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| UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
S? WASHINGTON. D.C. 20460
OCT
OFFICE Of
THE INSPECTOR GENERAL
MEMORANDUM
SUBJECT
FROM:
TO:
Audit of Superfund Interagency Agreements with the
Department of Energy - Fiscal 1988
Audit Report No. M5BFLO-11-0016-0100027
Kenneth D. Hockman
Divisional Inspector General for Audit
Internal Audit Division (A-109)
Harvey G. Pippen
Director, Grants Administration Division (PM-216F)
The Office of Inspector General, Department of Energy
prepared the subject report which is required by section lll(k)
of the Superfund Amendments and Reauthorization Act of 1986.
We are not making any recommendations to you and are closing this
report upon issuance. However, the Grants Administration
Division may want to emphasize to the Department of Energy that
indirect costs can be applied to Superfund interagency agreements
only if a rational, defensible allocation plan is being imple-
mented. General or Agency-wide indirect costs are not allowable
unless specifically authorized by legislation.
Should your staff have any questions concerning this report,
please have them call John Walsh on 475-6753.
cc: Mr. Broadwell, Department of Energy
HEADQUARTERS »!RRARY
ENVIRONMENT
WASHIMn.,.-
AGENCY
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APPENDIX
DISTRIBUTION OF REPORT
Director, Office of Emergency and
Remedial Response (OS-200)
Director, Office of Program Management (OS-240)
Director, Financial Management Division (PM-226)
Acting Chief, Grants Information and
Analysis Branch (PM-216F)
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Department of Energy
Washington, DC 20585
September 26, 1989
Mr, Ernest E. Bradley, III
Assistant Inspector General for Audits
Office of Inspector General (A-109)
Environmental Protection Agency
401 M Street, S.W.
Washington, D.C. 20460
Dear Mr. Bradley:
We conducted an audit of the Fiscal Year (FY) 1988 Superfund costs incurred
by the Department of Energy (DOE) on interagency agreements. The
Environmental Protection Agency (EPA) entered into the agreements with
various DOE field offices for the performance of specific services. The
agreements were assigned to DOE contractors for actual performance. After
reviewing the contractors' invoices for work performed, the appropriate DOE
field offices obtained reimbursement from EPA.
The purpose of the audit was to determine the reasonableness, allowability,
and allocability of costs incurred under the agreements for the period
October 1, 1987, through September 30, 1988.
The scope of the audit was limited to evaluating the accounting records and
other documentation supporting costs incurred for 19 agreements with
claimed costs of $3,777,364 of which $3,763,917 was acceptable and $13,447
was unallowable. Details are in the enclosed reports. Please note that
these reports may contain proprietary information.
Our audit was performed in accordance with generally accepted government
auditing standards and included such tests of the contractors' data and
records and such other auditing procedures as were considered necessary.
The Federal Acquisition Regulations, as supplemented by the Department of
Energy Acquisition Regulations, were used as criteria in the evaluation of
the claimed costs.
As reported 1n our FY 1987 letter, we continued to find that some older
interagency agreements included both Superfund work and non-superfund work
in the same agreement. As a result, DOE is not always maintaining separate
records on the specific use of the Superfund funds. This situation appears
to have been corrected on interagency agreements issued in FY 1988.
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-2-
If you wish additional details on the audit, or have questions about
release of the enclosed reports, please contact David Broadwell, Assistant
Manager, Capital Regional Office, at 586-8944.
Sincerely,
Son W. Harvey
'Assistant Inspector General
for Audits
Office of Inspector General
2 Enclosures
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REPORT No.: WR-CC-89-33
U.S. DEPARTMENT OF ENERGY
OFFICE OF INSPECTOR GENERAL
OFFICE OF AUDITS
WESTERN REGION
ALBUQUERQUE, NEW MEXICO 87115
Audit of Costs Incurred on EPA
Superfund Interagency Agreements
With the U.S. Department of Energy
Grand Junction Projects Office
October I/ 1987, through September 30, 1988
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REPORT No.: WR-CC-89-33
AUDIT OF COSTS INCURRED ON EPA
SUPERFUND INTERAGENCY AGREEMENTS
WITH THE U.S. DEPARTMENT OF ENERGY
GRAND JUNCTION PROJECTS OFFICE
OCTOBER 1, 1987, THROUGH SEPTEMBER 30, 1988
TABLE OF CONTENTS
Page
Purpose and Scope
Circumstances Affecting the Audit
Results of Audit .
