Inspection Report: DOE-OIG-25-26

July 24, 2025

Opportunities to Improve Internal Control Gaps for the Office of Clean Energy Demonstrations’ Implementation of the Advanced Industrial Facilities Deployment Program

The Office of Clean Energy Demonstrations (OCED) is responsible for administering $5.8 billion Inflation Reduction Act funds through the Advanced Industrial Facilities Deployment Program (IDP). The IDP provides 50 percent cost share through cooperative agreements to eligible private sector companies.  

We initiated this inspection to determine whether the OCED had adequate internal controls in place for the IDP.

We found that the OCED did not have adequate internal controls to implement the IDP. Specifically, the OCED did not develop, document, and implement required internal controls, including a lack of: (1) documented internal controls policies, procedures, and plans; (2) risk assessments and processes; (3) a plan to mitigate conflict-of-interest risks; (4) a program performance plan; and (5) a plan to track programmatic community benefits requirements. The issues we identified occurred, in part, because the OCED did not: (1) prioritize the full development and documentation of its internal controls system; and (2) differentiate between program-level and project-specific responsibilities and risks.

Without a robust internal controls system, the OCED risks negative impacts to the IDP outcomes, including unachieved goals and objectives, improperly reimbursed costs, fraud, waste, and undisclosed conflicts-of-interest. Additionally, the OCED may have difficulty identifying performance issues, including those at the program and project levels. Further, these risks are compounded by the magnitude of the projects and funding.

We have made two recommendations that, if fully implemented, should help ensure that the issues identified in this report are corrected.