Audit: DOE-OIG-24-07

November 22, 2023

Management of Indirect Funded Minor Construction Projects at Argonne National Laboratory

Argonne National Laboratory (ANL) is managed and operated by UChicago Argonne, LLC for the Department of Energy.  ANL modernizes its infrastructure, in part, through minor construction projects using laboratory indirect funds from the General Plant Projects overhead cost pool to provide infrastructure upgrades such as the electrical supply for electric vehicle charging stations, site security upgrades, and electrical modernization.  The Office of Science (Science) oversees many of the Department’s National Laboratories, as well as various programs and facilities, that help achieve its mission of delivering major scientific discoveries, capabilities, and tools to transform the understanding of nature and to advance U.S. energy, economic, and national security.

In a prior Office of Inspector General audit report issued in February 2015, the audit found that ANL may have inappropriately used, or planned to use, indirect funding to complete 4 of the 10 minor construction projects funded as Institutional General Plant Projects contrary to Department Order 430.1B Change 2, Real Property Asset Management.  Given the importance of infrastructure to the achievement of the Department’s mission, we initiated this audit to determine whether ANL managed its indirect funded minor construction projects in accordance with applicable laws, regulations, Science’s and ANL’s policies and procedures, and Department guidance.

We found that ANL did not manage two of the five projects we reviewed in accordance with applicable laws, regulations, Science’s and ANL’s policies and procedures, and Department guidance.  Specifically, we found one project, a $2.2 million buildout of a laboratory space in Building 223, that did not clearly and consistently document the reason for the renovation and how it supported multiple mission needs.  Additionally, we found a $4.2 million redundant cooling towers system subproject that did not support multiple mission needs because it only benefited the Advanced Photon Source, a user facility.

The issues we identified occurred, in part, because Department officials that approved these projects did not receive all available supporting documentation to verify whether a project supported multiple mission needs, and whether it was clearly defined.  The lack of key project documents occurred because Department officials we spoke with relied on the evaluation checklist, as well as inquiry or meetings to resolve questions, but did not request supplemental documentation on the two projects.

This report contains four recommendations that, if fully implemented, should help ensure that the management of indirect funded minor construction projects complies with applicable laws, regulations, Science’s and ANL’s policies and procedures, and Department guidance.  Management fully concurred with our findings and recommendations, and its proposed corrective actions are consistent with our recommendations.