Energy Management: Additional Uncosted Balances Could Be Used to Meet Future Budget Needs
RCED-94-26
Published: Oct 26, 1993. Publicly Released: Oct 26, 1993.
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Highlights
GAO reviewed the Department of Energy's (DOE) uncosted obligations, focusing on: (1) the accuracy of new uncosted obligation information; and (2) whether uncosted obligations resulting from program delays, cancellations, and downsizing could be used to offset the DOE fiscal year (FY) 1994 budget request.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Energy | The Secretary of Energy should develop measures to improve the usefulness of the information provided in the new uncosted balances reporting system by requiring contractors to develop systems that will account for outstanding encumbrances at the program level to provide the information needed for these reports and reduce the need for estimates. |
Further reviews of DOE's uncosted obligations have led to the conclusion that the usefulness of DOE's uncosted reporting system is limited not only by the inaccuracies in the data but also because the information becomes available too late in the development of DOE's proposed budget to be useful in identifying potential budget offsets.
|
| Department of Energy | The Secretary of Energy should develop measures to improve the usefulness of the information provided in the new uncosted balances reporting system by clarifying the approved work scope definition by describing the type of DOE approval needed for capital equipment and construction funds to be reported in this category. |
Because subsequent reviews of DOE's uncosted obligations have questioned the overall usefulness of DOE's uncosted reporting system for the development of DOE's proposed budget, efforts to improve the accuracy of the information reported have less importance.
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| Department of Energy | The Secretary of Energy should develop measures to improve the usefulness of the information provided in the new uncosted balances reporting system by establishing procedures for contracting officers to estimate the funds needed to settle completed and terminated purchase orders and contracts and deobligate the remaining amounts no longer needed. |
DOE agreed that there was a problem with the timeliness of the Department's contract closeouts, in part because of the time needed to obtain indirect expense closeout audits. In September 1994, DOE initiated a 3-year pilot program allowing quick closeout procedures (under which the contracting officer can negotiate the final indirect expenses in lieu of formal audits) to be used for all contracts involving indirect cost reimbursements of $1 million or less per year.
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Topics
Budget administrationBudget obligationsContract administrationCost analysisFederal agency accounting systemsFinancial managementForward fundingFuture budget projectionsManagement information systemsUnobligated budget balances