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Examination Report: OAS-RA-11-21

September 30, 2011

Action for a Better Community, Inc. – Weatherization Assistance Program Funds Provided by the American Recovery and Reinvestment Act of 2009

Under the American Recovery and Reinvestment Act of 2009 (Recovery Act), the Department of Energy's (Department) Weatherization Assistance Program (Weatherization Program) received $5 billion to increase the energy efficiency of dwellings owned or occupied by low-income persons.  Subsequently, the Department awarded approximately $394.6 million in a Recovery Act weatherization grant to the State of New York's Division of Housing and Community Renewal.  The State of New York allocated about $7.45 million of its grant to Action for a Better Community, Inc. (ABC), to weatherize 1,037 homes/units.  The Department's Office of Inspector General contracted with Otis and Associates, PC, an independent public accounting firm, to conduct examinations of the weatherization activities of ABC. 
Based on its examination, Otis found that ABC had not performed adequate weatherization services on five of the nine single-family homes selected for review.  Also, ABC had not ensured compliance with State of New York policies and procedures related to purchasing.  Specifically, a review of sample purchases showed that ABC had not obtained at least three bids on two purchases totaling $6,200.  Additionally, ABC had not deposited or maintained advance funding received from the Weatherization Program in an interest-bearing account, as required by Federal regulation.  Also, ABC had not maintained adequate segregation of duties in the process for determining owner/occupant eligibility for receiving weatherization services.  For example, eligibility determinations were made by the same employee who accepted weatherization applications.  Further, ABC had not maintained documentation to ensure homes/units selected for weatherization had not been weatherized with Department Weatherization Program funds.  Lastly, ABC had not maintained documentation supporting authorization and approval of reimbursements.  ABC generally concurred with most of the recommendations, providing planned and ongoing actions to address the issues identified.

Topic: Financial Assistance