A new government audit criticizes Oak Ridge National Laboratory for extravagant spending on scientific conferences - hosting "upscale and elaborate" meals with Department of Energy money and using conference fees to throw a party.

At one conference, ORNL used registration fees to pay for alcohol, entertainment and gifts, according to the report released today by DOE's Office of Inspector General. That violates DOE Order 110.3A, which allows for collection of registration fees to offset costs but specifically states the money cannot be used for alcohol and entertainment, the report said.

"UT-Battelle (the government's managing contractor at ORNL) spent $27,225 on an afternoon social event at a yacht club and $650 on cigars and wine," the report said.

Inspectors evaluated three DOE national laboratories, including Argonne National Laboratory and Thomas Jefferson National Accelerator Facility, and ORNL was singled out for not following "applicable policies and regulations."

The IG report said ORNL had not requested or obtained DOE approval to hold conferences from 2005 through 2007. Such approvals help ensure that conference locations and spending are appropriate, the report said. ORNL claimed an exclusion from the approval process for most of its conferences.

Inspectors also cited "unreasonable" meal costs associated with a four-day conference for scientific computing held at a Boston hotel in 2007.

The report said UT-Battelle spent $236,300 of DOE funds to feed approximately 318 people at the conference.

"Participants were provided full breakfasts and lunches, morning and afternoon snacks, as well as food and beverages at four evening events," the report said. The expenditures far exceeded the government's standard for daily meal allowances while traveling, the report said.

Auditors said it appeared that some federal and contractor employees may have eaten free at the conference and later filed for meal allowances in their travel reports.

The IG said DOE's Oak Ridge office subsequently did a review of conferences managed by UT-Battelle and found that the contractor exceeded allowable meal costs by $606,000 during the 2005-2007 period.

ORNL Director Thom Mason admitted today that the lab made a mistake in using registration fees to buy alcohol and entertainment, and he said UT-Battelle had already written a check to reimburse those costs.

He said lab officials misinterpreted rules on the use of conference fees from non-DOE sources.

"That was a mistake, and we corrected it," he said.

Some of the other costs cited in the report are still under discussion, Mason said. However, if they are found to be unreasonable, UT-Battelle will take responsibility for overspending DOE money, he said.

One of the issues that needs to be clarified is what constitutes reasonable spending at these conferences, the ORNL chief said.

Mason said the problems identified in the Inspector General's report involved a relatively small number of the conferences hosted by ORNL and were "isolated cases."

One of the roles of being a science lab is hosting conferences for researchers, and ORNL in most cases has performed that role in a responsible, cost-effective manner, Mason said.

The IG report made a number of recommendations, asking DOE to provide more specific guidance on the management of scientific conferences. The Inspector General also recommended that DOE's Oak Ridge office conduct regular reviews of UT-Battelle's spending habits and use of conference fees and "consider the information disclosed by our review when evaluating UT-Battelle's performance."

DOE concurred with most of the recommendations.