U.S. Department of Energy 

Office of Inspector General 

Office of Audit Services 

Audit Report 

Department of Energy's Efforts to 

Meet Accountability and 

Performance Reporting Objectives of 

the American Recovery and 

Reinvestment Act 

OAS-RA-09-04 September 2009 
Department of Energy 

Washington, DC 20585 

September 4, 2009 

MEMORANDUM FOR THE SECRETARY 

FROM: Gregory H. Friedman 

 Inspector General 

SUBJECT: INFORMATION: Special Report on the "Department of 

 Energy's Efforts to Meet Accountability and Performance 

 Reporting Objectives of the American Recovery and 

 Reinvestment Act" 

BACKGROUND

The purpose of the American Recovery and Reinvestment Act of 2009 (Recovery Act) 

was to jumpstart the U.S. economy, create or save millions of jobs, spur technological 

advances in health and science, and invest in the Nation's energy future. The Department 

of Energy will receive an unprecedented $38 billion in Recovery Act funding to support a 

variety of science, energy, and environmental initiatives. The Recovery Act requires 

transparency and accountability over these funds. To this end, the Office of Management 

and Budget (OMB) issued guidance requiring the Department to compile and report a 

wide variety of funding, accounting, and performance information. 

The Department plans to leverage existing information systems to develop accounting 

and performance information that will be used by program managers and ultimately 

reported to Recovery.gov, the government-wide source of Recovery Act information, and 

to OMB. The Department's iManage iPortal, a system that aggregates information from a 

number of corporate systems, will serve as the main reporting gateway for accounting 

information. In addition, the Department plans to implement a methodology or system 

that will permit it to monitor information reported directly to OMB by prime funding 

recipients. Furthermore, performance measures or metrics that outline expected 

outcomes are being developed, with results ultimately to be reported in a recently 

developed Department-wide system. 

Because of the significance of funds provided and their importance to strengthening the 

Nation's economy, we initiated this review to determine whether the Department had 

taken the steps necessary to ensure that Recovery Act funds can be appropriately tracked 

and are transparent to the public, and whether the benefits of the expenditures can be 

properly measured and reported clearly, accurately, and in a timely manner. 

RESULTS OF REVIEW

Although not yet fully mature, we found that the Department's efforts to develop, refine, 

and apply the control structure needed to ensure accurate, timely, and reliable reporting to 
2 

be both proactive and positive. We did, however, identify certain issues relating to 

Recovery Act performance management, accounting and reporting accuracy, and 

timeliness that should be addressed and resolved. In particular, at the time of our review: 

• Program officials had not yet determined whether existing information systems 

will be able to process anticipated transaction increases associated with the 

Recovery Act; 

• System modifications made to the Department's performance management 

system to accommodate Recovery Act performance measures had not yet been 

fully tested and verified; 

• The ability of prime and sub-recipients to properly segregate and report both 

accounting and performance information had not been determined; 

• There was a lack of coordination between Headquarters organizations related to 

aspects of Recovery Act reporting. For example, we observed that the Offices 

of Fossil Energy and Program, Analysis and Evaluation were both involved in 

developing job creation estimates that could yield significantly different results; 

and, 

• A significant portion (91 of 142, or 64 percent) of the performance measures 

developed for the Recovery Act activities were not quantifiable. In some 

instances, Project Operating Plans had not been finalized and we were not able to 

verify that all needed performance measures had been developed. Furthermore, 

the Department had not developed specific metrics to measure federal and 

contractor jobs creation and retention, an essential Recovery Act objective. 

The Department had devoted a great deal of time and resources to identifying and 

mitigating Recovery Act-related risks. For example, the Department developed a risk 

assessment tool that is intended to assist programs in identifying risks that can prevent its 

Recovery Act projects from meeting their intended goals. We also found that program 

staff and management officials at multiple levels were actively engaged in designing 

Recovery Act-related control and accountability programs. These efforts ranged from 

updating existing information systems to developing matrices designed to ensure that all 

required reporting and performance elements were addressed. Each of these activities 

required substantial effort and was accomplished within a relatively short period. 

Further, we noted that the Office of the Chief Financial Officer had been instrumental in 

helping impacted program elements identify issues that could adversely affect the 

Department's ability to execute its accounting, reporting, and performance monitoring 

responsibilities. 

While much has been done, additional work is necessary if the Department is to 

successfully manage Recovery Act-related risks. For example, as previously noted, 

OMB has issued guidance establishing Recovery Act monitoring and reporting 

requirements. This guidance, however, continues to evolve and the Department is 
3 

engaged in actively modifying systems and issuing new direction in response to these 

changes. Furthermore, we believe that in addition to current initiatives, there are other 

actions that could help enhance the Department's ongoing efforts. As such, our report 

contains a number of recommended activities that the Chief Financial Officer and 

cognizant program officials, in coordination with the Chief Information Officer, should 

take in this regard. 

