U.S. Department of Energy 

Office of Inspector General 

Office of Audit Services 

Audit Report 

The Department of Energy's 

Management of Contractor 

Intergovernmental Personnel and 

Change of Station Assignments 

DOE/IG-0761 March 2007 
Departmee~t of Energy 

\i\iashingron, GC 26555 

Pbrch 26, 2007 

MEMORANDUM FOR 

FROM: 

Inspector General 

SUBJECT: INFORMATION: Audit Report on "The Department of 

Energy's Management of Contractor Intergovernmental 

Personnel and Change of Station Assignments" 

BACKGROUND 

The Department of Energy's contractor-operated facilities use Intergovernn~ental 

Personnel Act (PA) and Change of Station (COS) assignments to permit contractor 

employees to work at other organizations. PA assignments are temporary transfers of 

personnel between the contractor and a Federal agency. Under COS assignments, 

personnel are temporarily transferred to a non-Federal organization (i.e., personnel loan 

agreements between contractors, non-profit organizations, or private sector entities). The 

Department's national laboratories frequently use PA and COS assiyments. 

Under the IPA Act, the Office of Personnel Management, as part of its Mobility Program, 

issued urovisions re~arding the cost and duration of PA assignments. Specifically: (i) 

IPA costs should be allocated among participating entities to reflect the mutual benefits 

of the program; (ii) employee expenses should be limited to either per dieill or relocation 

costs; and, (iii) PA assignments should be relatively short term in nature - no more than 

two years (with an allowance for an additional two years, if justified). PA provisions do 

not apply directly to contractor COS assignments. However, absent more definitive 

criteria, they provided an effective benchmark for evaluating the reasonableness of 

Departmental COS assignments. 

The objective of this audit was to determine whether the Department was effectively 

managing the contractor use of IPA and COS assignments. Our review focused on six of 

the Department's national laboratories-Argonne; Lawrence Berkeley; Lawrence 

Livermore; Los Alamos; Sandia; and, Pacific Northwest. 

RESULTS OF AUDIT 

The Department did not have a system to determine the number and propriety of PA and 

COS assignments. Relying purely on data provided by contractors managing the six 

laboratories, we identified 250 active IPA/COS assignments. We performed a detailed 

review of 77 such assignments and found that the Department was not actively ensuring 

that the PA and COS assignments were cost effective; operated in accordance with 

existing procedures or good business practice; or, that taxpayer-provided funds 

supporting IPA/COS assignments were put to the best possible use. We found that 3 1 of 

a9 Prinled with soy ink on recycled paper 
the 77 PNCOS assignments had questionable components. Under these assi,ments, 

which were sponsored by Los Alamos, Lawrence Livermore, and Sandia, the 

Department's contractors: 

Paid all the costs associated with 16 assignments even though the participating 

entities benefited from the assignments and should have shared the costs; 

Paid excessive allowances for 12 assigned employees, including the payment of 

both relocation and travel per diem costs; and, 

Assigned 10 employees to other organizations for extended periods of time, in 

one case up to 15 years, without ensuring that their assignments were the most 

cost-effective approach to meeting the purported requirements. 

We found, as well, that the Los Alamos National Laboratory had not collected funds due 

to the Department under cost-shared agreements for IPA assi,vnments. As of 

September 27, 2006, we identified $891,000 that had not been collected. 

We did not find similar problems at Argonne, Lawrence Berkeley and Pacific Northwest 

Laboratories, which accounted for less than twenty percent of the IPNCOS assignments 

included in our review. 

Some of the problems noted during our review were especially troubling. For example, 

Lawrence Livennore National Laboratory paid 100 percent of the costs for four 

assignments (approximately $3.7 million) even though it recognized that the participating 

entities benefited from the assignments. In another case, Los Alamos National 

1 9horatn1-y ageed to pay 100 percent ~f the estimated '$289 000 in cnsts for an TPA 

assignment that appeared designed to simply resolve a challenging personnel decision. 

