DEPARTMENT OF 

ENERGY

Budget Trends and 

Oversight 

Statement of Frank Rusco, Director 

Natural Resources and Environment

Testimony 

Before the Subcommittee on Oversight 

and Investigations, Committee on Energy 

and Commerce, House of Representatives

For Release on Delivery 

Expected at 10:30 a.m. EDT 

Wednesday, April 18, 2012

GAO-12-659T

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-659T, a testimony 

before the Subcommittee on Oversight and 

Investigations, Committee on Energy and 

Commerce, House of Representatives 

April 18, 2012 

DEPARTMENT OF ENERGY

Budget Trends and Oversight

Why GAO Did This Study

Understanding the impact of budgetrelated considerations has become

particularly important as Congress and 

the administration seek to decrease 

the cost of government while improving 

its performance. In recent years, 

Congress has authorized large 

increases in funding for DOE. For 

example, the Recovery Act, which 

Congress enacted to, among other 

things, preserve and create jobs and 

promote economic recovery, provided 

DOE with more than $41.7 billion in 

areas such as energy efficiency, 

renewable energy, and environmental 

cleanup. 

This testimony focuses on several key 

programs and related budget issues at 

DOE, including (1) the management of 

selected programs expanded or 

created by recent funding increases 

and (2) potential opportunities to 

achieve savings or enhance revenue. 

This testimony is based on prior GAO 

reports from February 2011 to March 

2012, and updated with readily 

available data from DOE. 

What GAO Recommends

GAO is making no new 

recommendations in this testimony but 

continues to believe that implementing

the recent recommendations made in 

the reports discussed should improve 

DOE program management, achieve 

savings, and enhance revenue. DOE 

has generally agreed with most of our 

recommendations, but disagreed on 

certain points related to the timing of 

implementing our recommendations.

What GAO Found

Recent GAO work found that funding increases have expanded or created 

Department of Energy (DOE) programs with varying results. For example: 

• Advanced Research Projects Agency-Energy (ARPA-E) awards grants to 

projects that help develop high-risk energy technologies. Since fiscal year 

2009 the program has received $855 million to fund energy projects that 

industry by itself was not likely to undertake. GAO found that ARPA-E uses 

several selection criteria in awarding funds, but its requirements for 

information on private funding could be improved. 

• The Loan Guarantee Program provides loan guarantees for innovative 

energy technologies. DOE has made about $15 billion in loan guarantees 

and is authorized to make up to $34 billion in additional loan guarantees. 

GAO found that the program does not have sufficient data to facilitate 

oversight, and its actual process for reviewing applications has differed from 

the established process. 

• The Weatherization Assistance Program helps low-income families reduce 

their energy bills by making long-term energy efficiency improvements to 

their homes. The American Recovery and Reinvestment Act of 2009 

(Recovery Act) provided $5 billion to enhance the program’s ability to make 

energy efficiency improvements to low-income family homes. GAO made 

recommendations to DOE to clarify the program’s production targets 

(e.g., the number of homes weatherized) and guidance.

• The Advanced Technology Vehicles Manufacturing Loan Program provides 

loans for projects to produce more fuel-efficient passenger vehicles and their 

components. DOE can make up to $25 billion in loans for fuel-efficient 

vehicles; at the time of GAO’s review, DOE could not be assured that 

projects would be delivered as agreed. 

GAO also reported that improvements at DOE may provide opportunities for 

increasing savings and enhancing revenue. For example: 

• Contractor support costs. DOE’s management of contractors, who operate 

DOE sites and represent 90 percent of DOE’s budget, has historically been 

decentralized, or fragmented. This adds to inefficiencies in support functions.

Since 2007, DOE and contractors at some DOE sites have had efforts to 

streamline these functions. GAO recommended that DOE assess whether 

further opportunities could be taken to streamline such functions. 

• Diesel emissions. DOE, the Department of Transportation, and the 

Environmental Protection Agency receive federal funding to reduce diesel 

emissions from mobile sources—14 programs in all, which also overlap on 

certain activities. DOE received $572 million for its 3 programs. GAO 

recommended that the three agencies establish a strategy for collaboration 

to reduce diesel emissions from mobile sources.

• Excess uranium inventories. Uranium is used in fuel for nuclear power plants. 

GAO reported DOE’s excess uranium inventories could be worth billions of 

dollars in additional revenue as fuel for commercial nuclear power plants. 

View GAO-12-659T. For more information, 

contact Frank Rusco at (202) 512-3841 or 

ruscof@gao.gov. 
Page 1 GAO-12-659T 

Chairman Stearns, Ranking Member DeGette, and Members of the 

Subcommittee:

I am pleased to be here today to discuss budget considerations at the 

Department of Energy (DOE). These issues are particularly important as 

Congress and the administration seek to decrease the cost of 

government while improving its performance and accountability.

