National Nuclear Security Administration: Additional Actions Could Improve Efficiency of Common Financial Reporting
Fast Facts
The National Nuclear Security Administration relies on contractors to manage and operate its labs and nuclear weapons facilities. But the agency has long had issues comparing costs across its programs because its contractors use different methods for tracking those costs.
In 2017, Congress required NNSA to implement a common financial reporting system to address this issue, and the agency has made significant progress doing so. However, we found that NNSA's offices don't all use the data collected.
We recommended that six NNSA offices develop plans to ensure that they are fully participating in the common financial reporting effort.
Highlights
What GAO Found
The National Nuclear Security Administration (NNSA)—a separately organized agency within the Department of Energy (DOE)—has taken additional steps to implement common financial reporting. However, NNSA's financial integration team continues to face challenges collecting data from the non-NNSA management and operating (M&O) contractors that perform work funded by NNSA but are overseen by other DOE offices. For example, NNSA faces challenges collecting data on indirect costs—such as for administrative and site support—from M&O contractors at sites overseen by DOE's Office of Science. DOE has not implemented GAO's prior recommendation on this issue.
NNSA program offices have taken steps to improve their collection and use of common financial data, but the offices are inconsistent in the extent to which they (1) use common financial data and (2) request additional financial data from M&O contractors. Program offices vary in the extent to which they use common financial data. For example, according to officials, some offices use systems for program management that do not integrate common financial data, and most program offices do not regularly use NNSA's common financial data dashboards. By assessing their actions to collect and use common financial data and developing a plan to fully participate in the effort, program offices could maximize efficiencies from the common financial reporting effort.
According to NNSA officials and contractor representatives, most program offices also continue to collect financial data from M&O contractors through additional requests, without having formally assessed whether common financial data could meet their needs. By assessing their additional data requests and reducing or eliminating them where possible, program offices could decrease duplication of effort and help ensure the accuracy of the agency's financial data.
NNSA's Data Collection through Common Financial Reporting and Additional Requests
Why GAO Did This Study
NNSA has long faced challenges identifying the total costs of its programs and comparing costs across its M&O contractors. 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.
Two Senate committee reports accompanying National Defense Authorization Act bills include provisions for GAO to review NNSA's progress in implementing common financial reporting. This is GAO's fourth report on this issue. This report examines (1) the steps NNSA's financial integration team has taken to implement common financial reporting since GAO's February 2022 report and (2) the extent to which NNSA's program offices have taken steps to collect and use common financial data.
GAO reviewed NNSA documents about implementing common financial reporting, examined cost data submitted to NNSA, and interviewed NNSA and DOE officials and M&O contractor representatives.
Recommendations
GAO is making 13 recommendations, including that the relevant Deputy or Associate Administrator of the six NNSA program offices (1) assess the actions they have taken and develop a plan to participate fully in the common financial reporting effort and (2) assess their financial data requests outside of common financial reporting and develop a plan to reduce or eliminate requests. NNSA agreed with the recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| National Nuclear Security Administration | The NNSA Deputy Administrator for Defense Programs should work with NNSA's Program Director for Financial Integration to assess the actions the office has taken to collect and use common financial data and develop and document a plan to fully participate in the effort, including meeting the office's responsibilities in the financial integration policy and ensuring that common financial data meet their program needs to the extent possible. (Recommendation 1) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to assess the offices' use of common financial data. The agency plans to use the results of these assessments to identify actions to enhance program office participation in the common financial reporting effort. NNSA officials estimated that they would complete action on this recommendation by March 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Deputy Administrator for Defense Nuclear Nonproliferation should work with NNSA's Program Director for Financial Integration to assess the actions the office has taken to collect and use common financial data and develop and document a plan to fully participate in the effort, including meeting the office's responsibilities in the financial integration policy and ensuring that common financial data meet their program needs to the extent possible. (Recommendation 2) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to assess the offices' use of common financial data. The agency plans to use the results of these assessments to identify actions to enhance program office participation in the common financial reporting effort. NNSA officials estimated that they would complete action on this recommendation by March 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Associate Administrator for Emergency Operations should work with NNSA's Program Director for Financial Integration to assess the actions the office has taken to collect and use common financial data and develop and document a plan to fully participate in the effort, including meeting the office's responsibilities in the financial integration policy and ensuring that common financial data meet their program needs to the extent possible. (Recommendation 3) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to assess the offices' use of common financial data. The agency plans to use the results of these assessments to identify actions to enhance program office participation in the common financial reporting effort. NNSA officials estimated that they would complete action on this recommendation by March 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Associate Administrator and Chief for Defense Nuclear Security should work with NNSA's Program Director for Financial Integration to assess the actions the office has taken to collect and use common financial data and develop and document a plan to fully participate in the effort, including meeting the office's responsibilities in the financial integration policy and ensuring that common financial data meet their program needs to the extent possible. (Recommendation 4) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to assess the offices' use of common financial data. The agency plans to use the results of these assessments to identify actions to enhance program office participation in the common financial reporting effort. NNSA officials estimated that they would complete action on this recommendation by March 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Associate Administrator for Counterterrorism and Counter-proliferation should work with NNSA's Program Director for Financial Integration to assess the actions the office has taken to collect and use common financial data and develop and document a plan to fully participate in the effort, including meeting the office's responsibilities in the financial integration policy and ensuring that common financial data meet their program needs to the extent possible. (Recommendation 5) |
