $510 million, with the largest increase attributable to work funded under the American Recovery and Reinvestment Act of 2009 (Recovery Act). The Department and CWI are now negotiating to close out the agreed upon scope of work covered by the contract performance period that ended September 30, 2012, and to calculate fee based upon the cost to complete this work. In that connection, the Department requested that we perform this review. Our objective was to examine the appropriateness of the contractor's allocation of General and Administrative (G&A) costs to the entire scope of non-target work."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-05
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Examination Report: Commonwealth of Puerto Rico Energy Affairs Administration - Energy Efficiency and Conservation Block Grant Program Funds Provided by the American Recovery and Reinvestment Act of 2009
From the Department of Energy webpage: "As part of the American Recovery and Reinvestment Act of 2009 (Recovery Act), the Energy Efficiency and Conservation Block Grant (EECBG) Program received $3.2 billion to develop, promote, implement and manage energy efficiency and conservation projects and programs designed to reduce fossil fuel emissions, reduce total energy use of the eligible entities, and improve energy efficiency in the transportation, building and other appropriate sectors. Commonwealth of Puerto Rico Energy Affairs Administration's (Puerto Rico) received a $9.6 million formula EECBG grant award that was to be expended over a 3-year period from September 21, 2009 through September 20, 2012. Puerto Rico requested and received an extension of its grant to March 31, 2013. The Office of Inspector General contracted with an independent certified public accounting firm to express an opinion on Puerto Rico's compliance with Federal and Commonwealth of Puerto Rico laws, regulations and program guidelines applicable to the EECBG Program. The examination found that except for the significant deficiencies described in its report, Puerto Rico complied in all material respects with the aforementioned requirements and guidelines relative to the EECBG Program for the period September 21, 2009 through December 31, 2011. For instance, Puerto Rico did not know the status of and had not maintained supporting documentation for four cash advances totaling $449,000 to ensure funds were used for allowable costs. The Department's comments were responsive to our recommendation."
United States. Department of Energy. Office of Inspector General. Office of Audits and Inspections
2013-07
