Nuclear Nonproliferation
DOE Needs to Reassess Its Program to Assist Weapons Scientists in Russia and Other Countries Gao ID: GAO-08-434T January 23, 2008During the decades before its dissolution, the Soviet Union produced a cadre of scientists and engineers whose knowledge and expertise could be invaluable to countries or terrorist groups trying to develop weapons of mass destruction (WMD). After the Soviet Union's collapse in 1991, many of these scientists suffered significant cuts in pay or lost their government-supported work. To address concerns about unemployed or underemployed Soviet-era weapons scientists, the Department of Energy (DOE) established the Initiatives for Proliferation Prevention (IPP) program in 1994 to engage former Soviet weapons scientists in nonmilitary work in the short term and create private sector jobs for these scientists in the long term. GAO was asked to assess (1) DOE's reported accomplishments for the IPP program, (2) DOE's exit strategy for the program, and (3) the extent to which the program has experienced annual carryovers of unspent funds and the reasons for any such carryovers. In December 2007, GAO issued a report--Nuclear Nonproliferation: DOE's Program to Assist Weapons Scientists in Russia and Other Countries Needs to Be Reassessed, (GAO-08-189)--that addressed these matters. To carry out its work, GAO, among other things, analyzed DOE policies, plans, and budgets and interviewed key program officials and representatives from 22 Russian and Ukrainian institutes.
DOE has overstated accomplishments on the number of scientists receiving DOE support and the number of long-term, private sector jobs created. First, although DOE claims to have engaged over 16,770 scientists in Russia and other countries, this total includes both scientists with and without weapons-related experience. GAO's analysis of 97 IPP projects involving about 6,450 scientists showed that more than half did not claim to possess any weapons-related experience. Furthermore, officials from 10 Russian and Ukrainian weapons institutes told GAO that the IPP program helps them attract, recruit, and retain younger scientists and contributes to the continued operation of their facilities. This is contrary to the original intent of the program, which was to reduce the proliferation risk posed by Soviet-era weapons scientists. Second, although DOE asserts that the IPP program helped create 2,790 long-term, private sector jobs for former weapons scientists, the credibility of this number is uncertain because DOE relies on "good-faith" reporting from U.S. industry partners and foreign institutes and does not independently verify the number of jobs reported to have been created. DOE has not developed an exit strategy for the IPP program. Officials from the Russian government, Russian and Ukrainian institutes, and U.S. companies raised questions about the continuing need for the program. Importantly, a senior Russian Atomic Energy Agency official told GAO that the IPP program is no longer relevant because Russia's economy is strong and its scientists no longer pose a proliferation risk. DOE has not developed criteria to determine when scientists, institutes, or countries should "graduate" from the program. In contrast, the Department of State, which supports a similar program to assist Soviet-era weapons scientists, has assessed participating institutes and developed a strategy to graduate certain institutes from its program. Even so, we found that DOE is currently supporting 35 IPP projects at 17 Russian and Ukrainian institutes where State no longer funds projects because it considers them to have graduated from its program. In addition, DOE has recently expanded the program to new areas. Specifically, DOE began providing assistance to scientists in Iraq and Libya and, through the IPP program, is working to develop projects that support a DOE-led international effort to expand the use of civilian nuclear power. In every fiscal year since 1998, DOE carried over unspent funds in excess of the amount that the Congress provided for the program. Two main factors have contributed to this recurring problem--lengthy review and approval processes for paying former Soviet weapons scientists and delays in implementing some IPP projects. In its recent report, GAO recommended, among other things, that DOE conduct a fundamental reassessment of the IPP program, including the development of a prioritization plan and exit strategy. DOE generally concurred with GAO's findings, but does not believe that the IPP program needs to be reassessed.
GAO-08-434T, Nuclear Nonproliferation: DOE Needs to Reassess Its Program to Assist Weapons Scientists in Russia and Other Countries
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United States Government Accountability Office:
GAO:
Testimony:
Before the Subcommittee on Oversight and Investigations, Committee on
Energy and Commerce, House of Representatives:
For Release on Delivery:
Expected at 10:00 a.m. EST:
Wednesday, January 23, 2008:
Nuclear Nonproliferation:
DOE Needs to Reassess Its Program to Assist Weapons Scientists in
Russia and Other Countries:
Statement of Robert A. Robinson:
Managing Director Natural Resources and Environment:
GAO-08-434T:
GAO Highlights:
Highlights of GAO-08-434T, testimony before the Subcommittee on
Oversight and Investigations, Committee on Energy and Commerce, House
of Representatives.
