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Investigative Report: INV-RA-11-01

December 3, 2010

Management Alert on the State Energy Efficient Appliance Rebate Program

The purpose of this management alert is to convey concerns regarding state-level implementation of the Department of Energy's State Energy Efficient Appliance Rebate Program (Rebate Program), which promotes the purchase of ENERGY STAR® qualified appliances. The Office of Inspector General (OIG) recently received an allegation concerning potential abuse of the program in the State of Georgia. Our investigation confirmed that an individual purchased multiple hot water heaters and returned them to the store, yet applied for and inappropriately received rebates under the Rebate Program. While we cannot confirm whether or not this was an isolated circumstance, our fundamental concern is that the Georgia program may currently lack sufficient safeguards to deter certain types of fraudulent or non-compliant rebate submissions. If similar process vulnerabilities exist in other jurisdictions, the Rebate Program could be exposed to abusive practices on a broad scale. For this reason, we are bringing this matter to your attention for expedited consideration.

Topic: Energy