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Audit results push Austin Energy to make changes in Efficiency Program

Thursday, August 8, 2013 by Elizabeth Pagano

Austin Energy is promising to change the way that it does business after an audit of its  Efficiency Program revealed serious flaws.


The program offers $50 to $2,000 rebates to customers who install high-efficiency heating and cooling equipment. Those rebates amounted to about $2.1 million over the course of the audit, which was conducted from October 2011 until March 2013.


Though policy requires inspection of the appliances, an audit of the program revealed no inspections were occurring. The Council Audit and Finance Committee took a look at that report on Wednesday afternoon.


Assistant City Auditor Walt Persons said that though management reported inspections of outdoor units were conducted “as time allowed,” paperwork was incomplete and did not indicate any inspections had taken place.


“Time allowed for zero inspections in that 18 months. Does that sound accurate to you?” asked Council Member Bill Spelman.


“I would say that if any were checked, there were very few,” said Energy Services Unit Manager Ann Salerno.


Salerno explained that Austin Energy performed inspections on 100 percent of those who participated in the utility’s more-extensive Energy Star program, indicating the department prioritized those inspections.


However, following the audit, Salerno said they would be making changes, aiming for an inspection of 10 percent of the units. She said that the utility hoped that communication about performing more inspections would deter those who were cutting corners on the program.


“The plan going forward is to verify that the equipment that is on the application is actually what was installed at the home,” said Salerno.


Council Member Kathie Tovo suggested that the department look into requiring receipts for the units. This is currently only done for window units.


“That really is of concern. Because if they are not providing receipts to show that they purchased units, and you’re not doing inspections to make sure that happened, there’s really no control at all to make sure that you’re not getting applications asking for money (on equipment) that’s never purchased,” said Tovo.


“As opposed to zero measures, a receipt would be some measure,” said Tovo.


In addition to the inspection issue, the audit also found that the number used to calculate rebates was not updated when the Department of Energy changed the Seasonal Energy Efficiency Ratio in January 2006. This means that the energy savings reported from the program may not be accurate.


Auditors also revealed that the program was vulnerable to misuse, due to insufficient supervision and lack of separation of duties.


“When a duplicate serial number is entered, the system will kick back a warning window. What we found is that they just click ‘okay,’ and then move on. Theoretically, they would take some action about that,” said Persons.


Salerno said the normal procedure was to relegate those duplicates to a pending status, and follow up with contractors. She explained the approvals were mistakes, and resulted in four duplicate payments that amount to a very small amount –  just over $2,000 in errors out of the $2.1 million in rebates.


“Our greater concern was not those over-payments, because percentage-wise, that’s really small. It was about the controls, or lack of controls we saw over the process that we feel left the door open for much greater abuses,” said Persons.

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