Why GAO Did This Study:
During the decades before its dissolution, the Soviet Union produced a
cadre of scientists and engineers whose knowledge and expertise could
be invaluable to countries or terrorist groups trying to develop
weapons of mass destruction (WMD). After the Soviet Union‘s collapse in
1991, many of these scientists suffered significant cuts in pay or lost
their government-supported work. To address concerns about unemployed
or underemployed Soviet-era weapons scientists, the Department of
Energy (DOE) established the Initiatives for Proliferation Prevention
(IPP) program in 1994 to engage former Soviet weapons scientists in
nonmilitary work in the short term and create private sector jobs for
these scientists in the long term. GAO was asked to assess (1) DOE‘s
reported accomplishments for the IPP program, (2) DOE‘s exit strategy
for the program, and (3) the extent to which the program has
experienced annual carryovers of unspent funds and the reasons for any
such carryovers.
In December 2007, GAO issued a report”Nuclear Nonproliferation: DOE‘s
Program to Assist Weapons Scientists in Russia and Other Countries
Needs to Be Reassessed, (GAO-08-189)”that addressed these matters. To
carry out its work, GAO, among other things, analyzed DOE policies,
plans, and budgets and interviewed key program officials and
representatives from 22 Russian and Ukrainian institutes.
What GAO Found:
DOE has overstated accomplishments on the number of scientists
receiving DOE support and the number of long-term, private sector jobs
created. First, although DOE claims to have engaged over 16,770
scientists in Russia and other countries, this total includes both
scientists with and without weapons-related experience. GAO‘s analysis
of 97 IPP projects involving about 6,450 scientists showed that more
than half did not claim to possess any weapons-related experience.
Furthermore, officials from 10 Russian and Ukrainian weapons institutes
told GAO that the IPP program helps them attract, recruit, and retain
younger scientists and contributes to the continued operation of their
facilities. This is contrary to the original intent of the program,
which was to reduce the proliferation risk posed by Soviet-era weapons
scientists. Second, although DOE asserts that the IPP program helped
create 2,790 long-term, private sector jobs for former weapons
scientists, the credibility of this number is uncertain because DOE
relies on ’good-faith“ reporting from U.S. industry partners and
foreign institutes and does not independently verify the number of jobs
reported to have been created.
DOE has not developed an exit strategy for the IPP program. Officials
from the Russian government, Russian and Ukrainian institutes, and U.S.
companies raised questions about the continuing need for the program.
Importantly, a senior Russian Atomic Energy Agency official told GAO
that the IPP program is no longer relevant because Russia‘s economy is
strong and its scientists no longer pose a proliferation risk. DOE has
not developed criteria to determine when scientists, institutes, or
countries should ’graduate“ from the program. In contrast, the
Department of State, which supports a similar program to assist Soviet-
era weapons scientists, has assessed participating institutes and
developed a strategy to graduate certain institutes from its program.
Even so, we found that DOE is currently supporting 35 IPP projects at
17 Russian and Ukrainian institutes where State no longer funds
projects because it considers them to have graduated from its program.
In addition, DOE has recently expanded the program to new areas.
Specifically, DOE began providing assistance to scientists in Iraq and
Libya and, through the IPP program, is working to develop projects that
support a DOE-led international effort to expand the use of civilian
nuclear power.
In every fiscal year since 1998, DOE carried over unspent funds in
excess of the amount that the Congress provided for the program. Two
main factors have contributed to this recurring problem”lengthy review
and approval processes for paying former Soviet weapons scientists and
delays in implementing some IPP projects.
