Internal Controls Over Selected Functions of Department of Energy Research Laboratories

In testimony before a Senate subcommittee, the Comptroller General discussed the results of the GAO review of the internal controls over selected functions of the Department of Energy's (DOE) research facilities. GAO found numerous weaknesses in internal controls at both the contractor-operated laboratories and the energy technology centers. In some cases, the control weaknesses have resulted in waste and misuse of Federal funds and property, and the potential for waste and misuse exists in others. Most of the control problems were in the procurement and property management functions. In the procurement area, problems with subcontracting for consultants and other professionals at the contractor-operated laboratories are often caused by the DOE practice of directing the laboratories to award contracts to firms selected by the agency. Inventory procedures at the laboratories were inaccurate, in that many property items were not marked and controlled properly and many excess and unneeded items appeared to be on hand. At the energy technology centers, internal controls over property and small purchases were also inadequate. GAO found ineffective inventory procedures, unreported missing property, and poor controls over property at offsite contractors. Although these facilities represent more than 30 percent of the DOE budget, they have received little audit coverage from the Inspector General (IG). Since only minimal audit coverage of these facilities is provided by auditors assigned to the DOE field operations office, and these auditors report only to the field office managers, audit independence is not assured. GAO has previously recommended that the DOE IG have control over all of the auditors who report to the managers of the field operations offices. Because both DOE and several contractors are concerned about these problems, they have taken or have promised to take action on many of them.