President Barack Obama's plan to create jobs and rein in energy costs through a steep increase in money for weatherizing the homes of low-income Americans has so far borne little fruit, with many of the biggest states meeting less than 2 percent of their three-year goals to date, the Department of Energy's inspector general said in a report on Tuesday. The inspector general, Gregory H. Friedman, called the lack of progress 'alarming.' Far into the nation's winter heating season, the program for the most part has neither saved energy nor put people to work, Friedman wrote. 'The job creation impact of what was considered to be one of the department's most 'shovel ready' projects has not materialized,' the report said. The assessment, issued a year after the weatherization program was created under the fiscal Recovery Act, comes as Congress moves toward passing a second bill to stimulate employment. Republicans and Democrats have been arguing over whether that second bill will add enough jobs in time to help revive the economy. Responding to the report, Cathy Zoi, the Energy Department's assistant secretary for energy efficiency and renewable energy, acknowledged on Tuesday that the weatherization program could have gotten off to a faster start but said that it was gaining momentum quickly. 'Since September 2009, we have tripled the pace of Recovery Act-funded home weatherization,' Zoi said in a statement. She added that the department was bolstering federal oversight of the program to ensure that the states continued to strengthen their efforts. Most of the weatherization projects involve improving insulation and replacing leaky windows and doors in the homes of low-income residents. Under the 2009 Recovery Act, $5 billion was allotted for weatherproofing apartments and houses over three years, up from $450 million in the previous fiscal year. States were authorized to spend up to 50 percent of the money they received by the end of December, the report said. Yet the report said action was hobbled by bureaucratic delays and by the recession itself, as spending cuts resulting from the economic downturn forced states to trim personnel expenses. Many states either furloughed the state employees who would administer such programs or instituted hiring freezes that prevented state offices from processing additional work -- even though the federal government would have paid the additional salaries, the report found. Another stumbling block was a decision by Congress to require contractors on the weatherization jobs to pay prevailing wages, the report said. To determine what those salary levels were, the Labor Department undertook a survey. In the meantime, the Energy Department instructed states to go ahead and put people to work and to keep records so the federal government could make retroactive payments if necessary. But most states did not begin hiring until the wage question was resolved last fall, the report said. As a result, as of mid-February, one year into the stimulus plan, less than 8 percent of the money had been disbursed, the inspector general said. The pace of actual weatherizations was also dismal, the report said. New York state, for example, had a goal of weatherizing 45,400 units over three years, but by December had finished only 280, a completion rate of 0.62 percent, the report found. One reason, it said, was a hiring freeze in New York City. Progress in Pennsylvania, which weatherized 1.28 percent of the houses and apartments it had intended to, was slowed by a deadlock over the state budget, the report said. Illinois wanted to hire 21 workers to oversee work on nearly 27,000 homes; it hired none because of a spending freeze, and completed only 331 homes, or 1.23 percent of its three-year target. But some state officials said that the numbers did not reflect current progress. Gordon Anderson, a spokesman for the Texas Department of Housing and Community Affairs, which administers the weatherization program there, said that as of Tuesday, the state had carried out 1,057 weatherizations under the federal program and that it expected another 459 to be completed by the end of next week. Anderson cited logistical complications for the slow start-up. 'We went from a budget of $13 million for weatherizations to $327 million,' he said, 'so we needed to get a serious plan in place to assure that our agency and all our contractors had the inadequate capacity to administer the funds.' Officials in other states also emphasized that the program required some time to put in place properly. Many said the number of houses they were weatherizing with the recovery money was now rising sharply. Jim Plastiras, a spokesman for the New York State Division of Housing and Community Renewal, said that action had been delayed by the confusion over wages, which was not resolved until October, but that efforts were now gathering steam. The state now has 17,400 homes in progress, Plastiras said. The government commissioned the inspector general's report to ensure that forceful safeguards were in place to ensure that the $5 billion achieved its purpose of creating jobs, improving the quality of life in low-income households and reducing the waste of energy. 