In its recent report, GAO recommended, among other things, that DOE
conduct a fundamental reassessment of the IPP program, including the
development of a prioritization plan and exit strategy. DOE generally
concurred with GAO‘s findings, but does not believe that the IPP
program needs to be reassessed.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-434T]. For more information, contact
Robert A. Robinson at (202) 512-3841 or robinsonr@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the Department of Energy's
(DOE) Initiatives for Proliferation Prevention (IPP) program, which
seeks to engage former Soviet weapons scientists in nonmilitary work in
the short term and create private sector jobs for these scientists in
the long term. Specifically, my remarks are based on the report we
issued in December 2007--Nuclear Nonproliferation: DOE's Program to
Assist Weapons Scientists in Russia and Other Countries Needs to Be
Reassessed.[Footnote 1] This report is our second review of the IPP
program. In 1999, we found significant problems with DOE's management
of the IPP program and, as a result, we made several recommendations
that DOE has implemented to improve the program.[Footnote 2]
After the Soviet Union's collapse in 1991, many scientists and
engineers with weapons of mass destruction (WMD) knowledge and
expertise suffered significant cuts in pay or lost their government-
supported work. To address concerns that these scientists would sell
their expertise to terrorists or countries of concern, DOE began its
IPP program in 1994. Through October 1, 2007, there were 929 draft,
active, inactive, and completed IPP projects involving personnel at
about 200 nuclear, chemical, and biological institutes in Russia and
other countries. As of April 2007, DOE reported it had supplemented the
salaries of over 16,770 scientists, engineers, and technicians and
created 2,790 long-term, private sector jobs in Russia and other
countries through the IPP program.
My testimony today will discuss (1) DOE's reported accomplishments for
the IPP program, (2) DOE's exit strategy for the IPP program, and (3)
the extent to which the IPP program has experienced annual carryover
balances of unspent funds and the reasons for such carryovers. In
conducting our review, we examined 207 of the 929 IPP projects. We
selected this sample of projects on the basis of a variety of factors,
such as geographic distribution, representation of all participating
U.S. national laboratories, and project costs. We interviewed key DOE
and national laboratory officials and analyzed documentation, such as
program guidance, project proposals, and financial information. We also
interviewed officials from 15 Russian and 7 Ukrainian institutes and 14
U.S. companies that participate in the program. In addition, we
analyzed program cost and budgetary information, interviewed
knowledgeable officials on the reliability of these data, and
determined that they were sufficiently reliable for the purposes of our
review. We conducted this performance audit from October 2006 through
December 2007 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
In Summary:
DOE has overstated the number of WMD scientists receiving DOE support
and the number of long-term, private sector jobs created. First,
according to our analysis of 97 IPP projects involving about 6,450
scientists for whom we had complete payment information, more than half
of the scientists paid by the program never claimed to have WMD
experience. Furthermore, according to officials at 10 nuclear and
biological institutes in Russia and Ukraine, IPP program funds help
them attract, recruit, and retain younger scientists and contribute to
the continued operation of their facilities. This is contrary to the
original intent of the program, which was to reduce the proliferation
risk posed by Soviet-era weapons scientists. For example, about 972 of
the scientists paid for work on these 97 projects were born in 1970 or
later, making them too young to have contributed to Soviet-era WMD
efforts. Second, although DOE asserts that through April 2007, the IPP
program had helped create 2,790 long-term, private sector jobs in
Russia and other countries, we were unable to substantiate the
existence of many of these jobs in our review of the projects DOE
considers to be commercial successes. DOE relies on "good-faith"
reporting and does not independently verify employment data it
receives. Finally, DOE officials stated that the IPP program metrics
are not sufficient to judge the program's progress in reducing
proliferation risks. However, DOE has not updated its metrics or set
priorities for the program on the basis of a country-by-country and
institute-by-institute evaluation of proliferation risks.
DOE has not developed an exit strategy for the IPP program. Officials
from the Russian government, Russian and Ukrainian institutes, and U.S.
companies raised questions about the continuing need for the program.
Importantly, a senior Russian Atomic Energy Agency official told us
that the IPP program is no longer relevant because Russia's economy is
strong and its scientists no longer pose a proliferation risk. However,
DOE has not developed criteria to determine when scientists,
institutes, or countries should "graduate" from the IPP program. In
contrast, the Department of State, which supports a similar program to
assist weapons scientists in Russia and other countries, has assessed
participating institutes and developed a strategy--using a range of
factors, such as an institute's ability to pay salaries regularly and
to attract funding from other sources--to graduate certain institutes
from its program. Even so, we found that DOE is currently supporting 35
IPP projects at 17 Russian and Ukrainian institutes where State no
longer funds projects because it considers them to have graduated from
its program and, therefore, no longer in need of U.S. assistance.
Furthermore, DOE has recently expanded the program to include new
countries and areas. According to a senior DOE official, this expansion
was undertaken as a way to maintain the IPP program's relevance as a
nonproliferation program. Specifically, DOE recently began providing
assistance to scientists in Iraq and Libya and, through the IPP
program, is working to develop projects that support the Global Nuclear
Energy Partnership (GNEP)--a DOE-led international effort to expand the
use of civilian nuclear power. DOE expanded the program's efforts
without a clear mandate from the Congress and suspended parts of its
IPP program guidance for projects in these new areas.