The need to report accurate and complete information to the public and OMB is a 

Recovery Act imperative. We are concerned that the Department's information systems 

supporting Recovery Act activities may be unable to handle significant increases in 

workload or provide appropriate mechanisms to ensure that funds are accurately tracked 

and reported. As discussed in our recent Special Report on the American Recovery and 

Reinvestment Act at the Department of Energy (OAS-RA-09-01, March 2009), without 

adequate accounting of funds that includes periodic evaluation of program results, 

taxpayers' confidence that Recovery Act projects are meeting intended goals may be 

eroded. Furthermore, the absence of adequate and quantifiable performance measures 

may limit the ability of the Department, OMB, and the public to accurately gauge the 

progress in achieving Recovery Act goals. 

This is the latest in a series of reports that focus on the Department's implementation of 

the Recovery Act. This report concentrates on the Department's Headquarters-managed 

systems for accounting for, reporting, and measuring Recovery Act-related performance. 

Separate reviews of efforts in the energy, science, and environmental areas are in process 

and will be reported under separate cover. 

MANAGEMENT REACTION 

Management generally concurred with the report's recommendations and agreed to take 

corrective action. In certain instances, management indicated that actions necessary to 

satisfy the intent of our recommendations had been completed. Management's comments 

are included in Appendix 3. 

Attachment 

cc: Deputy Secretary 

 Under Secretary of Energy 

 Under Secretary for Science 

 Administrator, National Nuclear Security Administration 

 Chief of Staff 

 Chief Financial Officer 

 Chief Information Officer 
REPORT ON THE DEPARTMENT OF ENERGY'S EFFORTS TO 

MEET ACCOUNTABILITY AND PERFORMANCE REPORTING 

OBJECTIVES OF THE AMERICAN RECOVERY AND 

REINVESTMENT ACT 

TABLE OF 

CONTENTS 

Recovery Act Accounting and Performance Reporting

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

Comments........................................................................................................................13 

Recommendations ...................................................................................................4, 9, 12 

Appendices 

1. Objective, Scope, and Methodology..........................................................................14 

2. Related Reports..........................................................................................................16

3. Management Comments ............................................................................................18 
RECOVERY ACT ACCOUNTING AND PERFORMANCE 

REPORTING 

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Page 1 Details of Finding

Background and As part of the American Recovery and Reinvestment Act 

Results of 2009 (Recovery Act), the Department of Energy 

(Department or DOE) is required to compile various reports 

to submit to the Recovery.gov website maintained by the 

Recovery Accountability and Transparency Board. These 

include reports detailing funding notifications, obligations, 

outlays, and Agency-wide and Program-specific plans 

outlining projects and activities. To meet these 

requirements, the Department plans to leverage its 

corporate information systems and utilize iManage iPortal 

as the main reporting gateway for Department information. 

In addition, prime recipients of Recovery Act funds will be 

responsible for reporting information directly to the Office 

of Management and Budget (OMB), and government-wide 

systems will be utilized for reporting Recovery Act awardlevel information. Furthermore, performance measures that 

outline expected outcomes consistent with the intent and 

requirements of the Recovery Act must be developed as 

part of Agency-wide and Program-specific Recovery Plans. 

Although not yet fully mature, we found that the 

Department's efforts to develop, refine, and apply internal 

controls to help ensure accurate, timely, and reliable 

reporting to be both proactive and positive. We did, 

however, identify various issues that could increase 

Recovery Act-related performance management, 

accounting and reporting accuracy, and timeliness risks. 

Without adequate accountability and reporting of Recovery 

Act funding use and results, the Department is at risk for 

potential fraud, waste, or abuse. To that end, we have 

recommended a number of actions the Department should 

take to address these challenges. 

Impact of Recovery To meet the requirements of the Recovery Act, the 

Act on Information Department identified existing corporate systems that will 

Systems be utilized to report Recovery Act information to OMB and 

Recovery.gov. While Department officials informed us 

that no new systems will be developed to support Recovery 

Act efforts, they had identified eight existing systems – 

some of them requiring modifications – to be used to track 

and report Recovery Act information. For example, data 

from the Standard Accounting and Reporting System 

(STARS) is being submitted as part of Weekly Financial 

and Activity Reports to provide a compilation of total 

obligations and gross outlays related to Recovery Act 

programs. In addition, the Strategic Integrated 
 

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Page 2 Details of Finding

Procurement Enterprise System (STRIPES) is being 

utilized as the Department's primary interface to collect and 

provide award-level reporting information on contracts to 

the government-wide Federal Procurement Data SystemNext Generation and the Federal Assistance Awards Data 

System.

