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Management Alert: IG-0864

May 17, 2012

Extended Assignments at Princeton Plasma Physics Laboratory

Princeton University operates the Princeton Plasma Physics Laboratory (Princeton) under a contract with the Department of Energy's Office of Science.  Princeton works with partners around the world to develop fusion as an energy source.  The Laboratory's annual operating costs are about $80 million, all of which is reimbursed by the Department.

On May 8, 2012, we issued a separate contract audit report on Audit Coverage of Cost Allowability for Princeton Plasma Physics Laboratory during Fiscal Years 2009-2010 under Department of Energy Contract Numbers DE-AC02-76CH03073 and DE-AC02-09CH11466 (OAS-V-12-06, May 2012).  One of the objectives of that audit was to determine whether questioned costs and internal control weaknesses impacting allowable costs that were identified during audits and reviews had been adequately resolved.  During the course of our contract audit, we identified specific costs that we considered to be unreasonable and related internal control weaknesses that led to the questionable costs.

Specifically, the Department reimbursed Princeton $1.04 million for lodging subsidies incurred by two employees who were on extended assignments - 14 years in one case, and, 9 years in the other.  While existing Laboratory policy permitted temporary assignments, the duration of these particular assignments appeared to be excessive and inconsistent with Department policies which we used for benchmarking purposes.  Consequently, we considered these costs to be unreasonable, and, as a result, we questioned their allowability.

Topic: Management & Administration