U.S. Department of Energy 

Office of Inspector General 

Office of Audit Services 

Audit Report 

The Department of Energy's 

American Recovery and 

Reinvestment Act - Florida State 

Energy Program 

OAS-RA-10-12 June 2010
 
 

 

 

 

 

 

 

Department of Energy 

Washington, DC 20585 

June 7, 2010 

MEMORANDUM FOR THE SECRETARY
 

FROM: Gregory H. Friedm

Inspector General 

an 

SUBJECT: INFORMATION: 

American Recover

Program" 

Audit Report on "The Department of Energy's 

y and Reinvestment Act – Florida State Energy 

BACKGROUND 

The Department of Energy's Office of Energy Efficiency and Renewable Energy (EERE) 

provides grants to states, territories, and the District of Columbia to support their energy 

priorities through the State Energy Program (SEP). The SEP provides Federal financial 

assistance to carry out energy efficiency and renewable energy projects that meet each state's 

unique energy needs while also addressing national goals such as energy security. Federal 

funding is based on a grant formula that takes into account population and energy consumption. 

The SEP emphasizes the state's role as the decision maker and administrator for the program. 

The American Recovery and Reinvestment Act of 2009 (Recovery Act) expanded the SEP, 

authorizing $3.1 billion in grants. Based on existing grant formulas and after reviewing statelevel plans, EERE made awards to states. The State of Florida's Energy Office (Florida) was 

allocated $126 million – a 90-fold increase over Florida's average annual SEP grant of $1.4 

million. Per the Recovery Act, this funding must be obligated by September 30, 2010, and spent 

by April 30, 2012. As of March 10, 2010, Florida had expended $13.2 million of the SEP 

Recovery Act funds. Florida planned to use its grant funds to undertake activities that would 

preserve and create jobs; save energy; increase renewable energy sources; and, reduce 

greenhouse gas emissions. To accomplish Recovery Act objectives, states could either fund new 

or expand existing projects. As a condition of the awards, EERE required states to develop and 

implement sound internal controls over the use of Recovery Act funds. 

Based on the significant increase in funding from the Recovery Act, we initiated this review to 

determine whether Florida had internal controls in place to provide assurance that the goals of 

the SEP and Recovery Act will be met and accomplished efficiently and effectively. 

RESULTS OF AUDIT 

We identified weaknesses in the implementation of SEP Recovery Act projects that have 

adversely impacted Florida's ability to meet the goals of the SEP and the Recovery Act. 

Specifically: 

Florida used about $8.3 million to pay for activities that did not meet the intent of the 

Recovery Act to create new or save existing jobs. With the approval of the Department, 
 

 

 

 

 

 

Florida used these funds to pay for rebates related to solar energy projects that had been 

completed prior to passage of the Recovery Act; 

State officials did not meet Florida's program goals to obligate all Recovery Act funds by 

January 1, 2010, thus delaying projects and preventing them from achieving the desired 

stimulative economic impact. Obligations were delayed because Florida officials selected 

a number of projects that either required a lengthy review and approval process or were 

specifically prohibited. In June 2009, the Department notified Florida that a number of 

projects would not be approved; however, as of April 1, 2010, the State had not acted to 

name replacement projects or move funds to other projects; 

Florida officials had not ensured that 7 of the 18 award requirements for Recovery Act 

funding promulgated by the Department had been passed down to sub-recipients of the 

award, as required; and, 

Certain internal control weaknesses that could jeopardize the program and increase the 

risk of fraud, waste and abuse were identified in the Solar Energy System Incentives 

Program during our September 2009 visit to Florida. These included a lack of separation 

of duties related to the processing of rebates and deficiencies in the written procedures for 

grant managers to review and approve rebates. 

From a forward looking perspective, absent aggressive corrective action, these weaknesses 

threaten Florida's efforts to meet future Recovery Act goals. In response to our review, Florida 

took corrective action to incorporate the additional award requirements in sub-recipient 

documents. It also instituted additional controls to correct the internal control weaknesses we 

identified. More, however, needs to be done with respect to Department oversight. This report 

details the circumstances surrounding these program issues and outlines actions that, in our 

opinion, will help Florida achieve its SEP Recovery Act-funded goals. 

