in Houston, Texas

$5.6 million federal stimulus contract halted in Abilene, subpar work found statewide in Texas' weatherization program

Thursday, Jun 24, 2010, 04:45AM CST
By Mark Lisheron

State inspectors have found administrative, workmanship and accounting problems in Texas' $326 million federal stimulus program to weatherize homes. An Abilene program has been stopped.

AUSTIN -- State officials ordered Community Action Program Inc. of Abilene to stop work on a $5.6 million federal weatherization stimulus program after inspectors detailed mismanagement at the core of the organization.

And the stimulus screw-ups aren't just going on there. There are problems statewide.

In all, inspectors for the Department of Housing and Community Affairs found administrative, workmanship and accounting problems with seven community groups that have state contracts with the $326 million Weatherization Assistance Program in Texas, a review of monitoring reports obtained by Texas Watchdog shows.

The others are: Cameron and Willacy Counties Community Projects, Brownsville; Concho Valley Community Action Agency, San Angelo; Arlington Housing Authority; Economic Opportunities Advancement Corporation of Planning Region XI, Waco; Community Action Center of Victoria; Bee Community Action Agency, Beeville.

This also comes on the heels of problems in Houston with the state's second-largest recipient of weatherization stimulus cash: Click here to see the Texas Watchdog story on those widespread problems -- and the fallout.

The reports bring into sharp relief the strain on the nearly four dozen nonprofit organizations throughout the state whose contractors are struggling to spend their federal stimulus allotments by a mandated deadline of August 2011 and at the same time produce quality work.

As of this week, these organizations had spent $39.5 million or just 12 percent of the $326 million total, more than 15 months after the money started flowing through the American Recovery and Reinvestment Act.

Brooke Boston, executive director for the state's weatherization program, said she remained confident that none of the federal money would go unspent and have to be returned. And while she did not minimize the problems some of the weatherizing programs were having, Boston said most of them came as contractors ramped up production while getting accustomed to stringent federal regulations and reporting for their work.

"I think so far this is pretty much what we expected early on," Boston said. "You have contractors learning a new program for the first time, contractors who aren't used to this level of scrutiny. A year from now, if we are still seeing this, I would say I'd be concerned."

Peggy Venable, leader of a group that favors limited government, is already concerned.

"I think people have all been focused on jobs, but it's clear to us that the federal stimulus spending has not created jobs, but has created problems," said Venable, Texas state director of Americans for Prosperity. "Our economy will improve when people are allowed to keep more of the money they work so hard to earn."

In the case of Abilene's Community Action Program, Boston said she believed the suspension and a search for a new team to take over is proof the controls and inspection process put in place by the U.S. Department of Energy and Housing and Community Affairs was working.

State inspectors in mid-April notified Community Action Program in Abilene that it was spending more than six times the limit on administration, according to the inspection document. Documentation of work done and money spent was in some case nonexistent, according to the findings.

A private auditing team sent in by the state determined there was no inappropriate use or criminal misuse of funds, Boston said.

But the department also determined to find an agency or group to take over and complete the contract at the same time Community Action moved to comply with the findings of the state inspection, she said.

Maria Aguilar, executive director of the Community Action Program in Abilene, did not respond to a voicemail message left last week asking that she comment on the findings of the state. Only one of the directors of the seven community groups cited in the state reports returned calls from Texas Watchdog seeking comment.

While many of the contract groups, called subrecipients, continue to struggle to submit adequate documenting paperwork to federal and state officials, the inspections reveal more rudimentary problems with cost management and workmanship. Inspectors noted things as simple as missed caulking, insufficient insulation in attics and unconnected air vents, to the complete reinstallation of air ducts, heater and handler units and installing necessary bathroom and kitchen ventilation.

Among the findings:

  • Inspections in Waco of the Economic Opportunities Corp. contractors showed deficiencies in workmanship requiring work to be fixed or completed at each of the 14 sites inspected. The inspectors also found deficiencies in weatherizing work paid for through a different federal program.
  • A random spot check by state inspectors in April found that in all 10 cases work done by contractors for Concho Valley in San Angelo had deficiencies requiring remedial work.
  • Seven of 10 units done by Arlington Housing Authority contractors required return visits. Inspectors took note that Arlington's final inspections were inadequate.
  • Inspectors challenged the energy savings and billings for more than $73,000 worth of weatherizing work done for 13 clients by Bee Community Action Agency contractors.
  • Victoria Community Action contractors failed to provide energy testing on appliances in a dozen cases; contractors provided inaccurate energy readings in 10 other cases and in one case failed to inspect a stove for carbon monoxide that was considered a health and safety hazard.
  • Inspectors told the Cameron and Willacy group in Brownsville that their contractors did insufficient work on seven of the 12 units they inspected. But rather than call the contractor back, executive director Amalia Garza said she has sent her own staff to complete the work. Garza said she worries about remaining in compliance with Housing and Community Affairs.

Garza attributes most of the negative findings in the report the state sent her in May to a process that places a premium on spending money quickly while at the same time setting an exacting standard for weatherizing work that's new to contractors in the Valley.
In past years, Cameron and Willacy contractors weatherized 60 to 90 homes a year. Before the stimulus, the annual budget was $780,000, she said. With the stimulus, Garza suddenly found herself with another $5.2 million and a goal of weatherizing 100 units a month. Inspectors criticized the program for having spent just $157,000 through February.
Garza's concerns are common to a program that took 10 months in Texas to produce its first completed weatherizing job. There have been months of delays in getting the money from the federal government, the months to get contracts approved and months taken to evaluate the wages of workers, she said.
In spite of what appears to be a huge pot of federal money, area contractors are suspicious that all the state and federal regulation will not make the weatherizing jobs profitable, she said. Contractors are also resentful that the ongoing state training, to understand the energy savings required by the federal regulation, takes too many laborers out of the field.
"We appreciate this opportunity, all of this money," Garza said. "But I don't think anyone expected what we are facing. I think if we could have been involved in the planning from the beginning, before we got started, I think we would have been better off.
"I'll be happy when it's over."

Contact Mark Lisheron at 512-299-2318 or Lee Ann O'Neal contributed to this report.

Photo of a stop sign by flickr user hoyasmeg, used via a Creative Commons license.
Monday, 06/28/2010 - 01:47PM

I like the fact that you chose to pick and choose which information you put in your article. You only used part of the facts which completely discredits you as a good journalist. Not to mention the quote stating that this money was suppose to help create jobs, but hasn't is completely false as well. I know many people that have jobs now because of it. Not to mention all the people that have been helped because of the weatherization programs. People who had no air conditioners or heaters or how about the ones with holes in their walls. Why don't you report the really good things that have come out of all of this. My goodness, with the way the economy is people need a little hope and positive information once in a while. Every program or business in the world has issues once in a while, but if you're going to report the issues then get your facts straight and tell the whole story.

Sunday, 09/26/2010 - 08:50AM

This does seem a bit one-sided, did the Tea Party have nothing better to do?

TJ Hollingsworth
Saturday, 10/23/2010 - 04:28PM

I do work has a sub-contractor. I have seen the clients in about 25-30 different counties in Texas smile because of the work done by different agencies . The little lady who sweated all summer or froze that past winter.Now she dont have to. I would say that, 85 percent or better, work is better than you have documented . Some subs might do substandard work. This is what you want to report ,then your not going to see the people these programs have helped. Look for thing wrong and you will find them. In everything you do thats a great article.

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