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	Introduction

Poverty is an ongoing topic of interest for Congress, in various capacities: as a factor to be considered when allocating funding for certain programs, as an eligibility criterion for some low-income assistance programs, and to gauge the well-being of individuals, families, or the economy as a whole. The poverty rate fell to 11.8% in 2018 from 12.3% in 2017. In both years, the poverty rate was lower than the pre-recessionary level of 12.5% in 2007. However, since the end of the Great Recession in 2009, the poverty rate remained elevated for approximately the first four years after the recession's end, and despite reductions in the poverty rate in recent years, it remains higher than its record-low of 11.1% in 1973. Poverty's persistence alongside indicators of economic strength has led policymakers to continually examine the drivers of povertyâboth economic and socialâand the effectiveness of various policy responses. As the conversations about poverty and public policy continue, it may be useful to consider the question: Who are the people who are poor in the United States?
This report provides a snapshot of who was poor in 2018 by selected demographic, economic, and social characteristics. The data presented here show that people in poverty are not a monolithic group, but rather a diverse collection of families and individuals at different stages of life, living in different circumstances. Special attention is paid in this report to the role of work in the lives of people who are poor. Income from work, or the lack thereof, is central to the economic fortunes not only of those considered "working-age," but also of children, who are generally dependent on working-age adults, and persons who are aged (age 65 and older), who generally have prior experience in the workforce that shapes their economic well-being after they retire. Attention is also paid to living arrangements. Because poverty is measured at the family level, considerations such as whether someone lives alone, or whom someone lives and potentially shares resources with, influence economic well-being. Other factors that affect family well-being, and that influence individuals' attachment to and success in the labor market, are important for considering individuals' experiences of poverty but are beyond the scope of this report.
This snapshot looks at the composition of people in povertyâwhat groups comprise what share of the poverty populationârather than at poverty rates among different groups. This provides a different perspective in viewing poverty. A large population group such as non-Hispanic whites might have relatively low poverty rates, but because of the group's size in the overall population it represents a relatively large share of the poverty population. A small population, such as American Indians and Alaska Natives, might have relatively high poverty rates, but because of the group's size it represents a relatively small share of the poverty population. Both perspectives on poverty are valid and relevant to public policy. Readers interested in an examination of poverty rates for different demographic groupsâand trends in poverty over timeâshould see CRS Report R46000, Poverty in the United States in 2018: In Brief , by Joseph Dalaker.

		Data Used in this Report

Poverty, in general, is a lack of resources to meet basic needs. This report uses the official measure of poverty used by the U.S. Census Bureau to identify individuals as "poor." However, it is important to note that the Census poverty measure is actually family -based. Whether a person is considered poor depends on his or her money income and the income of any other family membersâthose related to a family head by birth, marriage, or adoptionâwith whom the person lives and presumably shares resources. If an individual is living alone or with people who are not relatives, that individual is considered a family of one and only his or her income is counted in determining his or her poverty status. That money income is then compared with a dollar threshold, which is based on that individual's family composition. For example, the poverty threshold for a working-age single person (who does not live in a family) in 2018 was $13,064. A single person with income below that amount is considered poor. The poverty threshold for a family of two adults and two children was $25,465. If the combined income of all family members was below that amount, all people in that family would be considered poor.
The current official poverty measure has existed for about 50 years and is widely used, but it does have limitations. For example, the official measure looks only at pre-tax money income and does not examine the impact of government taxes and non-cash benefits on family well-being. The official measure also generally does not take the value of assets into account, though a recent change in measurement now considers distributions from retirement savings as income. The official measure is also the same across the country, and does not take into consideration differences in living costs in different geographical areas. Additionally, the measure's current definition of family does not take into account modern resource-sharing arrangements, such as those of cohabiting couples. The Census Bureau now publishes a supplemental poverty measure (SPM) for research purposes that does take into account taxes and transfers, make adjustments for housing costs by geographical area, and use an expanded definition of family.

	How Many People Were Poor in 2018?

In 2018, an estimated 38.1 million people had pre-tax money income below the poverty threshold. As shown in Figure 1 , people who were poor accounted for 11.8% of the total noninstitutionalized population.
The number and percentage of people in poverty reflect those whose family income fell short of the poverty threshold by any dollar amount. Of course, some people are poorer than others. One area of policy focus has been on the very poor: those considered to be in "deep poverty." Deep poverty is usually defined as having income below 50% of the poverty threshold. In 2018, an estimated 17.3 million persons, close to half of all people in poverty (45.3%), were counted as living in deep poverty.

	Who Was Poor in 2018? An Overview

The population of people living in poverty comprised individuals of all ages and sexes, and across all racial and ethnic groups.

