Weatherization—Money Continues to Pour | Citizens Against Government Waste

Weatherization—Money Continues to Pour

The WasteWatcher

It has been three and a half years since Congress passed the American Recovery and Reinvestment Act (ARRA), and the wasted money in this bill has taken its toll on taxpayers. President Obama and cheerleaders for the $838 billion stimulus promised it would be the antidote to a floundering economy, creating anywhere from “thousands and thousands” of jobs to 3.5 million jobs, depending upon which Obama administration spokesperson was making the rounds on the Sunday morning talk shows.

Today, with unemployment still hovering just under 8 percent, the President himself has been forced to concede the ARRA underperformed and that the millions of shovel-ready jobs envisioned by its proponents weren’t as “shovel-ready” as they had thought they would be.

Critics of ARRA, such as Citizens Against Government Waste (CAGW), immediately ascertained that ARRA would be vulnerable to massive wasteful spending and the predictions have been accurate. One program, the Department of Energy’s (DOE) Weatherization Assistance Program (WAP) offers the perfect illustration of the chaotic implementation, subsequent mismanagement, and large-scale losses that would come to pervade ARRA spending. WAP saw its budget balloon from an annual budget of $250 million to $5 billion as a result of the stimulus package.

The funding flowed through a tangled web of state agencies, more than 1,000 community action agencies, sub-grantees, and contractors, which performed much of the work. Most of the community action agencies saw unprecedented increases in funding as a result of the stimulus. Some states used the opportunity to create whole new departments and hire a slew of public-sector workers to administer the WAP program. But regardless of the mechanics, the one commonality seems to be that huge amounts of WAP funding have been mismanaged and will never be accounted for.

Since ARRA’s implementation and the staggering 2,000 percent increase in funding for the WAP program, the DOE’s Office of Inspector General (OIG) has issued at least 22 reports on mismanagement and financial disarray within WAP, and the Government Accountability (GAO) has produced at least three. The narrative is virtually the same in all of them. Untold sums have been wasted.

DOE Inspector General Stephen Friedman testified before the House Subcommittee on Regulatory Affairs, Stimulus Oversight, and Government Spending on November 2, 2011, saying “The concept of ‘shovel ready’ projects was not realized, nor, as we now have confirmed, was it a realistic expectation...In summary, a combination of massive funding, high expectations and inadequate infrastructure resulted, at times, in less than optimal performance.”

A few examples:

In September 2011, the DOE OIG issued a report on Action for a Better Community (ABC), which received $7.45 million in stimulus money from the state of New York. According to the report, ABC had not complied with many of the state’s regulations when carrying out the weatherization work. Contractors also failed to perform “adequate weatherization services on five of the nine single-family homes selected for review.”

In Pennsylvania, a February 2012 special report completed by the state’s Auditor General found that the state’s program, which was given $252 million from the ARRA, was riddled with fraud and abuse, including the use of deceased individuals’ social security numbers to illegally qualify for weatherization services, weatherization occurring in homes in which the renter did not pay rent to the landlord, and conflicts of interest that allowed certain buildings to obtain the weatherization services ahead of others on a growing waitlist.

In Ohio, which received $267 million in weatherization funds through ARRA, a June 2012 OIG report found that there were deficiencies in the state’s administration of the program, and that poor quality work WAS going “undetected and uncorrected.” The report also uncovered problems with the prioritization of jobs; some jobs were listed as high-priority, but the report established that those jobs were not completed before other lower-priority jobs. In addition, the report discovered that certain community action agencies reported incorrect jobs figures. One group, IMPACT Community Action, “reported creating about 36 more jobs...than had actually been created.” The report discusses a multitude of other issues, all mirroring what has been uncovered in states across the country.

On October 10, 2010 the OIG found that in Illinois, where the legislature decided to create a state-run program, 14 of 15 ‘weatherized’ homes chosen for inspection “failed because of poor workmanship,” 12 out of 15 homes contained substandard work that could have “resulted in significant property damage or injury to the homeowners.” Furthermore, in one of homes inspected, 11 of the 14 “green” items installed to insulate the home also failed inspection, another had an improperly installed exhaust system that posed a fire risk to occupants and in other OIG inspections, dangerous gas leaks were discovered. Friedman described contractors gouging homeowners, charging higher-than-market rates for the work, often up to 120 to 200 percent higher than market prices, shoddy billing, and charging for work never done.

WAP was included in the stimulus to create “green jobs.” President Obama promised five million “green jobs” over 10 years during his 2008 campaign. However, “of 53,000 people who participated in green jobs training, only 5,400, or 10.2 percent, were still employed in their new positions at the end of 2011,” according to Assistant Secretary of Employment and Training Jane Oates.

As the most recent unemployment figures tell us, the economy continues to hover in economic stasis. Even though the billions spent on weatherization have been largely inconsequential and made no measurable impact in terms of job creation, the program has clearly been deleterious to taxpayers and the budget.

Hundreds of news stories have documented the fraud and abuse associated with the WAP in states all over the country. And outmatched government watchdogs, who were behind the waste, fraud, and abuse curve even before the stimulus passed, have been left to try to determine the scope of the losses after the fact. The OIG has issued scathing reports covering Alabama, Arkansas, Delaware, Illinois, Kentucky, Massachusetts, North Carolina, New York, Pennsylvania, Tennessee, Texas, and West Virginia, to name a few. The reports serve as a disturbing echo chamber on the theme of waste, fraud, and abuse that have been rampant and systemic in the weatherization assistance program. Oversight was never a priority with regard to weatherization funds. Taxpayers have been ripped off for staggering sums of money. Given the WAP’s systemic shortcomings and the imminent fiscal crisis facing the country, members of Congress should add the WAP to their list of programs to be eliminated.

  -- Tom Miller

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