The Department of Energy expends approximately 90 percent of its budget through a variety of contracts and financial assistance agreements. The majority of these funds are spent through management and operating and environmental cleanup contracts. As part of these costs, the Department reimburses contractors for millions of dollars in settlement costs and for fees paid to outside law firms. From fiscal years 2009 through 2013, the Department reimbursed contractors more than $84 million in legal costs.
Although the Department’s management of contractor fines, penalties, and legal costs had improved since the OIG’s 2009 report, problems with the management of these costs continue to exist. Specifically, OIG’s testing revealed that the Department was still authorizing settlement payments without documented evidence of settlement reviews to determine the allowability of costs. OIG’s detailed review of 46 settlement agreements at 6 site contractors found 36 settlements (78 percent) valued at more than $62 million in which there was no documented evidence a settlement review had been performed. Report.