May 21, 2015

The Department of Energy's Management of Spare Parts at Selected Sites 

The Department of Energy's (Department's) 17 national laboratories provide world-class scientific, technological, and engineering capabilities to support Department missions.  As such, it is critical that the Department's equipment and facilities be available and operational, when needed.  Consequently, effective management of spare parts inventories is crucial to the Department's missions.

Our audit disclosed that spare parts inventories at the three sites we reviewed were not always effectively managed.  Spare parts often were not centrally managed or tracked, and many organizations did not maintain accurate inventory records.  These issues occurred because the Department had not ensured that sites were managing spare parts inventories for nuclear facilities in accordance with Department requirements.  Also, unlike guidance for nuclear facility spare parts, contractors were not provided with consistent guidance for the management of spare parts inventories for nonnuclear facilities.

During the course of our review, we also found inconsistent and potentially inappropriate accounting for spare parts.  Two of the three organizations reviewed expensed spare parts when they were purchased, while the third carried the value of the spare parts as an asset.  Given the disparate treatment we observed, we suggested that the Department evaluate whether sites are properly accounting for spare parts.

Topic: Management & Administration