State audit thrashes energy office Agency failed to keep annual budgets for 34 programs

DENVER - The Colorado Energy Office was so sloppy with the way it kept track of millions of dollars in stimulus money that it can't prove the spending did any good, according to a harsh audit of the office released Tuesday.

The office, formerly known as the Governor's Energy Office, was responsible for spending $144 million in money Congress sent through the stimulus bill starting in 2009. Money went to clean-energy projects such as home weatherization and loans to start up energy companies. But the office was unprepared to handle such a large amount of money, and its managers did a poor job of monitoring the contracts they signed with private firms to complete the green-energy work.

"CEO ultimately can't demonstrate that it is working cost-effectively or that the work it is doing is valuable," said Vickie Heller, who works for the State Auditor's Office and presented the report Tuesday.

The office didn't keep an annual budget for any of its 34 programs from 2007 to 2012, and when auditors reviewed a sample of 22 of the agency's contracts, they found that 20 of them were missing information that government agencies are required to monitor.

The energy office has found itself at the center of controversy for years. Last year, Gov. John Hickenlooper pushed legislators to expand its mission to promote all forms of energy, not just the clean-energy projects favored by his predecessor, Gov. Bill Ritter.

"To me, over the last four, five, six years, this office appears to be a prime example of arrogance in government, of how government can go wrong," said Rep. Jerry Sonnenberg, R-Sterling, a member of the Legislative Audit Committee.

Republicans on the committee blamed Ritter, not Hickenlooper. Both are Democrats.

"Under the Ritter administration, the energy office was the governor's slush fund," said Sen. Steve King, R-Grand Junction. "The idea that you have eight program managers and none of them could identify a budget or spending, it was apparent that there weren't best practices under the previous administration."

But Democratic Sen. Lucia Guzman of Denver said Hickenlooper is starting his third year, but the office is without a permanent director.

"If I start a job, and I've been on it for two years, it seems to me I should have some outcomes giving me reason to continue to be there," Guzman said.

The hearing had undertones of federal energy scandals. Companies such as Solyndra and Abound Solar went bankrupt after they got hefty loan guarantees from the stimulus bill.

The Colorado Energy Office also operates a $16.4 million revolving-loan program, and the auditors found that over a two-year period, 23 monthly reports were never filed.

However, none of the companies that got Colorado loans have gone out of business, CEO officials said.

Hickenlooper's administration is working to correct the problems by July. His deputy chief of staff, Kevin Patterson, is the office's interim chief.

"Some of these things aren't really pleasant for us to hear, but I think they're important for us to hear," Patterson said.

The office has endured a lot of turnover among its 34 employees.

Seven of the eight program managers have left since Hickenlooper became governor, Patterson said. Some left because they did not want to be part of the new direction Hickenlooper had set for the office.

Stimulus funding for the office is running out, and last year the Legislature voted to revamp the office, make it smaller and set up long-term funding that doesn't rely on heavy federal support.