		Age

 Figure 2 shows the composition of the population living in poverty and the overall population (for context) by age group in 2018. Three categories are presented: children (those under age 18), working-age adults (those ages 18 to 64), and the aged (those age 65 and older).
As shown in the figure, slightly less than one-third (11.9 million) of all people in poverty were children. Children were over-represented among people in poverty relative to the overall populationâ31.1% compared to 22.6%. People who were working age (18-64) made up the largest share of the population who were poor, but they were under-represented among people in poverty relative to the overall population (55.4% compared to 61.1%). Among persons who were poor, 13.5% were age 65 and older, a smaller representation than their share of the overall population (16.3%).

		Race and Ethnicity

 Figure 3 shows the composition of people in the poverty population and the total population (for context) by race and ethnicity for 2018. The racial and ethnic groups presented are ranked by the size of their total population (which is the same in both cases). Non-Hispanic whites were the largest racial/ethnic group overall (60.2% of the total population), and represented the largest racial/ethnic group within the poverty population (41.2%). Hispanics (of any race) were the second largest group (18.5% of the total population) and represented 27.6% of all those who were poor. Non-Hispanic African-Americans were the third largest racial/ethnic group in both the total and poverty populations, representing 12.3% and 21.9%, respectively.
Note that most minority groups were over-represented in the poverty population relative to their share of the overall population. The over-represented groups were Hispanics, non-Hispanic African-Americans, and non-Hispanic American Indians and Alaska Natives. Under-represented racial/ethnic groups were non-Hispanic whites and Asians.
The racial and ethnic composition of people in poverty by age group is shaped by the overall demographic trends affecting each age group. As illustrated in Figure 4 , children (under age 18), both poor and overall, are more racially and ethnically diverse than adults, especially the aged (age 65+). However, minorities were over-represented in the poverty population for all age groups in 2018. For instance, Hispanic children (of any race) made up the largest share of poor children (37.4%) whereas non-Hispanic white children made up the largest share (50.0%) of children overall.

		Sex

Women slightly outnumber men in the overall population, accounting for 51.0% of the total population in 2018. However, as shown in Figure 5 , women represented an even larger share (56.0%) of the population in poverty. This over-representation may be due, in part, to the fact that women are more likely than men to head single-parent households, a family type that is more likely to be poor. Additionally, men's earnings are higher than women's on average, even accounting for differences in full-time year-round employment status.

	Poverty Among Children, Working-Age Adults, and Aged Adults

Poverty raises different public policy considerations for children, working-age adults, and aged adults. Children are not expected to support themselves economicallyâthey are dependents of their parents or other adult caretakers who are assumed to fulfill that responsibility. Policies affecting the family income and poverty status of children generally apply to their parents or other adult caretakers. Working-age adultsâaside from those who are severely disabledâare expected to work and to support themselves and their children, if they have any. Aged adults may retire from work and draw income from public or private benefits, which are based primarily on their past work.
The remainder of this report separately explores poverty among children, working-age adults, and aged adults. Though relevant policy considerations may differ among the three groups, the central role played by work as the primary means of economic support for individuals and families is highlighted. That work could be one's own work, the work of the parents or other family members, or past work providing retirement income. Similarly, because poverty is a family-based measure and the ability to share resources is an important consideration in economic well-being, living arrangements are also explored.

		Children

As noted earlier, children made up slightly less than one-third of all people in poverty in America in 2018, even though they made up less than a quarter of the total population. Thus, children in America are disproportionately poor. Of the three age groups examined in this report, children had the highest poverty rate in 2018, 16.2%.
Children rely on their parents or other adult caretakers for their support. That support, even for children who are poor, is likely to come from earnings from the work of their parents or other adult caretakers.
 Figure 6 shows the composition of children who were poor and children in the total population by number of adult workers in the family for 2018. Note that the number of adult workers can exceed two, as it would include all adults in the family (such as siblings older than 18, grandparents, or other relatives over the age of 18). The figure shows that among children in the total population, 93.0% lived in families with at least one adult worker and roughly half (51.4%) lived in families with two or more adult workers.
Among children who were poor, just over two-thirds lived in families with one or more workers. A majority of children in poor families (57.1%) lived in families with one worker, compared with 11.0% who lived in families with two or more workers. The remaining 31.9% lived in families with no workers.
The number of potential adult workers in a child's family is affected by the type of family a child lives in. A single parent family might have only one potential adult worker, while a married-couple family has at least two potential adult workers.
 Figure 7 shows the distribution of children who were poor and children in the total population by family type in 2018. Children living in female-headed families accounted for a majority (57.5%) of all children who were poor, a disproportionate share relative to children in the total population. However, children in married-couple families still accounted for nearly one-third (32.2%) of all children who were poor.
Despite a relatively low poverty rate for children in married-couple families in 2018, the large size of this population overall (children in married-couple families accounted for over two-thirds of all children) meant that a substantial number of children who were poor lived in this family type. Married-couple families were the only family type that was significantly under - represented among the population of children in poverty relative to the overall population.
Children who are poor are also more likely to live in larger families. Larger families require more income to meet needs, and thus the poverty thresholds for larger families are higher than for small families. However, since most children live in families with earnings, and earnings are not determined by family sizeâthey are determined by what the worker can command in the labor marketâlarger families are more likely to be poor.
 Figure 8 shows the composition of children who were poor and children in the overall population by number of children in the family in 2018. In that year, 24.7% of all children who were poor were in families with four or more children, which is disproportionately higher than the 14.2% of children in the overall population living in families of that size. In contrast, 46.0% of children who were poor were in families with only one or two children.

