U.S. DEPARTMENT OF ENERGY
               OFFICE OF INSPECTOR GENERAL
 
 
 
             SEMIANNUAL REPORT TO CONGRESS
                   for the period of
         October 1, 1995, through March 31, 1996
 
 
 
 
 
 
                          APRIL 1996
 
The Honorable Hazel R. O'Leary
Secretary
Department of Energy
Washington, D.C.  20585
 
Dear Secretary O'Leary:
 
This Semiannual Report for the first half of Fiscal Year 1996
is submitted to you by the Office of Inspector General for
transmittal to the Congress, pursuant to the provisions of
the Inspector General Act of 1978.
 
During this reporting period, the Office of Inspector General
continued to advise Headquarters and field managers of
opportunities to improve the efficiency and effectiveness of
the Department's management controls, with particular
emphasis on coverage of issues addressed in the Department's
Strategic Plan.  We also have supported the Department's
reinvention and streamlining initiatives by evaluating the
cost effectiveness and overall efficiency of Department
programs and operations, placing special emphasis on key
issue areas which have historically benefited from Office of
Inspector General attention.
In our office's planning and operations, we continue to
balance available audit, inspection, and investigation
resources with our customersm requirements.  However, the
Office of Inspector General faces an unprecedented challenge
to comply with new mandates, such as the Government
Management Reform Act of 1994. This requires for the first
time audited consolidated financial statements for the
Department of Energy.  This and other unfunded mandates make
it increasingly difficult to provide the level of audit
coverage of the Department that we consider adequate.
Nevertheless, our overall focus remains on assisting
Department management to implement management controls
necessary to prevent fraud, waste and abuse; helping to
ensure the quality of Department programs and operations; and
keeping you and the Congress fully informed.
                             Sincerely,
                             John C. Layton
                             Inspector General
 
Enclosure
 
                 MISSION AND VISION STATEMENTS
 
 
                      MISSION STATEMENT
 
    The Office of Inspector General promotes the effective,
 
  efficient, and economical operation of Department of Energy
 
programs through audits, inspections, investigations and
 
                           other reviews.
 
 
 
 
 
 
 
 
 
 
 
 
 
                      VISION STATEMENT
 
 
 
 
 
 
 
 
     We do quality work that facilitates positive change
 
                      EXECUTIVE SUMMARY
 
 
                      OVERALL ACTIVITY
 
 
     This Office of Inspector General Semiannual Report to
the Congress covers the period from October 1, 1995, through
March 31, 1996.  The report summarizes significant audit,
inspection, and investigative accomplishments for the
reporting period, a large portion of which facilitated
Department of Energy management efforts to improve management
controls and ensure efficient and effective operation of its
programs.  A major accomplishment during this period was the
completion of financial statement audits for Fiscal Year
1995.  Annual financial statement audits are mandated by the
Chief Financial Officers Act of 1990.
     Narratives of our most significant reports are grouped
by measures which the Office of Inspector General uses to
gauge its performance.  The common thread that ties the
performance measures together is their emphasis on supporting
Department efforts to produce high quality products at the
lowest possible cost to the taxpayer.
     During this reporting period, the Office of Inspector
General issued 67 audit and 15 inspection reports.  For
reports issued during the period, the Office of Inspector
General made audit recommendations that, when implemented by
management, could result in $134.6 million being put to
better use. Management committed to taking corrective actions
which the Office of Inspector General estimates will result
in a more efficient use of funds totaling $333.2 million.
 
     Office of Inspector General investigations led to 6
criminal convictions and 1 pretrial diversion, as well as
criminal and civil prosecutions which resulted in fines and
recoveries of $10,942,714.  The Office of Inspector General
also provided 33 investigative referrals to management for
recommended positive action.
 
 
                  OIG RESOURCE LIMITATIONS
 
 
     For Fiscal Year 1996, the Office of Inspector General
absorbed a 19 percent budget reduction to $25,000,000 from
its amended budget request of $30,696,000.  The impact of the
budget reduction was exacerbated by moving the Departmentms
14member Office of Contractor Employee Protection into the
Office of Inspector General without providing funds to cover
its cost. Also, as part of the Departmentms Strategic
Alignment Initiative, the Office of Inspector Generalms
staffing level will be reduced from 356 full-time equivalents
in Fiscal Year 1995 (excluding the Office of Contractor
Employee Protection), to 254 end-of-year positions in Fiscal
Year 2000 (including the Office of Contractor Employee
Protection).  The severe impacts that these cuts are having
on the Office of Inspector General are discussed in Section 2
of this report.
 
                    TRACKING AND REPORTING ON
              THE STATUS OF OIG RECOMMENDATIONS
 
 
     The Inspector General Act of 1978 requires that the
Semiannual Report of the Inspector General include an
identification of each significant recommendation described
in previous Semiannual Reports on which corrective action has
not been completed.  In the Department of Energy, the Office
of Compliance and Audit Liaison within the Office of Chief
Financial Officer has responsibility for the audit followup
system.  Thus, this information is included as part of the
companion submission to this report which is provided by the
Secretary of the Department of Energy.
     Although the followup system is operated by the
Departmentms Chief Financial Officer, the Office of Inspector
General provides oversight in the form of biennial audits of
the followup system or its components, and semiannual reviews
of the progress of corrective actions on audit and inspection
reports.  In addition, the Office of Inspector General
conducts periodic followup audits or verifications in which
the objective is to determine if prior audit and inspection
report recommendations were implemented and, if so, whether
they were effective.  Also, at the start of each new audit or
inspection, the Office of Inspector General conducts a review
of prior reports on related topics, a review of the
recommendations included in these prior reports, and an
evaluation of the corrective actions that were taken.
 
     During this reporting period, there were no reports made
to the Secretary noting unreasonable refusal by management to
provide data to the Office of Inspector General.
 
               AUDIT OF THE DEPARTMENT OF ENERGYmS
            CONSOLIDATED STATEMENT OF FINANCIAL POSITION
 
     The Office of Inspector Generalms Office of Audit
Services assumed the leadership role in auditing the
Departmentms first consolidated statement of financial
position.  This statement, prepared and audited as required
by the Government Management Reform Act of 1994, reflected
the Department of Energyms assets of over $90 billion and
liabilities of $220 billion as of September 30, 1995.  To
account for these activities, the Department operated a
financial management system linked to a decentralized network
of separate systems maintained by integrated contractors,
field offices, and Headquarters offices.  From an Office of
Inspector General audit standpoint, no precedents existed to
deal with many of the accounting issues arising from the
Department's varied missions and programs.
Because of the size and complexity of auditing the financial
statements of an agency like the Department of Energy, the
Office of Inspector General adopted a 2-phased audit approach
that incorporated strict deadlines for completion of field
work and reporting.  Phase I consisted of auditing the Fiscal
Year 1995 Statement of Financial Position, while Phase II
includes auditing all of the Departmentms Fiscal Year 1996
financial statements.  Phase I provided for audits of the
opening balances for Fiscal Year 1996.  Phase I also included
documenting an understanding of the Departmentms internal
control structure, and provided an opportunity for auditors
and the Departmentms Chief Financial Officer to resolve many
of the difficult accounting issues that were inevitably
encountered, such as the valuation of nuclear materials and
contaminated facilities.  Phase I audit activities began in
June 1995.  The Office of Inspector Generalms fieldwork was
completed in December 1995, and on February 29, 1996, the
Office issued the national audit report (see results of Phase
I below).  In addition, the Office of Inspector General
issued 13 reports that addressed local management issues
identified during the audit of the consolidated statement.
Fieldwork was conducted at 29 Department activities and
included 15 major accounts representing over 95 percent of
the Departmentms assets, liabilities, and equity accounts.
These efforts, combined with the reports on 10 separate
financial statement audits of several of  the  most
significant Departmental commercial-type activities (such  as
its  power  marketing  administrations), represent  a
commitment  by  the  Office of Inspector  General to  audit
the Departmentms  financial statements which is as
comprehensive  as any among Federal agencies.
 
               Results of Phase I
 
     The national audit report was made up of three parts:
(1) a report on the Departmentms Statement of Financial
Position as of September  30,  1995;  (2)  a  report  on  the
internal control structure;  and  (3) a report on compliance
with applicable  laws and regulations.
          The  Office  of  Inspector General was unable  to
form  an opinion  on  the  Departmentms  Fiscal  Year  1995
Statement  of Financial Position because the Department did
not ensure that all unfunded  liabilities  (recorded at $200
billion)  were  properly identified.  Although the Department
prepared an estimate of  its unfunded environmental
liabilities, it had not estimated the cost of  environmental
remediation at certain facilities.   Also,  the Department
did not  identify additional  unfunded  liabilities,
including  an estimated $1.9 billion for environment, safety
and health compliance, that were not included in the
statements.
      Additionally, the Department did not have adequate
      controls over  its  property and equipment to ensure proper
accountability for these assets and it could not provide
adequate assurance that the  balances  attributable to the
Departmentms  portion  of  the Bonneville  Power
Administrationms assets and  liabilities  were accurate.
          The  internal  control report identified  eight
reportable conditions involving the Departmentms internal
control structure. These  weaknesses related to estimating
the Departmentms unfunded environmental  liability  of  $196
billion,  accountability  and valuation  of over $23 billion
in property, plant, and equipment, and the inability of the
Departmentms financial management system to  produce
adjusted consolidated  financial  statements.  The
report  on  the Departmentms compliance with laws and
regulations contained no findings.
 
                 Phase II Activities
 
          Phase II, which began in March 1996, focuses on
changes  in internal  controls,  but also involves  opining
on all  of  the Departmentms  financial statements, including
the Statement  of Financial  Position and the related
Statement of Operations  and Changes  in Net Position.  The
Chief Financial Officer  currently anticipates  that  the
Department will provide  the  Office  of Inspector General an
adjusted trial balance by November 1,  1996, and  the
financial statements by December 16, 1996.  To meet  the
March  1,  1997, submission date to the Office of Management
and Budget  imposed by the Government Management Reform Act,
a  draft audit  product  is planned to be issued by the  end
of  December 1996.
     The Office of Inspector Generalms Fiscal Year 1995
financial statement  audit efforts, as well as future efforts
to  meet  the March  1,  1997, mandated reporting deadline,
have made and  will continue  to make unprecedented demands
on the diminishing  level of  the Officems audit resources.
This is a significant concern. The  Office of Inspector
General will continue to work  with  the Office of Management
and Budget and the General Accounting Office interagency
task  groups studying the complex issues  associated with
financial reporting on Government activities.
 
 
                          SECTION 1
 
 
 
                    PERFORMANCE MEASURES
 
 
 
      Significant Office of Inspector General work is
narrated in this  section under qualitative performance
measures  which were used  to  gauge  the effectiveness and
efficiency  of Office  of Inspector  General products in
meeting the needs and expectations of its customers.
 
                    PERFORMANCE MEASURE:
                OIG RECOMMENDATIONS ACCEPTED
                OR IMPLEMENTED BY MANAGEMENT
 
     Explanation:  Management concurs with or implements
     recommendations contained in a published OIG report.
     Partial concurrence may be counted as acceptance if the
     proposed or implemented action by management is
     responsive to the recommendation.
 
