The American Recovery and Reinvestment Act (ARRA) included $250 million for a "RAT" board (pdf) established to audit and investigate stimulus-funded programs and projects. In addition, states have established their own auditing programs.   These auditing programs have started to reveal some problems with ARRA green building programs (subscrip. req.).   The Department of Energy received $3.1 billion to distribute to State Energy Programs for the green building, energy efficiency and renewable energy projects of the state’s choosing. With fifty states trying to manage unprecedented funding levels for the State Energy Programs, some states were bound to have trouble managing the funds. 

California risks losing $226 million in federal stimulus funds for energy projects for failing to quickly spend the cash and establish a system to track its use, a state auditor said today.

Auditor Elaine Howle said a state commission created to spend money from the American Recovery and Reinvestment Act "has been slow in developing guidelines, issuing requests for proposals and implementing the internal controls needed to administer" the funds. . . . The $226 million was given to California as part of $3.1 billion made available under the stimulus law’s State Energy Program."

The audit of the California State Energy Program concluded that the state has failed to create a system of internal controls adequate to ensure that those funds are used appropriately.

The implementation of "internal controls" to monitor ARRA projects is no surprise, but states that review this report may see a need for additional or more strenuous controls. Contractors participating in ARRA projects should certainly be prepared for onerous oversight and audits from states.   What are your experiences with state oversight of ARRA projects?   Related Links

Photo: Wikipedia