For Immediate Release
November 11, 2010 Contact: Jeff Tittel, NJ Sierra Club Director, 609-558-9100
Audit Shows DCA Program Keeps People Out in the Cold
An audit of the Weatherization Assistance Program administered by the Department of Community Affairs (DCA) reveals the program is plagued by mismanagement and is well off pace to meet projected goals. This means thousands of New Jersey residents who could have been aided by this program will enter a cold winter without the ability to keep their houses warmer and save money on energy bills.
"There are consequences to the failure of this program to do its job. It means more people in New Jersey will be suffering through a cold winter, higher unemployment, more expensive energy bills and more pollution," New Jersey Sierra Club Director Jeff Tittel said.
The audit, released this week by the Office of Legislative Services, shows that less than five percent of the total monies allocated to New Jersey in 2010 have been spent. The federal government allocated $119 million to New Jersey for the Weatherization Assistance Program, part of the American Reinvestment and Recovery Act. The federal government provided New Jersey with half of the money ($64 million) up front, with the other half promised once progress was demonstrated.
But of that $64 million, only $8.7 million in expenditures has been reported. Of that $8.7 million, $2.7 has been ruled as fraudulent and was not reimbursed. Therefore, the DCA has actually used just $6 million of that $64 million installment.
"While millions of dollars are sitting there and even more money is being wasted, the people of New Jersey who desperately need help going into the winter are not getting help. This audit not only shows waste and abuse, but that the people of New Jersey will be suffering as a consequence," Tittel said.
Furthermore, the funds that were spent went largely unmonitored, leading to waste and unnecessary spending in many cases. Agencies that have been given millions to participate in the program are struggling to complete the projections for the year and are seeking funding for inappropriate items, like expensive GPS systems and unapproved vehicles.
Not only are we dismayed because the program was mismanaged, we're also concerned that this lack of coordination and consistency will jeopardize New Jersey's ability to receive the remainder of its federal funding for this program. These funds are of particular importance now because of Governor Christie's widespread cuts to clean energy programs, including RGGI and the Clean Energy Fund.
Under the Weatherization Assistance Program, DCA provides grants to community action agencies or other public or nonprofit entities to administer the program at the local level as Weatherization Agencies. But a lack of proper implementation by DCA, an absence of cost controls, and an inadequate review process has enabled abuse by some of these Weatherization Agencies.
According to the OLS audit, Weatherization Agencies have been "reimbursed for unreasonable costs because of inadequate review of financial reports and a lack of guidance from the state and federal agencies."
Examples of unreasonable spending include one Weatherization Agency purchasing two, $1,499 in-dash GPS systems when a cheaper, portable model would have been sufficient. Another agency was reimbursed more than $17,000 for vehicles that were already purchased prior to the grant funding. The OLS reviewed two agencies that reported substantial auditing fees and found no auditing services at all had been performed, despite being reimbursed for the expense.
On top of unreasonable spending being approved by the DCA, there has been no consistency in approving large purchases. Under the rules of the funding, the DCA must pre-approve every expense that exceeds $5,000, like vehicles and substantial equipment. The OLS audit found that the DCA was not enforcing these rules and gave out thousands of dollars in reimbursements for unapproved spending. One agency even purchased four vehicles without pre-approval from the DCA, and the DCA reimbursed this expenditure.
A lack of DCA oversight also led to a drastic inconsistency in approved construction costs. For example, according to the audit, one agency charged the program $1.50 for light bulbs, while another charged and was reimbursed $27 for the same item. Similarly, one weatherization agency charged $10 for a dryer vent, when another charged $78 plus $48 for installation.
The report also stated that the DCA was not enforcing the federal requirement that all workers must be paid a fair living wage of at least $17.40 per hour plus benefits. While the agencies were paying their employees this amount, the audit found many of them were using contractors that did not. As part of its audit process, the OLS reviewed the wages for 54 employees working for 10 participating contractors and found that 29 of them were not being paid the minimum as required by the grant.
"While this money is sitting there, there are trained people out there looking for work. At a time when New Jersey's unemployment is well above nine percent, this is unconscionable," Tittel said, adding weatherization has numerous benefits for the people of New Jersey. "This investment in weatherization lowers energy costs and saves residents money, and means less pollution since we won't be burning as many fossil fuels to heat our homes."
The OLS data shows that, despite being awarded more than $1 million in grant funding, Passaic County has not completed the weatherization any units whatsoever. In Paterson, the Laborers Union has trained dozens of unemployed for jobs in weatherization, but still no one can find work despite that $1 million in funding available to finish important efficiency projects.
Mercer County was awarded $4 million in funding, and has completed just seven units, despite reporting more than $250,000 in costs.
Because of all the issues this audit has brought to light, we are concerned it may cause New Jersey to loose the remaining Federal Stimulus money for weatherization, which is especially important thanks to drastic clean energy cuts by the current administration.
Governor Christie cut the Clean Energy Fund by $52 million in FY2011. In FY2010, Governor Corzine took away $30 million from the fund and Governor Christie slashed it further by $158 million later that year. The Clean Energy Fund is supposed to be used towards weatherization and energy efficiency, the biggest untapped market for reduction of greenhouse gases and pollution.
"This audit exposes a shameful display by the DCA and these agencies wasting public money and more importantly, hurting the public," Tittel said. "Instead of being a skeptic on climate change, Governor Christie should be skeptical of the DCA weatherization program."
Read the full audit here: <http://www.njleg.state.nj.us/legislativepub/Auditor/95160.pdf> http://www.njleg.state.nj.us/legislativepub/Auditor/95160.pdf
Kara Seymour, Program Assistant NJ Sierra Club 145 W. Hanover Street Trenton, NJ 08618 609.656.7612 (f) 609.656.7618 <http://www.newjersey.sierraclub.org/> www.newjersey.sierraclub.org
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