Grants Management
EPA Actions Taken Against Nonprofit Grant Recipients in 2002 Gao ID: GAO-04-383R January 30, 2004The Environmental Protection Agency (EPA) awards over one-half if its budget, or about $4 billion, annually in grants. At the end of fiscal year 2002, EPA was providing funding to 4,100 grant recipients, with $245.4 million, or nearly 6 percent of its awarded grant dollars, going to nonprofit grant recipients. Congressional hearings in 1996 and 1999 cited concerns with the grants management capabilities of nonprofit grantees. Specifically, the 1996 hearing raised questions about nonprofit grant recipients' use of federal funds for lobbying. The 1999 hearing cited concerns with the ability of nonprofit grantees to manage their grants, because, for example, many nonprofit organizations do not have staff with accounting backgrounds. Often, their grants are too small to be covered under the requirements of the Single Audit Act. In response to such concerns, EPA has included lobbying restrictions in grant agreements, issued guidance and policies on grantee oversight, and has attempted to improve nonprofit grantees' grants management with a 1-day training course and follow-up instructional videotape specifically designed for nonprofit grant recipients. However, as we reported in August 2003, nonprofit grant recipients continue to have problems managing their grants. These problems have led EPA to recommend actions to correct specific problems, such as maintaining records to track staff time, obtaining a required audit, and improving a financial management system. In some cases, these problems led EPA to take more significant actions against nonprofit grant recipients, such as issuing suspension orders, holding payments, and designating grantees as high-risk. As a result of continuing concerns about the problems that nonprofit grant recipients have had in managing their grants, Congress asked us to provide supplementary information on the grants management performance of nonprofit grantees. Specifically, this report discusses (1) grants management problems EPA identified with nonprofit recipients in 2002, (2) corrective actions EPA recommended to address these problems, and (3) EPA's more significant actions taken against specific nonprofit grant recipients.
According to our analysis of EPA's calendar year 2002 in-depth reviews, EPA identified 276 problems with nonprofit grantees. EPA identified these problems in the 245 reviews it conducted of nonprofit grant recipients. These reviews represented 20 percent of EPA's 1,232 in-depth reviews. The identified problems included inadequate accounting systems, failure to obtain approved indirect cost rates, and insufficient documentation to support sole-source contracts and other expenditures charged to the grants. Overall, EPA recommended that nonprofit grant recipients take corrective action in response to an identified problem in approximately 66 percent of the in-depth reviews we analyzed. For example, EPA found that a nonprofit grant recipient needed to have a Single Audit conducted for 2001 and 2002. EPA recommended that the recipient immediately arrange to have these audits conducted. For another nonprofit grant recipient, EPA found that the recipient received funding from multiple sources but did not maintain records to track the staff time that was allocated to each of these grants. EPA recommended that the recipient develop and use timekeeping records that meet the standards outlined in the Office of Management and Budget's (OMB) circular. We also found that EPA took 32 significant actions against 15 different nonprofit grant recipients. In addition to taking significant actions against nonprofit grant recipients EPA also took actions against state and tribal grant recipients in 2002. Of the 32 significant actions EPA took against nonprofit grant recipients in calendar year 2002, 23 resulted from problems identified during in-depth reviews. EPA took the other nine significant actions as a result of problems identified during grantee oversight other than in-depth reviews and investigations by the EPA Office of Inspector General (OIG). Our analysis found that of the 36 nonprofit grant recipients that had three or more problems identified during in-depth reviews, EPA took at least one significant action in nine cases, or 25 percent of the cases. Nonprofit grant recipients that received significant actions were often cited as having multiple problems related to their accounting systems, internal controls, or financial expenditures. While the problems identified with some of these nonprofit recipients have been resolved through corrective and significant actions, information provided by EPA indicates that many problems remain unresolved. For example, some recipients have improved their financial management systems as a result of recommended actions, while in other instances a number of questionable grant expenditures are still in the audit resolution process.10 We have enclosed detailed information concerning the circumstances surrounding 15 nonprofit grant recipients that had significant actions taken against them in 2002.
GAO-04-383R, Grants Management: EPA Actions Taken Against Nonprofit Grant Recipients in 2002
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Washington, DC 20548:
United States General Accounting Office:
January 30, 2004:
The Honorable James M. Inhofe:
Chairman, Committee on Environment and Public Works:
United States Senate:
Subject: Grants Management: EPA Actions Taken against Nonprofit Grant
Recipients in 2002:
Dear Mr. Chairman:
The Environmental Protection Agency (EPA) awards over one-half if its
budget, or about $4 billion, annually in grants.[Footnote 1] At the end
of fiscal year 2002, EPA was providing funding to 4,100 grant
recipients, with $245.4 million, or nearly 6 percent of its awarded
grant dollars, going to nonprofit grant recipients. Congressional
hearings in 1996 and 1999 cited concerns with the grants management
capabilities of nonprofit grantees. Specifically, the 1996 hearing
raised questions about nonprofit grant recipients' use of federal funds
for lobbying. The 1999 hearing cited concerns with the ability of
nonprofit grantees to manage their grants,[Footnote 2] because, for
example, many nonprofit organizations do not have staff with accounting
backgrounds. Often, their grants are too small to be covered under the
requirements of the Single Audit Act.[Footnote 3] In response to such
concerns, EPA has included lobbying restrictions in grant agreements,
issued guidance and policies on grantee oversight, and has attempted to
improve nonprofit grantees' grants management with a 1-day training
course and follow-up instructional videotape specifically designed for
nonprofit grant recipients. However, as we reported in August
2003,[Footnote 4] nonprofit grant recipients continue to have problems
managing their grants.[Footnote 5] These problems have led EPA to
recommend actions to correct specific problems, such as maintaining
records to track staff time, obtaining a required audit, and improving
a financial management system. In some cases, these problems led EPA to
take more significant actions against nonprofit grant recipients, such
as issuing suspension orders, holding payments, and designating
grantees as high-risk.