Solar Energy System Incentives Program 

We found that Florida used Recovery Act funds to pay for rebates under a program that was in 

place prior to the passage of the Recovery Act, and, as such, did not satisfy the Recovery Act 

requirement of creating or saving jobs. In 2006, Florida's Solar Energy System Incentives 

Program was created to provide a rebate for the installation of residential and commercial solar 

energy systems through June 30, 2010. Rebates were paid through a rebate request process on a 

first-come, first-served basis with unpaid rebates given priority when funds were received in the 

following year. This program had been funded by Florida using State funds since its inception 

but, in 2008, an overwhelming response to the program exhausted the State's 2008 funding and 

created a backlog of rebate requests. 

The Department subsequently approved the use of SEP Recovery Act funds to continue this 

program. This included paying the backlog of rebates, some of which had been pending since 

March 2008, and funding additional rebates for this program. In August 2009, Florida began 

processing the $8.3 million backlog of rebates which had been pending prior to the passage of the 

Recovery Act. In our view, the use of Recovery Act funding in this way is inappropriate in that it 

2
 
 

 

did not advance the underlying purpose of the Recovery Act, that is, to create or save jobs. 

Clearly, the solar energy system installations covered by the backlog of rebate requests, as 

important as they may have been at the time, had been performed prior to the passage of the 

Recovery Act. 

Project Selection 

Florida has been unable to fully execute its SEP Recovery Act Plan, as intended. Specifically, 

Florida proposed 10 Recovery Act projects in May 2009, and planned to obligate most of its 

funds by January 1, 2010. Prior to approval, the National Environmental Policy Act (NEPA) 

requires that agencies consider the potential environmental impacts of proposed projects, 

including SEP Recovery Act projects. A number of the projects proposed by Florida either 

required a lengthy NEPA review or were specifically prohibited under SEP. To compensate for 

problems with initial project selection, Florida has had to change its plans to avoid delays 

associated with the NEPA approval process and to replace planned projects that are specifically 

prohibited. These changes have resulted in Florida missing its planned January 1, 2010, date for 

obligating most of its Recovery Act funds. Both State officials and EERE management assert that 

although Florida had not met its goals to obligate funds by the planned January 1, 2010, date, 

it is on track to meet the Department's goals that were established in February 2010 to obligate 30 

percent by March 31, 2010, and 80 percent by June 30, 2010. 

As of April 1, 2010, Florida has yet to finalize its plans and as such has not received approval for 

all of its projects under NEPA. Specifically, in June 2009, the Department notified Florida that 4 

of the 10 proposed projects were not approved under NEPA. After it was notified, Florida 

decided to scope down or modify the projects in an attempt to get them approved. Florida has 

since received NEPA approval for one of these projects and two others have been conditionally 

approved – needing further approval once the projects are fully developed. The remaining 

project has yet to receive approval. 

Notably, one of Florida's proposed projects, Shovel Ready Grants, has yet to be fully executed. 

This project consists of nine separate sub-grants that could, in theory, be started quickly. 

However, the Department indicated that two of these nine sub-grants proposed by Florida were 

specifically prohibited under SEP regulations. Additionally, two sub-grants were cancelled after 

NEPA concerns were identified, and one continues to undergo NEPA scrutiny. The other four 

sub-grants, worth $7.4 million, have been approved and funded. Even though Florida submitted 

these proposed sub-grants in its initial plan in May 2009, and was notified of the prohibition by 

the Department shortly thereafter, as of October 2009, Florida still had not reconsidered changing 

how it would use the funds. As of April 1, 2010, Florida still has not redeployed $12.1 million in 

funds reserved for five of these "shovel ready" sub-grants and was still considering its options on 

those sub-grants. 

As of April 1, 2010, Florida had changed its plan from 10 projects to 9 by combining 2 projects 

involving loan programs into one. If it successfully executes its current plan, Florida will have 

$67 million obligated by April 2010, with the remaining funds obligated by the Recovery Act's 

September 30, 2010, deadline. It plans to spend most of the SEP funds by June 30, 2011. 