An Unnecessary Expenditure of Funds Results from Not
Obtaining Customer Agreement Before Proceeding with Product
Development
 
The Department has joint responsibility with the Armed
Services for the safety of nuclear weapons in their custody.
An audit found that after successfully developing and
modifying accident resistant containers for use on Army
helicopters, the Department subsequently spent about $29
million to design, modify and produce 87 accident resistant
containers for the Air Force. However, the Air Force did not
want them and expressed no desire to use these containers.
This production occurred because the Department unilaterally
decided to produce containers without ensuring that the
containers met customer expectations.
  Although there may be circumstances where the Department
might do preliminary design and testing before agreeing with a
customer on requirements, the Department should reach
agreement on the requirement for products before final design
and production, or funds will be spent unnecessarily.  The
audit report recommended that management resolve issues
regarding these containers and preclude spending for
production of products without customer agreement to use the
product.
  Management concurred with the audit report recommendations.
However, management stated that this particular case was an
exception in that the Department was responding to a
"sincerely felt" requirement.  (IG-0380)
 
The Department Needs to Address Arms and Military-Type
Equipment Inventory Issues
 
 The Department of Energy maintains an inventory of arms and
military-type equipment for use in protecting its nuclear
weapons, materials, facilities, and classified information.
An audit disclosed that nine of ten sites had more arms
(handguns, rifles, and other special firearms) on hand than
appeared necessary to support site missions.  Further, this
property was not always accounted for on site inventory
lists, complete inventory listings were not always available,
some property could not be located or had incorrect
nomenclatures and serial numbers, and property was not recorded
and tracked on inventory lists because it was defined as nonfunctional.
  The review also showed that documentation to support
property disposals was not always available and correct,
sites retained weapons that went unused for years but were
not identified for disposal, and armored personnel carriers
were excessed to military museums and other locations without
documentation that demilitarization responsibilities were
transferred. Additionally, the Department allowed arms and
military-type equipment to be loaned for extended periods of
time even though it had established specific policies
prohibiting the practice. Most of the loans of arms exceeded
one year or were for unspecified periods of time, and timely
reviews of the loans were not performed.
  Department management concurred with the audit reportms
recommendations to correct the situation and is taking action
to resolve the issues addressed in the report.  (IG-0385)
 
Idaho Operations Office Needs to Improve Its Cost Control of
A/E Services
 
In 1990, the Office of Inspector General issued an audit
report which concluded that the Departmentms architect and
engineering (A/E) costs averaged more than twice that of
private industry. The primary cause of the higher costs was
the lack of Departmental A/E cost standards that would
provide measurement criteria for controlling costs.
  A recent audit at the Idaho Operations Office found that
the Office has begun to develop performance measures for A/E
design services and has developed cost control measures for
internally developed A/E tasks.  However, additional
opportunities exist to improve management control over the
costs of those services. For example, the auditors found that
A/E costs for 65 conventional construction projects were $5.8
million higher than comparable industry standards.
  The audit report recommended that the Office take
aggressive action to control the excessive cost of A/E
services that were previously identified in the 1990
Departmentwide audit report. This action should include the
establishment of expectations and performance measurements
for the management and operating contractor in the area of
A/E services.
 The Idaho Operations Office agreed with the recommendation,
stating that the recommenda-tion is in the process of being
accomplished as part of implementing a new Department Life
Cycle Asset Management Order.  (IG-0387)
 
Idaho Operations Office Acts To Account for $54 Million Worth
of Property Left Over From a Terminated Project
 
The April 1992 termination of the Departmentms Fuel
Processing Restoration Project left the Idaho National
Engineering Laboratory with over $54 million in tools,
equipment and material to be retained, used, or disposed of.
An audit found that the Department and its contractors had
not completely and accurately accounted for the property.  In
addition, the audit disclosed over 2,700 stock items which
had neither been identified for redistribution nor excessed.
Further, only a limited amount of property distributed
outside of the Laboratory was ever placed in the Departmentms
excessing system which makes property available throughout
the Department and to other Federal agencies.
 The audit report recommended that the Idaho Operations
Office ensure that a wall-to-wall inventory be performed on
property remaining at the Laboratory; all Fuel Processing
Restoration Project property be properly marked, tagged, and
accounted for in the Laboratoryms approved Government
property record; and all surplus property be excessed in
accordance with applicable rules and regulations.
  Management concurred with the auditms finding and
recommendations and has already initiated corrective actions.
(WR-B-96-04)
 
An Audit Helps Idaho Operations Office  Identify Construction
Projects for Further Streamlining
 
In response to the Secretaryms streamlining initiatives and
the Departmentms established policies, the Idaho Operations
Office has made a commitment to streamline operations and
make the Idaho National Engineering Laboratory less costly to
operate. An Office of Inspector General audit assisted Idaho
in addressing this commitment by identifying seven ongoing
construction projects, totaling over $40 million, that were
either not needed or larger than needed.
The audit report recommended that the Idaho Operations Office
review construction project plans and cancel those projects
that do not support the Idaho National Engineering
Laboratoryms current and foreseeable mission; independently
identify and consistently evaluate alternatives; limit needed
projects to the minimum size required to achieve the
Laboratoryms mission; and reassess the need for and size of
construction projects when significant events occur.  By
implementing these recommendations, Idaho could save about
$26.4 million.
  Management concurred with the auditms finding and
recommendations and has already begun corrective actions.
(WRB96-03)
 
An Audit Alerted Albuquerque Operations Office of the Need to
Reexamine Requirements for Another Laboratory
 
 An audit found that the Department planned to construct a
new Environmental, Safety, and Health Analytical Laboratory
at its Pantex Plant in Texas even though the Departmentms
mission requirements were already being satisfied either at
onsite laboratories or at commercial laboratories.
Construction of the laboratory had been approved because the
Department relied on justifications that were not updated.
Also, required evaluations of alternatives were either not
performed or not documented.  As a result, the Department
planned to spend an additional $8.4 million on a laboratory
that was not adequately justified, that may compete with private
sector laboratories, and that may not provide a sufficient appearance
of independence (which would be provided by using offsite laboratories).
The audit report recommended that the Albuquerque Operations
Office suspend additional funding for the project until the
need is clearly established and cost/benefit analyses are
performed. Albuquerque should cancel the construction project
if the Laboratory cannot be justified.  Albuquerque
management concurred with the recommendations.  (WR-B-96-02)
 
An Audit Called the Departmentms Attention to Cost Allocation
Disparities for Fire and Emergency Medical Services
 
 Under the Atomic Energy Act of 1954, the Department of
Energy provides fire and emergency medical services to Los
Alamos County, New Mexico.  Since the countyms inception in
1964, the county and the Department have been working toward
making the county self-sufficient.  To help achieve this
goal, the Department negotiated a contract transferring
responsibility for fire and emergency medical services to the
county and allocating the expected $39.9 million in costs
between the parties.
  An audit disclosed that the Department was paying about 99
percent of costs ($39.4 million) while using only 47 percent
of the services.  The audit also found that the formula used
to arrive at the cost allocation was neither justified as
reasonable nor appropriately documented.  In fact, data
needed to reconstruct the formula and fully understand it was
not available.  As a result, the Department and the county
cannot be assured that costs are allocated fairly and that
neither party is unnecessarily subsidizing the other.  The
audit report recommended that the Department either develop
alternative methods for sharing fire and emergency medical
services costs or separate responsibility for these services
between the Department and the county.  Management agreed.
(WR-B-96-01) An Inspection Identifies a Need for Improvements
in Intelligence Oversight at the Special Technologies
Laboratory
  The Department's Special Technologies Laboratory, located
at Santa Barbara, was established in 1986 to conduct research
and development on intelligence and national security-related
issues. The Laboratory also ensures that the technologies
developed are available for application to Department
missions.
  An inspection at the Laboratory identified a need for
improvements in several areas, including distribution of
Headquarters intelligence-related guidance to the field,
conduct of periodic reviews of collected information,
adherence to Attorney General-approved procedures regarding
approval of workfor-others projects from the intelligence
community, and conduct of foreign travel and contacts briefings.  The
inspection report recommended corrective actions which, when
implemented, would help ensure compliance with intelligence
related orders and procedures.  Management concurred with the
inspection reportms recommendations and outlined actions
which it intends to take to address them.  (INS-O-96-01)
 
Los Alamos Will Tighten Internal Controls Over Consultant
Agreements
 
 Department regulations state that purchases, which include
consulting agreements, be acquired in a manner most
advantageous to the Government by ensuring competition.
These agreements may be sole sourced, if the sole source is
fully justified.
  In contrast to these regulations, an audit found that Los
Alamos National Laboratory did not adequately justify 17 sole
source consultant agreements valued at $842,900.  This
condition occurred because (1) requesters did not follow
policies and procedures when preparing sole source
justifications, (2) Los Alamos did not have an internal
control mechanism to reject agreements that were not
adequately justified, and (3) the Department did not review
the adequacy of sole source justifications.  Without adequate
justifications, the Department may not have obtained
consultant services at the lowest possible cost.
The audit report recommended that the Albuquerque Operations
Office require Los Alamos to ensure proper sole source
justifications and enhance internal controls over consultant
agreements.  Management concurred with the finding and agreed
to implement the recommendations.  (WR-B-96-05)
 
                    PERFORMANCE MEASURE:
 
              LEGISLATIVE AND REGULATORY COMPLIANCE
                 RELATED TO OIG RECOMMENDATIONS
 
Explanation:  Office of Inspector General identification of
noncompliance with legislation or regulations.
 
An Audit Confirms Need for Management to Implement Its Draft
Contractor Overtime Policy
 
  Department policy requires contractors with cost-type
contracts to hold overtime to the minimum necessary to
support mission requirements.  Management and operating
contractor overtime costs totaled about $251 million in
Fiscal Year 1994, including about $65 million for exempt
employees (higher-paid executives, administrative, or
professional) and $186 million for nonexempt employees.
An audit conducted to evaluate contractor overtime payments
for compliance with applicable regulations and contract
provisions found that the Department did not adequately
monitor and manage contractor efforts to minimize overtime.
The audit report recommended a variety of cost reduction
strategies, including benchmarking contractor overtime
policies and procedures against best practices in the private
sector and prohibiting monetary payment to exempt employees
for irregular and occasional overtime worked.
  Department management commented that a draft overtime
policy has been designed to balance the need for reduced
oversight against the need to demonstrate responsible
stewardship of taxpayer dollars.  The policy, which will be
implemented through a Contract Reform Rulemaking, specifies
conditions that will trigger increased Department management of
contractor overtime.  (IG-0381)
 
Department Internal Controls for Intelligence and
Intelligence Related Human Subject Research Projects Need to
Comply with Regulations
 
 The Office of Inspector General conducted an inspection of
internal control procedures used by the Office of
Nonproliferation and National Security to manage selected
intelligence and intelligence-related projects that involve
human subject research.  The inspection did not find evidence
that Departmental officials and contractors knowingly
violated Federal regulations and Departmental directives
regarding the conduct of projects involving human subject
research projects. The inspection did find, however, that
selected officials and contractors did not comply with such
directives because they did not recognize that they were
conducting human subject research as defined by Federal
regulations (10 CFR 745), or were unfamiliar with
Departmental procedures developed to conduct human subject
research.
  The inspection found that officials at the Idaho Operations
Office and the Idaho National Engineering Laboratory did not
recognize that three intelligence-related Work for Others
projects that they had accepted and were conducting involved
human subject research as defined by 10 CFR 745.  As a
result, the Office of Health and Environmental Research
issued Idaho a stop work order on the three projects until
the conduct of the projects came into compliance with Federal
regulations.
The inspection also found that the Sandia National
Laboratories obtained approval of six projects involving
human subject research but initiated such research in two of
these projects before obtaining required human subject
approvals.  The inspection also disclosed that the Office of
Nonproliferation and National Security did not fully
implement the procedures they had developed to identify human
subject research projects.
  The inspection further determined that the Office of Energy
Intelligence had not ensured that management and operating
contractors, who were not members of a Departmental Field
Intelligence Element but were engaged in intelligence-related
Work for Others projects, had received training to
familiarize them with applicable regulations on intelligence
activities and procedures.
  The inspection report made ten recommendations which, when
implemented, would bring the Departmentms intelligence and
intelligence-related projects that involve human subject
research into compliance with Federal regulations.  In
commenting on the inspection report, management concurred
with all recommendations and completed or identified
corrective actions.  (IG-0383)
 
Oak Ridge Operations Office Needs to Address Environment,
Health and Safety Compliance Issues
 
 The President of Martin Marietta Energy Systems, Inc., at
Oak Ridge requested a corporate review at the three
Department of Energy sites operated by the contractor because
of his concerns about safety incidents and accidents during
the late spring and early summer of 1994.  The corporate
review was to determine if root causes existed for these
safety incidents and accidents, and to produce
recommendations for the reduction or prevention of future
safety incidents or accidents.
  The Office of Inspector General received a complaint that
dissemination of the corporate review teamms report on its
findings was being intentionally restricted and that response
to the findings was not timely.  An inspection found that
dissemination of the report had been more limited than had
typically been the case for past reports of other corporate
reviews, and that Energy Systems had not developed timely
corrective action plans to address the 18 recommendations
contained in the report.
  The inspection also found that a deliberate recordkeeping
inaccuracy, as reported by the corporate review team, had
resulted in non-compliance with the Resource Conservation and
Recovery Act, and could result in enforcement actions by the
State of Tennessee.  Also, an Energy Systems internal
investigation team incorrectly concluded that a daily visual
inspection, which had been performed in a cursory manner at
one site (which was the basis of the non-compliance), had
complied with Resource Conservation and Recovery Act
regulations.
 The inspection report made five recommendations which, when
implemented, will enhance the Departmentms oversight and
regulatory compliance in environment, safety and health
matters. The Oak Ridge Operations Office identified necessary
corrective actions in their response to the recommendations.
(IG-0384)
 
Inappropriate Funds Are Used to Pay Support Service Contract
Personnel
 
  During an investigation of another matter, the Office of
Inspector General identified improper disbursements from an
office supply account.  A former Acting Chief Financial
Officer at a Department field office inappropriately used an
account established to obtain office supplies to pay salaries
of contractor personnel working for the Chief Financial
Officerms section.  Such payments are not in compliance with
the Federal Acquisition Regulation.
 The investigation report recommended that the field office
manager conduct a review to ensure that all field office
organizational elements are in compliance with portions of
the Federal Acquisition Regulation which cover lpersonal
service contracts.n  Also, the manager should take
appropriate administrative action against the former Acting
Chief Financial Officer and any other Department employees
found to have improperly used funds to pay the salaries of
support services contractor employees hired under personal
service contracts. Field office management concurred with and
implemented the recommendations.  (I94CN008)
 
                    PERFORMANCE MEASURE:
 
                     COMPLAINTS RESOLVED
 
     Explanation:  Complaints and allegations resolved as a
     result of OIG work.  Complaints and allegations are
     considered resolved when a case is closed. Prosecutions
     and exonerations are included in this measurement.
 