This was done with knowledge of Department representatives but was contrary to the 

intent of the PA Mobility Program. In addition, Sandia National Laboratories placed an 

employee on loan to a non-profit organization for an extended period of approximately 

12 years to perform community outreach activities. Sandia National Laboratories paid 

the full cost of the employee's assignment, more than $1 million during that period. In 

March 2005, after its nearly 12-year term, the Department became aware of this 

assignment and initiated action to evaluate the assignment. It should be noted that the 

costs discussed in the above examples, while incurred by the contractors, were fully 

reimbursed by the Department. 

We found that the Department had not established adequate policy regarding IPNCOS 

assignments. Although the Department had issued guidance for IPA assignments, the 

guidance was not specifically structured so as to be applicable to contractors on PNCOS 

assignments with other Federal agencies and private organizations. Officials 

acknowledged that the lack of Departmental guidance contributed to the ineffective 

management of PNCOS assignments for contractor employees. 

Additionally, with one exception, that being the Sandia Site Office, Department officials 

had not monitored contractor use of PA or COS assignments. Specifically, site office 

officials had not reviewed the relevancy, length, and funding arrangements for IPNCOS 
assignments. To its credit, at Sandia, site officials began approving COS assignments in 

Fiscal Year 2004. 

The Department incurred about $1 1.3 million for the 3 1 IPNCOS assignments that are 

discussed in this report. These assignnlents either exceeded the four-year maximum term 

and/or had excessive relocation allowances. In addition, the costs of some of the 

assignments were not properly allocated among participating entities. As of the date of 

this report, the use of IPNCOS assignments continues. Unless clear and precise Federal 

guidance is promulgated and more aggressive contract management emphasis is applied 

to the IPAICOS program, additional questionable costs will be incurred. 

We recognize that the IPAICOS concept may benefit the Department; however, it is 

incumbent upon Departmental officials to ensure that the program is managed in the best 

interests of the U.S. taxpayers. Accordingly, the report includes recommendations to 

address the problems we found and to place the IPNCOS program on a sound footing 

g;oinp forward. 

In a previous Office of Lnspector General (OIG) report, Management of Facility 

Contractors Assigned to the Washington, D. C. Area (DOEIIG-0710, November 2005), 

involving other assignments of contractor employees, the OIG noted that the Department 

needed guidelines for evaluating the reasonableness of cost, including parameters for 

limiting or reducing the cost of contractor employees detailed to the Washington, D.C., 

area. A similx effart is a stzrting piat for addressing concerns regarding the IPHCOS 

program. 

MANAGEMENT REACTION 

Management concurred with the finding and recommendations. Specifically, the 

National Nuclear Security Administration (NNSA) agreed to take the lead in developing 

guidance to correct problems discussed in our report. NNSA committed to present the 

guidance to the Department's Under Secretaries and the Field Management Council for u 

standardization throughout the Department. Departmental procurement and human 

capital management officials who have an acknowledged direct interest in this matter 

concurred with this approach. 

Attachment 

cc: Deputy Secretary 

Acting Under Secretary of Energy 

Under Secretary for Science 

Acting Administrator, National Nuclear Security Administration 

Chief of Staff 
REPORT ON THE DEPARTMENT OF ENERGY'S MANAGEMENT 

OF CONTRACTOR INTERGOVERNMENTAL PERSONNEL AND 

CHANGE OF STATION ASSIGNMENTS 

TABLE OF 

CONTENTS 

Management of IPA/COS Assignments

Details of Finding ..............................................................................................1 

Recommendations..............................................................................................7 

Comments ..........................................................................................................8 

Appendices 

1. Objective, Scope, and Methodology............................................................9 

2 Prior Audit Reports....................................................................................11 

3. Summary of Estimated IPA/COS Assignment Costs ................................13 
DEPARTMENT'S MANAGEMENT OF IPA/COS ASSIGNMENTS 

Page 1 Details of Finding

Management of The Department of Energy (Department) is not ensuring the cost 

Assignments effective use of contractor Intergovernmental Personnel Act 

(IPA) and Change of Station (COS) assignments. Specifically, 

among 31 of 77 IPA/COS assignments reviewed, we found that 

contractors in some cases: 

• Paid all the costs associated with the assignment even 

though it appears that they should have shared the costs 

with the participating entities benefiting from the 

assignment; 

• Paid excessive allowances to assigned employees, 

including the payment of both relocation and travel per 

diem costs; and, 

• Assigned employees to other organizations for extended 

periods of time, in one case about 15 years, without 

ensuring their assignments were the most cost effective 

approach to meeting mission needs. 

