Office of Inspector General report on audit of the Department of Energy`s grant for economic development at the Mound Plant

The downsizing of the Department of Energy`s (Department) facilities as a result of the end of the Cold War had a negative impact on communities that were heavily dependent on the Department`s operations for economic stability. To lessen the impact, the Department provided financial assistance to local communities through Federal grants and cooperative agreements. The objective of this audit was to determine whether funding provided for economic development at the Mount Plant was used for the Department`s intended purposes. Overall, the authors found that the Department`s funds were used for their intended purposes. However, contrary to Federal regulations, the Department advanced the City of Miamisburg, Ohio (City) $2.6 million more than the minimum funds needed to meet immediate cash requirements, and the City kept the majority of the funds in non-interest bearing accounts. The funds were provided to fulfill commitments previously made to the City by senior Department officials, and the Department did not require the City to comply with Federal regulations or grant terms regarding cash advances. As a result, the City held a cash advance of $2.6 million for more than a year and remitted only $10,000 in interest earned on the advance. Management agreed with the finding and recommendations and initiated the appropriate corrective actions