Article

The value of compliance audits for federally funded state home Weatherization Assistance Programs

Feb. 1, 2021 · Authored by Steve Anami

The COVID-19 pandemic has shined a light on the extreme value of federally funded programs and services. As more individuals and families are staying home, Weatherization Assistance Programs (WAPs) have become crucial for low-income and underserved communities, as many of the goods and services provided via WAP programs have become indispensable for residents during the pandemic.

States must ensure their WAPs remain in compliance with federal and state regulations and departmental program policies. By maintaining compliance, state programs can continue to secure funds and bolster their services to meet the community's needs.

Compliance considerations and requirements

Federally funded programs like the WAP require an additional layer of compliance in addition to state laws and statutes. To continue to receive funds, state WAPs must operate within federal regulations and meet specific annual compliance requirements. The Department of Energy (DOE) provides oversight of all state-administered WAPs. In addition to DOE oversight, the Department of Health and Human Services (HHS) plays a role in compliance for state programs that utilize combined funding sources.

The following are examples of compliance monitoring activities.

DOE weatherization monitoring

Weatherization monitoring conducted by the DOE is the primary way the agency ensures programs continue to meet requirements. Per 10 CFR 440.23(b), periodic monitoring of WAP grantees (states) must be completed by the DOE. Monitoring is usually conducted in multiple forms that include onsite, ad hoc and desk monitoring.

State grantee monitoring

As the DOE continues to monitor program activities, per 10 CFR 440.23 grantees are responsible for establishing annual monitoring plans and performing annual monitoring of local subgrantees that provide weatherization services on behalf of the state. Monitoring activities should focus on:

• Oversight of program expenditures
• Oversight of program implementation
• Subgrantee program compliance
• Monitoring of contractor payments and reimbursement reports

Compliance is critical for these types of programs as non-compliance can disrupt WAP program performance and service by losing the federal funds that directly impact the job market and communities the state serves.

Compliance audits and guidance

It is important for states to conduct specific procedures to assess compliance with each function of WAP operations to be prepared for the audit. The compliance audit procedures generally include an examination of the following:

• Applicant program eligibility: verify that applicants are eligible for WAP services
• Required documentation: review the accuracy of applicant-required documents that support eligibility requirements
• Applicant assessment: Review home assessment applications for the required weatherization services to validate services rendered meet program requirements 
• Final inspection: Review completed work and validation of work based on weatherization service eligibility
• Invoiced services: Review program expenditures and analyze documented cost and actual invoiced charges to the program 

As a best practice, states should work with an independent advisor to ensure the program meets legal, regulatory and internal guidelines.

Baker Tilly can help

Baker Tilly's weatherization expertise and compliance audit services can help ensure state WAPs meet regulations outlined in 10 CFR 440, 10 CFR 600, 2 CFR 200, 2CFR 910 and other DOE regulations that may be administered. Our team examines the above areas in partnership with state staff. In addition to ensuring compliance, we document gaps, risks and areas of improvement and identify potential non-compliant program activities. Our documented action plan allows state agencies to fill gaps, make improvements and establish more robust risk mitigation controls that improve program operations and continue to meet federal guidelines. 

In addition to compliance audits, Baker Tilly can provide other services to support WAPs, including:

• Program manual development and updates to ensure procedures and requirements are documented and communicated
• Process re-engineering to identify opportunities for efficiency enhancements
• Information technology (IT) assessments to determine opportunities to improve technology use and process efficiency

For more information on WAP compliance, or to learn more about how Baker Tilly can help, contact our team.