January 18, 2007
Sandia National Laboratory-California Procurement Card Program
The mission of the Department of Energy’s (DOE’s) Sandia AND OBJECTIVE National Laboratory-California (Sandia-CA) includes applying advanced science and engineering to support the United States’ deterrence policy by ensuring the nuclear weapons stockpile is safe, reducing the proliferation of weapons of mass destruction, and enhancing the surety of energy. Sandia-CA is managed by Lockheed Martin Corporation for the National Nuclear Security Administration (NNSA). Sandia-CA employs about 900 people. In support of its mission, Sandia-CA procures more than $40 million in goods and services annually. Employees at Sandia-CA have several procurement methods available to them, to include the Procurement Card Program. This Program was established to simplify the procurement of low value, commercially available goods and services without going through a more protracted and costly competitive procurement process. Sandia-CA’s procurement card activities are administered by the Sandia National Laboratory-New Mexico (Sandia-NM) corporate organization. There are about 400 procurement card holders at Sandia-CA, with most limited to a spending authority of no more than $5,000 per transaction and $25,000 per month. However, some employees in the Sandia-CA Procurement Department have been authorized by Sandia management to spend as much as $250,000 to $1 million per monthly billing cycle. Given the wide-spread use of procurement cards throughout the Department and the potential for abuse, the Office of Inspector General (OIG) has established a proactive initiative to review procurement card programs at Department facilities. Appendix C contains a partial listing of prior OIG reports related to procurement card reviews. As part of the OIG initiative, we reviewed the Procurement Card Program at Sandia-CA. The objective of this inspection was to determine whether Sandia-CA’s internal controls ensured that purchases made using procurement cards were in accordance with applicable policies and procedures. Our inspection methodology included reviewing all of Sandia-CA’s procurement card transactions for January through November 2005. There were 21,568 transactions valued at $12.7 million.