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U.S. Department of Energy ORDER
Washington, D.C. DOE O 221.3A
Approved: 4-19-08
SUBJECT: ESTABLISHMENT OF MANAGEMENT DECISIONS ON
OFFICE OF INSPECTOR GENERAL REPORTS
1. PURPOSE. To establish the responsibilities and requirements
for Department of Energy (DOE) elements to make management
decisions on Office of Inspector General (OIG) audit and
public inspection reports.
2. CANCELLATION. DOE O 221.3, Establishment of Management
Decisions on Office of Inspector General Reports, dated
12-17-01.
3. APPLICABILITY.
a. DOE Elements. Except for the exclusions in paragraph 3c,
this Order applies to all Departmental elements involved
in responding to OIG audit and public inspection reports,
including those created after the Order is issued. (Go
to http://www.directives.doe.gov/pdfs/reftools/org-
list.pdf for the current listing of Departmental
elements.)
For purposes of this Order, the National Nuclear
Security Administration (NNSA), a separately organized
Agency within the Department answering to the
Secretary, is included as a DOE element.
The Administrator of the NNSA will assure that NNSA
employees comply with their respective responsibilities
under this Order.
b. DOE Contractors. This Order does not apply to
contractors.
c. Exclusions. This Order does not apply to reports of:
(1) audits of contracts or grants requested by
contracting officers;
(2) particularly “severe or flagrant” problems which
are required to be reported immediately and are
addressed under the Inspector General Act of 1978,
as amended, 5 United States Code (U.S.C.),
Appendix 3, section 5(d);
(3) OIG investigations; or
(4) OIG inspections or other reviews that result in
nonpublic reports.
4. REQUIREMENTS. OIG audits and inspections are management tools
used to prevent and detect fraud, waste, abuse, and
mismanagement in DOE and to promote economies, efficiencies
and effectiveness in the administration of DOE programs and
operations. (Hereafter, except in paragraphs 6a and i,
“audit” includes performance inspections and “audit report”
includes public inspection reports.)
a. The OIG will provide draft audit reports (including
monetary impact statements, where applicable) to the
responsible managers of audited organizations and DOE
elements affected by the audit findings for review and
comment or in the case of NNSA, to the Director,
Policy and Internal Controls Management. Information
copies will also be provided to the Office of Internal
Review and the program audit liaison staff.
b. Recipients of draft audit reports will not release the
contents of the reports for any purpose other than
official review and comment and will not disclose the
contents of reports to anyone outside DOE without the
express consent of the OIG. In this context, major
facilities management contractors are considered to be
part of the Department. Federal employees making the
decision to share the draft report with such
contractor personnel are responsible for ensuring the
contractor personnel have a need-to-know and control
the report consistent with the requirements in this
directive. Draft audit reports remain the property of
the OIG and are to be returned on demand. Draft
documents subject to a valid Freedom of Information
Act request will be referred back to the OIG for
releasability determination.
c. After issuance of a draft, the OIG will contact the
responding management official to set up a meeting, if
appropriate, that will take place within approximately
10 working days of draft issuance to discuss the
response and resolve any misunderstandings.
(1) If responsible management officials disagree with
the facts or conclusions in a draft, they should
be prepared to fully explain their reasons for
disagreement and present additional facts at the
scheduled meeting.
(2) Any new information should be supported by
analysis and documentation at the time of the
meeting.
(3) Disagreements that are resolved to the
satisfaction of both parties do not need to be
included in the management response (see
paragraph 4d).
d. Within 15 working days of issuance of a draft audit
report, management will provide written comments to
the OIG, with a copy to the Chief Financial Officer.
(1) Management is encouraged to limit comments to no
more than two pages.
(2) Comments should clearly indicate whether
responsible management officials agree that the
findings are factual and accurately reported and
whether they concur with each of the
recommendations. A sample management response is
contained in Attachment 1.
(3) Concurrence will include a statement of actual
corrective actions with completion dates and/or
planned corrective actions to be taken and
estimated completion dates (corrective action
plan).