As a result of continuing concerns about the problems that nonprofit
grant recipients have had in managing their grants, you asked us to
provide supplementary information on the grants management performance
of nonprofit grantees. Specifically, this report discusses (1) grants
management problems EPA identified with nonprofit recipients in 2002,
(2) corrective actions EPA recommended to address these problems, and
(3) EPA's more significant actions taken against specific nonprofit
grant recipients.
To obtain this information, we relied on the results of our analysis of
EPA's oversight of grant recipients conducted in calendar year 2002. As
part of this effort, we reviewed the records of 1,232 in-depth grantee
reviews EPA conducted. EPA conducts in-depth reviews to analyze
grantees' compliance with grant regulations and specific grant
requirements.[Footnote 6] For each of these in-depth reviews, we
developed and answered a standard set of questions concerning the
grantee and the findings of the review.[Footnote 7] We also obtained
and analyzed additional information from EPA on the nonprofit grant
recipients who received significant actions, including background
information on the organizations and any results of EPA actions. For
each of these grant recipients, we summarized EPA's information on the
problems identified, the corrective actions recommended, significant
actions taken, and the results of EPA's actions, if provided. Enclosure
I describes the types of problems EPA identified in its 1,232 in-depth
reviews and provides examples of these problems. Enclosure II provides
specific details on 15 nonprofit grant recipients that EPA took a
significant action against in 2002.
EPA Identified Many Problems with Nonprofit Grant Recipients:
According to our analysis of EPA's calendar year 2002 in-depth reviews,
EPA identified 276 problems with nonprofit grantees. EPA identified
these problems in the 245 reviews it conducted of nonprofit grant
recipients. These reviews represented 20 percent of EPA's 1,232 in-
depth reviews.[Footnote 8] The identified problems included inadequate
accounting systems, failure to obtain approved indirect cost rates, and
insufficient documentation to support sole-source contracts and other
expenditures charged to the grants. Table 1 describes the five most
frequently identified types of problems with nonprofit grant
recipients.
Table 1: Most Frequently Identified Problems with Nonprofit Grant
Recipients, 2002:
Problem: Technical issues;
Number of problems: 49;
Examples of this type of problem: The grantee was behind in the
progress of its work.
Problem: Written procedures;
Number of problems: 41;
Examples of this type of problem: The grantee's written policies or
procedures were either missing or inadequate.
Problem: Procurement;
Number of problems: 38;
Examples of this type of problem: The grantee lacked documentation to
support sole-source contracts and did not report its efforts to
encourage procurement from disadvantaged businesses.
Problem: Progress reports;
Number of problems: 29;
Examples of this type of problem: The grantee's progress report was
late, or it did not include all the necessary information.
Problem: Personnel/payroll;
Number of problems: 28;
Examples of this type of problem: The grantee did not track the amount
of time its employees spent on specific grant activities or did not
have appropriate staff resources to perform the grant activities.
Source: GAO's analysis of EPA's in-depth reviews.
EPA identified at least one problem in almost half of its reviews of
nonprofit grant recipients. Table 2 shows the number of problems
identified per in-depth review for nonprofit grant recipients.
Table 2: Number of Problems Per In-depth Review of Nonprofit Grant
Recipients, 2002:
Number of problems identified: 0;
Number of reviews: 124;
Percentage of reviews: 51.
Number of problems identified: 1;
Number of reviews: 51;
Percentage of reviews: 21.
Number of problems identified: 2;
Number of reviews: 34;
Percentage of reviews: 14.
Number of problems identified: 3;
Number of reviews: 15;
Percentage of reviews: 6.
Number of problems identified: 4;
Number of reviews: 8;
Percentage of reviews: 3.
Number of problems identified: 5;
Number of reviews: 6;
Percentage of reviews: 2.
Number of problems identified: 6;
Number of reviews: 2;
Percentage of reviews: 1.
Number of problems identified: 7;
Number of reviews: 2;
Percentage of reviews: 1.
Number of problems identified: 8;
Number of reviews: 3;
Percentage of reviews: 1.
Number of problems identified: Total;
Number of reviews: 245;
Percentage of reviews: 100.
Source: GAO's analysis of EPA's in-depth reviews.
[End of table]
Our analysis of EPA's 2002 in-depth reviews also identified similar
grants management problems with other types of recipients including
states, native American tribes, local governments, universities, and
others (see GAO-03-846, app. III).
EPA Recommended Corrective Actions to Resolve More than Half of the
Problems Identified:
Overall, EPA recommended that nonprofit grant recipients take
corrective action in response to an identified problem in approximately
66 percent of the in-depth reviews we analyzed. For example, EPA found
that a nonprofit grant recipient needed to have a Single Audit
conducted for 2001 and 2002. EPA recommended that the recipient
immediately arrange to have these audits conducted. For another
nonprofit grant recipient, EPA found that the recipient received
funding from multiple sources but did not maintain records to track the
staff time that was allocated to each of these grants. EPA recommended
that the recipient develop and use timekeeping records that meet the
standards outlined in the Office of Management and Budget's (OMB)
circular.[Footnote 9] Table 3 shows the number of nonprofit grant
recipient problems identified by type of problem, compared with the
number of corrective actions EPA recommended.
Table 3: Comparison of Nonprofit Grant Recipient Problems with EPA's
Recommended Corrective Actions, 2002:
Problem: Problem: Accounting;
Number of problems[A]: 18;
Number of corrective actions: 16;
Percentage of problems with corrective action: 89.
Problem: Administrative;
Number of problems[A]: 12;
Number of corrective actions: 7;
Percentage of problems with corrective action: 58.
Problem: Approval of modifications;
Number of problems[A]: 1;
Number of corrective actions: 0;
Percentage of problems with corrective action: 0.
Problem: Conflict of interest;
Number of problems[A]: 4;
Number of corrective actions: 1;
Percentage of problems with corrective action: 25.
Problem: Cost sharing;
Number of problems[A]: 1;
Number of corrective actions: 0;
Percentage of problems with corrective action: 0.
Problem: Financial expenditures;
Number of problems[A]: 13;
Number of corrective actions: 10;
Percentage of problems with corrective action: 77.
