September 27, 2019

The Use of Grant DE-EM0003780 by the Regional Coalition of LANL Communities

The mission of the Department of Energy’s Office of Environmental Management (Environmental Management) is to address the Nation’s Cold War environmental legacy resulting from 5 decades of nuclear weapons production and Government-sponsored nuclear energy research.  Environmental Management’s Los Alamos Field Office is tasked to safely and efficiently complete the cleanup of legacy contamination and waste resulting from nuclear weapons development and research at the Los Alamos National Laboratory.  To help accomplish its cleanup mission, Environmental Management issues grants to non-Federal entities.  Environmental Management’s Consolidated Business Center (CBC) is responsible for awarding and overseeing Environmental Management grants.

On September 30, 2015, the Environmental Management CBC awarded the Regional Coalition of LANL [Los Alamos National Laboratory] Communities (RCLC) a 5-year, $500,000 grant (grant number DE-EM0003780).  The Environmental Management CBC provided grant funds to RCLC to promote environmental protection, economic development, and regional planning, and to allow the RCLC to evaluate policy initiatives and legislative impacts on its members. 

We initiated this inspection after obtaining information indicating that the RCLC may have misspent Department of Energy grant funds.  A separate inspection was initiated to determine the facts and circumstances of an allegation that Department of Energy employees accepted meals and sporting event tickets purchased by the RCLC.  The objective of our inspection was to determine if the RCLC properly accounted for and used Department of Energy grant funding in accordance with Federal requirements and the terms of the grant, and whether the Department’s oversight was effective.

We found that the RCLC did not properly account for Department of Energy grant funds or use the funds in accordance with Federal requirements and the terms of the grant; in addition, we found that the Department did not provide effective oversight of RCLC’s spending and activities.  The RCLC comingled Department funds with funds received from other sources and subsequently engaged in activities prohibited by the U.S. Code and the terms of the grant agreement.  Due to the comingling of funds, RCLC could not demonstrate how Department funds were used, and we were unable to determine the extent to which RCLC spent Department funds on allowable activities.  As a result, we are questioning $300,000 in Department of Energy grant funds, for which the Department should seek appropriate reimbursement.  We made three recommendations related to recovering allowable questioned costs and to improving Department oversight of RCLC’s spending and activities.

Topic: Management & Administration