Inspector General Office finds Biden DOE awarded $7.6 billion without proper accounting procedures

A new Office of Inspector General report finds a division of the Biden Energy Department overseeing billions in funding to bolster the U.S. energy grid lacked adequate financial controls and staffing to properly manage the program. 

In October 2024, the Department of Energy awarded $7.6 billion in funding to 105 projects across the United States, in support of various grid resilience initiatives. The Grid Resilience and Innovation Partnerships Program (GRIP) had a total of $10.5 billion allocated to it from the Infrastructure Investment and Jobs Act. 

The DOE Office of Inspector General initiated an investigation to determine if the department’s Grid Deployment Office (GDO), which administered the funding for the GRIP program under the Biden administration, had adequate internal controls and resources to implement the program. 

According to the OIG’s report released Wednesday, the GDO lacked an effective internal controls system to manage risk, nor did it have staffing resources to implement the program. As a result, the GDO risked improperly reimbursed costs, fraud, waste and undisclosed conflicts of interest. 

The lack of adequate accounting practices for taxpayer funding may extend beyond the GDO. 

Trump’s Energy Secretary Chris Wright said during a House Appropriations hearing earlier this month the Loans Program Office at the DOE had issued about $40 billion in loans for energy projects over the last 15 years. But in the last 76 days of the Biden administration, that number jumped to $100 billion. Wright said that the rushed loan agreements lacked clauses traditionally required by the DOE. 

Walking the walk

In October 2023, the GDO awarded $3.46 billion in funding to 58 projects across 44 states. These included grants to modernize the grid to “reduce the impacts due to extreme weather and natural disasters.” 

The program also provided funding to strengthen and increase the capacity of the transmission system. 

Another program provided funding to state and local governments, as well as public utility commissions, for “innovative approaches to transmission, storage, and distribution infrastructure to enhance grid resilience and reliability.” 

The Biden administration rolled out a second round of awards in October 2024, granting $4.2 billion to 46 projects in 47 states. Among the recipients in the second round was the California Energy Commission, which received $630 million to upgrade 100 miles of transmission lines with grid-enhancing technologies. The upgrades would provide interconnection improvements to increase grid access for wind and solar farms. 

“Once again, the Biden-Harris Administration is not just talking the talk, they’re walking the walk. This funding is critical to our efforts to build a power grid that ensures all Californians have access to cleaner, cheaper, more reliable electricity,” California Democratic Gov. Gavin Newsom said in a statement. 

Not following the Green Book

According to the OIG report, as of September, the GDO was in pre-award negotiations with 44 of the applicants that had been selected to receive funding, and the office had executed 13 grant awards by that point. 

The office is required to develop and document effective internal control systems for the program, which follows the Government Accountability Office’s standards for financial controls in the federal government, known as the Green Book. 

The OIG found that the GDO did not develop and document an effective internal control system, including risk assessments as the Green Book requires. 

The GDO had contracted with the National Energy Technology Laboratory (NETL) to plan, review and administer awards through the lifecycle of the grants. This included auditing and other requirements the recipients are required to do to ensure grant compliance. The report found that the GDO had not provided proper oversight of NETL’s procedures to ensure they were adequate. 

The office also lacked sufficient staff to oversee the activities that support the GRIP program. Officials at the GDO provided the inspector general with no evidence that it had incorporated Green Book components or principles into its own internal control systems, the report stated. 

In the past, the OIG found that insufficient oversight resulted in “questionable costs.” 

In 2013, for example, the OIG issued an audit report that found that the DOE’s Smart Grid Demonstration Program had approved $12.3 million in questionable reimbursements. 

Recommendations

The OIG recommended that the GDO develop and implement an effective controls system for the GRIP program, and that it create a plan to ensure GRIP-related internal controls and processes are adequate and effective. 

The GDO management, according to the report, agreed with the recommendations and will carry out the recommendations by March 31, 2026. The GDO, however, disputed many of the findings in the report, including that it did not develop and document effective internal controls or that it failed to independently assess NETL’s procedures. These disputes, the report said, lacked supporting evidence. 

“As demonstrated in the report, GDO did not furnish objective evidence of a documented internal controls systems,” the report said. 

The OIG said the proposed actions of the GDO’s management are generally responsive to the inspector’s recommendations, but the inspector warned that the time allotted to develop and implement these recommendations could expose the DOE to additional risk. 

The DOE did not respond to requests for comment on the report.