Additional Actions Would Strengthen New Mexico’s Internal Controls for Implementing the Home Energy Rebates Programs
January 27, 2026
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January 22, 2026
Additional Actions Would Strengthen New Mexico’s Internal Controls for Implementing the Home Energy Rebates Programs
The Inflation Reduction Act of 2022 allocated $8.8 billion to the Department of Energy for issuing grants to states, U.S. territories, and Indian Tribes for distribution to the public in the form of home energy rebates. The Department’s Office of State and Community Energy Programs is responsible for oversight and guidance of the $87.6 million of grants awarded to the New Mexico State Energy Office (NMSEO).
We initiated this inspection to assess the NMSEO’s internal controls to administer the Home Energy Rebates programs under the Inflation Reduction Act of 2022.
We found that the NMSEO had not established a comprehensive internal controls system, though it has offered rebates since September 2024. Specifically, the NMSEO did not: (1) identify, assess, and document potential risks that could prevent the programs from achieving stated objectives; (2) document important control activities; and (3) ensure the activities of the implementing company aligned with what the Office of State and Community Energy Programs had approved.
Additionally, we identified areas of potential risk related to the NMSEO’s proposed plan to contract a company to implement a multifamily energy rebates program. Under the proposed plan, the multifamily implementing company would oversee its own work for installing energy-saving equipment and approving rebate requests. Additionally, the implementing company did not plan to verify self-reported household income or follow up with property owners to ensure they meet certain occupancy and rent requirements.
A fully established internal controls system helps protect Department funds and meet program objectives. Further, without well-documented policies and procedures, continuity of operations for the programs could be at risk when personnel normally assigned to complete those procedures are unavailable.
To address the issues identified in this report, we made one recommendation and one suggested action that, if fully executed, should help strengthen the NMSEO’s internal controls to implement the Home Energy Rebates programs.