As part of its preliminary Recovery Act efforts, the 

Department identified which systems needed to be 

modified to meet tracking and reporting requirements, 

including STARS, STRIPES, the iManage Data 

Warehouse, and the Corporate Human Resource 

Information System (CHRIS). Officials informed us, 

however, that because these systems were upgraded with 

new hardware and software over the past several years, the 

existing flexibility of the systems resulted in the need to 

make very few changes. Although these actions should 

help alleviate potential issues, we believe that the ability of 

the Department's information systems to process the huge 

amount of Recovery Act data is a challenge that requires 

continued attention of senior Department officials. 

Information System Risks and Program Mitigation 

Strategies

The influx of significant new funding presents a number of 

challenges and risks to the Department related to its use of 

corporate systems for managing Recovery Act programs. 

In particular, as a result of OMB mandates, the 

Department's information systems are required to: 

• Have the capacity to handle the large number of 

additional Recovery Act transactions. For instance, 

officials informed us that up to 8,000 additional 

STRIPES transactions per year are expected, a 

significant increase over normal activities; 

• Track and monitor detailed data supporting 

Recovery Act activities carried out by Departmental 

programs; and, 

• Be capable of appropriately separating funding and 

program data supporting Recovery Act and nonRecovery Act functions. 
 

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Page 3 Details of Finding

As part of a proactive strategy to address Recovery Act 

requirements and related risks, responsible program 

officials had taken action to review and update information 

systems, as necessary. Specifically, the Department: 

• Added storage and server capacity to a few 

corporate systems that will be used for tracking and 

reporting Recovery Act funds. During our review, 

officials noted that they expect to add additional 

capacity as needed in the future. 

• Issued guidance and conducted testing related to 

newly created edit checks – automated controls 

designed to test the validity of data – in its 

procurement system. Specifically, the most recent 

DOE Acquisition and Financial Assistance 

Implementation Guide, issued on May 31, 2009, 

detailed the process for contracting officers to 

follow when procuring Recovery Act-related 

resources. In addition, Policy Flashes were issued 

to alert contracting officers of the edit checks and 

procedures. The Department also developed an edit 

check to help prevent the comingling of Recovery 

Act funds from normal appropriations. Program 

officials noted that this control was successfully 

tested in the STRIPES system by entering incorrect 

information, using mixed project codes (i.e. 

Recovery and non-Recovery Act), and entering 

incorrect project codes. 

• Issued procurement guidance that instructed 

contracting officers not to combine Recovery Act 

and non-Recovery Act funding on a single 

requisition, even as separate line items. For 

example, the Department utilizes the Department of 

Treasury Automated Standard Application for 

Payments (ASAP) system for financial assistance 

agreements, which is unable to cost non-Recovery 

Act and Recovery Act funding separately. 

However, according to Department officials, the 

guidance and separate requisitions will help 

alleviate problems with recipient payments. 

• Established new Treasury Appropriation Fund 

Symbols (TAFS) and codes for the projects 

submitted for funding under the Recovery Act to 

track and distinguish the Recovery Act data from 
 

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Page 4 Details of Finding

system to system. Currently, there are 18 TAFS 

and 163 project codes that will be used to track the 

funding and ensure linkage between project, 

performance, procurement, and financial data. 

Remaining Information Systems Challenges

Although the Department had taken actions to update its 

information systems, several challenges require resolution 

to help ensure that Recovery Act goals and objectives can 

be satisfied. In particular: 

• As more Recovery Act funds are spent, additional 

updates to systems may be required to accommodate 

the increased processing requirements. For instance, 

program officials informed us that they will not know 

whether current systems are capable of increased 

workloads until more transactions are processed by 

the systems. 

• Testing of changes to information systems to 

accommodate expedited reporting timeframes 

required by the Recovery Act may be a challenge 

for various programs and prime recipients. For 

example, although Department officials reported 

that they had modified the Program Measure 

Manager (PMM) system to track Recovery Act 

performance measure data separately from other 

activities, they had not yet verified the effectiveness 

of the changes through system testing. 

• As requirements for tracking and reporting data 

related to Recovery Act activities continue to 

evolve, Department officials expressed concern that 

systems maintained by prime recipients may not be 

capable of necessary modifications. 

