The State Worker

UPDATED at 2:30 p.m. with comments from the Community Services department

The state's Department of Community Services and Development could forfeit $37.4 million in federal American Recovery and Reinvestment Act grants earmarked for home weatherization, according to a state auditor's report released today.

Next spring, the state risks seeing that money go back to the federal government unless it quickly ensures contractors start weatherizing a greater number of homes or provide a longer list of improvements at each home.

State Auditor Elaine Howle reported last year that the department's program got off to a rocky start in 2009 because of issues "both beyond and within its control." While things improved last year, the state was slow to issue higher standards on what measures -- from weather-stripping windows to insulating water heaters -- contractors had to put in place at each home. The use of lower standards for so long meant millions of dollars less than expected was spent making homes more energy-efficient.

Though statewide monthly targets have been met, the auditor noted some individual cities such as Oakland, San Francisco and Los Angeles were behind. As of April 30, San Francisco had spent about $87,000 without weatherizing any homes.

California received $186 million in Recovery Act funds for the program. The state originally planned to update 43,150 homes at an average cost of $3,660 per home. As of April 30, about 26,800 homes had been weatherized at a cost of about $2,540 per home. The deadline to spend the money is March 31, 2012.

Department spokeswoman Rachel Arrezola said the state auditor's review "was appreciated" and that the department is taking steps to ensure the goals that came along with the grant are met.

The department sent a letter to U.S. Energy Secretary Steven Chu asking next year's deadline be extended to March 2013. In the letter, interim department director John Wagner acknowledged that "California will not be able to expend all of the funds by the current grant deadline."

In a separate letter to the Energy Department last week, Wagner listed "a number of recent actions or guidance by DOE that present significant barriers and further impede our ability to meet production projections."

About $1.9 billion of the $5 billion in weatherization grants awarded nationwide were unspent as of July 1, according to a recent report by the Federal Funds Information for States.