In recent years, Congress has authorized large increases in funding for 

DOE. For example, the American Recovery and Reinvestment Act of 

2009 (Recovery Act), which Congress enacted in response to the recent 

economic crisis to, among other things, preserve and create jobs and 

promote economic recovery, provided DOE with more than $41.7 billion—

$35.2 billion for projects and activities and $6.5 billion in borrowing 

authority—in areas such as energy efficiency, renewable energy, and 

environmental cleanup. Congress also passed the America Creating 

Opportunities to Meaningfully Promote Excellence in Technology, 

Education, and Science Act of 2007 (America COMPETES Act), with the 

overall goal of increasing federal investment in scientific research.1

My testimony today draws on our recent work in which we made 

recommendations intended to improve the management of DOE’s 

programs. DOE has generally agreed with most of our recommendations, 

but disagreed on certain points related to the timing of implementing our 

recommendations. I will focus my remarks today on several key programs 

and related budget issues at DOE concerning (1) the management of 

selected programs that were expanded or created by recent funding 

increases and (2) potential opportunities to achieve savings or enhance 

revenue.

In this 

context, the President’s fiscal year 2007 budget proposed doubling 

funding for DOE’s Office of Science by fiscal year 2016, in part under the 

goals of the America COMPETES Act. However, policy decisions made in 

response to the current budget environment have since shifted the Office 

of Science’s funding trajectory away from this target.

This statement is based largely on our prior work issued from February 

2011 to March 2012, including our work on overlap and duplication of 

 

1

Pub. L. No. 110-69, 121 Stat. 572 (2007); reauthorized by Pub. L. No. 111-358, 124 Stat. 

3982 (2011). 
Page 2 GAO-12-659T 

federal programs that may result in inefficient use of taxpayer funds,2 and 

updated with readily available data from DOE. Detailed information on our 

scope and methodology for our prior work can be found in these reports. 

(See our list of related GAO products at the end of this testimony.) We do 

not provide budget summary data for all programs and initiatives 

associated with the activities included in this testimony because many of 

them (e.g., renewable energy initiatives, DOE contractor support costs, 

diesel emissions, and excess uranium inventories) span a number of 

DOE programs. We conducted the underlying performance audits in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform audits to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our statement 

today.

From fiscal years 2007 through 2012, DOE’s budget requests rose in 

nominal terms from about $23.6 billion to $29.5 billion, and its 

appropriations rose over that time from about $23.8 billion to $26.3 billion, 

increasing to almost $33.9 billion in fiscal year 2009. DOE requested 

approximately $27.2 billion for fiscal year 2013, as shown in table 1.

 

2

GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, 

D.C.: Feb. 28, 2012). This statement does not discuss DOE’s National Nuclear Security 

Administration (NNSA) or Office of Environmental Management. 

Funding Increases 

Have Expanded or 

Created Programs 

with Varying Results
Page 3 GAO-12-659T 

Table 1: DOE Budget Requests and Appropriations, Fiscal Years 2007-2013

Dollars in thousands

Fiscal year Budget request Appropriations

2007

a

$23,556,755 $23,754,228

2008 24,259,251 24,032,338

2009 25,014,956 33,856,453

2010 26,393,982 26,425,673

2011 28,404,359 25,692,833

2012 29,546,730 26,299,547

2013 27,155,072

Source: DOE.

b

Note: In fiscal year 2009, DOE received about $36.7 billion in Recovery Act appropriations, with 

varying obligation deadlines. During the yearly appropriations process, DOE generally receives noyear funding. No-year funding refers to appropriations that do not restrict the time by which funds 

must be obligated. For more information on DOE’s no-year funding, see GAO, DOE’s No-Year 

Funding, GAO/RCED-95-91R (Washington, D.C.: Mar. 8, 1995). 

a

This column does not include Recovery Act appropriations. 

b

According to agency documents, in addition to aligning its fiscal year 

2013 budget request with its strategic plan, DOE released a technology 

review in September 2011 that provided a framework for preparing 

budgets for some of its energy and science programs. Since then, 

according to these documents, DOE has worked closely with the Office of 

Management and Budget to develop, under its strategic plan, new priority 

goals—including maximizing the benefits of investments in scientific 

facilities—for fiscal year 2013.

Appropriations have not yet been determined for fiscal year 2013. 