1
3
3
Exhibit A
Schedule A-l
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Amounts Obligated and Costs Claimed 4
Reconciliation of EPA Disbursements to
Costs Claimed 5
Summary of Claimed Costs and Audit Results
EPA Interagency Agreements 6
Statement of Claimed Costs and Audit Results
EPA Interagency Agreement No. DW8993245101 . . 7
Statement of Claimed Costs and Audit Results
EPA Interagency Agreement No. DW8993273601 . . 8
Statement of Claimed Costs and Audit Results
EPA Interagency Agreement No. DW8993290801 . . 9
Statement of Claimed Costs and Audit Results
EPA Interagency Agreement No. DW8993290901 . . 10
Statement of Claimed Costs and Audit Results
EPA Interagency Agreement No. DW8993291001 . . 11
Statement of Claimed Costs and Audit Results
EPA Interagency Agreement No. DW8993291401 . . 12
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U.S. DEPARTMENT OF ENERGY
OFFICE OF INSPECTOR GENERAL
OFFICE OF AUDITS
WESTERN REGION
ALBUQUERQUE, NEW MEXICO 87115
AUDIT OF COSTS INCURRED ON EPA SUPERFUND INTERAGENCY AGREEMENTS
WITH THE DEPARTMENT OF ENERGY GRAND JUNCTION PROJECTS OFFICE
OCTOBER 1, 1987, THROUGH SEPTEMBER 30, 1988
REPORT NO: WR-CC-89-33
PURPOSE AND SCOPE
As requested by the Department of Energy (DOE), Office of
Inspector General (OIG), Capital Region, we have completed an
audit of costs claimed under six Environmental Protection Agency
(EPA) Superfund Interagency Agreements. The agreements cover the
period March 30, 1987 through December 31, 1990, and provide for
DOE to do remedial design and action at properties included in
operable units of the Denver Radium Superfund Site.
Section III of the Superfund Amendments and Reauthorization
Act of 1986 requires annual audits of payments, obligations,
reimbursements, and other uses of the EPA Superfund
appropriations to assure that the fund is being properly
administered. The DOE is authorized to use Superfund monies
through a series of interagency agreements with EPA.
Work on the interagency agreements was performed by UNC
Geotech (formerly UNC Technical Services, Inc.) under Contract
No. DE-AC07-86ID12584 with the Grand Junction Projects Office.
-------
UNC Geotech is a DOE integrated contractor at Grand Junction,
Colorado.
The purpose of the audit was to determine the allowability
of costs allocated to the Superfund obligation within these
agreements and claimed for the period October 1, 1987, through
September 30, 1988. Allowable costs are those which are reason-
able, allocable, and according to the terms of the interagency
agreements, applicable cost principles, laws and regulations, and
generally accepted accounting principles and practices
appropriate to the circumstances.
The audit scope was limited to reviewing the accounting
books and records and other documents supporting the contractor's
claimed costs. Specific transactions were tested, but the
contractor's total internal control system and technical perform-
ance were not evaluated.
As defined in the above scope, we followed the generally
accepted government auditing standards that applied and included
tests of the contractor's data and records and other audit
procedures considered necessary in the circumstances. The
Federal Acquisition Regulation (FAR), DOE Acquisition Regulation
(DEAR), and the terms and conditions of the interagency
agreements were used as criteria to evaluate incurred costs.
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CIRCUMSTANCES AFFECTING THE AUDIT
«
The contract between DOE and the contractor required
negotiation of annual indirect cost rates. Negotiated rates were
not available for fiscal year 1988 because the contractor had not
prepared a final overhead rate submission. However, the
contractor did adjust claimed costs to actual as of September 30,
1988 (fiscal year end). Costs claimed may need to be adjusted
when the indirect expense rates for fiscal year 1988 are
negotiated.
