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Audit Report: OAS-RA-14-04

June 17, 2014

Selected Activities of the Office of Energy Efficiency and Renewable Energy's Advanced Manufacturing Office

The Department of Energy's Office of Energy Efficiency and Renewable Energy's Advanced Manufacturing Office (Program) is committed to researching, developing and demonstrating new energy-efficient manufacturing processes and material technologies. To meet its mission, the Program distributed funding through financial assistance awards, contracts and inter-entity work orders to projects across various sectors of manufacturing. Specifically, between Fiscal Years 2009 and 2012, the Program funded 261 projects totaling over $450 million, including over $170 million in American Recovery and Reinvestment Act of 2009 (Recovery Act) funding. As of August 2013, approximately $300 million in Department funds had been spent by award recipients.

We found that the Department had not always effectively managed the Program awards. In particular, during our review of 10 projects awarded a total of $107 million, including approximately $95 million in Recovery Act funds, we discovered that although specifically required to obtain appropriate supporting documentation, Program officials approved and reimbursed approximately $17 million to three recipients without reviewing detailed documentation to substantiate costs claimed. In addition, during site visits to two additional recipients, we examined a sample of supporting information and found that over $16,000 in questionable and/or unallowable costs had been charged to the projects. Further, we found that Program officials had not maintained records of analyses or documentation supporting comprehensive pre-award desk reviews conducted on two of the projects we reviewed.

The issues we identified occurred, in part, because the Department had not consistently provided effective monitoring and oversight of recipient activities. Specifically, at the time of our review, the Department had not developed criteria or defined a standard level of documentation needed to ensure an efficient/consistent review of project costs. We made recommendations to help achieve the objectives of the Recovery Act and the Program. Management generally concurred with the recommendations and indicated that it would take or had already implemented actions to address them.
 

Topic: Financial Assistance