A Complainant Alleges Improper Property Control at the
Departmentms CEBAF
 
  The Office of Inspector General received an allegation of
improper property accountability at the Departmentms
Continuous Electron Beam Accelerator Facility (CEBAF).  CEBAF
is a Federally funded research and development center at
Newport News which is operated under contract by Southeastern
Universities Research Association.
An inspection based on the complaint disclosed that portions
of CEBAFms personal property management system did not meet
the requirements of the Departmentms property management
regulations. For example, CEBAF property custodians were not
adequately performing their duties as custodians and had not
received formal training.  Also, the personnel out-processing
system implemented at CEBAF did not ensure that departing
employeesm property accounts were properly cleared.  Further,
CEBAF had not met requirements for conducting walk-through
inspections to identify idle and unneeded personal property,
and the Departmentms Contracting Officer had not performed a
required review of CEBAFms walk-through inspection procedures
to evaluate their effectiveness.  Additionally, the
inspection found that CEBAF had not met all requirements for
conducting periodic physical inventories, processing
inventory results, and managing its property loan program.
  The inspection report concluded that the Departmentms CEBAF
Site Office Property Administrator needed to provide adequate
administration of the property management requirements of the
CEBAF management and operating contract with Southeastern
Universities Research Association.  The inspection report
made several recommendations which, when implemented, will
help improve CEBAFms property accountability.
  Management concurred with the reportms recommendations, and
Southeastern Universities Research Association committed to
preparing a one-page guide for every property custodian to
highlight key custodial responsibilities and directions on
how to obtain appropriate training.  (INS-O-96-02)
 
An Investigation Finds Areas for Improvement in
Subcontracting Award Selections
 
  The Office of Inspector General investigated a complaint
that contractor employees at the Departmentms Nevada Test
Site were circumventing acquisition regulations in awarding
subcontracts and purchase orders.  The complainant also
alleged that the employees were receiving compensation from
subcontractors for their awards.
  The investigation found no evidence to substantiate the
allegations.  In the course of the investigation, however, it
was found that a contractor employee had entered into pre-
award agreements with a subcontractor which included the
promise to pay about $200,000 to the subcontractor in the
event that the subcontractor was not awarded the contract.
The subcontractor was awarded the contract in spite of not
having received the highest evaluation from the selection
committee.  Additionally, the Financial Compliance Review
Division of the Nevada Operations Office conducted an
internal audit at the request of the investigators and found
that the contractor had used
operational funds to make tenant improvements.
The investigative report recommended that the Nevada
Operations Office determine (1) if the pre-award agreements
gave the contract award recipient an unfair advantage, and
evaluate the merits of this issue as part of the contractorms
award fee process; (2) if the contractorms failure to use
impartial evaluation criteria gave an unfair advantage to the
selectee in the selection process; and (3) if the contractor
used operational funds to pay for unallowable tenant
improvement costs and, if so, recover the funds.
 The Nevada Operations Office responded to the investigation
reportms recommendations by concurring that the pre-award
agreements and the impartial evaluation criteria gave unfair
advantages to the selectee.  The Office further agreed to
evaluate the merits of these issues as part of the
contractorms award fee process.  The Office also found that
the contractor used $24,144 in operational funds for
unallowable tenant improvement costs and will request the
contractor to refund the money.  (I93LL027)
 
Department Management Faces an Allegation of Government
Chartered Aircraft Misuse
 
A complainant alleged that Department employees flew a
Government-chartered aircraft to receive a private tour of Carlsbad
Caverns. An investigation determined that a Department
contractor provided a  chartered flight from Albuquerque to
Carlsbad, New Mexico, for six passengers to tour the Departmentms
Waste Isolation Pilot Project.  The justification for the chartered
flight stated that the six passengers were Department employees, and
therefore the charter would save the Government $65.80 because
of a reduced charter rate.
  The investigation found that not all of the passengers were
Department employees.  Because the rates for non-Department
passengers are considerably higher than the reduced rate for
Department employees, a commercial flight would have been more
cost-effective than the chartered one, making the chartered
flight unallowable.  Additionally, chartered Government
aircraft are not to be used for travel to make routine site
visits, according to Office of Management and Budget Circular
A-126.
   The passengers were provided a guided afterhours tour of
Carlsbad Caverns by an employee of the Departmentms site
contractor who donated his time without charge.
  The investigation report recommended that the Operations
Officems Chief Counsel (1) determine if there was any conflict
of interest involved with the Government employees receiving a
park tour provided by the contractor employee, and (2) ensure
that adequate policies and procedures are in place regarding
the use of aircraft.
  Department management concurred with the recommendations,
also stating that the incident will be used as a llessons
learnedn discussion during the next annual ethics training
session. (I93AL015)
 
A Contractor Responds to Misrepresentations Made by One of Its
Security Employees
 
 The Office of Inspector General received an allegation that a
contractor security employee at the Departmentms Rocky Flats
Environmental Technology Site had contacted households in his
neighborhood offering to have the area patrolled by two
uniformed guards for a $40 annual cash fee from each
household. He had characterized his enterprise as a
lneighborhood watchn program to combat crime and gang-related
activity.
   An investigation determined that the contractor security
employee had misrepresented himself to at least 200 homes as a
Federal officer and as having a law enforcement background.
Further, he had failed to notify his employer of his
representations.
When the investigation results were reported to the
contractor, the contractor re-advised all of its personnel of
their employment status and legal obligations regarding
authority reserved for Federal employees versus that of
contractors. Additionally, all contractor protection force
personnel were counseled that display of Department of Energy
credentials, or any other indications that contractor
employees are granted authority reserved for Federal
employees, is a statutory violation of Federal laws and
contractor work rules. (I94DN004)
 
A Contractor Employeems Vehicle Usage Leads to 5-Day
Suspension
Without Pay
 
 The Office of Inspector General received an allegation that
a National Renewable Energy Laboratory contractor employee
was misusing official vehicles by driving them home at night
and over weekends.
  An investigation uncovered evidence that the contractor
employee used Laboratory vehicles leased from the General
Services Administration for personal business, including the
transportation of relatives.  Also, log entries for times
during which vehicles were used by the contractor employee
were not always clear or logically consistent.  For example,
one log entry specified the userms ldestination and purposen
as lclean.n However, the mileage entry showed that the
vehicle had been driven 104 miles.  Additionally, the
contractor employee drove Laboratory-leased vehicles for
almost 5 years without a valid driverms license.
  The results of the investigation were sent to the
Departmentms Golden Field Office.  Shortly thereafter, the
contractor employee was suspended without pay for 5 days and
admonished that future violations could result in termination
of employment.  (I94DN001)
 
Better Missing Property Reporting Procedures Could Help to
Improve the Rocky Flats Property Control System
 
A complainant requested that the Office of Inspector General
look into lsignificant property lossesn at the Departmentms
Rocky Flats Plant.  The request named eight items as
lpossible stolen property.n
  An investigation determined that the Federal Bureau of
Investigation (FBI) had received a list of over 100 missing
property items from the Departmentms Rocky Flats Field
Office, although the FBI had not opened an investigation into
the lost property.  At the request of investigators, the
management and operating contractor at the Rocky Flats Plant
listed all missing items categorized as ltheft.n  The list
contained only the same eight items which the complainant had
originally sent to the Office of Inspector General, but a
contractor employee told an investigator that there was no
system currently in place at the Rocky Flats Plant for
reporting missing and stolen property.
  An investigative report was sent to the Rocky Flats Field
Office recommending that management consider acquiring and
implementing a computerized property management system which
would track property from introduction to retirement.  The
report also recommended that management consider developing
and implementing standardized missing Government property
forms for use by all Rocky Flats contractors.  Management
should also ensure that a proposed Rocky Flats individual
accountability program becomes operational and that copies of
missing property reports are forwarded to the Office of
Inspector General.
  Management concurred with the recommendations and is taking
action to implement them.  (I94DN007)
 
An Accident Investigation Board at Brookhaven Did Not
Adequately Address Specific Management Systems and
Organizations as a Root Cause
 
 A complainant alleged to the Office of Inspector General
that an accident investigation of a fire at the Brookhaven
National Laboratory violated Department regulations.  The
complainant contended that there was not clear agreement
among the Accident Investigation Board members on the
investigationms scope because the Board Chairman wanted to
focus on the physical causes of the fire.  At least one Board
member wanted to focus on the apparent management
deficiencies that allowed the experiment to operate for so
many years without a proper safety analysis and in violation
of Department regulations.
An inspection concluded that the written scope for the
accident investigation was generally consistent with
Department regulations.  However, the inspection also
determined that the Board had conducted the investigation and
prepared a report that did not adequately address specific
management systems and organizations as a root cause.
Without a thorough root cause
analysis of specific management systems, deficiencies in the
exercise of oversight responsibilities by lupstreamn
management organizations may not be identified and corrected.
  The Office of Inspector General concluded that the Board
Chairmanms and the Board membersm limited experience and
training in accident investigation (including root cause
analysis) may have contributed to the Board conducting an
accident investigation that did not adequately address
specific management systems and organizations.  Further, the
Board Chairman and the Board did not believe that they should
be critical of management in their investigative report.  The
inspection found evidence indicating that this may not be an
isolated case, but may be a more general problem with
Department accident investigations and, in particular, with
those conducted by field components.
 The inspection report made 17 recommendations to cognizant
Department managers, which included modifying permanent
oversight and training procedures and regulations, reviewing
and expediting the Departmentms program on employee concerns,
identifying and reviewing management systems and procedures,
conducting a root cause analysis of the Brookhaven accident,
and ensuring that future investigation boards understand
their responsibilities in investigating and reporting
management systems as a root cause. Management agreed with
the recommendations.  (IG-0386)
 
Written Reprimands Result from Misuse of a Government
Computer
 
The Office of Inspector General received an allegation that
two National Renewable Energy Laboratory employees were doing
personal work on a Government computer.  An investigation
substantiated the allegation.  The two employees were using a
Government computer, which was assigned to a third party, to
work on architecture plans related to a personal residence
which one of the employees was intending to build.
The investigative report recommended to the Departmentms
Golden Field Office that appropriate administrative action be
taken against the two employees and that specific steps be
taken to increase Laboratory employee awareness of what
constitutes improper computer use.  The Golden Field Office
responded by stating that the Laboratory agreed to issue
written reprimands to the two employees and to reimburse the
Department $100 for the inappropriate use of Government
property.  The Laboratory also agreed to ensure that all of
its employees receive two applicable brochures (lStandards of
Business Conduct,n and lComputer Security at NRELn).  The
Laboratory will ensure that all
employees sign acknowledgment forms, which will then be
retained in the Laboratoryms Human Resources Office.
(I96DN001)
 
Investigative Results Increase Awareness of the Need for
Tighter Property Controls on Government Equipment
 
The Office of Inspector General received an allegation that
two contractor employees at the Departmentms Savannah River
Site improperly took Government property offsite and misused
a Government vehicle.  Subsequent investigation substantiated
the allegation.
The two contractor employees had removed Government property
from the Site for repairs without first obtaining a Material
and Authorization Pass.  Because the property fell below the
monetary threshold for inventory control, the pass would have
documented the propertyms removal and served as a tracking
device until the propertyms return.  Additionally, the
property had not been properly marked or otherwise identified as
belonging to the Government, as specified in established
procedures.
The investigation further revealed that, while transporting
the Government property, the two contractor employees had
used their Government vehicle to travel to a hardware store
to make personal purchases.
The investigation report recommended that the Savannah River
Operations Office ensure that the contractor adheres to
established procedures regarding identification, marking and
transporting Government property.  The Office should also
ensure that all employees are familiar with established
procedures for the proper use of Government equipment and
consider administrative action for its misuse.
  The Savannah River Operations Office agreed with the
recommendations, and the two contractor employees received
written reprimands for misuse of the Government vehicle.
(I95SR016)
 
Savannah River Operations Office Non-competitive Promotions
Needed Better Processing Procedures
 
A complainant alleged to the Office of Inspector General that
several Savannah River Operations Office personnel had
conspired to fraudulently promote an employee from GS-14 to
GS15.  An investigation did not substantiate the conspiracy
allegation; however, weaknesses in personnel procedures were
identified.
  The investigation disclosed that a personnel management
specialist altered a lRequest for Personnel Actionn form
originally intended for a reorganization to process a
promotion of an employee.  The specialistms team leader, who
was aware of the change made by the specialist, did not
initiate action to correct it.
  Additionally, the investigation found that there were no
procedures in place to notify management of pending
noncompetitive promotions.  Without written procedures to
follow, the personnel management specialist simply noted the
results of applying newly revised position classification
standards which raised the employeems grade level and
processed the action without management notification.
  The specialist had previously examined this same position
before publication of the newly revised standards, but the
action at that time had not resulted in a change to higher
grade.  The specialist contended that a promotion resulting
from an application of standards does not have to be
competitively announced.
  In response to the investigative report, the Savannah River
Operations Office developed procedures to define and document
its personnel program processes, including notifying
management before processing noncompetitive promotions.
(I95SR007)
 