		Working-Age Adults

The majority of people in poverty in America are working-age adults (18-64 years old). This age group represented 55.4% (21.1 million individuals) of all people in poverty in 2018. Overall, this age group had a poverty rate of 10.7%, a lower rate than that of the overall population.
Because poverty is a state of low income, and income generally comes from work, it is useful to explore the work status of working-age adults who are poor. In the overall population of working-age adults, the majority (77.3%) worked in 2018. However, among working-age adults who were poor, the majority (63.2%) did not work.
As shown in Figure 9 , 36.8% of working-age adults who were poor were working in some capacity, either full- or part-time, full- or part-year. However, a relatively small share (12.0%) of working-age adults who were poor worked full-time all year.
When working-age adults, both the poor and those in the overall population, were asked why they were not working, a wide range of reasons were given. Of non-working adults who were poor, one-third reported being ill or disabled, one-fourth reported taking care of family members, 18.8% said they were going to school, 11.4% said they were retired, and 6.0% said they could not find a job. For those not working in the overall population, a greater proportion (16.2%) reported being retired and a smaller proportion (27.1%) reported being ill or disabled.
A large body of research has shown that success in the workforce is related to educational attainment. Credentials indicating higher levels of education tend to be reflected in higher earnings and steadier work. Figure 10 shows both working-age adults who were poor and all working-age adults by educational credential. The largest group (54.7%) of poor working-age adults in 2018 were those who obtained a high school diploma but no post-secondary educational credential. (High school graduates without a post-secondary credential were also the largest group (45.8%) within the total population of working-age adults.) Those lacking a high school diploma accounted for another 24.2% of all poor working-age adults, more than twice the share represented in the overall population (10.2%). The remaining 21.1% of 18 to 64 year olds below poverty had some postsecondary credential; the corresponding figure for all 18 to 64 year olds was 44.0%.
It should be noted that the working-age adult group includes young adults, whose education might not be finished.
Working-age adults represented a diverse group in terms of their family and living arrangements. Figure 11 shows both poor and all working-age adults by their living arrangements. A majority of both groups lived in families, although family living arrangements were more prevalent in the overall population (77.8%) than among the poor (56.4%). (As noted previously, "family," as used by the Census Bureau, includes people related by birth, marriage, or adoption.)
Working-age adults who did not live in families were disproportionately poor in 2018; 43.6% of all working-age adults in poverty lived outside of a family. Included in this group were those living alone (19.0%) and those living with cohabiting partners (13.0%) or other unrelated adults/roommates (11.7%). However, determination of the poverty status of people living outside of families but with others is not straightforward. The poverty status of individuals with cohabiting partners or who are living with other adults is based on each individual's income; no "pooling" of income is assumed in the official poverty measure, including among cohabiting partners who may be sharing resources.

		Aged Persons

Of the three age groups discussed in this report, aged adults are the least likely to be living below the poverty line. In 2018, they accounted for 16.3% of the total population, compared with 13.5% of the population in poverty. The poverty rate among aged adults was 9.7% in 2018.
Aged adults may retire from the workforce with the support of both public and private sector policies, and in 2018, 76.4% of all adults aged 65 and older did not work. However, income derived from workâpast work, the earnings of other family members, and the earnings of the minority of aged adults who continue to workâplays a key role in determining the economic well-being of aged adults.
 Figure 12 explores various forms of work-related income received directly by aged persons or their families, including the following:
Social Security income is earned through past work, with the initial benefit determined based on past earnings, with the benefit replacing a portion of those earnings. In 2018, Social Security was received by the families of 63.8% of all aged persons who are poor, compared to 85.1% of aged persons in the total population. Aged persons also frequently receive income from pensions and other benefits earned from jobs held during their working careers. These include private pensions or government pensions paid to former public sector employees. Far fewer aged adults in poverty receive these benefits compared to the overall aged population. In 2018, retirement, disability, or survivor pensions were received by the families of 51.6% of all aged persons, compared with 10.4% of the families of aged persons who were poor. Earnings from current workâeither by the aged adult member or other family membersâare also often received by families with aged persons. In 2018, earnings were received by the families of 41.4% of aged persons. In comparison, 10.5% of families of aged persons who were poor received earnings from work.
When considering all of these various forms of work-derived income, most aged adults (97.1%) in the total population lived in families with income derived from work: either past work where Social Security or pension income was earned, or the current work of the aged adult or a family member. This share was smaller among aged persons who were poor, but still, almost three in four (74.2%) lived in families with income derived from work.
 Figure 13 shows aged adults living in poverty by living arrangement, which is, as previously mentioned, an important consideration because of the possibility of resource-sharing. In 2018, roughly half (49.9%) of aged adults who were poor lived alone, which is a significantly higher rate than in the overall population of aged adults (28.0%). Aged adults in poverty were much less likely to be living in families than the overall aged population (43.1% compared to 68.4%).

