Energy Management:

Use of Uncosted Balances to Meet Budget Needs

RCED-94-232FS: Published: Jun 6, 1994. Publicly Released: Jul 7, 1994.

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Pursuant to a congressional request, GAO provided information on the Department of Energy's (DOE) management and operating contractors' (M&O) uncosted obligations.

GAO found that: (1) by the end of 1993, DOE M&O contractors held about $5.7 billion in total uncosted obligations; (2) $508 million of the uncosted balances were not tied to specific needs or were excess to expected needs; (3) $132 million in uncosted balances were mistakenly identified as encumbered obligations and $254 million in uncosted balances were identified by contractors as prefinancing or unencumbered obligations; (4) during 1994, $54 million became available because of subcontract closeouts, program terminations, or cost savings; (5) $67 million has been requested for certain activities in 1995 that are not tied to specific needs; (6) the need for this amount is questionable because $60 million will already be available from uncosted obligations and the remaining $7 million will not be needed because of project suspensions and cancellations; (7) although DOE plans to use some of its uncosted balances to offset 1995 activities, it has not specifically identified which uncosted balances it will use; and (8) DOE cannot ensure that it is using the maximum amount of available uncosted obligations, since it sets target levels for using uncosted balances.

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