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Audit Report: OAS-M-14-05

April 21, 2014

Audit of Incurred Costs for UT-Battelle under Department of Energy Contract No. DE-AC05-00OR22725 during Fiscal Year 2012

We contracted with the independent certified public accounting firm KPMG LLP, to determine whether UT-Battelle’s incurred cost to manage and operate Oak Ridge National Laboratory (ORNL) for the term October 1, 2011 through September 30, 2012, were allowable, allocable and reasonable. Since 2000, UT-Battelle has managed and operated ORNL under contract with the Department of Energy. During fiscal year 2012, UT-Battelle incurred and claimed $1,532,200,040. KPMG concluded that UT-Battelle prepared its fiscal year 2012 Statement of Costs Incurred and Claimed in accordance with applicable guidance including Federal Acquisition Regulation, Department of Energy Acquisition Regulations and Cost Accounting Standards regarding accuracy, allowability, allocability and reasonableness of incurred costs. However, KPMG identified several issues related to unallowable costs. In addition, KPMG noted certain internal control weaknesses.

Topic: Management & Administration