Report No. 2007-82
December 2007

Complete Audit Report

Additional Oversight Needed of the Weatherization Assistance for Low-Income Persons Program

The Department of Natural Resources (DNR) Energy Center is responsible for administering the federal Weatherization Assistance for Low-Income Persons Program (WAP) in Missouri. This audit included (1) analyzing DNR's review and follow-up procedures on subgrantee audit reports, (2) evaluating the effectiveness of DNR's on-site monitoring of subgrantee operations, and (3) evaluating DNR's overall program oversight to ensure subgrantee compliance with program requirements. We found weaknesses exist in DNR's program monitoring procedures. As a result, subgrantees have not always complied with program requirements, and program over billings have occurred.

Inadequate review and analysis of audit reports

Energy Center personnel have not always or timely followed-up with subgrantees when (1) independent CPA audits reported WAP and overall agency internal control findings, (2) audited financial information differed from DNR records, (3) audit results did not include a required schedule, or (4) audit reports had not been submitted timely. Federal Department of Energy WAP grant guidance requires states conduct a comprehensive review of each subgrantee including financial audits. Federal regulating agencies could require additional oversight and impose additional grant conditions on Missouri because of the failure by the state to comply with monitoring requirements. (See page 6)

Limited monitoring of subgrantee procedures

Energy Center personnel on-site monitoring and expenditure review need improvement because personnel (1) limited client file reviews and inspections of houses receiving improvements, which resulted in documentation deficiencies being missed, (2) have not ensured correction of problems identified in the house inspections, (3) did not conduct analysis of bidding requirements as part of the on-site visits, (4) did not review sufficient documentation to support program expenditures, and (5) did not use training and technical assistance reports to evaluate training expenditures claimed by subgrantees. (See page 9)

Cash management compliance weaknesses

Energy Center personnel have not monitored whether subgrantees complied with federal cash management requirements for interest earned on advanced funding. In addition, the Energy Center personnel advanced WAP funding to some subgrantees without considering funding needs or whether subgrantees met requirements for advances. (See page 12)

Complete Audit Report