Audit: No independent verification of $217 million assistance programs

By M.D. Kittle | Wisconsin Reporter

MADISON, Wis. — Taxpayers and power customers paid out $217.1 million in energy and weatherization assistance in fiscal 2012-13, but a new audit finds the state agency that administers the fund cannot independently verify the accuracy of information used in determining eligibility.

The state Legislative Audit Bureau report also finds the state Department of Administration has failed to deliver an annual independent audit of its low-income emergency and weatherization assistance programs funded by fees on state energy consumers. State law requires DOA to do so.

Statutes also direct the agency to consult with the Council on Utility Public Benefits, an advisory and consultative body established in 1999 by law. The council is supposed to provide additional oversight for the assistance programs.

“We found that the Council has been inactive since at least 2007 and does not have any of its statutorily prescribed 11 members currently appointed,” the audit states. “Instead, DOA has relied on the Low-Income Energy Advisory Committee as an ongoing forum for programmatic input.”

The programs are in large part income-based.

In the fiscal year under review, the assistance programs received $111.2 in federal funding, down nearly 23 percent from peak assistance levels of $143.4 million in fiscal 2008-09, according to the audit.

State funding comes from the Utility Public Benefits Fund, administered by the DOA and supported with fees collected by utilities from their customers. That fund accounted for $102.8 million in fiscal 2012-13, an increase of about 12.4 percent from 2008-09, when customers contributed $91.5 million.

That fiscal year, Wisconsin taxpayers and customers paid out $235 million for the energy and weatherization assistance programs.

In 2009, Wisconsin Act 11 expanded the financial eligibility limit for both programs to 60 percent of the state median income.

“Local energy assistance agency employees are generally required to review documentation to establish non-financial eligibility based on criteria such as state residency, citizenship or immigration status, and possession of a valid social security number for each household member,” the audit states.

“In addition, local energy assistance agency employees are to positively identify new applicants by verifying photo identification. Households determined eligible for the energy assistance program are automatically eligible for the weatherization assistance program if the dwelling in which they live also meets program requirements.”

The number of households receiving energy assistance benefits has soared from 179,662 in fiscal 2008-09 to 222,470 in fiscal 2012-12, according to the audit, thanks in large part to the expanded eligibility limit.

Still, the average assistance benefits declined from $686 to $504 per household over the period, partly due to the decrease in federal funding and the increase in households receiving assistance.

DOA employs a contractor to provide oversight of the programs. The audit bureau found DOA or its contractor identified at least one area of weatherization program noncompliance for 83.7 percent of the dwelling units. The most common area of noncompliance was incomplete or unsatisfactory weatherization work.

“In addition, we found 37 instances in which weatherization agencies billed DOA for work they did not perform or materials they did not provide,” the audit states.

Officials from the DOA did not immediately return calls for comment.

The audit bureau recommends that DOA:

• comply with statutes by providing for an annual independent audit of its low-income energy assistance and weatherization assistance programs funded by the Utility Public Benefits Fund or request that the Legislature eliminate the statutory requirement for an audit
• ensure applicants’ reported incomes are verified using additional sources of data
• implement policies that require retention of original source documentation supporting applicants’ eligibility for at least three years from the date of application
• report to the Joint Legislative Audit Committee by November 14, 2014, on the status of its efforts

Contact M.D. Kittle at mkittle@watchdog.org