A Contractor Employeems Allegations of Wrongful Discharge for
Raising Concerns to the Inspector General Hotline Were
Settled After Investigation
 
  An employee of a Department Headquarters support contractor
alleged that he was discharged for providing information to
an Inspector General investigator regarding alleged misuse of
funds by Department managers overseeing the contract.  The
contractor asserted that the employeems discharge was based
upon cost reduction requirements.
 The investigation determined that the employee had provided
information to an Office of Inspector General investigator
regarding misuse of imprest funds and alteration of invoice
documents.  The information had resulted in disciplinary
action against the Contracting Officerms Technical Representative
overseeing the contractor for whom the employee worked.  A
review of the contractorms financial records disclosed no
significant cost savings effected as a result of the
employeems discharge.
  A decision was issued requiring the contractor employeems
reinstatement and payment of back pay.  (S96IS021)
 
A Contractor Employeems Allegations of Reprisal Were
Determined To Be Unfounded
 
An employee of the management and operating contractor for
the Oak Ridge Institute for Science and Education alleged
that she had been reprised against for disclosing health and
safety issues and for making allegations of fraud, waste and
abuse by contractor management.  The employee asserted that
the retaliation included harassment, poor performance
evaluations, and a reduction-in-force dismissal.
  The investigation determined that the employeems alleged
health and safety disclosure was too remote from the actions
she alleged were reprisals.  Moreover, there was no
corroborative evidence to support the employeems harassment
allegations.  The employee did make allegations of management
fraud, waste or abuse to Inspector General representatives.
However, there was no information to indicate contractor
management became aware that the employee was the source of
the allegations at the time that the alleged retaliatory
actions were taken.  Further, there was no evidence that the
employee was deliberately singled out for reduction-inforce
dismissal, and the contractor had found a new position for
the employee when the reduction-in-force occurred.  The
contractor also provided evidence that the employeems
performance reports were not significantly at variance with
those she received before making any disclosures.
A decision was issued finding that the employee had not been
reprised against.  As a result of this finding, the employee
withdrew a second complaint of reprisal that was based upon
similar allegations.  (S96IS035)
 
Contractor Employees Misuse Government Computers to Access
Pornography on the Internet
 
 A complainant alleged to the Office of Inspector General
that about 130 Pacific Northwest National Laboratories
employees had used Government computers to download
pornographic pictures from the Internet.  The complainant
reported that the pictures were lsoftcoren images, not
lhardcoren or child pornography.
 In response to investigative report recommendations, Pacific
Northwest National Laboratories management stated that the
Laboratories will continue to randomly monitor computer usage
to inhibit abuse.  The Laboratories will also conduct a
review to determine whether the Department should be
reimbursed for any time related to the misuse of Government
computers. Management also notified the Office of Inspector General
that 19 employees received suspensions without pay which ranged from
3 days to 2 weeks, and 73 employees received written
reprimands. (I96RL004)
 
A Security Contractor Fails to Properly Report a Potentially
Criminal Matter Involving Two of Its Employees
 
  An Office of Inspector General investigation found
administrative deficiencies in a security contractorms
handling of an investigation of computer equipment stolen by
two of its own employees.  The Inspector Generalms review
disclosed that the theft of the computer equipment and the
mishandling of classified material associated with the theft had not been
properly reported to the cognizant Department Operations
Office or to the Office of Inspector General.  The security
contractorms report listed the computer as merely ldiscovered
missingn from a building, and the report stated that the
computer had been recovered.  The security contractor
terminated the employment of the two individuals responsible
for the theft.  After being notified by the Office of
Inspector General about the theft, the field office moved to
review the still-effective security clearances of the two
former employees.
 Based on investigative report recommendations, field office
management directed the security contractor to improve
communications with the field office and Office of Inspector
General officials through use of the contractorms daily
activity report which is submitted to Department management.
The security contractor was reminded of its contractual
obligation to report and identify any matter that may
adversely affect the Department.
  The contractor has been directed to advise field office
management of actions it plans to take to address Office of
Inspector General concerns regarding (1) timely notification
of the Inspector General and Department management about
potentially criminal matters, (2) providing complete and
accurate details on issues discussed in the daily activity
reports, (3) providing adequate information to the Department
so that appropriate decisions can be made regarding
terminated employeesm security clearances, and (4) ensuring
adequacy of the contractorms administrative process for
identifying deficiencies in the areas of property control and
security. The Department terminated the two contractor
employeesm security clearances.  (I96SR017)
 
                    PERFORMANCE MEASURE:
               INVESTIGATION RECOVERIES/FINES
             AND FUNDS IDENTIFIED FOR BETTER USE
 
     Explanation:  Applies to investigations and allegation
     based inspections only, and consists of recoveries
       (both property and money) and fines which were
     collected as a result of management actions based on OIG
     work, as well as funds identified in reports for better
     use.  Statistics on investigative recoveries/fines will
     be collected separately and will be included in Section
     4 of the Semiannual Report.
 
Internal Auditors Catch Second Submission of Fraudulent
Invoices, Leading to Over $75,000 in Recoveries
 
  Internal auditors working for a management and operating
contractor in Las Vegas found duplicate submissions of at
least 100 small purchase invoices that had been made over an
18-month period.
  An investigation found that the project manager of a
subcontractor had conspired with a vendor to submit false
invoices.  The vendor supplied 152 invoices with a total
value of over $42,000 to the project manager, who then submitted them
to the management and operating contractor for reimbursement.
The vendor and the project manager shared the proceeds
equally. Unknown to the vendor, however, the project manager
also resubmitted 118 of the false invoices for a second
payment of over $33,000 which was not shared.
   Based on the investigative report, the county district
attorney accepted the case for prosecution.  The vendor and
the project manager each pled guilty to one count of felony
theft. They were sentenced to 2 years in prison (suspended),
5 years of probation, 80 hours of community service, and full
restitution of the stolen amount.  (I94LV003)
 
An Engineerms False Statement Results in $40,431 in Improper
Charges
 
  The Departmentms Idaho Field Office notified the Office of
Inspector General that a contractor engineer may have
falsified information provided to the Nuclear Regulatory
Commission (NRC).
  A joint investigation with the NRC revealed that the
engineerms employment had been terminated when the falsification of the
information came to light.  The engineer had arranged for the
procurement of materials and for testing their aging and
corrosion at two independent laboratories, but he had neither
procured nor actually conducted the tests.  His actions
ultimately resulted in $40,431 of improper testing-related
charges.
  As a result of the investigation, the Assistant U.S.
Attorney accepted the case for prosecution and the engineer
was indicted on seven counts of making false statements.  The
engineer pled guilty to one count and was ordered to pay
restitution of $1000 and a fine of $5600.  He was also
ordered incarcerated for 4 months in home detention and was
placed on probation for 5 years.
 In a report to management, the Office of Inspector General
recommended that the Idaho Operations Office verify that
$40,431 in improper charges have been credited by the man
agement and operating contractor to the Department.
Management responded by verifying that the $40,431 was in
fact credited back to the Department.  (I92IF009)
 
An Investigation Finds Delinquent Reimbursable Travel Going
Unrepaid and Honoraria Remaining Unidentified
 
  The Office of Inspector General was informed that a
Lawrence Livermore National Laboratory technical expert had
not turned in reimbursable travel checks and honoraria given
to him by another agency.
 The investigation determined that the technical expert had
failed to reimburse the Laboratory over $16,000 in travel
payments he had received directly from another agency while
on reimbursable travel at that agency.  He also had failed to
report $2,250 in honoraria that he had received for his work
at the agency.
  The investigation found that the Laboratory had no defined
policy on the acceptance and reporting of honoraria received
by Laboratory employees who are traveling on official
business funded by the Government.  Also, although travel
clerks contacted the technical expert on several occasions
regarding the status of his travel reimbursements, there
appears to be no formal method of contacting travelers for
repayment whose vouchers are in hold status pending
reimbursements from host agencies.
The investigation did not establish any intent by the
technical expert to defraud the Government.  He repaid his
delinquent travel and turned over his honoraria to the
Laboratory.  The investigative report which was issued to the
Oakland Operations Office recommended that the Office confirm
repayment of the travel funds and the submission of the
honoraria to the Laboratory.  Additionally, the report
recommended that the Laboratory be directed to establish
policy prohibiting employees from accepting honoraria while on official
duty.  The Laboratory should also ensure restitution or settlement
of delinquent travel accounts associated with reimbursable
travel and enforce its policies of (1) not approving further
travel for employees whose repayments are more than 30 days
delinquent, and (2) deducting amounts delinquent for more
than 45 days from the employeems salary.  The Oakland
Operations Office complied with all report recommendations.
(I94LL032)
 
Over $3,600 in Personal Family Reunion Work That Was Charged
to the Government Is Recovered
 
 A prime contractorms audit director notified the Office of
Inspector General of allegations that a subcontractorms
supervisor had directed that time and materials for personal
work on a family reunion be charged to Government accounts.
  The investigation substantiated the allegations.  At the
direction of the supervisor, the subcontractor
inappropriately charged expenses of three subcontractor
employees who had spent about 4 weeks working to prepare a
booklet for the family reunion of a manager of their prime
contractor.  The supervisor expressed gratitude for all that
the manager had done for the subcontractor, and said that he
did not intend to charge him for the cost of the work.  He
said that producing the material for the managerms family
reunion was a way of showing appreciation. The manager denied
any wrongdoing, saying that he had asked the subcontractor
supervisor to bill him for any costs.
   As a result of the investigation, the manager wrote two
checks to the subcontractor totaling $1,112.45 to cover
expenses for the family reunion materials.  The
subcontractorms corporate president admonished the supervisor
concerning his improper time charging.
 The Assistant U.S. Attorney declined prosecution in lieu of
available administrative remedies.  An investigative report
recommended that the Oak Ridge Operations Office (1)
recommend appropriate disciplinary action be taken by the
prime contractor against the manager, (2) require
reimbursement of all costs associated with work on the family
reunion, (3) ensure prime contractor employees are aware of
what constitutes prohibited acts of conflict of interest.
The prime contractor suspended its manager for one day and
will reimburse the Department $2,500 for labor costs
associated with the mischarging.  The prime contractor also
advised its employees of conflict of interest prohibitions.
The total recovery on this case was $3,612.45.  (I95OR030)
 
Computer Equipment Purchases on a Personal Services Contract
Result in $15,000 in Avoidable Costs
 
  An investigation found that a computer company on a
personal services contract had improperly charged the
Departmentms Oak Ridge management and operating contractor
for computer hardware and software.
The investigation established that the management and
operating contractorms program manager had requested and
authorized the computer company to purchase computer hardware
and software, in spite of knowing that the companyms
statement of work was for direct labor hours only.  The
computer company complied with the program managerms request,
billing the $15,000 in hardware and software as a direct
cost.  The program manager then approved the invoices for
payment.  Similar equipment, purchased through proper
procurement channels, would have cost about $3,000 less.
  After an interview with investigators, the program manager
resigned his employment with the management and operating
contractor.  Although the matter was referred to the
Assistant U.S. Attorney for prosecution, the case was
declined for civil action in lieu of other administrative
remedies available.
An investigative report to management recommended that the
Oak Ridge Operations Office pursue reimbursement for the
improper charges.  Management concurred with the
recommendation and stated that the Department will recoup
over $15,000 as an avoidable cost.  (I93OR019)
 
A Company Employee Billed the Government for Airline Tickets
Obtained Through Frequent Flyer Credits
 
  The Office of Inspector General received an allegation that
a company employee had claimed reimbursement for airline
tickets purchased with frequent flyer credits.  The company
worked under contract to a university which was a secondary
recipient of Department funds through a cooperative
agreement.
  The investigation substantiated the allegation, determining
that the company employee used frequent flyer credits to
obtain airline tickets and then invoiced the Department for
the quoted ticket prices.  The investigation report
recommended that Department management seek reimbursement for
any unallowable travel costs by the employee.  Management
informed the Office of Inspector General that the company had
credited the university $2,189, plus $328.25 in ticket
handling fees, for the full amount of the employeems
unallowable travel costs. Management also stated that
reimbursement of travel costs to contractors under the
Departmentms cooperative agreement will be monitored more
carefully.  (I95SR020)
 
Thieves at Savannah River Will Make Full Restitution for
Stealing Freon Cylinders
 
The Office of Inspector General was informed of the loss of
76 30-pound cylinders of Freon-12 from a storage facility at
the Departmentms Savannah River Site.  The value of the
missing cylinders was estimated at over $18,000.
  An investigation determined that a total of 81 cylinders
was missing.  The investigation also identified a purchaser
of some of the missing cylinders who, in turn, identified the
seller. Further review disclosed that the seller and an
accomplice, both contractor employees at the Site, had stolen
the Freon cylinders and had sold them to several businesses
and individuals.  Some empty or partially filled cylinders
were recovered.
  The case was accepted for prosecution by the Assistant U.S.
Attorney, and a grand jury indicted the two thieves.  During
the arraignment hearing, they pled guilty to one count of
theft of Government property and agreed to make full
restitution of $19,845.  The Assistant U.S. Attorney also
recommended that the thieves receive 4 to 10 months in-house
detention in lieu of custodial detention, and sentencing is
scheduled for later in the year.  Both  men were fired by
their employers.  (I95SR017)
 
