o Forecast minority residential energy demand.

o Conduct in-depth analyses of energy topics critical to
minorities.

o Conduct regional assessments to advise the Secretary
on the impact of DOE's policies, programs, and
regulations on minorities and minority businesses.

II. Management and Technical Assistance

III.

o Continue the Cooperative Development Energy Program with minority educational institutions to create minority employment by linking industry-related energy technologies with educational curricula and work study programs.

o Update and increase the number of current assessments
of HBCU's capabilities and needs.

o Continue the Minority Honors Training Program,
including match-making for three of the funded schools
with high technology industries for specialized training,
cooperative training, full-time employment and retraining.

Financial Assistance

o Continue providing loans.

o Continue to manage the Minority Bank Development
Project, which includes minority-owned thrift
institutions.

Mr. Chairman, this concludes my remarks, I would be happy to

answer any questions which you or the members of your

Subcommittee might have concerning MI's programs.

STATEMENT OF JAMES R. RICHARDS, INSPECTOR GENERAL

RESPONSIBILITIES

The statutory responsibilities of the Inspector General, as stated in Section 208, Public Law 95-91, are to detect and prevent fraud and abuse and to promote economy and efficiency in the programs and operations of DOE. These responsibilities relate to the work of over 16,700 employees directly employed by the Department, to about 124,000 people working for DOE contractors at Governmentowned, contractor-operated facilities, and to the activities of employees of many thousands of other contractors and grantees of the Department.

The Department of Energy is a complex and multi-missioned Department with missions varying from the assembly of nuclear weapons to the funding of low income weatherization. Further, the Department

is second only to the Department of Defense in the amount of its procurement activity. Thus, the audit, inspection, and investigative requirements of DOE are extensive and varied in scope and

complexity.

ORGANIZATION

- Audits, Inspections, Investigations

The Office is organized in three divisions with three Assistant Inspectors General. The Office of Audits functions as the internal auditing arm for the Department and performs the following types of audits: financial and compliance, efficiency and economy, and program results. The Office of Investigations is responsible for the detection and prevention of fraud and abuse. The Office of Inspections is responsible for inspection of DOE's scientific and technical programs and operations. In addition, an Office of

Executive Director performs administrative, personnel, policy,

planning, and management information functions for the Inspector General.

The field structure for the Office of Audits is composed of an Eastern (Oak Ridge) and Western (Albuquerque) Regional Office with 11 satellite offices, and the Capital Regional Audit Office, located in Germantown, Maryland. The field structure for the Office of Investigations is composed of Regional Investigative Offices at Oak Ridge, Albuquerque, and New Orleans with seven satellite offices, permitting the location of at least one investigator at each of the Department's Operations Offices except Savannah River.

The Inspector General, beginning in FY 1983, has utilized contract auditing performed by private accounting firms and the Defense Contract Audit Agency (DCAA). The FY 1985 budget request includes $6.4 million for auditing by private accounting firms. This is an increase over the $1.8 million made available in FY 1984 from unobligated balance for contract audit by private accounting firms. The DCAA audits non-Government-owned, contractor-operated contractors and subcontractors.

ACCOMPLISHMENTS

During FY 1983, as discussed in our Semiannual Reports for that period and in our budget request, extensive procedures were developed and implemented to provide uniformity of approach to both the conduct of the audits and the reporting of findings. The Department's first fully integrated annual workplan for all audits to be conducted in Fiscal Year 1983 was developed and published. The Office of Audits issued 194 audit reports which primarily resulted from our reviews of departmental contracts. The potential savings relating to audit recommendations for this period was in excess of $40 million with nearly $12 million of this being per annum savings. FY 1983 savings from audit recommendations amounted to approximately $8.76 for each dollar spent.

The purpose of the Office of Inspections is to conduct independent and objective inspections of the Department's scientific and

engineering programs and projects and to make specific recommendations to management for changes in programs or project execution for the purpose of improving economy, efficiency and the overall effectiveness of the programs and operations selected for review.

The Office of Inspections has demonstrated that substantial costavoidances can be achieved as a result of inspections. During FY 1983, we pointed the way to $41.2 million in cost-avoidances in three of the ten major programs evaluated. First, we identified a $7 million savings in the High-Level Nuclear Waste Immobilization Program with which management agreed. Second, we acted as a catalyst for the conduct of a cost reduction study relative to the Uranium Mill Tailings Remedial Action Program which will result in cost-avoidances of $17.1 million over the life of the project. The cost reduction study was undertaken by management as a result of recommendations made by the Office of Inspections. Finally, as a result of the inspection effort, DOE will receive approximately $17 million more each year for crude oil produced at the Naval Petroleum Reserves.

The Office of Investigations continued its work on discovering and preventing waste, fraud and error. Ninety-two cases were referred to prosecutive authorities and other investigative agencies. Thirty-one of the cases were accepted for prosecution. Monies identified for recovery as a result of investigative cases totaled $216,365 and investigations resulted in recommendations that suspension and debarment actions be initiated against ten firms.

The Federal Managers' Financial Integrity Act of 1982 has had a major impact on our activities. The Inspector General has taken an active role in assisting the Department in meeting the requirements of the Act. The Inspector General is also a member of the Department of Energy's Steering Committee on Internal Controls.

The purpose of the Committee is to provide management oversight, to review the progress and make decisions about the deployment of limited resources to the Department's internal control efforts, and to advise the Secretary on the result of these efforts.

The establishment of the President's Council on Integrity and Efficiency--a combined program of the Inspectors General and the Office of Management and Budget--has resulted in several cooperative efforts with other Inspector General offices, including a review over Government property and a suspension and debarment procedure against contractors engaged in fraudulent practices. The Inspector General is a member of the recently established Prevention Committee of the President's Council.

The Semiannual Report for the first half of FY 1984 will be submitted to you in May 1984.

FUNDING LEVEL

The following is a description of the FY 1984 appropriation and the FY 1985 request:

1/ Excludes $1,800,000 funded from unobligated balances for contract

audits.