This Office of Inspector General Semiannual Report to the Congress covers the period from October 1, 1996, through March 31, 1997. The report summarizes significant audit, inspection, and investigative accomplishments for the reporting period which facilitated Department of Energy management efforts to improve management controls and ensure efficient and effective operation of its programs. Narratives of the most significant reports are grouped by measures which the Office of Inspector General uses to gauge its performance. The common thread that ties the performance measures together is their emphasis on supporting Department efforts to produce high quality products at the lowest possible cost to the taxpayer. Five such performance measures were used during this semiannual period to present outcomes of Office of Inspector General work in terms of improvements in Department programs and operations.

This is the Secretary of Energy's sixteenth Semiannual Report to Congress submitted under the Inspector General Act of 1978, as amended. Pursuant to the Inspector General Act Amendments of 1988 (Public law 100-504), agency heads are to report to Congress on the status of final action taken on audit report recommendations. This report complements a report prepared by the Department's Office of Inspector General that provides information on audit reports issued during the period and on the status of management decisions made on Inspector General audit reports. During the period covered by this report, October 1, 1996, through March 31, 1997, the Department took final action on 31 operational, financial, and preaward audit reports. At the end of the period 74 reports awaited final action. Final action was taken on 11 contract and financial assistance audits, leaving no reports requiring final action at the end of the period. This report has three sections. The first section outlines significant audit resolution and followup accomplishments achieved by the Department during the reporting period. The second section contains the statistical tables that illustrate the status of final action on Inspector General audit reports. The third lists the audit reports that are one year or more past management decision and have not completed final action. This section also provides the status of corrective actions on each of those reports.

This report contains a brief synopsis of some of the many and diverse subjects the Office of the Inspector General reviews, audits or investigates in a 6-month timeframe. We hope that this new format enables the reader to focus on what we see as a few of the key issues - or risks - the Department faces in managing the billions of dollars of taxpayer money it spends to equip, train and deploy America's armed forces. In this report, we focus on: (1) Financial Management, (2) Information Management and Technology, (3) The Defense infrastructure, (4) The Challenges of Acquisition Reform, (5) Improving Business Practices, (6) Reducing Weapon Systems Costs, and (7) Health Care Fraud. In addition, we continue to work on high profile issues, including: (a) Attempting to locate missing Gulf War logs, (b) Reviewing DoD and military personnel assigned to Capitol Hill, (c) The Cuban shootdown of two unarmed civilian aircraft in international waters, (d) The School of the Americas, (e) Base closure costs and savings, and (f) Munitions scrap disposal safety.