From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Watchdog Report: Recovery Act Funding of Energy
Efficiency Grants

Audio interview by GAO staff with Mark Gaffigan, Managing Director,
Natural Resources & Environment

Related GAO Work: GAO-11-379: Recovery Act: Energy Efficiency and
Conservation Block Grant Recipients Face Challenges Meeting Legislative
and Program Goals and Requirements

Released on: April 7, 2011


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[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the Government Accountability Office. It's April 7th,
2011. $3.2 billion of Recovery Act funding went to the Energy Efficiency
and Conservation Block Grant program at the Department of Energy. This
funding was intended to develop and manage projects that improve energy
efficiency and reduce fossil-fuel emissions. A group led by Mark
Gaffigan, Managing Director of GAO's Natural Resources and Environment
Team, recently reviewed the use and accountability of $2.8 billion of
those funds, as part of GAO's Recovery Act reporting. GAO's Jeremy
Cluchey sat down with Mark to learn more.

[ Jeremy Cluchey: ] You found that recipients of the Energy Efficiency
and Conservation Block Grants tended to use their funding for three main
purposes. Can you describe what those are?

[ Mark Gaffigan: ] Sure. About two-thirds of the money went for these 3
main purposes. They can use it for up to 14 different purposes. And the
three areas are: One, energy retrofits. So those are things that we have
an existing building and you want to replace the windows, that sort of
thing, and make it more energy-efficient. The second area is financial
incentive programs. And those are things like providing revolving loan
funds to set up energy-efficiency projects, or to maybe provide some
incentive payments. And the third area was sort of funding for
energy-efficiency programs for buildings and facilities. For example, a
solar heating project for a building that would be a new
energy-efficiency project.

[ Jeremy Cluchey: ] And what sorts of monitoring and oversight has GAO
found that the Department of Energy and the block-grant recipients are
conducting to make sure this funding is being spent properly?

[ Mark Gaffigan: ] Sure. There's oversight at both the DOE level and the
recipient level. At the DOE level, DOE takes kind of a risk-based
approach in terms of focusing a lot more effort on those recipients that
are receiving larger amounts of funds. So, at the recipient level, we
found it's quite varied. We found there wasn't really a lot of good
information on the extent of recipient oversight throughout the program,
and it was one of our recommendations to DOE that—to just try to get a
handle on who's doing what kind of oversight and where.

[ Jeremy Cluchey: ] In terms of gauging the impact on energy savings,
your team identified some challenges that DOE faces. Can you expand on
these?

[ Mark Gaffigan: ] Sure. I think this is a challenge that's faced by
energy efficiency in general, not just this program. The issue is, we
don't really have good measures for how much energy we didn't use. For
example, you're in your car. Your gas gauge will tell you how much
energy you used. Your meter at home will spin, and you'll get a bill at
the end of the month telling you how much electricity you used. You
don't really have a sense of, “Hmm, when I lowered my thermostat, how
much did I avoid in terms of energy costs?”. And that—in the essence—is
the biggest challenge, and I think DOE's facing that with these
projects. They're going to have to wait till the projects are over to
actually measure what they got. So, we think there's a lot of room to
grow—not only for this program, but for all energy-efficiency
programs—to really identify where we're going to get the biggest bang
for our buck in energy savings.

[ Jeremy Cluchey: ] In each of these Recovery Act reports, GAO looks at
the quality of the jobs data that is reported by funding recipients.
What did you conclude here?

[ Mark Gaffigan: ] We've continued to look at the jobs data. That's been
part of our mandate—to look at Recovery Act spending. And we have found,
overall, the data is pretty good. There are still some inconsistencies
and discrepancies, but it's been a minority of the data, around 2%.
Specifically looking at the EECBG job data, we have found that to be
growing. And that's not surprising, in that it was one of the programs
that was the slowest to get off, in terms of starting, because it was a
new program and because there are lots of recipients. So we're seeing a
kind of steady growth in the number of jobs reported.

[ Jeremy Cluchey: ] Given these factors, what should the public take
away from this new report?

[ Mark Gaffigan: ] I think there's a couple of things. I think—I think
for specifically the energy-efficiency program, they should take away
the importance of oversight, but also, the importance of developing good
metrics for measuring energy. I think, on a global level, for the
Recovery Act in general, they should take away the idea that there's a
real balance that needs to be struck between doing something quickly and
fast, to stimulate the economy—for the economy to recover—and doing it
right. We had under—EECBG was a program that had a lot of money going to
over 2,000 different recipients. So that money—or those 2.8 billion—is
going to 2,000 different recipients in smaller chunks, ranging from, you
know, a couple of million dollars, down to as little as $50,000. So each
one of those entities has to implement the program, has to understand
the requirements, and has to get it out. And to do that quickly, while
meeting all the requirements, is a difficult challenge. And I think as
people think about Recovery Act types of programs [background music] in
the future, that's something to keep in mind— striking that balance.

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to tune in to the next edition of GAO's Watchdog Report for more from
the congressional watchdog, the Government Accountability Office.