Financial Management

In fiscal year 1992, the Department of Energy (DOE) paid $16 billion to universities and private companies to run government-owned facilities involved in research and development and other activities. Serious problems with contractor operations at these facilities have led to gross mismanagement of government property and funds, prompting the Office of Management and Budget and GAO to flag this area as one at highest risk for waste, fraud, and abuse. As part of a series of GAO management reviews of major federal department and agencies, this report examines DOE's efforts to (1) oversee its contractors' financial operations and (2) correct the financial management material weaknesses cited in DOE's Federal Managers' Financial Integrity Act report.

GAO found that: (1) DOE contract provisions do not fully protect the government's interests or permit DOE to exercise adequate oversight and financial management control over its contractors; (2) the DOE financial management system cannot provide all the information needed to effectively oversee integrated contractors; (3) field office staffing levels are insufficient to perform needed reviews of contractors' financial management practices and procedures; (4) DOE does not promptly complete required audits of contractors' allowable costs; (5) DOE has prematurely upgraded the status of its financial management problems from material to nonmaterial weaknesses; and (6) DOE has not fully completed the reforms it initiated to resolve these problems.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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