Energy Department officials did not disclose that they knew government-backed electric car charger company ECOtality was heading toward bankruptcy, putting some of the $135 million in aid it got through the 2009 stimulus in jeopardy, the department's watchdog has found.
The department failed to include what it knew in an audit this summer about ECOtality's financial woes, Inspector General Greg Friedman found, The Washington Times
ECOtality filed for bankruptcy in September. Its assets were bought
by The Car Charging Group for $3.3 million in October.
Friedman said in his report
government didn't disclose that ECOtality had problems meeting the terms of its government financing.
"The disclosure of issues that could have impacted project completion would have led us to perform additional audit procedures to evaluate ECOtality's ability to fulfill its obligations under the Recovery Act award," Friedman wrote.
"These issues also could have impacted our overall conclusions regarding ECOtality's performance under the award. In response, Department officials stated that they had always strived to fully disclose everything requested and needed for the audit and never intended to omit anything of interest to the Office of Inspector General."
The San Francisco business' problems have many similarities to those of the Solyndra solar company, which filed for bankruptcy in September 2011, not long after receiving $535 million in stimulus funding through the Energy Department.
Most of Solyndra's federal funding will be lost, officials admit, and the Obama administration promised better oversight for similar grant recipients that may be having financial trouble.
Over the past eight years, ECOtality has gotten a total of $135 million, including $35 million for projects approved in 2005 and 2011 and another $100 million from the federal Recovery Act, which helps energy-efficient companies.
There was plenty of warning over the summer months, however, that ECOtality was preparing to file bankruptcy, Friedman said.
In May, the company said it was not on track to meet September goals, including the installation of charging stations and collecting usage data from electric vehicles, resulting in cost overruns that were about 200 percent higher than originally budgeted, the report said.
The Energy Department notified the company that it would have to submit a plan to address the problems with meeting its September goals, and cut off ECOtality's Recovery Act funding. It kept making payments to the company for a $26 million project it was awarded in 2011, however, saying it "asserted that previous award modifications" made the goals achievable.
The Energy Department said it didn't think the information about the company's struggles was relevant to the audit, but agreed with Friedman's suggestions for improving transparency.
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