November 7, 2018

Management of Selected Financial Assistance Agreements under the Wind Program

The Office of Energy Efficiency and Renewable Energy’s (EERE) Wind Energy Technologies Office (Wind Program) invests in energy science research and development activities that enable the innovations needed to advance U.S. wind systems, while continuing to address market and deployment barriers.  According to the Department of Energy Fiscal Year 2018 Congressional Budget Request, as of 2016, wind energy provided nearly 5.5 percent of our Nation’s electricity. The Wind Program’s long-term goal is to achieve significant reductions in the cost of wind energy. 

To accomplish the Wind Program’s mission, EERE enters into financial assistance agreements, also referred to as awards, with recipients.  Award management is a shared responsibility among multiple EERE entities, including the Wind Program, the Financial Assistance Office, and the Procurement Policy and Compliance Office.  Given its significant role in supporting initiatives for energy independence and environmental protection, we initiated this audit to determine whether EERE effectively managed selected Wind Program financial assistance agreements. 

We found that EERE had not always monitored project costs for one of the two financial assistance awards included in our audit in an effective manner.  Specifically, we identified issues related to effective monitoring of project costs on the Principle Power, Inc. award.  We did not identify any issues with the management of the award to Virginia Electric and Power Company, the second financial assistance agreement reviewed.  

During the audit, EERE took action to address and resolve the issues related to the Principle Power, Inc. award.  Because the costs were resolved, no costs are being questioned.  However, we did identify other opportunities for EERE to improve its management of financial assistance awards.  We made two recommendations to ensure an effective and timely process of managing indirect costs throughout the life of financial assistance awards and to ensure that indirect and fringe costs are reconciled annually.

Topic: Financial Assistance