Through the Recovery Act, Congress provided approximately $8 billion 

for three existing DOE programs: (1) $0.4 billion in initial funding for the 

Advanced Research Projects Agency-Energy to support advanced energy 

research, (2) $2.5 billion for the Loan Guarantee Program to guarantee 

loans for innovative energy projects, and (3) $5 billion for the 

Weatherization Assistance Program to make energy efficiency 

improvements to the homes of low-income families. Since these funding 

increases were implemented, we reviewed the programs receiving the 

funds and made several recommendations intended to improve their 

management. In addition, under the Advanced Technology Vehicles 

Manufacturing loan program, which received some Recovery Act funds, 

DOE can provide up to $25 billion in loans for fuel-efficient vehicle 

DOE Programs Funded by 

the Recovery Act
Page 4 GAO-12-659T 

projects, but at the time of our review, it could not be assured that 

projects would be delivered as agreed. We also recently reported that, 

among the 92 renewable energy-related initiatives DOE implemented in 

fiscal year 2010, the Recovery Act established 7 and increased funding 

for 36.3

The America COMPETES Act of 2007 established the Advanced 

Research Projects Agency-Energy (ARPA-E) within DOE to overcome the 

long-term and high-risk technological barriers to the development of 

energy technologies. However, ARPA-E did not receive an appropriation 

until 2 years later, in 2009, in the Recovery Act. Including the Recovery 

Act funds and subsequent appropriations, ARPA-E has received about 

$855 million in appropriations. According to ARPA-E’s budget director, as 

of March 1, 2012, the program has awarded no more than the $521.7 

million that, as we reported in January 2012, was provided to universities, 

public and private companies, and national laboratories to fund 181 

projects that attempt to make transformational advances to a variety of 

energy technologies, including high-energy batteries and renewable fuels. 

This official told us that ARPA-E has not yet selected award recipients for 

fiscal year 2012. Award winners must meet cost-share requirements, 

through either in-kind contributions or outside nonfederal funding sources. 

ARPA-E is required by statute to achieve its goals through energy 

technology projects that, among other things, accelerate transformational 

technological advances in areas that industry by itself is not likely to 

undertake because of technical and financial uncertainty. At the same 

time, the agency’s director is required to ensure, to the maximum extent 

practicable, that its activities are coordinated with, and do not duplicate 

the efforts of, programs and laboratories within DOE and other relevant 

research agencies. Table 2 shows the program’s budget requests and 

appropriations since receiving an appropriation through the Recovery Act 

in fiscal year 2009.

 

3

GAO, Renewable Energy: Federal Agencies Implement Hundreds of Initiatives, 

GAO-12-260 (Washington, D.C.: Feb. 27, 2012). 

Advanced Research 

Projects Agency-Energy
Page 5 GAO-12-659T 

Table 2: Advanced Research Projects Agency-Energy Budget Requests and Appropriations, Fiscal Years 2010-2013

Dollars in thousands

Fiscal year Budget request Appropriationsa

2010 $10,000 0 

2011 273,400 179,640

2012 521,943 275,000

2013 350,000

Source: DOE.

b

Note: In fiscal year 2009, Advanced Research Projects Agency-Energy received about $400 million in 

Recovery Act appropriations. 

a

This column does not include Recovery Act appropriations. 

b

Appropriations have not yet been determined for fiscal year 2013. 

In January 2012, we reported that ARPA-E uses several selection criteria 

in making awards, although its requirements for information on private 

sector funding could be improved.4 For example, we reported that ARPAE’s program directors spent time and resources to determine the extent of 

prior funding for proposed ARPA-E projects. Also, our review suggested 

that most ARPA-E projects could not have been funded solely by the 

private sector. Furthermore, according to ARPA-E officials and 

documents, agency officials have taken steps to coordinate with other 

DOE offices in advance of awarding ARPA-E funds to help avoid 

duplication of efforts. We recommended that ARPA-E consider providing 

applicants guidance with a sample response explaining prior sources of 

funding, requiring applicants to provide letters from investors explaining 

why they are not willing to fund proposed projects, and using third-party 

venture capital data to identify applicants’ prior funding. DOE agreed with 

our recommendations.

Under the Energy Policy Act of 2005, the Loan Guarantee Program (LGP) 

was created to provide loan guarantees for innovative energy 

technologies. Until February 2009, the LGP was working exclusively 

under section 1703 of the act, which authorized loan guarantees for new 

 

4

GAO, Department of Energy: Advanced Research Projects Agency-Energy Could Benefit 

from Information on Applicants’ Prior Funding, GAO-12-112 (Washington, D.C.: Jan. 13, 

2012). 

Loan Guarantee Program
Page 6 GAO-12-659T 

or innovative energy technologies that had not yet been widely 

commercialized in the United States. At that time, Congress had 

authorized DOE to guarantee approximately $42.5 billion in section 1703 

loans.5 Although Congress had provided funds to DOE to cover the 

program’s administrative costs, it had not appropriated funds to pay the 

“credit subsidy costs” of these guarantees. Credit subsidy costs are the 

government’s estimated net long-term cost, in present value terms, of 

direct or guaranteed loans over the entire period the loans are 

outstanding (not including administrative costs). In February 2009, the 

Recovery Act amended the Energy Policy Act of 2005, adding section 

1705, which made certain commercial technologies eligible for loan 

guarantees if they could start construction by September 30, 2011.6 The 

Recovery Act also provided $6 billion in appropriations—later reduced by 

transfer and rescission to about $2.5 billion7

—to cover DOE’s credit 

subsidy costs for an estimated $18 billion in additional loan guarantees. In 

fiscal year 2011, Congress appropriated about $170 million to cover 

subsidy costs of section 1703 loan guarantees for the first time. Table 3 

shows the program’s budget requests and appropriations since fiscal year 

2008.