A Savannah River Site Subcontractor Acknowledges Charging
Time to Two Contracts Simultaneously
 
  The Office of Inspector General received a complaint that a
Westinghouse Savannah River Company subcontractor had
submitted time-sheets claiming that he had worked on his
Westinghouse contract when in fact he had worked on another
contract elsewhere.  An internal Westinghouse investigation
report showed that the subcontractor had fraudulently charged
720 hours to Westinghouse while he was actually working at
another site.  The Federal Bureau of Investigation began a
review of the case, but agreed to continue working the investigation
with the Office of Inspector General as lead agency.
  As a result of the investigation, the Assistant U.S.
Attorney accepted the case for prosecution.  The
subcontractor entered a guilty plea to making false
statements in Federal District Court and was sentenced to 3
years probation and was required to pay $40,000 in
restitution to the Department of Energy. (I93SR019)
 
Using a Department Credit Card to Purchase a Computer Allowed
Property Controls To Be Circumvented
 
A Department of Energy Headquarters senior official informed
the Office of Inspector General of the theft of a Government
computer valued at over $3,000.  Subsequent investigation
disclosed that an administrative clerk had taken the computer
and pawned it at a local pawn shop.  Instead of being bought
through the Departmentms procurement system, the computer had
been purchased directly with a Government credit card.  When
it was delivered, the computer had not been processed to
receive a Department of Energy control number, nor had it
been marked as Government property.
The administrative clerk admitted selling the computer to the
pawn shop.  After her arrest, she agreed to pay full
restitution and to perform 40 hours of community service.
The investigation report recommended that Department
management monitor the restitution repayment, take
appropriate administrative and disciplinary action against
the administrative clerk, and ensure that measures are in
place to safeguard against theft of Government-owned
equipment. Management should specifically ensure that all
equipment purchased with a Department credit card is properly
identified as Government property and is entered on
applicable inventory records.
In response to the investigative report, management notified
the Office of Inspector General that it was garnishing the
administrative clerkms pay for the full value of the
computer, plus interest.  The administrative clerkms
supervisor has proposed a 3-day suspension for the clerk, as
well as directed counseling under the direction of the
Departmentms Employee Assistance Counselor.  Further, new
office procedures have been put in place, including a sign-in
procedure for visitors and a new reporting system for missing
office items.  Additionally, regular discussions during staff
meetings are being held to keep employees mindful of their
responsibilities in managing Federal property.  (I95HQ032)
 
 
A Company Misapplied Funding While Executing a Cooperative
Agreement
 
  A Pittsburgh Energy Technology Center official notified the
Office of Inspector General that a coal processing company
was not complying with the requirements of its cooperative
agreement with the Department of Energy.  Specifically, the
company had requested and was receiving payments from the
Department to be used in Phase 3 of a project to produce a
modified, low cost coal. Contrary to the cooperative
agreement, the company was using the Phase 3 money to pay for
its share of the still incomplete Phase 2.
An investigative report recommended that the Pittsburgh
Energy Technology Center take appropriate action to recover
misappropriated Phase 3 payments.  Management responded that
the Department is withholding $9.7 million in future payments
on the project until the companyms debt involving Phase 3
expenditures is satisfied.  It is estimated that
satisfaction of the debt will occur in August 1996.
(I96PT003)
 
Senior Department Official Misuses Frequent Flyer Award
Certificates and Repays the Department Over $6200
 
The Office of Inspector General received allegations that a
senior field office official had used frequent flyer miles
accrued on official Government business for personal
travel. An investigation substantiated the allegation.
  Investigators found that the senior official had used
frequentflyer accumulated mileage at times for which there
were no travel vouchers or other itineraries to account for
their use.  The total value of award certificates unsupported
by official documentation was $6,297.  The senior official
confirmed that he had used the award certificates for his
personal travel and offered to make full reimbursement.  As a
result of the investigation, management gave the senior
official an oral reprimand.  The official also reimbursed the
Department $6,297. (I95LL003)
 
                       NONCONCURRENCE
          WITH OFFICE OF INSPECTOR GENERAL REPORTS
 
    Explanation:  The reports summarized in this section
     met with Department managementms general nonconcurrence.
     In some cases, management may have concurred with a
     finding or principle stated in a report, but it did not
     concur with the recommendations or agree to take
     alternative actions to address the issues raised in the
     report.  The Office of Inspector General cannot compel
     compliance with its recommendations.  Nevertheless, the
     Office considers it an accomplishment just to have made
     its customers aware of important issues, and
     recommendations offered in these reports may still be of
     use to management at some future time.
 
Guidance Contained in Site Safeguards and Security Plans Is
Being Used as Policy
 
The Departmentms Safeguards and Security program is designed
to provide appropriate, efficient, and effective protection
of the Departmentms nuclear weapons, nuclear materials,
facilities, and classified information.  Department policy
contained in directives specifies that Departmental interests
shall be protected against a range of threats through the
development of Site Safeguards and Security Plans.  These
plans are intended to depict the existing condition of
safeguards and security of each facility site-wide, establish
improvement priorities, and provide an estimate of the
resources required to carry out the necessary improvements.
  An audit found that the Site Safeguards and Security Plan
guidance issued by the Office of Safeguards and Security was
used as policy to prepare, complete, and review field site
security plans.  This guidance was not coordinated with and
did not receive concurrence from Headquarters program offices
and field sites.  In addition, the guidance established new
unjustified protection requirements and was used improperly
as a tool to evaluate field site performance.  The
Departmental Directives System Manual states that guidance may only
provide non-binding instructions for implementation that are
not mandatory and do not establish new requirements.
Moreover, policy directives can only be issued with the
appropriate review, coordination and concurrence of the
affected organizations.
  The audit report recommended that the Office of
Nonproliferation and National Security discontinue using
guidance as policy for evaluation, approval, and concurrence
of Site Safeguards and Security Plans until they have been
formally coordinated and concurred on by program and field
elements.  The audit report also recommended that all proposed policy
changes and guidance, when used as policy, be coordinated
with affected program and field offices through the
Departmental Directives System.
  Although the Office of Nonproliferation and National
Security agreed that guidance should not be used as policy,
it did not agree to implement the recommendations and stated
that it will continue to use the guides.  In addition, the
Office did not agree that the guidance it issued established
requirements or that the new security requirements were
unjustified.  (IG-0382)
 
Government Credit Cards Are Being Used for Personal Purchases at
Savannah River Operations Office
 
Through an account number processing error, a personal
purchase made by a Savannah River Operations Office employee
on her Government American Express charge card appeared on
the canceled Government card of a former employee.  An
investigation determined that the two credit card numbers
were nearly identical.  When the investigator brought the
personal charge on the Government credit card to the
attention of the current employee, she freely admitted making
the purchase on her card and told the investigator of several
others.  She stated that she had seen official notices
informing employees that they should only use their
Government American Express cards for official business.
  The investigation disclosed that the Savannah River
Operations Office Finance Division has sent out information
on the Sitems lall-in-onen communication system notifying
employees to use Government-issued cards only for official
business.  Although employees continue to make personal
purchases with the card, the Finance Division does not
initiate disciplinary action against any employees as long as
the employees pay their debts on time.
 A review of one American Express Industry Spending Summary
for the Savannah River Operations Office revealed that Savannah
River employees spent $21,070 on retail purchases from
January to August 1995.  The analysis identified frequent use
of the Government card to pay for meals at local restaurants,
as well as for purchases at retail businesses such as a
muffler shop, a floral service, Walt Disney World, and a tire
service center.
  The Accounting Officer of the Finance Division explained
that the Division is aware of employees using their Government
charge cards for personal purchases.  However, as long as the
employee has a good payment history and the account is not in
arrears, no action is taken.
The investigation report recommended that the Savannah River
Operations Office conduct a review of potential personal
purchases and consider taking administrative or disciplinary
action in connection with Department employeesm misuse of
Government credit cards.  The report also recommended that
all Savannah River Operations Office employees comply with
the provisions and agreements governing the proper use of the
card.
  In response to the report, the Savannah River Operations
Office stated that it did not conduct a review of potential personal
purchases because it is difficult to determine when a
purchase is personal versus business-related.  Therefore, no
administrative actions will be taken against employees
discussed in the report. The Office reiterated its position
that its primary focus will be to counsel employees who
become delinquent debtors.  The Office did, however, issue an
announcement to remind employees of their responsibility when
using Government credit cards.  (I95SR021)
 
 
                          SECTION 2
 
            OFFICE OF INSPECTOR GENERAL OVERVIEW
 
 
 
 
 
 
    This   section   describes  the  mission,   staffing
and organization  of the Office of Inspector General,  and
discusses key Office of Inspector General concerns which
have potential  to impact  the accomplishment of audit,
inspection, or investigative work.
 
 
                   OFFICE OF INSPECTOR GENERAL
                           OVERVIEW
 
 
                            MISSION
 
 
     The Office of Inspector General operates under the
Inspector General Act of 1978, as amended, with the following
responsibilities:
 
      To provide policy direction for, and to conduct,
supervise, and coordinate audits and investigations relating to the
programs and operations of the Department of Energy.
 
      To review existing and proposed legislation and
regulations relating to programs and operations of the Department of
  Energy, and to make recommendations in the semiannual reports
  required by the Inspector General Act of 1978 concerning the
  impact of such legislation or regulations on the economy and
  efficiency in the administration of programs and operations
  administered or financed by the Department, or on the
  prevention and detection of fraud and abuse in such programs
  and operations.
 
      To recommend policies for, and to conduct, supervise, or
  coordinate other activities carried out or financed by the
  Department of Energy for the purpose of promoting economy and
  efficiency in the administration of, or preventing and
  detecting fraud and abuse in, its programs and operations.
 
      To recommend policies for, and to conduct, supervise, or
  coordinate relationships between the Department of Energy and
  other Federal agencies, state and local government agencies,
  and nongovernmental entities with respect to:
 
     }    All matters relating to the promotion of economy and
       efficiency in the administration of, or the prevention
       and detection of fraud and abuse in, programs and
       operations administered or financed by the Department.
 
     }    The identification and prosecution of participants in
       such fraud or abuse.
      To keep the Secretary of the Department of Energy and the
  Congress fully and currently informed, by means of the
  reports required by the Inspector General Act of 1978,
  concerning fraud and other serious problems, abuses and
  deficiencies relating to the administration of programs and
  operations administered or financed by the Department of
  Energy, to recommend corrective action concerning such
  problems, abuses, and deficiencies, and to report on the
  progress made in implementing such corrective action.
 
    In addition to the above, the Office of Inspector General
receives complaints by contractor employees alleging reprisal
by their employers for engaging in activities protected under
Section 6006 of the Federal Acquisition Streamlining Act of
1994 or the Department of Energy Contractor Employee Protection
Program (10 CFR Part 708), and attempts to resolve those
complaints through investigation and adjudication, or
alternative dispute resolution.  Further, the Office of
Inspector General receives and investigates allegations by
Federal and contractor employees of misuse of the personnel
security process in reprisal for engaging in lwhistleblowern
activities.
 
 
                   ORGANIZATION AND STAFFING
 
 
     The activities of the Office of Inspector General are
divided into four offices which are administered by Deputy
Inspectors General.
 
  The Office of Audit Services provides policy direction and
supervises, conducts and/or coordinates all internal and
contracted audit activities for Department of Energy programs
and operations.  The Office of Inspector General audit staff
has been organized into three regional offices, each with field
offices located at major Department sites:  Capital Regional
Audit Office, with field offices in Washington, DC, Germantown,
and Pittsburgh; Eastern Regional Audit Office, with field
offices located at Cincinnati, Chicago, New Orleans, Oak Ridge
(Tennessee), Princeton, and Savannah River; and Western
Regional Audit Office, with field offices located at
Albuquerque, Denver, Idaho Falls, Las Vegas, Livermore
(California), Los Alamos, Richland (Washington), and Portland.
 
