Jefferson Science Associates FY2019-2020 Cost Audit

DOE OIG Reports

Filed March 26th, 2026

Detected March 31st, 2026

Summary

The DOE Office of Inspector General issued Audit Report DOE-OIG-26-27 examining Jefferson Science Associates, LLC's costs under Contract No. DE-AC05-06OR23177 for fiscal years 2019 and 2020. The audit, performed by CohnReznick LLP on behalf of DOE OIG, questioned approximately $650,000 in costs for direct materials and costs in various expense pools, and identified approximately $8.9 million in unresolved costs related to pending investigations. Two internal control deficiencies were reported regarding subcontract monitoring and purchasing systems.

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What changed

The DOE OIG audit examined whether $650,000 in questioned costs charged by JSA to DOE Contract No. DE-AC05-06OR23177 for fiscal years 2019 and 2020 were allowable, allocable, and reasonable. CohnReznick identified deficiencies in JSA's internal controls, including inadequate subcontract monitoring and failure to remove unallowable costs and maintain an adequate purchasing system. Approximately $8.9 million in additional unresolved costs related to pending investigations were also noted. The audit made two recommendations and suggested the contractor coordinate with the contracting officer to address questioned and unresolved costs. JSA nonconcurred with how the questioned costs were calculated and withheld further comment pending negotiations.

JSA, as a Management and Operating contractor for the Thomas Jefferson National Accelerator Facility, should prepare to negotiate the $650,000 in questioned costs with the DOE contracting officer. The contractor must address identified internal control deficiencies related to subcontract monitoring and purchasing systems. Companies holding similar DOE M&O contracts should review their own cost accounting practices to ensure compliance with FAR allowability standards and verify adequate subcontract oversight procedures are in place.

What to do next

Review internal controls over subcontract monitoring and purchasing systems against FAR requirements
Prepare for negotiations with DOE contracting officer regarding $650,000 in questioned costs
Evaluate whether $8.9 million in unresolved costs related to pending investigations require separate cost treatment or segregation

Source document (simplified)

Audit: DOE-OIG-26-27

Jefferson Science Associates, LLC’s Costs Incurred and Claimed for Fiscal Years 2019 and 2020 Under Contract No. DE-AC05-06OR23177

Office of Inspector General

March 30, 2026

March 26, 2026

Jefferson Science Associates, LLC’s Costs Incurred and Claimed for Fiscal Years 2019 and 2020 Under Contract No. DE-AC05-06OR23177

This audit was performed by CohnReznick LLP (CohnReznick) on behalf of the Department of Energy’s Office of Inspector General and examined Jefferson Science Associates, LLC’s (JSA) costs incurred and claimed for fiscal years 2019 and 2020 under management and operating contract No. DE-AC05-06OR23177.

The audit’s objective was to determine if costs charged to Department contract No. DE-AC05-06OR23177 for fiscal years 2019 and 2020 were allowable, allocable, and reasonable in accordance with applicable laws, regulations, and contract terms.

CohnReznick performed the audit in accordance with generally accepted government auditing standards.

CohnReznick questioned approximately $650,000 in costs for purchases identified as direct material and for costs included in the Material and Handling, General and Administrative, and Facilities/Infrastructure pools. CohnReznick also identified two deficiencies in JSA’s internal controls related to inadequate subcontract monitoring and the failure to remove unallowable costs and maintain an adequate purchasing system. CohnReznick also reported approximately $8.9 million in unresolved costs related to pending investigations at the time of the audit.

CohnReznick made two recommendations. Additionally, we recommend that the contractor coordinate with the contracting officer to address the questioned and unresolved costs identified in this report. If the issues identified are fully addressed, it should help ensure that costs charged to the Department are allowable, allocable, and reasonable in accordance with contract terms.

JSA nonconcurred with how the questioned costs were calculated. JSA withheld further comment pending negotiations with the contracting officer.