 

Recommended Actions

To address the risk that the Department's information 

systems will be unable to accommodate the additional 

requirements posed by the Recovery Act, the Department 

should: 

1. Conduct formal testing of the systems that were 

modified and will be used for managing Recovery 
 

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Page 5 Details of Finding

Act efforts to help ensure their capabilities meet 

established objectives; 

2. Share Recovery Act best practices among programs 

and continue to provide guidance and direction to 

programs and field sites regarding the Department's 

efforts to meet Recovery Act requirements; and, 

3. Periodically test the output of its corporate systems 

to ensure that policy is adhered to and users are 

properly segregating Recovery Act transactions. 

The actions described above, when completed, should help 

the Department address the risks associated with 

developing and maintaining information systems sufficient 

to meet Recovery Act goals and objectives. 

Reporting Recovery As part of the Recovery Act, agencies must meet seven 

Act Information requirements for reporting information to OMB and 

Recovery.gov, including Major Communications, Funding 

Notification Reports, Weekly Financial and Activity 

Reports, Agency-wide Recovery Act Plans, Programspecific Recovery Act Plans, Award-level Reporting, and 

Recipient Reporting. The Department is responsible for 

addressing six of the reporting requirements and recipients 

are responsible for meeting the remaining requirement. 

Department officials determined that the iManage iPortal 

will be used as the main gateway for the Department's 

reporting to Recovery.gov. Most information for the 

reports will be generated by corporate systems such as 

STARS and STRIPES, but will also be compiled through 

data calls and manual entry. Furthermore, the Department 

is responsible for continuing to enter award-level 

information (contracts and federal assistance) into existing 

government-wide systems, such as Federal Procurement 

Data System-Next Generation and Federal Assistance 

Awards Data System, which will then be transmitted to 

OMB and Recovery.gov. 

In addition, prime recipients of Recovery Act awards and 

contracts will need to separately report information to 

FederalReporting.gov, a website maintained by OMB and 

used to collect information from prime recipients. The 

prime recipients of the Department's Recovery Act funding 

will begin to report information starting on October 10, 

2009, and will continue to report information by every 10th

workday after the end of each quarter. The recipients are 
 

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Page 6 Details of Finding

required to report on several different data elements 

including the total amount of Recovery Act funds received 

from the Department, the number of jobs created or 

retained with those funds, and a detailed list of all projects 

or activities for which funds were expended or obligated. 

Recovery Act Reporting Risks and 

Department Mitigation Strategies

The addition of new reporting requirements mandated by 

the Recovery Act presents the Department with various 

challenges not previously encountered during the 

management of its programs. Specifically, OMB guidance 

mandates that the Department: 

• Ensure unprecedented transparency of program 

operations to the public by regularly reporting on 

the recipients of Recovery Act funds, including 

detailed reports such as the Weekly Financial and 

Activity Reports regarding obligation and outlay of 

funds; 

• Develop formal documented plans for how 

Recovery Act funds will be applied and managed by 

the Department and program elements; and, 

• Perform data quality reviews of recipient 

information such as comparing expenditures with 

Department award data to identify significant 

omissions and/or reporting errors. 

In response to the unprecedented level of reporting 

requirements mandated by the Recovery Act, the 

Department had taken a number of actions to help ensure 

that it can accurately report information to the public 

regarding the operation and management of its programs, 

including activities carried out by prime recipients. 

Specifically, the Department: 

• Developed a matrix that included all Recovery Actrequired data elements for reporting and the systems 

and/or manual procedures that will provide needed 

information. For example, program officials 

determined that the Funding Notification reports – 

which detail all publicly announced award types 

including contracts, cooperative agreements, and 
 

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Page 7 Details of Finding

grants – would be developed utilizing information 

from the Procurement and Assistance Data System 

and STARS. 

• Submitted several reports to OMB and 

Recovery.gov since February 2009, including Major 

Communications, Funding Notification reports, and 

Financial and Activity Reports. These reports 

detailed items of interest, publicly announced 

funding opportunities, and obligations and funding 

outlays to prime recipients. 

• Developed Project Operating Plans (Operating 

Plans) for most of the projects that will be funded 

by the Recovery Act. Using these, the Department 

compiled and submitted its Agency-wide and 

Program-specific Recovery Plans to OMB. 

• Assembled a Recovery Act Financial Assistance 

Working Group to discuss areas of concern related 

to Recovery Act reporting. For example, the group 

analyzed risks, controls, and potential process 

improvements related to advances using Recovery 

Act funding. The group then developed a risk 

mitigation plan, which detailed procedures to be 

followed to eliminate problems with advances to 

funding recipients. However, both the risk 

mitigation plan and the procedures remained in 

draft at the time of our review. 