AUDIT RESULTS
The audit disclosed no questioned, unsupported or unresolved
costs. However, DOE did not claim the added factor cost for
administration and depreciation as required in DOE Order 2110.1A.
Applying this Order would have led to an additional cost recovery
of $449,234 for administration in fiscal year 1988. The
additional cost recovery for depreciation was not determined
because a depreciation factor had not been established for the
Grand Junction Projects Office. The audit results, detailed in
the Exhibits, were discussed with representatives of UNC Geotech
and the Grand Junction Projects Office, who agreed with the data
presented.
ADC, LTD.
ACCEPTED BYt
^^V
3
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REPORT No.: WR-CC-89-33 EXHIBIT A
GRAND JUNCTION PROJECTS OFFICE
GRAND JUNCTION, COLORADO
EPA Interagency Agreements
Amounts Obligated and Costs Claimed
Fiscal Year 1988
Agreement Amounts Obligated Costs Claimed
Number PriorFY1988 Total Prior FY1988 Total
Note 1 Note 2
DW8993245101 $349,000 $2,625,000 $2,974,000 $166,786 $1,554,059 $1,720,845
DW8993273601 76,015 1,630,985 1,707,000 4,957 457,249 462,206
DW8993290801 -0- 431,000 431,000 -0- 133,094 133,094
DW8993290901 -0- 301,000 301,000 -0- 50,592 50,59:
8993291001 -0- 578,300 578,300 -0- 240,224 240,224
DW8993291401 -0- 436,000 436,000 -0- 207,334 207,334
Notes:
1. These amounts represent total obligations under interagency
agreements through fiscal year 1988. A difference of $300 was noted
between the amount obligated under agreement number DW8993291001 and
EPA records.
Interagency Agreement $578,300
EPA Records 578,000
Difference $ 300
2. See Schedule A-l for reconciliation of EPA disbursements to
costs claimed.
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REPORT No.: WR-CC-89-33
SCHEDULE A-l
GRAND JUNCTION PROJECTS OFFICE
GRAND JUNCTION, COLORADO
Reconciliation of EPA Disbursements to Cost Claimed
EPA Interagency Agreements
Fiscal Year 1988
Audit Adjustments
Agreement EPA
Number Disbursements
DW8993245101
DW8993273601
DW8993290801
DW8993290901
DW8993291001
t
^8993291401
$1,354,171
315,092
102,452
41,888
215,789
183,392
Sept. 1987 Sept. 1988
Billing Billing
Note l Note l
$(74,179) $274,068
(4,957) 147,114
24,146
5,435
24,440
23,941
Claimed
Other Costs
Note 2
$ (1) $1,55
45
6,496 13
3,269 5
(5) 24
1 20
50,592
Note;
1. EPA disbursement records included timing differences. A
one-month lag of posting billed amounts created a year-end cutoff
difference. September 1987 billings were subtracted and September
1988 billings added to the recorded EPA disbursements to arrive at
fiscal year 1988 cost claimed.
2. These amounts represented rounding and recording differences.
On agreement DW8993290801, the $6,496 was an amount billed and
collected from EPA, but not shown on EPA's records. On agreement
DW8993290901, the $3,269 was an amount billed by DOE, but not
collected from EPA.
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REPORT NO.: WR-CC-89-33 EXHIBIT
GRAND JUNCTION PROJECTS OFFICE
GRAND JUNCTION, COLORADO
Summary of Claimed Costs and Audit Results
EPA Interagency Agreements
Fiscal Year 1988
Audit Results
Claimed QuestionedUnresolved
Costs Costs Costs
Direct Labor $525,025
Overhead 348,228
Common Support 233,661
Material 63,879
Purchased Services 124,069
Subcontracts 700,250
Other Direct 196,195
Subtotal $2,191,307
General and Admin-
istrative Expense 451,245
Total Costs $2,642,552 - 0 - - 0 -
xmmmmmmmmm *nmm* s*==z
Note:
DOE Order 2110.1A, Pricing of Departmental Material and Services,
dated July 14, 1988, established DOE policy for pricing materials and
services provided to non-DOE organizations, either directly or through
operating contractors. The Order required charging other Federal
agencies the Department's full cost when the other agency passes costs
to organizations outside the Federal Government. Full cost would
include the integrated contractor's cost and fee, plus DOE's
depreciation and administration cost.
