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West Virginia's Weatherization Assistance Program Receives Bad Marks in Federal Report

West Virginia's Weatherization Assistance Program Receives Bad Marks in Federal Report

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The U.S Department of Energy took the West Virginia Governor's Office of Economic Opportunity to task in a report criticizing the agency for "not always managed its Weatherization Program efficiently and
effectively."

The U.S Department of Energy took the West Virginia Governor's Office of Economic Opportunity to task in a report criticizing the agency for "not always managed its Weatherization Program efficiently and
effectively."

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Published by: The West Virginia Examiner/WV Watchdog on Jun 16, 2011
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06/16/2011

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U.S. Department of EnergyOffice of Inspector GeneralOffice of Audits and Inspections
Audit Report
The Department of Energy'sWeatherization Assistance Programunder the American Recovery andReinvestment Act in the State ofWest Virginia
OAS-RA-11-09 June 2011
 
 
Department of Energy
Washington, DC 20585
June 13, 2011MEMORANDUM FOR THE ACTING ASSISTANT SECRETARY FOR ENERGYEFFICIENCY AND RENEWABLE ENERGYFROM: Gregory H. FriedmanInspector GeneralSUBJECT: INFORMATION: Audit Report on “The Department of Energy’sWeatherization Assistance Program Funded under the AmericanRecovery and Reinvestment Act in the State of West Virginia”BACKGROUNDThe Department of Energy's Weatherization Assistance Program (Weatherization Program)received $5 billion under the American Recovery and Reinvestment Act of 2009 (Recovery Act)to improve the energy efficiency of residences owned or occupied by low-income persons. TheDepartment subsequently awarded a three-year Recovery Act Weatherization Program grant of almost $38 million to the State of West Virginia. This grant provided nearly eight times the$4.8 million in Departmental funds available to West Virginia for weatherization in Fiscal Year(FY) 2009.The West Virginia Governor's Office of Economic Opportunity administers the Recovery Actgrant through 12 local community action agencies. These agencies are responsible fordetermining applicant eligibility, assessing and weatherizing homes, and conducting homeinspections. West Virginia's goal is to weatherize approximately 3,500 homes with RecoveryAct funding, providing services to qualified elderly and handicapped low-income persons on apriority basis. As of October 2010, the State reported weatherizing almost 1,800 homes at a costof $16.3 million in Recovery Act funding.Given the significant increase in funding and the demands associated with weatherizingthousands of homes, we initiated this audit to determine if West Virginia and three of its localagencies – Eastern West Virginia Community Action Agency (Eastern), North Central WestVirginia Community Action Association (North Central) and Southwestern Community ActionCouncil (Southwestern) – had adequate safeguards in place to ensure that the WeatherizationProgram was managed efficiently, effectively and in compliance with Federal and State laws andregulations.RESULTS OF AUDITThe State of West Virginia had not always managed its Weatherization Program efficiently andeffectively, nor had it always ensured compliance with applicable laws and regulations. Wefound problems in the areas of weatherization workmanship, financial management,prioritization of applicants for weatherization services, and compliance with laws andregulations. Specifically, we noted that:
 
Despite the fact that over half of the homes weatherized and inspected by local agencies(102 of 183) had failed State re-inspections due to poor workmanship (including health
 
 2and safety issues such as ventilation and clearance issues with furnaces, stoves, and gashot water heaters) or the need to install prescribed materials, West Virginia had notdeveloped a state-wide plan to identify and address systemic problems. Instead,workmanship issues were handled on a case-by-case basis; a practice that, while perhapseffective in correcting problems at the particular re-inspected units, did not address whatappeared to be pervasive, wide-spread quality issues.
 
Financial management at the State and the three agencies needed improvement:
 
North Central had billed for all costs associated with weatherizing homes,regardless of whether the work had been fully completed. We were unable todetermine the extent of the problem since North Central had not maintainedrecords of the homes that required work for which it had already billed the State;
 
North Central and Southwestern had not effectively accounted for materialsinventories. Specifically, neither local agency had reconciled inventory balancesto actual inventories, resulting in numerous observed differences betweenrecorded and on-hand balances;
 
Eastern, contrary to State procurement rules, had not always competitivelyselected sub-contractors and had not properly accounted for over $4,000 inadministrative personnel costs; and,
 
At the State level, we reviewed the three personal services contracts funded withRecovery Act monies and found that documentation was unavailable to supportany of the $47,500 paid. In these particularly troubling examples, State serviceagreements supporting the payments had limited or no defined work products.
 
North Central had given preferential treatment to its employees and their relatives whoqualified for the Program. As a result of this troubling practice which violates programguidance, elderly and handicapped applicants who should have received services on apriority basis according to the State's Weatherization Program were at a distinctdisadvantage. In fact, while employees and their relatives waited for services an averageof about 2.8 months from the date of application, the general population included in oursample of 32 client files waited an average of 21.4 months for needed weatherizationservices; and,
 
Local agencies had not established controls necessary to ensure compliance withRecovery Act requirements. For example, controls were not effective in preventingprovision of services to homes that had been weatherized after September 30, 1994.Neither the State nor two of the three local agencies we reviewed had maintainedinformation sufficient to identify homes that had been weatherized after 1994. Further,Eastern had not ensured compliance with the Davis-Bacon Act regarding compensatingsub-contractor employees in accordance with prevailing wages and the Recovery Actregarding reporting jobs created and saved.

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