Problem: Indirect costs;
Number of problems[A]: 7;
Number of corrective actions: 6;
Percentage of problems with corrective action: 86.
Problem: Internal controls;
Number of problems[A]: 11;
Number of corrective actions: 10;
Percentage of problems with corrective action: 91.
Problem: Lobbying;
Number of problems[A]: 0;
Number of corrective actions: 0;
Percentage of problems with corrective action: N/A.
Problem: Missing required audit;
Number of problems[A]: 2;
Number of corrective actions: 2;
Percentage of problems with corrective action: 100.
Problem: Personnel/payroll;
Number of problems[A]: 28;
Number of corrective actions: 20;
Percentage of problems with corrective action: 71.
Problem: Procurement;
Number of problems[A]: 38;
Number of corrective actions: 29;
Percentage of problems with corrective action: 76.
Problem: Program income;
Number of problems[A]: 1;
Number of corrective actions: 0;
Percentage of problems with corrective action: 0.
Problem: Progress reports;
Number of problems[A]: 29;
Number of corrective actions: 16;
Percentage of problems with corrective action: 55.
Problem: Property management;
Number of problems[A]: 3;
Number of corrective actions: 3;
Percentage of problems with corrective action: 100.
Problem: Quality assurance;
Number of problems[A]: 5;
Number of corrective actions: 2;
Percentage of problems with corrective action: 40.
Problem: Subagreements;
Number of problems[A]: 1;
Number of corrective actions: 1;
Percentage of problems with corrective action: 100.
Problem: Technical issues;
Number of problems[A]: 49;
Number of corrective actions: 17;
Percentage of problems with corrective action: 35.
Problem: Terms and conditions of work;
Number of problems[A]: 8;
Number of corrective actions: 1;
Percentage of problems with corrective action: 13.
Problem: Travel;
Number of problems[A]: 4;
Number of corrective actions: 4;
Percentage of problems with corrective action: 100.
Problem: Written procedures;
Number of problems[A]: 41;
Number of corrective actions: 36;
Percentage of problems with corrective action: 88.
Problem: Total;
Number of problems[A]: 276;
Number of corrective actions: 181;
Percentage of problems with corrective action: 66.
Source: GAO's analysis of EPA's in-depth reviews.
[A] See enclosure I for a description of problems identified in EPA's
in-depth reviews.
[End of table]
Our analysis of EPA's 2002 in-depth reviews found that for all types of
grant recipients (nonprofits, states, native American tribes, local
governments, universities, and others), EPA recommended corrective
actions for about half the problems it identified (see GAO-03-846, app.
III).
EPA Took Significant Actions against Some Nonprofit Grant Recipients:
We also found that EPA took 32 significant actions against 15 different
nonprofit grant recipients. These significant actions are shown in
table 4.
Table 4: Significant Actions EPA Took Against Nonprofit Grant
Recipients, 2002:
Type of significant action: Grant termination/annulment or novation (or
transfer);
Description of significant action: EPA cancels the grant, or transfers
it to a different recipient;
Number of significant actions: 1.
Type of significant action: Disallowance of costs;
Description of significant action: EPA disallows a recipient's
expenditures when the agency determines that the recipient did not
spend its grant funds in accordance with federal cost principles or its
particular grant agreement;
Number of significant actions: 7.
Type of significant action: Suspension order;
Description of significant action: EPA requires a recipient to stop
work and take action to minimize its grant-related expenditures until
it resolves EPA's areas of concern;
Number of significant actions: 5.
Type of significant action: Payment hold;
Description of significant action: EPA decides it will not make any
more payments to a recipient until the recipient has resolved an area
of concern;
Number of significant actions: 6.
Type of significant action: High-risk designation/imposition of special
grant conditions;
Description of significant action: EPA designates the recipient as high
risk and places certain requirements on further grant work, such as
having EPA approve all expenditures before the recipient receives a
reimbursement;
Number of significant actions: 5.
Type of significant action: Referral for investigation;
Description of significant action: EPA requests that its Inspector
General conduct an audit of the recipient;
Number of significant actions: 3.
Type of significant action: Threat to take action;
Description of significant action: EPA threatens to take a significant
action, such as disallowance of costs or a payment hold;
Number of significant actions: 5.
Type of significant action: Total;
Number of significant actions: 32.
Source: GAO analysis of EPA documents.
Note: EPA can also debar a grant recipient by declaring that the
particular organization or individual is not eligible to receive grants
for a specific period of time. We did not find any instances where EPA
debarred grant recipients in 2002.
[End of table]
In addition to taking significant actions against nonprofit grant
recipients EPA also took actions against state and tribal grant
recipients in 2002 (see GAO-03-846, app. III).
Of the 32 significant actions EPA took against nonprofit grant
recipients in calendar year 2002, 23 resulted from problems identified
during in-depth reviews. EPA took the other nine significant actions as
a result of problems identified during grantee oversight other than in-
depth reviews and investigations by the EPA Office of Inspector General
(OIG). Our analysis found that of the 36 nonprofit grant recipients
that had three or more problems identified during in-depth reviews, EPA
took at least one significant action in nine cases, or 25 percent of
the cases. Nonprofit grant recipients that received significant actions
were often cited as having multiple problems related to their
accounting systems, internal controls, or financial expenditures. While
the problems identified with some of these nonprofit recipients have
been resolved through corrective and significant actions, information
provided by EPA indicates that many problems remain unresolved. For
example, some recipients have improved their financial management
systems as a result of recommended actions, while in other instances a
number of questionable grant expenditures are still in the audit
resolution process.[Footnote 10] We have enclosed detailed information
concerning the circumstances surrounding 15 nonprofit grant recipients
that had significant actions taken against them in 2002 (see encl. II).
We provided a draft of this report to EPA for comment. In response, we
received oral comments from EPA officials including the Director of the
Grants Administration Division. The EPA officials generally agreed with
the information presented in our report and provided some clarifying
comments that we incorporated into this report, as appropriate.