The Superfund Act authorized enforcement action and cost recovery
from those responsible for a hazardous waste problem, based upon the
principle that "the polluter should pay." These recoveries, plus tax
revenues, were the main source of funds for cleaning up hazardous
waste sites. Recoveries could play a major role in replenishing the
Superfund.
The costs billed to EPA in fiscal year 1988 did not include DOE's
administrative and depreciation costs. The costs were understated by
$449,234 ($2,642,552 X 17%) for administration. The understated costs
for depreciation were not determined because Idaho Operations Office
had not established a depreciation factor for the Grand Junction
Projects Office.
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REPORT No.: WR-CC-89-33
EXHIBI'
GRAND JUNCTION PROJECTS OFFICE
GRAND JUNCTION, COLORADO
Statement of Claimed Costs and Audit Results
' EPA Interagency Agreement No. DW8993245101
Fiscal Year 1988
Claimed
Costs
Audit Results
Questioned
Costs
Unresolved
Costs
Direct Labor
Overhead
Common Support
Material
Purchased Services
Subcontracts
Other Direct
Subtotal
General & Admin-
istrative Expense
Total Costs " "
$231,367
165,823
98,867
20,673
49,698
651,011
71,355
$1,288,794
265,265
$1,554,059
- 0 -
- 0 -
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REPORT No.: WR-CC-89-33
EXHIBIT
GRAND JUNCTION PROJECTS OFFICE
GRAND JUNCTION, COLORADO
Statement of Claimed Costs and Audit Results
' EPA Interagency Agreement No. DW8993273601
Fiscal Year 1988
Claimed
Costs
Audit Results
Questioned
Costs
Unresolved
Costs
Direct Labor
Overhead
Common Support
Material
Purchased Services
Subcontracts
Other Direct
Subtotal
General & Admin-
istrative Expense
Total Costs
121,418
74,885
53,828
20,722
14,736
49,239
44,186
$379,014
78,235
$457,249
- 0 -
- 0 -
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REPORT No.: WR-CC-89-33
GRAND JUNCTION PROJECTS OFFICE
GRAND JUNCTION, COLORADO
Statement of Claimed Costs and Audit Results
' EPA Interagency Agreement No. DW8993290801
Fiscal Year 1988
EXHIBIT
Claimed
Costs
Audit Results
Questioned
Costs
Unresolved
Costs
Direct Labor $ 34,303
Overhead 20,155
Common Support 15,793
Material » 5,115
Purchased Services 8,719
Subcontracts —
Other Direct 26,292
Subtotal $110,377
General & Admin-
istrative Expense 22,717
Total Costs $133,094
- 0 -
- 0 -
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REPORT No.: WR-CC-89-33
GRAND JUNCTION PROJECTS OFFICE
GRAND JUNCTION, COLORADO
Statement of Claimed Costs and Audit Results
EPA Interagency Agreement No. DW8993290901
Fiscal Year 1988
EXHIBIT
Claimed
Costs
Audit Results
Questionea
Costs
Unresolved
Costs
Direct Labor $ 14,994
Overhead 9,852
Common Support 7,205
Material 161
Purchased Services 7,468
Subcontracts —
Other Direct 2,277
Subtotal $ 41,957
General & Admin-
istrative Expense 8,635
Total Costs $ 50,592
- 0 -
- 0 -
10
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REPORT No.: WR-CC-89-33
EXHIBIT
GRAND JUNCTION PROJECTS OFFICE
GRAND JUNCTION, COLORADO
Statement of Claimed Costs and Audit Results
EPA Interagency Agreement No. DW8993291001
Fiscal Year 1988
Claimed
Costs
Audit Results
Questioned
Costs
Unresolved
Costs
Direct Labor
Overhead
Common Support
Material
Purchased Services
Subcontracts
Other Direct
Subtotal
General & Admin-
istrative Expense
Total Costs
$ 64,824
40,700
30,602
5,254
22,900
34,942
$199,222
41,002
$240,224
- 0 -
- 0 -
11
