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Illinois Energy Program Overpriced, 'Substandard': Audit

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SPRINGFIELD, Ill. — Energy-efficiency work on homes in the Chicago area funded by federal stimulus program money was sub-par, overpriced and poorly monitored, an audit released Tuesday said.

The U.S. Energy Department's inspector general criticized Illinois' handling of part of its $242 million, three-year share of the $5 billion home-weatherization portion of the stimulus.

"Substandard weatherization work can pose health and safety risks to occupants," the audit said. "Payment of excessive materials costs to contractors reduces the amount of funding available to weatherize homes ... and reduces the amount of funding for direct job creation."

The Illinois Department of Commerce and Economic Opportunity disagreed, saying work the audit reviewed was not completed, that no contractors were overpaid and that it had made improvements in the way it assigns and oversees work done.

Some of the problems arose from the federal government's huge infusion of cash so quickly that staff members and contractors were hired who were trained but inexperienced, said officials from the Community and Economic Development Association of Cook County Inc., or CEDA.

State officials said they will offer additional training sessions for those doing weatherization work and continue to make improvements in their review of work done.

"The department has already taken decisive steps to address issues identified by DOE auditors during their site visits," Commerce and Economic Opportunity spokeswoman Marcelyn Love said.

The audit focused on work done by CEDA, which plans to handle $91 million to weatherize 12,500 homes – nearly half of the total planned statewide.

In 15 weatherized homes visited, auditors found 14 would not pass safety inspections because of poor work quality. Twelve of the homes had "substandard work that could have, in some cases, resulted in significant property damage or injury to the homeowners," the report said, such as a kitchen exhaust vented to the attic that auditors said posed a fire hazard.

In ten homes, the audit said contractors were overpaid about $3,300 for materials not installed or work not done, including $1,000 extra for a larger boiler when a smaller one was actually installed.

And eight homes were not assessed properly for energy efficiency in the first place, it said. In one case, attic insulation was recommended but sizable leaks in the roof overlooked.

The audit knocked followup and inspection procedures by the state and CEDA and criticized overpayments to contractors for materials it said were significantly cheaper on hardware-store shelves.

State officials said the 15 homes visited had not yet been cleared by final inspections, while CEDA claimed in its response to the audit that the sample was too small. Both said over-billings had been discovered before anyone was overpaid.

"Absolutely no erroneous payments were made to contractors," CEDA officials wrote. The audit countered that from October 2008 to February 2010, it had found 20 instances where contractors had been paid for work not performed.

State and CEDA officials also contended that materials they used were of higher quality, and thus cost more, than those the audit used to compare prices. Auditors said they had seen no documentation to support that claim.

Love said $90 million of Illinois' share of weatherization money has been spent, and the rest will be spent by June, nine months ahead of schedule.

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Online: http://www.ig.energy.gov/143.htm