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Audit Report: OAS-RA-13-15

March 21, 2013

The Department of Energy's Industrial Carbon Capture and Storage Program Funded by the American Recovery and Reinvestment Act

The Department of Energy (Department) received nearly $1.5 billion through the American Recovery and Reinvestment Act of 2009 (Recovery Act) to invest in clean industrial technologies and sequestration projects through the Industrial Carbon Capture and Storage Program (Carbon Program).  The National Energy Technology Laboratory awarded 46 cooperative agreements to a variety of demonstration and research and development projects.  The agreements required substantial involvement by Federal project managers and relied on recipients to share in the investments needed to complete the projects.  The audit found that the Department had not always effectively managed the Carbon Program and the use of Recovery Act funds.  In particular, our review of the Carbon Program, including 15 recipients awarded a total of approximately $1.1 billion, revealed that the Department had not adequately documented the approval and rationale to use $575 million of the $1.1 billion reviewed to accelerate existing projects rather than proceeding with new awards as required by Federal and Department policies.  In addition, the Department reimbursed recipients approximately $16.8 million without obtaining or reviewing adequate supporting documentation, and awarded three recipients over $90 million in Recovery Act funding even though the merit review process identified significant financial and/or technical issues.  Further, the Department had not ensured that recipient subcontractor or vendor selections for goods and services represented the best value to the Government.  Therefore, we identified up to $18.3 million in questionable reimbursement claims that were approved by the Department for just the sample of awards reviewed.  The issues identified occurred, in part, because program officials had not always provided effective monitoring and oversight of recipient activities.  In response to our finding, management concurred with most of the recommendations and indicated that it had initiated and/or taken corrective actions to improve the Department’s implementation of the Carbon Program. 

Topic: Financial Asssitance