Department of Energy unveils strict new policy to track $15 billion in federal awards as taxpayer watchdogs and Republican lawmakers raise alarms about wasteful spending practices.
At a Glance
- The DOE is reviewing 179 financial assistance awards totaling over $15 billion, with particular focus on those issued in the final days of the Biden administration
- Secretary Chris Wright has implemented more stringent oversight requirements to ensure projects are financially sound and aligned with national security interests
- Recipients must provide timely documentation or risk having funds withheld or terminated
- Congressional Republicans have increased scrutiny of DOE and EPA spending following the allocation of $200 billion through the Infrastructure Investment and Jobs Act and Inflation Reduction Act
- The DOE also implemented a 15% cap on indirect costs for university research, projected to save $405 million annually
DOE Initiates Comprehensive Financial Review
The Department of Energy has launched a sweeping review of financial assistance awards issued during the previous administration. Secretary Chris Wright’s Secretarial Memorandum, titled “Ensuring Responsibility for Financial Assistance,” mandates thorough examination of 179 awards with a combined value exceeding $15 billion. The policy represents a significant shift toward stricter financial oversight and aims to eliminate wasteful spending of taxpayer dollars. Recipients now face enhanced documentation requirements to prove their projects comply with federal objectives and national security standards.
The DOE’s action comes after mounting pressure from congressional Republicans who have raised concerns about potential mismanagement of funds allocated through the Infrastructure Investment and Jobs Act and Inflation Reduction Act. These laws directed approximately $200 billion to the DOE and EPA for renewable energy and environmental justice programs. Secretary Wright has highlighted specific concerns about awards rushed through in the final days of the Biden administration.
“Over the past 110 days, the Energy Department has been hard at work reviewing the billions of dollars that were rushed out the door, particularly in the final days of the Biden administration, and what we have found is concerning” said Secretary Wright.
Congressional Oversight Intensifies
With Republicans controlling Congress, scrutiny of DOE and EPA financial awards has increased dramatically. The House Energy and Commerce Committee’s Oversight Plan specifically states they “will continue to review management and implementation of clean energy and advanced technology grant and loan programs authorized under the Energy Policy Act of 2005, the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA).” Committee members have expressed particular interest in ensuring appropriate due diligence was conducted and that funds are being used as intended.
Congressional hearings have already featured testimony from various oversight bodies, including the EPA Office of Inspector General, DOE Office of Inspector General, and the Government Accountability Office. These watchdogs have warned that the rapid disbursement of billions in funding created significant risks of waste, fraud, and abuse. Companies that have received DOE or EPA funding are now being advised to prepare for potential congressional inquiries or inspector general investigations.
University Research Funding Reformed
In a parallel effort to increase financial accountability, the DOE has implemented a policy limiting “indirect costs” for university research funding to 15%, down from previous averages exceeding 30%. This standardization is projected to save taxpayers approximately $405 million annually. The department provides over $2.5 billion each year to more than 300 colleges and universities for scientific research, with a significant portion previously allocated to facilities and administrative costs rather than direct research activities.
“The purpose of Department of Energy funding to colleges and universities is to support scientific research – not foot the bill for administrative costs and facility upgrades,” U.S. Secretary of Energy Chris Wright said.
The policy change applies specifically to institutions of higher education and aligns with government-wide regulations for research funding. It represents part of a broader effort by the department to ensure taxpayer dollars directly support scientific advancement rather than administrative overhead.
Consequences for Non-Compliance
Under the new oversight framework, financial assistance recipients face clear consequences for failing to cooperate. Projects meeting the established standards will proceed as planned, but those failing to provide required documentation or demonstrate compliance may see their funding modified or terminated entirely. The department has emphasized that while enhancing oversight, they will continue to protect proprietary information and intellectual property rights of award recipients.
The policy responds to recent high-profile instances of alleged financial mismanagement, including a DOE Inspector General report on Secretary Jennifer Granholm’s 2023 electric vehicle road trip that found 86% of travel vouchers exceeded government per diem rates. House Oversight Committee Chairman James Comer has cited this as evidence of “the Biden Administration failing to protect taxpayer dollars and leaving funds exposed to serious waste, fraud, and abuse.
