Department of Energy Management of the Strategic Petroleum Reserve

GAO discussed selected facets of the Department of Energy's (DOE) management of Strategic Petroleum Reserve (SPR) activities. In reviewing DOE audit recommendation followup procedures, GAO noted a wide disparity between contract expenditures questioned by the Defense Contract Audit Agency (DCAA) and the amounts recovered by DOE in individual audit reports. To assess this disparity, GAO suggested that contractors' accounting systems be examined. Regarding the tracking of audit recommendations, GAO found that DOE has given this function to SPR management. However, although SPR maintains documentation on audit report followups, it does not track the resolution of recommendations contained in DCAA audits. GAO also noted that DOE does not have centrally controlled, automated instrumentation and control systems at Bryan Mound and West Hackberry, which are the two largest storage sites. DOE is presently evaluating this situation to assess the costs and benefits of making the equipment operable and incorporating it into the system. GAO concluded that the success of the SPR instrumentation and control systems at the two sites depends upon the contractors' ability to make the systems operational and maintain them after development. GAO also cited the need for DOE to establish good quality assurance programs.