U.S. Department of Energy 

Office of Inspector General 

Office of Audit Services 

Audit Report 

Management Controls over 

Implementation of the Homeland 

Defense Equipment Reuse 

Program 

 OAS-M-08-03 December 2007 
Department of Energy 

Washington, DC 20585 

December 11, 2007 

MEMORANDUM FOR THE MANAGER, OAK RIGE OFFICE 

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FROM: George W. Collard 

Assistant Inspector General 

for NNSA and Energy Audits 

Office of Inspector General 

SUBJECT: INFORMATION: Audit Report on "Management Controls 

over Implementation of the Homeland Defense Equipment 

Reuse Program" 

In June 2002, the Department of Energy's (Department) Oak Ridge Office entered into an 

Interagency Agreement with the U.S. Department of Justice to provide excess 

radiological detection equipment and other equipment to designated state and local first 

responder agencies under the Homeland Defense Equipment Reuse (HDER) Program. 

On March 1, 2003, the Department of Justice transferred its responsibility for 

administering the HDER Program to the Department of Homeland Security. 

Under the Agreement, Oak Ridge located, received, evaluated, and rehabilitated excess 

Federal equipment for reuse by first responder agencies. Essential first responder 

equipment included items such as radiation detection meters and face respirators. 

Oak Ridge used a contractor to carryout its responsibilities under the Agreement. As of 

December 2006, equipment with an acquisition value of more than $1.5 million was 

stored at the HDER processing facility. 

In January 2007, Oak Ridge temporarily suspended activities because of concerns about 

the effectiveness of property controls. Based on concerns raised to us by Oak Ridge 

management, we conducted this audit to determine whether controls were in place to 

ensure that all equipment transferred to the HDER Program was made available to 

approved first responders. 

RESULTS OF AUDIT 

While we found that Oak Ridge provided equipment to first responders in a timely 

manner, key property management controls were not in place to ensure that all equipment 

transferred to the HDER Program was made available to first responders. Specifically: 

All items approved for transfer to the HDER Program could not be located; and, 

Other equipment received by the HDER contractor was provided to first 

responders without prior Homeland Security approval. 

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We were precluded from fully testing HDER Program inventories because records of 

transferred property were not complete. However, we identified instances where 

transferred property could not be located. For example, Oak Ridge and its HDER 

contractor could not locate 11 of 30 items approved for transfer to HDER by one 

Department site. Equipment that was unaccounted for included heat stress monitors and 

a fuel tank and pump. 

Key property management controls were not in place because Oak Ridge had not 

required its contractor to provide a complete accounting for equipment transferred by 

Federal sites to the HDER Program. Further, the contractor did not follow procedures 

established for the HDER Program. Specifically, the contractor allowed local responders 

to visit its processing facility and take equipment before it was entered into the 

Responder Knowledge Base, thereby preventing Homeland Security from reviewing and 

approving the request for the distribution of the equipment. 

Without critical property management controls, the Department and Homeland Security 

cannot be assured that equipment vital to first responders is being made available as 

needed. In April 2007, Oak Ridge resumed HDER Program activities. Given the 

importance of the HDER equipment to first responders and Oak Ridge's decision to 

resume activities, we made recommendations to improve property management controls. 

MANAGEMENT REACTION 

Management agreed with our report and corresponding recommendations and noted the 

corrective actions that have been or will be taken to address weaknesses noted in the 

report. Management's proposed actions are responsive to our recommendations and are 

included in Appendix 2 of the report. 

Attachment 

cc: Chief of Staff 

Deputy Director for Field Operations, SC 

Manager, Oak Ridge Office 

Team Leader, Audit Liaison Team, CF-1.2 

Audit Liaison, Oak Ridge Office, SC-OR 
REPORT ON MANAGEMENT CONTROLS OVER IMPLEMENTATION 

OF THE HOMELAND DEFENSE EQUIPMENT RESUSE PROGRAM 

TABLE OF 

CONTENTS 

Equipment Transfers to First Responders

Details of Finding 1 

Recommendations 2 

Comments 3 

Appendices

1. Objective, Scope, and Methodology 4 

2. Management Comments 6 
EQUIPMENT TRANSFERS TO FIRST RESPONDERS 

Page 1 Details of Finding 

Equipment During our review, we identified several instances where 

Availability equipment approved for transfer to the Homeland Defense 

Equipment Reuse (HDER) Program could not be located or was 

distributed to first responders without prior approval of the 

Department of Homeland Security (Homeland Security). 

Transferred Equipment

We were unable to locate all equipment approved for transfer to 

the HDER Program at the contractor's HDER processing facility. 

Specifically, the Oak Ridge Office (Oak Ridge) and its HDER 

contractor were able to tentatively identify only 19 of the 30 items 

that had been approved for transfer by the Department of Energy's 

(Department) Ashtabula closure site. Based on discussions with 

Ashtabula closure site personnel, the items were likely shipped to 

the contractor's processing facility on multiple shipments over a 

four month period. However, controls did not provide sufficient 

evidence to determine whether the equipment actually arrived at 

the processing facility. Examples of the 11 items not found 

included equipment beneficial to first responders such as two heat 

stress monitors and a fuel tank and pump. In another instance, 

while observing the offloading of a HDER shipment to the 

contractor processing facility, we were only able to locate 9 of the 

19 boxes of Personal Protective Equipment that were listed on the 

transfer document from the Department's Y-12 National Security 

Complex. 

Distributed Equipment

Furthermore, the HDER contractor provided equipment to first 

responders without prior Homeland Security approval. 

