Assessment Report: DOE-OIG-18-16

February 7, 2017

Audit Coverage of Cost Allowability for Stanford University During Fiscal Years 2014 and 2015 Under Department of Energy Contract No. DE-AC02-76SF00515

During fiscal years (FY) 2014 and 2015, Stanford incurred and claimed costs for SLAC totaling $384,596,380.60 and $430,229,715.83, respectively.  Stanford is required by its contract to account for all funds advanced by the Department annually on its annual Statement of Costs Incurred and Claimed, to safeguard assets in its care, and to claim only allowable costs.  The Department’s Office of Inspector General, Office of Acquisition Management, integrated management and operating contractors, and other select contractors have implemented a Cooperative Audit Strategy (Strategy) to make efficient use of available audit resources while ensuring that the Department’s contractors claim only allowable costs.

Nothing came to our attention during our assessment to indicate that Internal Audit’s allowable cost–related audit work for FYs 2014 and 2015 could not be relied upon.  We did not identify any material internal control weaknesses with the allowable cost audits, which generally met the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing.  As part of its FYs 2014 and 2015 allowable cost audits, Internal Audit reviewed subcontracts for which incurred costs were a factor in determining the amount payable to the subcontractor.  Internal Audit identified internal control weaknesses in both audits and questioned costs totaling $3,128 in the FY 2015 audit.  The internal control weaknesses and questioned costs had all been resolved.

During our retesting work, we identified additional questioned costs of $990 related to printing expenses, which have been resolved.

Topic: Management & Administration