	Conclusion

This report presents basic information about the 38.1 million people in America who had income below the poverty line in 2018. Although it is presumed that they are all subject to income constraints, these data illustrate that they are not a homogenous group. For example, they are children, working-age adults, and aged adults; full-time full-year workers, caretakers for family members, or outside the workforce for other or unknown reasons; and living alone or in families.
As this report shows, certain groups are over-represented among those living in poverty relative to the total population. These include, among others, women, minorities, children, and people living outside of families or alone. The report also shows the central role of income from work in determining whether a group is over-represented among those living in poverty. For children, this income is based on the work of their parents or other family members. For working-age adults, it is their own work that generally determines their poverty status. For aged adults, who are often retired from the workforce, it is primarily their past work or the work of those they live with that determines their status. However, sometimes earnings from work are not enough to prevent poverty. Two-thirds of children living in poverty in 2018 were in families with at least one adult earning income during the year. In 2018, more than 7 out of 10 poor aged persons had some form of work-based income.
The complexity of circumstances that result in individuals experiencing povertyâboth individual and systemicâare beyond the scope of this report. However, those circumstances warrant further exploration when considering federal policy interventions designed to reduce the incidence, or ameliorate the effects of, poverty.

		Appendix. Data Tables


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	DOE’s Estimated Environmental Liability Was $494 Billion in Fiscal Year 2018 and May Continue to Grow

In its fiscal year 2018 financial statement, DOE reported an estimated  environmental liability of $494 billion. The majority of this liability was for  cleanup work overseen by EM. We reported in January 2019 that in  recent years, EM’s environmental liability has grown annually at a level  that has outpaced the department’s annual spending on cleanup  activities, and its liability may continue to grow.

		DOE Estimated Its Environmental Liability Was $494 Billion in Fiscal Year 2018

In its fiscal year 2018 financial statement, DOE reported its estimated  environmental liability at $494 billion. In the financial statement, EM  accounted for $377 billion (over 75 percent) of DOE’s total liability. In  developing its environmental liability estimate, EM estimates the costs of  storing, treating, or disposing of a variety of waste types. Storing and  treating radioactive tank waste account for the largest portion of EM’s  costs. For example, in January 2019 we reported that, in fiscal year 2017  (the most recent year for which these data were available at the time of  our review), EM’s responsibilities to store and treat radioactive waste  stored in underground tanks accounted for nearly half of EM’s total  environmental liability, and its responsibilities for addressing  contaminated facilities and remediating soil and groundwater  contamination accounted for about one-quarter. Figure 2 shows the  percentage and dollar amount of EM’s environmental liability by cleanup  activity for fiscal year 2017.
In January 2019, we also found that, of the 16 sites across the United  States at which EM has cleanup responsibilities, two sites accounted for  more than 70 percent of EM’s environmental liability in fiscal year 2017:  the Hanford site and the Savannah River site (see fig. 3). These sites  also include the majority of EM’s radioactive tank waste and the majority  of radioactive contamination, which is particularly costly and complicated  to treat. The Hanford site has 177 tanks containing 55 million gallons of  waste, and the Savannah River site has 43 tanks containing 36 million  gallons of waste.

