Assistance Listing, Federal Agency, and Program Name 81.087, U.S. Department of Energy, Research and Development Cluster
Federal Award Identification Number and Year DE EE0009755
Pass through Entity N/A Direct award
Finding Type Significant deficiency
Repeat Finding No
Criteria Under the terms and conditions of certain Department of Energy (DOE) award agreements, if the recipient anticipates involving foreign nationals in the performance of the award, the recipient must, upon DOE’s request, provide DOE with specific information about each foreign national to ensure compliance with the requirements for participation and access approval. GTI Energy's policies and procedures require project managers to inform the Contracts Manager when a foreign national will begin work on a project irrespective of whether it requires DOE approval. The Contracts Manager will input the foreign national employee's name into the internal foreign national tracking system and initiate the communication to the DOE, if required under the agreement.
Condition Controls in place did not ensure a foreign national employee's involvement on a project were communicated to the Contracts Manager for tracking.
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A There were no questioned costs identified.
Context In one out of seven employees sampled for testing, the contracts manager was not informed of the employee's involvement on a DOE project. Although the contract did not require DOE approval, GTI Energy did not follow its procedures and controls to ensure the completeness and accuracy of foreign nationals working on projects.
Cause and Effect GTI Energy's controls failed to track a foreign national employee's involvement before they charged time to the project. Without proper tracking of foreign national employees working on federal grants, there is an increased risk that the DOE is not notified and does not provide approval for the employee to work on the grant, which can result in unallowable costs being charged to the grant.
Recommendation We recommend that GTI Energy review its procedures and controls to ensure that the involvement of foreign national employees is tracked and communicated internally in a timely manner to ensure communication to the Department of Energy (DOE) in a timely manner, when required. Additionally, we suggest that GTI Energy assess whether program managers need further training to help identify and appropriately track foreign national employees.
Views of Responsible Officials and Corrective Action Plan Management takes its responsibility to comply with the terms and conditions of awards seriously, and, while this particular finding did not result in noncompliance with the terms of an award, a repeat occurrence could result in noncompliance. To prevent future occurrences, management will enhance internal controls to ensure consistent tracking and reporting of foreign nationals working on Department of Energy sponsored projects by taking the following corrective actions by July 31, 2025:
1) Update the company’s policy for tracking and reporting foreign nationals to include:
a) A requirement that all team members must be approved by Contract Services before starting work on a DOE project.
b) A requirement that Contract Services review a payroll report monthly to ensure all individuals who charged time to DOE projects were pre approved.
2) Train business unit leaders, project managers, and contract services staff on the revised policy and procedures for tracking and reporting foreign nationals.
Assistance Listing, Federal Agency, and Program Name 81.087 and 81.089, U.S. Department of Energy, Research and Development Cluster
Federal Award Identification Number and Year DE EE0009755 and DE FE0032176
Pass through Entity N/A Direct award
Finding Type Significant deficiency
Repeat Finding No
Criteria Recipients of federal grant funds must establish and maintain effective internal controls that provide reasonable assurance that grant funds are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, according to the Code of Federal Regulations (CFR).
GTI Energy policies and procedures require that every sole source procurement above the micro purchase threshold of $10,000 must be documented and approved prior to the purchase.
Condition Controls in place did not ensure the procurement policy was followed consistently.
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A There were no questioned costs identified.
Context In our sample of 40 purchase orders (POs), we found two issues. One PO had sufficient procurement documentation for the estimated purchase, however, through our walk through of the blanket PO procedures, we noted a lack of controls to identify when a blanket PO exceeds the micropurchase threshold. Another PO had sole source documentation provided by the GTI Energy, but it was not approved before the purchase.
Cause and Effect GTI Energy lacks controls to identify blanket purchase orders (POs) exceeding $10,000, which require documentation to prove competition standards were met. Additionally, the controls failed to detect that a sole source justification was not approved before payment. These lack of controls increases the risk of noncompliance and may result in noncompliance instances not being identified in a timely manner.
Recommendation We recommend that GTI Energy review its procurement procedures and controls to ensure they address the issues mentioned above, including evaluating the need for preventive or detective controls specific to blanket purchase orders (POs). Additionally, GTI Energy should redistribute its existing procurement policy to relevant personnel and provide adequate training. To ensure compliance with the policy, GTI Energy should establish monitoring procedures to verify that purchasers are adhering to it. Furthermore, we recommend that GTI Energy implement a system limitation requiring approval of certain procurement documentation before submission for payment.
