Energy Management:

Better DOE Controls Needed Over Contractors' Discretionary R&D Funds

RCED-91-18: Published: Dec 5, 1990. Publicly Released: Mar 20, 1991.

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Pursuant to a congressional request, GAO reviewed the discretionary research and development (R&D) activities of three Department of Energy (DOE) laboratories and the DOE need for, uses of, and management controls over those activities.

GAO found that: (1) DOE had specific authority to approve laboratories' reasonable use of funds for discretionary R&D activities; (2) DOE had statutory authority to use laboratory operating funds to conduct R&D projects at the discretion of the laboratory directors; (3) the DOE order regarding the use of exploratory R&D funds was not clear enough to ensure that laboratories used funds appropriately; (4) DOE did not evaluate laboratories' discretionary R&D activities to determine the extent to which results benefited DOE programs; and (5) DOE lacked effective controls over laboratories' administration and use of discretionary funds.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The conference report accompanying the DOE FY 1991 energy and water development appropriation required that future DOE budget submissions identify the amount and location of future discretionary R&D funds for DOE laboratories and justify this amount. This action should be adequate to assure Congress that DOE discretionary R&D expenditures are not excessive.

    Matter: To ensure that expenditures under section 303 of Public Law 95-39 are not excessive, Congress may want to consider clarifying the term reasonable amount by establishing a specific funding ceiling for the DOE discretionary R&D program.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE issued revised guidance on February 28, 1991, DOE Order 5000.4, which specifically states that all laboratories' discretionary R&D activities are covered by the order. Further, the revised order sets forth procedures for setting laboratory funding levels.

    Recommendation: The Secretary of Energy should ensure that the funding level established for each laboratory covers all discretionary R&D carried out at the laboratory. The proposed guidance on discretionary R&D developed by DOE, in its current form, would apply to all discretionary R&D activities carried out by the laboratories and, when implemented, satisfy this recommendation.

    Agency Affected: Department of Energy

  2. Status: Closed - Implemented

    Comments: DOE issued revised guidance on appropriate and inappropriate uses of discretionary R&D funds at its laboratories. The revised guidance generally addresses the areas identified by GAO as needing clarification.

    Recommendation: The Secretary of Energy should review and revise DOE Order 5000.1A to clarify guidance on the appropriate and inappropriate uses of exploratory R&D funds. Areas requiring further definition and elaboration include the: (1) permissible conditions under which, and the general types of, capital equipment that can be purchased for use on exploratory R&D projects; (2) appropriateness of funding exploratory R&D projects jointly with related activities funded from different sources; (3) appropriate size of exploratory R&D projects; and (4) appropriate duration of exploratory R&D projects.

    Agency Affected: Department of Energy

  3. Status: Closed - Implemented

    Comments: The revised DOE guidance makes clear that it applies to all discretionary R&D activities carried out at the laboratories. It also reiterates the requirements of P.L. 95-39 that funded activities be "employee suggested."

    Recommendation: The Secretary of Energy should establish guidance that applies to all discretionary R&D activities carried out by the laboratories, including the basic research component of Los Alamos' program, and establish controls to ensure that discretionary R&D funds are used only for employee-suggested R&D activities, as specified in section 303 of Public Law 95-39.

    Agency Affected: Department of Energy

  4. Status: Closed - Implemented

    Comments: DOE revised guidance specifically requires annual DOE headquarters oversight reviews of each laboratories' LDRD (discretionary R&D) activities, including the laboratory's system for managing these activities and the results of the laboratory's program.

    Recommendation: The Secretary of Energy should direct the Assistant Secretary for Defense Programs and the Director, Office of Energy Research, to carry out the on-site reviews, or other headquarters oversight reviews, required in DOE Order 5000.1A, or any superseding guidance.

    Agency Affected: Department of Energy

  5. Status: Closed - Implemented

    Comments: The oversight provisions of DOE revised guidance apply to all discretionary R&D conducted by the laboratories.

    Recommendation: The Secretary of Energy should direct the Assistant Secretary for Defense Programs and the Director, Office of Energy Research, to expand the oversight provisions of Order 5000.1A, or any superseding guidance, to cover all discretionary R&D activities, including the basic research component of Los Alamos' discretionary R&D program.

    Agency Affected: Department of Energy

  6. Status: Closed - Implemented

    Comments: The revised DOE order on LDRD (discretionary R&D) specifically requires that laboratories submit reports to the Office of Scientific and Technical Information.

    Recommendation: The Secretary of Energy should direct the Assistant Secretary for Defense Programs and the Director, Office of Energy Research, to incorporate into Order 5000.1A, or any superseding guidance, the requirement included in Public Law 95-39 that project reports be submitted to the DOE Office of Scientific and Technical Information at the completion of each project.

    Agency Affected: Department of Energy

  7. Status: Closed - Implemented

    Comments: The revised DOE order on LDRD (discretionary R&D) clearly defines the roles of headquarters and field office personnel in overseeing this activity.

    Recommendation: The Secretary of Energy should direct the Assistant Secretary for Defense Programs and the Director, Office of Energy Research, to clarify with operations office managers how oversight responsibilities listed in Order 5000.1A, or any superseding guidance, will be conducted so as to ensure that all requirements contained in the guidance are carried out.

    Agency Affected: Department of Energy

  8. Status: Closed - Implemented

    Comments: DOE believes that it has an adequate system in place to ensure compliance with applicable provisions of appropriation and authorization acts. DOE disagrees with GAO assessment of two acts which are the basis for this recommendation. DOE intends no further action on this recommendation.

    Recommendation: The Secretary of Energy should direct the Director, Office of Budget, to establish the necessary controls to ensure that DOE laboratories' assessment of funds for discretionary R&D complies with applicable provisions in appropriation and authorization acts.

    Agency Affected: Department of Energy

  9. Status: Closed - Implemented

    Comments: DOE recently completed a comprehensive evaluation of the results and benefits of funding discretionary R&D activities at its multiprogram laboratories. In addition, the revised DOE Order 5000.4 covering this activity requires that the laboratories submit annual reports and plans on this activity to the DOE assistant secretaries responsible for authorizing funding levels for this activity.

    Recommendation: The Secretary of Energy should periodically assess the relative benefits and costs of past discretionary R&D activities. This could be done by including a requirement that the annual reports on discretionary R&D submitted by the laboratory directors be reviewed by the various DOE program offices in order that they may judge the value of past discretionary activities to their programs and provide feedback to the Assistant Secretary for Defense Programs. Further, this input by the program offices could be considered by the Assistant Secretary in recommending to the Secretary a discretionary R&D funding ceiling for each laboratory.

    Agency Affected: Department of Energy

 

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