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GAO Finds Issues in Energy Department’s Subcontractor Oversight

The Government Accountability Office called on the Department of Energy to improve oversight of its subcontractors after a recent review found that the department had failed to audit over $3.4 billion in subcontracts over the past 10 years. GAO issued a report on Tuesday highlighting the improper auditing process at DOE and the challenges in tracking subcontract ownerships in the department’s multi-billion dollar programs.

The report cited that in 2016 many companies who had prime contracts with DOE also served as subcontractors to some deals. GAO questioned nearly 3,000 subcontracts that received up to $927 million from DOE’s fiscal year 2016 obligations. The government watchdog also found the department has failed to issue procedures or guidance for local offices to monitor contractors and conduct subcontract audits in a timely manner.

“Without such procedures or guidance, unallowable costs may go unidentified,” GAO explained. “Local officials do not independently review information on subcontractor ownership because doing so is not required, although such information could alert officials to potential conflicts of interest.”

GAO recommends that DOE requires offices to monitor contractors for subcontract audits and requires officials to independently review subcontractor ownership information. The department agreed with most of the recommendations, expect independent reviews of subcontractor ownership information.

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