Two NNSA offices, NA-23 and NA-25, documented management controls for almost all of their contracts that we reviewed; but the third office, NA- 24, could not provide us with the complete records necessary to document these controls. Similarly, NA-23 and NA-25 provide their technical reviewers and contract managers with procedural guidance that assists in maintaining these controls, while NA-24 did not provide this type of guidance. In addition, NA-23 and NA-25 maintain the key contract documents at headquarters and the national laboratories, respectively, in such a way that the records are quickly accessible for active monitoring by contract and program managers, as evidenced by their ability to provide us with key contract records. Two NNSA offices, NA-23 and NA-25, documented management controls for most of their contracts that we reviewed. As shown in table 1, for eight of the nine contracts we reviewed from these two offices, NA-23 staff and national laboratory officials who manage NA-25’s contracts provided us with complete records of deliverables and invoices as well as evidence that technical reviewers and contract officers reviewed and approved deliverables and invoices, respectively. (For the ninth contract, which involved comprehensive physical protection upgrades to a strategic rocket forces site in Russia, Oak Ridge National Laboratory did not provide complete documentation of approvals for deliverables.) For example, the two contracts we reviewed from NA-23—which are designed to construct or refurbish fossil-fuel plants for the Russian cities of Zheleznogorsk and Seversk so that each city can shut down its plutonium-producing nuclear reactor that it currently uses to generate heat and electricity—involve multiple contractors in the United States and Russia. Despite being by far the largest contracts by dollar value in our sample ($390 million for Seversk and $570 million for Zheleznogorsk—the next largest contract was valued at $29 million), NA-23 headquarters provided us with, among other things, complete documentation of all invoices; photographs of the deliverables (i.e., construction work) completed to date; and evidence of the reviews and approvals of the invoices and payments to the foreign contractors and subcontractors. NA-23 also provided us with detailed breakdowns of work (called Work Breakdown Structures), work authorizations, and cost evaluations for each project. The documentation NA-23 provided us was among the most complete and organized of all the contracts we reviewed. An NA-23 official told us that this office makes efforts to specify in acute detail the work to be done and the costs for that work because this enables the office to effectively monitor and maintain a degree of control over the work of foreign contractors and subcontractors. NA-25 officials also provided us with complete documentation of management controls for the contracts they manage. As shown in table 1, for six of the seven contracts we reviewed, the national laboratories that manage these contracts provided complete records of deliverables and invoices as well as evidence that technical reviewers at the national laboratories and/or contract officers at the national laboratories and/or NA-25 reviewed and approved the deliverables and invoices, respectively. (The seventh contract is the Oak Ridge contract, mentioned above.) For example, for the two contracts we reviewed that Brookhaven National Laboratory manages for NA-25, each invoice on the contracts received at least one approval from technical reviewers at the laboratory, and each financial transaction received two approvals from contract managers. In another contract involving the purchase of nuclear detection devices for deployment in Russia, the national laboratory managing the contract— Pacific Northwest—provided us with purchase orders for the contract as well as a receipt of delivery so that we could verify that the goods purchased had reached their destination prior to final delivery in Russia. Both NA-23 and NA-25 maintain copies of key records, such as deliverables and invoices within quick access to program and contract managers, as evidenced by the ability of each office to provide these records to us. NA-23 maintains these records at headquarters, while NA-25 maintains the records at the national laboratories that provide the day-to-day management over the contracts. However, it is important to note that the laboratories should be able to provide NNSA managers with complete and quick access to contract records, as the national laboratories are contractors to DOE, and it is NNSA that is ultimately responsible for monitoring the nonproliferation projects. NA-23 and NA-25 each apply formal, procedural guidance that assists technical reviewers and contract managers in maintaining management controls. For example, because the contracts involve capital procurement or acquisitions exceeding $5 million, NA-23 must apply the rules and procedures specified in DOE Order 413.3, Project Management for the Acquisition of Capital Assets. NA-23’s contract managers receive program guidance through work authorizations signed by an authorized official at NNSA headquarters and guidance on the payment process via DOE’s Contract Specialist Guide 42.8, which specifies procedures for review and approval of vouchers and invoices so that contract