Audit Backs DOE’s Loan Program

An independent audit of the Department of Energy’s loan guarantee program finds little fault with the program but urges the agency to improve management and oversight. The White House initiated the audit in response to criticism from Republicans in the House of Representatives who are investigating the loan program in the wake of the bankruptcy of loan recipients Solyndra and Beacon Power. The audit was led by Herbert M. Allison Jr., former assistant secretary of the Treasury Department. It evaluated 30 DOE loan guarantees and loans issued to support innovative but risky clean energy projects. Some $2.7 billion is at risk of default out of $23.7 billion in loans and guarantees, the audit concluded, stressing that its methodology cannot exactly predict failure. The report recommends management changes, including a new chief risk officer, who would be independent of the loan office. Although Energy Secretary Steven Chu heralded the audit immediately after its Feb. 10 release, House Republicans were not swayed. They said they will continue to seek more White House documents to fuel their investigation of the program.