Federal Officials Question Financial Discrepancies at Savannah River Site Near Augusta

Federal officials are questioning serious accounting discrepancies at a massive federal site that processes nuclear materials near Augusta.

The U.S. Department of Energy's inspector general says the Washington Savannah River Company can't properly account for $1.4 billion spent at the Savannah River Site in 2007.

It says auditors at the company failed to properly approve procurements and omitted information, and inappropriately changed information in its internal audits to hide discrepancies. The report says the company's actions violated procedures designed to detect costs that the federal government might not otherwise pay for, over the protests from the auditors themselves. It also blasts the DOE for inadequate oversight of the process.

"I have a feeling that over the years that a lackadaisical attitude has developed in managing all this money, and the company essentially thought that they could do as they pleased," says Tom Clements, a spokesman for Friends of the Earth, an environmental group.

The Washington Savannah River Company lost its contract to manage the site last year, after about 18 years there. It's unclear if the issues brought up in the audit were the reason for that.

A spokesman at the company declined to comment on the report.

Officials with the U.S. Department of Energy were not available for comment.

The Washington Savannah River Company still manages the removal and disposal of liquid waste there, employing about 2000 people. It managed about 6500 other employees under the management contract it lost a year ago.

Federal officials in December awarded the liquid waste contract to Savannah River Remediation, whose parent company is the same as the Washington Savannah River Company, but a losing bidder has challenged the award.

New company to manage Savannah River Site

The U.S. Department of Energy has selected a new contractor to manage a federal site that processes nuclear materials near Augusta.

Savannah River Nuclear Solutions will take over management of the site during a transition period beginning Jan. 24, according to D.O.E. officials. The company consists of Fluor Federal Services, Inc., Honeywell International, Inc. and Newport News Shipbuilding and Drydock Company, a Northrup Grumman Company. Lockheed Martin Services, Inc., and Nuclear Fuel Services, Inc., will also be subcontractors with the company.

The D.O.E. officials say a variety of factors, such as approaches to management and technical operations, as well as the management team itself, led to the decision.

The company won a five-year $4 billion contract over the Washington Savannah River Company, who has managed the site for 19 years.

The contract includes environmental cleanup, consisting of the management of spent nuclear fuel and remediation of soil and ground water. It will also manage operation of the Savannah River National Laboratory research facility and activities of the National Nuclear Security Administration, such as operation of the site's tritium facilities, completion of the plutonium disposition program and disposition of highly enriched uranium, according to a statement by the D.O.E.

"We and our partners had put together what we thought was a novel and creative proposal and a similar exceptional team that has a proven record of performance in all the areas critical to the site," said Jack Herman, a spokesman for Washington Group International.

The management and operations division of the Savannah River Site employs about 6500 people.

But only about 60-100 high level management employees will lose their jobs, according to stipulations in the federal contract.

Washington Savannah River Group still manages the disposition of liquid waste at the site.

But it's currently in a contract bidding process for that operation as well.