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Audit Report: OAS-RA-11-11

August 22, 2011

The Advanced Research Projects

The Advanced Research Projects Agency – Energy (ARPA-E), an agency within the Department of Energy, was authorized in 2007 as part of the America COMPETES Act (COMPETES Act) to fund high-risk, high-payoff  research in energy technologies.  ARPA-E generally had systems in place to make research awards and to deploy American Recovery and Reinvestment Act of 2009 (Recovery Act) resources.  However, we found that ARPA-E had not established a systematic approach to ensure that it was meeting the technology transfer and outreach requirement of the COMPETES Act and had not drafted or, in some cases, approved draft policies and procedures in a number of key areas, including those in the areas of monitoring and oversight of awardees; termination of non-performing awards; technology transfer and outreach; and, invoice review.  Additionally, through transaction testing we performed at three recipient sites, we identified and questioned approximately $280,387 in unsupported, unreasonable, or unallocable costs, or costs considered to be specifically unallowable, that had been incurred by two recipients.  According to an ARPA-E official, ARPA-E focused its attention on meeting the Recovery Act requirement of expeditiously awarding funds to projects by September 30, 2010; and, as a consequence did not have sufficient time and resources to devote to establishing all its operational controls in the area of policies and procedures.  Without improvements in these areas, ARPA-E is at risk of not meeting its goals for the transfer of technology and for reimbursing unallowable recipient costs.

Topic: Management & Administration