Kenneth Fletcher
WC Monitor
10/17/14

Infrastructure modernization and deferred maintenance are a “special concern” in the Department of Energy Inspector General’s latest annual report on DOE management challenges, released late last week. Infrastructure modernization was not listed as a management challenge, but instead on a lower level watch list. However, the topic is a “special concern” this year for the Inspector General. “We have noted a significant upward trend in the Department’s Deferred Maintenance Account,” the memo states. “In FY 2009, deferred maintenance on the Department balance sheet was $3.9 billion. For FY 2013, that figure had grown to more than $5 billion. Given this trend, we are concerned that important functions could be curtailed if maintenance is not sustained on a current basis,” the IG said in an Oct. 7 memo to DOE Secretary Ernest Moniz. Maintenance issues are believed to have contributed to the February fire at the Waste Isolation Pilot Plant, triggering a complex-wide review of deferred maintenance by the Office of Environmental Management.

This year the IG removed from the list of management challenges operational efficiency and cost savings and downgraded human capital management. This year’s list includes cybersecurity, environmental cleanup, nuclear waste disposal, safeguards and security and stockpile stewardship. The efficiency and cost savings challenge was added to the list in FY’12 in the wake of the financial crisis, and the IG included a number of suggestions for increasing savings and efficiency. “We have been encouraged to find that steps have been taken to further explore these suggestions,” the IG said, explaining the removal of the challenge from the list in the memo.

Those steps include the May 2014 DOE action to form a congressionally mandated Commission to Review the Effectiveness of the National Laboratories. Additionally, the Congressional Advisory Panel on the Governance Structure of NNSA is examining NNSA’s current organizational structure.  The topics suggested by the IG included establishing commissions to analyze the laboratory and technology complex as well as eliminating duplicative NNSA functions. It also asked DOE to reprioritize the Department’s environmental remediation efforts and reevaluate the current structure of DOE’s physical security apparatus.

Human Capital Management Downgraded

The lower-level watch list includes the loan guarantee program, worker and community safety and the human capital management topic, which this year was downgraded from a management challenge. “For a number of years strategic management of human capital has been recognized by oversight organizations as one of the Government’s most significant challenges. While concerns remain, the Department has worked aggressively in this arena,” the memo states. “For example, it has instituted a program to close critical skills gaps, and the Department’s Office of the Chief Human Capital Officer has initiated efforts to improve senior executive recruitment and orientation. The Department also has begun an implementation process to improve human resource delivery models.”

The other management challenges from previous years remain on the list. That includes contract and financial assistance. “The challenges associated with managing the Department’s sizeable contracting portfolio have been recognized internally by the agency, as well as externally by the Government Accountability Office,” the IG’s most recent report on the challenges states. Environmental cleanup remains a challenge given the complex and costly disposal effort projected to cost more than $280 billion total, which is governed by numerous regulatory agreements and court orders, the report states. Nuclear waste disposal has been an issue since the cancellation of the Yucca Mountain program in 2010 left DOE with no clear strategy for permanent disposal, the report notes.

Stockpile stewardship remains a challenge despite action in recent years to enhance the stockpile because “sustained efforts will be necessary if the Department is to extend the life of aging warheads and maintain a viable weapons stockpile,” the report states. Safeguards and security has been on the list since the 2012 breach of the Y-12 facility at Oak Ridge by peace activists. And cybersecurity is also on the list, as it has had numerous weaknesses and recommendations offered by the IG. “Clearly, it is critical that cybersecurity protective measures keep pace with the growing threat,” the report states.