NNSA concurred with our recommendation, As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to assess the offices' use of common financial data. The agency plans to use the results of these assessments to identify actions to enhance program office participation in the common financial reporting effort. NNSA officials estimated that they would complete action on this recommendation by March 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Associate Administrator for Infrastructure should work with NNSA's Program Director for Financial Integration to assess the actions the office has taken to collect and use common financial data and develop and document a plan to fully participate in the effort, including meeting the office's responsibilities in the financial integration policy and ensuring that common financial data meet their program needs to the extent possible. (Recommendation 6) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to assess the offices' use of common financial data. The agency plans to use the results of these assessments to identify actions to enhance program office participation in the common financial reporting effort. NNSA officials estimated that they would complete action on this recommendation by March 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | NNSA's Program Director for Financial Integration should collect information from M&O contractors participating in common financial reporting on the recurring financial data requests they receive from NNSA program offices outside of common financial reporting and provide this information to the program offices for use in their assessments of such requests. (Recommendation 7) |
NNSA concurred with our recommendation. As of October 2023, NNSA planned to schedule meetings with each M&O contractor to request a list of financial data requests that they receive from program offices each year and compare these requests against data collected for common financial reporting to identify potentially redundant requests. NNSA officials estimated that they would complete action on this recommendation by September 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Deputy Administrator for Defense Programs should develop, document, and implement a plan to (1) regularly assess whether the office is making recurring financial data requests to M&O contractors that are duplicative of data that are or could be collected through common financial reporting and (2) reduce or eliminate data requests where possible. In conducting the assessment, the office should coordinate with NNSA's Program Director for Financial Integration and incorporate information from M&O contractors. (Recommendation 8) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to periodically evaluate recurring requests for financial data made outside of common financial reporting and identify opportunities to reduce or eliminate specific requests. NNSA officials estimated that they would complete action on this recommendation by September 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Deputy Administrator for Defense Nuclear Nonproliferation should develop, document, and implement a plan to (1) regularly assess whether the office is making recurring financial data requests to M&O contractors that are duplicative of data that are or could be collected through common financial reporting and (2) reduce or eliminate data requests where possible. In conducting the assessment, the office should coordinate with NNSA's Program Director for Financial Integration and incorporate information from M&O contractors. (Recommendation 9) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to periodically evaluate recurring requests for financial data made outside of common financial reporting and identify opportunities to reduce or eliminate specific requests. NNSA officials estimated that they would complete action on this recommendation by September 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Associate Administrator for Emergency Operations should develop, document, and implement a plan to (1) regularly assess whether the office is making recurring financial data requests to M&O contractors that are duplicative of data that are or could be collected through common financial reporting and (2) reduce or eliminate data requests where possible. In conducting the assessment, the office should coordinate with NNSA's Program Director for Financial Integration and incorporate information from M&O contractors. (Recommendation 10) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to periodically evaluate recurring requests for financial data made outside of common financial reporting and identify opportunities to reduce or eliminate specific requests. NNSA officials estimated that they would complete action on this recommendation by September 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Associate Administrator and Chief for Defense Nuclear Security should develop, document, and implement a plan to (1) regularly assess whether the office is making recurring financial data requests to M&O contractors that are duplicative of data that are or could be collected through common financial reporting and (2) reduce or eliminate data requests where possible. In conducting the assessment, the office should coordinate with NNSA's Program Director for Financial Integration and incorporate information from M&O contractors. (Recommendation 11) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to periodically evaluate recurring requests for financial data made outside of common financial reporting and identify opportunities to reduce or eliminate specific requests. NNSA officials estimated that they would complete action on this recommendation by September 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Associate Administrator for Counterterrorism and Counter-proliferation should develop, document, and implement a plan to (1) regularly assess whether the office is making recurring financial data requests to M&O contractors that are duplicative of data that are or could be collected through common financial reporting and (2) reduce or eliminate data requests where possible. In conducting the assessment, the office should coordinate with NNSA's Program Director for Financial Integration and incorporate information from M&O contractors. (Recommendation 12) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to periodically evaluate recurring requests for financial data made outside of common financial reporting and identify opportunities to reduce or eliminate specific requests. NNSA officials estimated that they would complete action on this recommendation by September 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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| National Nuclear Security Administration | The NNSA Associate Administrator for Infrastructure should develop, document, and implement a plan to (1) regularly assess whether the office is making recurring financial data requests to M&O contractors that are duplicative of data that are or could be collected through common financial reporting and (2) reduce or eliminate data requests where possible. In conducting the assessment, the office should coordinate with NNSA's Program Director for Financial Integration and incorporate information from M&O contractors. (Recommendation 13) |
NNSA concurred with our recommendation. As of October 2023, officials stated that the Program Director for Financial Integration would work with NNSA program offices to develop a plan to periodically evaluate recurring requests for financial data made outside of common financial reporting and identify opportunities to reduce or eliminate specific requests. NNSA officials estimated that they would complete action on this recommendation by September 2024. We will continue to monitor NNSA's efforts to address this recommendation.
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