Uranium Enrichment

This fact sheet reviews the transition of the Energy Department's uranium enrichment program to a new government corporation--the United States Enrichment Corporation. GAO discusses (1) the transfer of property and other assets to the Corporation, including uranium inventories and accounts receivable; (2) decisions leading to the preparation of the Corporation's financial statements, pursuant to the requirements of the Atomic Energy Act of 1956; (3) the Corporation's contracting practices, including the extent to which the Corporation complied with federal acquisition regulations; and (4) the Corporation's personnel policies, such as salary and staffing requirements.

GAO found that: (1) despite a short transition period and a small transition team, the Corporation was successfully established on July 1, 1993; (2) DOE effectively completed the lease agreements, developed regulatory oversight responsibilities, and transferred the assets necessary for the Corporation's establishment; (3) of the $11.9 million in total transition costs, DOE costs totalled about $6.5 million and the transition team's costs totalled about $5.4 million; (4) most of DOE costs resulted from planning studies, acquiring lease agreements for uranium plants, and transfer fees; (5) the Corporation used uranium enrichment account funds to pay for all transition costs; (6) at the time of the Corporation's establishment, DOE transferred about $2.2 billion in cash, accounts receivable, and raw and low-enriched uranium inventories to the Corporation; and (7) during the Corporation's operation it developed procurement policies and procedures, properly contracted support services using competitive procedures, implemented integrated financial accounting systems that conformed with appropriate accounting principles, and developed effective personnel policies.