We performed our work from December 2003 through January 2004 in
accordance with generally accepted government auditing standards. As we
agreed with your office, unless you publicly announce the content of
this report earlier, we plan no further distribution until 30 days from
the report date. At that time, we will be sending copies of this report
to the congressional committees with jurisdiction over EPA and its
activities; the Honorable Mike Leavitt, EPA Administrator; and the
Honorable Joshua B. Bolten, Director, Office of Management and Budget.
In addition, this report will be available at no charge on the GAO Web
site at http://www.gao.gov.
If you have any questions about this report or need additional
information, please contact me at (202) 512-3841. Key contributors to
this report were Andrea Wamstad Brown, Christopher Murray, Rebecca
Shea, Carol Herrnstadt Shulman, and Amy Webbink.
Sincerely yours,
John B. Stephenson:
Director, Natural Resources and Environment:
Description of Problems Identified in EPA's 1,232 In-depth Reviews:
Problem: Accounting;
Description of problems included in EPA‘s in-depth reviews:
Any failure of a grantee's financial management system of shortcomings
in the procedures it used to ensure the proper accounting of federal
funds. For example, EPA found cases in which a grantee;
* could not compare budgeted amounts with actual expenditures;
* did not properly reconcile report balances to the general ledger, or;
* did not separately track funds for different grants.
Problem: Administrative;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee's record keeping system was inadequate.
Problem: Approval of modifications;
Description of problems included in EPA‘s in-depth reviews:
Any instance in which a grantee had begun performing tasks outside its
original scope of work without seeking prior approval from EPA.
Problem: Conflict of interest;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee, using grant funds, entered into a contract
with a closely affiliated organization.
Problem: Cost sharing;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee failed to appropriately track and document its
cost-sharing expenditures.
Problem: Financial expenditures;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee did not sufficiently document expenses to
determine the eligibility of costs or charged ineligible costs to the
grant.
Problem: Indirect costs;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee did not have an approved indirect cost rate or
indirect cost allocation plan.
Problem: Internal controls;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee did not adequately segregate financial
responsibilities.
Problem: Lobbying;
Description of problems included in EPA‘s in-depth reviews:
No instances of lobbying problems.
Problem: Missing required audit;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee did not have its required audit performed or
had not submitted a copy of its audit to EPA.
Problem: Personnel/payroll;
Description of problems included in EPA‘s in-depth reviews:
Problems included cases in which a grantee did not track the amount of
time its employees spent on specific grant activities, or did not have
sufficient staff resources to perform the grant activities.
Problem: Procurement;
Description of problems included in EPA‘s in-depth reviews:
Cases in which grantees lacked documentation to support sole-source
contracts and did not report their efforts to encourage procurement
from disadvantaged businesses.
Problem: Program income;
Description of problems included in EPA‘s in-depth reviews:
In one case, a grantee generated income through the use of grant funds
but did not manage the funds in accordance with the grant agreement;
Description of problems included in EPA‘s in-depth reviews:
and in another, the grant agreement did not allow the grantee to
generate such income.
Problem: Progress reports;
Description of problems included in EPA‘s in-depth reviews:
Instances in which a grantee's progress report was missing or late, or
did not include all the necessary information.
Problem: Property management;
Description of problems included in EPA‘s in-depth reviews:
Cases in which the grantee did not properly control property, such as
equipment.
Problem: Quality assurance;
Description of problems included in EPA‘s in-depth reviews:
Instances in which a grantee needed to revise its quality assurance
plan. Quality assurance plans are required to ensure the quality of
data collected during the grant work.
Problem: Subagreements;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee did not properly monitor subgrantees, or when
a subgrantee's files were incomplete.
Problem: Technical issues;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee was behind in the progress of its work.
Problem: Terms and conditions;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee was not meeting the terms and conditions of a
grant agreement. Terms and conditions vary, depending on the grant
agreement and in some cases overlap with the other problem categories.
Problem: Travel;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee lacked documentation to support travel
expenditures or did not obtain written approval from the appropriate
official prior to incurring travel expenses.
Problem: Written procedures;
Description of problems included in EPA‘s in-depth reviews:
Cases in which a grantee's written policies or procedures were either
missing or inadequate.
Source: GAO's analysis of EPA's in-depth reviews.
[End of table]
Detailed Information on 15 Nonprofit Grant Recipients that Received
Significant EPA Actions in 2002:
This enclosure provides detailed information on 15 nonprofit grant
recipients against which the Environmental Protection Agency (EPA) took
significant actions in 2002. The information provided includes
background on the recipient and the grant(s) received, descriptions of
EPA identified problems and recommended corrective actions, EPA's
significant actions, the results of these corrective and significant
actions, and other information. This information is presented for each
grant recipient in alphabetical order. We developed this information
from our analysis of EPA's 2002 in-depth reviews, as well as other
information we obtained from EPA during our audit work for the August
2003 report on EPA's grants management.[Footnote 11] Additionally, EPA
provided specific information on these 15 grant recipients.
Academy of Natural Sciences:
During the week of October 22, 2001, officials from EPA's Region 3
conducted an on-site evaluation of the Academy of Natural Sciences (the
Academy) and identified several concerns with the Academy's financial
management and procurement systems. A subsequent review by officials
from EPA's Office of Grants and Debarment on February 27, 2002, found
that these concerns had been addressed through the appropriate
corrective actions. However, after evaluating the costs charged to the
grant, Region 3 disallowed costs in the amount of $51,085 because of a
conflict of interest and lack of competition of a contract agreement,
and lack of supporting documentation in accounting records. The Region
3 Administrator reversed the decision to disallow these costs on
January 22, 2003.
Background:
The Academy is a nonprofit organization governed by a board of
trustees. It was founded in 1812 for the purpose of advancing knowledge
about the natural world. The Academy is based in Philadelphia,
Pennsylvania, and is affiliated with the Patrick Center for
Environmental Research and the Estuarine Research Center.