     The Office of Investigations performs the statutory
investigative duties which relate to the promotion of economy
and efficiency in the administration of, or the prevention or
detection of, fraud or abuse in programs and operations of the
Department.  Priority is given to investigations of apparent or
suspected violations of statutes with criminal or civil
penalties, especially procurement fraud, environmental, health
and safety matters, and matters which reflect on the integrity
and suitability of Department officials.  Suspected criminal
violations are promptly reported to the Department of Justice
for prosecutive consideration.  The Office was recently
reorganized into four regional offices, each with reporting
offices located at major Department sites:  (1) the Northeast
Regional Office is located in Washington, DC, with reporting
offices in Pittsburgh and Chicago; (2) the Southeast Regional
Office is located in Oak Ridge, with reporting offices located
in Cincinnati and Aiken (South Carolina); (3) the Southwest
Regional Office is located in Albuquerque, with a reporting
office in Denver; and (4) the Northwest Regional Office is
located in Richland, with reporting offices in Idaho Falls and
Oakland.  The Inspector General Hotline is also
organizationally aligned within the Office of
Investigations.
     The Office of Inspections performs inspections and
analyses, as required by the Inspector General.  This Office
also performs reviews based on administrative allegations
received by the Office of Inspector General and processes
Inspector General referrals to Department management for
appropriate action.  The Office of Inspections, through its
Contractor Employee Protection component, investigates and
adjudicates contractor employee allegations of employer
retaliation for engaging in activities protected by Section
6006 of the Federal Acquisition Streamlining Act of 1994, or
the Department of Energy Contractor Employee Protection
Program (10 CFR Part 708).  The Contractor Employee
Protection component provides guidance and support for using
alternative dispute resolution methods to resolve contractor
employee reprisal complaints, investigates Federal and
contractor employee allegations of reprisal through misuse of
personnel security procedures, and conducts systemic
inspections to ascertain the existence or level of the
reprisal environment at Department of Energy facilities.  The
Inspection staff is organized with a Headquarters
organization and two regional offices.  The Eastern Regional
Office is located in Oak Ridge, with a field office in
Savannah River.  The Western Regional Office is located in
Albuquerque, with a field office in Livermore, California.
   The Office of Policy, Planning and Management directs the
development, coordination, and execution of overall Office of
Inspector General management and administrative policy and
planning.  This responsibility includes directing the Office
of Inspector Generalms strategic planning process, financial
management activities, personnel management programs,
procurement and acquisition policies and procedures, and
information resources programs.  In addition, staff members
from this Office represent the Inspector General in budget
hearings, negotiations, and conferences on financial,
managerial, and other resource matters.  Also, staff members
provide management and administrative support services,
including personnel, procurement, security, travel, training,
and automated data processing services.  The staff prepares
and/or reviews responses to Freedom of Information Act and
Privacy Act requests directed to the Office of Inspector
General and coordinates all activities of the Presidentms
Council on Integrity and Efficiency in which the Inspector
General participates.  The Office is organized into three
offices:  Administrative Services, Human Resources
Management, and Information Resources.
 
 
             INSPECTOR GENERAL RESOURCE CONCERNS
 
 
  As part of the National Performance Review, the Office of
Inspector General has continued to re-engineer its processes
and to fully participate with the Department of Energy in
achieving new ways to do more with less. We re-examined our
own organization and practices and implemented new
initiatives to further enhance productivity, raise the
quality level of our products, increase customer
satisfaction, and reduce costs.
 
     As early as 1991, the Secretary declared inadequate
audit coverage of management and operating contractors to be
a material weakness as part of the annual Federal Managersm
Financial Integrity Act (FMFIA) report to the President.
This resource concern was exacerbated by additional audit
requirements mandated in the Government Management Reform Act
of 1994 (which provides for final agency-wide implementation
of the Chief Financial Officers Act of 1990).  This new
requirement severely erodes the Office of Inspector Generalms
ability to address significant Departmental issues.
    As a result of the Office of Inspector Generalms re-
engineering efforts, we have closed offices, reduced our
supervisor-to-employee ratio, and increased minority and
female representation in our work force.  In terms of process
re engineering, we participated with the Departmentms Chief
Financial Officer to improve audit and inspection report
resolution and follow-up, implemented a Cooperative Audit
Strategy and a Cooperative Complaint Resolution Strategy, and
established a Complaint Coordination Committee that reviews
and makes decisions on the disposition of Hotline calls and
other complaints.  Furthermore, as an important step to
conserve our financial resources, we reduced our support
service contracts from $8 million in Fiscal Year (FY) 1990 to
the current level of $1.75 million.
 
     In November 1995, the Office of Contractor Employee
Protection was transferred to the Office of Inspector General
from the Office of the Assistant Secretary for Field
Management. The Office of Inspector General absorbed the cost
of the transfer without funding, even though the transfer
increased the Office of Inspector General staffing total in
FY 1996 by 14 positions.  The Office of Contractor Employee
Protection performs investigations relating to lwhistleblower
retaliation.n  Due to continued downsizing within the
Department of Energy, it is reasonable to expect an increased
number of complaints to be filed throughout the foreseeable
future.  The Office of Contractor Employee Protection will
continue to emphasize alternative dispute resolution to
effect cost savings and reduce average case processing times.
  As we begin the second half of FY 1996, the Department of
Energy and the Office of Inspector General face further
staffing and funding reductions. By FY 2000, the Department
will make a 27 percent reduction in its work force to 10,269,
and the Office of Inspector General will be reduced 29
percent to 254, which includes the Office of Contractor
Employee Protection.
 
     In terms of the FY 1996 budget, the Department of Energy
as a whole was reduced in funding from its request of $18.6
billion to $16.3 billion, or 12 percent.  The Office of
Inspector General was reduced in funding from its FY 1996
request of $31 million to $25 million, a 19 percent
reduction. While the Office of Inspector General has been
able temporarily to make up the difference, recent unfunded
mandates have significantly increased the Officems work load.
The Office has matched increased work demands with FY 1996
staffing and funding levels in part by further reducing the
volume of audit, inspection and investigation work performed.
We are working priority issues with the resources available.
Our efforts include:
 
       Continuing implementation of the Chief Financial
       Officers Act of 1990 and the Government Management
       Reform Act of 1994 audit requirements.
 
       Relying, in coordination with the Department, on our
       Cooperative Audit Strategy where contractor internal
       auditors provide reasonable assurances that the
       procedures used to determine costs and charges to the
       Government are accurate, complete, and in compliance
       with Department contracts.  It should be noted,
       however, that as downsizing occurs within contractor
       internal audit staffs, our ability to rely on this Strategy
       could be impaired.
 
       Working highest priority issues, categorized as "most
       significant," and addressing remaining issues
       afterward until resources are exhausted.
       Raising thresholds for accepting complaints for Office
       of Inspector General action and referring more
       complaints to Department management for resolution.
       Investigating as a high priority those cases with the
       best potential for successful criminal or civil
       prosecution, and only investigating the remainder as
       resources permit.  Criminal cases which do not score
       high may be referred to other law enforcement agencies
       for their consideration, put on hold in the event that
       resources might become available, referred to
       Department management for action, or may be dropped.
       Continuing to conduct administrative allegation
       inspections that are highly focused fact-finding
       reviews and are typically in response to allegations
       of waste or mismanagement.
 
       Managing expected increase in whistleblower reprisal
       allegation cases resulting from continued contractor
       downsizing.
 
     The Office of Inspector General will continue to do its
best to accomplish its statutory mission with the resources at
its disposal.  However, it is important that we advise our
customers of our reduction in resources and the resulting
impact on our services.
 
                  MANAGEMENT REFERRAL SYSTEM
 
     The Office of Inspections manages and operates the Office
of Inspector General Management Referral System.  Under this
system, selected matters received through the Office of
Inspector General Hotline or from other sources are referred to
the appropriate Department managers or other Government
agencies for review and appropriate action.  We referred 213
complaints to Department management and other Government
agencies during the reporting period.  We asked Department
management to respond to us concerning the actions taken on 111
of these matters.  Complaints referred to the Department
managers included such matters as time and attendance abuse,
misuse of Government vehicles and equipment, violations of
established policy, and standards of conduct violations.
Referrals to management resulted in 14 administrative
disciplinary actions being taken during the reporting period.
The following are examples of the results of referrals to
Department management.
 
      An allegation was substantiated that a second-tier
  subcontractor at a Department of Energy laboratory was
inappropriately allowed to use Department heavy equipment in
the performance of its contract.  It was also determined that
out-of scope work was being done by the second-tier
subcontractor at the direction of first-tier subcontractor
employees as compensation for use of the equipment.  Such
compensatory measures had not been authorized by the contract
administrator.  The second-tier subcontractor subsequently
compensated the laboratory $6,051 for the use of the equipment,
and steps were taken to prevent future incidents of out-of-
scope work.
 
      As a result of an allegation raising concerns about
asbestos removal at a Department laboratory, additional cleanup
  measures were taken and air sampling procedures were to be
  enhanced.
 
      Costs are being examined for recovery as a result of the
  identification of underused training facilities leased by a
  Department laboratory subcontractor.  Also, identification
  of noncompliance with contracting/subcontracting requirements
  resulted in the management and operating contractor being
  directed to obtain Department approval to lease space and to
  ensure that all applicable subcontracts contain a standard
  clause which, if it had been included in the subcontract,
  could have avoided some of the costs associated with the
  subcontract.
 
      As a result of an allegation being substantiated that an
  employee was conducting a personal business on Government
  time, the employee received oral and written reprimands.
 
      An allegation was substantiated that a contracting
  officer's representative was inappropriately directing the
  activities of contractor personnel.  The representative was
  counseled on proper procedures.
 
      A complaint that an employee only got voice mail when
  attempting to reach a management and operating contractors
  employee concerns hotline resulted in management establishing
  specific hours when the hotline will be staffed and notifying
  employees of the new practice.
 
      In response to an allegation that a Department site
  experienced an increase in thefts between Fiscal Years 1994
  and 1995 as a result of increased lopennessn at the site,
  management reported that alternative measures have been
  implemented to enhance security, such as special security
  patrols.
 
 
               LEGISLATIVE AND REGULATORY OVERVIEW
 
 
Congressional Requests
 
     During the reporting period, congressional committees or
subcommittees, members of Congress, and their respective staffs
made 56 requests to the Office of Inspector General.  We
responded by appearing at one hearing, providing four briefings,
and providing data or reports in 74 instances, including 17
interim responses and 57 final responses.  Interim responses are
provided for open matters which remain under review by the
Office of Inspector General.
 
Legislative Review
 
    In accordance with the Inspector General Act of 1978, the
Office of Inspector General is required to review existing and
proposed legislation and regulations relating to Department
program and operations, and to comment on the impact which they
may have on economical and efficient operations of the
Department.  During this reporting period, the Office
coordinated and reviewed 10 legislative and regulatory items.
 
 
             INSPECTOR GENERAL REPORTS AVAILABILITY
 
 
On the Internet
 
    As part of an ongoing effort to streamline operations and
provide better service to customers, many Office of Inspector
General audit and inspection reports are available on the
Internet.  Hardcopy distribution is costly, time consuming and
often may not reach the requester in a timely fashion.  Making
our reports available on the Internet is an efficient way to
distribute reports and should be of value to our customers.
     Our reports are available in plain text format (ASCII)
to anyone with Internet Gopher (a simple client/server
protocol used to organize access to Internet resources), or
file transfer protocol (FTP) capability.  Users can find our
reports at gopher.hr.doe.gov, selecting lDepartment of Energy
Informationn from the first menu, and then selecting lDOE
Inspector General Reports.n  Our published reports can also
be obtained via anonymous FTP at vm1.hqadmin.doe.gov.  Once
at that location, the user can go to the IG directory to
download available reports.
 
By U.S. Mail
 
     Persons wishing to request hardcopies of reports to be
mailed to them may do so by calling the automated Office of
Inspector General Reports Request Line at (202) 586-2744.
The caller should leave a name, mailing address, and
identification number of the report needed.  If the reportms
identification number is unknown, then the caller should
leave a short description of the report and a telephone
number where the caller may be reached in case further
information is needed to fulfill the request.
 
Requests by Telefax
 
     In addition to using the automated Office of Inspector
General Reports Request Line, persons may telefax requests
for reports to (202) 586-3636.  Telefaxing requests may be
especially convenient for people requesting several reports.
Point of Contact for More Information
 
     Persons with questions concerning the contents,
     availability, or distribution of any Office of Inspector
     General report may contact Wilma Slaughter by telephone at
     (202) 586-1924 or via the Internet at wilmatine.slaughter@hq.doe.qov.
 
 
                          SECTION 3
 
 
 
                       REPORTS ISSUED
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     The 67 audit reports issued during this semiannual
reporting period are listed below in three categories:
contract, operational, and financial reports.  Significant
financial results associated with each report are also
presented when applicable.  Nine inspection reports are listed separately.
 