Regarding its management of IPP program funding, DOE has carried over
unspent funds in excess of the amount that the Congress provided for
the IPP program in every fiscal year since 1998. Two main factors have
contributed to this recurring problem: (1) lengthy and multilayered
review and approval processes by DOE and its contractors for paying
former Soviet weapons scientists for IPP-related work and (2) long
delays in implementing some IPP projects. DOE officials told us they
are attempting to improve the program's financial oversight by
developing a new program management system.
We recommended, among other things, that DOE comprehensively reassess
the IPP program to help the Congress determine whether to continue to
fund it. We believe this reassessment should include, at a minimum, a
thorough analysis of the proliferation risk posed by weapons scientists
in Russia and other countries, a well-defined prioritization strategy
to effectively target the scientists and institutes of highest
proliferation concern, more accurate reporting of program
accomplishments, and a clear exit strategy for the program. DOE
generally agreed with our recommendations to improve the overall
management of the IPP program, noting that a number of changes were
already under way, but DOE did not agree that it needs to reassess the
IPP program. We continue to believe that the nature, scope, and volume
of problems we identified during the course of our review necessitates
a reassessment of the IPP program to ensure that limited program funds
are directed to the scientists and institutes of highest proliferation
risk.
Background:
IPP project proposals are prepared and submitted to DOE by officials
from the participating national laboratories.[Footnote 3] Each national
laboratory provides technical and financial oversight for a set of
projects. An Inter-Laboratory Board (ILAB) serves as the primary
coordinating body for the national laboratories involved in the
program. Partnerships are formed by the national laboratories between
U.S. companies--known as industry partners--and institutes in Russia
and other countries. IPP project proposals are reviewed by DOE's
national laboratories, the IPP program office, and other agencies
before they are approved for funding. Because the national laboratory
prepares the proposal, the laboratory project manager is responsible
for including, among other things, a list of intended participants and
for designating the WMD experience for each participant. The proposed
participants are assigned to one of the following categories: Category
I--direct experience in WMD research, development, design, production,
or testing; Category II--indirect WMD experience in the underlying
technologies of potential use in WMD; or Category III--no WMD-relevant
experience. After the project passes an initial review within the
national laboratory, it is analyzed by the ILAB and its technical
committees, which then forward the proposal to DOE for review. DOE, in
turn, consults with State and other agencies on policy,
nonproliferation, and coordination considerations. DOE's IPP program
office is responsible for making final decisions on all projects.
DOE requires that at least 65 percent of each IPP project's funding be
used as payments to individuals actually working on the project or to
the participating institutes in payment for project-related supplies,
equipment, and overhead. Because the IPP program is not administered
through a government-to-government agreement, DOE distributes IPP
funding through three tax-exempt entities to avoid paying foreign
taxes. These organizations transfer funds directly to the personal bank
accounts of IPP project participants. To receive payment, project
participants must submit paperwork to these organizations indicating,
among other things, whether they possess WMD experience.
DOE Has Overstated the IPP Program's Progress and Achievements:
DOE has not accurately portrayed the IPP program's progress in the
number of WMD scientists receiving DOE support and the number of long-
term, private sector jobs created. Many of the scientists in Russia and
other countries that DOE has paid through its IPP program did not claim
to have WMD experience. Furthermore, DOE's process for substantiating
the weapons backgrounds of IPP project participants has several
weaknesses. In addition, DOE has overstated the rate at which weapons
scientists have been employed in long-term, private sector jobs because
it does not independently verify the data it receives on the number of
jobs created, relies on estimates of job creation, and includes in its
count a large number of part-time jobs that were created. Finally, DOE
has not revised the IPP program's performance metrics, which are based
on a 1991 assessment of the threat posed by former Soviet weapons
scientists.
Many Scientists in Russia and Other Countries Who Did Not Claim Direct
Experience with WMD Have Received Funds from DOE:
A major goal of the IPP program is to engage former Soviet weapons
scientists, engineers, and technicians, and DOE claims to have
supplemented the incomes of over 16,770 of these individuals since the
program's inception. However, this number is misleading because this
figure includes both personnel with WMD experience and those without
any WMD experience, according to DOE officials. We reviewed the payment
records of 97 IPP projects, for which information was available and
complete, and found that 54 percent, or 3,472, of the 6,453
participants in these projects did not claim to possess any WMD
experience in the declarations they made concerning their backgrounds.
