Independent Oversight of Recovery Act Funding for Mississippi's Weatherization Assistance Program
GAO-10-796R, Jun 30, 2010
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The American Recovery and Reinvestment Act of 2009 (Recovery Act) assigns GAO a range of responsibilities to help promote accountability and transparency. One of the act's recurring requirements includes having GAO conduct bimonthly reviews of selected states' and localities' use of funds made available under the act. GAO's review of the use of Recovery Act funding in Mississippi this year included the Weatherization Assistance Program. The Weatherization Assistance Program, administered by the Office of Energy Efficiency and Renewable Energy within the U.S. Department of Energy (DOE), enables low-income families to reduce their utility bills by making long-term energy-efficiency improvements to their homes by, for example, installing insulation, sealing leaks, and modernizing heating equipment, air circulation fans, and air-conditioning equipment. As part of our overall review of the weatherization program in Mississippi, we visited community action agencies responsible for weatherization activities located in Columbia, D'Lo, McComb, and Meridian. In our review of client files, and other data provided by the Division of Community Services (DCS) personnel and one community action agency, we found several problems at the community action agency, which we shared with DCS. We also identified issues concerning the quality of oversight of the program by Mississippi Department of Human Services' (MDHS) Division of Program Integrity (DPI), which we have discussed with MDHS officials. This correspondence confirms the substance of our conversations with DCS and MDHS officials.
DCS has implemented a monitoring plan that generally exceeds the requirements established by DOE. In its Recovery Act training and technical assistance review plan, DCS states that it plans to monitor more than 22 percent of all homes completed. As of March 31, 2010, DCS has monitored 33 percent, and has set a goal for itself to monitor 40 percent of all homes completed from April 2010 through the end of the program. It was during the course of monitoring community action agencies' weatherization activities that DCS identified significant mismanagement by one community action agency, Southwest Mississippi Opportunity (SMO). DCS determined that SMO failed to provide adequate oversight of contractors weatherizing homes and SMO program staff. Specifically, DCS determined that SMO staff did not perform adequate inspections of homes weatherized and that 23 of 40 homes weatherized by SMO contractors exhibited poor workmanship. DCS also determined that SMO was 188 homes behind schedule. Other problems identified by DCS included incomplete client files and a lack of qualified staff. DCS subsequently terminated its subgrant with SMO because of SMO's failure to take corrective action as directed by DCS. During the course of GAO's review of SMO's client files we determined, and DCS concurred, that SMO paid contractors in excess of the levels established by DCS. The Director of DCS told us that the amount paid for labor should not exceed 110 percent of material costs. GAO determined that SMO had paid contractors between 200 percent and 400 percent of material cost. Because these actions did not correspond with DCS policy, DCS has required that SMO reimburse more than $38,000 in Recovery Act funding to DCS. DCS subsequently modified its guidelines for community action agencies regarding labor costs, raising the rate from 110 percent to 125 percent. The new rate is significantly lower than that paid by SMO. MDHS' DPI is responsible for performing independent reviews of all federal grants received by MDHS that are administered by its divisions such as DCS. For the Recovery Act Weatherization Assistance Program, MDHS requires DPI to monitor fiscal and programmatic records. In addition, DPI has established a policy to inspect 10 percent of homes completed by each community action agency.