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REPORT No.: WR-CC-89-33
GRAND JUNCTION PROJECTS OFFICE
GRAND JUNCTION, COLORADO
Statement of Claimed Costs and Audit Results
1 EPA Interagency Agreement No. DW8993291401
Fiscal Year 1988
EXHIBIT
Claimed
Costs
Audit Results
Questioned
Costs
Unresolved
Costs
Direct Labor $ 58,119
Overhead 36,813
Common Support 27,366
Material 11,954
Purchased Services 20,548
Subcontracts —
Other Direct 17,143
Subtotal $171,943
General & Admin-
istrative Expense 35,391
Total Costs $207,334
- 0 -
- 0 -
12
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REPORT NUMBER: ER-C-89-06
U.S. DEPARTMENT OF ENERGY
OFFICE OF INSPECTOR GENERAL
OFFICE OF AUDITS
EASTERN REGIONAL OFFICE
Oak Ridge, Tennessee 37830
Interim Audit of Costs Claimed
by the Oak Ridge Operations Office
Under Selected Interagency Agreements
With the Environmental Protection Agency
for Work Performed by
Martin Marietta Energy Systems, Inc.
October 1, 1987, to September 30, 1988
Contractor information contained in this audit report may be
confidential. The restrictions of 18 USC 1905 should be
considered before this information is released to the public.
This report may not be released to anyone outside the Department
of Energy without the approval of Headquarters Office.of Audits,
except to an Agency involved in negotiating or administering the
contract. Furthermore, the information contained in this report
should not be used for purposes other than those intended without
prior consultation with the Department of Energy's Office of
Inspector General regarding its applicability.
Date: July 19, 1989
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REPORT NUMBER: ER-C-89-06
INTERIM AUDIT OF COSTS CLAIMED
BY THE OAK RIDGE OPERATIONS OFFICE
UNDER SELECTED INTERAGENCY AGREEMENTS
WITH THE ENVIRONMENTAL PROTECTION AGENCY
FOR WORK PERFORMED BY
MARTIN MARIETTA ENERGY SYSTEMS, INC.
OCTOBER 1, 1987, TO SEPTEMBER 30, 1988
TABLE OF CONTENTS
Purpose and Scope ................................... '. ....... 1
Circumstances Affecting the Audit ........................... 2
Audit Results ............................................... 3
Statement of the Department of Energy's costs
Claimed and Audit Results Fiscal Year 1988 -
Exhibit A .................................................. 6
Statement of Amounts Obligated and
Costs Claimed Fiscal Year 1988 - Exhibit B ................. 8
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U.S. DEPARTMENT OF ENERGY
OFFICE OF INSPECTOR GENERAL
OFFICE OF AUDITS
Oak Ridge, Tennessee 37830
INTERIM AUDIT OF COSTS CLAIMED
BY THE OAK RIDGE OPERATIONS OFFICE
UNDER SELECTED INTERAGENCY AGREEMENTS
WITH THE ENVIRONMENTAL PROTECTION AGENCY
FOR WORK PERFORMED BY
MARTIN MARIETTA ENERGY SYSTEMS, INC.
OCTOBER 1, 1987, TO SEPTEMBER 30, 1988
REPORT NO. ER-C-89-06 July 19, 1989
PCTRPOSE AND SCOPE
As required by the Superfund Amendments and Reauthorization
Act of 1986, we have performed an interim audit of costs incurred
under 13 interagency agreements between the Department of
Energy's (DOE) Oak Ridge Operations Office (ORO) and the
Environmental Protection Agency (EPA). Martin Marietta Energy
Systems (Energy Systems) performs the work requested in these
agreements under the existing contract with ORO. The 13
interagency agreements and related work descriptions are:
Agreement Description
DW890341 Assistance in genetic toxicology and carcinogenicity
studies.