Grants Received:
* The Academy received a grant for $500,000 (X-983127-01) in June 1999,
for the Urban Rivers Awareness Program; a pilot program for scientific
research, hands-on and virtual educational experiences and exhibit
design. The recipient received an amendment in June 2000 for an
additional $665,000, bringing the total award to $1,165,000. This grant
was closed in July 2003 after Region 3 received all required
deliverables.
* The Academy received a grant for $698,500 (X-983127-02) in August
2001 for the Urban Rivers Awareness Program. The objectives of this
grant were to test watershed education methods and to have a
sustainable, effective program. The recipient received an amendment for
this grant in August 2003 and work on the grant is ongoing.
* The Academy received a grant for $76,569 (CB-983683-01) in August
2002 for the Chesapeake Bay Program. The purpose of this grant was to
assist in characterizing chemical contaminant impacts in tributaries to
the Chesapeake Bay. Work on this grant is ongoing, and the project is
scheduled to last until June 2004.
Description of Problems and Corrective Actions:
The reviewers found problems in the following areas with the Academy's
management of grant number X-983127-01: [Footnote 12]
Conflict of Interest:
* The Academy entered into a contract for work with an entity whose
sole owner was previously employed by the recipient. More importantly,
the scope of work for the contract was submitted on August 11, 2000,
but the employee was not separated from the organization until
September 29, 2000, and the contract was signed on October 19, 2000.
The reviewers determined that this was a conflict of interest and that
the contract had not been awarded competitively, and disallowed the
costs of the contract in the amount of $44,900.
Financial Expenditures:
* The Academy could not provide adequate documentation to support a
charge to the grant in the amount of $6,185. The reviewers disallowed
these costs.
Procurement:
* The Academy's procurement files did not include documentation of
competitive awards or cost or price analyses for contracts awarded,
although its policies and procedures required this documentation. The
reviewers recommended that the recipient perform a cost or price
analysis for the remaining contracts awarded under the EPA grant.
EPA's Significant Actions:
EPA notified the Academy that, based on its evaluation of costs
incurred under grant number X-983127-01, it was disallowing $51,085 for
nonconformance with EPA grants management regulations. This amount
included the $44,900 from the noncompetitive contract the Academy had
awarded to a previous employee and $6,185 in costs for which the
Academy could not provide adequate supporting documentation. EPA
requested that a check for this amount be mailed to Region 3 within 30
days.
Results of Corrective and Significant Actions, and Other Information:
In February 2002, officials from EPA's Office of Grants and Debarment
found that the Academy had addressed the problems with its financial
and procurement systems identified by Region 3 officials. However, the
Academy appealed the decision to disallow $51,085 in costs. The
Regional Administrator for Region 3 reversed the decision to disallow
these costs on January 22, 2003. EPA indicated that this decision was
made after reviewing additional information and supporting
documentation submitted by the Academy for the disallowed costs.
American Public Works Association:
On January 30, 2002, officials from EPA's Office of Grants and
Debarment conducted an on-site, in-depth review of a grant with the
American Public Works Association (the Association). The reviewers
found a number of problems including unallowable costs related to
alcoholic beverages included as part of meal expenses. EPA reported
that the Association took corrective action before the recipient was
formally notified.
Background:
The Association is a nonprofit organization governed by a 17-member
board of directors. The Association is an international educational and
professional association of public agencies, private sector companies,
and individuals that provide goods and services related to public
works. It has offices in Kansas City, Missouri and Washington, D.C.,
and is affiliated with the Canadian Public Works Association.
Grants Received:
* The Association received a grant for $55,000 (X-82741801-2) in May
1999 to inform its members and other interested parties about certain
federal stormwater regulations. EPA reported that the workshops the
Association hosted were successful, and the program generated enough
income for the recipient to complete the work without drawing all of
the grant funds available. The grant was closed in June 2003.
Description of Problems and Corrective Actions:
The reviewers found problems and recommended corrective actions in the
following areas:
Financial Expenditures:
* The Association's policies allowed alcoholic beverages to be included
as part of meal expenses that in some cases were paid by the grant. EPA
recommended that the recipient examine all meal expenses paid for by
federal funds, and reimburse the appropriate accounts.
Procurement:
* The Association had not filed reports of its efforts to select
disadvantaged businesses for grant activities. EPA recommended that the
recipient implement internal control policies and procedures within 30
days, including maintaining documentation, to ensure compliance with
the grant's terms and conditions regarding the selection of these
businesses. EPA also recommended that the recipient begin submitting
its required report to EPA within 90 days.
The Association was unable to provide documented evidence of a cost or
price analysis being conducted for advertising services. The
Association was purchasing space in its own official magazine. However,
the reviewers could not find documentation supporting or justifying the
award of the noncompetitive contract for advertising services. EPA
recommended that the recipient perform and document a cost or price
analysis for every procurement action using federal funds. EPA also
required the recipient to construct contract files that include a sole
source justification in all noncompetitively awarded contracts.
EPA's Significant Actions:
Following the review, EPA provided the Association with a letter
documenting its concerns and asking the recipient to provide a
corrective action plan within 30 days. These corrective actions
included examining all meal expenses paid for by federal funds, and
reimbursing the appropriate accounts.
Results of Corrective and Significant Actions, and Other Information:
EPA noted that the Association began taking action to address its
concerns on compliance with requirements for selecting disadvantaged
businesses and justifying noncompetitive contracts. Additionally, the
Association's accounting staff began removing alcoholic beverage
charges from the grant accounts. EPA reported that the recipient took
corrective action before it was formally notified.
Association for Commuter Transportation/Transportation Demand
Management Institute:
On July 11, 2002, an official from EPA's Office of Grants and Debarment
conducted a prereview in preparation for an on-site review of a grant
with the Transportation Demand Management Institute (the Institute).
The reviewer found that the Institute actually had no paid employees,
but rather employees of Urban Trans Consultants, an associated for-
profit company, were contracted to work on the grant. As a result of
the conflicts of interest that were apparent with this company, EPA
warned the Institute that it was considering whether to issue a
suspension order unless the recipient responded within 10 days.
