An Energy Department watchdog last week questioned hundreds of thousands of dollars in energy efficiency stimulus expenditures to a group of African drummers and a media company with ties to top officials who oversaw stimulus awards.
The groups received a combined $630,000 in grants under DOE’s stimulus-funded Energy Efficiency and Conservation Block Grant Program to monitor and inspect energy efficiency retrofit efforts, despite their lack of experience on such projects.
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As a result of that inexperience, both awardees performed poorly in servicing the grants and DOE failed to exercise adequate oversight even in the face of evidence of their poor performance, according to a DOE IG report released last week.
The IG report raised the possibility that Prosperity Media Enterprises (PME), a Washington, D.C. based company that "make[s] media accessible to the underrepresented and nonprofit organizations," received its grant due to its ties to DC officials overseeing the program.
The District Department of the Environment (DDOE), the agency that administers D.C.’s energy efficiency block grant program, "may have been improperly influenced by prior professional relationships between DDOE employees and a member of PME's team," the IG found.
A PME project manager that helped draft the group’s proposal for weatherization assistance funds was a former DDOE official who, during his time at the office, had supervised two members of the DDOE selection committee that oversaw decisions to award weatherization funds.
"DDOE was unable to provide any evidence that it had considered whether the individual's previous employment in DDOE and his role as a former supervisor of two of the selecting officials should have precluded him from working with the agency on these matters," the IG noted.
DDOE failed to consult with its general counsel or ethics officer before granting the funds to PME based on a proposal that, the IG found, may have improperly inflated the group’s qualifications.
The selection committee gave PME’s proposal a score of 97 out of a possible 100, which the IG said "was clearly not warranted." Similar scores were given to other organizations with significantly more experience in managing energy efficiency projects.
Neither PME nor a group called the African Heritage Drummers and Dancers, which also received weatherization funds, had much experience in the area.
The awards, the IG found, "did not appear to be prudent given the lack of prior experience with energy-related work and the basic missions of these organizations."
The IG inspected projects on which the groups had spent federal energy efficiency funds, and found they had both misspent money or failed to adequately accomplish objectives for which the funds were awarded.
PME submitted invoices for 12 of its 33 DOE-funded projects when it had not actually performed the required work, the report found. Nineteen of its projects had failed PPOE inspections.
A majority of PME’s subcontractors also failed DDOE inspections. One subcontractor’s failure rate was a whopping 91 percent, according to the IG.
"DDOE documentation of its inspections of PME's work showed that DDOE personnel had noted PME submitted claims for installations that were found not to have been installed, items referenced as ‘priced too high,’ incomplete jobs, and jobs with quality issues," the report noted.
According to the report, D.C. officials overseeing the program repeatedly failed to report poor performance by PME to DOE, as required. That failure may have resulted in violations of the False Claims Act going unreported.
D.C. officials took steps to prevent additional grant expenditures after problems with PME’s award were discovered, but "DDOE had not addressed the systemic issues by allowing PME and its contractors to continue work on tasks included in previously assigned projects without redirecting work to more capable" groups, the IG found.
DDOE does not actually maintain a list of vendors that have performed poorly on past awards, making it difficult to ensure that they do not receive additional funding.
The little oversight DDOE did exercise was inadequate, according to the IG’s review. "DDOE had neither requested nor reviewed PME's inspection documentation," the report found.
Had it inspected that documentation more closely, it may have discovered that, in one instance, two of the four energy efficiency measures for which PME had requested reimbursement had not actually been inspected. "Those measures subsequently failed DDOE inspection," the IG said.
"Without a proper control system in place, there is an increased risk for fraud, waste and abuse," the IG concluded.
Asked for comment, DOE noted that it is working with DDOE to implement corrective actions spelled out in the report, which the IG said adequately addressed the issues it raised.
PME did not immediately respond to a request for comment. The phone number for African Heritage Drummers and Dancers is disconnected, and its website is not available.