 

5

The LGP’s total authority for section 1703 loans was $34 billion, as of March 12, 2012.

6

To be eligible for Recovery Act funding, projects were required to meet other 

requirements as well, including that workers employed on the project were to be paid 

wages not less than prevailing on similar work in the locality, in accordance with the 

Davis-Bacon Act. 

7

In fiscal year 2009, the LGP received nearly $6 billion in Recovery Act appropriations to 

pay the credit subsidy costs of projects supported under section 1705 with the limitation 

that funding to pay the credit subsidy costs of leading-edge biofuel projects eligible under 

this section would not exceed $500 million. Congress later authorized the President to 

transfer up to $2 billion of the nearly $6 billion to expand the “Cash for Clunkers” program. 

Pub. L. No. 111-47 (Aug. 7, 2009). The $2 billion was transferred to the Department of 

Transportation, leaving nearly $4 billion to cover credit subsidy costs of projects supported 

under section 1705. On August 10, 2010, Pub. L. No. 111-226 rescinded an additional 

$1.5 billion from the loan guarantee appropriation to pay for education-related jobs, 

Medicaid and other initiatives, further reducing available funding to $2.5 billion. 
Page 7 GAO-12-659T 

Table 3: Loan Guarantee Program Budget Requests and Appropriations, Fiscal Years 2008-2013

Dollars in thousands

Fiscal year Budget request Appropriationsa

2008 $8,390 $4,459

2009 0 0 

2010 0 0 

2011 500,000 169,660

2012 200,000 0 

2013 0 

Source: DOE.

b

Notes: The table includes funding for section 1703 and section 1705 of the Energy Policy Act of 2005. 

In fiscal year 2009, the Loan Guarantee Program received $6 billion in Recovery Act appropriations, 

which were later reduced by transfer and rescission to about $2.5 billion. 

a

This column does not include Recovery Act appropriations. 

b

Appropriations have not yet been determined for fiscal year 2013. 

In March 2012, we reported that DOE had made $15 billion in loan 

guarantees and conditionally committed to an additional $15 billion as of 

September 30, 2011.8

 

8

GAO, DOE Loan Guarantees: Further Actions Are Needed to Improve Tracking and 

Review of Applications, 

However, we also reported that the program does 

not have the consolidated data on application status needed to facilitate 

efficient management and program oversight. In addition, the program 

adhered to most of its established process for reviewing applications, but 

we reported that its actual process differed from its established process at 

least once on 11 of the 13 applications we reviewed. DOE agreed with 

our recommendations to (1) ensure that its records management system 

contains documents supporting past decisions, as well as those in the 

future, and (2) regularly update program policies and procedures. DOE 

disagreed with our recommendation to commit to a timetable to fully 

implement a consolidated system to provide information on program 

applications and measure overall program performance, stating that it did 

not agree to a hard timetable for implementing the recommendation. We 

continue to believe that DOE should commit to developing such a system 

in a timely fashion.

GAO-12-157 (Washington, D.C.: Mar. 12, 2012). 
Page 8 GAO-12-659T 

The Recovery Act appropriated $5 billion for the Weatherization 

Assistance Program to help low-income families reduce their energy bills 

by making long-term energy efficiency improvements to their homes.9

This appropriation represented a significant funding increase for a 

program that had received about $225 million per year in recent years. As 

of February 28, 2012, we found that DOE had awarded 58 state-level 

grant recipients approximately $4.84 billion to implement the 

Weatherization Assistance Program under the Recovery Act, and these 

recipients reported spending about $4.22 billion and weatherizing 

709,138 homes, exceeding the program’s production target of 607,000 

homes.10

Table 4: Weatherization Assistance Program Budget Requests and Appropriations, Fiscal Years 2007-2013

Table 4 shows the program’s budget requests and 

appropriations since fiscal year 2007.

Dollars in thousands

Fiscal years Budget request Appropriations

2007

a 

$164,198 $204,550

2008 144,000 227,222

2009 0 450,000

2010 220,000 210,000

2011 300,000 174,300

2012 320,000 68,000

2013 139,000 b

Source: DOE.

c

Notes: The table includes $250 million in emergency funding for the Weatherization Assistance 

Grants program provided by the Consolidated Security, Disaster Assistance, and Continuing 

Appropriations Act, 2009, Pub. L. No. 110-329, § 130(a) (Sept. 30, 2008). In fiscal year 2009, the 

Weatherization Assistance Program received almost $5 billion in Recovery Act appropriations. 

a

This column does not include Recovery Act appropriations. 

b

 The budget request for fiscal year 2013 also includes Weatherization Training and Technical 

Assistance. 

c

 

9

These improvements include installing insulation, sealing leaks, and modernizing heating 

equipment and air conditioning equipment. 

