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Audit: Colorado Energy Office Plagued By Misspending

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(credit: colorado.gov/energy)

(credit: colorado.gov/energy)

DENVER (AP) – Colorado’s embattled energy development office is plagued by misspending, sloppy accounting and high turnover, according to a blistering state audit released Tuesday.

The review blasted the Colorado Energy Office for a number of issues, including not keeping track of travel expenses and contracts, and not following up to make sure projects were complete.

The audit concluded the agency can’t demonstrate the $252 million spent over the past six years was used cost-effectively. Much of that amount – $144 million from fiscal years 2009 through 2012 – was federal stimulus money.

“This office appears to be a prime example of arrogance in government, of how government can go wrong,” Republican Rep. Jerry Sonnenberg told the agency’s interim head after reviewing the audit.

First created in 1977 to promote energy conservation, the office took on new significance under former Democratic Gov. Bill Ritter, whose focus on renewable energy development was a legacy of his term from 2007 to 2011. Last year, the Legislature and current governor, Democrat John Hickenlooper, agreed to expand beyond renewables, with funding for all types of energy development projects in the mix, including gas, oil and coal.

The legislator-requested audit outlined a raft of problems with the office.

Auditors found that between 2007 and 2012, the agency had no comprehensive annual budget for 34 programs and couldn’t determine the amount spent on any of them. Auditors reviewed eight of those programs in depth, finding that staff couldn’t identify goals or whether any of them had been achieved.

Nearly all the agency’s contracts reviewed by auditors – 20 of 22 – were missing required paperwork. More than half were missing required progress reports from contractors.

Travel spending was also sloppy, auditors found. Sixteen of 40 travel and other expenditures reviewed by auditors were missing approval and justification documentation.

In one instance the agency spent $25,000 on something supported only by the statement, “2008 Membership.” In another case, the office paid $1,500 for an ex-employee to attend training after termination, without documentation demonstrating how the cost was reasonable or necessary.

Staff turnover was another problem. Only one of 14 core staffers at the end of 2010 was still working there by the end of last year.

The office is looking for a new director. The interim director, Kevin Patterson, was grilled by lawmakers about the audit Tuesday and assured them a cleanup has already begun. Patterson said the office should be in much better shape by the middle of this year.

“I’ve been trying to bring something out of chaos,” Patterson said.

Many lawmakers were sympathetic, telling Patterson the troubles were greatest under the Ritter administration and that improvements are being made.

“It’s not your fault, it’s not our governor’s fault right now. It’s just your mess to clean up,” Republican Sen. Steve King told Patterson.

Democratic Sen. Lucia Guzman warned that patience is wearing thin. Hickenlooper has been in office more than two years, she pointed out, and blame can’t keep flowing backward

“If I start a job, and I’ve been on it two years, it seems to me I should have some outcomes that give me a reason to still be there.” Guzman said to Patterson.

Patterson assured lawmakers that change is happening quickly at the energy office and that they’ll see better accounting and management quickly.

“We have a lot of work to do in a very short period of time,” Patterson said.

- By Kristen Wyatt, AP Writer

A Look At Problems In Colorado’s Energy Office

- SLOPPY SPENDING: Auditors concluded that the energy office couldn’t show that $252 million spent over the past six years was spent cost-effectively. $144 million of that came from federal stimulus money.

- LACK OF FOCUS: Employees in the office weren’t always sure what certain program goals were, or whether they were being met.

- NO PAPERWORK: Auditors reviewed 22 contracts issued by the energy office and found that 20 had incorrect or missing information in the state contract database. Thirteen of those were missing required contractor progress reports.

- NO FOLLOWUP: Of the 59 payments to contractors auditors reviewed, 10 totaling $1.5 million were not supported by adequate evidence of contractor progress.

- TRAVEL QUESTIONS: Auditors found missing paper work for 40 travel and other expenditures. The energy office’s misspending included $1,500 for an ex-employee to attend training after termination.

- HIGH TURNOVER: At the end of 2010, the office had 14 core staff members. Only one remained with the agency by the end of 2012.

Source: Office of the State Auditor

(© Copyright 2013 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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