GAO Urges Reform Of Loan Programs

The Government Accountability Office has found that the Department of Energy’s loan guarantee program suffers from poor documentation and record keeping and has missed steps in its review program. In a report released last week, GAO, an investigative arm of Congress, notes that DOE required months to assemble loan material needed for GAO’s examination. However, the report also finds DOE’s basic review process to be comparable with that of private lenders. Some 460 applicants sought loans, GAO says, and DOE offered financing to only 7% of them. The department has provided $15 billion in loan guarantees and has committed to another $15 billion. GAO urges DOE to consolidate its review system and improve program policies and procedures. DOE has been under congressional attack for program failures, particularly the bankruptcy of solar company Solyndra, which cost taxpayers $535 million in a federally backed loan. Subsequently, Energy Secretary Steven Chu has slowed the program. But last week, senators pressed Chu at a hearing to speed the process and release guarantees to several companies that remain in the pipeline.