Commissioner Putnam Reveals Success and Failures in Energy Grant Programs; Identified Fraud and Bankruptcy, Saving $2.45 Million in Taxpayer Dollars

Commissioner Putnam Reveals Success and Failures in Energy Grant Programs; Identified Fraud and Bankruptcy, Saving $2.45 Million in Taxpayer Dollars

Audit of Office of Energy Released

Tallahassee, FL – Commissioner of Agriculture Adam Putnam unveiled the findings of his audit of the Office of Energy (OOE) today, revealing both success and failures in the various energy grant programs managed by the office. He also announced savings of $2.45 million in taxpayer dollars as a result of fraud and indications of bankruptcy uncovered by his Office of Inspector General. These findings are part of the audit report requested by Commissioner Putnam shortly after he assumed responsibility of the state energy programs.

“These energy grant programs were intended to yield jobs, cost savings, energy savings and reduced emissions,” said Commissioner Putnam. “Now that the energy programs are my responsibility, it is my job to ensure they have met their objectives and, ultimately, will have a positive impact on Floridians.”

The state’s OOE was transferred to the Florida Department of Agriculture and Consumer Services, under the leadership of Commissioner Putnam, by the Legislature in 2011. Upon assuming this responsibility, Commissioner Putnam called on his Inspector General to:

* Evaluate energy grants to determine if the contractually stated goals were reached and if the anticipated returns on investment were realized;

* Investigate indicators of fraud or waste; and

* Assess the overall effectiveness of the OOE in its implementation and oversight of the energy programs, grants and activities.

“Based on the findings and recommendations of this audit, we’ve established performance measures that will enable us to hold grant recipients accountable for their contractual obligations and evaluate the continuing impact of these grant projects on the state of Florida.”

The report revealed some successful programs. As part of the Solar Energy Systems Incentives Program, for example, the OOE carefully reviewed 12,000 solar rebate applications and awarded nearly $25 million within the first 100 days after the office was transferred to the department. This program garnered significant participation, had a meaningful impact on the state’s economy by creating or retaining 792 jobs and resulted in $58 million in energy savings by consumers.

In another example, the ENERGY STAR/HVAC programs, which encouraged consumers to purchase ENERGY STAR appliances, saved Floridians more than 7.5 million kWH and approximately 123 million gallons of water and generated $51 million in economic impact and $3.6 million in tax revenues.

The report also revealed that some projects did not meet their objectives. The E85 and B20 Public, Private Fueling Facilities Grant, for example, was intended to increase the availability of E85 and B20 fuels to consumers at retail stations throughout Florida. Prior to the transfer of OOE to the department, the grant program awarded nearly $1 million to 20 facilities, yet as of March 31, not one facility had submitted for reimbursement or reported return on investment (ROI). Of the 20 grant recipients, 12 have already been terminated and only eight remain ongoing.

Commissioner Putnam issued today a letter to all grant recipients, both completed and ongoing projects, calling for an update on progress and continuing impact by the end of August 2012. Commissioner Putnam plans to use this information to evaluate the effectiveness of the grant programs in reaching their objectives.

As a result of potential fraud identified during the audit, the department terminated two grant agreements, resulting in cost avoidance in excess of $2.26 million. The department is currently working in coordination with federal and state law enforcement to conduct criminal investigations against these organizations. The audit identified another organization was undergoing bankruptcy proceedings and had previously been awarded four grants. The termination of all four grants resulted in $198,000 in savings of taxpayer dollars.

“Misuse of taxpayer dollars is unacceptable,” said Commissioner Putnam. “Organizations guilty of committing fraud against the state of Florida will be held accountable.”

The report revealed significant shortcomings in OOE management of grant programs including missing required documentation, insufficient reimbursement documentation and lack of correspondence between the grant manager and the grant recipient. The report provided recommendations for improving the office’s policies and procedures to address these shortcomings. Many of these policies and procedures have already been enhanced during the year since the office was transferred to the department. Grant managers were provided with training opportunities and granted permission to conduct site visits to verify grant progress reports. Recommendations that have not yet been enacted are currently being implemented.

A copy of the audit can be found here http://www.freshfromflorida.com/newsroom/resources/IA_1112-02_Final_Rep ort-Operational_Audit_of_OOE.pdf> .

For more information about the Florida Department of Agriculture and Consumer Services, visit www.FreshFromFlorida.com http://www.freshfromflorida.com/ .

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IA_1112-02_Final_Report-Operational_Audit_of_OOE

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