		EM’s Environmental Liability May Continue to Grow

We reported in January 2019 that in recent years, EM’s environmental  liability has grown annually at a level that has outpaced the department’s  annual spending on cleanup activities. This growth has occurred at the  same time as the number of contaminated sites has decreased. In fiscal  years 2011 through 2018, EM spent over $48 billion, primarily to address  radioactive tank waste as well as treat and dispose of other nuclear and  hazardous materials. Nonetheless, since 2011, EM’s environmental  liability grew by $214 billion, from $163 billion to $377 billion, according to  our analysis of DOE financial data and documents (see fig. 4).
EM’s environmental liability may continue to grow because its currently  estimated environmental liability does not include the costs of all cleanup  activities for which the agency will likely be responsible in the future and  because the cost of addressing some of EM’s largest projects is still  underestimated. First, not all of the cleanup activities EM must undertake  are captured in the current liability because, according to federal  accounting standards, only work that is probable and reasonably  estimable is required to be reported in an agency’s liability. For  example, EM has not yet developed a cleanup plan or cost estimate for  the Nevada National Security site and, as a result, the cost of future  cleanup of this site was not included in EM’s reported environmental  liability. The nearly 1,400-square-mile site has been used for hundreds of  nuclear weapons tests since 1951. These activities have resulted in more  than 45 million cubic feet of radioactive waste at the site, but the costs for  the cleanup of this waste are excluded from EM’s annually reported  environmental liability. Second, the current cost associated with some of  EM’s cleanup efforts may be underestimated. For example, as of April  2018, EM and its contractor had still not negotiated a cost for completing  the WTP—DOE’s largest and most complex construction project.
Further, although EM typically spends about $6 billion per year on  cleanup activities, a large amount of its cleanup budget does not support  actual cleanup activities. Instead, this funding goes toward recurring  activities necessary to maintain the sites rather than toward reducing the  environmental liability. EM refers to these activities as “minimum safety”  work. According to EM officials, examples of such work include physical  security, health and radiation protection, or critical facility and  infrastructure maintenance for safe conditions. These officials said that  minimum safety work constitutes 30 to 60 percent of individual sites’  budgets, for a total of at least $2.7 billion of EM’s fiscal year 2018 budget,  as we reported in February 2019. The Assistant Secretary for EM noted  in September 2018 that much of DOE’s environmental liability is associated with managing minimum safety work and that significant  potential cost savings could result from reducing minimum safety work.  Accordingly, she stated that EM planned an initiative in fiscal year 2019 to  examine how EM can reduce this work.
EM has undertaken several ad hoc studies and initiatives to address the  growing costs in its cleanup program. However, EM has not conducted a  formal root cause analysis to identify the causes for the growth in its  environmental liabilities. Specifically, EM headquarters officials we  interviewed said they were aware of the increases to the environmental  liability from year to year, as well as the areas in which the liability  changed; however, they said they had not done a detailed analysis of the  root causes of the growth. A leading practice for program management is  monitoring and controlling the program, which includes conducting root  cause analyses and developing corrective action plans. However, in  February 2019, we found that EM’s cleanup policy does not follow this  leading practice because it does not include any such requirements. We  recommended that EM review and revise its policy to include program  management leading practices in its requirements, including for  monitoring and controlling the program. DOE agreed with our  recommendation and stated that it plans to revise its policy.