(4) Nonconcurrence will be explained and accompanied
by submission of additional facts and proposed
alternative corrective actions, if necessary.
e. Extensions to the established due date for
management comments will be granted by the Deputy
Inspector General for Audit Services or the Deputy
Inspector General for Investigations and Inspections
for their respective reports.
(1) Extensions will be granted only in extenuating
circumstances and must be requested in writing by
management.
(2) Requests for extensions should include a proposed
due date and an explanation of the reason the
extension is needed.
(3) Absent an approved extension, the OIG may proceed
with its process to issue the final report after
the established due date for management comments
has passed.
f. The OIG will review comments submitted by management
and address relevant comments in the final audit
report or revise the report, if appropriate. The OIG
will make every effort to include management comments
in their entirety in the final report if those
comments are deemed appropriate. To facilitate
including management comments in their entirety,
comments should be limited to two pages with technical
comments attached. The OIG is responsible for the
content of final audit reports.
g. As a general practice, the OIG will offer responsible
management officials the opportunity for a formal exit
conference before the final report is issued.
h. The OIG will request a management decision on any
recommendation with which management nonconcurred or
did not include actual corrective action(s) with
completion date(s) and/or a corrective action plan.
The purpose of the management decision is to: 1)
obtain management’s official position and/or 2) obtain
actual or planned corrective actions and actual or
estimated completion dates.
i. No management decision will be required when
management clearly concurs with all the
recommendations and provides actual or planned
corrective actions with actual or estimated completion
dates.
j. The transmittal memorandum for the final OIG report
should address the status of audit recommendations and
indicate whether recommendations are considered closed
and which recommendations need to be tracked in the
Departmental Audit Report Tracking System (DARTS).
k. Within 70 days of issuance of final reports,
management officials will submit proposed management
decisions to the Director, Office of Internal Review,
or in the case of NNSA, the NNSA Director, Policy and
Internal Controls Management will prepare the
management decisions.
l. The Director, Office of Internal Review or the NNSA
Director, Policy and Internal Controls Management (as
applicable) will provide proposed management decisions
to the OIG for review and comment. The OIG will
provide to the Director, Office of Internal Review or
the NNSA Director, Policy and Internal Controls
Management responses to proposed management decisions
within 5 working days of their receipt.
m. The Director, Office of Internal Review or the NNSA
Director, Policy and Internal Controls Management (as
applicable) will submit the final management decision
to the Secretary or a designee or in the case of NNSA
to the Administrator, for approval and finalization.
n. The Director, Office of Internal Review or the NNSA
Director, Policy and Internal Controls Management will
forward final management decisions to the OIG within
90 days of issuance of final reports, as appropriate.
5. RESPONSIBILITIES.
a. Secretary of Energy or Designee. Reviews the final
management decision and approves it or remands
it to the heads of the appropriate DOE elements
for revision.
b. NNSA Administrator. For NNSA, reviews the final
management decision and approves it.
c. Inspector General.
(1) Provides copies of draft reports, including
monetary impact statements where applicable, to
the responsible management officials of audited
organizations; DOE elements affected by audit
findings; and the Office of Internal Review. For
NNSA, all draft reports are issued to the
Director, Policy and Internal Controls
Management.
(2) Provides information copies of draft reports to
the program and local audit liaison staff.
(3) Reviews and evaluates management comments on
draft reports and, if appropriate, addresses
relevant comments by rebutting the comments in
the final report or revising the report.
(4) As a general practice, provides responsible
management officials the opportunity for formal
exit conferences.
(5) After issuance of a draft, contacts the responding
management official to set up a meeting, if
appropriate, that will take place within
approximately 10 working days of draft issuance to
discuss the response and resolve any
misunderstandings.
(6) Grants extensions to the established due date
for management comments.
(7) Determines whether any unresolved issues exist
and, if so, requests a management decision in the
transmittal memorandum that accompanies final
audit reports.
(8) Distributes final audit reports to the appropriate
DOE elements; the Director, Office of Internal
Review; and NNSA, if appropriate, and makes
further distribution to authorized committees and
subcommittees of Congress as necessary.
