It can be really tricky for government to spend money today on investments that may not pay off for years. Every politician knows that a ribbon-cutting this year is way better politically than a plan to cut a bunch of ribbons in 2015.

Still that didn’t stop the authors of the Recovery Act from designing its weatherization program in a way in which much of the payoff would come in the future. We’ve written about projections of future energy savings in Iowa and have seen some very interesting work on this front in Florida, Georgia and Arizona.  But our optimism about the ultimate success of this program is tempered by a series of audits we’ve seen in the last couple of weeks. With a vast expansion in the dollars available for this work, capacity issues in state and local agencies and a large number of inexperienced contractors, audits continue to find significant problems.

In Pennsylvania, for example, an Inspector General Report that was issued in early November pointed to problems that local agencies were having in prioritizing the houses to be weatherized. The Department of Energy’s inspector complained that the state plan to prioritize work on high energy users sometimes didn’t pan out, with lower energy users getting attention first. The audit also criticized the state’s local agencies for taking advances from the state energy office and not expending the money in a timely way.

The auditor’s findings were mild compared to a legislative audit about weatherization in New Jersey that came out last week and criticized the weatherization program for its extremely slow progress. As of the end of July, the audit reported that only $8.7 million had been spent. That's about 8 percent of the total stimulus dollars that are due to the state through March 31, 2012 to weatherize 13,381 homes.

Among the problems cited were undocumented program costs, contractors who were paying employees less than they were supposed to, and improper reimbursements. There were major lags in processing financial paperwork and making payments, inspections that hadn’t been completed and weird disparities in prices charged by local agencies. For example, the audit noted that one weatherization agency charged $10 for a clothes dryer vent, while another charged $78. Low flow shower heads ranged in price from $3 to $60.

But Pennsylvania and New Jersey look like models of effectiveness compared to Illinois, at least based on a weatherization audit last month done by the Department of Energy’s Inspector General. That program, like Pennsylvania’s has had about a tenfold increase in spending compared to fiscal year 2009.  

Although there are 35 local agencies administering the program, the audit focused on the largest, the Community and Economic Development Association of Cook County, Inc. (CEDA), which will ultimately be responsible for 12,500 homes. A few highlights of the very grim audit:

• Of 15 homes that the IG’s office visited with CEDA inspectors, 12 failed a final inspection due to “substandard workmanship.” Among the problems? Emitting carbon monoxide at “higher than acceptable” levels.
• In eight of the 15 homes, the initial assessment of necessary weatherization measures was “inappropriate.” An example: Attic insulation was recommended for houses that already had dramatically leaking roofs. Water is not a good thing for the effectiveness of insulation.
•  In ten of the homes, there were labor charges for tasks that hadn’t been performed.
• Other problems that were cited in the audit: internal control weaknesses, inadequate final inspections, ineffective follow-up on inspection issues, and insufficient training.

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