Additionally, the Los Alamos National Laboratory (Los Alamos) 

had not collected monies due to the Department under cost-share 

agreements for IPA assignments. As of September 27, 2006, we 

identified $891,000 that had not been collected. 

The costs incurred for and the duration of contractor IPA and 

COS assignments were not consistent with the guidance 

established by the Office of Personnel Management in IPA 

Mobility Program Provisions (IPA provisions) that summarize 

requirements for both federal and non-federal employees. 

Although these IPA provisions are not directly applicable to 

contractor COS assignments, we used them as a benchmark to 

evaluate the reasonableness of costs and assignment duration in 

the absence of more definitive criteria. 

Cost Sharing

Sixteen assignments were not cost shared with the host 

organizations even though the assignments were intended to 

benefit both the laboratories and host organizations. IPA 

provisions state "Cost Sharing arrangements for mobility 

assignments should be based on the extent to which the 

participating organizations benefit from the assignment. The 

larger share of costs should be absorbed by the organization 
Page 2 Details of Finding

which benefits most from the assignment." Further, assignments 

should not be arranged to meet personal interests of employees 

or for other personnel reasons. 

We found the following instances where assignments were not 

cost shared and in one case, appeared to facilitate a personnel 

decision. 

• Lawrence Livermore National Laboratory (Livermore) 

agreed to pay 100 percent of the cost for four 

assignments with an approximate cost of $3.7 million as 

of August 2006. However, Livermore did not have 

documentation to support its funding decisions. In fact, 

one Livermore manager stated that he was not sure why 

an assignment costing Livermore about $723,000 was not 

cost shared. He stated that most funding decisions are 

verbally negotiated between Livermore's division 

directors and the host organizations. Furthermore, 

according to the Livermore manager, funding decisions 

are highly dependent on the availability of funds within 

site organizations, i.e., if a Livermore division has a 

surplus of funds, it may agree to pay 100 percent of the 

assignment costs even though the host entity benefits 

from the assignment. 

• Sandia National Laboratories (Sandia) paid all of the 

expenses for two assignments at a cost to the Department 

of approximately $1.4 million as of August 2006. Sandia 

stated that the purpose of the assignments was to provide 

community service and authoritative advice to a host 

entity. Sandia did not maintain any documentation to 

support its decision to pay the entire cost of the 

assignments. 

• Los Alamos agreed to pay 100 percent of the costs for 

10 assignments at a cost to the Department of 

approximately $3 million as of August 2006. 

Specifically, Los Alamos did not have documentation to 

justify why it agreed to pay all costs associated with these 

assignments even though they benefited the recipient 

organizations. For example, the University of California 

(UC) initiated an IPA assignment of a senior Los Alamos 

official to the Defense Threat Reduction Agency 

(DTRA). Los Alamos agreed to pay 100 percent of the 

costs of the IPA assignment even though it benefited 
Page 3 Details of Finding

DTRA. The employee was tasked with developing and 

implementing a strategy for DTRA's science and 

technology program. 

We concluded that the IPA assignment was negotiated to 

facilitate a personnel decision to remove the senior 

official from Los Alamos, with the Department's 

knowledge. The IPA assignment allowed the individual: 

(1) to continue employment with Los Alamos/UC, 

although there were no plans for a return to the 

Laboratory; and, (2) to become eligible for retirement 

benefits. On June 1, 2006, during the course of our audit 

and subsequent to an internal audit report which 

questioned the allowability of the cost associated with the 

assignment, UC agreed to transfer the assignment and its 

cost from Los Alamos to UC. As of June 1, 2006, the 

cost to the Department associated with this assignment 

was about $289,000. 

Excessive Allowances

The laboratories paid excessive amounts for dislocation 

allowances, including relocation and temporary living expenses. 