(9) Reviews proposed management decisions and
provides preliminary comments to the Director,
Office of Internal Review or the NNSA Director,
Policy and Internal Controls Management
(whichever is applicable) and the responsible
management officials. Indicates whether
management’s proposed actions are acceptable
and, where agreement is reached, which audit
recommendations require tracking in DARTS.
(10) Informs the Director, Office of Internal Review
and/or the NNSA Director, Policy and Internal
Controls Management, as appropriate, when
significant disagreements exist between
responsible management officials and the OIG,
including unresolved issues on reports issued by
regional offices.
(11) Requests that major audit issues still unresolved
after the proposed management decision process go
to the Departmental Internal Control and Audit
Review Council (DICARC) for final resolution.
d. Responsible Management Officials. To maximize the value of
OIG reports, management officials or their designees will—
(1) Attend exit conferences, unless they are
waived.
(2) Designate responsible officials for coordinating
management comments for each report, including
reports that have findings or recommendations that
cross boundaries of more than one departmental
element.
(3) Meet the requirements specified in 4c(1).
(4) Provide comments on draft reports within 15
working days of issuance.
(5) Prepare proposed management decisions on final OIG
reports. The OIG will request a management
decision whenever management does not concur with
any recommendation in a final report or management
comments do not include actual or planned
corrective actions with actual or target dates for
completion.
(6) State in the proposed management decision whether
they concur with the facts, findings,
recommendations, and potential monetary benefits
presented in the corresponding audit report. For
nonconcurrences, explain why management does not
concur and present additional facts and/or
alternative corrective actions, if necessary.
(7) Except for NNSA, submit proposed management
decisions to the Director, Office of Internal
Review within 70 days of issuance of final
reports.
(8) Take prompt and effective action to implement
agreed-upon corrective actions.
e. Director, Office of Internal Review or NNSA Director of
Policy and Internal Controls Management.
(1) Responsible for audit resolution and tracking
functions (exclusive of those responsibilities
specifically assigned to the OIG).
(2) Ensures proposed management comments are
coordinated with pertinent, crosscutting, and
affected organizations, as appropriate, and that
they are approved by the head of the audited
organization.
(3) Reviews proposed management decisions prepared by
responsible management officials to assess
responsiveness to audit findings and
recommendations.
(a) Returns proposed management decisions to
responsible management officials for revision
if the management decisions are not
responsive.
(b) Sends proposed management decisions to the
OIG for preliminary review if the proposed
management decisions appear to be responsive.
(4) Forwards OIG comments on proposed management
decisions to responsible management officials
for review and revision, if appropriate.
(5) Requests major audit issues still unresolved after
the proposed management decision process go to
DICARC for final resolution.
(6) Submits final management decisions to the
Secretary or a designee, or in the case of NNSA to
the Administrator, for approval.
(7) Forwards final management decisions to the OIG for
review and comment within 90 days of issuance of
final reports.
f. Departmental Internal Control and Audit Review Council.
Reviews issues the OIG and management cannot resolve.
(The composition and operations of DICARC are described
in DOE O 224.3, Audit Resolution and Follow-Up Program,
dated 1-24-05.)
g. Director, Office of Classification. Provides classification
and declassification services regarding OIG reports
and related management comments.
6. DEFINITIONS.
a. Audit. Work by auditors following the Government
Accountability Office’s Government Auditing Standards
to examine financial statements and review compliance
with laws and regulations, economy and efficiency of
operations, and effectiveness in achieving program
results.
b. Audit Report Recommendations. Actions the Office of
Inspector General deems appropriate to correct
conditions described in an audit finding.
c. Corrective Action Plan. A formal written document
that describes the specific steps and milestones necessary
for completion of corrective actions and dates for
completion. The plan is submitted with management comments
on the audit report or with the management decision,
whichever is applicable.
d. Responsible Management Officials. Heads of DOE elements
that have the authority and responsibility to manage
a particular departmental entity or function.
