State lawmakers are raising new concerns about Department of Energy and Environmental Protection staffing after a new audit concluded that the former administration allowed millions of dollars in federal funds owed Connecticut — some dating to 2001 — to go uncollected.

The same audit also found that the former Department of Environmental Protection improperly wrote off nearly $2 million that the emergency spill response program should have received in the 2008 and 2009 fiscal years, and failed to report another $3 million in losses by assigning responsibility for 575 cases to unidentified parties.

But an administrator at the new Department of Energy and Environmental Protection, a realigned energy and environmental watchdog agency created last spring, said Monday that the department has made “significant progress” addressing these concerns with a new, streamlined accounting database.

“Certainly I would like to see more people in the department,” Rep. Richard Roy, D-Milford, House chairman of the Environment Committee, said Monday. “We’ve expressed our dismay at the lack of enforcement personnel in the past. But I think the staffing in general eroded over a long time and we can see that’s a problem.”

“This was a major wake-up call for me,” said Sen. Edward Meyer, D-Branford, the Environment Committee’s other co-chairman.

Meyer, who introduced legislation last year that would have mandated minimum staffing levels for environmental protection permitting and enforcement tasks, said lawmakers must discuss increasing DEEP staff during the 2012 session, which starts in February.

“This is an agency that has been decimated in many ways over the decades by attrition, early retirement incentive programs and other cuts to staff,” Meyer said.

With 942 positions in 2010, staffing reached its lowest level since 1987, when the department employed 964, according to Meyer’s office. Dennis Thibodeau, chief of administrative services at DEEP, added that the agency’s staff, excluding those assigned to energy planning or regulation functions, currently totals 1,002.

The state Council on Environmental Quality, a small environmental watchdog agency, reported in 2008 that the then-DEP’s budget — adjusted for inflation — and staff levels, matched those of the mid-1970s.

The council’s executive director, Karl Wagener, said that while he wasn’t familiar with the concerns raised by state auditors about DEEP, “I do know that they don’t have enough staff to do everything they need to do.”

One of the chief concerns raised by state auditors John Geragosian and Robert Ward involves the department’s responsibility to “draw down” or collect federal funds the agency already has qualified for in connection with various programs. In many cases, state funds initially are spent and then reimbursed with federal money.

There is always a lag time between the steps in that process, but the auditors found that between the 2008 and 2010 fiscal years, more than $7.1 million in state funds were spent while the corresponding federal payments were not obtained.

Further review showed that certain programs, such as a regional trails initiative, still hadn’t recovered federal money due as far back as 2001.

For three years in a row, DEP staff had made no progress in reducting the gap in 24 different programs, the auditors noted. In nine of those 24, the gap had not changed for five years.

“Lack of attention to this area caused the above conditions,” Geragosian and Ward wrote.

In a written response to the auditors, DEEP administrators did not contest the finding, but noted that the agency must track “126 active grants across nine federal agencies all of which are unique.”

Thibodeau, the agency’s chief of administrative services, said legislators’ concerns about decades worth of inadequate increases in staff and other resources are valid. “That’s absolutely fair,” he said. “But we are prioritizing what we need to address immediately.”

And though Thibodeau didn’t provide specific numbers, he said, “we have really made significant progress” since 2009 to reverse its backlog of uncollected federal funds using a new, streamlined accounting database.

State environmental staff also oversee an emergency spill cleanup program and must try to recoup funds from any individuals or businesses held liable for those spills.

The DEP reported in 2008-09 that the program was due $22.3 million. But nearly $3 million of those funds, involving 575 cases or 13.3 percent of the entire program caseload, “had no identified responsible party,” the auditors wrote.

“Since DEP did not have anyone identified to collect the receivables from or enforce a claim against, there was no enforceable legal claim,” they said.

Thibodeau said this problem stemmed from a misunderstanding between the department and the auditors regarding its reporting requirement, and that this won’t happen under the new accounting system.

But, in their written response to the auditors, DEEP officials also raised concerns about their ability to process these claims.

“The agency understands the importance of immediate collection action in order to improve collection success but also it should be noted that additional time is warranted to complete the necessary review process,” DEEP officials wrote.

If a claim is not paid after 120 days, the department refers the matter to the attorney general’s office for lien purposes or additional collection action.

The auditors found that claims had been reduced by nearly $1.9 million in total during the audit period by “unauthorized write-offs.”

According to the audit, environmental protection staff routinely exclude interest and penalty charges from damage cost assessments when submitting claims to the AG’s office. But during the audit period, $1.9 million in interest “was not added back into account balances” afterward by DEP staff once the reviews were completed.

“DEP would have recognized these adjustments and made corrections if reconciliations had been performed,” they wrote, concluding that problems with the emergency spills account developed because “management had not identified this as a high priority.”

Lastly, auditors also found that the department struggled during the 2008 and 2009 fiscal years to monitor grants of state funds awarded to municipalities or private entities.

State law requires a written review on the use of each grant that’s more than $100,000.

A sample of 23 grant awards were reviewed by the auditors. In some instances inspection findings were not documented and in no cases had those reports been read or reviewed by department authorities.

“Noncompliance may go undetected and uncorrected,”  Geragosian and Ward wrote. “The department had assigned a low priority for the review of … reports received.”

Thibodeau added that while the audit, in general, was fair, “the agency has made a great commitment to protecting state resources both under the current administration and under past administrations. Our business environment continues to change and sometimes it’s difficult to keep pace when the resources are limited but I believe we are ahead of the curve at DEEP and I feel that we will continue to make the commitment to be efficient and effective as we manage the agency’s resources.”