Views of Responsible Officials and Planned Corrective Actions Management acknowledges the importance of adhering to the procurement policy and takes its compliance obligations seriously. Although this particular finding did not result in noncompliance, management recognizes that a recurrence could lead to noncompliance. To prevent future occurrences, management is committed to enhancing internal controls. The following corrective actions will be implemented to ensure consistent adherence to procurement standards:
1. Update purchasing policies, procedures, forms, and job aides to enhance the clarity of requirements, particularly requirements for blanket purchase orders.
Target completion date: 6/30/2025
2. Retrain agency staff, purchasing staff, and accounts payable staff on their roles and responsibilities related to purchasing policies.
Target completion date: 7/31/2025
3. Implement a monthly review process for all vouchers posted against blanket POs to verify compliance.
Target completion date: 7/31/2025
4. Update standard terms and conditions for blanket purchase orders (POs) to prohibit any purchase under a blanket PO from exceeding $10,000, and communicate this limit to all vendors with open blanket POs, requiring an acknowledgement of this change of terms. Failure to return the acknowledgement will result in closure of the blanket PO.
Target completion date: 9/31/2025
5. Investigate the feasibility of implementing a system control within the purchasing system to require review and approval of requisitions by senior staff or management prior to PO issuance.
Target completion date: 8/31/2025
Assistance Listing, Federal Agency, and Program Name 81.087 and 81.089, U.S. Department of Energy, Research and Development Cluster
Federal Award Identification Number and Year DE EE0009755 and DE FE0032176
Pass through Entity N/A Direct award
Finding Type Significant deficiency
Repeat Finding No
Criteria Recipients of federal grant funds must establish and maintain effective internal controls that provide reasonable assurance that grant funds are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, according to the Code of Federal Regulations (CFR).
GTI Energy policies and procedures require that every sole source procurement above the micro purchase threshold of $10,000 must be documented and approved prior to the purchase.
Condition Controls in place did not ensure the procurement policy was followed consistently.
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A There were no questioned costs identified.
Context In our sample of 40 purchase orders (POs), we found two issues. One PO had sufficient procurement documentation for the estimated purchase, however, through our walk through of the blanket PO procedures, we noted a lack of controls to identify when a blanket PO exceeds the micropurchase threshold. Another PO had sole source documentation provided by the GTI Energy, but it was not approved before the purchase.
Cause and Effect GTI Energy lacks controls to identify blanket purchase orders (POs) exceeding $10,000, which require documentation to prove competition standards were met. Additionally, the controls failed to detect that a sole source justification was not approved before payment. These lack of controls increases the risk of noncompliance and may result in noncompliance instances not being identified in a timely manner.
Recommendation We recommend that GTI Energy review its procurement procedures and controls to ensure they address the issues mentioned above, including evaluating the need for preventive or detective controls specific to blanket purchase orders (POs). Additionally, GTI Energy should redistribute its existing procurement policy to relevant personnel and provide adequate training. To ensure compliance with the policy, GTI Energy should establish monitoring procedures to verify that purchasers are adhering to it. Furthermore, we recommend that GTI Energy implement a system limitation requiring approval of certain procurement documentation before submission for payment.
Views of Responsible Officials and Planned Corrective Actions Management acknowledges the importance of adhering to the procurement policy and takes its compliance obligations seriously. Although this particular finding did not result in noncompliance, management recognizes that a recurrence could lead to noncompliance. To prevent future occurrences, management is committed to enhancing internal controls. The following corrective actions will be implemented to ensure consistent adherence to procurement standards:
1. Update purchasing policies, procedures, forms, and job aides to enhance the clarity of requirements, particularly requirements for blanket purchase orders.
Target completion date: 6/30/2025
2. Retrain agency staff, purchasing staff, and accounts payable staff on their roles and responsibilities related to purchasing policies.
Target completion date: 7/31/2025
3. Implement a monthly review process for all vouchers posted against blanket POs to verify compliance.
Target completion date: 7/31/2025
4. Update standard terms and conditions for blanket purchase orders (POs) to prohibit any purchase under a blanket PO from exceeding $10,000, and communicate this limit to all vendors with open blanket POs, requiring an acknowledgement of this change of terms. Failure to return the acknowledgement will result in closure of the blanket PO.
Target completion date: 9/31/2025
5. Investigate the feasibility of implementing a system control within the purchasing system to require review and approval of requisitions by senior staff or management prior to PO issuance.
