February 19, 2013
City of Los Angeles – Energy Efficiency and Conservation Block Grant Program Funds Provided by the American Recovery and Reinvestment Act of 2009
As part of the American Recovery and Reinvestment Act of 2009 (Recovery Act), the Energy Efficiency and Conservation Block Grant (EECBG) Program received $3.2 billion to develop, promote, implement and manage energy efficiency and conservation projects and programs designed to reduce fossil fuel emissions, reduce total energy use of the eligible entities, and improve energy efficiency in the transportation, building and other appropriate sectors. In July 2009, the Department of Energy (Department) awarded the City of Los Angeles (City) a 3-year formula grant of $37 million. The City allocated EECBG funds to 10 of its departments, including the Department of Water and Power, General Services Department (GSD), and the Los Angeles Housing Department. The City assigned responsibility for managing its grant to the Community Development Department. The Office of Inspector General contracted with Lopez and Company, LLP to conduct an examination of the City’s EECBG Program. The examination found that the City had not ensured GSD contractors paid their employees prevailing wages in accordance with the Davis-Bacon Act. Further, the City did not properly account for or document EECBG equipment purchases in accordance with Federal regulations, and had not properly calculated total labor hours used to compute jobs created and retained. These issues occurred, in part, because the City did not perform an adequate review of certified payrolls to verify appropriate wages were paid or ensure adequate supporting documentation for apprentices was maintained. In response to the findings, the Department concurred with the recommendations and initiated corrective action to improve the administration of the EECBG Program.