Remaining Recovery Act Reporting Challenges

While the Department had initiated actions to address the 

challenges associated with transparency and reporting 

requirements, our review identified a number of risk areas 

that will require additional or supplementary action to help 

ensure that the goals and objectives of the Recovery Act are 

satisfied. In particular: 

• Absent implementation of the draft procedures for 

advances of funds to recipients, the Department 

may report inaccurate information on project 

progress due to the timing of Recovery Act 

requirements. Specifically, since the ASAP system 

used for paying invoices does not show advances, a 

Financial Status Report needs to be separately filed 

to show how much funding was taken for advances. 
 

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Page 8 Details of Finding

However, these reports are not required until 30 

days after the month close, thus possibly creating a 

significant difference for quarterly reporting. While 

it does not currently present a problem, once the 

Recovery Act funding increases, the differences 

may become more significant and could impact the 

Recovery Act reporting. Finalizing and ensuring 

complete implementation of the Department's draft 

procedures should help remedy this issue. 

• There was a lack of coordination between 

Headquarters organizations related to Recovery Act 

reporting. For example, the Office of Fossil Energy 

was actively working on developing estimates for 

jobs created and retained based on the funding for 

its projects. However, Office of Program Analysis 

and Evaluation (PA&E) officials informed us that 

they contracted with the University of 

Massachusetts to develop an overall job estimate for 

Department Recovery Act funding. PA&E officials 

noted that if OMB requires a job estimate from the 

Department, it would provide the job estimates and 

not solicit any input from officials from other 

programs. Despite these activities, both the PA&E 

and Fossil Energy officials were unaware of each 

others' efforts. 

• Department officials have also expressed concern 

over whether they will have enough time and 

resources to conduct quarterly reviews of 

information reported to OMB by recipients. While 

OMB does not require the Department to conduct 

an extensive review of recipient information, it does 

require the Department to perform limited data 

quality reviews to identify significant omissions 

and/or reporting errors. At the time of our review, 

the Department was in the process of developing a 

quality assurance strategy for reviewing recipient 

information. 

• Department officials indicated that they were 

concerned that contractors and other prime 

recipients may not have the capability to track and 

report the data necessary to meet Recovery Act 

requirements. For example, officials commented 

that certain recipients may not have the information 
 

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Page 9 Details of Finding

technology resources necessary to submit electronic 

information to meet Recovery Act reporting 

mandates. 

Recommended Actions

To prepare for the unprecedented level of reporting 

requirements mandated by the Recovery Act and to address 

the risks we have identified in our report, the Department 

should take steps to: 

4. Finalize and issue procedures for reporting 

advances under the Recovery Act; 

5. Ensure adequate coordination among Headquarters 

organizations; 

6. Develop a strategy for reviewing recipient 

information, to include a central office for 

collection and dissemination of data; and, 

7. Determine whether any existing corporate systems 

will be leveraged for the collection of recipient 

information and, if so, ensure the process is 

documented and approved. 

Taking actions such as these are essential to ensuring that 

the Department's programs and prime recipients report 

meaningful and accurate data to demonstrate progress made 

towards meeting the goals of the Recovery Act. 

Recovery Act The Department is required to develop quantifiable 

Performance Metrics performance measures that address the use of Recovery Act 

funds. These measures should include information such as 

the length of the period between measurements, the 

measurement methodology, and how the results will be 

made readily accessible to the public. In addition, the 

Recovery Act requires the Department to monitor the 

progress of program performance to identify areas of high 

risk or low performance and make any necessary changes. 

The Recovery Act also requires all prime recipients to 

report on performance metrics, including those related to 

the creation and retention of jobs. The current OMB 

implementing guidance requires recipients to report job 

estimates for themselves, as well as sub-recipients and 

vendors. In addition, the Department is required to conduct 
 

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Page 10 Details of Finding

oversight on recipient reporting, including determining the 

completeness of performance metrics such as the number of 

jobs reported and progress made in other project areas. 

Performance Measure Risks and 

Associated Mitigation Strategies

The addition of new programs and projects presents 

challenges to the Department in developing performance 

measures that meet the goals of the Recovery Act. In 

particular, OMB mandated the Department develop 

performance measures that: 

• Correspond to the funding, intent, and requirements 

of the Recovery Act; 

• Are quantifiable, outcome-oriented, and specify the 

length of the period between measurements (e.g., 

monthly, quarterly), the measurement methodology, 

and how the results will be made readily accessible 

to the public; and, 

• Can be validated by the Department's programs and 

contain documentation supporting the results. 

