An assessment by the Department of Energy’s Office of Inspector General raised questions about hundreds of thousands of dollars of costs incurred by DOE’s Oak Ridge cleanup contractor — URS/CH2M Oak Ridge — but UCOR said it resolved all of the issues before the report was made public this week.
The IG regularly conducts reviews of DOE’s managing contractors to evaluate whether costs claimed under their federal contracts are allowable and properly accounted for during internal audit. The report released Wednesday looked at UCOR’s first three years on the job — Fiscal Years 2011, 2012 and 2013.
The report also said more than $250 million in subcontractor costs had not been audited for those first three years under UCOR’s leadership and those, too, are considered to be unresolved until the audits are completed.
Ashley Hartman, a spokeswoman for UCOR, said all planned subcontract audit for 2011-2013, as well as those for Fiscal Years 2014, 2015 and 2016, will be completed by Dec. 31.
According to the IG’s assessment, there was no “material concern” that indicated UCOR’s internal audits could not be trusted or relied up. And there were no general weaknesses with the cost-allowability audits, which “generally met” international auditing standards.
However, it was noted that UCOR’s internal audits had questioned $404,252 of the costs claimed during the three-year period, of which $112,613 had not been resolved. Therefore, the IG said it, too, questioned that amount and also identified some weaknesses that needed to be addressed to make sure only allowable costs were claimed and reimbursed to the contractor. There also were issues where the conclusions of internal audits were not accurate.
Of note among those weaknesses was that UCOR did not always conduct audits of its subcontracts when costs incurred were a factor.
“UCOR believes that the findings in the Inspector General’s report speak for themselves,” Hartman said in response to questions, “and we support the audit’s conclusions. Prior to the release of the report, UCOR had corrected or resolved all unallowable or questionable (contractor) costs raised in the findings.”
Even though the IG said it ultimately found that it could rely on UCOR’s internal audits, the report said there were instances where the audit papers did not contain sufficient information to substantiate the conclusions.
The IG report listed five recommendations for improvements at DOE’s Oak Ridge contractor, and the federal agency’s cleanup chief — Sue Cange — said she agreed with those recommendations.
Among those recommendations was that all unresolved costs be resolved and that all unallowable costs be collected from UCOR. DOE’s Oak Ridge Office of Environmental Management instructed UCOR to have most of the issues resolved by mid-May.
Mike Koentop of DOE’s Oak Ridge cleanup office said the agency was pleased with UCOR’s response to the issues.
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