Appropriations have not yet been determined for fiscal year 2013. 

10This information is based on updates provided by DOE officials to our data in GAO, 

Recovery Act: Progress and Challenges in Spending Weatherization Funds, GAO-12-195

(Washington, D.C.: Dec. 16, 2011). 

Weatherization Assistance 

Program
Page 9 GAO-12-659T 

In December 2011, we reported that some grant recipients had been able 

to exceed their production targets because of a lower average cost of 

weatherizing homes and lower training and technical assistance 

expenses than anticipated.11 In addition, most recipients reported 

experiencing more implementation challenges in the first year of the 

Recovery Act than in the third year. We also reported that a long-term 

Weatherization Assistance Program goal is to increase energy efficiency 

through cost-effective weatherization work and that March 2010 costbenefit estimates from an Oak Ridge National Laboratory study indicate 

that energy savings will likely exceed the program’s costs. That is, every 

$1 spent on the weatherization program for 2009 through 2011 would 

result in almost $2 in energy savings over the useful life of the 

investment; the laboratory plans to issue more definitive estimates in 

2013.12 Also in our December 2011 report, we discussed actions DOE 

took in response to a recommendation we made in a May 2010 report,13

 

11

that DOE clarify production targets and funding deadlines, among other 

things; DOE officials provided documentation concerning targets but did 

not provide clarification of the consequences for not meeting the targets. 

In response to concerns about whether or not program requirements were 

being met, our May 2010 report included recommendations to DOE to 

clarify its guidance, production targets, funding deadlines, and associated 

consequences. DOE’s program guidance stated that recipients could 

spend Recovery Act funds until March 31, 2012. According to DOE, 

several grant recipients had requested additional time to spend these 

funds. Between the issuance of our two reports, in September 2011, the 

Office of Management and Budget released a memorandum stating that 

Recovery Act funds should be spent by September 2013. In our 

December 2011 report, we found that, as of November 2011, DOE had 

not determined if an extension would be available for grant recipients. In 

January 2012, DOE issued guidance stating that it was offering grant 

GAO-12-195. 

12For its estimates, Oak Ridge National Laboratory considered the 50 states and the 

District of Columbia and not the Native American tribes and the U.S. territories that are 

also recipients of the weatherization program under the Recovery Act. Oak Ridge National 

Laboratory assumed that the weatherization investment would yield energy savings over a 

20-year period. 

13GAO, Recovery Act: States’ and Localities’ Uses of Funds and Actions Needed to 

Address Implementation Challenges and Bolster Accountability, GAO-10-604

(Washington, D.C.: May 26, 2010). 
Page 10 GAO-12-659T 

recipients an opportunity to modify the original March 31, 2012 funding 

deadline. 

In December 2007, Congress enacted the Energy Independence and 

Security Act of 2007, which mandates more stringent average fuel 

economy standards for newly manufactured passenger vehicles sold in 

the United States by model year 2020 and established in DOE the 

Advanced Technology Vehicles Manufacturing (ATVM) loan program, to 

provide loans for projects to produce more fuel-efficient passenger 

vehicles and their components. The ATVM loan program is to provide up 

to $25 billion in loans for more fuel-efficient vehicles and components. 

Congress also provided $7.5 billion to pay the required credit subsidy 

costs of the loans, as shown in table 5.

Table 5: Advanced Technology Vehicles Manufacturing Loan Program’s Budget Requests and Appropriations, Fiscal Years 

2009-2013

Dollars in thousands

Fiscal year Budget request Appropriationsa

2009 $0 $7,510,000

2010 20,000 20,000

2011 9,998 9,978

2012 6,000 6,000

2013 9,000

Source: DOE. 

b

Note: In fiscal year 2009, the Advanced Technology Vehicles Manufacturing Loan Program received 

$10 million in Recovery Act appropriations. 

a

This column does not include Recovery Act appropriations. 

b

In February 2011, we reported that the ATVM loan program had made 

$8.4 billion in loans that DOE expects to yield fuel economy 

improvements in the near term, along with greater advances through 

newer technologies, in years to come.

Appropriations have not yet been determined for fiscal year 2013. 

14

 

14GAO, Department of Energy: Advanced Technology Vehicle Loan Program 

Implementation Is Under Way, but Enhanced Technical Oversight and Performance 

Measures Are Needed, 

These loans represent about a 

third of the $25 billion authorized by law, but we reported that the program 

GAO-11-145 (Washington, D.C.: Feb. 28, 2011). 