According to the IPA provisions, an agency may reimburse a 

federal or non-federal employee for either limited relocation 

expenses, such as housing and furniture rental costs, or a per 

diem allowance for temporary living expenses in accordance 

with Federal Travel Regulations, but may not pay both. In 

addition, the IPA provisions state that a per diem allowance 

should not be paid for an assignment expected to last for more 

than one year or for an indefinite period. However, the 

laboratories exceeded reimbursement limitations noted in the 

provisions by paying 12 assignees for both relocation and per 

diem allowances. Specifically, we noted that: 

• Sandia paid six assignees approximately $361,000 in 

dislocation allowances during Fiscal Years (FYs) 2004 

and 2005, which included reimbursement for both per 

diem and relocation. Furthermore, Sandia was the only 

contractor in our review that paid assignees an additional 

10 percent special salary increase (approximately 

$102,000 for these six assignees) for accepting the 

assignments. 
Page 4 Details of Finding 

• Los Alamos reimbursed five assignees for both per diem 

and relocation expenses, totaling approximately $243,000 

during FYs 2004 and 2005. According to one IPA 

agreement, the host agency stated that the Los Alamos 

assignee had to choose between the reimbursement of per 

diem or relocation costs. However, Los Alamos agreed 

to reimburse all expenses in excess of the reimbursement 

limitations. 

• At Livermore, an assignee on loan to a research facility 

in a foreign country was paid approximately $400,000 for 

dislocation allowances during FYs 2004 and 2005. 

Although the assignee has been on loan since June 1998, 

the site continued to pay for dislocation allowances 

including reimbursement for housing/cost of living 

adjustments, furniture rental, renter's insurance, car 

allowance, private school for a dependent, and foreign 

language lessons for a spouse. As of June 2006, total 

assignment costs were approximately $2.7 million. 

Extended Assignments

The laboratories assigned 10 employees to other organizations 

for extended periods of time without ensuring the assignments 

were the most cost-effective approach to meeting mission needs. 

In some cases, assignments were extended without formal 

agreements or transition plans for returning the employees to the 

laboratories. This practice was contrary to IPA regulations 

requiring that assignments be short term - limited to two years 

with a two-year extension, if justified. After the fourth 

continuous year, the employee must return to his/her originating 

duty station for at least 12 months if assigned to a different 

agency or at least 60 days if returning to the same agency before 

entering into a new IPA agreement. Although the IPA provisions 

do not apply to contractor COS assignments, they can be used as 

a benchmark for evaluating the reasonableness of these 

assignments, in the absence of more definitive criteria. For 

example, we noted that: 

• Six employees at Livermore were on extended 

assignments for more than four years. None of the 

assignments had transition plans for the assignees to 

return to Livermore. In fact, several Livermore 

department managers stated that transitioning assignees 

back to the site was typically a difficult process. 

Additionally, Livermore had not performed any analyses 
Page 5 Details of Finding 

to ensure that these extended assignments were cost 

effective to Livermore or the Department. One 

assignment is currently in its 15th year, but was originally 

designated for six months and was extended with an 

"open" end date. The assignment has cost the 

Department approximately $1.2 million as of August 

2006. 

• A Sandia employee was on a COS assignment for 

approximately 12 years without the execution of a written 

agreement. During the 12 years, the employee never 

physically worked at Sandia, and instead served as 

executive officer of a non-profit organization. Sandia had 

no analyses to demonstrate that this extended assignment 

was a cost effective approach for the site to meet a 

mission requirement. The assignment has cost the 

Department over $1 million. In March 2005, the 

Department became aware of the assignment and is 

currently reviewing it for cost allowablility. 

• Los Alamos had three assignments that had been 

extended beyond four years. One IPA assignment had 

been in effect for six years and at the time of our review, 

Los Alamos was in the process of extending the 

assignment. Additionally, a COS assignment to another 

Department contractor was in effect for nine years, and 

there was no formalized transition plan for the employee 

to return to Los Alamos. The third IPA assignment has 

been in effect for approximately 5 1/2 years. 

In each of the above cases, the concerned laboratories had 

not identified or determined the cost benefit of 

alternatives available to meeting the objectives of the 

IPA/COS assignments. 