3
 
 

 

 

 

 

 

Flow-Down Requirements 

The SEP Recovery Act grant mandates that 18 requirements be passed down to program subrecipients. These requirements, which are critically important to ensure accountability and 

transparency, are designed to help prevent or detect, in a timely manner, problems in the 

administration or execution of SEP projects. However, our review of Recovery Act flow-down 

requirements found that the following requirements were not included in Florida sub-recipient 

agreement documents: 

Authorized representatives of the Department must be provided access to facilities, 

resources, or persons, as necessary; 

Sub-grantees or bidders are prohibited from entering into agreements with labor 

organizations; 

Revenues, obligations, and expenditures related to Recovery Act funding must be 

segregated; 

Recovery Act funds may not be used for any casino, gambling establishment, aquarium, 

zoo, golf course, or swimming pool; 

Whistleblowers must be protected; 

Recipient and sub-recipients shall promptly refer to the Department or other appropriate 

Inspector General any credible evidence that a false claim has been submitted under the 

False Claims Act; and, 

Recipients of Recovery Act funds must use American iron, steel, and manufactured 

goods, where appropriate. 

After we notified Florida of these discrepancies, it took corrective action and modified its subrecipient documents to include these requirements. 

Internal Control Weaknesses 

During our review of the Solar Energy System Incentives Program, we also identified other 

internal control weaknesses. Specifically, an administrative staff member was performing 

multiple duties, including receiving the rebate forms, recording the rebates, approving the rebates 

for payment, and mailing the rebate checks. These duties should have been separated and 

performed by different individuals to minimize the possibility of theft. In addition, there were no 

written requirements for grant managers to review or approve the rebates prior to payment 

authorization. Since the time of our review, Florida told us that it had instituted additional 

controls to correct these weaknesses. 

4
 
 

 

 

 

 

Departmental Monitoring 

The deficiencies discussed in this report occurred, at least in part, due to insufficient 

Departmental monitoring. Specifically, the Department has not ensured that all of Florida's 

planned activities will save or create jobs and that all targeted projects could be started 

expeditiously in accordance with the Recovery Act. In addition, the Department is required to 

perform monitoring of each state's SEP activities annually; however, in the case of Florida, it had 

not performed on-site monitoring visits since the passage of the Recovery Act. As a result, the 

Department was unable to detect the deficiencies that have occurred in Florida's contract flowdown provisions and rebate processing controls. 

The Department has not ensured that all projects chosen for SEP will create or save jobs. 

Specifically, the Department's project officer told us that he did not verify the exact amount of the 

backlog during his review of the Solar Energy System Incentives Program. Otherwise he would 

have known that all of the Recovery Act funds were going to pay the $8.3 million backlog. 

When asked about the backlog of rebates, the project officer said that his initial assumptions 

were that the funds were only going to pay a small portion to the backlog but the majority of 

funds would be used for expansion of the program and payment of new rebate requests. Had the 

project officer requested details regarding the backlog he would have found that none of the 

funds would be used for new rebate requests. Florida has since increased the funds for this 

program to $14.4 million, paying all of the backlog and new rebates that have been submitted 

since the passage of the Recovery Act. 

Even though the Department provided oversight and guidance to Florida on its projects, it 

allowed 10 months to pass while Florida finalizes its SEP Recovery Act Plan. In May 2009, 

Florida submitted its plan to the Department. In October 2009, the Department's project officer, 

while performing desk monitoring, pointed out that certain Florida projects were not viable and 

suggested that Florida direct its Recovery Act funds to alternative projects. However, as of 

April 1, 2010, Florida had not made that change. Florida attributed the delays to the NEPA 

process and to State approval requirements for grants. Given the pressing economic needs and 

unemployment situations, the Recovery Act gave a preference to activities that could be started 

expeditiously. While the Department has encouraged the use of "shovel ready" activities, such 

activities are not always viable. Thus, ongoing monitoring by the Department is necessary to 

ensure that alternatives can be quickly selected and implemented. 

Timely monitoring by the Department could have discovered the deficiencies in Florida's 

contract flow-down provisions and rebate processing controls. For example, Florida assumed 

that it had added sufficient language in its contract clauses to address each of the 18 Recovery 

Act requirements. According to Florida officials, it was not until our review that Florida 

discovered that there were deficiencies. No reviews had been performed by the Department 

that would identify the discrepancies in flow-down requirements and internal control 

weaknesses we discovered. 

