Overview
During our audit period, the Department of Energy Resources’ (DOER’s) Green Communities Division (GCD) did not ensure that all the municipalities it had designated as green communities submitted their required annual reports. Specifically, GCD did not receive annual reports from 11 green communities during fiscal year 2019 or from 17 green communities during fiscal year 2020.
As a result, GCD cannot be sure that these municipalities are compliant with the five criteria in the Green Communities Act. Compliance with the criteria would allow them to maintain their green community designation. Further, since DOER uses the information in these municipal reports to produce its annual report for the state Legislature, the information in DOER’s annual report may be incomplete and inaccurate.
Authoritative Guidance
DOER’s Guide to Internal Controls, dated July 2017, states,
Designated Green Communities are required to submit to [GCD] by November 30 each year annual reports detailing their compliance with the five criteria in the Green Communities Act. Through review of these reports, [GCD] staff can determine if communities are out of compliance, and take appropriate steps to help them comply. These reports also determine if initial designation grants are spent and projects complete, making a Green Community eligible for the annual competitive grant round. Based in part on data and information in Green Communities’ annual reports, [GCD] submits an annual report to the Legislature detailing the accomplishments of the Green Communities Designation and Grant Program.
According to the GCD “Being a Green Community” policy in effect during our audit period,
Green Communities are required to submit an Annual Report to demonstrate they still meet the Five Designation Criteria.
Finally, Section 10(f) of Chapter 25A of the Massachusetts General Laws states,
[GCD] shall annually, not later than April 1, submit a report to the clerks of the senate and the house of representatives, the joint committee on telecommunications, utilities and energy, the joint committee on state administration and regulatory oversight, and the senate and house committees on ways and means detailing the expenditures and results relative to the green communities program.
Reasons for Issue
GCD has not established effective monitoring controls over its green communities’ reporting process that would allow it to identify green communities that have not submitted their required annual reports in a timely manner and prompt them to submit the reports.
Recommendation
GCD should establish monitoring controls over its green communities’ reporting process that will allow it to identify green communities that have not submitted their required annual reports in a timely manner and prompt them to do so.
Auditee’s Response
DOER requires annual reports from green communities that receive grant funding on an annual basis. DOER engages with these communities about reporting deadlines, hosts webinars with municipalities with instructions for successful submission of reports, responds to questions about reporting and tasks its green communities’ regional coordinators to personally reach out to their respective communities to ensure grantees are aware of key dates they need to comply with in the green communities program. Unfortunately, municipalities sometimes fail to provide annual reports even after this outreach has been done. In [fiscal year] 2019, for example, 164 out of 185 green communities submitted annual reports; and in [fiscal year] 2020, 199 out of 210 submitted annual reports.
DOER has a well-established process for reviewing annual reports after they are submitted and notifying municipalities of their eligibility status for future green communities grants. However, DOER does not have a documented procedure for notifying municipalities that fail to submit annual reports. In response to the recommendation, DOER will revise its report review procedures and will notify green communities that haven’t submitted their annual reports and request that they do so. Green communities that fail to submit their annual report are not considered to be a green community in good standing. Under current practices, and throughout the audit period, failure by a green community to submit its annual report results in that green community being ineligible to receive green communities grant funds for the following year. These communities reinstate their eligibility for green communities grants by submitting the most recent annual report along with green communities data from the missing year(s) regarding adherence to the green communities requirements.
Auditor’s Reply
Based on its response, DOER is taking measures to address our concerns on this matter.
| Date published: | November 10, 2021 |
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