RALEIGH -- A massive nationwide effort to make low-income homes more energy-efficient has fallen months behind schedule as local nonprofits that oversee the work navigate federal regulations designed to prevent fraud and abuse.
The delays are raising the stakes for North Carolina and other states to take advantage of the federal stimulus funds before the program expires in March 2012. The weatherization program pays for free insulation, duct sealing and, in some cases, new central heating and cooling systems. Any unspent money would likely have to be returned unless Congress extends the $5 billion program created last year as part of the American Recovery and Reinvestment Act.
Workers were supposed to start fixing homes in this state in July, but the work didn't get under way until November and the crews didn't get to Wake County until December. The weatherization program will pump $132 million in federal stimulus funds into North Carolina over three years to weatherize more than 22,000 homes.
North Carolina's effort is about 4 1/2 months behind schedule, which is in line with most other states, said Harold Davis III, manager of the weatherization program for the Office of Economic Opportunity in Raleigh. As of Friday, crews had weatherized 678homes in the state, just 3 percent of the total project.
That means hundreds of homes weren't ready for the winter cold snap that has chilled the state since January. A properly weatherized home can cut energy costs by more than half and save the owner $1,000 a year in utility bills. The program pays up to $6,500 in fixes per home.
"It's a slow start, obviously not the best public relations, but it's not insurmountable," Davis said.
A report this week by the Government Accountability Office in Washington drew attention to the situation across the country, noting that as of Dec. 31 9,100 homes had been weatherized out of a planned 593,000, or 1.5 percent of the project.
The delays could lead to more hiring as nonprofits and contractors push to make sure all the money is spent in time, Davis said.
One issue is that federal contracting rules require the nonprofit agencies that administer stimulus funds to pay their contractors fair wages. That rule required the U.S. Department of Labor to calculate a prevailing wage for a "weatherization worker" in every county in each state.
Weathering all the rules
Davis said the state wasn't able to offer the first weatherization training courses at local community colleges until December. And before states could use the stimulus money, officials had to perform audits on the local nonprofit agencies to make sure they met federal standards.
Some states lag behind North Carolina, but all show how state agencies and local nonprofits can become overwhelmed by complex national legislation involving billions of dollars. In Michigan, for example, 90 percent of the homes to be weatherized are more than 50 years old and have to go through a historic preservation review under that state's laws.
"The feds thought it could be done in a couple of weeks," said Garman Troup, director of the housing and home improvement department at Resources for Seniors, the Raleigh nonprofit agency that is overseeing weatherization in Wake County.
Troup's group has weatherized 30 homes in Wake County out of a planned 1,000. The nonprofit has hired eight employees and five subcontractors to do the work. The group wants to be able to weatherize about 45 homes a month.
The federal program's anti-fraud safeguards are so complicated that contractors inexperienced in federal compliance often have to fill out the invoices several times before they get them right, Davis said.
Each home that is weatherized is assessed before the work is done, and then audited afterward to certify completion of the job. Nothing is final without the submission of a 10-page audit document that requires a breakdown of materials, labor and other details.
The 30 nonprofits across the state administering the money were warned not to use the funds to finance regular operations. In particular, they were warned not to use the money to pay employee bonuses.
"They gave out stimulus dollars to banks and you know how that went," Troup said. "They wanted to be sure that didn't happen again."
John Sawyer, owner of Climate Control in Asheboro, has been doing weatherization work for 28 years. He's one of the contractors on the project and has already hired six workers; he is planning to add four more. He also bought extra tools and equipment this summer, long before the work was ready for him.
"It was hurry up and wait," he said. "We put on extra equipment, but the actual contracts didn't come down until December."
Sawyer said the program is a lifesaver for people who would never be able to afford the upgrades.
"You wouldn't believe some of the houses we work on," he said. "We see ductwork lying on the ground, almost no insulation, lots of water pipes leaking."