Outstanding Balances

Our analysis of IPA/COS assignment accounts receivable 

balances at Los Alamos confirmed a recent Los Alamos internal 

audit finding that Los Alamos had failed to collect monies owed 

to Los Alamos from IPA/COS assignments. Specifically, the 

internal audit group identified approximately $1 million due to 

Los Alamos from host entities as of June 30, 2005. As of 

September 27, 2006, we identified $891,000 that had not been 

collected. During the course of our audit, Los Alamos 
Page 6 Details of Finding 

acknowledged the need to improve its collection of IPA/COS 

receivables and implemented corrective actions to address the 

collection problems. 

Guidance and The Department has not developed the policy and guidance or 

Oversight provided the oversight necessary to effectively manage 

contractors' use of IPA and COS assignments. 

Departmental Guidance

The Department has not provided guidance to its contractors 

regarding the duration of assignments or the reimbursement of 

allowances (relocation and per diem costs) to assignees working 

at other agencies. Additionally, it has not required contractors to 

identify and determine the cost benefit of alternative approaches 

to achieving the mission objectives of IPA/COS assignments that 

involve extended duration and/or extensive relocation costs. 

Although the Department has established guidance (DOE M 

321.1-1, Intergovernmental Personnel Act Assignments) for 

federal and non-federal employees on IPA assignments who are 

assigned to the Department, the guidance does not provide 

specific coverage for contractor employees who go to other 

federal agencies and organizations on IPA/COS assignments. 

Department officials confirmed the current IPA assignment 

policy would not apply to such assignments and stated that the 

lack of clear guidance has contributed to the ineffective 

management of IPA/COS assignments for contractor employees. 

Officials at the laboratories stated that the language in the 

Intergovernmental Personnel Act of 1970 (IPA Act) and the IPA 

Mobility Program Provisions was vague and, therefore, was not 

uniformly implemented. In addition, the laboratories had 

internal policies and guidance that were not consistent with the 

IPA Act, federal regulations, or Mobility Program Provisions. 

For example, the laboratories relied on internal policies and 

guidance to extend IPA assignments beyond four years and to 

reimburse temporary living allowances beyond one year. In 

some cases, laboratory officials told us that the extended 

assignments and relocation expenses were justified by the 

mission benefits provided by the IPA/COS assignments. 

However, as discussed above, the laboratories had not identified 

and determined the cost benefit of alternatives to achieve the 

same mission benefits at reduced costs. 
Page 7 Recommendations

Departmental Oversight

Department officials did not review contractors' use of IPA/COS 

assignments. For example, Department site offices were 

generally unaware of the duration and cost of such assignments. 

However, the Sandia Site Office approved COS assignments per 

the Sandia contract. To its credit, Sandia recently implemented a 

centralized process for facilitating the management of 

assignments for loaned personnel. Specifically, Sandia 

developed an internal organization responsible for reviewing and 

approving all personnel loan assignments. 

Operational Impacts The Department incurred about $11.3 million for assignments 

included in our review that were either too long, resulted in 

excessive costs, or were not appropriately cost shared with host 

entities (See Appendix 3 for a summary of total estimated 

IPA/COS assignment costs). Additionally, Los Alamos did not 

collect about $891,000 in IPA/COS accounts receivable 

balances; these monies could have been applied to other mission 

needs. Further, we question about $289,000 associated with the 

IPA between UC and DTRA regarding the assignment of a 

former senior Los Alamos official. Until the Department 

provides additional guidance and effective oversight of 

contractors' use of IPA/COS assignments, it is likely to incur 

additional unnecessary costs. 

RECOMMENDATIONS To further strengthen controls over IPA/COS assignments with 

both federal and non-federal entities, we recommend that the 

Associate Administrator for Management and Administration, 

National Nuclear Security Administration (NNSA), develop 

guidance for contractor use of IPA/COS assignments to be 

presented to the Field Managers Council for adoption throughout 

the Department. 

As part of the Department-wide guidance, we recommend the 

Chairman, Field Managers Council: 

1. Require a determination of the cost benefit of alternatives 

to meeting the mission objectives of IPA/COS 

assignments; and, 

2. Establish parameters and/or requirements for: 

• Length of assignment; 
Page 8 Comments

• Reimbursement of dislocation allowances; and, 

• Cost sharing. 

