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Audit Report: OAS-RA-L-12-05

July 10, 2012

Follow-up on the Department of Energy's Implementation of the Advanced Batteries and Hybrid Components Program Funded under the American Recovery and Reinvestment Act

Under the American Recovery and Reinvestment Act of 2009, the Department of Energy's (Department) Advanced Batteries and Hybrid Components Program (Advanced Batteries Program) received almost $2 billion to support the construction of U.S. based battery and electric drive component manufacturing plants.  In April 2010, we issued our first report on the Advanced Batteries Program, Progress in Implementing the Advanced Batteries and Hybrid Components Program under the American Recovery and Reinvestment Act (OAS-RA-L-10-04).  In short, we concluded that the Department had made significant progress implementing the Advanced Batteries Program, including developing a comprehensive monitoring system plan to reduce the financial, technical and marketing risks associated with large-scale projects.  Based on our test work in this follow-up audit effort, we were unable to substantiate an allegation received, during the course of the effort, related to a potential conflict of interest.  However, opportunities were identified for the Department to improve its administration of the Advanced Batteries Program.  Specifically, the Department could better define regulations governing the retention of documentation supporting procurement decisions and ensure recipients adequately safeguard equipment purchased with Federal funds.  In addition, the Department could obtain and review required audit reports to ensure the sufficiency of internal controls and compliance with laws and regulations.  The Department indicated that recent actions had been taken to obtain required audit reports and clarify guidance related to those reports.  Therefore, we made several suggestions to the Department to address the issues identified and improve management of the Advanced Batteries Program.

Topic: Financial Assistance