In support of its Recovery Act strategy, the Department had 

taken a number of actions to help ensure that it can accurately 

measure the progress of programs and projects funded by the 

Recovery Act. Specifically: 

• At the time of our review, the Department had 

prepared high-level performance measures for at least 

142 of the 163 Recovery Act-funded projects. 

• The Department hired independent consultants to 

review its performance measures to ensure 

consistency across the programs. Specifically, the 

consultants were reviewing each of the Operating 

Plans to ensure that performance measures were 

meeting the intent of the Recovery Act and were 

quantifiable and measurable. The Department plans 

to use the results of the review to modify the 

Operating Plans, as necessary. 

• Performance measures will be tracked in the 

Department's PMM system. The Department plans to 

report the results to the public at the end of Fiscal 
 

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Page 11 Details of Finding

Year (FY) 2009 in conjunction with the results for the 

performance measures related to its annual budget. 

Also, unlike prior reporting systems, the PMM system 

will provide for external reporting to the general 

public. 

Remaining Performance Metrics Challenges

The Department had initiated various actions to address the 

challenges associated with developing appropriate 

performance metrics. Our review, however, identified a 

number of risk areas that should be effectively managed to 

meet the goals and objectives of the Recovery Act. In 

particular: 

• The Department had not finalized all of the Operating 

Plans and many were still being reviewed by 

consultants. We were not able to verify that all of the 

Operating Plans contained performance measures that 

corresponded to the Recovery Act. Furthermore, the 

Department has not developed specific measures for 

federal and contractor jobs created and retained. 

• At the time of our review, we found that 91 of 142 

(64 percent) measures were not quantifiable. For 

example, the Office of Energy Efficiency and 

Renewable Energy had a performance measure to 

initiate a pilot effort using new and innovative 

approaches to make low-income homes more energy 

efficient to expand the traditional weatherization 

program. However, we found no metrics related to 

how many homes will be included in the pilot or how 

long the pilot phase will last. 

• Although the results are not being reported yet, a 

prior year report on the Department's Financial 

Statements disclosed that the performance reporting 

process had not ensured that reported performance 

information reflected actual performance and was 

adequately supported by documentation. 

Furthermore, as noted in our recent Audit Report on 

Controls over the U.S. Department of Energy's 

Performance Measures (OAS-L-09-14, July 2009), 

we found minor inaccuracies and inconsistencies in 
 

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Page 12 Details of Finding

the reporting of performance information that could 

negatively impact stakeholders' reliance on reported 

results. 

Recommended Actions

To meet the requirements mandated by the Recovery Act 

and to address the risks to performance reporting we have 

identified in our report, the Department should: 

8. Finalize all Operating Plans to include measures that 

are quantifiable and can be used to measure progress 

towards meeting the requirements of the Recovery 

Act and OMB mandates; 

9. Develop performance measures for federal and 

contractor jobs created and retained; and, 

10. Ensure that established policy and guidance is fully 

implemented for reporting performance and 

validating results. 

Controls such as these are essential to establishing 

performance metrics that can serve as a mechanism to 

monitor performance and ensure accountability. 

Potential Impacts Absent action to address the challenges noted during our 

review, the Department may be unable to report accurate 

and complete Recovery Act information to OMB and the 

public. The Department's information systems supporting 

Recovery Act activities may also be unable to 

accommodate significant increases in workload or provide 

appropriate mechanisms to ensure that funds are accurately 

tracked and reported. In addition, as previously reported in 

our recent Special Report on the American Recovery and 

Reinvestment Act at the Department of Energy (OAS-RA09-01, March 2009), without adequate accounting of funds 

that includes periodic evaluation of results, taxpayers' 

confidence that Recovery Act projects are meeting intended 

goals may be eroded. Furthermore, the absence of 

complete, adequate, and quantifiable performance measures 

may inhibit the ability of the Department, OMB, and the 

public to accurately gauge the progress in achieving 

Recovery Act goals. 
 

MANAGEMENT Management concurred with 8 out of 10 

REACTION recommendations made in the report. Management 

indicated that action had been taken or was currently 

underway to address many of the issues identified during 

our review. However, management partially disagreed 

with two of the recommendations in the report. 

In response to recommendation eight, management agreed 

that the Operating Plans should contain performance 

measures; however, management disagreed with our 

assertion that it did not comply with all Recovery Act and 

OMB mandates. Officials commented that Operating Plans 

were developed to be used as a management tool and were 

not required by the Recovery Act. Management stated that 

the Recovery Act requires Program-specific Recovery Plan 

metrics, which had been provided to OMB. 

Management also partially concurred with recommendation 

nine to develop performance measures for federal and 

contractor jobs created and retained. Officials stated that 

OMB does not require agencies to report or measure 

federal jobs created under the Recovery Act. However, the 

Department is currently tracking federal employees hired to 

conduct Recovery Act work and/or paid with Recovery Act 

funds. 