The response provided to EPA did not satisfy all concerns regarding the
apparent conflicts of interest, and EPA asked for additional
information. EPA conducted an on-site, in-depth review of the recipient
on October 9, 2002. As a result of findings identified during the on-
site review, EPA decided to novate (i.e., transfer) the grant from the
Institute to the Association for Commuter Transportation (the
Association).
Background:
The Association is a nonprofit organization based in Denver, Colorado,
and governed by an 18-member board of directors. The Association's
purpose is to support its members in their efforts to enhance mobility,
improve air quality, and conserve energy through transportation demand
management activities. The Institute is a charitable foundation
established by the Association to conduct research and provide
educational opportunities to the membership and public. The executive
committee of the Association also serves as the board of directors for
the Institute.
Grants Received:
* The Institute received a grant for $69,750 (X-82893401-0) in April
2001 to redesign and update a Web site that would educate and inform
key constituencies and stakeholders in the Commuter Choice Initiative.
The grant has resulted in the Commuter Choice Web site,
www.commuterchoice.com. The grant was closed in November 2003.
* The Institute received a grant for $150,000 (X-82964601-0) in March
2002 to benefit the public by expanding awareness of transportation
choices, especially for commuters. The grant resulted in a conference
and the Commuter Choice Web site; and was transferred to the
Association with a remaining balance of $12,987.
Description of Problems and Corrective Actions:
During the prereview, reviewers identified the following concerns with
the Institute's management of grant number X-82964601-0:
Conflict of Interest:
* The reviewer was concerned about the relationship between the
Institute and Urban Trans Consultants, a for-profit company. In its
grant application, the Institute gave the impression that it had its
own staff and budget. However, during his discussion with the
Institute's associate director, the reviewer learned that the
organization did not actually have any paid employees, but rather
contracted for the work of staff employed by Urban Trans Consultants.
Additionally, the executive director of the Institute was the president
of Urban Trans Consultants. EPA's primary concern was that the
affiliate relationships with interlocking officers and directors
created apparent conflicts of interest, especially when those with the
apparent conflicts of interest awarded and managed the contracts. EPA
asked the Institute to provide information on its financial statements,
how the grant and all contracts paid with grant funds had been
administered and by whom, its indirect cost rate proposal, and the
relationships between the Association, the Institute, and Urban Trans
Consultants.
EPA's Significant Actions:
Based on its concerns regarding potential conflicts of interest between
the Institute and Urban Trans Consultants, EPA notified the Institute
that it was considering whether to impose a suspension order. The
suspension order would take effect if the Institute did not provide
specific information within 10 days. The Institute responded to EPA's
concerns, but it did not satisfy the questions that had been raised
during the prereview, according to EPA. EPA asked the Institute for
additional information that, if not provided within 10 days, would
result in the suspension order being imposed. EPA also asked to meet
with the recipient. EPA conducted an on-site review of the Institute on
October 9, 2002. Based on the findings identified during the review,
EPA transferred the grant to the Association. EPA determined that this
transfer would allow for a more appropriate structure and relationship
between Urban Trans Consultants, the Association, and EPA.
Results of Corrective and Significant Actions, and Other Information:
EPA reported that, as of October 2003, the grant is being transferred
to the Association, with a remaining balance of $12,987.
Calcasieu League for Environmental Action Now, Inc.
On May 31, 2002, an official from EPA's Region 6 conducted an off-site
evaluation of a grant with the Calcasieu League for Environmental
Action Now. The reviewer determined that the recipient was not making
progress on the grant work or meeting the terms and conditions of its
grant. The reviewer warned the recipient that if it continued to not
use its grant funds, EPA would not extend the grant. Information
provided by EPA indicated that it has found the recipient noncompliant
with its grant, and it will not be allowed to apply for any future
grants.
Background:
The Calcasieu League for Environmental Action Now, Inc. is a nonprofit
community group governed by five board members and five officers. The
organization is a group of private citizens who are affected by the
North Ryan site in Lake Charles, Louisiana, that is on the Superfund
National Priority List. The grantee is affiliated with the Calcasieu
Estuary Task Force and the Calcasieu Local Emergency Planning
Committee.
Grants Received:
* The recipient received a grant for $50,000 (1-98658201-0) in January
2001 to hire independent technical advisors to help interpret and
comment on site-related information generated by the state agency or
EPA. The grantee has not produced any results, and the grant's project
period is scheduled to end in January 2004.
Description of Problems and Corrective Actions:
The reviewer found problems in the following areas:
Accounting:
* The recipient did not keep budget records.
Procurement:
* The recipient had not submitted reports documenting compliance with
disadvantaged business contracting requirements.
Progress Reports:
* The recipient had not submitted the required progress reports.
Technical Issues:
* The recipient had not expended any funds, and the grant work was not
on schedule.
Terms and Conditions:
* The recipient had not submitted the required financial status
reports.
EPA's Significant Actions:
EPA documentation indicated that repeated efforts to assist the
recipient with its grant activities had failed. A Region 6 official
warned the organization that at a minimum, it needed to submit the
required quarterly progress reports and that EPA would not extend the
grant if the organization continued to not use its funds.
Results of Corrective and Significant Actions, and Other Information:
As a result of EPA's warnings, the Region 6 reviewer noted that the
recipient began sending in "no progress" reports the following quarter.
According to additional EPA documentation, the recipient has not used
the grant funds and has failed to produce the agreed upon deliverables.
EPA has found the organization was noncompliant with the grant and
informed the recipient that it cannot apply for any future grants.
Central States Air Resource Agencies Association:
In July 2002, EPA's Office of Inspector General (OIG) issued a draft
audit of costs claimed under two grants awarded to the Central States
Air Resource Agencies Association (the Association). The draft audit
identified a number of problems with the recipient's management of its
funds. The OIG notified Region 6 of the findings, at which time EPA
warned the Association that it was considering whether to impose a
suspension order. EPA also designated the recipient as high-risk and
imposed special conditions on future grant work.