Target completion date: 8/31/2025
Assistance Listing, Federal Agency, and Program Name 81.087, U.S. Department of Energy, Research and Development Cluster
Federal Award Identification Number and Year DE EE0009755
Pass through Entity N/A Direct award
Finding Type Significant deficiency
Repeat Finding No
Criteria Under the terms and conditions of certain Department of Energy (DOE) award agreements, if the recipient anticipates involving foreign nationals in the performance of the award, the recipient must, upon DOE’s request, provide DOE with specific information about each foreign national to ensure compliance with the requirements for participation and access approval. GTI Energy's policies and procedures require project managers to inform the Contracts Manager when a foreign national will begin work on a project irrespective of whether it requires DOE approval. The Contracts Manager will input the foreign national employee's name into the internal foreign national tracking system and initiate the communication to the DOE, if required under the agreement.
Condition Controls in place did not ensure a foreign national employee's involvement on a project were communicated to the Contracts Manager for tracking.
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A There were no questioned costs identified.
Context In one out of seven employees sampled for testing, the contracts manager was not informed of the employee's involvement on a DOE project. Although the contract did not require DOE approval, GTI Energy did not follow its procedures and controls to ensure the completeness and accuracy of foreign nationals working on projects.
Cause and Effect GTI Energy's controls failed to track a foreign national employee's involvement before they charged time to the project. Without proper tracking of foreign national employees working on federal grants, there is an increased risk that the DOE is not notified and does not provide approval for the employee to work on the grant, which can result in unallowable costs being charged to the grant.
Recommendation We recommend that GTI Energy review its procedures and controls to ensure that the involvement of foreign national employees is tracked and communicated internally in a timely manner to ensure communication to the Department of Energy (DOE) in a timely manner, when required. Additionally, we suggest that GTI Energy assess whether program managers need further training to help identify and appropriately track foreign national employees.
Views of Responsible Officials and Corrective Action Plan Management takes its responsibility to comply with the terms and conditions of awards seriously, and, while this particular finding did not result in noncompliance with the terms of an award, a repeat occurrence could result in noncompliance. To prevent future occurrences, management will enhance internal controls to ensure consistent tracking and reporting of foreign nationals working on Department of Energy sponsored projects by taking the following corrective actions by July 31, 2025:
1) Update the company’s policy for tracking and reporting foreign nationals to include:
a) A requirement that all team members must be approved by Contract Services before starting work on a DOE project.
b) A requirement that Contract Services review a payroll report monthly to ensure all individuals who charged time to DOE projects were pre approved.
2) Train business unit leaders, project managers, and contract services staff on the revised policy and procedures for tracking and reporting foreign nationals.
Assistance Listing, Federal Agency, and Program Name 81.087 and 81.089, U.S. Department of Energy, Research and Development Cluster
Federal Award Identification Number and Year DE EE0009755 and DE FE0032176
Pass through Entity N/A Direct award
Finding Type Significant deficiency
Repeat Finding No
Criteria Recipients of federal grant funds must establish and maintain effective internal controls that provide reasonable assurance that grant funds are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, according to the Code of Federal Regulations (CFR).
GTI Energy policies and procedures require that every sole source procurement above the micro purchase threshold of $10,000 must be documented and approved prior to the purchase.
Condition Controls in place did not ensure the procurement policy was followed consistently.
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A There were no questioned costs identified.
Context In our sample of 40 purchase orders (POs), we found two issues. One PO had sufficient procurement documentation for the estimated purchase, however, through our walk through of the blanket PO procedures, we noted a lack of controls to identify when a blanket PO exceeds the micropurchase threshold. Another PO had sole source documentation provided by the GTI Energy, but it was not approved before the purchase.
Cause and Effect GTI Energy lacks controls to identify blanket purchase orders (POs) exceeding $10,000, which require documentation to prove competition standards were met. Additionally, the controls failed to detect that a sole source justification was not approved before payment. These lack of controls increases the risk of noncompliance and may result in noncompliance instances not being identified in a timely manner.
Recommendation We recommend that GTI Energy review its procurement procedures and controls to ensure they address the issues mentioned above, including evaluating the need for preventive or detective controls specific to blanket purchase orders (POs). Additionally, GTI Energy should redistribute its existing procurement policy to relevant personnel and provide adequate training. To ensure compliance with the policy, GTI Energy should establish monitoring procedures to verify that purchasers are adhering to it. Furthermore, we recommend that GTI Energy implement a system limitation requiring approval of certain procurement documentation before submission for payment.