AUDITOR COMMENTS Management's comments and planned actions are 

responsive to our recommendations. We modified 

recommendation eight to address management's comments. 

In particular, while we agree that Operating Plans were not 

required by the Recovery Act, they should contain detailed 

performance measures that can be used for tracking 

progress towards meeting Recovery Act objectives. We 

also continue to recommend that the Department develop 

performance measures for federal and contractor jobs 

created and retained. Although we agree that OMB does 

not require the Department to report on federal jobs 

creation, the Department should measure its progress in this 

area as the creation of jobs is one of the primary goals of 

the Recovery Act. 

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Page 13 Comments 
Appendix 1 

OBJECTIVE To determine whether the Department of Energy (Department) 

is ensuring that funds provided by the American Recovery and 

Reinvestment Act of 2009 (Recovery Act) are appropriately 

tracked and transparent to the public, and whether the benefits 

of the funds are reported clearly, accurately, and in a timely 

manner. 

SCOPE This audit was performed between March and August 2009 at 

Department Headquarters in Washington, D.C., and 

Germantown, Maryland, and the National Energy Technology 

Laboratory in Pittsburgh, Pennsylvania. 

METHODOLOGY To accomplish the audit objective, we: 

 

• Reviewed applicable laws, directives, and guidance 

pertaining to Recovery Act implementation, including 

Office of Management and Budget (OMB) M-09-10 , 

Initial Implementing Guidance for the American 

Recovery and Reinvestment Act of 2009; M-09-15, 

Updated Implementing Guidance for the American 

Recovery and Reinvestment Act of 2009; and, M-09-21, 

Implementing Guidance for the Reports on Use of 

Funds Pursuant to the American Recovery and 

Reinvestment Act of 2009; 

• Obtained documentation and held discussions with 

federal and contractor personnel to discuss what 

systems were used for Recovery Act tracking and 

reporting and whether any changes were made to the 

systems; 

• Determined what controls were in place in the 

information systems to prohibit comingling of 

Recovery and non-Recovery Act funds; 

• Determined the Department's process for reporting 

Recovery Act information to OMB and the public; and, 

• Verified whether performance measures and metrics 

were in place, or in development, for all Recovery Act 

funds and determined the process used by the 

Department to validate the performance metrics results. 

We conducted this performance audit in accordance with 

generally accepted Government auditing standards. Those 

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Page 14 Objective, Scope, and Methodology 
Appendix 1 

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 objectives. 

We believe that the evidence obtained provides a reasonable 

basis for our finding and conclusions based on our audit 

objectives. Because our review was limited, it would not 

necessarily have disclosed all internal deficiencies that may 

have existed at the time of our audit. This review of the 

Department's Recovery Act performance measures included 

certain aspects of compliance with the Government 

Performance and Results Act of 1993, as necessary, to 

accomplish the objective. We addressed the reliability of 

computer-processed data which we determined to be critical to 

achieving our audit objective. 

Management waived an exit conference. 

________________________________________________________________ 

Page 15 Objective, Scope, and Methodology 
Appendix 2 

RELATED REPORTS

Office of Inspector General Reports 

• Controls over the U.S. Department of Energy's Performance Measures (OAS-L-09-

14, July 2009). This audit revealed that, in spite of specific quality and supporting 

information standards, certain sites and program elements had not completely 

resolved problems with documentation used to support reported performance results. 

Specifically, for some of the tested measures, supporting documentation differed from 

or did not adequately support information reported in the Annual Performance 

Report. For most of the measures, the differences noted were individually immaterial 

and did not have an impact on whether or not an associated goal was achieved. 

However, given the increasing emphasis on accountability and transparency 

associated with the American Recovery and Reinvestment Act of 2009 (Recovery 

Act) they do, in aggregate, represent issues that are worthy of correction. 

• The American Recovery and Reinvestment Act at the Department of Energy (OASRA-09-01, March 2009). This report informed the Department of Energy's 

(Department) leadership of the risks that it should consider as stimulus activities 

progress. Specifically, the report identified specific risks discovered during past 

reviews and investigations in areas such as fund accountability and reporting, grant 

and cooperative agreement execution, contract management, and the management of 

loan guarantee efforts. The report also provides the Department with "lessons 

learned" and suggests approaches for reducing the risks associated with the Recovery 

Act funding. Suggested actions are included that should be considered during 

Recovery Act planning and program execution to help reduce the likelihood that 

historical problems will recur. The report also describes the Department's initial 

efforts to identify risks and to develop strategies to help ensure that the Recovery Act 

goals and objectives are satisfied and outlines the OIG's risk-based approach to 

oversight and planned means of satisfying our Recovery Act review and investigative 

responsibilities. 