Additionally, the EPA Region 6 project officer for these grants
conducted a number of reviews throughout 2002. On September 5, 2002,
the Association's staff visited with EPA to submit corrective documents
in response to the OIG audit. The EPA reviewer found additional
problems and decided to continue the recipient's high-risk status until
the audit issues were resolved, as well as informing the recipient that
new awards would be postponed. EPA reported that the Association began
to take action in a number of areas.
In March 2003,[Footnote 13] the OIG published its audit of the costs
claimed under these grants. The OIG questioned $1,644,618 in recipient
claims. As of January 2004, the OIG's findings are in the audit
resolution stage.
Background:
The Association is a nonprofit organization governed by an 11-member
board of directors. The purpose of the organization is to promote
interstate collaboration on air issues among the states of the central
United States through a multistate organization. The recipient is
affiliated with the Central Regional Air Planning Association and is
located in Oklahoma City, Oklahoma.
Grants Received:
* The Association received a grant for $255,000 (X-996940-01) in May
1998 to fund a regional multistate organization. The grant was
subsequently amended to total $2,226,243, and resulted in the
establishment of a multistate organization to promote the exchange of
information on controlling air pollution among the states of Arkansas,
Iowa, Kansas, Louisiana, Minnesota, Missouri, Nebraska, Oklahoma, and
Texas, and other interested parties. The organization provided a
unified regional voice for the air quality agencies in the central
states. It also provided training and performed other activities
necessary to support the development of sound air pollution control
policy.
* The Association received a grant for $420,000 (X-986920-01) in
September 2001 to continue funding the multistate organization for
training and to provide a forum for interstate ozone issues. The grant
resulted in maintaining the operations of the multistate organization
to promote the exchange of information between the states and
interested parties in the central United States. Training was provided
on basic principles and practices of air pollution control, inspection,
technical writing, and air quality modeling. The recipient also
provided information and support to member states and interested
parties on technical and policy issues related to sound air pollution
control policy.
* The Association received a grant for $500,000 (X-986516-01) in April
2000 and an amendment for an additional $500,000 in April 2001 to fund
a regional planning body for the central states. The grant resulted in
establishing an infrastructure for a regional planning body, including
both states and tribes, to address the 1999 Regional Haze Rule.
Modeling, monitoring, implementation and control strategies,
communication, emissions inventory and international workgroups were
formed with representation from states and tribes in the central United
States. Training, emissions inventory, and modeling activities were
initiated to support regional haze analyses.
Description of Problems and Corrective Actions:
The OIG and Region 6 reviewer found problems and recommended corrective
actions in the following areas: [Footnote 14],
Accounting:
* The OIG found that the Association had claimed outlays that did not
agree with the general ledger, which led the OIG to question all
$1,644,618 in costs claimed under these two grants.
* The OIG recommended that EPA require the Association modify its
financial management system to meet federal requirements. Modifications
were to, among other things, ensure that financial results are current,
accurate, and complete; include written procedures to determine
reasonableness, allocability, and allowability of costs; and include
accounting records that are supported by adequate source documentation.
* The OIG also recommended that EPA suspend work under the grants and
make no new awards until the Association could demonstrate that its
accounting practices were consistent with federal requirements.
Financial Expenditures:
* The OIG found that it was unable to evaluate the claimed direct costs
because the Association improperly charged all indirect costs to one of
its grants. The OIG recommended that EPA recover all grant funds that
could not be supported within 180 days.
Indirect Costs:
* The OIG and Region 6 reviewer found that the Association did not
develop an indirect cost rate to allocate costs benefiting multiple
projects and to distinguish between direct and indirect costs.
Personnel/payroll:
* The OIG found that the Association had an inadequate labor
distribution system. Specifically, labor claimed under the EPA grants
was not based on actual hours worked. Employees prepared time sheets
but did not identify any grant projects or final cost objectives. Also,
the organization did not use the time sheets to record salary costs in
the general ledger, but instead, charged all employee salaries,
including vacation, holiday, and sick leave to one grant. Region 6
officials recommended that the recipient implement an adequate labor
tracking system as soon as possible.
* The Region 6 reviewer found that the Association's staff and
facilities were not appropriate to handle the grant work.
Procurement:
* The OIG found that the Association did not competitively procure
equipment and services and did not perform a cost or price analysis for
these purchases. The OIG recommended that EPA recover the costs of
$575,743 for equipment and services unless the organization ensured
that federal requirements had been met.
Progress Reports:
* The Region 6 reviewer found that the required progress reports were
not always being submitted on time and did not always include the
required financial information.
Technical Issues:
* The Region 6 reviewer found that grant work was not on schedule.
Terms and Conditions:
* The Region 6 reviewer found that the Association had not complied
with its grants' terms and conditions.
Written Procedures:
* The OIG found that the Association did not have written accounting
procedures regarding the allocation of joint costs.
EPA's Significant Actions:
Region 6 notified the Association that as a result of the issues
identified in the draft OIG report it was considering issuing a
suspension order unless the organization responded appropriately. It
also notified the recipient that, in lieu of issuing a suspension order
before the recipient responded, EPA would designate the organization as
high risk and impose special conditions on future grant work. These
special conditions included the following:
* requiring EPA approval for each request for reimbursement of grant
expenses, based on clearly defined cost documentation, and:
* postponing additional Clean Air Act awards until resolution of the
audit issues.
After the additional issues identified during the Region 6 review, EPA
reinforced the consequences of noncompliance with statutory and
regulatory requirements. EPA also informed the Association that its
status on the high-risk list would continue, as would the postponement
of new awards until the audit issues had been resolved.
Results of Corrective and Significant Actions, and Other Information:
EPA documentation noted that the Association had begun to take action
in a number of areas. It had submitted new financial management, labor
distribution, personnel, procurement, property management, and travel
policies for EPA approval. Additionally, it had hired a consultant to
assist it in developing an adequate labor tracking system. EPA
indicated that these actions were sufficient for the Association to
continue its grant activities under the high-risk conditions without
EPA imposing the threatened suspension order. In its March 2003 report
on its audit, the OIG noted that the Association did not agree with the
OIG's findings, but the OIG continued to question the organization's
claims for $1,644,618. As of January 2004, the OIG's findings are in
the audit resolution stage.
