Summary

The law prohibits Nevada from using its nuclear waste grant funds for lobbying, litigation, and certain multistate activities. Yet GAO found that Nevada had used this money to advance, on a national stage, its opposition to a repository at Yucca Mountain. In one case, a videotape produced by a contractor was intended to influence legislation pending before Congress. In another case, Nevada's use of grant funds to underwrite a multistate tour in 1993 was inappropriate because the main goal of the tour appeared to be to generate public opposition in other states to the repository project. Until 1992, the Energy Department (DOE) reviewed and approved the state's applications for grant funds and required the state to give DOE periodic progress and financial reports. Since then, DOE's role in overseeing the state's grant has diminished. The agency makes direct grant payments to the state, and Nevada must certify that the money was spent in accordance with the law. DOE has recovered about $75,000 of the more than $1 million that GAO previously reported as improperly spent. DOE has decided that $670,000 worth of expenditures was either allowable or that it would not try to recover the funds. DOE has no records of whether it ever decided to recover the remaining $309,000 in expenditures that GAO questioned.

GAO found that: (1) Nevada inappropriately used grant funds to publicize its opposition to the Yucca Mountain nuclear waste repository; (2) Nevada improperly used appropriated funds to contract for a videotape that was designed to influence Congress; (3) there was insufficient documentation to determine whether another contractor engaged in prohibited activities; (4) Nevada inappropriately supported a 1993 multistate tour, since the tour's primary purpose was to create public opposition to the repository in other states; (5) there was no evidence that Nevada inappropriately used grant funds in its litigation against two local governments; (6) since fiscal year (FY) 1992, controls to ensure that Nevada did not misspend grant funds included DOE reviews of Nevada's program plans, Nevada's certifications that it appropriately used grant funds, and independent audits of Nevada's use of grant funds; (7) Nevada has not corrected previously identified internal control weaknesses relating to documentation supporting expenditures of grant funds; (8) although DOE recovered about $75,000 of $1.054 million in misspent grant funds, it has decided that $670,000 of these funds were either allowable or unrecoverable; (9) DOE has no record of its decision regarding the remaining $309,000; and (10) in FY 1995, Nevada spent $1.5 million to operate its nuclear waste project office, $346,000 for contractors, and $59,000 for legal services, and paid $3.495 million to local government and other state agencies.