September 21, 2011

Fixed Monthly Living Expense Payments at the Lawrence Livermore National Laboratory

The Lawrence Livermore National Laboratory (Livermore) is a Department of Energy (Department) laboratory managed and operated by Lawrence Livermore National Security, LLC, for the Department’s National Nuclear Security Administration (NNSA).  Livermore's mission is to ensure the safety and security of the nation through applied science and technology.  In certain circumstances, Livermore utilizes subcontractors to obtain specialized skill sets that are not available locally.  To minimize travel expenses, some subcontractors receive fixed monthly living expenses (FMLE), which are negotiated travel reimbursements that provide a fixed monthly payment to cover specified travel expenses.  FMLE is also designed to reduce subcontract travel costs by encouraging the subcontractor to obtain long-term, lower cost housing arrangements.  The Office of Inspector General (OIG), Office of Investigations, received a complaint which alleged improper payment of FMLE to certain Livermore subcontractor employees.  The investigation determined that a Livermore subcontractor authorized FMLE payments in the amount of $181,666 to subcontract employees who claimed and received payments to which they were not entitled.  Livermore was able to recover the funds because the subcontractor violated a contract clause by failing to substantiate the eligibility of the lower-tier subcontractor for reimbursements under FMLE.  The Office of Investigations subsequently learned that Livermore had other subcontracts with FMLE provisions.  We found that Livermore had taken actions to address FMLE issues as a result of the investigation.  Specifically, Livermore established policies and procedures for the management and administration of the FMLE process.  In addition, Livermore reviewed all subcontracts with FMLE provisions but did not identify any other subcontract employees who claimed and received payments to which they were not entitled.

Topic: Management & Administration