The Department of Energy has not used leading practices to manage the risk of fraud and other improper payments to its contractors and subcontractors, according to a Government Accountability Office report released Monday.
The report found inconsistent review of invoices, too little data for oversight, and a lack of centralized and detailed policies. “Improper payments, which include fraudulent payments, are a significant problem in the federal government,” the GAO report said.
Sen. Claire McCaskill (D-Mo.), the ranking member on the Senate Homeland Security and Governmental Affairs Committee, requested the review in light of several high-profile fraud cases at DOE sites.
The GAO report cited the example of former contractor Fluor Hanford paying $4 million in 2011 to resolve allegations as the Department of Justice prosecuted some of its employees. Some workers used government credit cards to purchase items such as home appliances for their personal use and other employees accepted kickbacks for purchases made for use at the Hanford Site in Washington state. Fluor denied it knowingly participated in any wrongdoing.
In a more recent case, Hanford Waste Treatment Plant contractor Bechtel National and subcontractor AECOM agreed in November 2016 to pay $125 million to resolve allegations they charged DOE for materials and work that did not meet the exacting standards required for nuclear facilities. Bechtel and AECOM admitted no wrongdoing in the settlement agreement.
“DOE relies heavily on contractors to police themselves and it is ironic that much of the fraud that is discovered at DOE, including the activities which led to the $125 million settlement, only comes to light because of whistleblowing – considering DOE’s troubled history with regard to protecting its whistleblowers,” McCaskill wrote in a letter to Energy Secretary Rick Perry on Monday. The settlement is an example of DOE’s inability to provide sufficient oversight of contracts to ensure taxpayers are getting what they paid for, she said in the letter.