5
 
 

 

 

 

 

 

 

 

RECOMMENDATIONS 

To address the problems outlined in our report, we recommend that the Assistant Secretary, 

Energy Efficiency and Renewable Energy ensure that: 

1.	 Project officers work closely with states that propose projects that may be delayed due to 

NEPA or noncompliance with regulations, to pursue other viable alternatives; 

2.	 Projects selected are meeting the Recovery Act requirement to create or save jobs; 

3.	 Flow-down requirements are properly addressed in sub-recipient award documents; and, 

4.	 Appropriate internal controls and procedures are in place to prevent inappropriate 

expenditures of Recovery Act funding. 

MANAGEMENT COMMENTS 

Management concurred with each of the recommendations. EERE and the Project Management 

Center stated that they continue to complete actions to better manage Recovery Act requirements. 

Specifically, EERE stated that it has taken action to (1) work closely with states to accelerate 

NEPA determinations while developing contingency plans for alternative projects that can be 

implemented quickly; (2) communicate with State Energy Offices to ensure state officials 

understand that the Recovery Act has job creation as a primary objective and give preference to 

activities that can be started and completed expeditiously; (3) instruct project officers to monitor 

whether flow-down requirements are properly addressed in sub-recipient award documents; and, 

(4) ensure appropriate, effective use of SEP Recovery Act funds by performing visits to all states, 

revising reporting requirements, expanding monitoring, issuing program guidance, and putting 

communication and data collection and reporting systems in place. Management's comments are 

included in their entirety in Attachment 2. 

Comments submitted by the State of Florida are included as Attachment 3. 

AUDITOR RESPONSE 

Management's comments are responsive to the recommendations. 

cc: Deputy Secretary 

Under Secretary of Energy 

Assistant Secretary, Energy Efficiency and Renewable Energy, EE-1 

Chief of Staff 

Director, Office of Risk Management, CF-80 

Team Leader, Office of Risk Management, CF-80 

Audit Resolution Specialist, Office of Risk Management, CF-80 

Audit Liaison, Energy Efficiency and Renewable Energy, EE-3A 

Audit Liaison, National Energy Technology Laboratory 

6
 
 

 

 

Attachment 1 

OBJECTIVE, SCOPE, AND METHODOLOGY 

OBJECTIVE 

The objective of this audit was to determine whether the State of Florida's Energy Office had 

internal controls in place to provide assurance that the goals of the State Energy Program (SEP) 

and the American Recovery and Reinvestment Act of 2009 (Recovery Act) will be met and 

accomplished efficiently and effectively. 

SCOPE 

The audit was performed from August 2009 to April 2010, at the Florida Energy & Climate 

Commission in Tallahassee, Florida. We also obtained information from the National Energy 

Technology Laboratory (NETL) in Pittsburgh, Pennsylvania. The audit scope was limited to 

Florida's SEP. 

METHODOLOGY 

To accomplish the audit objective, we: 

Reviewed Federal regulations and Department of Energy (Department) guidance related 

to the SEP and Recovery Act; 

Reviewed State legislation related to the SEP in Florida; 

Reviewed Florida's SEP annual plan for Recovery Act funds; 

Reviewed Florida's grantee documents for recipients of Recovery Act funds; 

Held discussions with Florida Energy & Climate Commission personnel; and, 

Held discussions with program officials from NETL. 

We conducted this performance audit in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to obtain sufficient, 

appropriate evidence to provide a reasonable basis for our findings and conclusions based on our 

audit objective. We believe that the evidence obtained provides a reasonable basis for our 

findings and conclusions based on our audit objective. Because our review was limited, it would 

not necessarily have disclosed all internal control deficiencies that may have existed at the time 

of our audit. Finally, we did not rely on computer-processed data to accomplish our audit 

objective. 

We briefed Florida officials on April 9, 2010, and Department officials at NETL and 

Washington, D.C. on April 12, 2010. An exit conference was held with Department officials on 

June 1, 2010. 

7
 
Department of Energy 

Washington, DC 20585 

HAY 14 2010 

MEMORANDUM FOR: George Collard 

Assistant Inspector General 

for Perfonnance Aud4 . 

FROM: Kathleen B. Hogan &- == 

Deputy Assistant Sec ' 

for Energy Effici 

Office of Technology Development 

Energy Efficiency and Renewable Energy 

SUBJECT: 	 Response to the Office of Inspector General Draft Report on 

"Audit ofthe Department of Energy's American 

Recovery and Reinvestment Act - Florida State Energy Program" 

The Office of Energy Efficiency and Renewable Energy (EERE) appreciates the opportunity to 

review the Office of Inspector General's (IG) draft audit report "Audit of the Department of 

Energy's American Recovery and Reinvestment Act - Florida State Energy Program." 

