Weaknesses identified in U.S. smart grid demonstration program management


Gregory H. Friedman,
Inspector General,
Washington, DC, U.S.A. — (METERING.COM) — January 25, 2013 – In his latest audit on the Department of Energy’s handling of smart grid funding, the Department’s inspector general has found that the smart grid demonstration program funding had not always been managed effectively and efficiently.

Based on a review of 11 projects, which had been awarded $279 million in Recovery Act funding and $10 million in non-Recovery Act funding, the inspector general said about $12.3 million in questioned costs were identified, as a result of weaknesses in reimbursement requests, cost-share contributions, and coordination efforts with another Department program.

“In the absence of significant improvements, the Program is at risk of not meeting its objectives and has an increased risk of fraud, waste and abuse,” said the inspector general.

Further, “the failure of recipients to comply with their agreed upon cost-share contributions increased the risks associated with these projects.”

To this end the inspector general recommends to:

  • Ensure adequate review of payments made to recipients
  • Provide training to recipients on proper submission of reimbursement packages
  • Ensure that recipients contribute their required cost-share from allowable sources and,
  • Ensure the elimination of any potential overlapping funding among awards authorized by various Department programs.

The DOE was also recommended to resolve the questioned amounts in the report, which the inspector general stated had been initiated. The inspector general also said in the report: “Management concurred with the report’s recommendations and indicated that corrective actions have been or would be initiated. However, management expressed concerns with several conclusions in our report.”

The Smart Grid Demonstration Program was allocated nearly $700 million,which was awarded to 32 regional demonstrations and energy storage projects. The Program also provided supplemental Recovery Act funding to 10 existing Department projects for renewable and distributed systems integration and high temperature superconductivity.

The inspector general’s previous audit focused on the Smart Grid Investment Grant (SGIG) program.