	EM Has Not Resolved Management Challenges in Its Cleanup Program

EM has not resolved long standing management challenges that affect its  cleanup program and contracts. In March 2019, we issued our 2019 High- Risk Series, which included updates related to DOE’s environmental  liability and its contract management. While officials at EM have taken  some steps toward management improvements aimed at reducing its  environmental liabilities, we found that EM has not demonstrated  progress toward resolving these challenges. We have identified several  unresolved issues including the following:
EM does not have a program-wide cleanup strategy. We reported in  January 2019 that EM relies primarily on individual sites to locally  negotiate cleanup activities and establish priorities. Our analysis of  DOE documents identified instances of decisions involving billions of  dollars where such an approach did not always balance overall risks  and costs. For example, we reiterated what we found in May 2017  that two EM sites had plans to treat similar radioactive tank waste  differently, and the estimated costs for treating the waste at one site— Hanford—may be tens of billions more than those at the other site— Savannah River. In addition, EM sites generally do not consider  other sites’ risks and priorities when making cleanup decisions. We  reported in January 2019 that this approach is not consistent with  recommendations we and others have made over the last 2 decades  that EM develop national priorities to balance risks and costs across  and within its sites. Moreover, EM has not developed a program- wide strategy that sets such priorities and describes how EM will  address its greatest risks. Instead, according to agency officials, it  continues to prioritize and fund cleanup activities by individual site.  We recommended in January 2019 that EM develop a program-wide  strategy that outlines how EM will direct available resources to  address human health and environmental risks across and within  sites. DOE agreed with our recommendation and has since said it is  working toward this goal.
EM manages most of its cleanup work as operations activities, under  less stringent requirements than capital asset projects. In February  2019, we reported that EM manages its cleanup work under different  requirements, depending on whether it classifies the work as a capital  asset project or an operations activity. EM currently manages most  of its work as operations activities. In its fiscal year 2019 budget,  operations activities accounted for 77 percent of EM’s budget (about  $5.5 billion), and capital asset projects accounted for 18 percent  (about $1.3 billion). Operations activities have less stringent  requirements. For example, unlike capital asset projects, operations  activities are not required to go through a thorough upfront planning  process to determine the scope of work to be completed. In addition,  under EM cleanup requirements, operations activities are not subject  to independent oversight by entities outside EM. As a result, DOE  management does not have information on how EM manages  operations activities and cannot hold EM accountable for cost- effective and timely completion of this cleanup work. Since 2015,  experts in DOE’s Office of Project Management have raised concerns  that some operations activities, such as cleanup of radioactive tank  waste, should be classified as capital asset projects. In February  2019, we recommended that EM work with DOE’s Office of Project  Management—which is responsible for providing DOE-wide  leadership and assistance pertaining to project management—to  establish requirements for classifying cleanup work as capital asset  projects or operations activities and then work together to asses EM’s  ongoing operations activities to determine if they should be  reclassified as capital asset projects based on the newly established  requirements. DOE generally agreed with our recommendations and  committed to review and revise its requirements as appropriate.
EM’s cleanup policy does not follow program and project  management leading practices. In February 2019, we also found that  EM’s 2017 cleanup policy, which outlines procedures that govern the  EM program and its operations activities, does not follow most  selected leading practices for program and project management.  Specifically, we found that EM’s 2017 cleanup policy does not follow  any of 9 selected program management leading practices related to  scope, cost, schedule performance, and independent reviews. For  example, the policy does not require the program management  leading practice of monitoring and controlling the program, including  conducting root cause analyses and developing corrective action  plans. Further, EM’s 2017 cleanup policy follows only 3 of 12 selected  project management leading practices related to these areas. For  example, EM’s 2017 cleanup policy does not require any independent  reviews of its operations activities by anybody outside of EM. We  recommended that DOE review and revise EM’s cleanup policy to  include program and project management leading practices related to  scope, cost, schedule performance, and independent reviews. DOE  agreed with our recommendations.
In addition, broader DOE management challenges affect EM and have  implications for EM’s ability to effectively manage its cleanup work and  begin reducing its environmental liability. EM, like DOE, executes its  program activities primarily through the use of contracts. We have  reported that about 90 percent of DOE’s budget is spent on contractors  that manage the laboratories and carry out DOE’s programs. DOE’s  contract management, however, is one of the areas we have identified as  posing a high risk of fraud, waste, abuse, and mismanagement because  of DOE’s record of inadequate management and oversight of contractors.  As a result, DOE’s contract and project management has been on our  High Risk List since 1990. Most recently, we found in March 2019 that  DOE did not always ensure that contractors audited subcontractors’  incurred costs as required in their contracts. We identified more than  $3.4 billion in subcontract costs incurred over a 10-year period that had  not been audited as required, and some subcontracts remained  unaudited or unassessed for more than 6 years. Completing audits in a  timely manner is important because of a 6-year statute of limitations to  recover unallowable costs that could be identified through such audits.  We recommended that DOE develop procedures that require local offices  to monitor contractors to ensure timely completion of required subcontract  audits. DOE partially concurred with this recommendation and stated that  it plans to review existing requirements and guidance and to consider the  extent to which it requires monitoring of contractors’ progress in  completing required subcontract audits. As we noted in the March 2019  report, we believe that DOE’s plans to further examine the issues raised  in our report is a positive step toward resolving the issues; however, we  continue to believe that the actions called for in our recommendations  remain valid and that DOE could more efficiently resolve the issues by  proceeding to implement those actions.

	EM Has Not Reported Required Information about the Status of Its Cleanup

Accurate and reliable information on the status and progress in a program  is essential for effective management and to ensure key stakeholders are  provided the information they need to fulfill their oversight, advisory, and  other essential roles. However, EM’s performance measures for  operations activities do not provide a clear picture of overall performance,  and EM has not followed best practices in implementing its performance  reporting systems. In addition, EM has historically not provided all of the  statutorily required information about the status of its cleanup effort, and  the information EM has reported has been incomplete or inaccurate.  Finally, in its recent budget materials, EM did not include the funding it  says it needs to meet its schedule cleanup milestones.

		EM’s Cleanup Performance Measures Do Not Provide a Clear Picture of Overall Performance