We also found that DOE is not complying with a requirement of its own
guidance for the IPP program--that is, each IPP project must have a
minimum of 60 percent of the project's participants possessing WMD-
relevant experience prior to 1991 (i.e., Soviet-era WMD experience). We
found that 60 percent, or 58, of the 97 projects for which we had
complete payment information did not meet this requirement.
Finally, many IPP project participants that DOE supports are too young
to have contributed to the Soviet Union's WMD programs. Officials at 10
of the 22 Russian and Ukrainian institutes we interviewed said that IPP
program funds have allowed their institutes to recruit, hire, and
retain younger scientists. We found that 15 percent, or 972, of the
6,453 participants in the payment records of the 97 projects we
reviewed were born in 1970 or later and, therefore, were unlikely to
have contributed to Soviet-era WMD efforts. While DOE guidance for the
IPP program does not prohibit participation of younger scientists in
IPP projects, DOE has not clearly stated the proliferation risk posed
by younger scientists and the extent to which they should be a focus of
the IPP program.
DOE's Process for Assessing IPP Project Participants' WMD Credentials
Has Weaknesses:
In 1999, we recommended that, to the extent possible, DOE should obtain
more accurate data on the number and background of scientists
participating in IPP program projects.[Footnote 4] DOE told us that it
has made improvements in this area, including developing a
classification system for WMD experts, hiring a full-time employee
responsible for reviewing the WMD experience and backgrounds of IPP
project participants, and conducting annual project reviews. However,
DOE relies heavily on the statements of WMD experience that IPP project
participants declare when they submit paperwork to receive payment for
work on IPP projects. We found that DOE lacks an adequate and well-
documented process for evaluating, verifying, and monitoring the number
and WMD experience level of individuals participating in IPP projects.
According to DOE officials, IPP projects are scrutinized carefully and
subjected to at least 8, and in some cases 10, stages of review to
assess the WMD experience of the project participants. However, we
found limitations in DOE's process. Specifically:
* DOE has limited information to verify the WMD experience of personnel
proposed for IPP projects because government officials in Russia and
other countries are reluctant to provide information about their
countries' scientists. For example, three national laboratory officials
stated that it is illegal under Russian law to ask project participants
about their backgrounds, and that instead they make judgments regarding
the WMD experience of the project participants on the basis of their
personal knowledge and anecdotal information.
* Some IPP project proposals may advance from the national laboratories
to DOE with insufficient vetting or understanding of all personnel who
are to be engaged on the project. Senior representatives at five
national laboratories told us that they and their project managers do
not have sufficient time or the means to verify the credentials of the
proposed project participants.
* DOE does not have a well-documented process for verifying the WMD
experience of IPP project participants, and, as a result, it is unclear
whether DOE has a reliable sense of the proliferation risk these
individuals pose. DOE's review of the WMD credentials of proposed
project participants relies heavily on the determinations of the IPP
program office. We examined the proposal review files that the program
maintains, and we were unable to find adequate documentation to
substantiate the depth or effectiveness of the program office's review
of the WMD experience of proposed IPP project participants.
* Because it can be a matter of months or longer between development of
an IPP project proposal and project implementation, the list of
personnel who are actually paid on a project can differ substantially
from the proposed list of scientists. For several IPP projects we
reviewed, we did not find documentation in DOE's project files
indicating that the department was notified of the change of staff or
had assessed the WMD backgrounds of the new project participants. For
example, one IPP project--to discover new bioactive compounds in Russia
and explore their commercial application--originally proposed 27
personnel and was funded at $1 million. However, 152 personnel were
eventually paid under this project, and we did not find an updated list
of the project personnel or any indication of a subsequent review by
DOE in the IPP project files.
The limited information DOE obtains about IPP project participants and
the limitations in DOE's review of the backgrounds of these individuals
leave the IPP program vulnerable to potential misallocation of funds.
We found several instances that call into question DOE's ability to
adequately evaluate IPP project participants' backgrounds before the
projects are approved and funded. For example, a National Renewable
Energy Laboratory official told us he was confident that a Russian
institute involved in a $250,000 IPP project to monitor microorganisms
under environmental stress was supporting Soviet-era biological weapons
scientists. However, during our visit to the institute in July 2007,
the Russian project leader told us that neither he nor his institute
was ever involved in biological weapons research. As a result of this
meeting, DOE canceled this project on July 31, 2007. DOE's cancellation
letter stated that the information provided during our visit led to
this action.