Advanced Technology 

Vehicles Manufacturing 

Loan Program
Page 11 GAO-12-659T 

had used 44 percent of the $7.5 billion allocated to pay credit subsidy 

costs, which is more than was initially anticipated. These higher credit 

subsidy costs were, in part, a reflection of the risky financial situation of 

the automotive industry at the time the loans were made. As a result of 

the higher credit subsidy costs, we reported that the program may be 

unable to loan the full $25 billion allowed by statute. We also reported that 

the ATVM loan program had set procedures for overseeing the financial 

and technical performance of borrowers and had begun using the 

procedures to oversee the loans; at the time of our report, however, it had 

not yet engaged the engineering expertise needed for technical oversight, 

as called for by its procedures. As a result, we reported that without 

qualified oversight to analyze the information submitted by the borrowers 

and to provide technical monitoring, DOE could not be adequately 

assured that the borrowers are delivering the vehicle and component 

projects as required by the loan agreements. In addition, we reported that 

DOE had not developed sufficient performance measures that would 

enable it to fully assess progress toward achieving its program goals. 

DOE disagreed with our recommendations that the agency accelerate its 

efforts to engage the expertise needed for effective oversight and develop 

sufficient performance measures, although we continue to believe that the 

agency should take these actions.

In February 2012, we reported that DOE had implemented 92 renewable 

energy-related initiatives in fiscal year 2010.15

 

15

These initiatives supported 

every renewable energy source in our review, including bioenergy, solar, 

and wind, and most initiatives supported more than a single energy 

source. In addition, more than 70 percent of these initiatives supported 

both the public and private sectors. These initiatives were distributed 

across multiple federal responsibilities, with the largest percentage of 

DOE’s initiatives supporting research and development. Approximately 

one-third (36) of the 106 existing federal renewable energy-related 

initiatives that received additional funding under the Recovery Act were 

implemented by DOE, primarily involving research and development of 

new renewable energy technologies. Overall, the Recovery Act affected 

49 DOE initiatives: 7 were established, 36 received more funding, and 11 

GAO-12-260. 

Renewable Energy 

Initiatives
Page 12 GAO-12-659T 

expanded or had their scope changed.16 Several of the renewable 

energy-related initiatives we reviewed have expired or will expire, in full or 

in part, because of the expiration of legislative authority, depletion of 

available appropriations, or some other expiration under the law as 

written as of fall of 2011.17 Our report contained no recommendations to 

DOE.

We have previously reported on several areas at DOE that may provide 

opportunities for achieving increased savings and enhancing government 

revenue. Areas that may provide opportunities for increased savings 

include (1) contractor support costs and (2) potential overlap of effort 

across certain activities for programs to reduce diesel emissions from 

mobile sources. An area that may provide an opportunity for enhanced 

government revenue concerns DOE’s uranium inventories, which are 

worth potentially billions of dollars to commercial nuclear power plants 

that can use the material as fuel in their reactors.

DOE spends 90 percent of its annual budget—which totaled $27 billion 

for fiscal year 2011—on the contractors that carry out its diverse missions 

and operate its sites nationwide. In January 2012, we reported that DOE 

and contractors at some DOE sites, including the Office of Science, have

been carrying out a variety of efforts since 2007 to streamline and reduce 

the costs of sites’ support functions.18

 

16The numbers total more than 49 because some initiatives were affected by the 

Recovery Act in multiple ways. The Recovery Act also had an indirect or other impact on 

three DOE initiatives. 

Such functions include procuring 

needed goods and services; recruiting and hiring workers; managing 

health and retirement benefits; maintaining facilities and infrastructure; 

17We did not report budget requests or appropriations for these initiatives because our 

data do not always match agencies’ reported information on these activities, such as 

information contained in budget documents. In particular, we developed data on agencies’ 

initiatives that were related to renewable energy through a specific emphasis or focus, 

even if renewable energy was part of a broader effort. Renewable energy activities may 

be part of broader initiatives which are not primarily focused on renewable energy. In 

these instances, renewable energy projects can be one of many eligible types of activities 

that receive support under an initiative. 

18GAO, Department of Energy: Additional Opportunities Exist to Streamline Support 

Functions at NNSA and Office of Science Sites, GAO-12-255 (Washington, D.C.: Jan. 31, 

2012). 

Opportunities May 

Exist to Achieve 

Savings and Enhance 

Revenue

Contractor Support Costs
Page 13 GAO-12-659T 

and providing day-to-day accounting, information technology, and 

security. In addition, we found that contractors at sites have undertaken 

their own streamlining and cost-reduction efforts, ranging from automating 

hiring, training, or other human resources activities to reducing employee 

health care and pension costs. Also in February 2012, in our annual 

report on overlap and duplication of federal programs that may result in 

inefficient use of taxpayer funds, we recommended that DOE assess 

whether further opportunities could be taken to streamline support 

functions, estimated to cost over $5 billion, at its contractor-managed 

laboratories and other sites, including Office of Science sites, in light of 

contractors’ historically fragmented approach to providing these 

functions.19 DOE agreed with the recommendation. 

