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Audit Report: OAS-RA-L-12-03

January 26, 2012

The Department of Energy's American Recovery and Reinvestment Act – Arizona State Energy Program 

The Department of Energy (Department) allocated $55.4 million in SEP funds under the American Recovery and Reinvestment Act of 2009 (Recovery Act) to the State of Arizona (Arizona) in support of energy priorities through the State Energy Program (SEP).  These funds were allocated to grants for energy savings and renewable energy projects, such as retrofits for schools, public buildings and non-profit organizations, and renewable energy products manufactured in Arizona.  We found that Arizona had developed a number of processes and controls to accomplish the objectives of the SEP and the Recovery Act.  For example, Arizona established a plan to select projects that would save energy and increase renewable energy sources; leveraged Recovery Act funds to increase economic stimulus and reduce project risk; and, tracked the number of jobs created by projects.  However, we identified several concerns that could impact Arizona's success in accomplishing SEP and Recovery Act objectives.  Specifically, we noted that Arizona had not always ensured timely commencement of project work at schools; applicable Recovery Act provisions were included in sub-recipient agreements; and, historic preservation office approvals were obtained prior to spending Federal funds to alter structures or sites.  We determined that actions taken by Arizona to improve administration of SEP Recovery Act funds appear reasonable.

Topic: Financial Assistance