November 20, 2012
Questioned, Unresolved and Potentially Unallowable Costs Incurred by Los Alamos National Laboratory During Fiscal Year 2010
On November 19, 2012, we issued a separate contract audit report on Assessment of Audit Coverage of Cost Allowability for Los Alamos National Laboratory during Fiscal Year 2010 under Department of Energy Contract No. DE-AC52-06NA25396 (OAS-V-13-01, November 2012). The objectives of the assessment included determining whether questioned costs and internal control weaknesses that were identified in audits and reviews and impacting allowable costs had been adequately resolved and whether Los Alamos National Laboratory (Los Alamos) conducted or arranged for audits of its subcontractors when costs incurred were a factor in determining the amount payable to a subcontractor. We identified approximately $50,000 in questioned and unresolved costs claimed by Los Alamos during Fiscal Year 2010. We also identified nearly $24 million in subcontract costs requiring audit; nearly $1.4 million in unresolved questioned subcontract costs; and, approximately $10.7 million in unresolved costs pertaining to a potential Anti-Deficiency Act violation. Finally, we identified more than $434 million in previously reported unresolved costs from prior years. The National Nuclear Security Administration's management agreed with the findings and recommendations and provided proposed corrective actions.