IG RECOMMENDS ACCOUNTING IMPROVEMENTS IN SANDIA WFO PROGRAM

A Department of Energy Inspector General Audit released yesterday noted that improvements in accounting practices at the Work for Others Program at Sandia National Laboratories could result in significant annual savings. For example, costs relating to Sandia’s WFO support organizations were included in a general organization-wide cost pool rather than an allocating them to a separate indirect rate for WFO support projects, according to the IG report, which was based on an audit by the independent accounting firm KPMG, LLP on the program’s Fiscal Year 2011 spending. The IG recommended making the change, noting it could save $2.3 million annually.

The program, which had a budget of $790.8 million in FY 2011, provides research and technical assistance to other government agencies on a full cost recovery basis. The IG also recommended that the program “analyze year-end indirect cost pool variances to ensure that its mid-year rate changes result in immaterial variances at the end of the year.” Additionally, it found that pension costs of $15 million were moved from fringe benefits to other cost pools, meaning that the fringe benefit rate was understated and other indirect cost rates were overstated.