A U.S. Energy Department audit found that the two companies that run the Savannah River nuclear weapons plant in South Carolina illegally hid millions of dollars in cost overruns, The New York Times reported Tuesday.
The department's inspector general cited the money transfers as one example of severe mismanagement at the weapons plant, the nation's largest, the paper said.The report, coupled with a separate inquiry into the plant ordered by Energy Secretary James Watkins, resulted in the department suspending construction last week on two new buildings at the South Carolina plant.
Westinghouse Savannah River Co., a subsidiary of Westinghouse Electric Corp., operates the plant for the government and hired Bechtel Savannah River, a unit of the Bechtel Group, as a subcontractor.
The Augusta (Ga.) Chronicle reported the stop-work order last week and said Westinghouse had until Wednesday to submit a report on the impact of the suspension. The Chronicle also said Westinghouse was ordered to submit a plan to correct management problems.
Investigators found that the companies hid large cost overruns by transferring tens of million of dollars in and out of a $400 million account meant for new construction, the Times said.
Energy Department auditors found that the account was also frequently used to buy equipment and pay management fees that should have been paid for from other accounts - actions that violated budgetary and department laws.
It also found that technicians were unable to find at least a quarter of $33 million worth of tools and construction equipment that the plant bought last year.
The amount Westinghouse is paid depends on a formula that measures its ability to manage money and people. The money transfers outlined in the report would conceal overspending and make it look like the company performed better than it did. The Energy Department commended the company's performance last year.