Department of Energy:

Poor Property Management Allowed Vulnerability to Theft at Rocky Flats

OSI-95-4: Published: Jul 3, 1995. Publicly Released: Jul 3, 1995.

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Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) property management practices at its Rocky Flats facility, focusing on: (1) the impact of theft on DOE inability to account for millions of dollars worth of equipment; and (2) allegations of theft and contract abuse at the facility's Motor Vehicle Maintenance Shop.

GAO found that: (1) DOE and its current operations and maintenance (O&M) contractor cannot account for millions of dollars worth of government-owned property because of theft; (2) poor property management practices and inadequate records make it impossible to determine the extent to which theft contributes to equipment accounting problems; (3) the contractor often fails to report thefts to DOE and DOE, in turn, fails to refer instances of potential theft to the responsible investigative authorities; (4) in response to GAO audits and investigations, DOE, its Inspector General, and the Federal Bureau of Investigation have increased their investigations concerning missing or stolen property; (5) the maintenance shop's poor ordering and inventory systems, ineffective management oversight, inadequate internal controls, and lax physical security render the shop vulnerable to theft; (6) the shop's supervisor gained unauthorized access to the part ordering database and disclosed the incumbent supplier's unit prices to a competitor who eventually won the new contract; and (7) DOE and the contractor have made improvements in the ordering system and the physical security of government-owned equipment, but greater vigilance will be needed during the transition to the new O&M contractor who must be made aware of the property management problems.

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