Specifically, we identified two instances where the contractor 

allowed first responders to physically visit its HDER processing 

facility and take equipment without approval of Homeland 

Security. The contractor had entered some of the selected 

equipment into the Department's Asset Reutilization Inventory 

System (ARIS) while other items had not been entered. For those 

items that had been accounted for in ARIS, HDER contractor 

personnel improperly recorded them in the system as recycled, 

indicating that the items were unfit for HDER Program use and 

had been disposed of, rather than indicating that the equipment had 

been provided to the first responders. The ARIS inventory system 

was used to update, on a quarterly basis, Homeland Security's 

Responder Knowledge Base through which it approved first 

responder's equipment requests. 
 

Page 2 Recommendations 

Property Controls Key property controls were not in place to ensure that equipment 

was controlled and made available to first responders. For 

example, Oak Ridge did not require a complete accounting of all 

equipment transferred to and received at the HDER processing 

facility, and did not require the HDER contractor to reconcile 

receipts with site transfer documents. Departmental sites were 

allowed to send equipment to HDER through transfer documents 

that contained generalized, rather than specific, descriptions of the 

items transferred to the program. Examples of generalized 

descriptions on the approved transfer documents include 

"miscellaneous air and water monitoring equipment," 

"miscellaneous radiological supplies" and "personal protection 

clothing, various." In the absence of a complete listing of 

equipment and with no requirement in place to reconcile inventory 

received to the transfer documents, it is difficult for Oak Ridge to 

determine which items have actually been transferred to the HDER 

processing facility and ultimately made available to first 

responders. 

Also, the HDER contractor did not follow established procedures 

for entering data in inventory systems and in issuing equipment to 

first responders. Under HDER Program procedures, first 

responders must submit justifications to Homeland Security for 

specific items. Homeland Security approves distribution of the 

equipment based on the needs identified by the first responders. 

Despite these procedures, the contractor allowed two local first 

responders to visit the processing facility and take equipment 

without approval from Homeland Security. 

Impact on First Without proper controls, the Department cannot be assured that 

Responders equipment is being provided to first responders in order to enhance 

their domestic preparedness capabilities. During the course of the 

HDER Program, Oak Ridge provided equipment to fire 

departments, emergency management agencies, and law 

enforcement agencies that otherwise might not have the ability to 

procure the items, some of which were new and still in the original 

boxes. This equipment is vital to the mission of first responders. 

RECOMMENDATIONS We recommend that the Manager, Oak Ridge Office: 

1. Establish controls to ensure that the description and 

quantity of items transferred to the HDER Program is 

clearly identified; 

2. Require the HDER contractor to reconcile deliveries and 

receipts;
 

Page 3 Recommendations and Comments 

3. Ensure that all useful items transferred to HDER are 

accurately and appropriately reflected in ARIS; and, 

4. Enforce HDER procedures on the contractor which 

require Department of Homeland Security approval of 

equipment distributions. 

Management and Management immediately took action to address the deficiencies 

Auditor Comments noted in the report. These changes include instituting a more 

rigorous equipment tracking system; drafting new procedures for 

the execution of the program; and, improving oversight of 

contractor activities. Additionally, management has developed a 

corrective action plan to address the recommendations contained in 

the report. These actions include revisions to the HDER Operating 

Manual to reflect the implementation of additional controls, 

increased oversight by Departmental staff, and updating the 

existing contractor's Statement of Work.

We consider Management's comments and actions to be responsive 

to the weaknesses and recommendations identified in the report. 

Management's comments are included in Appendix 2 of the report. 
Appendix 1 

Page 4 Objective, Scope, and Methodology 

OBJECTIVE The objective of this audit was to determine whether the Oak 

Ridge Office has controls in place to ensure that all equipment 

transferred to the Homeland Defense Equipment Reuse (HDER) 

Program was made available to approved first responders. 

SCOPE We conducted the audit from March to October 2007 at the Oak 

Ridge Office in Oak Ridge, Tennessee. The scope of the audit 

covered equipment transfers to the HDER Program since 2002.

METHODOLOGY To accomplish the audit objective, we: 

• Obtained and reviewed laws, regulations, policies, and 

procedures relevant to the HDER Program; 

• Reviewed related prior audit reports and reviews; 

• Evaluated Oak Ridge Office internal controls over the 

transfer of excess property; 

• Reviewed files and documentation related to HDER 

property transfers; 

• Analyzed transferred property inventory listings; and, 

• Interviewed key personnel at the Oak Ridge Office, 

Ashtabula closure site, and Oak Ridge's HDER contractor. 

We conducted this performance audit in accordance with generally 

accepted Government auditing standards. Those standards require 

that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our finding and 

conclusions based on our audit objective. The audit included tests 

of internal controls and compliance with laws and regulations to 

the extent necessary to satisfy the audit objective. We were 

precluded from fully testing HDER Program inventories because 

records of transferred property were not complete. However, we 

used alternative procedures, including observation of property 

transfers, to support our finding and conclusion. We believe that 

the evidence obtained provides a reasonable basis for our finding 

and conclusions based on our audit objective. 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. 

Also, we evaluated the Department of Energy's implementation of 

the Government Performance and Results Act of 1993 as it related 

to the audit objective. 
Appendix 1 

Page 5 Objective, Scope, and Methodology 

Our review did not identify any performance measures directly 

relating to the HDER Program. Finally, since we did not rely upon 

automated data processing information to accomplish our audit 

objective, we did not conduct an assessment of the reliability of 

computer processed data. 
Appendix 2 

Page 6 Management Comments 
Appendix 2 (continued) 

Page 7 Management Comments 
Appendix 2 (continued) 

Page 8 Management Comments 
IG Report No. OAS-M-08-03

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