We concur with the recommendations as stated. EERE and the PMC will continue to oversee 

that the actions described by the Florida Governor's Energy Office are followed by regular onsite visits, desk monitoring and frequent communication. We will continue to work with Florida 

to ensure their ARRA SEP programs and projects are successfuL 

Should you have any questions, please contact Mark Bailey at 202-586-9424. 

*Printed with soy ink on recycled paper 
Draft Response to Inspector General Audit Report: 


"Audit of the Department of Energy's American Recovery and Reinvestment Act - Florida State 


Energy Program. It 


Recommendation 1 

Project officers work closely with states that propose projects that may be delayed due to 

NEP A or noncompliance with regulations, to pursue other viable alternatives; 

Response 

Concur 

Florida established the target date of January 1, 2010, by which it intended to have 100% ofthe 

funds obligated. However, by not initially limiting projects to those that could be categorically 

excluded under NEP A, that target date was overly aggressive. Energy Efficiency and Renewable 

Energy (EERE) Headquarters and Project Management Center (PMC) staffs continue to work 

closely with states to accelerate National Environmental Policy Act (NEP A) determinations 

while developing contingency plans for alternative projects that can be implemented quickly. 

The NEPA determination rate for state projects has increased dramatically due to increased staff 

and contractors assigned to our NEPA review team. [No SWAT team resources have been 

devoted to Florida as to NEP A issues.] 

Since Florida's initial Recovery Act application submission, National Energy Technology 

Laboratory (NETL) Staff and the State Energy Office (SED) have been diligent in addressing 

NEPA and other hurdles to project implementation. Over 50% of the Florida projects have a 

NEP A Categorical Exclusion (CX) meaning that the state has no NEP A conditions on over 50% 

oftheir money. The Recovery Act brought a scale offunding not previously encountered by any 

state energy program. The State of Florida was one of the first states to propose programs related 

to biofuel production (under the Shovel Ready Grants market title) in the Southeast U.S. Florida 

SED's close contact with the project officer and the NEPA compliance officer in addressing the 

biofuel project approvals informed the development of an efficient and effective NEP A review 

and approval process for all State applications. EERE saw that it was necessary to augment 

DOE resources to address the immediate and surge requirements. The State of Florida, the 

project officer, and these additional DOE experts available to Federal and state personnel worked 

collaboratively to address concerns, including: Federal regulatory review, the Florida internal 

approval processes (Florida Energy & Climate Commission) grant sub-recipient and stakeholder 

interests. [There were no additional NEP A staff devoted to Florida; the issues listed above are 

unrelated to NEP A. Funds can be obligated by the state with NEPA conditions -- and the state 

is still pursuing projects that require EAs or EISs. The problems Florida experienced were 

mostly unrelated to NEP A.] 
With this collaborative approach, the team has been able to address and manage the Florida SEO 

projects and learn how to revise projects to better meet Recovery Act requirements. As part of 

the EERE requirements for a rigorous monitoring process, the project officer also facilitates 

weekly project update calls with Florida and all other assigned states to monitor performance and 

provide assistance as needed. The Department has sent all states a letter with suggested 

program area, e.g. appliance rebates, that funding could be transferred to ifNEPA review 

prohibits a selected project. 

Estimated Completion Date: Ongoing and continuous. 

Recommendation 2 

Projects selected are meeting the Recovery Act requirement to create or save jobs; 

Response 

Concur 

Section 3 (a) ofthe Recovery Act states: "The purposes ofthis Act include the following: (1) To 

preserve and create jobs and promote economic recovery ..." To meet this objective, the DOE 

continuously interacts with State Energy Offices via weekly calls by project officers, frequent 

calls by Senior Management to ensure SEO's have the tools needed to cost their money, Senior 

Management visits, through program guidance and through communication tools to ensure state 

officials understand that the Recovery Act has job creation as a primary objective and gives 

preference to activities that can be started and completed expeditiously. To address the Act's 

objectives, DOE gave preference to projects that quickly enhanced job creation,job preservation 

and economic recovery. SEP Program Notice 09-01, the 2009 SEP Formula Grant Guidance for 

ARRA and Regular Appropriations, all strongly encourage the states to allocate their Recovery 

Act funds to projects and programs with a high potential for job creation and energy savings. 