DW890793 Technical assistance in implementing a new
analytical methodology for health risk assessments.
DW891215 Development of a hazardous waste control technology
data base.
DW891258 Development of methods to interpret metabolism data.
DW891475 Information support to EPA's Office of Waste
Programs Enforcement.
DW892002 Establishment of holding times for environmental
samples.
DW892147 Perform risk assessments of toxic substances.
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Agreement Description
DW892633 Modeling support for the EPA's Reduction of
Uncertainties in Risk Assessments project.
DW392701 Evaluation of toxic effects and development of
methods for risk assessments of environmental
pollutants.
DW893015 Development of potential carcinogenicity profiles.
DW893082 Research assistance for remedial action decisions at
superfund sites.
DW893252 Assistance in superfund local cost sharing.
DW893278 Development of a prototype telemetry locator system.
The purpose of the audit was to determine the allowability
of costs incurred under these interagency agreements and claimed
for the period October 1, 1987, to September 30, 1988.
Allowable costs are costs incurred that are reasonable,
allocable, and in accordance with the terms and conditions of the
interagency agreements, applicable cost principles, laws and
regulations, and generally accepted accounting principles and
practices appropriate to the particular circumstances.
The audit scope was limited to reviewing the accounting
records and other documentation supporting Energy System's
claimed costs. Specific transactions were tested. However,
Energy System's entire cost control system and technical aspects
of Energy System's performance were not evaluated.
As defined in the above scope, the audit was conducted
according to the sections of the generally accepted Government
auditing standards that applied and included tests of the
contractor's data and records and other audit procedures
considered necessary under the circumstances. The contract
between ORO and Energy Systems, the DOE Acquisition Regulations,
and the terms and conditions of the interagency agreements were
used as criteria to evaluate costs.
We did not perform technical reviews of the interagency
agreements. Accordingly, our recommendations for acceptance of
costs are qualified pending the contracting officer's technical
review of Energy System's performance.
-------
On five of the agreements audited, superfund costs claimed
did not represent actual superfund costs incurred. These
agreements contained superfund obligations as veil as other EPA
program obligations. EPA did not require separate accounting or
billing of superfund costs. Thus, costs incurred for the
superfund portion of two of these agreements were not accounted
for separately. For three other agreements, superfund costs
were separately accounted but not billed to the EPA by individual
program obligations.
On September 22, 1988, ORO formally requested the Grants
Administration Division to segregate the superfund portion of
these agreements from other EPA program obligations.
Henceforth, ORO agreed to account for and bill superfund costs
separately.
AUDIT RESULTS
The audit results showing Energy System's costs claimed are
detailed in exhibit A and are summarized below:
Costs Claimed $1,134,812
Costs Unallowed $13,447
In our opinion, except for the instances of unallowable
costs described in the notes to exhibit A, and the
effects, if any, of the internal control weakness disclosed in
"Other Matters to be Reported," Energy Systems complied with the
terms and conditions of the interagency agreements for
transactions tested. Nothing came to our attention in connection
with our examination that would cause us to believe Energy
Systems was not in compliance with any terms and provisions of
laws and regulations pertaining to the interagency agreements for
transactions not tested.
As a result of not accumulating superfund costs separately
as explained under "Circumstances Affecting the Audit," agreement
numbers DW890793 and DW891215 reflect total costs incurred and
billed for the entire agreement rather than the superfund
portions.
Similarly, for three other agreements,. although Energy
Systems accounted for superfund costs separately, the costs were
billed for the total interagency agreement (as required) rather
-------
than the individual program obligations. The following is a
comparison of the actual superfund costs incurred and related
billings to the EPA:
AGREEMENT
NUMBER COSTS 1HCUMED COSTS •ILLEO
SUPE^PUHO OTHER TOTAL SUPESEUMO OTHEft TOTAL
OWS92002 S274.227 S 56,853 S 331,060 S32B.830 S 2,250 $ 331,080
OV892147 535,307 US,103 683,410 574,660 108,750 683,410
OWS93015 63,630 11,191 74.821 56,708 18,113 74.821
TOTAL *1,089,311 11,089,311
For all other agreements audited, superfund costs were accounted
for and billed separately.
