April 26, 2018
Inquiry into an Alleged Anti-Deficiency Act Violation at the Department of Energy
In October 2017, the Office of Inspector General (OIG) received allegations that the Department obligated more funds than permitted by existing apportionments, which resulted in an Anti-Deficiency Act violation. The Anti-Deficiency Act requires, among other things, a system of administrative controls within each agency and prohibits incurring obligations or making expenditures in excess of an apportionment. Violations of the Anti-Deficiency Act must be reported to the President, Congress, and the Comptroller General of the United States.
It was also alleged that the Department of Energy’s Office of the Chief Financial Officer (OCFO) attempted to hide the violation from external auditors. Specifically, it was alleged that the Deputy Chief Financial Officer instructed staff to correct the issue and make the matter go away, and did not follow procedures for assessing the violation and notifying General Counsel. We initiated an inspection to determine the facts and circumstances surrounding the alleged Anti-Deficiency Act violation and whether there was an attempt to hide any potential violations from external auditors.
We substantiated the allegation that the Department obligated more funds than were apportioned for the specific account reviewed. In particular, while the OIG is not the Department’s authority for determining whether an Anti-Deficiency Act violation occurred, our test work confirmed that the Department obligated approximately $16 million more than was apportioned in fiscal year 2017 for direct funding in the Electricity Delivery and Energy Reliability (EDER account) activities account reviewed. We received conflicting responses on whether the OCFO completed an evaluation of the potential Anti-Deficiency Act violation. While the Deputy Chief Financial Officer stated in writing on December 8, 2017, that the OCFO completed a thorough review of the alleged violation and determined a violation did not occur, subsequent discussions with OCFO officials indicated a comprehensive assessment of the potential violation was not completed. We were unable to substantiate that the Deputy Chief Financial Officer and/or OCFO management willfully attempted to cover up the potential violation to prevent the Department’s external auditors and oversight authorities from becoming aware of the issue. In conducting our review, we also identified opportunities for improvement related to communication within the Department.
Topic: Management & Administration