Bloomberg | November 12, 2010
By Dunstan McNichol

Contractors billed New Jersey $27 for light bulbs, and ran up tens of thousands of dollars in other “unreasonable costs” on a $119 million weatherization program funded with U.S. stimulus money, the state auditor said.

Out of $613,600 in charges reviewed, $54,000, or 8.8 percent, was deemed unreasonable by Auditor Stephen Eells, according to a Nov. 8 report to lawmakers. The audit examined program oversight by the state Community Affairs Department.

One contractor sought $27 for light bulbs, while another billed $1.50 for similar items, according to the report and Assistant Auditor Thomas Meseroll. Another vendor charged $75 for carbon-monoxide detectors that it had provided to a different program for $22, the report said. Eells also cited $32,700 in auditing fees when “no services had been performed” and $69,000 in construction costs that couldn’t be verified.

“Weatherization agencies have been reimbursed for unreasonable costs because of inadequate review of financial reports and lack of guidance from the state and federal governments,” said the audit. It said the state agency’s review of contractor expenditures was “cursory.”

The state didn’t pay for the $27 light bulbs and the $75 carbon-monoxide detectors after the audit, according to Lori Grifa, the Community Affairs Department’s commissioner. Since Eells began the review, the two most-senior state employees overseeing the program have been replaced and a third has been reassigned, Grifa said in a written response to the audit.

The $27 included “labor and materials” for compact fluorescent light bulbs, Lisa Ryan, a spokeswoman for the department, said today in an e-mailed response to questions.

Accountants Hired

In May, the department hired an accounting firm to review invoices from the 23 agencies that carry out the weatherization work under program contracts, Grifa said. The added controls will help the state make more than 13,000 residential units more energy efficient within three years, she said.

Senate Majority Leader Barbara Buono, a Middlesex County Democrat who leads the chamber’s Legislative Oversight Committee, said she will seek a hearing on the audit’s findings and administrative changes in the program.

New Jersey is in line for $119 million in grant funds for weatherization from the U.S. Energy Department. The money comes from last year’s $814 billion federal economic-stimulus program. The state has allocated about $64 million of that to local agencies, which have spent about $6 million, the audit said.

Through July 30, the state had refurbished 1,051 of the 13,381 units scheduled for work, the report said.

About $5 billion in stimulus funds were provided to the weatherization program, according to the Energy Department’s website. By the end of August, almost 221,300 homes had been refurbished using the money, the department said.