According to DOE officials, a number of factors explain why energy- efficiency retrofits, financial incentive programs, and buildings and  facilities programs account for such a large portion of all EECBG-funded  projects. However, in April 2010 DOE determined that many recipients were not on  a trajectory to obligate and spend all of their funds within this time frame. However, many recipients have had difficulty meeting these new  milestones. Table 5  shows the frequency of DOE’s planned monitoring activities. Some recipients also used EECBG  funds to help fund rebate programs. However, officials stated that  DOE does not gather specific information on recipient monitoring  practices except during on-site visits. DOE Officials and Recipients Reported Technical, Staffing, and Expertise Challenges That Hinder Efforts to Ensure Requirements Are Met

DOE officials and some recipients reported experiencing technical,  staffing, and expertise challenges that hinder the ability of both DOE and  recipients to provide oversight to ensure that Recovery Act and program  requirements are met, but DOE is taking steps to address many of these  challenges. Staffing and Expertise Challenges

Some DOE officials, monitoring staff, and grant recipients, as well as all  stakeholders we contacted, stated that some recipients are also  encountering staffing and expertise challenges that have limited their  ability to monitor the use of Recovery Act funds and ensure effective and  efficient use of funds while also meeting Recovery Act and other federal  requirements. DOE Has Faced Challenges in Determining the Extent to Which the EECBG Program is Meeting Recovery Act and Program Goals for Energy Savings

EECBG program recipients reported using EECBG grant funding to  develop projects designed to achieve a variety of benefits in line with  Recovery Act and program goals, including reducing total energy use and  increasing energy savings for local governments and residents. These officials said that instead of collecting actual energy- savings data, most recipients report estimates to comply with program  reporting requirements. While DOE officials said they believe that estimates  calculated with the current version of this tool are more accurate than  those calculated with previous versions, DOE does not require that  recipients who use its estimating tool to use the most updated version  when calculating and reporting estimates. Another factor that affects DOE officials’ ability to assess reasonableness  is the fact that the agency recommends but does not require, that  recipients report the methods or tools used to calculate estimates, so DOE  officials do not know which recipients are using older versions of DOE’s  estimation tool or other methods to estimate energy-related impact  metrics. As a result, DOE officials  reported that some recipients have had difficulty developing their  estimates. Oversight of Recipient Reporting Data Quality Continues for the Sixth Round of Reporting

To meet our mandate to comment on recipient reports, we have continued  monitoring data that recipients reported for Recovery.gov, including data  on jobs funded. As we noted in  September, some confusion may have existed about the acceptability and use  of some methods for calculating FTEs over the course of the reporting  periods. DOE officials indicated that they continue to assess  compliance with and encourage recipients to follow the DOE and Office of  Management and Budget (OMB) guidance on how to correctly report FTEs. Because of this limited assessment, DOE is not always able to identify  when recipients’ monitoring practices are sufficient to ensure compliance  with applicable federal requirements. Solicit information from recipients regarding the methodology they used  to calculate their energy-related impact metrics and verify that recipients  who use DOE’s estimation tool use the most recent version when  calculating these metrics. Appendix I: Objectives, Scope, and Methodology

	Objectives

We took a number of steps to address our objectives, which were to  determine (1) how Energy Efficiency and Conservation Block Grant  (EECBG) funds are being used, and what challenges, if any, do EECBG  recipients face in obligating and spending their funds; (2) actions  Department of Energy (DOE) officials and EECBG recipients are taking to  provide oversight of EECBG funds and challenges, if any, they face in  meeting Recovery Act and other requirements; (3) the extent to which  EECBG program recipients and the EECBG program are meeting  Recovery Act and EECBG program goals for energy savings, and what  challenges, if any, have recipients encountered in measuring and reporting  energy savings; and (4) how the quality of estimates of jobs created and  retained reported by Recovery Act recipients, particularly EECBG  recipients, has changed over time. To update the status of open recommendations from previous bimonthly  and recipient reporting reviews, we obtained information from agency  officials on actions taken in response to the recommendations. 2.
Why GAO Did This Study

The American Recovery and Reinvestment Act of 2009 (Recovery Act) provided $3.2 billion for the Department of Energy's (DOE) Energy Efficiency and Conservation Block Grant Program (EECBG) to develop and manage projects to improve energy efficiency and reduce energy use and fossil fuel emissions. The Recovery Act requires GAO to review funds made available under the act and to comment on recipients' estimates of jobs created or retained. GAO examined (1) how EECBG recipients used EECBG funds and challenges they faced, if any; (2) DOE and recipients' oversight and monitoring activities and challenges, if any; (3) the extent to which the EECBG program is meeting Recovery Act and program goals for energy savings; and (4) the quality of jobs data reported by Recovery Act recipients, particularly EECBG recipients. GAO also updates the status of open recommendations from previous bimonthly and recipient reporting reviews. GAO analyzed DOE recipient data and interviewed DOE officials and a nonprobability sample of EECBG recipients, among other things.

What GAO Found

According to DOE data, EECBG recipients primarily used funds for 3 of the 14 activities eligible for EECBG funding. These activities are energy-efficiency retrofits, financial incentive programs, and buildings and facilities projects. Some DOE officials, recipients, and others identified challenges in obligating and spending funds due to local jurisdictional requirements and staff and resource limitations. In addition, in April 2010 DOE determined that many recipients were not on a trajectory to obligate and spend funds within specified time frames, so DOE issued new milestones for obligating and spending funds. Many recipients reported having had difficulty meeting the new milestones. DOE is taking steps to address these difficulties. According to DOE officials and documentation, DOE follows a programwide monitoring plan to oversee the use of Recovery Act funds and uses a variety of techniques to monitor recipients. Overall, recipients also use various methods to monitor contractors and subrecipients, but DOE does not always collect information on recipients' monitoring activities. As a result, DOE does not always know whether the monitoring activities of recipients are sufficiently rigorous to ensure compliance with federal requirements. Some DOE officials, recipients, and others have reported to GAO that some DOE staff and recipients faced challenges with overseeing the use of funds, including (1) technical challenges with a Web-based reporting application DOE uses as a primary oversight tool and (2) staffing and expertise limitations, such as some recipients' unfamiliarity with federal grant procedures. Recipients contacted and some DOE officials reported to GAO that recipients are using EECBG funds to develop projects designed to reduce energy use and increase energy savings in line with Recovery Act and program goals. However, DOE officials have experienced challenges in assessing the extent to which the EECBG program is meeting those goals. Because actual energy savings data are generally available only after a project is completed, DOE officials said that most recipients report estimates to comply with program reporting requirements. DOE takes steps to assess the reasonableness of these estimates but does not require recipients to report the methods or tools used to develop estimates. In addition, while DOE provides recipients with a tool to estimate energy savings, DOE does not require that recipients use the most recent, updated version of its estimating tool. GAO's analysis of the Recovery.gov data that recipients reported, including jobs funded, shows data quality this quarter reflects minor amounts of inconsistencies or illogical data. The portion of EECBG recipients reporting some jobs funded has continued to increase. DOE headquarters and field officials continue to address data quality concerns, including ensuring that recipients and reviewers had the updated Office of Management and Budget guidance on narrative descriptions. However, data across reporting periods may not be comparable because, in earlier periods, some confusion existed about methods for calculating jobs funded.

What GAO Recommends

GAO recommends that DOE (1) explore a means to capture information on recipients' monitoring activities, and (2) solicit information on recipients' methods for estimating energy-related impact metrics and verify that recipients use the most recent version of DOE's estimating tool. DOE generally agreed with GAO's recommendations.