GAO FINDS NNSA HAS MADE PROGRESS TOWARDS IMPROVING ITS FINANCIAL REPORTING

Earlier this month, the Government Accountability Office (GAO) released a report assessing the National Nuclear Security Administration’s (NNSA) progress on meeting recommendations issued in previous GAO reports “Progress Made Toward Fully Addressing Recommendations on Common Financial Reporting”.

NNSA relies on management and operating (M&O) contracts to carry out its missions at eight (8) government-owned, contractor-operated national laboratories and nuclear weapons production facilities, collectively known as the nuclear security enterprise. 

NNSA and Congress have had difficulty understanding the total costs of NNSA’s programs and comparing constituent costs between contractors because the M&O contractors use different methods of accounting and tracking costs. Congress needs this information to provide oversight and make budgetary decisions. The National Defense Authorization Act for Fiscal Year 2017 required NNSA to implement a common financial reporting system, to the extent practicable.

GAO has issued four prior reports on NNSA’s progress in implementing common financial reporting since fiscal year 2019 and made 28 recommendations to DOE and NNSA on this topic. As of June 2023, 19 of GAO's recommendations were outstanding. GAO now assesses that DOE and NNSA have fully implemented two of the 19 outstanding recommendations and partially implemented nine. Eight of the recommendations have not yet been addressed. NNSA needs to take additional actions to fully implement the remaining 17 outstanding recommendations. 

NNSA addressing and fully implementing the remaining outstanding recommendations would provide better assurance to NNSA, M&O contractors, Congress, and other stakeholders that the data collected for common financial reporting are accurate, consistent, and standardized. Implementing GAO’s recommendations would also help NNSA to reduce duplicative data requests across its offices and minimize the cost and reporting burdens on M&O contractors, while ensuring that common financial reporting provides the data needed to understand the total costs of NNSA’s programs and compare costs across its M&O contractors. 

GAO will continue to review NNSA’s efforts to address and fully implement the remaining 17 outstanding recommendations on common financial reporting. DOE and NNSA generally agreed with the prior recommendations.

Read GAO’s summary of its report here.

Read the full report here.