e. Draft Audit Report. Preliminary report issued by the
OIG to the management officials of an audited
program/operation and affected elements for review and
comment before it is issued as a final report.
f. Exit Conference. Formal conference between OIG staff
and responsible management officials at the conclusion
of a review to discuss audit results.
g. Final Audit Report. Report ultimately released by the OIG
after consideration of program/operation comments
received on the draft report, if any were received,
and discussed at the exit conference, if one was held.
h. Follow-Up Review. Review done by the OIG to verify that
corrective actions previously recommended and agreed
to have been completed and are effective in correcting
the reported conditions.
i. Inspection. Work by inspectors and program analysts, following
the President’s Council on Integrity and Efficiency’s
Quality Standards for Inspections, to evaluate DOE
programs/operations for economy, efficiency, and
effectiveness and for compliance with laws,
regulations, directives, etc. Some inspection reports
are non-public, typically due to privacy concerns.
j. Management Decision. The official position taken by
responsible management officials on the unresolved
findings and recommendations contained in a final
OIG report. Will also be requested if no corrective
action plan is submitted with the management comments
to the draft report. Replaces the term “departmental
position.”
k. Departmental Audit Report Tracking System (DARTS).
Overall audit resolution and tracking system for all
departmental elements and NNSA that tracks open
recommendations on all Government Accountability Office
and Office of Inspector General audit reports and
public inspection reports and all post award contract
reports containing questioned costs or other findings.
l. Investigation. Work done by investigators, following the
President’s Council on Integrity and Efficiency’s Quality
Standards for Investigations, in connection with alleged
violations of criminal and civil laws and serious
administrative misconduct.
7. REFERENCES.
a. Title XXXII of P.L. 106-65, National Nuclear Security
Administration Act, as amended, which established a
separately organized agency within the DOE.
b. The Inspector General Act of 1978, as amended, 5
U.S.C., Appendix 3, which sets forth authority and
functions of the Inspector General.
c. Office of Management and Budget Circular A-50, “Audit
Followup,” which contains the policies and procedures
for use in considering audit reports where follow-up is
necessary.
d. DOE O 224.3, Audit Resolution and Follow-Up Program,
dated 1-24-05, which provides policy on audit
resolution and establishes the follow-up system to be
applied.
e. DOE O 224.2A, Auditing of Programs and Operations,
dated 11-09-07 , which sets forth audit
responsibilities for the promotion of economy and
efficiency in the administration of, or the prevention
or detection of fraud and abuse in, DOE programs and
operations.
8. NECESSITY FINDING STATEMENT. In compliance with Sec. 3174
of P.L. 104-201 (50 USC 2584 note), DOE hereby finds that
this Order is necessary for the protection of human health
and the environment or safety, fulfillment of current legal
requirements, or conduct of critical administrative functions.
9. CONTACT. Questions concerning this Order should be addressed
to the Office of Inspector General, 202-586-4128.
BY ORDER OF THE SECRETARY OF ENERGY:
JEFFREY F. KUPFER
Acting Deputy Secretary
ATTACHMENT 1
ILLUSTRATION OF MANAGEMENT COMMENTS TO A DRAFT REPORT
United States Government Department of Energy
MEMORANDUM
DATE: Month XX, 20XX
REPLY TO: Routing Symbol
SUBJECT: Management Comments on Draft Report “Draft Report Title”
TO: Office of Inspector General Official who issued the draft report
Include any overall comments or observations here.
Management Reaction:
Recommendation 1: We concur (do not concur) with the recommendation.
Include comments and/or alternative recommendations.
Include taken and planned correction actions with actual or
target dates.
Recommendation X: (Repeat format for each recommendation in the draft report)
Comments:
Explain any remaining disagreements with the findings and/or monetary impacts,
and present additional facts if necessary. Attach supporting documentation. Because
this memorandum will most likely be included verbatim in the final report, it is best to
handle minor editorial comments in an attachment or to handle issues that can be
resolved prior to final report issuance through discussions before the official comments
are finalized.
If you have any questions, please contact [Name] at [phone number].
Signature
Title
cc: Chief Financial Officer