DOE Has Overstated the Number of Jobs Created By the IPP Program:
Although a senior DOE official described commercialization as the
"flagship" of the IPP program, we found that the program's
commercialization achievements have been overstated and are misleading.
In its most recent annual report for the IPP program, DOE indicated
that 50 projects had evolved to support 32 commercially successful
activities. DOE reported that these 32 commercial successes had helped
create or support 2,790 new private sector jobs for former weapon
scientists in Russia and other countries.[Footnote 5] In reviewing
these projects, we identified several factors that raise concerns over
the validity of the IPP program's reported commercial success and the
numbers of scientists employed in private sector jobs. For example:
* The annual survey instrument that the U.S. Industry Coalition
distributes to collect information on job creation and other commercial
successes of IPP projects relies on "good-faith" responses from U.S.
industry partners and foreign institutes, which are not audited by DOE
or the U.S. Industry Coalition. In 9 of the 32 cases, we found that DOE
based its job creation claims on estimates or other assumptions. For
example, an official from a large U.S. company told us that the number
of jobs it reported to have helped create was his own rough estimate.
* We could not substantiate many of the jobs reported to have been
created in our interviews with the U.S. companies and officials at the
Russian and Ukrainian institutes where these commercial activities were
reportedly developed. For example, officials from a U.S. company we
interviewed claimed that 250 jobs at two institutes in Russia had been
created, on the basis of two separate IPP projects. However, during our
visit to the Scientific Research Institute of Measuring Systems in
Russia to discuss one of these projects, we were told that the project
is still under way, manufacturing of the product has not started, and
none of the scientists have been reemployed in commercial production of
the technology.
DOE Has Not Revised the IPP Program's Performance Metrics:
The IPP program's long-term performance targets do not accurately
reflect the size and nature of the threat the program is intended to
address because DOE is basing the program's performance measures on
outdated information. DOE has established two long-term performance
targets for the IPP program--to engage 17,000 weapons scientists
annually by 2015 in either IPP grants or in private sector jobs
resulting from IPP projects, and to create private sector jobs for
11,000 weapons scientists by 2019. However, DOE bases these targets on
a 16-year-old, 1991 National Academy of Sciences (NAS) assessment that
had estimated approximately 60,000 at-risk WMD experts in Russia and
other countries in the former Soviet Union. DOE officials acknowledged
that the 1991 NAS study does not provide an accurate assessment of the
current threat posed by WMD scientists in Russia and other countries.
However, DOE has not formally updated its performance metrics for the
IPP program and, in its fiscal year 2008 budget justification,
continued to base its long-term program targets on the 1991 NAS
estimate.
Moreover, DOE's current IPP program metrics do not provide sufficient
information to the Congress on the program's progress in reducing the
threat posed by former Soviet WMD scientists. The total number of
scientists supported by IPP grants or employed in private sector jobs
conveys a level of program accomplishment, but these broad measures do
not describe progress in redirecting WMD expertise within specific
countries or at institutes of highest proliferation concern. DOE has
recognized this weakness in the IPP program metrics and recently
initiated the program's first systematic analysis to understand the
proliferation risk at individual institutes in the former Soviet Union.
DOE officials briefed us on their efforts in September 2007, but told
us that the analysis is still under way, and that it would not be
completed until 2008. As a result, we were unable to evaluate the
results of DOE's assessment.
DOE Has Not Developed an Exit Strategy for the IPP Program but Instead
Has Expanded Efforts to New Areas:
DOE has yet to develop criteria for phasing-out the IPP program in
Russia and other countries of the former Soviet Union. Russian
government officials, representatives of Russian and Ukrainian
institutes, and individuals at U.S. companies raised questions about
the continuing need for the IPP program, particularly in Russia, whose
economy has improved in recent years. Meanwhile, DOE is departing from
the program's traditional focus on Russia and other former Soviet
states to engage scientists in new countries, such as Iraq and Libya,
and to fund projects that support GNEP.
