A new audit of the Department of Energy’s $34 billion loan guarantee program said the agency needs to establish a one-stop shop for tracking its loan guarantee applications and recipients, the Government Accountability Office said in a report released Monday.
A loan tracking system could improve the government’s loan review process and help underwriters to make better lending decisions.
The audit by the GAO carries fresh relevance amid the bankruptcies of two of the first three firms to land the government’s green energy funding: Solyndra Inc. and Beacon Power Corp.
The Department of Energy’s standards for loan guarantees are as high or higher than any in the private sector, the GAO said. The problem is that the DOE may not be following its own standards.
The non-partisan congressional investigative agency said the Energy Department “skipped applicable review steps” and that poor documentation leaves DOE “open to criticism that it exposed taxpayers to unacceptable financial risks.”
Missing or incomplete steps in the review process could lead the department to make riskier loans than it otherwise would.
The GAO recommended the loan tracking system after it took more than three months for the department’s loan office to retrieve data — which was spread across several sources — on the application status of several loan guarantees. A loan tracking system could better document and monitor the loan process.
Meanwhile on Tuesday, at a hearing before the Energy and Natural Resources Committee, Herbert Allison, former assistant secretary at the Treasury Department, defended the decision not to review bankrupt Solyndra LLC as part of his audit.
Allison issued a report earlier this year saying taxpayers could lose nearly $3 billion through the Department of Energy loan program, though his review did not include the collapses of two high-profile recipients, Solyndra LLC and Beacon Power.
Sen. Rand Paul, Kentucky Republican, questioned Mr. Allison sharply on why the two bankrupt companies weren’t included in the report.