May 25, 2016

The Department of Energy’s Small Modular Reactor Licensing Technical Support Program

Commercializing and deploying small modular reactors (SMR) has been a high priority of the Department of Energy’s Office of Nuclear Energy SMR Licensing Technical Support Program (SMR Program).  The mission of the SMR Program is to support design certification and licensing with industry partners to promote commercializing and deploying SMRs.  The SMR Program, which began in 2011, has a budget of $452 million from which the Department awarded two major cost-shared cooperative agreements (awards).  The primary purpose of these awards was to achieve design certification by the Nuclear Regulatory Commission.

During our audit, nothing material came to our attention to indicate that the SMR Program was not being managed effectively and efficiently.  We did, however, determined that in certain instances, the Department reimbursed its award recipients for unallowable costs, including rent payments, relocation, travel, and labor costs totaling $483,675.

Improper costs and associated reimbursements occurred because the Department’s invoice review process was not sufficient.  While the Department does not have a specific policy for reviewing financial assistance award invoices, it elected to follow its Acquisition Guide for Reviewing and Approving Contract Invoices.  However, the Department’s review did not discover the questionable costs we identified and was vulnerable to improper payments.  It should also be noted that during our review, after we identified questionable costs, management quickly took action to correct some of these costs.

Topic: Management & Administration