managers will handle them in a timely and efficient manner. According to NA-23 officials, Federal Acquisition Regulations also stipulate many of the specific steps that NA- 23 must undertake in the planning, implementation, and review of the contracts that make up the Seversk and Zheleznogorsk projects. NA-25 developed its own procedural guidance, known as the Project Management Document, for technical reviewers and contract officials. This guide provides instructions on, among other things, project planning, funds management, reporting of a project’s ongoing progress and costs, contract management, and procedures for putting important contract data into NA- 25’s Program Management Information System. Finally, according to NNSA’s Director of Policy and Internal Controls Management and an NNSA official in charge of acquisitions in the Office of Defense Nuclear Nonproliferation, neither NA-23 nor NA-25 perform periodic reviews of their management control processes, although NNSA’s Office of Engineering and Project Support, at the outset of NA-23’s projects, did perform a general review of NA-23’s management controls. GAO’s management control guidelines state that agencies should monitor and regularly evaluate their control activities to ensure that they are still appropriate and working as intended. NA-24 could not provide evidence of the records necessary to document its management controls. Despite our numerous inquiries from January 2005 to June 2005 and discussions with agency officials—including one with NNSA’s Principal Assistant Deputy Administrator—the documentation we received on seven of the nine contracts we examined from this office was either incomplete or did not provide a clear audit trail that we could follow. (For the two other contracts, one managed by Brookhaven National Laboratory and one managed by Los Alamos National Laboratory, laboratory officials provided complete documentation of management controls.) For example, for one contract managed by the Idaho National Laboratory involving the discovery of bioactive compounds in Russia that may be used in watershed protection or carbon sequestration: Ten of the 35 invoices did not include a document showing that NA-24 had authorized payment to the Russian contractors. Fourteen invoices on this contract did not include evidence that Idaho National Laboratory’s technical reviewer for the contract approved the deliverable on which the invoice was based. For another contract managed through NA-24 headquarters, Foundation for Russian American Economic Cooperation (FRAEC), NA-24 provided us with documentation, but we were able to determine very little about the contract on the basis of this documentation because of the following reasons: there appeared to be no explanation of the linkages between the work products outlined in the contract, the deliverables, and the invoices, and we received fewer than half of the invoices for the contract and fewer than one-fifth of the deliverables for the contract. Senior officials with NA-24 told us that it doesn’t need to keep copies of key contract documents because the documents are maintained at the national laboratories managing the contracts and accessible to NA-24. However, the fact NA-24 was unable to obtain complete sets of records on seven of the nine contracts we reviewed suggests otherwise. In addition, NA-24 did not provide us with formal, written guidance that provides managers with the procedures on how to process and maintain key contract records, and the office appears to rely on each national laboratory to provide its own procedural guidelines. Finally, NA-24, like NA-23 and NA-25, does not perform periodic reviews of its management control processes. GAO’s management control guidelines state that agencies should monitor and regularly evaluate their control activities to ensure that they are still appropriate and working as intended. On the basis of our review of the contracts, it appears that, if an NNSA program office provides its managers with procedural guidance on how to maintain management controls, the office does a better job at implementing and documenting these management controls. In our view, procedural guidance enables program and contract managers to implement and document management controls in a systematic way, as evidenced by the fact that NA-23 and NA-25 each use procedural guidance and were able to document their controls. In addition, maintaining managers’ quick and complete access to key contract records—regardless of whether the records are located at the national laboratory or NNSA headquarters—appears to coincide with maintaining and documenting management controls. Officials at NA-24 told us that they have access to all contract records through the laboratories that manage their contracts, yet the office was unable to provide us with these records. Finally, as required by GAO standards for management controls, periodic reviews of management controls would help the NNSA offices that we reviewed determine whether they are adhering to their management controls and whether these controls are relevant and effective. For example, if NA-24 had performed a review of its management control procedures, it might have discovered that it did not have on hand complete sets of invoices and approvals of deliverables for each of the office’s nonproliferation contracts.