                         REPORTS ISSUED
 
                     CONTRACT AUDIT REPORTS
 
ER-C-95-06*  Audit of Final Indirect Cost Rates for
           Fiscal Year 1988 Through 1992 Princeton
           University, Princeton, New Jersey,
           September 27, 1995 Questioned Costs:
           $6,150,499
 
ER-C-95-07*  Final Audit of U.S. Department of the Navy
           Contracts With Princeton University, Princeton,
           New Jersey, September 27, 1995
 
ER-C-96-01 Report on the Interim Audit of Costs Incurred
           Under Contract No. DE-AC05-92OR21972 From October
           1, 1993, to September 30, 1994, Fernald
           Environmental Restoration Management Corporation,
           Fernald, Ohio, March 29, 1996
           Questioned Costs:  $928,000
 
WR-C-96-01 Review of Mason & Hangar-Silas Mason Company,
           Inc., Cost Accounting Standards Compliance,
           October 30, 1995
           Questioned Costs:  $139,000
 
WR-C-96-02 Audit of Costs Claimed Under Contract Numbers DE
           AC0285ER80276, DE-AC02-87ER80454, and DE-AC02
           88ER80599, September 1985 Through December 1993,
           Scientific Systems International, Los Alamos, New
           Mexico, November 13, 1995
           Questioned Costs:  $22,233
 
WR-C-96-03 Review of Lawrence Livermore National Laboratory
           Cost Accounting Standards Board Disclosure
           Statement Adequacy and Cost Accounting Standards
           Compliance, January 4, 1996
 
WR-C-96-04 Review of Lawrence Berkeley National Laboratory
           Cost Accounting Standards Board Disclosure
           Statement Adequacy and Cost Accounting Standards
           Compliance, January 8, 1996
 
*Note:  These audit reports were processed too late to be
     listed in the previous semiannual reporting period.
 
 
                 OPERATIONAL AUDIT REPORTS
 
 
IG-0380    Audit of the Department of Energyms
           Transportation Accident Resistant Container Program,
           October 11, 1995
           Savings:  $46,000
 
IG-0381    Audit of Management and Operating Contractor
           Overtime Costs, October 27, 1995
           Savings:  $65,000,000
 
IG-0382    Audit of the Department of Energyms Site
           Safeguards and Security Plans, December 1, 1995
           Savings:  $12,000,000
 
IG-0385    Special Audit Report on the Department of
           Energy's Arms and Military-Type Equipment, February 1,
           1996
 
IG-0387    Audit of Architect and Engineering Costs at the
           Idaho National Engineering Laboratory, March 22, 1996
           Savings:  $2,500,000
 
CR-L-96-01 Review of Funds-Out Interagency Agreements,
           November 22, 1995
 
CR-L-96-02 Report on the Department of Energyms
           Implementation of Restrictions on Lobbying,
           December 13, 1995
 
CR-L-96-03 Assessment of Pittsburgh Naval Reactors Internal
           Audit Function, December 15, 1995
 
CR-L-96-04 Federal Managersm Financial Integrity Act Audit
           Report, December 20, 1995
 
CR-L-96-05 Assessment of Schenectady Naval Reactors Internal
           Audit Function, December 21, 1995
 
ER-L-96-01 Audit of Work Force Restructuring at the Pinellas
           Plant, October 5, 1995
 
ER-L-96-02 Audit of Lockheed Martin Energy Systems, Inc.ms,
           Waste Management Program, October 19, 1995
 
ER-L-96-03 Review of the Adequacy of Lockheed Martin
           Specialty Components, Inc.ms, Cost Accounting
           Standards Disclosure Statement, October 25, 1995
 
ER-L-96-04 Methods of Obtaining Steam and Electricity at the
           Savannah River Site, January 4, 1996
 
ER-L-96-05 Audit of Pollution Prevention at Lockheed Martin
           Energy Systems, Inc., January 25, 1996
 
ER-L-96-06 Audit of Chicago Environmental Project, February
           15, 1996
 
WR-B-96-01 Audit of Fire and Emergency Medical Services Cost
           Sharing Between the Department of Energy and Los
           Alamos County, October 2, 1995
           Savings:  $18,300,000
 
WR-B-96-02 Audit of Construction of an Environmental, Safety,
           and Health Analytical Laboratory at the Pantex
           Plant, October 6, 1995
           Savings:  $8,400,000
 
WR-B-96-03 Audit of Construction Management at the Idaho
           National Engineering Laboratory, October 18,
           1995 Savings:  $26,800,000
 
WR-B-96-04 Audit of Fuel Processing Restoration Property,
           October 20, 1995
 
WR-B-96-05 Audit of Consultant Agreements at Los Alamos
           National Laboratory, February 25, 1996
           Questioned Costs:  $842,900
 
WR-L-96-01 Review of the Department of Energyms Management
           and Operating Contractorsm Workersm
           Compensation Benefits, October 10, 1995
 
WR-L-96-02 Audit of Management of Department of Energy
           Nevada Operations Office Nuclear Emergency
           Preparedness and Response Teams, January 5, 1996
           Savings:  $500,000
 
WR-L-96-03 Audit of the Management of High Explosive
           Facilities at the Weapon Design Laboratories,
           March 15, 1996
 
                   FINANCIAL AUDIT REPORTS
 
AP-FS-96-01 Audit of the Design, Operations and Internal
           Control Structures for the Financial Information
           System, March 15, 1996
 
AP-FS-96-02 Audit of Departmental Integrated Standardized
           Core Accounting System (DISCAS) Design and
           Internal Control Structure, March 19, 1996
 
CR-FC-96-01 Federal Energy Regulatory Commissionms Fiscal
           Year 1995 Financial Statement Audit Under the
           Chief Financial Officers Act, February 12, 1996
 
CR-FS-96-01 Report on Matters Identified at the Pittsburgh
           Naval Reactors Office During the Audit of the
           Departmentms Consolidated Statement of Financial
           Position as of September 30, 1995, March 8, 1996
 
CR-FS-96-02 Management Report Audit of the Department of
           Energyms Consolidated Statement of Financial
           Position as of September 30, 1995, March 20, 1996
 
CR-V-96-01 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to TRW
           Environmental Safety Systems, Inc., Under
           Department of Energy Contract No. DE-AC01
           91RW00134, February 8, 1996 Questioned Costs:
           $233,311
 
CR-V-96-02 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Westinghouse
           Electric Corporationms Bettis Atomic Power
           Laboratory Under Department of Energy Contract
           No. DE-AC1193PN38195, February 29, 1996
 
CR-V-96-03 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Martin
           Corporationms Knolls Atomic Power Laboratory
           Under Department of Energy Contract No. DE-AC12
           76SN00052, February 29, 1996
           Questioned Costs:  $4,044
 
ER-FC-96-01 Isotope Production and Distribution Programms
           Fiscal Year (FY) 1995 Financial Statement Audit,
           February 12, 1996
 
ER-FC-96-02 Department of Energyms Uranium Enrichment
           Decontamination and Decommissioning Fund Fiscal
           Year 1995 Financial Statement Audit Under the
           Chief Financial Officers Act, February 21, 1996
 
ER-FC-96-03 Department of Energyms Southeastern Federal
           Power Program Fiscal Year 1995 Financial
           Statement Audit Under the Chief Financial
           Officers Act, February 20, 1996
 
ER-FS-96-01 Report on Results of Audit Procedures Performed
           at Chicago Operations Office During the Audit of
           the Departmentms Consolidated Statement of
           Financial Position as of September 30, 1995,
           March 22, 1996
 
ER-FS-96-02 Report on Matters Identified at the Oak Ridge
           Operations Office During the Audit of the
           Departmentms Consolidated Statement of Financial
           Position as of September 30, 1995, March 27,
           1996
 
ER-V-96-01 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability
           of Costs Claimed by and Reimbursed to Oak Ridge
           Associated Universities Under Department of
           Energy Contract No. DE-AC05-76OR00033, February
           16, 1996
 
ER-V-96-02 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability
           of Costs Claimed by and Reimbursed to Fermi
           National Accelerator Laboratory Under Department
           of Energy Contract No. DE-AC02-76CH03000,
           February 28, 1996
 
ER-V-96-03 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability
           of Costs Claimed by and Reimbursed to Ames
           Laboratory Under Department of Energy Contract
           No. W-7405-ENG 82, February 28, 1996
 
ER-V-96-04 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability
           of Costs Claimed by and Reimbursed to EG&G
           Applied Technologies, Inc., Under Department of
           Energy Contract No. DE-AC24-88-DP43495, February
           28, 1996
 
IG-FS-96-01 Audit of the Department of Energyms Consolidated
           Statement of Financial Position as of September
           30, 1995, February 29, 1996
 
WR-FC-96-01 U.S. Department of Energy Naval Petroleum and
           Oil Shale Reserves 1995 Financial Statement
           Audit Under the Chief Financial Officers Act,
           February 15, 1996
 
WR-FC-96-02 Southwestern Federal Power System 1995 Financial
           Statement Audit Under the Chief Financial
           Officers Act, February 22, 1996
 
WR-FC-96-03 Alaska Power Administration Fiscal Year 1995
           Financial Statement Audit Under the Chief
           Financial Officers Act, February 22, 1996
 
WR-FC-96-04 Western Area Power Administration Fiscal Year
           1995 Financial Statement Audit Under the Chief
           Financial Officers Act, February 23, 1996
 
WR-FS-96-01 Report on Matters Identified at the Richland
           Operations Office During the Audit of the
           Departmentms Consolidated Statement of Financial
           Position as of September 30, 1995, March 18,
           1996
 
WR-FS-96-02 Report on Matters Identified at the Idaho
Operations Office During the Audit of the Departmentms
           Consolidated Statement o Financial Position as
           of September 30, 1995, March 22, 1996
 
WR-FS-96-03 Report on Matters Identified at the Rocky
           Flats Field Office During the Audit of the
           Departmentms Consolidated Statement of Financial
           Position as of September 30, 1995, March 22, 1996
 
WR-FS-96-04 Report on Matters Identified at the Oakland
           Operations Office During the Audit of the
           Departmentms Consolidated Statement of Financial
           Position as of September 30, 1995, March 22, 1996
 
WR-FS-96-05 Report on Matters Identified at the
           Albuquerque Operations Office During the Audit of
           the Department's Consolidated Statement of
           Financial Position as of September 30, 1995, March
           22, 1996
 
WR-V-96-01 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Sandia
           Corporation Under Department of Energy
           Contract No. DE-AC0494AL85000, October 5,
           1995
 
WR-V-96-02 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Lawrence
           Livermore National Laboratory Under Department
           of Energy Contract No. W-7405-ENG-48, January 9,
           1996
 
WR-V-96-03 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Raytheon
           Services Nevada Under Department of Energy
           Contract No. DEAC08-91NV10833, February 9, 1996
 
WR-V-96-04 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Reynolds
           Electrical and Engineering Company, Inc., Under
           Department of Energy Contract No. DE-AC08
           94NV11432, February 9, 1996
 
WR-V-96-05 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to EG&G Energy
           Measurements Under Department of Energy
           Contract No. DE-AC08-93NV11265, February 16,
           1996
 
WR-V-96-06 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Allied Signal
           Federal Manufacturing & Technologies/Kansas City
           Under the Department of Energy Contract No. DE-AC04
           76DP00613, February 23, 1996
 
WR-V-96-07 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Westinghouse
           Electric Corporation, Waste Isolation Division Under
           Department of Energy Contract No. DE-AC0486AL31950,
           March 11, 1996
 
WR-V-96-08 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Lockheed
           Idaho Technologies Company Under Department of Energy
           Contract No. DE-AC07-94ID13223 and DE-AC07
           94ID13299, March 20, 1996
 
WR-V-96-09 Assessment of Changes to the Internal Control
           Structure and Their Impact on the Allowability of
           Costs Claimed by and Reimbursed to Mason &
           Hanger Silas Mason Company, Inc., Under Department of
           Energy Contract No. DE-AC04-91AL65030, March 26, 1996
 
          INSPECTION REPORTS
 
 
IG-0383    Inspection of Human Subject Research in Intelligence
           and Intelligence-Related Projects, January 16, 1996
 
IG-0384    Inspection of Concerns Regarding the Martin Marietta
           Corporate Review of Health and Safety at Martin Marietta
           Energy Systems, January 18, 1996
 
IG-0386    Summary Results of the Inspection of Issues Regarding
           the Scope of the Accident Investigation of the
           TRISTAN Fire at the Brookhaven National
           Laboratory, March 15, 1996
 
INS-L-96-01 Inspection of the Control of Selected Chemicals at
           the Rocky Flats Environmental Technology Site, October 20, 1995
 
INS-L-96-02 Report on Inspection of Los Alamos National Laboratory
           Chest Count Screening Procedures, November 3, 1995
 
INS-L-96-03 Inspection of the Use of Investigatory Leave at Los
           Alamos National Laboratory, November 24, 1995
 
INS-L-96-04 Inspection Report on Savannah River Property
           Maintenance and Storage, March 11, 1996
 
INS-O-96-01 The Intelligence Oversight Inspection of the Special
           Technologies Laboratory, October 13, 1995
 
INS-O-96-02 Selected Concerns Regarding Property Accountability
           at the Continuous Electron Beam Accelerator Facility,
           November 24, 1995
 
 
               SECTION 4
 
 
 
 
              STATISTICS
 
 
 
 
 
     This section lists audit reports issued before the beginning of the
semiannual reporting period for which no management decisions have been
made by the end of the reporting period, the reasons management decisions
have not been made, and the estimated dates (where available) for achieving
management decisions.  This section also presents audit statistics on
questioned costs, unsupported costs, and dollar value of recommendations
resulting from audit reports issued during this reporting period.  In
addition, this section presents statistics on inspection and
investigative results achieved during this semiannual reporting period.
 
