Objective

To determine whether the Division of Housing and Community Renewal is obtaining federal reimbursements on time and in a manner that recovers all costs and adequately ensures the Weatherization Assistance Program (WAP) meets federal reimbursement documentation requirements. The audit covered the period from April 1, 2017 through December 31, 2020.

About the Program

Homes and Community Renewal’s Division of Housing and Community Renewal (Division) administers the State’s WAP. The purpose of the program is to reduce energy and utility costs by installing energy efficiency measures in the homes of income-eligible persons, especially those occupied by the elderly, persons with disabilities, and families with children. The Division implements the WAP through a network of local organizations that provide weatherization services, including air sealing to prevent air infiltration and reduce drafts, insulation to reduce heat loss, and modifications to heating systems. Subgrantees are required to follow procedures to ensure compliance with all program requirements and perform most of the functions that are necessary to meet program goals.

The Division receives funding for the WAP from both the U.S. Department of Energy (DOE) and the U.S. Department of Health and Human Services (HHS) and must expend and account for WAP awards in accordance with federal statutes, regulations, and the terms and conditions of the awards. State agencies should make every effort to disburse and/or adjust all unspent federal awards as soon as possible and maximize federal funding. The Division was appropriated a total of $92,317,035 from DOE between April 1, 2017 and December 31, 2020 and a total of $163,539,842 from HHS between October 1, 2016 and December 31, 2020. WAP funds were used to weatherize 18,418 units occupied by 38,110 individuals between April 1, 2017 through September 30, 2020. We reviewed $212,333,241 of the $255,856,877 (the remaining funding was either out of our scope or not due to be expended within our scope period due to various extensions).

Key Findings

Generally, the Division has established controls to ensure WAP meets federal reimbursement documentation requirements and that the Division receives federal reimbursements on time and in a manner that recovers all funds. However, the Division lost $120,475 in federal funding during our audit period because it was not expended by program deadlines, primarily due to a decrease in production caused by the COVID-19 pandemic. As of December 31, 2020, the Division had until March 31, 2022 to obligate and expend $10,925,486 or it will be returned to DOE.

Key Recommendations

• Identify and take steps to mitigate potential future losses of federal funds caused by unexpected events.
• Ensure all remaining funds are obligated and expended by the end of the current grant period.