In February 2019, we found that EM’s performance measures for  operations activities—which constitute most of its cleanup activities—do  not provide a clear picture of overall performance. According to EM  documentation and officials, EM uses three tools to measure the overall  performance of operations activities: earned value management (EVM),  performance metrics, and cleanup milestones. We found problems  with EM’s use of each of these tools. Figure 5 summarizes our findings on  these three performance measures and how they affect EM’s ability to  effectively manage the cleanup effort.
First, we found in February 2019 that EM does not always ensure that its  EVM data are comprehensive or reliable. EVM measures the value of  work accomplished in a given period and compares it with the planned  value of work scheduled for the period and with the actual cost of the  work accomplished. EM relies primarily on EVM data to measure the  overall performance of its operations activities. EM relies on contractors’  EVM systems to measure the performance of its contractors’ operations  activities. We reviewed all 20 EM contracts covering operations activities  and found that EM requires its contractors to maintain EVM systems for  17 of all 20 contracts. We also found that EM paid its contractors to  maintain these systems and provide EVM reports to EM. However, we  found that EM has not followed best practices to ensure that these  systems are (1) comprehensive, (2) provide reliable data, and (3) are  used by EM leadership for decision-making—which are the three  characteristics of a reliable EVM system. For example, only about half of  the EVM systems met the best practices for conducting integrated  baseline reviews and performing ongoing surveillance. Among those,  many of the reviews were not rigorous enough to ensure that the  performance measurement baseline captured all of the work. We found  that EM officials were not performing thorough surveillance reviews to  ensure that EVM systems were in alignment with EVM guidelines and that  the data being reported by the EVM systems were reliable. In addition,  the EVM data for contracts covering operations activities contained  numerous, unexplained anomalies in all the months we reviewed,  including missing or negative values for some of the completed work to  date. Even though EM requires most of its contractors for operations  activities to maintain EVM systems and pays them for doing so, EM’s  2017 cleanup policy generally does not require that EVM systems be  maintained and used in a way that follow EVM best practices. The use of  EVM as a management tool is considered an industry standard and a  best practice for conducting cost and schedule performance analysis for  projects. EVM data can alert project managers to potential problems  sooner than expenditures alone can. Because EM does not follow best  practices in administering its EVM systems, EM leadership may not have  access to reliable performance data to make informed decisions in  managing billions of dollars’ worth of cleanup work every year and to  provide to Congress and other stakeholders. We recommended that EM  update its cleanup policy to require that EVM systems be maintained and  used in a way that follows EVM best practices. DOE agreed with this  recommendation, and said it would implement it.
Second, we found that EM’s performance metrics do not link performance  to cost. EM collects performance metrics from the sites monthly to  measure progress toward completing the scope of work for the contract  and against a goal set at the beginning of each year. We found in  February 2019 that EM’s performance metrics do not link that work to the  cost of completing it. For example, EM reported that it eliminated 72,000  gallons of radioactive liquid waste out of a target of 342,000 gallons for  fiscal year 2017 at the Savannah River site and disposed of 1,734 cubic  meters of low-level waste out of a target of 360 cubic meters at the Idaho  site. However, in neither case did EM indicate how much that work cost to  accomplish, such as whether those costs were above or below what had  been planned. Because EM’s metrics do not link performance to cost, the  performance information EM has provided to Congress does not indicate  whether EM received good value from the contractor since it does not  show how much that work cost to accomplish. We recommended that EM  integrate EVM data into EM’s performance metrics for operations  activities. DOE agreed with this recommendation and said it would  implement it.
Finally, we found in February 2019 that sites regularly renegotiate  cleanup milestones they are at risk of missing, and EM does not track  data on the history of postponed milestones or the reasons why  milestones were postponed. As a result, milestones have limited value  as a means of tracking cleanup progress since EM does not track the  original (or any previously revised) milestone dates, which could provide  some data to measure the progress of cleanup activities. We  recommended that EM track and report original milestones dates as well  as changes to its cleanup milestones. DOE agreed with our  recommendation and said it is already tracking this information at the site  level. In response, we reiterated the importance of tracking these  changes and reporting that information at the headquarters level to help  inform Congress.

		EM Has Inconsistently Reported on Cleanup Status and Its Information May Be Misleading

We reported in January 2019 that EM has not submitted congressionally  mandated reports on its cleanup program and the information EM has  reported has been incomplete or inaccurate. These reports are intended  to provide Congress with information on the progress, challenges, and  expected future costs of the EM cleanup program. Under the fiscal year  2011 National Defense Authorization Act, EM must annually develop and  report to Congress a Future-Years Defense Environmental Management  Plan that reflects estimated expenditures and proposed appropriations  included in the DOE budget for defense environmental cleanup  activities. It must do so at or about the same time that it submits its  budget request. The plan is to cover the fiscal year for which the budget is  submitted and at least the 4 succeeding fiscal years. The plan is required  to describe the cleanup activities to be carried out during the period  specified by the plan, estimated expenditures and proposed  appropriations necessary to support them, and each milestone in an  enforceable agreement governing the cleanup activity. For each  milestone, EM is to identify whether the milestone will be met and, if not,  explain why not and provide the date by which EM expects to meet it.
EM submitted the required plan in fiscal year 2012 but did not submit  plans from fiscal year 2013 through fiscal year 2016, as we found in  January 2019, or in fiscal year 2018. EM’s most recent Future-Years  Defense Environmental Management Plan, which DOE submitted to  Congress in August 2017, included little of the information required by the  fiscal year 2011 National Defense Authorization Act . Table 1 shows our  assessment of the information EM provided in its 2017 Future-Years  Defense Environmental Management Plan against the reporting  requirements.
We also found in February 2019 that the forecast completion dates for  milestones listed in the 2012 and 2017 plans may not present an accurate  picture of the status of the milestones and EM’s cleanup efforts. For  example, in the 2012 plan, DOE reported that only four out of 218  milestones were at risk of missing their planned completion date, while  the rest were on schedule. When comparing these milestones to the 2017  plan, we found that at least 14 of them had been postponed. Similarly, the  2017 plan listed only one milestone out of 154 as forecast to miss its due  date. However, because EM does not have a historical record of the  changes made to the milestones, it is unclear how many of these  milestones were recently revised or actually represented their original due  dates because the report does not include this information.
Because DOE is not consistently and comprehensively submitting  complete information about the status of its cleanup, Congress and other  stakeholders may not have access to reliable information to make  informed decisions about billions of dollars of cleanup work. We  recommended that DOE submit in EM’s annually required Future-Years  Defense Environmental Management Plan all mandated requirements, as  well as information on annual growth in environmental liability estimates  by site, the key factors causing that growth, and an explanation of  significant differences between environmental liability estimates and life  cycle cost estimates. DOE agreed with our recommendation and has  since said it is working toward this goal.

