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AUDIT REPORT: OAS-L-13-10

June 24, 2013

Fiscal Year 2011 Audit of the Work Performed Under the Work for Others Program at the Lawrence Berkeley National Laboratory

The Office of Inspector General contracted with an independent certified public accounting firm, KPMG, LLC (KPMG) to determine whether Lawrence Berkeley National Laboratory (Berkeley) met the internal control and compliance requirements established by the Department to achieve the current goals and objectives of the Work for Others (WFO) Program.

KPMG concluded that, except for the finding detailed in the attached report, Berkeley implemented internal controls and compliance procedures in Fiscal Year 2011 that met the Department of Energy's (Department) WFO Program requirements, as stated in Department regulations, guidance, and applicable contract provisions.  Specifically, KPMG found that costs relating to Berkeley's WFO support organization, the Office of Sponsored Projects and Industry Partnerships, were included in the general and administration cost pool that is allocated to both WFO projects and other Department projects on an organization-wide basis, rather than using an allocation base that bears a more direct causal beneficial relationship to the support organization's costs.  KPMG estimated that if the Department implemented a separate indirect rate for this support organization, the annual savings would be approximately $400,000.  Further, KPMG noted that corrective action from a September 2010 Berkeley Internal Audit Division Time and Effort Reporting audit related to the accuracy of labor distribution to WFO and the Department's non-WFO projects had not been implemented as of October 31, 2012. 

The Berkeley Site Office did not agree with the finding and recommendation made in the report, and believes that the current allocation method complies with Cost Accounting Standards. 

TOPIC: Management & Administration