DOE's SEP project officers continue to work with the states to assist them in implementing high 

impact programs so that Recovery Act funds are used effectively as well as expeditiously. 

With regard to the instant audit finding and recommendation, the Department concurs that we 

need continuous oversight rigor to ensure that projects funded via the Recovery Act meet the 

purposes ofthe Act. To ensure that proper rigor is observed, EERE WIP has produced a 

Monitoring Plan and Guidance Manual, which, along with related monitoring checklists, details 

the precision expected from Federal staff responsible for administering Recovery Act funds. 

The State Energy Program guidance and Monitoring plan can be accessed at 

wwwl.eere.energy.gov/wip/guidance.html and 

www.l.eere.energy.gov/wip/pdfs/monitoring-p1an.pdf 

Estimated Completion Date: Completed 
Recommendation 3 

Flow-down requirements are properly addressed in sub-recipient award documents 

Response 

Concur 

The objectives of our monitoring program include providing quality assurance in the 

administration of grants for the State Energy Program. The DOE project officers have already 

begun weekly, monthly and quarterly desktop monitoring of their assigned state energy offices. 

Project officers have been instructed to monitor whether flow-down requirements are properly 

addressed in sub-recipient award documents. EERE and PMC staffs are scheduled to begin onsite monitoring on May 24, 2010 for the State of Florida Energy Office Recovery Act projects. 

EERE will notifY each ofthe Project Management Centers ofthese findings and take necessary actions to 

ensure that States are fully aware ofthe flow-down requirements. These actions wilt include both a 

written reminder to each State and compliance reminder during the PMC Project Officer's weekly grantee 

calls. 

Estimated Completion Date: Completed and ongoing 

Recommendation 4 

Appropriate internal controls and procedures are in place to prevent inappropriate expenditures 

of Recovery Act funding. 

Response 

Concur 

Even before final passage ofthe Recovery Act, DOE began to assess and strengthen the internal 

controls and review procedures that would apply to those funds. Senior Management performed 

"'preparedness visits" to all states to work with states to ensure that they were ready to manage 

and execute on greatly increased program funding. Reporting requirements have been revised to 

gather additional information from the states more frequently. Monitoring procedures and 

frequency have been significantly expanded as well. Additional SEP project officers, field 

liaisons and monitoring personnel have been brought on board at HQ and the PMC, to enable 

DOE to work more closely with individual states. These measures, along with robust Program 

guidance, communication and data collection and reporting systems and structures have been put 

in place to ensure appropriate, effective use of SEP Recovery Act funds. We will continue to 

assess and strengthen our internal controls as well as the states management controls as 

necessary. 

Estimated Completion Date: Completed and ongoing 
 

 

 

 

 

 

 

 

 

 

 

May 12, 2010 

Mr. Rickey R. Hass 

Deputy Inspector General for Audit Services 

Department of Energy Office of Inspector General 

Washington, DC 20585 

RE:	 Comments on draft report, “Audit of the Department of Energy’s 

American Recovery and Reinvestment Act (ARRA) – Florida State Energy 

Program”. (508 VERSION NO SIGNATURE) 

Dear Mr. Hass: 

Thank you for the opportunity to review and provide comment on the accuracy and completeness 

of the information contained in the above referenced draft report. In response to the program 

issues outlined, please consider the following information. 

Solar Energy System Incentives Program 

•	 Since 2007, the Solar Rebate Program has been a Department-approved measure 

under the State Energy Program. This approval predates the advent of ARRA. 

•	 As acknowledged in the audit report, it is important to note that Florida 

undertook this action with the Department of Energy’s (DOE) approval. 

•	 It is important to consider that the Solar Rebate Program has been an 

acknowledged catalyst in the growth of the solar industry in Florida and the 

significant impact it continues to make on the State’s economy. 

Project Selection 

•	 Florida has established a number of internal goals since the advent of ARRA. 

Internal goals were established in order to set priorities and organize the multiple 

tasks associated with allocating the increased amount of funding and are everchanging. More important, and relevant to the discussion, is the fact that Florida 

is on track to meet DOE’s goals for obligating funds. 

•	 While Florida received initial approval of its overall SEP plan in July 2009, most 

of the individual programs remained in a “prohibited” status under the Special 

Terms and Conditions of the Agreement pending additional eligibility and 

environmental review. 