		EM’s Recent Budget Materials Have Not Reflected the Funding EM Anticipates Is Needed to Meet Its Future Cleanup Responsibilities

In addition to the Future-Years Defense Environmental Management  Plan, DOE is to submit a budget request each fiscal year to Congress  along with an explanation of what EM cleanup activities the funding will  accomplish. However, in January 2019 we found that the information EM  provided to Congress in its fiscal years 2016, 2017, and 2018 budget  requests did not reflect the funding some senior DOE officials said EM  needs to meet its scheduled cleanup milestones. We reported that in a  2015 presentation on cleanup priorities, EM’s Deputy Assistant Secretary  noted that EM’s anticipated long-term funding needs for the full costs of  cleanup far exceeded the office’s annual budget requests and noted that  in fiscal years 2016, 2017, and 2018, EM anticipated that it needed nearly  $8 billion annually to meet scheduled milestones called for in compliance  agreements. However, DOE’s budget requests for those fiscal years were  $5.8 billion, $6.1 billion, and $6.5 billion, respectively—a shortfall of at  least $1.5 billion per year. The Deputy Assistant Secretary also noted  that if EM continued to receive about $6 billion per year in the coming 2  decades, it would face a funding shortfall of about $28 billion. He also  said that the time frame for EM’s cleanup mission would likely be  extended for years, thereby increasing cleanup costs and raising the  environmental liability. Similarly, we reported that in a 2017 site cleanup  meeting, EM’s Associate Principle Deputy Assistant Secretary for Field  Operations said that in order for EM to meet all of the cleanup  requirements reflected in agreements with federal and state regulators,  EM would need a much larger budget than was requested in fiscal year  2018. For example, this official said that EM’s Hanford site, which received about $2.5 billion in fiscal year 2018, needed more than $4  billion per year to meet scheduled milestones to construct and operate  the WTP—one of many cleanup activities at the site—for the duration of  its planned mission. The official added that EM’s annual budget will not  cover all needs, particularly because infrastructure maintenance, repair,  and replacement needs are growing and extending the completion of  cleanup further into the future. We recommended that DOE disclose the  funding EM needs to meet all of its scheduled milestones. DOE agreed  with this recommendation and said it plans to request the funding needed  to meet its cleanup agreements.
Chair DeGette, Ranking Member Guthrie, and Members of the  Subcommittee, this concludes my prepared remarks. I would be happy to  respond to any questions that you may have at this time.

	GAO Contact and Staff Acknowledgments

If you or your staff have any questions about this testimony, please  contact David C. Trimble, Director, Natural Resources and Environment,  at (202) 512-3841 or trimbled@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this testimony. GAO staff who made key contributions to this testimony  are Amanda Kolling (Assistant Director), Chad Clady, Kelly Friedman,  Cristian Ion, Jeff Larson, Cynthia Norris, Dan Royer, and Kiki  Theodoropoulos.

Related GAO Products

Department of Energy Contracting: Actions Needed to Strengthen  Subcontract Oversight. GAO-19-107. Washington, D.C.: March 12, 2019.
High-Risk Series: Substantial Efforts Needed to Achieve Greater  Progress on High-Risk Areas. GAO-19-157SP. Washington, D.C.: March  6, 2019.
Nuclear Waste Cleanup: DOE Could Improve Program and Project  Management by Better Classifying Work and Following Leading  Practices. GAO-19-223. Washington, D.C.: February 19, 2019.
Nuclear Waste: DOE Should Take Actions to Improve Oversight of  Cleanup Milestones. GAO-19-207. Washington, D.C.: February 14, 2019.
Department of Energy: Program-Wide Strategy and Better Reporting  Needed to Address Growing Environmental Cleanup Liability.  GAO-19-28. Washington, D.C.: January 29, 2019.
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