Shaw-AREVA MOX Services was billed and reimbursed approximately $3.7 million for “excessive temporary living expenses” for its subcontractors over a period of five years, according to a recent audit report released by the Department of Energy’s Office of Inspector General.
The Office of Inspector General initiated an examination of staff augmentation expenses after it received a complaint in June 2011 alleging a number of problems involving the “appropriateness” of MOX Services’ billing and subsequent reimbursement from the National Nuclear Security Administration.
MOX Services handles the design and construction of the MOX project at SRS.
Specifically, the examination found more than $2.3 million in excessive temporary living expenses as a result of 43 subcontractors exceeding the two-year duration for such expenses, some by more than 2.5 years, according to the audit report.
“Prior to July 2008, MOX Services’ policy had been to limit the cost of temporary living expenses for subcontract employees to the estimated cost of relocation. MOX Services eliminated the cost ceiling in July 2008, when employees’ temporary living expenses started exceeding the relocation estimate,” the report states.
Additionally, the examination found $1.4 million for subcontractor employees who had not met established requirements for receiving temporary living expenses, whether it was by not demonstrating dual residences or not obtaining prior approval of their eligibility for reimbursements, among other things.
The audit report maintains the “excessive and unnecessary” costs occurred in part because MOX Services eliminated its cost ceilings and did not fully and consistently implement other portions of its policies for managing expenses.
“MOX Services disagrees with the report’s conclusion. We are reviewing the report and are working with NNSA (National Nuclear Security Administration) to determine the best path forward,” Shaw-AREVA MOX Services spokesman Bryan Wilkes wrote in an email.
The Office of Inspector General made several recommendations to ensure payment of temporary living expenses are limited to only those necessary, including identifying and recovering “unallowable” costs paid to staff augmentation subcontractor employees.
In its response to the audit report, the National Nuclear Security Administration wrote that it concurred with every recommendation made and that its SRS Field Office Contracting Officer is reviewing policies and files to meet the recommendations.
• Haley Hughes is the news editor for the Aiken Standard. She joined the newspaper in 2007 and covered the Aiken County government until her promotion in 2013. Hughes, a graduate of Middle Tennessee State University, hails from Knoxville, Tenn.