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related to Recovery Act spending and allows for the reporting of potential fraud, waste, and abuse.

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IGs Continue Scrutiny of Recovery Programs

 Department of Energy IG Gregory H. Friedman

While federal agencies have paid out most of their Recovery funds, the Inspectors General continue to oversee the agencies’ management of Recovery programs and to publicly disclose their findings.

For example, appearing before a House subcommittee on November 2, the Department of Energy IG, Gregory H. Friedman, provided details on DOE’s Recovery efforts, calling them “more challenging than many originally envisioned.”

The challenges stemmed primarily from the agency’s having to manage $35.2 billion in Recovery funds in addition to its annual budget ($27 billion for the 2011 fiscal year), an increase that imposed significant administrative demands at all levels, Friedman said.

The “huge influx of Recovery Act funds,” Friedman testified, “required extensive advance planning, organizational enhancements, and additional staffing and training. We found this to be true at the federal, state, and local levels. As a result, despite a major effort in a high pressure environment, the Department struggled to obligate and expend Recovery Act funds on a timely basis.

“Federal, state, and local government infrastructures were, simply put, overwhelmed,” Friedman further stated. “In several states, the very personnel who were charged with implementing the Recovery Act's provisions had been furloughed due to economic situations. Ironically, this delayed timely allocation and expenditures of funds intended to boost the U.S. economy and create jobs."

Among the resulting complications that Friedman and his staff found:

  • Few “shovel ready” projects existed at the start of the Recovery initiative in 2009
  • As of October 22, 2011, about 45 percent of DOE’s Recovery Act funds had not yet been spent  by recipients -- state and local governments for the most part
  • In one audit of 17 homes that had been weatherized under a DOE Recovery program, 9 failed inspection because of substandard workmanship
  • The Loan Guarantee Program for developing renewable energy sources had not properly documented risks prior to granting loan guarantees

The first loan guarantee issued under the energy program went to a California firm – Solyndra, for $535 million – in the fall of 2009.  Solyndra filed for bankruptcy in September 2011, prompting investigations by Friedman’s office, the FBI, and the House Energy and Commerce Committee.

In his testimony, Friedman said that his office has so far initiated more than 100 Recovery Act-related criminal investigations. “These involve various schemes, including the submission of false information, claims for unallowable or unauthorized expenses, and other improper uses of Recovery Act funds. To date, our Recovery Act-related investigations have resulted in over $2.3 million in monetary recoveries as well as five criminal prosecutions.”


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