Analysis of Energy Reorganization Savings Estimates and Plans

EMD-82-77: Published: Aug 2, 1982. Publicly Released: Aug 2, 1982.

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Pursuant to several congressional requests, GAO reviewed aspects of the administration's proposed reorganization of the Department of Energy (DOE). Specifically, GAO reviewed: (1) the extent to which the administration's fiscal year 1983 budget proposal recognized reorganization costs and savings; (2) the adequacy of documentation in support of the administration's cost savings estimates and its plans for implementing the reorganization; and (3) potential expenses that could result from the proposed reorganization.

The proposal to reorganize DOE was incorporated in the fiscal year 1983 budget request and was introduced in the Senate. GAO found that, in preparing the budget, the primary consideration was reducing the overall size of the energy budget request through program and employment reductions. However, the potential costs or savings effects of the reorganization were not assessed. The administration projected a savings goal of $1 billion over a 3-year period to result from the reorganization, but GAO found that the estimate did not include offsetting expenses and was not adequately documented. The Secretary of Commerce estimated a much lower cost saving from the proposed reorganization. However, this estimate also lacked adequate documentation and failed to reflect a full assessment of potential reorganization expenses. There are potential expenses associated both with the continued use of DOE policies, procedures, and financial and management systems and their merger with systems of other agencies. Although some of these expenses might be avoided or deferred, others would be incurred immediately. Although the administration has taken the appropriate step of establishing a high-level interagency task force to assist in the reorganization, it has not: (1) performed the detailed planning necessary to define how energy functions would be organized, coordinated, managed, and operated; (2) identified the administrative and operational requirements for implementing changes; and (3) documented the potential costs and savings of the reorganization.

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