The audit results were discussed with Ms. Christine
Travaglini and Mr. John Hickey of Energy System's Finance and
Materials Department on July 5, 1989. They concurred with the
amount of costs unallowed and stated that corrective actions were
taken on June 27, 1989.
OTHER MATTERS TO BE REPORTED
In planning and performing our audit, we considered the
internal control structure in order to determine our auditing
procedures for the purpose of expressing our opinion, but not for
providing assurance on the internal control structure. The
significant internal accounting controls that Energy Systems
should maintain to administer these interagency agreements
include controls to ensure that:
o Direct costs are adequately documented, equitably
allocated, and properly accounted for,
o Indirect costs are properly applied,
o Allowable and unallowable costs are routinely
identified and segregated in the accounting system,
and
o Assets are safeguarded against loss or unauthorized
use.
We noted no conditions, except for those described in the
following paragraph, involving the internal control structure and
its operation that we consider reportable under the
auditing standards. Reportable conditions involve matters coming
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to our attention relating to significant deficiencies in the
design or operation of the internal control structure that, in
our judgement, could adversely affect the organization's
ability to record, process, summarize, report, and bill financial
data consistent with the interagency agreements.
An Energy System's internal audit report dated January 22,
1988, disclosed several weaknesses in internal time distribution
practices, including the allocation of employee compensated
absences to final cost objectives during the month in which the
absences occur. Cost accounting standards require that these
absences be allocated during the period when earned. Energy
System's management concurred with findings in the internal audit
report and implemented corrective actions on October 1, 1988.
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REPORT NUMBER: ER-C-89-06 Exhibit A
NOTES TO SCHEDULE A Page 2 of 2
1. Represents total costs incurred under this agreement.
2. Unallowed costs of $13,447 were as follows:
a. Subcontract costs of $12,905 were accrued and charged
to this agreement. These costs exceeded the amount of
the subcontract and were not paid, but the accrued
costs were never reversed.
b. Overhead costs of $542 were applied to the above
costs. This overhead was the off-site subcontract
surcharge of 3.7 percent and the work-for-others
office charge of 0.5 percent.
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REPORT MUHitt: ER-C-89-06
EXHIBIT B
EPA INTERAGENCY AGREEMENTS
STATEMENT OF AMOUNTS OBLIGATED AND COSTS INCURRED
FISCAL TEAR 1988
AGREEMENT
NUMBER
BUS90341
OU890773
OU89121S
DU891258
OU891475
OU892002
OU892147
&U892633
DU892701
W893015
OU893082
OW893232
OU893278
TOTAL
SUPERFUNO
OBLIGATIONS
STARTING DURING
BALANCE FT 1988
1*0,000 S
94,000
130.079
70,000
19,980 (271)
450,000
315.000 345,650
155,000
400,000
95,713
60,000
. . 110.000
50,000
S918.980 11.416,171
COSTS INCURRED BY DOE
TOTAL
AVAILABLE
S40.000
94,000
130,079
70,000
19,709
450,000
660,650
155,000
400,000
95,713
60,000
110,000
50,000
S2.335.151
PRIOR
TEARS FT 1988
S8.152 S18.214
39,205 48,194
112.211
19,709
107,226 274,227
128,778 535,307
34,254
63,630
48,775
1303,070 SI, 134,812
TOTAL MOTES
$26,366
87,399 1
112.211 2
19.709
381,453
664,085
34,254
63,630
48,775
SI, 437,882
Net* 1: Rapraaonta total obligation* and total eaata Incurred undar this agraoaant.
Tha ««)arfu«d portion of thla obligation ia 119,000.
Nota 2: lapraaanta total obllgatlona and total eaata Incurrad wdar
thU acraoaant. Tha aucwrfuid portion of this obligation ia
S90.000. Of ttw S112.211 of eaata Incurrad, only S95.462 ttaa
all lad to tfta EM during Flaeal Taar 1988 dua to an overnight.
Tha raMlning S16.749 MOO billad in Juia 1989 aa a raault of
our audit.
8
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