DOE Developed and Implemented a New Process to Assess the Department’s Financial Assistance against the Administration’s Priorities

In 2017, DOE developed and implemented a new review process to  assess DOE financial assistance for new work against the current  administration’s priorities, including financial assistance for which ARPA- E had already made award selections. DOE reviewed and approved  ARPA-E’s opportunities for financial assistance on a rolling basis from  May to September 2017, and nearly all were approved to proceed. Figure 1 shows the  timeline of DOE’s review of ARPA-E financial assistance. According to DOE Office of Management officials we interviewed, the  review team assessed the department’s financial assistance against five  criteria:
Whether the financial assistance was statutorily mandated;
Whether the financial assistance was described in congressional
Whether the financial assistance was consistent with administration  priorities, as identified in budget documents and other statements  from the President and Secretary of Energy, among other things;
What technology readiness level the financial assistance was  intended to fund; and
Whether the technology encompassed by the project was already  being funded by the private sector or others. DOE Office of Management  officials also noted that they met with ARPA-E leadership to obtain  additional information about ARPA-E financial assistance on three  occasions during the course of the review. According to DOE Office of Management officials, the review team  worked as quickly as possible to review all of DOE’s financial assistance  to minimize potential disruptions for recipients and DOE’s funding  organizations. However, according to ARPA-E selectees we  interviewed, this message was generally not communicated to them,  which led to uncertainty about whether their projects would be funded. According to information we collected, DOE’s review of ARPA-E financial  assistance, as part of the DOE-wide review process, did not require the  President to send a special message under the Impoundment Control  Act. DOE’s Financial Assistance Review Created Uncertainty for ARPA-E Selectees, Which Led to Delayed Project Timelines and Staffing Difficulties, among Other Impacts

According to the 10 ARPA-E selectees we interviewed, DOE’s financial  assistance review process created uncertainty, which led to a variety of  impacts—the most frequently cited of which were potentially delayed  project timelines and difficulties staffing project teams. DOE Office of Management officials said the fiscal year 2017  review process helped to better identify and coordinate future financial  assistance department-wide on crosscutting issues. DOE is conducting  the fiscal year 2018 review process prior to publicly issuing funding  announcements. Selectees also cited challenges to staffing project teams as a result of the  uncertainty caused by the review. Because the review will occur prior to publicly issuing funding opportunity  announcements, and thus before any recipients apply or are selected,  DOE Office of Management officials said the delays and uncertainty that  selectees experienced in fiscal year 2017 should be reduced. The officials said that they discussed the review  process with senior leaders in DOE’s funding organizations to help  ensure that they understood the priorities, expectations, and steps of the  review process. According to DOE Office of  Management officials we interviewed, a key benefit of the fiscal year  2017 review process was that the review team noticed that DOE had  several funding announcements at multiple funding organizations  related to these areas. DOE provided technical comments, which we  incorporated as appropriate.
Why GAO Did This Study

ARPA-E provides funding for research to overcome long-term and high-risk technological barriers in developing energy technologies. Since 2009, ARPA-E has awarded approximately $1.3 billion to universities, public and private companies, and national laboratories to fund energy research projects. Starting in May 2017, DOE began reviewing its financial assistance department-wide, including ARPA-E's, to determine if it met the administration's priorities.
GAO was asked to examine this review process as it pertained to ARPA-E. This report describes (1) how DOE implemented the financial assistance review process; and (2) the perspectives of ARPA-E selectees on the impacts of the review process.
GAO reviewed documents and interviewed officials at ARPA-E and DOE's Office of Management, which coordinated the review. GAO also interviewed a nonprobability sample of 10 of the 68 ARPA-E award selectees whose financial assistance was evaluated under the review. GAO identified selectees to interview based on representation across ARPA-E's recipient types, including universities, private companies, and national laboratories, among other criteria. While the views of selectees GAO interviewed cannot be generalized to all affected ARPA-E selectees, they provide illustrative examples of the effects of DOE's review.

What GAO Found

The Department of Energy (DOE) developed and implemented a new process to review its financial assistance to ensure that all new work funded by the department—including by DOE's Advanced Research Projects Agency-Energy (ARPA-E)—was consistent with the current administration's priorities. The review process covered funding opportunity announcements as well as certain other types of financial assistance. New awards were delayed until the review of the underlying financial assistance opportunity was completed. DOE reviewed and approved ARPA-E's financial assistance on a rolling basis from May through September 2017, and nearly all ARPA-E financial assistance was approved. DOE Office of Management officials met with ARPA-E officials on several occasions to discuss their review of ARPA-E financial assistance. DOE officials GAO interviewed said they wanted to complete the review as quickly as possible to minimize effects on DOE programs. GAO determined that the delay was not reportable under the Impoundment Control Act. The Impoundment Control Act requires the President to notify Congress if an agency wants to withhold the obligation of funds. GAO has separately informed Congress of an impoundment of $91 million in funds that were not allocated to any financial assistance awards, and was not related to DOE's review process.
According to the 10 ARPA-E project selectees GAO interviewed, DOE's financial assistance review process created uncertainty, which led to a variety of project impacts. The impacts most commonly cited by selectees included potentially delayed project timelines, as well as difficulties in staffing their project teams, among other impacts as shown below.
DOE officials GAO interviewed said that they are reviewing DOE financial assistance in fiscal year 2018. DOE officials said that a key benefit of the fiscal year 2017 review process was an opportunity to better identify and coordinate future financial assistance department-wide on crosscutting issues. However, DOE plans to review fiscal year 2018 financial assistance prior to issuing funding opportunity announcements to the public, and thus before any recipients apply or are selected. As a result, DOE officials said, the uncertainty that ARPA-E selectees experienced during the fiscal year 2017 review process should be reduced.

What GAO Recommends

GAO is not making any recommendations. DOE provided technical comments, which GAO incorporated as appropriate.