Weatherization Program Continues Unbroken Streak of Failed Audits

State auditor takes Department of Community Affairs to task for indefensible expenses, weaknesses in oversight

More than $16,000 to install 30 windows in just one apartment; $2,200 for 12 light bulbs at a cost of $185 each, when the true expense was $1.85; and $1,500 in labor to install a $3.30 device on a single faucet.

Once again an audit has found questionable cost practices, although probably not as widespread as in previous reports, with the state Department of Community Affairs’ weatherization program

The program, financed by federal stimulus funds as a way of promoting job growth, typically tries to lower energy bills for residents by installing insulation, sealing ducts, and replacing windows and doors, among other things.

But the program has come under intense scrutiny from the State Auditor on three previous occasions and from state lawmakers, both of whom have criticized lax oversight of spending and failure to document appropriate expenditures in three separate audits.

In New Jersey, total expenditures for the program were more than $100 million between 2009 and 2012. The DCA, in contrast to previous highly critical audits of the program, disputed many of the findings. The program originally aimed to weatherize 13,381 units at its outset.

“With DCA ending the program by weatherizing 22,419 units, the only logical conclusion to draw is that this program was a huge success,’’ wrote DCA Commissioner Richard Constable in a response to the audit.

The agency questioned some of its conclusions. For instance, the department argued it had disallowed the expenditure of more than $16,000 for installation of 30 windows in one apartment.

Overall, the audit found adequate controls were in place at the DCA to determine the propriety of program costs for the weatherization efforts, particularly regarding multifamily units, which the report focused on.

“In making this determination, we noted certain internal control weaknesses and compliance issues meriting management’s attention,’’ said State Auditor Stephen Eells.

The problems included failure to collect required landlord contributions for weatherization projects for units that they owned. Those contributions were not collected at 106 of the 117 projects, which the audit assessed, resulting in uncollected contributions of $1.6 million.

The audit also found that the DCA failed to adequately review projects at the delegated agency — the Housing and Mortgage Finance Agency — to ensure weatherization funds were spent effectively and in compliance with agency’s policies.

The latest audit follows up three previous reports focusing on the weatherization program. Each one homed in on a different aspect of the program—on local and community-based organizations; on single- family units; and on a grant to the New Jersey Community Action Association.

One of the abuses cited in a prior audit was the failure of a 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 process. No plan was ever developed.

Beyond providing jobs, the weatherization program is viewed by clean energy advocates as a crucial way to help New Jersey curb its use of electricity and gas, a priority of the state’s Energy Master Plan.

The latest audit dismayed advocates of the weatherization program, which reduces energy consumption. They question when it is going to be fixed.

“It shouldn’t be happening again,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “We lost $65 million because they did not do it properly in the first round.’’