As stimulus money doubles Wisconsin's weatherization budget for the next two years, a review of state records since 2007 found weatherization work done on hundreds of low-income homes failed to meet federal standards.

 

A $141.5 million infusion of federal stimulus dollars is to be used to weatherize more than 36,000 homes and apartments through 2011 - from installing new furnaces to adding attic insulation.

 

But a Journal Sentinel review of three years of state records showed that inspectors with the Division of Energy Services found 12.3% of the performance measures they spot-checked were below standard. Inspectors flagged projects when done in a way that could threaten the safety of residents or if the project didn't save enough energy.

 

"We strive for perfection, but we are not afraid to mark something as a measure that needs improvement and let the grantee know that," said Dan Schooff, deputy secretary of the state Department of Administration, which oversees the program.

 

The newspaper reviewed inspection records from 2007 to 2009. At three of the state's 22 nonprofit agencies that award weatherization contracts, more than one out of six measures inspected failed to meet standards in that period. The Ashland County Housing Authority had the worst results, with 20% of spot-checks failing to meet standards.

 

Meanwhile, Milwaukee's Social Development Commission weatherization program has gone from the worst-performing in the state to one of the best, records show.

 

The federal stimulus money will be used to weatherize more than 33,000 homes and about 3,000 units in apartment buildings during the next two years.

 

Nationally, the federal weatherization program is distributing $5 billion in stimulus funds - a 22-fold increase from the $227 million spent in 2008. The program disburses money to states, which award contracts to community action agencies and housing authorities, which in turn hire local contractors to perform the work.

 

Leslie Paige, spokeswoman for the Council for Citizens Against Government Waste, said the program is open to fraud because of the way oversight is divided. She has sought, but found little evidence of, past oversight by the U.S. Department of Energy, which administers the program nationally.

 

"This program went from a little backwater program to this massive increase," Paige said. "There is a lot of opportunity for siphoning off of money. There are so many layers of bureaucracy. This is just a black hole."

 

The accountability requirements for weatherization have been ramped up with the federal stimulus package, and state officials say they are on the lookout for fraud and waste.

 

Federal regulations normally require states to spot-check 5% of weatherized units, but Schooff said the state will step up its oversight efforts by inspecting 10% of stimulus-funded projects.

 

"We are vigilant about this," Schooff said. "All of our plans try to catch each little indication of fraud early. We have administered this money in the past, and we have beefed up oversight in each and every place. I don't know if we will be perfect, but we'll know in 18 months."

 

A review of inspection records showed numerous cases of below-par work, but not cases where officials suspected fraud.

 

Jerry Kotek, research analyst at the state Division of Energy Services, said the agency spot-checks homes that have a greater amount of work done to maximize energy savings across the state.

 

"We pick units with the most measures because it gives us more efficiency," Kotek said. "The reason we have such a big error rate is because we are picking the hardest ones."

 

The spot-checks have shown progress. In the past three years, records show the percentage of problems found at homes that were spot-checked has decreased from 14.5% to 9.7% - even as the number of units inspected has gradually increased.

 

The Journal Sentinel this fall requested records from the U.S. Department of Energy to provide a state-by-state comparison of weatherization performance. However, that information is kept at the state level, not tracked by the federal agency, agency spokeswoman Jen Stutsman said.

 

When a housing authority or community action agency fails to meet performance measures, the state can add special conditions to its contract or simply terminate the contract, Schooff said. In the past five years, only one agency - the defunct Opportunities Industrialization Center of Greater Milwaukee - had its contract dropped.

 

The stimulus funding is expected to create or save 470 public- and private-sector jobs over a two-year period, according to the state Department of Administration. Through Sept. 30, when federal stimulus numbers were first reported, the program was credited with creating or saving 20 jobs.

 

The program also is expected to boost the state's economy through the purchase of insulation, lumber and furnaces to weatherize homes.

 

Typical weatherization work includes the insulation of attics, sidewalls and basements. Homeowners or renters can be eligible for replacement of refrigerators, deep freezers, water heaters, furnaces and old light bulbs with energy efficient ones.

 

To qualify for weatherization, a homeowner must first be eligible for energy assistance payments from the state. Applicants must verify their monthly income, employment and fuel costs at the home.

 

Households are eligible if gross income is equal to or less than 60% of Wisconsin's median income, or no more than $45,067 for a family of four. A home can get priority if it shows high energy use, if the homeowner is elderly or disabled, or if a child younger than 6 lives there.

 

Wisconsin will spend an average of $6,500 to weatherize each home.

 

Here's how the process works:

 

A home energy auditor employed by a community action agency visits the home to gather information about energy usage. The energy auditor determines if a home requires additional insulation or new energy-efficient appliances. Then requests for a proposal go out, which are bid on by area contractors.

 

After the work is done, a third-party private inspector checks to see if the work was done correctly. If not, the subcontractors are supposed to return and correct mistakes. Once all this occurs, the home or apartment could be among those spot-checked by state inspectors.

 

The whole idea is to help low-income residents save money and conserve energy.

 

Energy auditors from the Social Development Commission in Milwaukee visited Gina Jones' north side home in September, and the weatherization work was being finished this month. Her home qualified for a new furnace, water heater, refrigerator, freezer and additional insulation.

 

Jones praised the program.

 

"I wouldn't have been able to afford all this stuff because my business has been on the decline," said Jones, a graphic design artist who is raising two children. "I can feel the difference in the house already. I hardly turn my heat up past 60 degrees now."

In the past three years, state inspectors have identified issues with 20% of the weatherization work contracted by the Ashland County Housing Authority, which was the highest rate in Wisconsin.

 

Neil Deering, Ashland County weatherization director, acknowledged some contractors hired in the past performed poorly and were not always made to fix mistakes.

 

"We had issues with contractors, and there was a lack of quality that was going on," Deering said. "We have really buckled down and increased our staff and now we send contractors back out to fix any problem we find, at their expense."

 

When state inspectors spot-checked jobs done through the Central Wisconsin Community Action Council in Wisconsin Dells, they found about 16% of the measures were substandard since 2007.

 

Central Wisconsin weatherization director Chris Utley defended the quality of his agency's work, saying that performance measures usually fail for minor issues and are often disputed by his employees.

 

"We take very seriously anything that doesn't meet the minimum performance standard because we want work done correctly," Utley said. "I feel that many of these reports aren't fair. We usually disagree with the inspectors' findings and can show documentation to prove why."

 

Since 2007, the weatherization program at the Social Development Commission has shown improvement in the quality of work done by its contractors.

 

The Milwaukee agency ranked worst in the state that year with nearly 23% of performance measures spot-checked having problems. Last year, that figure had dropped to 6.3%, among the best in the state.

 

"A few years ago we were low on the list, but now we're near the top of the state because we hold (contractors) more accountable," said Vince Montgomery, weatherization manager for the Social Development Commission. "We handle the process with a fine-tooth comb."

 

Montgomery said in the past he has dismissed vendors who did shoddy work: "We expect you to know your job. There are strict guidelines."

 

SDC weatherization field supervisor Ed Byrnes said it all comes down to demanding quality work. Contractors know that if their work doesn't meet federal standards, the private inspector will find it and require them to come back and finish the job.

 

"Some of our contractors get annoyed by it," Byrnes said.