GAO reviewed the Department of Energy's (DOE) three restricted reserves of unobligated funds. GAO noted that: (1) DOE established the reserves to respond to unforeseen departmental funding requirements; (2) these reserves include the Prior-Year Deobligation Reserve, the Prior-Year Cost Adjustment Reserve, and the Project Overrun Reserve; (3) the reserves are composed of deobligated funds that no longer have a defined need and are unavailable for use unless released by DOE; (4) DOE has not consistently followed its own criteria for placing funds in or using funds from the reserves; (5) funds have been allocated from the reserves without proper documentation and for purposes that do not meet the DOE criteria; and (6) reserve guidelines need to be revised to better reflect departmental needs.
Recommendations for Executive Action
|Office of the Chief Financial Officer||1. The Acting Chief Financial Officer, DOE, should clarify the purpose for the Prior-Year Deobligation Reserve, the Prior-Year Cost Adjustment Reserve, and the Project Overrun Reserve and revise, as necessary, the criteria governing the three reserves.|
|Office of the Chief Financial Officer||2. The Acting Chief Financial Officer, DOE, should instruct officials within his office to place a high priority on following the criteria and better documenting that the criteria have been followed.|