We recommend that the Managers, Los Alamos, Sandia, and 

Livermore Site Offices: 

1. Develop and implement processes to ensure that the 

requirements of the established guidance are followed; 

and, 

2. Make cost allowability determinations on amounts paid 

for assignees discussed in this report under IPA 

agreements/COS assignments and collect any 

unallowable amounts. 

We also recommend that the Manager, Los Alamos Site Office, 

ensure that Los Alamos strengthens internal controls for 

collecting amounts owed to the Department for reimbursable 

assignments and collects outstanding balances. 

MANAGEMENT Management concurred with the finding and recommendations. 

REACTION Specifically, NNSA management agreed to take the lead for the 

the Department in developing guidance to correct problems 

discussed in our report. NNSA committed to present the 

guidance to the Department's Under Secretaries and the Field 

Management Council for standardization throughout the 

Department. Departmental procurement and human capital 

management concurred with this approach to addressing our 

recommendations. 

AUDITOR Management's comments are responsive to our 

COMMENTS recommendations. 

 
Appendix 1

Page 9 Objective, Scope, and Methodology

OBJECTIVE The audit objective was to determine whether the Department 

of Energy (Department) is effectively managing the use of 

contractor Intergovernmental Personnel Act (IPA) and Changeof-Station (COS) assignments to other federal agencies and 

qualified organizations. 

SCOPE The audit fieldwork was performed between December 2005 

and November 2006, and included a sample of active 

assignments during Fiscal Year (FYs) 2004 and 2005, at the 

Argonne National Laboratory; Lawrence Berkeley National 

Laboratory; Lawrence Livermore National Laboratory; Los 

Alamos National Laboratory; Sandia National Laboratories; and, 

Pacific Northwest National Laboratory. 

METHODOLOGY To accomplish the audit objective, we: 

• Reviewed applicable laws and internal/external policies 

and procedures; 

• Reviewed prior audits; 

• Obtained listings of assignments that were initiated, 

active, or terminated during FYs 2004 and 2005; 

• Judgmentally selected a sample of active IPA and COS 

agreements during FYs 2004 and 2005; 

• Obtained and reviewed assignment agreements and 

correspondence files; and, 

• Discussed processes for the implementation, 

management, review and approval of assignments with 

both laboratory and Department officials. 

The audit was conducted in accordance with generally accepted 

government auditing standards for performance audits and 

included tests of internal controls and compliance with laws and 

regulations to the extent necessary to satisfy the objective of the 

audit. Accordingly, we assessed the significant internal controls 

and performance measures established under the Government 

Performance and Results Act of 1993 and found that measures 

had not been established for contractor IPA and COS 
Appendix 1 (continued)

Page 10 Objective, Scope, and Methodology

assignments. Because our review was limited, it would not 

necessarily have disclosed all internal control deficiencies that 

may have existed at the time of our audit. We determined that 

controls over computer-processed data were not integral to 

meeting the objectives of our audit. Management waived the exit 

conference.
Appendix 2

Page 11 Prior Audit Reports 

PRIOR AUDIT REPORTS

The Office of Inspector General (OIG) and other audit organizations have previously reported 

on the implementation and management of contractors on loan to the Department of Energy 

(Department) and other organizations. 

OFFICE OF INSPECTOR GENERAL REPORTS

• Management of Facility Contractors Assigned to the Washington, D.C. Area (DOE/IG0710, November 2005). The Department requires D.C. area assignments to be limited 

to one year in duration unless considered critical. However, the audit found that 36 of 

the 189 employees reviewed had been in the Washington area for 10 or more 

years. The assignment justifications were found to be inadequate or not prepared for 

the 30 people in the sample. It was also found that living expense reimbursements 

varied by laboratory, including one laboratory that paid an employee about twice the 

per diem rate for a year ($140,000 versus $70,000). The average annual employee 

assignment cost was $247,000, with as much as $576,000 per year for one person. As a 

result, the OIG recommended the establishment of guidelines for evaluating the 

reasonableness of cost, including parameters for limiting or reducing the cost of 

assignments. 

