Waste of the Day: National Lab Had $160 Million In Questioned Costs

This story originally was published by Real Clear Wire

By Adam Andrzejewski
Real Clear Wire

Waste of the Day: National Lab Had $160 Million In Questioned Costs

The Department Of Energy’s Fermi National Accelerator Lab in Illinois had $160 million in questioned costs in 2018, due to lost invoices, excessive reimbursements and holiday pay, according to a recent audit by the Department of Energy’s Inspector General.

The audit examined costs incurred by Fermi Research Alliance, LLC, the contractor that operates the lab near Batavia, Illinois. The lab is owned by the Department of Energy, and receives millions in funding from the federal government. It also recently received $260 million from the Inflation Reduction Act of 2022.

The audit found that costs claimed by the Fermi Research Alliance were not always allowable or reasonable. The inspector general questioned $160 million in indirect costs as unsupported, $15 million in subcontract costs as unresolved (pending audit), and $2.5 million as unsupported, unallowable, or unreasonable.

Specifically, the IG had many concerning findings. This includes Fermi Research Alliance losing over $2.4 million in vendor invoices, unreasonable subsistence reimbursements to visiting scientists and researchers in excess of $30,000, and excessive holiday pay exceeding $50,000. Fermi Research Alliance was also not in compliance with federal cost accounting standards.

The IG found that “These issues could result in the Department reimbursing [Fermi Research Alliance] for costs that were unallowable, not allocable, or unreasonable.”

This mismanagement directly impairs the mission of the Department of Energy, since these questionable expenditures could have gone towards further research efforts at the lab by purchasing more equipment or hiring more researchers.

This waste was completely preventable by enforcing accounting standards and frequently auditing to ensure they are met, but instead, lax oversight meant these issues went undiscovered for five years.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com