Russian Government Officials, Russian and Ukrainian Scientists, and
U.S. Industry Representatives Questioned the Continuing Need for the
IPP Program:
Officials from the Russian government, representatives of Russian and
Ukrainian institutes, and individuals at U.S. companies raised
questions about the continuing need for the IPP program. Specifically:
* A senior Russian Atomic Energy Agency official told us in July 2007
that the IPP program is no longer relevant because Russia's economy is
strong and its scientists no longer pose a proliferation risk.
* Officials from 10 of the 22 Russian and Ukrainian institutes we
interviewed told us that they do not see scientists at their institutes
as a proliferation risk. Russian and Ukrainian officials at 14 of the
22 institutes we visited told us that salaries are regularly being
paid, funding from the government and other sources has increased, and
there is little danger of scientists migrating to countries of concern.
* Representatives of 5 of the 14 U.S. companies we interviewed told us
that, due to Russia's increased economic prosperity, the IPP program is
no longer relevant as a nonproliferation program in that country.
In economic terms, Russia has advanced significantly since the IPP
program was created in 1994. Some of the measures of Russia's economic
strength include massive gold and currency reserves, a dramatic
decrease in the amount of foreign debt, and rapid growth in gross
domestic product. In addition, the president of Russia recently pledged
to invest substantial resources in key industry sectors, including
nuclear energy, nanotechnology, and aerospace technologies. Many
Russian institutes involved in the IPP program could benefit from these
initiatives, undercutting the need for future DOE support.
In another sign of economic improvement, many of the institutes we
visited in Russia and Ukraine appeared to be in better physical
condition and more financially stable, especially when compared with
their condition during our previous review of the IPP program. In
particular, at one institute in Russia--where during our 1998 visit we
observed a deteriorated infrastructure and facilities--we toured a
newly refurbished building that featured state-of-the-art equipment.
Russian officials told us that the overall financial condition of the
institute has improved markedly because of increased funding from the
government as well as funds from DOE. In addition, one institute we
visited in Ukraine had recently undergone a $500,000 renovation,
complete with a marble foyer and a collection of fine art.
DOE Has Not Developed Criteria to Phase Out the IPP Program:
DOE has not developed an exit strategy for the IPP program, and it is
unclear when the department expects the program to have completed its
mission. DOE officials told us in September 2007 that they do not
believe that the program needs an exit strategy. However, they
acknowledged that the program's long-term goal of employing 17,000 WMD
scientists in Russia and other countries does not represent an exit
strategy.
DOE has not developed criteria to determine when scientists,
institutes, or countries should be "graduated" from the IPP program,
and DOE officials believe that there is a continued need to engage
Russian scientists. In contrast, State has assessed institutes and
developed a strategy--using a range of factors, such as the institute's
ability to pay salaries regularly and to attract external funding--to
graduate certain institutes from its Science Centers program. We found
that DOE is currently supporting 35 IPP projects at 17 Russian and
Ukrainian institutes that State considers to already be graduated from
its Science Center program and, therefore, no longer in need of U.S.
assistance.
DOE Has Expanded Efforts to Iraq and Libya and Is Working to Support
GNEP:
DOE recently expanded its scientist assistance efforts on two fronts:
DOE began providing assistance to scientists in Iraq and Libya, and,
through the IPP program, is working to develop IPP projects that
support GNEP. These new directions represent a significant departure
from the IPP program's traditional focus on the former Soviet Union.
According to a senior DOE official, the expansion of the program's
scope was undertaken as a way to maintain its relevance as a
nonproliferation program.
DOE has expanded the IPP program's efforts into these new areas without
a clear mandate from the Congress and has suspended parts of its IPP
program guidance for implementing projects in these new areas.
Specifically:
* Although DOE briefed the Congress on its plans, DOE officials told us
that they began efforts in Iraq and Libya without explicit
congressional authorization to expand the program outside of the former
Soviet Union. In contrast, other U.S. nonproliferation programs, such
as the Department of Defense's Cooperative Threat Reduction program,
sought and received explicit congressional authorization before
expanding their activities outside of the former Soviet Union.
* In Libya, DOE is deviating from IPP program guidance and its standard
practice of limiting the amount of IPP program funds spent at DOE's
national laboratories for project oversight to not more than 35 percent
of total expenditures.
* Regarding efforts to support GNEP, DOE has suspended part of the IPP
program's guidance that requires a U.S. industry partner's
participation, which is intended to ensure IPP projects' commercial
potential.
