Department of Community Affairs Flunks State Audit -- Again
Third audit of DCA's troubled weatherization program reveals new abuses and improprieties.
A new audit of the state’s troubled weatherization program yesterday found widespread problems once again in the department overseeing the effort, allowing the agency delegated to disburse the funds to improperly spend federal grant money.
The audit, the third critical probe involving the weatherization program, examines the spending of $2.1 million in federal stimulus funds in a program with a goal of creating jobs for contractors and cutting energy bills for homeowners by insulating their homes.
Among the abuses cited in the audit was the failure of the delegated agency to document approximately $600,000 of the $2.1 million it was paid to oversee the program. It also found one vendor hired by the agency was paid $27,500 to analyze weatherization training and develop a plan to expand the training process. No plan was ever developed.
Both the Department of Community Affairs (DCA) and the New Jersey Community Action Association (NJCAA), its delegated agency, came under withering criticism from the State Auditor in the Office of Legislative Services (OLS).
"We found the DCA’s inadequate budgetary and spending controls over the grant enabled the NJCAA to improperly spend weatherization grant funds," the audit concluded. "The issues we discovered raised questions about NJCAA’s viability as an ongoing concern."
In addition, the audit said the department circumvented state policies regarding procurement by using the association to contract with vendors instead of entering into agreements directly with vendors.
In the audit, the association could only document $1.5 million in expenses, and it has only $270,000 in its bank accounts as of November 30, 2010. This amount is insufficient to cover the remaining balance of $600,000, the audit noted.
A call to the association was answered by a recording. No response was made to a request for a comment.
When the details of the NJCAA’s financial management problems were brought to the DCA’s attention in October 2010, the department immediately put spending controls in place for all grants provided to the agency, the audit noted.
In response to the audit, DCA Commissioner Lori Grifa wrote the department "concurs with the recommendations presented in the report and with your overall conclusions that controls need to be more effectively implemented." Toward that end, Grifa said the department has undergone a significant change in management.
The audit documented numerous problems with the weatherization program:
An individual with no affiliation with the NCAA approved of 26 percent of the stimulus weatherization checking using a signature stamp for the association’s treasurer.
Overcharges totaling $18,000 were paid by the association to one vendor for advertising contracts.
In November 2009, salary increases were given to four association personnel ranging from 21 percent to 61 percent ($7,000 to $40,000) based on "increased responsibilities resulting from the weatherization program."
No account payable records were maintained by the association. NJ Spotlight was unable to determine with certainty the total outstanding bills during its review. Based on the documents provided, there is $400,000 in outstanding bills.
A previous audit of the program faulted the department for spending only a fraction of the money allocated to it and failing to conduct inspections of homes to that were weatherized. At that time, Grifa blamed the problems on weaknesses in monitoring caused by the rapid expansion of the program due to the injection of federal stimulus funds.
Initially, the state hoped to weatherize more than 13,000 homes. The audit did not detail how many of those homes have been weatherized. The DCA has ceased funding the association, except for critical areas.