Office of Inspector General report on audit of Department of Energy`s activities designed to recover the taxpayers` investment in the Clean Coal Technology Program

A detailed analysis of six Clean Coal projects revealed that recoupment decisions made by the Department limited its ability to recover the taxpayers` investment. These decisions exempted foreign sales, excluded some domestic sales on certain projects, and lowered the repayment rate on some sales. As a result, the Department may not recoup an estimated $133.7 million of the taxpayers` $151 million investment in these six projects and may limit its opportunity to recover future investments in other energy technology programs. An analysis and justification of recoupment decisions would help ensure that the Department is balancing overall program goals of the clean coal program with their recoupment goal. Analysis and justification of recoupment decisions would also facilitate implementation of future Departmental technology transfer programs. These programs are required by the Energy Policy Act of 1992 to model their recoupment procedures after those of the Clean Coal Technology Program. Formal financial policies and procedures also had not been established to track, account for, and verify the accuracy of moneys due and collected from industry participants. Repayment policies and procedures would help ensure that the Department collects moneys from successfully commercialized clean coal projects. The Deputy Assistant Secretary for Coal Technology, the Deputy Controller, and the Directors, Pittsburgh and Morgantown Energy Technology Centers, agreed with the report`s recommendations. However, the Deputy Assistant Secretary cautioned that the greatest payback to the nation from the program will not be in the form of repayment of Federal cost-sharing, but rather from general contributions to a clean environment and economic prosperity (e.g., sales of equipment and jobs creation). Part 2 of this report provides details on the audit findings and recommendations, and Part 3 includes detailed management and auditor comments.