Watchdog’s Irony Over DOE Community Benefit Plans
TL/DR –
The Office of Clean Energy Demonstrations (OCED) mishandled a $6 billion grant program, according to a report by the Department of Energy’s internal watchdog. The report alleges that OCED failed to establish standardized internal controls, risk assessments, performance plans and mitigation for conflicts of interest for the Advanced Industrial Facilities Deployment Program. In response, OCED leadership agreed with the report’s findings and stated plans to implement the recommended improvements; however, as most of the staff will have moved on by the planned implementation date, former OCED employees believe this commitment is largely symbolic.
The Inspector General’s Report on OCED Raises Concerns
After the Department of Energy’s internal watchdog published a report last month, alleging a mismanagement of a $6 billion grant program by the Office of Clean Energy Demonstrations (OCED), insiders were not caught off guard.
The report highlighted that the OCED failed to set up standardized internal controls for the Advanced Industrial Facilities Deployment Program. This program is an initiative for sharing the cost of industrial retrofit and upgrade projects. The report criticized the absence of risk assessments, performance plans, and conflict of interest mitigation plans in the program’s setup.
The consequence of these failures, according to the report, was that OCED risked missing the program’s objectives and could overlook vital project performance issues.
Community Benefit Plans: A Bone of Contention
A particular point of contention was the management of community benefit plans—a requirement for nearly all funding opportunities under the Bipartisan Infrastructure Law and the Inflation Reduction Act during the Biden era. However, these community benefit plans were hastily rescinded when the Trump administration assumed office in January.
It is not unusual or partisan for the Department of Energy’s inspector general to conduct audits and find programs falling short of meeting congressionally-mandated requirements. This inspection activity is the primary function of inspector general offices across the federal government under a law dating back to the 1970s.
This specific OCED investigation started during the Biden administration and is one of several reports that began in early 2024, nearly a year before the November elections and the ensuing overhaul of the energy agency led by DOGE. These reports have recently been released by the DOE inspector general’s office.
A Break from Tradition: OCED’s Response to the Report
What set this investigation apart was the response from OCED, especially considering the Trump administration’s plans to dismantle the office.
The inspector general typically sends a draft of its findings to the office under investigation and asks for feedback from its professionals. A former DOE official (who wished to remain anonymous) suggested that the responses to these inquiries are usually nuanced and are included in the final public report delivered to Congress.
However, in this case, the career staff’s feedback was not featured in OCED’s response to the inspector general. The office simply submitted a single sentence comment: “We concur with the auditors’ findings.”
OCED leadership skipped the standard “exit conference” with the inspector general in July and instead promised to implement the inspector general’s recommendations by December 15, 2025. These recommendations include developing, documenting, and implementing an internal control system, and systems to assess community benefits plans.
However, former OCED employees have noted that this short response seems largely symbolic. By mid-December, most of the office’s career staff will have finished their “deferred resignation” period and moved on. The entire team focusing on project oversight will have left, and most projects previously relying on OCED funding will have sought out other sources.
The Report’s Valid Points
Community benefit plans have been a part of philanthropic grantmaking for several decades, but their use in federal grantmaking picked up speed in the 2020s.
Funded programs by the BIL and IRA required applicants to detail how they planned to make their projects a positive addition to the communities they were building in. These plans were based on four government priorities at the time: community and labor engagement, workforce development, diversity, equity, and inclusion, and implementing the Biden administration’s Justice40 Initiative. The latter required that at least 40% of a federally-funded project’s overall benefits go to disadvantaged communities.
The inspector general’s report on OCED’s handling of CBPs was released amidst a political transition at DOE. Although Career OCED staff disagreed with how the Trump-appointed OCED leadership interpreted the report’s findings, they conceded that some of the issues identified in the report, including problems with community benefits plans, were valid.
OCED’s Future
Despite being created through bipartisan efforts, OCED has been targeted for closure by the MAGA wing of the Republican party before the November elections. Project 2025, the conservative policy guide from the Heritage Foundation, labeled OCED’s work as “green corporate welfare,” and claimed it was “distorting energy markets.”
Upon assuming office in January, the second Trump administration promptly addressed these criticisms, rescinding diversity, equity, and inclusion programs, community benefit requirements, and the Justice40 initiative within all DOE programs. In March, Elon Musk’s “Department of Government Efficiency” drastically reduced OCED’s staff from over 250 to a few dozen, with plans to shut down the office by the end of the year.
OCED was also found encouraging its remaining grant recipients to “drop out” of the program in exchange for a fee. As such, the criticism of community benefit plans and office leadership’s response to the inspector general report seems somewhat moot against the backdrop of the Trump administration’s plans to dismantle OCED altogether.
“If community benefit plans were a problem, that entire oversight team all left, [and] the only people who are around are there to sort of close up shop,” noted a former official. “I don’t see a future for OCED at all.” OCED did not respond to Latitude Media’s request for comment.
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