What We Did
The overall audit objective was to determine whether the memorandum of agreement (MOA) and corrective action plan (CAP) between DoD and the Department of Energy (DOE) addressed the findings in DoD OIG Report No. D-2011-021, “More DoD Oversight Needed for Purchases Made Through the Department of Energy,” December 3, 2010, and to determine whether DoD personnel complied with the roles and responsibilities outlined in the MOA.
What We Found
To address conditions identified in the previous audit report, Defense Procurement and Acquisition Policy (DPAP) and DOE officials agreed to corrective actions in the MOA and CAP. However, DPAP officials did not fully implement or verify compliance with the MOA and CAP. Specifically, DPAP officials did not develop a standardized reporting system to allow DoD officials to track funds provided to DOE; issue guidance that required technical project managers performing oversight to meet standard contracting officer’s representative training requirements; or formally collaborate or meet quarterly with DOE.
These conditions occurred because DPAP officials did not place a high priority on implementing the terms of the MOA and CAP. As a result, DoD did not have visibility over approximately $7.3 billion in funds provided to DOE from FY 2010 through FY 2012.
We also determined that Air Force and Under Secretary of Defense (Comptroller)/Chief Financial Officer, DoD, (USD[C]) officials did not perform a review of a potential Antideficiency Act violation, as recommended in Report No. D-2011-021.
What We Recommend
We recommend that the Director, DPAP:
- direct DoD Components to perform a review to determine whether they are complying with the MOA and Defense policies issued as a result of the MOA;
- coordinate with the USD(C) to develop a method for gathering data for DoD-related projects with DOE;
- implement the remaining action items in the CAP; and
- establish a quality control process to enforce the requirement for DoD Components to provide monthly obligation reports for funds provided to DOE and maintain them in an auditable system.
We recommend that the USD(C):
- require DoD Components to use a standard funding document number where the first six positions are the DoD activity address code for the funding agency;
- require DoD Components to provide the USD(C) with copies of all funding documents sent to DOE; and
- instruct the Air Force to initiate a review of the potential Antideficiency Act violation.
Management Comments and Our Response
The Director, DPAP, and the USD(C) generally agreed with the recommendations. The comments were responsive and no further comments are required.