•	 Unlike a number of states that have elected to focus on a few SEP programs, 

Florida has elected to pursue a broad portfolio of new programs that address a 

wide range of sectors. DOE representatives have previously endorsed this 

approach as furthering the “market transformation” that is a key element of SEP. 

•	 The allocation of SEP funding is subject to the review and oversight of the 

Florida Energy and Climate Commission, established in 2008 under Section 

377.6015 of the Florida Statutes. 

•	 The Commission is a volunteer, part-time body that meets on monthly basis. The 

Commission is subject to Florida’s rigorous Open Government and procurement 

laws. 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

•	 The Shovel-Ready Grants have proven challenging for all parties. Due to the 

nature of the projects, DOE and the State have engaged in extensive reviews. 

The evolving nature of ARRA’s eligibility requirements has also had an impact. 

For example, one of the grant proposals was approved by DOE in October 2009, 

only to be reversed in December 2009. 

Flow-Down Requirements 

•	 Florida maintains that the majority of the flow-down requirements were 

contained in the agreement documents. 

•	 As acknowledged by DOE, Florida has taken additional action to clarify the 

flow-down requirements within the agreement documents. 

Internal Control Weaknesses 

•	 The Florida Energy Office has historically had a small staff that necessitated 

some individuals to perform multiple duties specifically regarding the 

administration of the Solar Energy Rebate Program. 

•	 The audit doesn’t recognize the oversight roles performed by the EOG 

Administration Office and Florida Department of Financial Services who provide 

additional review prior to releasing funds. 

•	 The addition of staff has enabled Florida to segregate duties, strengthen internal 

controls and significantly minimize the opportunities for fraud, waste and/or 

abuse of the funds. 

Departmental Oversight 

•	 Florida believes that it has an effective working relationship with DOE project 

officers and is committed to continuing to work with DOE staff to resolve 

outstanding issues and move forward. 

The Energy Office is committed to its role of ensuring that the goals of the State Energy Program 

(SEP) and the American Recovery and Reinvestment Act of 2009 (Recovery Act) will be met and 

accomplished efficiently, effectively and in compliance with all applicable laws and regulations. 

If you have any questions regarding any of these issues, please do not hesitate to contact me at 

(850) 487-3800. 

Sincerely, 

Robert Vickers, Executive Director 

Governor’s Energy Office/Florida Energy & 

Climate Commission 

RV/gs 

cc:	 Jason Kirkham, US Department of Energy Auditor in Charge 

Kim Mills, Governor’s Office of the Chief Inspector General 
 

 

 

IG Report No: OAS-RA-10-12 

CUSTOMER RESPONSE FORM 

The Office of Inspector General has a continuing interest in improving the usefulness of its 

products. We wish to make our reports as responsive as possible to our customers' requirements, 

and, therefore, ask that you consider sharing your thoughts with us. On the back of this form, 

you may suggest improvements to enhance the effectiveness of future reports. Please include 

answers to the following questions if they are applicable to you: 

1.	 What additional background information about the selection, scheduling, scope, or 

procedures of the inspection would have been helpful to the reader in understanding this 

report? 

2.	 What additional information related to findings and recommendations could have been 

included in the report to assist management in implementing corrective actions? 

3.	 What format, stylistic, or organizational changes might have made this report's overall 

message more clear to the reader? 

4.	 What additional actions could the Office of Inspector General have taken on the issues 

discussed in this report which would have been helpful? 

5.	 Please include your name and telephone number so that we may contact you should we have 

any questions about your comments. 

Name Date 

Telephone	 Organization 

When you have completed this form, you may telefax it to the Office of Inspector General at 

(202) 586-0948, or you may mail it to: 

Office of Inspector General (IG-1) 

Department of Energy 

Washington, DC 20585 

ATTN: Customer Relations 

If you wish to discuss this report or your comments with a staff member of the Office of 

Inspector General, please contact Felicia Jones at (202) 253-2162. 
The Office of Inspector General wants to make the distribution of its reports as customer friendly and cost 

effective as possible. Therefore, this report will be available electronically through the Internet at the 

following address: 

U.S. Department of Energy Office of Inspector General Home Page 

http://www.ig.doe.gov 

Your comments would be appreciated and can be provided on the Customer Response Form.