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Management Alert: OAS-RA-11-16

September 1, 2011

The Status of Energy Efficiency and Conservation Block Grant Recipients' Obligations

Under the American Recovery and Reinvestment Act of 2009 (Recovery Act), the Department of Energy (Department) Energy Efficiency and Conservation Block Grant (EECBG) Program received $3.2 billion to improve energy efficiency and reduce energy use and fossil fuel emission.  EECBG agreements have a maximum performance period of 36 months and, in support of the Recovery Act's goal of immediate investment in the economy, the Department required grant recipients to obligate all funds within 18 months of the grant award date.  Our examination disclosed that as much as $879 million, or 33 percent of the $2.7 billion allocated for formula-based EECBG grants, had not been obligated by the recipients.  Our testing also revealed a number of apparent inaccuracies in data that Department officials used to monitor grantee obligations and spending.  These issues undermine one of the basic premises of the Recovery Act, that is, to promptly stimulate the economy and create jobs.  Further, given established deadlines to deploy these Recovery Act resources and the reality of the "ticking clock," pressure to expedite both obligations and expenditures significantly increases the risk that program safeguards, important to ensuring that taxpayer interests are protected, may be circumvented.  Due to the urgency of addressing these matters, we are issuing this report as a Management Alert.  Department management concurred with our three recommendations and indicated in its response that it was executing plans to address each of the issues identified. 

Topic: Financial Assistance