Reforms Target Pa. Weatherization Program Waste

By Melissa Daniels | PA Independent

HARRISBURG — New reinforcements may be on their way to insulate Pennsylvania’s weatherization program from wasteful spending.

A recent study on this program’s lack of checks and balances prompted state representatives to require new income eligibility verification for the Weatherization Assistance Programs and Low Income Heating Assistance Program.

House Bill 1991 aims to deflect funds from ineligible residents, so they can reach the thousands of eligible Pennsylvanians on the waiting list.

Another aspect of the measure would eliminate conflicts of interest on projects between agencies and contractors.

Past problems

A February special report from the Office of the Auditor General cited eligibility issues in the federally funded weatherization program under the state Department of Community and Economic Development.

Following are other observations in the study of 90 cases:

• Eight weatherization projects, totaling $29,841, were carried out at residences where the applicant was deceased. The audit says DCED management did not confirm re-eligibility before moving ahead with projects.
• Twenty cases, totaling $154,958, involved renters receiving benefits who did not pay rent to the landlord.
• One household received $2,878 in services in 2010, even though the Social Security number provided on the application belonged to a resident who died in 2008;
• Three projects, totaling $28,609, were completed, even though the applicants were not income eligible.

The audit followed a similar investigation in 2007 that found errors and issues of noncompliance in 82 of 100 cases.

The overall goal of the program is to reduce energy costs by insulating a home to handle winter weather. Improvements cover heating system repairs, insulation, window replacement or other energy-saving measures like new appliances.

The average expenditure per household is $6,500, according to DCED. By the end of fiscal 2010-11, the program expended $104 million, the most recent data cited by the Office of the Auditor General.

Growing demand

Bill sponsor state Rep. Bryan Cutler, R-Lancaster, said because of growing demand, the measure seeks to ensure that weatherization funds go to people who need them.

This year, around 14,000 families were on a waiting list, according to the Office of the Auditor General. That figure was 9,000 five years ago.

Weatherization funds are available to a single person earning up to $21,660 or a family of four earning up to $44,100, which is 200 percent of the federal poverty income level.

This year, program funds will see an even tighter squeeze, as last season included millions in federal stimulus money. The stimulus offered $252 million over a three-year period, the last of which was scheduled to be used in March.

Other weatherization funds come from Department of Energy grants.

“That’s a program where the need always far outstrips the resources,” Cutler said. “There’s always a substantial waiting list, and they run out of money in the program long before everyone who needs help actually gets it.”

The proposal

The bill would verify income eligibility using a 19-point check system. It would cover Social Security numbers, addresses and number of dependents, which would prevent fraud like double-dipping households, Cutler said.

This standard is used in similar programs under the state’s Public Welfare Code. Legislation put the system in place for Department of Public Welfare applications last year, but it left out the weatherization programs.

Cutler said the weatherization programs were not included because they use federal funds, falling under a different section of the law.

“Once we realized what it was, we put a new urgency on it,” he said.

Applicants or providers who recognize an instance of fraud are asked to report it to the Office of the Inspector General, according to the bill.

The bill requires DCED to file a six-month, follow-up report on the implementation process with the Governor’s Office, House and Senate committee chairmen and the Office of the Inspector General.

The bill, approved in late June, was referred to the state Senate Public Health and Welfare Committee for consideration in the fall.

Checks and balances

Steve Kratz, spokesman for DCED, said the weatherization office is working with the Legislature to address the program’s waiting list, and other items addressed in the February audit.

“In general, the waiting lists have been lengthy because the need for weatherization services greatly outweighs the available funding,” he said in an email. “The reduction of federal funds for weatherization will have an effect on the waiting list as well.”

The bill also would require DCED to create a conflict-of-interest policy for the approval process of weatherization assistance.

That conflict-of-interest policy could stop local agencies and subcontractors from engaging in mutually beneficial projects.

According to this year’s audit, one local agency approved applications for 83 apartment rental units in a building that it owned. Further, a member of the agency’s board of directors was the senior vice president for the construction company that received the contract, and the work was worth more than $600,000.

Cutler’s move to reduce fraud received bipartisan support in the House. State Rep. Ron Waters, D-Philadelphia, a co-sponsor, said some people wait so long to receive funds, it’s well into the next season or the next year by the time they hear back.

“If you had more people applying for it than really should be applying who don’t really need it, it ties up the line,” Waters said, “and it makes people who are waiting on the services wait in longer lines than they should.”