The Government Management Reform Act of 1994 requires that the Department of
Energy (DOE) annually submit audited financial statements to the Office of Management and
Budget (OMB). A departmentwide audit was conducted to determine whether there was
reasonable assurance that DOE's consolidated Fiscal Year (FY) 1999 financial statements were
free of material misstatements. We conducted a portion of the departmentwide audit at the Idaho
Operations Office (Idaho) and its then management and operating contractor for the Idaho
National Engineering and Environmental Laboratory (INEEL), Lockheed Martin Idaho
Technologies Company (Lockheed).1
Energy (DOE) annually submit audited financial statements to the Office of Management and
Budget (OMB). A departmentwide audit was conducted to determine whether there was
reasonable assurance that DOE's consolidated Fiscal Year (FY) 1999 financial statements were
free of material misstatements. We conducted a portion of the departmentwide audit at the Idaho
Operations Office (Idaho) and its then management and operating contractor for the Idaho
National Engineering and Environmental Laboratory (INEEL), Lockheed Martin Idaho
Technologies Company (Lockheed).1
Commercial Off-The-Shelf Software Acquisition Framework
The Department of Energy (Department) devotes a significant amount of its annual budget
to the acquisition and maintenance of information technology resources. About $1.6 billion,
or almost 9 percent of the Department's Fiscal Year 1999 budget of $17.9 billion, was for
the acquisition, operation, and maintenance of information technology. Approximately $200
million, or 12.5 percent of the information technology budget, was for desktop (personal
computing) technology. Over 130,000 personal computers are in use Department-wide.
These computers operate a wide variety of commercial off-the-shelf (COTS) computer
software, including electronic mail, word processing, spreadsheet, database management,
application development, statistical analysis, presentation, security and virus protection.
Many Departmental offices, including the Headquarters Office of Procurement and
Assistance Management, various program and field offices, and contractor-operated
facilities, have independently negotiated contracts to acquire and maintain information
technology related products.Ï
to the acquisition and maintenance of information technology resources. About $1.6 billion,
or almost 9 percent of the Department's Fiscal Year 1999 budget of $17.9 billion, was for
the acquisition, operation, and maintenance of information technology. Approximately $200
million, or 12.5 percent of the information technology budget, was for desktop (personal
computing) technology. Over 130,000 personal computers are in use Department-wide.
These computers operate a wide variety of commercial off-the-shelf (COTS) computer
software, including electronic mail, word processing, spreadsheet, database management,
application development, statistical analysis, presentation, security and virus protection.
Many Departmental offices, including the Headquarters Office of Procurement and
Assistance Management, various program and field offices, and contractor-operated
facilities, have independently negotiated contracts to acquire and maintain information
technology related products.Ï
Report on Matters Identified at The Idaho Operations Office During The Audit of The Department of Energy's Consolidated Fiscal Year 1999 Financial Statements
The Government Management Reform Act of 1994 requires that the Department of
Energy (DOE) annually submit audited financial statements to the Office of Management and
Budget (OMB). A departmentwide audit was conducted to determine whether there was
reasonable assurance that DOE's consolidated Fiscal Year (FY) 1999 financial statements were
free of material misstatements. We conducted a portion of the departmentwide audit at the
Richland Operations Office (Richland); Office of River Protection (ORP); CH2M Hill Hanford
Group, Incorporated (CH2M Hill); Bechtel Hanford, Incorporated (Bechtel); and Fluor Hanford,
Incorporated (Fluor) and its subcontractors.
The audit disclosed an error, as of September 30, 1999, in the Environmental Liabilities
account. Richland's Environmental Liabilities account was understated because the cost estimates
for closure of single shell tank farms had not been updated to reflect current engineering estimates.
We recommended that Richland adjust the Environmental Liabilities account and that
management review other project cost estimates to determine if estimates were based on the best
available data. Management concurred with the recommendations and implemented corrective
actions.
Energy (DOE) annually submit audited financial statements to the Office of Management and
Budget (OMB). A departmentwide audit was conducted to determine whether there was
reasonable assurance that DOE's consolidated Fiscal Year (FY) 1999 financial statements were
free of material misstatements. We conducted a portion of the departmentwide audit at the
Richland Operations Office (Richland); Office of River Protection (ORP); CH2M Hill Hanford
Group, Incorporated (CH2M Hill); Bechtel Hanford, Incorporated (Bechtel); and Fluor Hanford,
Incorporated (Fluor) and its subcontractors.
The audit disclosed an error, as of September 30, 1999, in the Environmental Liabilities
account. Richland's Environmental Liabilities account was understated because the cost estimates
for closure of single shell tank farms had not been updated to reflect current engineering estimates.
We recommended that Richland adjust the Environmental Liabilities account and that
management review other project cost estimates to determine if estimates were based on the best
available data. Management concurred with the recommendations and implemented corrective
actions.
Report on Matters Identified at The Hanford Site during the Audit of The Department of Energy's Consolidated Fiscal year 1999 Financial Statements
Charitable Giving Requirements in Department of Energy Contracts
It recently came to our attention thas several contracts awarded by the Department to manage its facilities include clauses requiring charitable giving by the contractors. In pursuit of this matter, the Office of Inspector General conducted a limited review and identified three recent solicitations and corresponding contracts that did, in fact, contain such provisions. These provisions are over and above contractor requirements for local economic development. One contract, for example, requires the contractor to contribute $1 million per year to "educational, cultural, civic, and health and welfare organizations" for each year of the contract. This was consistent with the contractor's commitment made in response to the Department's terms for soliciting bids. the level of giving with respect to the other two contracts we reviewed is $860,000 over the life of one contract and a minimum of $600,000 per year in the other contract. A listing of the solications and contracts is attached.
National Low-Level Waste Management Program
Under the Low-Level Radioactive Waste Policy Act of 1980 (Act), States were responsible for providing for disposal of commercial low- level radioactive waste. They were encouraged to enter into compacts to facilitate the development of new disposal sites. The Department of Energy (Department) was required to provide technical assistance to support States and compact regions in developing such facilities. In 1990, the Department was also directed by the Congress to provide assistance in establishing an independent, self-directed association through which States and compact regions could accomplish low- level waste disposal objectives.