Audit Report: IG-0629

The Southeastern Universities Research Association is the Department
of Energy's (Department) contractor for the operation of the Thomas
Jefferson National Accelerator Facility (Jefferson Lab). The Jefferson
Lab contract provided for reimbursement of central office expenses that
are allowed by the cost principles contained in Office of Management
and Budget Circular A-122, Cost Principles for Non-Profit
Organizations. In general, central office expenses are general and
administrative expenses incurred by a contractor. Among other things,
for a cost to be allowable it must be reasonable, allocable, conform to
limitations and exclusions set forth in the principles and in the contract,
and be adequately documented. We observed, however, that the
Department reimbursed the contractor for a number of costs that were
unallowable or not adequately supported. Specifically, in Fiscal Years
(FY) 2000, 2001, and 2002, the Department reimbursed the contractor
for central office expenses that were prohibited by the contract or cost
principles or were not allocable to Jefferson Lab. We also noted other
costs for salaries, employee benefits, and administrative expenses that
were not adequately supported.