The Department of Energy has launched a sweeping crackdown on financial award programs, placing over $15 billion under review and slashing academic overhead reimbursements.
At a Glance
- DOE launched a policy overhaul to enhance accountability in financial awards.
- Over $15 billion in projects are being scrutinized for mismanagement.
- Indirect cost recovery for universities is now capped at 15%.
- The move follows concerns over rushed Biden-era spending.
- Projected savings from reforms total over $400 million annually.
Cracking Down on Waste
The Department of Energy (DOE) has unveiled a bold new policy overhaul targeting the financial assistance system amid rising concerns of federal waste. Over $200 billion from the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) had been funneled to the DOE and EPA, but recent audits and congressional oversight have raised red flags about the vetting of recipients and oversight of projects. Now, more than $15 billion in energy and environmental grants is under active review.
According to DOE Secretary Chris Wright, the reforms come after “concerning” findings related to spending in the final days of the Biden administration. “We’re ensuring taxpayer dollars generate the greatest return possible,” Wright stated, pledging to inject business-grade fiscal discipline into federal energy programs.
Watch a report: DOE’s New Accountability Measures.
Universities Hit Hard
One of the most contentious shifts is a new cap on indirect costs reimbursed to colleges and universities. Previously used to cover administrative expenses, the support has now been limited to 15%, a change the department says will save $405 million annually. “DOE funds are for science, not for building renovations,” Wright emphasized.
The decision has rattled academic institutions reliant on federal research funding. Critics argue it undermines innovation, but supporters contend it eliminates bloat. Meanwhile, lawmakers are signaling tighter scrutiny across the board. “These risks increased under past infusions of funding,” the House Energy and Commerce Committee noted, suggesting deeper probes may follow.
Political Repercussions and Oversight
The reforms arrive amid intense political backlash over DOE’s recent financial conduct. A House Oversight report slammed former Secretary Jennifer Granholm’s taxpayer-funded electric vehicle tour, calling it a “radical publicity stunt.” Republican leaders, including Rep. James Comer, have promised continued investigations and collaboration with the incoming Trump administration to “combat waste, fraud, and abuse.”
With billions at stake and national energy priorities on the line, the DOE’s initiative represents not just a fiscal reset, but a warning shot to grant recipients and bureaucrats alike. Federal funding will now come with strings attached—and serious scrutiny.