• Summary Audit Report on Contractor Employee Relocation and Temporary Living 

Costs (DOE/IG-0400, January 1997). The audit disclosed systemic problems of 

contractors charging the Department for unreasonable and unallowable employee 

relocation and temporary living and associated travel costs. These unreasonable and 

unallowable costs were charged because the Department did not use clearly defined 

contractual provisions that were consistent with the Federal Acquisition Regulations 

and Department of Energy Acquisition Regulations, as applicable, to establish 

reasonable and allowable charges for contractors. As a result, contractors claimed and 

were reimbursed about $13.6 million for costs to which they were not entitled. 

Since 1992, the OIG has issued nine audit reports that identified unreasonable and 

unallowable charges for employee relocation and temporary living costs by contractors 

and their subcontractors. The audits cited instances of salary allowances, relocation 

costs and temporary living allowances that appeared to be excessive. 

GOVERNMENT ACCOUNTABILITY OFFICE REPORTS 

• Homeland Security (DHS) Needs to Improve Ethics-Related Management Controls for 

the Science and Technology Directorate (GAO-06-206, December 2005). This audit 

focused on conflicts of interest created by IPAs at the Department of Homeland 

Security's Science and Technology Directorate. The purpose of the Directorate is to 

identify and develop countermeasures to chemical, biological, radiological, nuclear, and 

other emerging terrorist threats on the United States. The Directorate had 16 portfolio 

managers, of which 5 came from Department of Energy's (DOE) laboratories.
Appendix 2 (continued)

Page 12 Prior Audit Reports

In Fiscal Year (FY) 2004, 23 percent of the Directorate's $761 million in funding went 

to DOE laboratories. The report stated that the role of the five managers, in 

determining where research and development projects and associated funds were 

directed, was unclear. This was attributed to there being no documentation of the 

decision-making process and the inability to determine the extent that IPA involvement 

affected funding decisions of their home laboratories. The report recommended that the 

Directorate take several steps designed to alleviate conflicts of interest and better define 

the role of IPAs in the organization. 

CONTRACTOR INTERNAL AUDIT REPORTS 

• Audit of Intergovernmental Personnel Act and Change of Station Assignments (Los 

Alamos National Laboratory Audits and Assessments Division, January 27, 2006). The 

audit report disclosed that IPA and COS assignments were generally consistent with 

DOE requirements and Los Alamos policies and procedures. However three issues 

were identified: outstanding balances from partners; potential conflicts of interest; and, 

lack of documentation for funding decisions. 

Specifically, the audit found that 24 of the 55 agreements reviewed had reimbursement 

terms. Of the 24, 22 had outstanding balances totaling more than $1 million as of 

June 30, 2005. About $962,000 of that amount was at least 60 days past due, including 

about $275,000 originally invoiced in FY 2003 and about $442,000 originally invoiced 

in FY 2004. The audit team identified a weakness in internal controls over the 

collection of reimbursable agreements. The problem was due to a sub-ledger system of 

work-for-others not working properly. There was no effort made to correct the system. 

As a result, several organizations with large balances had not been billed for over a year 

for their cumulative amounts due. In addition, seven potential conflicts of interest were 

identified. The conflicts of interest were identified as resembling lobbying 

activity. Lastly, the report expressed concern about inadequate justifications for 

funding decisions made, particularly those where Los Alamos was paying 100 percent 

of the costs. It noted that it was sometimes unclear why the other organizations were 

not contributing to the cost when they were receiving a benefit from the assignments. 
Appendix 3

Page 13 Summary of Estimated IPA/COS Assignment Costs

SUMMARY OF TOTAL ESTIMATED IPA/COS ASSIGNMENT COSTS 

Department's 

National 

Laboratories 

Total 

Assignment 

Costs Not 

Shared with 

Host Entities 

Excessive 

Allowances 

(FYs 2004-

2005) 

Extended 

Assignments 

Total 

 (1) 

Los Alamos $2,991,615 $242,575 

Livermore $3,730,823 $407,528 $1,220,183 

Sandia $1,368,424 $361,272 $1,056,218 

Total $8,090,862 $1,011,375 $2,276,401 $11,378,638 

 (1) Approximately $113, 407 of this amount represents costs for assignments that had 

duplicative issues (i.e. cost sharing and excessive allowance issues). 
IG Report No. DOE/IG-0761

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