              DEFINITIONS
 
The following definitions, based on the Inspector General Act of 1978,
apply to terms used in this Semiannual Report.
 
Questioned Cost:  A cost which the Inspector General questions because
of:
 
 1. An alleged violation of a provision of a law, regulation,
       contract, grant, cooperative agreement, or other agreement
       or document governing the expenditure of funds;
 
 2. A finding that, at the time of an audit, such cost is not
       supported by adequate documentation; or
 
 3. A finding that the expenditure of funds for the intended
       purpose is unnecessary or unreasonable.
 
Unsupported Cost:  A cost which the Inspector General questions because
the Inspector General found that, at the time of an audit, such cost is not
supported by adequate documentation.
 
Disallowed Cost:  A questioned cost which Department management, in a
management decision, has sustained or agreed should not be charged to the
Government.
 
Recommendation That Funds Be Put to Better Use (lSavingsn): An Inspector
General recommendation that funds could be used more efficiently if
Department management took actions to implement and complete the
recommendations, including:
 
     1.   Reduction in outlays;
     2.   Deobligation of funds from programs or operations;
     3.   Withdrawal of interest subsidy costs on losses or loan
          guarantees, insurance or bonds;
     4.   Costs not incurred by implementing recommended
          improvements related to Department operations,
          contractors, or grantees;
 
     5.   Avoidance of unnecessary expenditures noted in preaward
          reviews of contract or grant agreements; or
 
     6.   Any other savings which are specifically identified.
 
Management Decision:  The evaluation by Department management of the
findings and recommendations included in an audit report and the issuance of
a final decision by Department management concerning its response to
such findings and recommendations, including actions concluded to be
necessary.
 
Final Action:  The completion of all actions that
Department management has concluded, in its management decision, are
necessary with respect to the findings and recommendations included in an
audit report.  In the event that Department management concludes no
action is necessary, final action occurs when a management decision has
been made.
 
        AUDIT REPORT STATISTICS
 
The following table shows the total number of operational and financial
audit reports, and the total dollar value of the recommendations.
 
Those issued before the
reporting period for
which no management
decision has been made:  9
One-Time Savings:   $165,717,907
Recurring Savings:  $94,015,948
Total Savings:      $259,733,855
 
Those issued during the
reporting period:   60
One-Time Savings:   $129,026,255
Recurring Savings:  $5,600,000
Total Savings:      $134,626,255
 
Those for which a
management decision was
made during the reporting
period:             25
One-time Savings:   $263,223,200
Recurring Savings:  $70,051,948
Total Savings:      $333,275,148
 
Agreed to by management:
One-Time Savings:   $101,141,926
Recurring Savings:  $66,774,864
Total Savings:      $167,916,790
 
Not Agreed to by management:
One-Time Savings:   $124,309,109
Recurring Savings:  $3,277,084
Total Savings:      $127,586,193
 
Those for which a
management decision is
not required:       35
One-Time Savings:   $104,044
Recurring Savings:  $400,000
Total Savings:      $504,044
 
Those for which no
management decision had
been made at the end of
the reporting period*:  9
One-Time Savings:   $69,189,083
Recurring Savings:  $29,164,000
Total Savings:      $98,353,083
 
*NOTE:  The figures for this item include sums for which management
decisions on the savings were deferred.
 
AUDIT REPORT STATISTICS
 
The following table shows the total number of contract audit reports, and
the total dollar value of questioned costs and unsupported costs.
 
Those issued before the
reporting period for
which no management
decision has been made:  16
Questioned Costs:   $13,872,077
Unsupported Costs:  $110,948
 
Those issued during the
reporting period:  7
Questioned Costs:  $7,239,732
 
Those for which a
management decision was
made during the
reporting period:  2
Questioned Costs:  $551,088
 
Value of disallowed costs:  $4,616
 
Value of costs not disallowed:  $546,472
 
Those for which a
management decision is
not required:  0
 
Those for which no
management decision had
been made at the end of
the reporting period:  21
Questioned Costs:      $20,560,721
Unsupported Costs:     $110,948
 
              REPORTS LACKING MANAGEMENT DECISION
 
The following are audit reports issued before the beginning of
the reporting period for which no management decisions have
been made by the end of the reporting period, the reasons
management decisions have not been made, and the estimated
dates (where available) for achieving management decisions.
These audit reports are over 6 months old without a management
decision.
 
The Contracting Officers have not yet made decisions on the
following contract reports for a variety of reasons.  They
include delaying settlement of final costs questioned in
audits pending negotiation of indirect cost rates, awaiting
review of independent research and development costs, and
litigation. Also, tentative agreements on allowable costs have
been reached, but final vouchers indicating these agreements
have not been submitted by some contractors.  The Department
has a system in place which tracks audit reports and
management decisions.  Its purpose is to ensure that
recommendations and corrective actions indicated by audit
agencies and agreed to by management are indeed addressed and
effected as efficiently and expeditiously as possible.
 
CR-C-89-01     Interim Audit of Costs Claimed Under Contract
               Number DE-AC05-84OR21441, October 1, 1986, to
               September 30, 1987, Cotton and Company, 100
               South Royal Street, Alexandria, VA 22314, June
               20, 1989
 
CR-C-90-01     Interim Audit of Costs Claimed Under Contract
               No. 21441, October 1, 1987, to September 30, 1988,
               Cotton & Company, 100 South Royal Street,
               Alexandria, VA 22314, October 19, 1989
 
ER-CC-90-03    Interim Audit of Costs Claimed Under U.S. DOE-
               Funded Contracts, July 1, 1986, to June 30, 1988,
               and Review of Proposed Cost Allocation Plan
               With Revis Institute of Biological Research,
               Inc., Oak Ridge, Tennessee, October 31, 1989
 
ER-CC-90-21    Report on the Independent Interim Audit of
               Subcontract Costs Claimed Under Contracts No.
               DE AC05-85OR21510 and No. DE-AC05-86OR21644,
               September 30, 1985, to December 31, 1986,
               Analysas Corporation, Washington, D.C., April
               16, 1990
 
WR-CC-90-32    Audit of Costs Claimed Under Contract No. DE-
               AC01-80RA32049 for the Operation Period From October
               1, 1984, Through April 30, 1985, and the Post
               Operation Period from August 1, 1985, Through
               November 30, 1987, Williams Brothers Engineering
               Company, Tulsa, Oklahoma, May 10, 1990
 
WR-C-92-01     Report on the Final Audit of Costs Incurred by
               EWA, Inc., Environmental and Water Resources
               Management, Minneapolis, Minnesota, Under Its
               Contract with the Yakima Indian Nation, United
               States Department of Energy Grant DE-FG06
               83RL10545, for the period May 14, 1984, Through
               December 22, 1988, April 6, 1992
 
WR-C-93-01     Report on the Independent Final Audit of
               Contract No. DE-AC04-85AL27671, October 22, 1984, Through
               June 30, 1990, Wackenhut Services, Inc., Central
               Training Academy, Albuquerque, New Mexico,
               January 22, 1993
 
ER-CC-93-05    Report Based on the Application of Agreed-Upon
               Procedures With Respect to Temporary Living
               Allowance Costs Claimed Under Contract No. DE-AC0988SR18035,
               October 1, 1987, to September 20, 1990, Bechtel National, Inc.,
               San Francisco, California, and Bechtel Savannah River, Inc.,
               North Augusta, South Carolina, May 3, 1993
 
ER-C-94-01     Interim Audit of Costs Claimed Under Contract
               No. DE-AC05-84ER40150, October 1, 1988, Through
               September 30, 1991, Southeastern Universities
               Research Association, Inc., Newport News,
               Virginia, October 27, 1993
 
CR-C-95-01     Report on the Interim Audit of Contract No. DE-
               AC35-89ER40486, Jan. 18, 1989, to September 30,
               1989, Universities Research Association, Inc.,
               Superconducting Super Collider Laboratory,
               Waxahachie, Texas, February 3, 1995
 
WR-C-95-01     Report on Independent Final Audit of Contract
               No. DE-AC34-91RF00025,  July 26, 1990, to March 31,
               1993, Wackenhut Services, Inc., Golden,
               Colorado, March 13, 1995
 
ER-C-95-03     Report on the Interim Audit of Costs Incurred
               Under Contract No. DE-AC05-92OR21972 from
               September 1, 1992, to September 30, 1993,
               Fernald Environmental Restoration Management
               Corporation, Fernald, Ohio, May 11, 1995
 
ER-C-95-04     Interim Audit of Contract Number DE-AC05-
               84ER40150, October 1, 1991, Through September
               30, 1993, Southeastern Universities Research
               Association, Inc., Newport News, Virginia, June
               6, 1995
 
WR-C-95-05     Review of Los Alamos National Laboratory
               Disclosure Statement Adequacy and Cost
               Accounting Standards Compliance, June 2, 1995
 
Additional time was necessary to develop management decisions
for the following reports.  Further explanations for the
delays follow each audit report.
 
AP-B-95-01     Audit of Management and Control of Information
               Resources at Sandia National Laboratories,
               November 1, 1994  (The auditee collected
               additional information and has had several
               meetings to resolve issues regarding the
               recommendations.  It is estimated that a
               management decision will be reached by August
               15, 1996.)
 
IG-0373        Audit of Administration of Cooperative
               Research and Development Agreements at DOE National
               Laboratories, May 19, 1995  (The finalization
               of the management decision on this report is
               awaiting the resolution of pertinent
               responsibilities within the Department.)
 
                  INVESTIGATIVE STATISTICS
 
    The investigative statistics below cover the period from
             October 1, 1995, through March 31, 1996
 
Investigations open at the start of this reporting period: 292
Investigations opened during this reporting period          94
Investigations closed during this reporting period         102
Investigations open at the end of this reporting period    284
 
Debarments/Suspensions                                       4
Investigations Referred to Management for Recommended
Positive Action                                             33
Complaints Referred to Management for Review and Followup    4
Administrative Disciplinary Actions Taken                  116
 
Investigations Referred for Prosecution                     47
     Accepted*                                              38
     Declined*                                              24
     Indictments                                            19
     Convictions                                             6
   Pretrial Diversions                                       1
 
Fines, Settlements, and Recoveries**               $10,942,714
 
*Some of the investigations accepted or declined during this 6
month period were referred for prosecution during a previous
reporting period.
 
**Some of the money collected was the result of Task Force
Investigations.
 
 
                     Hotline Statistics
 
Complaints Received via the Hotline                      117
Complaints Received via the General Accounting Office      1
Total Complaints Received                                118
 
Investigations Opened on Hotline Complaints                4
Complaints Resolved or Pending Resolution                 93
Complaints That Required No Investigation by OIG          21
Total Complaints Disposition                             118
 
                    INSPECTION STATISTICS
 
      The inspection statistics below cover the period from
             October 1, 1995, through March 31, 1996
 
 
     Allegation-Based and Management System Inspections
 
Inspections open at the start of this reporting period   143
Inspections opened during this reporting period           27
Inspections closed during this reporting period           21
Inspections open at the end of this reporting period     149
Complaints referred to Department management/others      213
Number of these referrals requesting a response for OIG
     evaluation                                          111
Reports issued*                                           15
Allegation-based inspections closed after prelim. review   9
Inspection recommendations
     Accepted this reporting period                       42
     Implemented this reporting period                    51
Personnel management actions taken as a result of
     inspections or complaints referred to management     14
Funds impacted by inspections**               $1,074,981,000
 
*Reports include non-public reports such as administrative
allegation reports.
 
**The total dollar value of the program, project, or
activity controlled by the management system which we are
seeking to improve through our recommendation(s).
 
 
        Contractor Employee Protection Investigations
 
Complaints open at the start of this reporting period     68
Complaints opened during this reporting period            32
Complaints closed during this reporting period            25
     Complaints dismissed                                  8
     Reports of investigation & proposed decisions issued  3
     Allegation of Reprisal complaints settled             9
     Allegation of Reprisal complaints withdrawn           3
     Personnel security abuse reviews completed            2
Complaints open at the end of this reporting period       75
 
 
 
                       FEEDBACK SHEET
 
 
 
 
The  contents of the April 1996 Semiannual Report to
Congress comply  with the requirements of the Inspector
General Act  of 1978, as amended.  However, there may be
additional data which could  be included or changes in
format which would be  useful to  recipients  of  the
Report.  If you have  suggestions  for making  the  report
more responsive  to  your  needs,  please complete this
feedback sheet and return it to:
 
                    Department of Energy
                    Office of Inspector General (IG-13)
                    Washington, D.C.  20585
 
                   ATTN: Wilma Slaughter
 
 
 
 
 
Your name:
 
Your daytime telephone number:
 
Your  suggestion  for improvement: (please  attach
additional sheets if needed)
 
 
 
 
 
 
If  you  would  like to discuss your suggestion with  a
staff member  of the Office of Inspector General or would
like  more information, please call Wilma Slaughter at
(202) 586-1924  or contact her on the Internet at
wilmatine.slaughter@hq.doe.gov.