COLORADO SPRINGS, March 28, 2013 — Last month, the State Audit Committee released an audit of the Colorado Energy Office (CEO) which reported that it misspent millions in stimulus funds and could not account for a variety of other financial statements. It failed to competently manage over $252 million in taxpayer money, much of it stimulus funds from the federal government.
The CEO, which began in 1977 as the Office of Energy Conservation, in 2007 had a budget of $ 26.7 million. The budget has ballooned to $82 million in FY2011. Unfortunately, the audit found that the office could not account for more than $252 million over the last six years, roughly $144 million of that from the stimulus program.
The focus of the office shifted from conservation to green energy initiatives, renewable energy and clean-energy jobs when Democratic Gov. Bill Ritter took office in 2007. One of Ritter’s priorities was what he called the “New Energy Economy,” which emphasized development of wind and solar energy.
At the same time, legislative mandates have forced the closure of coal-fired plants, all but killing the mountain town of Craig whose economy relied on coal. In addition, mandates have forced utility companies to generate an increasing percentage of power from the relatively unreliable wind and solar sources. This in turn has resulted in rising electric rates in the state.
On February 7, shortly after the audit was released, Senator Owen Hill proposed budget cuts for the agency. The Senate ended up adopting a mere $3.5 million cut to the office’s budget.
On February 26, the Legislative Audit Committee refused, on a party-line vote, to allow the State Auditor an additional eight hours of audit time to further examine the books.
Representative Dan Nordberg (R-Colorado Springs), a member of the State Audit Committee, said:
“Just one month ago, Democrats were willing to spend $100,000 to audit a $5,000 discretionary fund, but when it comes to the misuse of more than $250 million, the Democrats refused to allow eight hours of additional investigation. That’s absurd. We have a responsibility to dig deeper and ensure we are responsible stewards of taxpayer dollars.”
Most of the activity audited occurred under former Gov. Bill Ritter. Ritter, who chose not to seek re-election in 2010 amid scandal of another sort, is now head of the privately-funded Center for the New Energy Economy — at a salary of $300,000 per year — at Colorado State University.
Colorado Democrats are heavily invested in alternative energy amid widespread rumors in the industry that contracts go to politically-connected firms, much like Solyndra at the federal level. Democrats emphasize that the audit contained no illegal activities; however, there were quite a few “irregularities.”
The audit found, for example, that the CEO did not calculate or maintain annual budgets for any of the 34 programs it administered since FY 2007. “As a result, CEO could not determine the total cost or the total amount spent for any of its programs,” the audit stated.
Numerous other discrepancies, missing financial information, and a lack of documentation also plagued the state agency, according to the audit. Of the eight programs reviewed in-depth, as many as three failed to have identifiable goals or lacked information on whether the goals, if any, were actually achieved.
Twenty of 22 contracts administered by the agency contained incorrect or missing information in the state contract database, with six missing performance elements and another 13 missing contractor progress reports. Both elements are required by the state.
Gov. Hickenlooper last week named a new CEO Director.
This latest scandal follows Abound Solar, which declared bankruptcy last summer amid Solyndra-like scandal. Just last week, an inspector with the Colorado Department of Public Health and Environment found 2,000 pallets of unsold solar panels in a Denver warehouse not approved for hazardous waste storage.
Violations of hazardous waste rules can rack up hefty fines – potentially thousands of dollars per violation, per day. There’s only one facility in Colorado that can dispose of the panels – which will likely have to be treated, encased in cement and then buried.
Not a bad idea for the whole New Energy Economy.
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