Views of Responsible Officials and Planned Corrective Actions Management acknowledges the importance of adhering to the procurement policy and takes its compliance obligations seriously. Although this particular finding did not result in noncompliance, management recognizes that a recurrence could lead to noncompliance. To prevent future occurrences, management is committed to enhancing internal controls. The following corrective actions will be implemented to ensure consistent adherence to procurement standards:
1. Update purchasing policies, procedures, forms, and job aides to enhance the clarity of requirements, particularly requirements for blanket purchase orders.
Target completion date: 6/30/2025
2. Retrain agency staff, purchasing staff, and accounts payable staff on their roles and responsibilities related to purchasing policies.
Target completion date: 7/31/2025
3. Implement a monthly review process for all vouchers posted against blanket POs to verify compliance.
Target completion date: 7/31/2025
4. Update standard terms and conditions for blanket purchase orders (POs) to prohibit any purchase under a blanket PO from exceeding $10,000, and communicate this limit to all vendors with open blanket POs, requiring an acknowledgement of this change of terms. Failure to return the acknowledgement will result in closure of the blanket PO.
Target completion date: 9/31/2025
5. Investigate the feasibility of implementing a system control within the purchasing system to require review and approval of requisitions by senior staff or management prior to PO issuance.
Target completion date: 8/31/2025
Assistance Listing, Federal Agency, and Program Name 81.087 and 81.089, U.S. Department of Energy, Research and Development Cluster
Federal Award Identification Number and Year DE EE0009755 and DE FE0032176
Pass through Entity N/A Direct award
Finding Type Significant deficiency
Repeat Finding No
Criteria Recipients of federal grant funds must establish and maintain effective internal controls that provide reasonable assurance that grant funds are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, according to the Code of Federal Regulations (CFR).
GTI Energy policies and procedures require that every sole source procurement above the micro purchase threshold of $10,000 must be documented and approved prior to the purchase.
Condition Controls in place did not ensure the procurement policy was followed consistently.
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A There were no questioned costs identified.
Context In our sample of 40 purchase orders (POs), we found two issues. One PO had sufficient procurement documentation for the estimated purchase, however, through our walk through of the blanket PO procedures, we noted a lack of controls to identify when a blanket PO exceeds the micropurchase threshold. Another PO had sole source documentation provided by the GTI Energy, but it was not approved before the purchase.
Cause and Effect GTI Energy lacks controls to identify blanket purchase orders (POs) exceeding $10,000, which require documentation to prove competition standards were met. Additionally, the controls failed to detect that a sole source justification was not approved before payment. These lack of controls increases the risk of noncompliance and may result in noncompliance instances not being identified in a timely manner.
Recommendation We recommend that GTI Energy review its procurement procedures and controls to ensure they address the issues mentioned above, including evaluating the need for preventive or detective controls specific to blanket purchase orders (POs). Additionally, GTI Energy should redistribute its existing procurement policy to relevant personnel and provide adequate training. To ensure compliance with the policy, GTI Energy should establish monitoring procedures to verify that purchasers are adhering to it. Furthermore, we recommend that GTI Energy implement a system limitation requiring approval of certain procurement documentation before submission for payment.
Views of Responsible Officials and Planned Corrective Actions Management acknowledges the importance of adhering to the procurement policy and takes its compliance obligations seriously. Although this particular finding did not result in noncompliance, management recognizes that a recurrence could lead to noncompliance. To prevent future occurrences, management is committed to enhancing internal controls. The following corrective actions will be implemented to ensure consistent adherence to procurement standards:
1. Update purchasing policies, procedures, forms, and job aides to enhance the clarity of requirements, particularly requirements for blanket purchase orders.
Target completion date: 6/30/2025
2. Retrain agency staff, purchasing staff, and accounts payable staff on their roles and responsibilities related to purchasing policies.
Target completion date: 7/31/2025
3. Implement a monthly review process for all vouchers posted against blanket POs to verify compliance.
Target completion date: 7/31/2025
4. Update standard terms and conditions for blanket purchase orders (POs) to prohibit any purchase under a blanket PO from exceeding $10,000, and communicate this limit to all vendors with open blanket POs, requiring an acknowledgement of this change of terms. Failure to return the acknowledgement will result in closure of the blanket PO.
Target completion date: 9/31/2025
5. Investigate the feasibility of implementing a system control within the purchasing system to require review and approval of requisitions by senior staff or management prior to PO issuance.
Target completion date: 8/31/2025