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IG: reimbursement irregularities in DOE Smart Grid pilots

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The Energy Department's $700 million Smart Grid demonstration program is not always being managed effectively and efficiently, according to a DOE inspector general audit report (.pdf).

"The program has a unique opportunity to improve the nation's power grid," writes DOE IG Gregory Friedman in a memo accompanying the report. However, it is at risk of not meeting its objectives and has an increased risk of fraud, waste and abuse, he adds.

Designed to promote innovative grid technologies, the program funded 32 regional demonstrations and energy storage projects. In the IG's review of 11 projects, awarded $279 million with stimulus funds from 2009 and $10 million in other funding, auditors identified weaknesses in reimbursement requests, cost-share contributions, and coordination efforts with another DOE program, resulting in $12.3 million of questioned cost. The report says the approved reimbursements lacked supporting documentation

Contrary to award terms and conditions, DOE reimbursed two recipients for claims based on estimated rather than actual costs, resulting in overpayments of $9.9 million. A third recipient received nearly $2.4 million without providing adequate supporting documentation.

"After being presented with the results of our audit, the Department initiated actions to resolve the $12.3 million in questioned costs we discovered," the report adds.

The report is the second in a series on DOE's efforts to modernize the nation's power grid. A January 2012 report on a separate Smart Grid grant program identified weaknesses in financial management and incomplete and insufficient cybersecurity plans

For more:
-read the report, OAS-RA-13-08 (.pdf)

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