Diesel engines play a vital role in public transportation, construction, 

agriculture, and shipping, largely because they are more durable and 

reliable than gasoline-powered engines, as well as 25 to 35 percent more 

energy efficient. However, exhaust from diesel engines is a pervasive and 

harmful form of air pollution that affects public health and the 

environment. Table 6 shows funding, by program, for DOE activities to 

reduce diesel emissions from mobile sources.

 

19GAO, 2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP (Washington, 

D.C.: Feb. 28, 2012). In GAO-12-255, we examined sites overseen by both DOE’s Office 

of Science and the National Nuclear Security Administration. As discussed in this report, 

these DOE sites’ support costs for recent years are not fully known, because DOE 

changed its data collection approach in 2010 to improve the quality of its cost data. Also, 

DOE has not yet fully implemented a quality control process for these more recent data 

but intends to do so in 2012.

Diesel Emissions
Page 14 GAO-12-659T 

Table 6: Estimated Federal Grants Obligated for DOE Activities to Reduce Diesel Emissions from Mobile Sources, by 

Program, Fiscal Years 2007-2011

Dollars in thousands

Program Purpose Grants

Clean Cities program To advance the nation’s economic, environmental, and energy security by 

funding projects that reduce petroleum use in transportation

$305,000

Energy Efficiency and 

Conservation Block Grant 

program

To support energy efficiency and conservation projects that reduce fossil fuel 

emissions and energy use and improve energy efficiency in the transportation 

and building sectors 

256,000

State Energy Program To support state development and implementation of strategies and goals that 

promote energy efficiency and conservation

11,000

Source: GAO analysis of relevant laws and DOE data and documents.

Note: The Recovery Act provided funding for DOE’s Clean Cities, Energy Efficiency and Conservation 

Block Grant, and State Energy programs.

In February 2012, we reported that federal grant and loan funding for 

activities that reduce mobile source diesel emissions is fragmented 

across 14 programs at DOE, the Department of Transportation (DOT), 

and the Environmental Protection Agency (EPA).20 Moreover, we reported 

that each of these programs overlaps with at least one other program in 

the specific activities they fund, the program goals, or the eligible 

recipients of funding.21 In addition, we found that these programs 

generally do not collaborate. We previously reported that uncoordinated 

program efforts can waste scarce funds, confuse and frustrate program 

customers, and limit the overall effectiveness of the federal effort.22 To 

help ensure the effectiveness and accountability of federal funding that 

reduces diesel emissions, we recommended that DOE, DOT, and EPA 

establish a strategy for collaboration in reducing mobile source diesel 

emissions. DOE agreed with our recommendation.

 

20GAO-12-342SP. 

21We did not report budget requests or appropriations for these programs because only 

one has a specific purpose of reducing mobile source diesel emissions. The remaining 

programs focus on other goals or purposes, such as supporting energy efficiency projects 

or reducing petroleum use. 

22GAO, The Government Performance and Results Act: 1997 Governmentwide 

Implementation Will Be Uneven, GAO/GGD-97-109 (Washington, D.C.: June 1997). 
Page 15 GAO-12-659T 

Uranium is used in fuel for nuclear power plants. Twenty percent of our 

nation’s electricity comes from nuclear power, and growing anxiety over 

climate change generated by ever-growing demand for fossil fuels has 

sparked interest in increasing the use of nuclear power, despite ongoing 

concerns about the safety of such power in light of the March 2011 

nuclear accident in Japan. In September 2011, we reported that a healthy 

domestic uranium industry is considered essential to ensuring that 

commercial nuclear power remains a reliable option for supporting the 

nation’s energy needs.23

We reported in March 2008 that marketing DOE’s excess uranium tails 

could provide billions in revenue for the government.

DOE maintains large inventories of uranium that 

it no longer requires for nuclear weapons or as fuel for naval nuclear 

propulsion reactors. A large portion of these inventories consists of 

depleted uranium hexafluoride, otherwise known as “tails”—a byproduct 

of the uranium enrichment process. Recent increases in uranium prices 

could transform these tails into a lucrative source of revenue for the 

government. In addition, DOE maintains thousands of tons of natural 

uranium, which likewise could be sold to utilities or others for additional 

revenue.

24 In June 2011, we 

reported our estimates of the value of the tails at $4.2 billion; this estimate 

was based on May 2011 uranium prices and enrichment costs and 

assuming sufficient re-enrichment capacity was available.25 Executed in 

accordance with federal law, sales of natural uranium by DOE could also 

generate additional revenue for the government. In September 2011, we 

reported that in seven transactions executed since 2009, DOE has, in 

effect, “sold” nearly 1,900 metric tons of natural uranium into the market, 

using its contractor as a sales agent, and receiving from $109 to $183 per 

kilogram.26

 

23GAO, Excess Uranium Inventories: Clarifying DOE’s Disposition Options Could Help 

Avoid Further Legal Violations, 

The total proceeds from these transactions funded over $250 

million in environmental cleanup services by that contractor at the 

Portsmouth uranium enrichment plant. DOE characterized these sales as 

GAO-11-846 (Washington, D.C.: Sept. 26, 2011). 

