PA Auditor General Jack Wagner Finds Sharp Increase in Families Needing Urgent Home Heating Repairs from Five Years Ago

HARRISBURG, Pa., Feb. 28, 2012 /PRNewswire-USNewswire/ -- Despite an extra $252 million in federal stimulus money, the number of Pennsylvanians on a waiting list for home repairs under the Weatherization Assistance Program has nearly doubled over the past five years, Auditor General Jack Wagner said today.

His follow-up report, issued today, found that 14,000 families were now on a waiting list for home repairs, up from 9,000 in 2007, when he first issued a performance audit criticizing the Department of Community and Economic Development's lax oversight of the program. The 2007 audit concluded that it would take nine years to clean up the backlog of applicants.  

"For our most vulnerable Pennsylvanians, many of whom are senior citizens or children, it is unacceptable to keep them on a waiting list, sometimes for years, and not help them cope with severe winter conditions," Wagner said.  By releasing his report, Wagner calls for greater transparency and accountability within DCED and local agencies. "Let's not lose sight of the people who truly need help with basic needs such as adequate shelter."

Wagner's latest report, which is available to the public at www.auditorgen.state.pa.us, attributed the increased backlog to more people seeking help. Wagner said his auditors found flaws in the weatherization program such as a lack of trained labor, too few vendors, and a lack of uniform policy and procedures.

Before 2009, approximately 8,400 homes were rehabbed each year.  Once the stimulus package was implemented, local agencies were able to hire more workers and subcontractors, increasing the number of homes rehabbed in a year.  Based on the faster repair rate, DCED estimated it would take six years to clean up the backlog.

The Weatherization Assistance Program's goal is to lower energy costs for the elderly and families living in poverty by making energy-efficient improvements to their homes.  The federal money comes from the U.S. Department of Energy, with an additional 15 percent coming from the Low Income Home Energy Assistance Program.  Wagner said that $104 million was spent on weatherization projects in Pennsylvania in the fiscal year ended June 30, 2011, down from $122 million the previous year.

About two-thirds of the stimulus money, or $156 million, received since 2009 has been spent, leaving a balance of $96 million as of June 30, 2011, Wagner said. 

To qualify, a family of four must earn no more than $44,700.  According to a 2010 DCED report, approximately 41,000 people received benefits in 17,000 homes.  DCED provides funds to local public and non-profit agencies, which hire subcontractors.

Common repairs include caulking and weather stripping windows and doors to reduce drafts, insulating walls, repairing foundations and roofs, and installing new water heaters. Some projects include installing low-flow shower heads, and replacing lights and refrigerators. Benefits include lowering heat and electric bills as well as saving energy.

According to the U.S. Department of Energy, weatherization reduced energy bills by an average of $215 per year in more than 105,000 low-incomes homes in 2002.  Studies show recipients often became more self-sufficient and less likely to default on energy bills or require emergency heating assistance.

In his special report on the Weatherization Assistance Program, Wagner noted that problems identified in 2007 still exist today, including ineligible clients and unsupported costs.  Auditors also found new problems, including misuse of deceased individuals' Social Security numbers, questionable transactions between landlords and tenants, inflated subcontractor prices, and purchases of high-end refrigerators instead of economy models.

Wagner's auditors studied 90 weatherization projects between July 1, 2009 and June 30, 2010.  Although eight people died before work started, almost $30,000 in repairs were still completed on their homes.

In a similar case, a $3,000 project was completed in March 2010, although the homeowner had died two years earlier, according to records verified by the Pennsylvania Department of Health.   Auditors found evidence that someone signed the deceased person's name and used her Social Security number on the application.  In both cases, Wagner linked the misuse of taxpayer money to poor management by the Department of Community and Economic Development and local agencies.

Auditors found that a Lancaster County agency processed and approved repairs to 83 rental properties in a building managed by the agency's parent company.  A member of the company's board of directors was also senior vice president of the construction firm that was paid more than $600,000 for the job. 

DCED has no conflict-of-interest policy regarding landlords and local agencies.  However, Wagner said, "We take exception to a local agency approving tenant applications for weatherization services and being the landlord of the rental property," and called on DCED to develop conflict-of-interest policies.

Wagner's special report contained seven findings and 13 recommendations. It said DCED should:

• Take immediate action to reduce and eliminate the waiting list.
• Require local agencies to verify the identity of the individuals and their household members applying for weatherization services, and to obtain independent data exchanges, such as Social Security numbers, death files and income to verify applicant households are eligible for weatherization.
• Require local agencies to request applicants to inform local agencies when a change in household composition has occurred subsequent to applying, such as a household member dying, and when it occurs to re-determine eligibility prior to starting the weatherization services.
• Require local agencies to ensure that subcontractors are not paid using a two-tiered billing structure that inflates prices when performing weatherization services.

Wagner said, "We feel it is essential that DCED immediately address the inefficiencies identified by our auditors and implement our recommendations to ensure that the program is administered professionally and ethically.  This will ensure that individuals truly in need of assistance, including individuals forced to wait several years on a waiting list, will continue to have access to a worthwhile program."

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly.  He is the commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations.  The Department of the Auditor General conducts thousands of audits each year.  To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's website at www.auditorgen.state.pa.us.

SOURCE Pennsylvania Department of the Auditor General