• Report on the Department of Energy's Fiscal Year 2006 Consolidated Balance Sheet

(OAS-FS-07-02, November 2006). This report indicated that the Department's 

performance reporting process does not always ensure that reported performance 

information reflects actual performance and is adequately supported. Specifically, the 

report identified 2 of 29 annual performance targets or performance measures 

selected were incorrectly reported. In addition, the Department was unable to provide 

underlying data to support the reported performance results for an additional 4 of the 

29 annual performance measures tested. 

Government Accountability Office Reports 

• GAO's Efforts to Work with the Accountability Community to Help Ensure Effective 

and Efficient Oversight (GAO-09-672T, May 2009). GAO has been coordinating 

efforts with the Recovery Accountability and Transparency Board, the Inspectors 

General (IGs), OMB, and state and local government auditors to help ensure effective 

________________________________________________________________ 

Page 16 Related Reports 
 Appendix 2 (continued) 

and efficient oversight of Recovery Act funds. GAO regularly coordinates with 

individual Inspectors General, and participates in discussions with state and local 

organizations. Teams working in the states collected documents from and 

interviewed State Auditors, Controllers, and Treasurers; state Inspectors General; and 

other key audit community stakeholders to determine how they planned to conduct 

oversight of Recovery Act funds. GAO also maintains a fraud reporting service, 

which has recently generated more than 25 allegations of misuse of Recovery and 

other federal funds. These allegations are currently under review by the forensic 

audit team.

• As Initial Implementation Unfolds in States and Localities, Continued Attention to 

Accountability Issues is Essential (GAO-09-580, April 2009). The Government 

Accountability Office (GAO) describes selected states' and localities' (1) uses of and 

planning of Recovery Act funds; (2) accountability approaches; and, (3) plans to 

evaluate the impact of funds received. GAO's work is focused on 16 states and the 

District of Columbia. States are undertaking planning activities to identify projects, 

obtain approval at the state and federal level, and move them to contracting and 

implementation. Before they can expend Recovery Act funds, states must reach 

agreement on the specific projects; as of April 16, 2009, 2 of the 16 states had 

agreements covering more than 50 percent of their states' apportioned funds, and 

three states did not have agreement on any projects. GAO found that the selected 

states and the District are taking various approaches to ensuring that internal controls 

manage risk up-front; they are assessing known risks and developing plans to address 

those risks. Officials in 9 of the 16 states and the District expressed concern about 

determining the jobs created and retained under the Recovery Act, as well as 

methodologies that can be used for estimation of each. 

________________________________________________________________ 

Page 17 Related Reports 
Appendix 3 

___________________________________________________________________ 

Page 18 Management Comments 
Appendix 3 (continued) 

___________________________________________________________________ 

Page 19 Management Comments 
Appendix 3 (continued) 

___________________________________________________________________ 

Page 20 Management Comments 
Appendix 3 (continued) 

___________________________________________________________________ 

Page 21 Management Comments 
Appendix 3 (continued) 

___________________________________________________________________ 

Page 22 Management Comments 
IG Report No. OAS-RA-09-04

CUSTOMER RESPONSE FORM 

The Office of Inspector General has a continuing interest in improving the usefulness of 

its products. We wish to make our reports as responsive as possible to our customers' 

requirements, and, therefore, ask that you consider sharing your thoughts with us. On the 

back of this form, you may suggest improvements to enhance the effectiveness of future 

reports. Please include answers to the following questions if they are applicable to you: 

1. What additional background information about the selection, scheduling, scope, or 

procedures of the inspection would have been helpful to the reader in understanding 

this report? 

2. What additional information related to findings and recommendations could have 

been included in the report to assist management in implementing corrective actions? 

3. What format, stylistic, or organizational changes might have made this report's 

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4. What additional actions could the Office of Inspector General have taken on the 

issues discussed in this report which would have been helpful?

5. Please include your name and telephone number so that we may contact you should 

we have any questions about your comments. 

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When you have completed this form, you may telefax it to the Office of Inspector 

General at (202) 586-0948, or you may mail it to: 

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ATTN: Customer Relations 

If you wish to discuss this report or your comments with a staff member of the Office of 

Inspector General, please contact Judy Garland-Smith (202) 586-7828. 
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The Office of Inspector General wants to make the distribution of its reports as customer friendly 

and cost effective as possible. Therefore, this report will be available electronically through the 

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Your comments would be appreciated and can be provided on the Customer Response Form.