24GAO, Nuclear Material: DOE Has Several Potential Options for Dealing with Depleted 

Uranium Tails, Each of Which Could Benefit the Government, GAO-08-606R

(Washington, D.C.: Mar. 31, 2008). 

25GAO, Nuclear Material: DOE’s Depleted Uranium Tails Could be a Source of Revenue 

for the Government, GAO-11-752T (Washington, D.C.: June 13, 2011). 

26GAO -11-846. 

Excess Uranium 

Inventories
Page 16 GAO-12-659T 

barter transactions. We reported that while DOE received no cash from 

the transactions, our review found that the agency allowed a sales agent 

to keep cash from the sales, which DOE would otherwise have owed to 

the United States Treasury, thus violating the miscellaneous receipts 

statute.27 We therefore reported that Congress should consider providing 

DOE with explicit authority to barter excess uranium and to retain the 

proceeds from barters, transfers, and sales. Likewise, Congress could 

direct DOE to sell uranium for cash and make those proceeds available 

by appropriation for decontamination and decommissioning expenses at 

DOE’s uranium enrichment plants. Congress has taken some actions in 

response to our work.28

Chairman Stearns, Ranking Member DeGette, and Members of the

Subcommittee, this concludes my prepared statement. I would be happy 

to respond to any questions you may have at this time.

For further information regarding this testimony, please contact Frank 

Rusco at (202) 512-3841 or ruscof@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on 

the last page of this statement. Kim Gianopoulos, Chad M. Gorman, Carol 

Herrnstadt Shulman, Kiki Theodoropoulos, Jeremy Williams, Michelle R. 

Wong, and Arvin Wu made key contributions to this testimony.

 

27The miscellaneous receipts statute requires an official or agent of the government 

receiving money for the government from any source to deposit the money in the U.S. 

Treasury. 

28GAO-12-342SP. 

Contact and 

Acknowledgments
Page 1 GAO-12-659T 

Department of Energy: Advanced Research Projects Agency-Energy 

Could Improve Its Collection of Information from Applications,

GAO-12-407T (Washington, D.C.: Jan. 24, 2012).

2012 Annual Report: Opportunities to Reduce Duplication, Overlap and 

Fragmentation, Achieve Savings, and Enhance Revenue, GAO-12-342SP

(Washington, D.C.: Feb. 28, 2012).

Diesel Pollution: Fragmented Federal Programs that Reduce Mobile 

Source Emissions Could be Improved, GAO-12-261 (Washington, D.C.: 

Feb. 7, 2012).

Renewable Energy: Federal Agencies Implement Hundreds of Initiatives,

GAO-12-260 (Washington, D.C.: Feb. 27, 2012).

Department of Energy: Additional Opportunities Exist to Streamline 

Support Functions at NNSA and Office of Science Sites, GAO-12-255

(Washington, D.C.: Jan. 31, 2012).

Department of Energy: Advanced Research Projects Agency-Energy 

Could Benefit from Information on Applicants’ Prior Funding, GAO-12-112

(Washington, D.C.: Jan. 13, 2012).

Recovery Act: Progress and Challenges in Spending Weatherization 

Funds, GAO-12-195 (Washington, D.C.: Dec. 16, 2011). 

DOE Loan Guarantees: Further Actions Are Needed to Improve Tracking 

and Review of Applications, GAO-12-157 (Washington, D.C.: Mar. 12, 

2012).

Excess Uranium Inventories: Clarifying DOE’s Disposition Options Could 

Help Avoid Further Legal Violations, GAO-11-846 (Washington, D.C.: 

Sept. 26, 2011).

Nuclear Material: DOE’s Depleted Uranium Tails Could be a Source of 

Revenue for the Government, GAO-11-752T (Washington, D.C.: June 13, 

2011).

Department of Energy: Advanced Technology Vehicle Loan Program 

Needs Enhanced Oversight and Performance Measures, GAO-11-745T

(Washington, D.C.: June 9, 2011).

Related GAO Products
Page 2 GAO-12-659T 

Recovery Act: Status of Department of Energy’s Obligations and 

Spending, GAO-11-483T (Washington, D.C.: Mar. 17, 2011).

Department of Energy: Advanced Technology Vehicle Loan Program 

Implementation Is Under Way, but Enhanced Technical Oversight and 

Performance Measures Are Needed, GAO-11-145 (Washington, D.C.: 

Feb. 28, 2011).

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