Audit: DOE-OIG-26-19

March 4, 2026

The Regents of the University of California’s Costs Incurred and Claimed for Fiscal Year 2021 Under Contract No. DE-AC02-05CH11231

This audit was performed by the Defense Contract Audit Agency (DCAA) on behalf of the Department of Energy’s Office of Inspector General and examined the Regents of the University of California’s (UC Regents) costs incurred and claimed for fiscal year ending September 30, 2021, at the Lawrence Berkeley National Laboratory under management and operating contract No. DE-AC02-05CH11231.

The audit’s objective was to determine if cost charged to Department Contract No. DE-AC02-05CH11231 for fiscal year 2021 were allowable, allocable, and reasonable in accordance with applicable laws, regulations, and contract terms.

The DCAA performed the audit in accordance with generally accepted government auditing standards.

The DCAA identified two audit findings and questioned approximately $6.4 million in the management fee in the total cost rate pool. The DCAA questioned the management fee, which represented a contractual incentive paid by the Department of Energy, because the UC Regents included the fee as a cost in the total cost rate pool. The DCAA reconciled the proposed fee amount to the general ledger, and the Department determined that the contractor was entitled to the earned fee. In addition, the DCAA increased the UC Regents’ proposed allocation bases for three indirect cost pools because of the UC Regents’ error in the treatment of several purchase orders that resulted in understated allocation bases.  

If the issues identified by the DCAA are fully addressed, it should help ensure that costs charged to the Department are allowable, allocable, and reasonable in accordance with contract terms. We recommend that the contractor coordinate with the contracting officer to resolve the questioned and adjusted base costs identified in this report.