- The Washington Times
Wednesday, May 14, 2014

The Energy Department’s loan office — which came under fire for its handling of failed solar panel maker Solyndra — left a key oversight office understaffed for nearly a year, according to a recent government audit.

Launched in February 2012 following the Solyndra failure, the risk management division of the department’s loan office left 11 of its 16 positions unstaffed until late 2013, and operated without a director for much of last year, according to a Government Accountability Office report released this month.

The GAO’s findings of staffing shortfalls in the risk-management office happened despite the headline-making loan program failures that had embarrassed the Obama administration.

The loan office is tasked with evaluating risk for a program that had seen three of its loan recipients file for bankruptcy and others require restructuring deals. Even as some companies’ finances worsened, staffing troubles in the loan office resulted in a failure to prepare dozens of credit reports mostly in 2011, according to the GAO.

The congressional watchdog office also said “inconsistent adherence to policies and incomplete staffing” had limited the Energy Department’s ability to assure the public that it’s been effective in managing tens of billions of dollars in loans.

In a less critical report, the Energy Department’s inspector general said officials have made “substantial progress” in implementing recommendations from a White House ordered review issued in January 2012.

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Still, despite the inspector general’s “generally favorable findings,” auditors found the loan office still hadn’t implemented eight of 12 recommendations from the 2012 review, such as improved public reporting, restructured internal oversight and establishing an external oversight board.

A department spokeswoman defended the loan office Wednesday.

“The department takes its responsibility to the American taxpayer very seriously. As noted in a previous GAO report, as well as in independent reports, the department’s due diligence is as rigorous — or more so — than that performed in the private sector,” spokeswoman Dawn Selak wrote in an email.

“In addition, this week’s IG report shows that the department’s Loan Programs Office has taken the Allison report seriously and addressed its recommendations.”

Another concern raised by auditors revealed a lack of a formal process to settle differences between the risk management division and other agency offices on loan deals.

After the 2012 collapse of Solyndra, the California solar panel maker that received a half-billion dollar federal loan and whose factory President Obama once toured, emails surfaced revealing red flags about the company’s finances long before it went broke.

Other documents revealed concerns about the company from inside the Office of Management and Budget as early as 2010.

While a grand jury was formed to investigate the company, no charges against Solyndra officials were ever filed.

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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