Financial Statement Audit: DOE-OIG-25-09

December 12, 2024

The Department of Energy’s Fiscal Year 2024 Consolidated Financial Statements

The report presents the results of the independent certified public accountants’ audit of the Department of Energy’s consolidated financial statements as of September 30, 2024, and 2023, and the related consolidated statements of net costs, changes in net position, and combined statements of budgetary resources for the years then ended, and the related notes to the consolidated financial statements.

To fulfill the Office of Inspector General’s (OIG) audit responsibilities, we contracted with the independent public accounting firm of KPMG LLP (KPMG) to conduct the audit, subject to our review.  KPMG is responsible for expressing an opinion on the Department’s financial statements and reporting on applicable internal controls and compliance with laws and regulations.  The OIG monitored audit progress and reviewed the audit report and related documentation. This review disclosed no instances where KPMG did not comply, in all material respects, with generally accepted government auditing standards.  The OIG did not express an independent opinion on the Department’s financial statements.

KPMG audited the consolidated financial statements of the Department as of September 30, 2024, and 2023, and the related consolidated statements of net costs, changes in net position, and combined statements of budgetary resources for the years then ended, and the related notes to the consolidated financial statements.  Based on its audit and the reports of other auditors, KPMG concluded that except for an opinion qualification on the Portsmouth Paducah Project Office’s $39.1 billion environmental liability and a material weakness for internal controls related to financial reporting over environmental liability estimates, the consolidated financial statements are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles for the years ended September 30, 2024, and 2023. 

As part of this review, the auditors also considered the Department’s internal controls over financial reporting and tested for compliance with certain provisions of laws, regulations, contracts, and grant agreements that could have a direct and material effect on the consolidated financial statements.  During the audit, KPMG identified a material weakness over the environmental management liability estimate.  KPMG determined that Office of Environmental Management Headquarters had not ensured that the environmental liability estimate was adequately supported with valid cost estimates, schedules, and assumptions.  For instance, KPMG identified that numerous sites did not maintain documentation to support risks and cost estimates associated with the environmental liability.  In addition, KPMG noted that the lack of management review at one site contributed to an environmental liability overstatement of $1.8 billion. 

The OIG issued notices of findings and recommendations to management throughout the audit.  All findings and recommendations will be detailed in a separate management letter that will be provided to the Department.  The audit disclosed no instances of noncompliance or other matters required to be reported under applicable audit standards and requirements. There are no formal recommendations that need to be tracked in the Departmental Audit Report Tracking System; therefore, an additional response is not required.