January 17, 2013
The Department of Energy's $700 Million Smart Grid Demonstration Program Funded through the American Recovery and Reinvestment Act of 2009
The Department of Energy's (Department) Office of Electricity Delivery and Energy Reliability received about $4.5 billion under the American Recovery and Reinvestment Act of 2009 (Recovery Act) to enhance the reliability and resilience of the Nation's power grid, or nearly 33 times the amount appropriated in Fiscal Year 2009. Of the amount awarded, the Department allocated nearly $700 million to the Smart Grid Demonstration Program (Program) to fund 32 regional demonstrations and energy storage projects. The Program also provided supplemental Recovery Act funding to 10 existing Department projects for renewable and distributed systems integration and high temperature superconductivity. The audit found that the Department had not always managed the Program effectively and efficiently. Review of 11 projects, awarded $279 million in Recovery Act funding and $10 million in non-Recovery Act funding, identified weaknesses in reimbursement requests, cost-share contributions, and coordination efforts with another Department program. These issues resulted in about $12.3 million in questioned costs. Although the Program had established procedures over financial reviews of projects, the problems identified occurred, in part, because it had not adequately reviewed financial transactions and planned for or monitored recipient cost-share provisions. In response to the finding, the Department concurred with the recommendations and indicated that corrective actions have been or would be initiated to improve the management of the Program and to resolve questioned costs.