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Audit Report: OAS-M-14-07

June 26, 2014

The Department of Energy's Water Power Program

The Department of Energy, Office of Energy Efficiency and Renewable Energy's (EERE) Water Power Program promotes the development of innovative technologies capable of generating cost-effective, renewable electricity from water resources. To accomplish its goals, the Program provides financial assistance awards for research, development, demonstration and deployment activities. From June 2008 to January 2013, the Program provided 105 financial assistance awards totaling $157 million. The awards ranged from $56,000 to almost $13 million and were given to more than 70 recipients, including universities, marine engineering firms, and public utility companies. Seven of these recipients received a total of $30.6 million in funding from the American Recovery and Reinvestment Act of 2009.

We found that the Program had generally implemented controls designed to help enhance its project management practices by establishing short-term goals, monitoring its recipients on a regular basis, and in some cases, requiring recipients to submit cost documentation prior to being reimbursed. However, we identified several opportunities to improve the economy and efficiency of the Program. Specifically, for-profit recipients had not completed and submitted compliance audits as required by Federal regulations and payment restrictions were not put in place to address weaknesses identified in an accounting system audit at one recipient.

EERE had begun to take action to address the issues identified during our review. However, additional actions are needed to further improve controls over the Program. We made several recommendations that, if implemented, should help improve controls over the Program. Management concurred with the report's recommendations.

Topic: Financial Assistance