The IPP Program's Large Balances of Unspent Program Funds Result from
Multiple DOE and Contractor Reviews and Delays in Project
Implementation:
Since fiscal year 1994, DOE has spent about $309 million to implement
the IPP program but has annually carried over large balances of unspent
program funds. Specifically, in every fiscal year from 1998 through
2007, DOE carried over unspent funds in excess of the amount that the
Congress provided for the program in those fiscal years. For example,
as of September 2007, DOE had carried over about $30 million in unspent
funds--$2 million more than the $28 million that the Congress had
appropriated for the IPP program in fiscal year 2007. In fact, for 3
fiscal years--2003 through 2005--the amount of unspent funds was more
than double the amount that the Congress appropriated for the program
in those fiscal years, although the total amount of unspent funds has
been declining since its peak in 2003.
Two main factors have contributed to DOE's large and persistent
carryover of unspent funds: the lengthy and multilayered review and
approval processes DOE uses to pay IPP project participants for their
work, and long delays in implementing some IPP projects. DOE identified
three distinct payment processes that it uses to transfer funds to
individual scientists' bank accounts in Russia and other countries.
These processes involve up to seven internal DOE offices and external
organizations that play a variety of roles, including reviewing project
deliverables, approving funds, and processing invoices. DOE officials
told us that these processes were introduced to ensure the program's
fiscal integrity and acknowledged the enormity of the problem that the
lag time between the allocation of funds, placement of contracts, and
payment for deliverables creates for the IPP program and told us they
are taking steps to streamline their payment processes. In addition,
Russian and Ukrainian scientists at 9 of the 22 institutes we
interviewed told us that they experienced delays in payments ranging
from 3 months to 1 year.
Delays in implementing some IPP projects also contribute to DOE's large
and persistent carryover of unspent funds. According to officials from
U.S. industry partners, national laboratories, and Russian and
Ukrainian institutes, some IPP projects experience long implementation
delays. As a result, project funds often remain as unspent balances
until problems can be resolved. These problems include implementation
issues due to administrative problems, the withdrawal or bankruptcy of
the U.S. industry partner, and turnover in key project participants.
In part to address concerns about unspent program funds, DOE began
implementing its Expertise Accountability Tool, a new project and
information management system designed to better manage IPP projects'
contracts and finances, in October 2006. According to DOE officials,
the system will allow instant sharing of IPP project data between DOE
and participating national laboratories. DOE officials believe that the
system will allow the IPP program office to better monitor the progress
of IPP projects at the national laboratories, including reviews of IPP
project participants' WMD backgrounds and tracking unspent program
funds.
Mr. Chairman, this concludes my prepared statement. We would be happy
to respond to any questions you or the other Members of the
Subcommittee may have.
GAO Contact and Staff Acknowledgments:
For further information about this testimony, please contact me at
(202) 512-3841 or at robinsonr@gao.gov. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this statement. Gene Aloise (Director), Glen Levis (Assistant
Director), R. Stockton Butler, David Fox, and William Hoehn made key
contributions to this statement.
[End of section]
Footnotes:
[1] GAO-08-189 (Washington, D.C.: Dec. 12, 2007).
[2] See GAO, Nuclear Nonproliferation: Concerns with DOE's Efforts to
Reduce the Risks Posed by Russia's Unemployed Weapons Scientists, GAO/
RCED-99-54 (Washington, D.C.: Feb. 19, 1999). As a result of our 1999
review, DOE modified the IPP program by implementing requirements to
(1) better categorize the weapons backgrounds of scientists
participating in IPP projects; (2) review projects for potential dual-
use technology; (3) limit funding for DOE national laboratories to no
more than 35 percent for each IPP project; (4) eliminate basic research
projects; (5) establish direct, tax-free payments to participating
former Soviet scientists; and (6) institute audits conducted by the
Defense Contract Audit Agency as a way of verifying proper transfer of
IPP program funds and equipment.
[3] The 12 national laboratories that participate in the IPP program
are the Argonne, Brookhaven, Idaho, Lawrence Berkeley, Lawrence
Livermore, Los Alamos, Oak Ridge, National Renewable Energy, Pacific
Northwest, Sandia, and Savannah River National Laboratories and the
Kansas City Plant.
[4] GAO/RCED-99-54.
[5] We found that DOE made a mathematical error in totaling the number
of new jobs created and in migrating data from the U.S. Industry
Coalition survey to the Fiscal Year 2005 IPP Program Annual Report. As
a result, the actual total of new jobs that DOE should have reported is
2,780.
[End of section]
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