Report: Energy Dept. mismanaged stimulus-backed climate program

“For example, the Department awarded more than $48 million to one recipient whose financial condition precluded it from obtaining a satisfactory merit review score. Rather than addressing the underlying issues, the Department accepted increased risk and lowered the recipient's required cost share,” the IG states.

The report also finds that DOE’s monitoring of some funds was not robust enough, noting up to $18.3 million in “questionable reimbursement claims” from funding recipients.

Elsewhere, the IG faults DOE for using $575 million to accelerate existing projects “rather than proceeding with new awards as required by Federal and Department policies.”

Overall, the IG found that of the $1.5 billion for the industrial emissions program in the 2009 stimulus law, only about $623 million has been spent, and says there’s room to improve the program.

“With approximately $860 million in Recovery Act Carbon Program funds yet to be spent, we believe the Department still has an opportunity to implement needed program enhancements and internal controls designed to increase the likelihood of a successful outcome,” the report states.

DOE agrees with most of the recommendations for enhancing the program’s oversight, and is taking steps to improve its procedures, according to the report.

But DOE is also defending its decision to grant money to existing projects, according to a response to the findings from a senior official that’s included with the report.

Assistant Secretary for Fossil Energy (FE) Chuck McConnell notes that DOE, facing a Sept. 30, 2010 deadline to obligate funds, had fewer candidates for funding that anticipated.

“With insufficient time remaining for FE to complete another competitive solicitation, FE recommended to DOE’s Recovery Act team that these funds be obligated to existing FE research and development . . . projects that could accelerate the achievement of the objectives of the Department’s Clean Coal Research Program. This recommendation was accepted,” McConnell writes.

He said those projects could, if successful, produce technologies that might “facilitate” carbon capture from industrial sources.