Department of Energy Accounting and Internal Control Systems

In testimony before a congressional subcommittee, GAO reported on the Department of Energy's (DOE) accounting and internal control systems. GAO stated that DOE is operating with several outdated, poorly documented accounting systems which are not designed to meet current requirements. These accounting systems, combined with inadequate management control, make DOE susceptible to financial losses. Overall, the areas in need of improvement include: (1) internal controls over collections, receivables, and disbursements; (2) management of grant funds; and (3) contract administration procedures. DOE has recently taken a number of actions to improve its accounting and overall financial management, including: (1) prohibiting the practice of advancing 60 percent of grant funds at the award date; (2) requiring field offices to develop plans for closing out grants and contracts; and (3) directing property management reviews. GAO concluded that, while the DOE actions were a step in the right direction, more needs to be done. Top management must give adequate priority and commitment to ensure that strong internal controls and effective financial management systems exist. GAO will continue its review and make recommendations to assist DOE in that endeavor.