Consumer Federation of America Foundation:
On March 21 and 22, 2002, officials from EPA's Office of Grants and
Debarment conducted an on-site, in-depth review of the Consumer
Federation of America Foundation (the Foundation). The reviewers found
a number of problems with the Foundation's grants management, which led
EPA to take four significant actions against it: issuing a suspension
order, issuing a payment hold, identifying unallowable costs, and
requesting that the OIG audit the Foundation. EPA reported that the
Foundation was restructured and that EPA imposed special terms and
conditions on April 25, 2002. The OIG indicated that its audit was
completed in December 2003, and it is currently awaiting comments from
the Foundation. It expects to receive these comments in late January
2004, and will issue the report soon afterwards.
Background:
The Foundation was established in 1972 as a nonprofit organization to
complement the work of the Consumer Federation of America (the
Federation), a lobbying organization. The Foundation, assists state and
local organizations, provides information to the public on consumer
issues, and conducts consumer research projects. The Foundation's State
and Local Resource Center provides training and technical assistance on
governance and resource development. It also awards grants for
organization development and equipment. The Center convenes an annual
caucus for state and local leaders and, through a Web site and regular
mailings, serves as a clearinghouse for information. The Foundation is
governed by the same 40-member board of directors as its affiliated
organization, the Federation. The Foundation's executive director is
the executive director of the Federation, while its project managers
and comptroller are also employed by the Federation. The Foundation
used Federation employees to run a centralized grants management
system.
Grants Received:
* The Foundation received a grant for $1,806,708 (X-825612-01) in July
1997 to create a national radon public service announcement to increase
voluntary home radon testing and mitigation. The grant resulted in
television, radio, and print public service announcements yielding
1,094,237 broadcasts/advertisements. The grant also resulted in the
development of materials for National Radon Action Week and strategies
to increase awareness from consumer studies and research. The grant was
closed in December 2002.
* The Foundation received a grant for $1,737,532 (X-825837-01) in
October 1997 to create a national media campaign to reduce childhood
exposure to environmental tobacco smoke. The grant resulted in a number
of television, radio, and print public service announcements. It also
used telephone and e-mail promotions to reach 1,500 media directors and
participated in two national press conferences publicizing the Smoke
Free Home Campaign. The grant is waiting for closeout as of January
2004.
* The Foundation received a grant for $225,161 (X-828814-01) in
February 2001 to promote the environmental, economic, and health
benefits of buying energy-efficient products. The grant resulted in,
among other things, training for 16 states and local affiliates for
public outreach activities; publishing an article on the benefits of
energy efficiency; and maintaining and enhancing a Web site
(www.buyenergyefficient.org). The grant was closed in November 2003.
* The Foundation received a grant for $359,000 (X-829178-01) in August
2001 to educate consumers about reducing their risks from radon and
other indoor air quality issues by promoting testing and mitigation.
This grant is still active.
* The Foundation received a grant for $434,928 (XA-831201-01) in
September 2003 to increase public awareness of the environmental,
economic, and health benefits of energy-efficient products and
practices. The grant is still active and is expected to result in
community outreach to inform consumers and to support the Web site.
Description of Problems and Corrective Actions:
The reviewers found problems and recommended corrective actions in the
following areas:
Conflict of Interest:
* The Foundation awarded a sole-source contract to the Federation for
administrative and personnel services. It appeared to the reviewers
that hundreds of thousands of dollars were flowing between the two
entities for labor, fringe benefits, and indirect costs without signed
or written agreements. Additionally, the parent company is a lobbying
organization, but the reviewers had difficulty separating the two
entities. EPA required the Foundation to establish written agreements
for all services paid for with grant funds, provide written
justifications for sole-source contracts to the parent company, and
explain how sole-source contracts did not violate the code of ethics.
Further, the reviewers recommended that the recipient completely
separate the two entities.
Financial Expenditures:
* The Foundation was paying one of its consultants at $600 per hour,
significantly above the rate allowed by federal regulations--which EPA
indicated was $498.32 a day or $62.29 per hour. EPA recommended that
the recipient provide documentation of hourly rates for consultants
over the allowable limit, and then reimburse the grants for consultant
costs that were above the limitation.
Indirect Costs:
* The Foundation did not have a current indirect cost rate approved by
EPA as required by the terms and conditions of the grant. The recipient
was instead operating under an old rate. The reviewers were also
concerned that the Foundation had no employees. Therefore all of the
wages that were being charged as indirect costs were actually for
contract labor from the Federation. EPA recommended that the recipient
develop an indirect cost rate proposal and reimburse the grants for the
mis-charged indirect costs.
Personnel/payroll:
* The Foundation and Federation employees did not fill out a time sheet
or personnel activity report, and the Foundation allocated labor costs
using budget estimates. The reviewers determined that this allocation
method was not allowable for supporting these expenses. EPA recommended
that the recipient complete personnel activity reports for personnel
whose compensation was charged to the grants. EPA also stated that any
personnel charges incurred on EPA grants that could not be supported
with the appropriate documentation would be disallowed and would have
to be repaid to the appropriate grant.
Procurement:
* The reviewers did not find evidence to document that a cost or price
analysis was being performed for most contracted services. EPA
recommended that the recipient document a cost or price analysis,
including a sole-source justification, for procurements using federal
funds.
* The Foundation had not complied with disadvantaged business
procurement requirements, and had not submitted the required reports
within 30 days of the end of each federal fiscal year. EPA recommended
that the recipient, within 30 days, implement procedures to ensure
compliance with these requirements. EPA also recommended that the
recipient begin filing the required reports within 90 days.
Written Procedures:
* The Foundation did not have written travel policies. EPA recommended
that the recipient either adopt federal travel guidelines or develop
its own travel policy. EPA also required that all charges in excess of
the federal per-diem rates be repaid to the appropriate grant.
EPA's Significant Actions:
As a result of the findings identified during the on-site review, EPA
notified the Foundation that it was suspending work and temporarily
withholding funds for grant numbers X-825612-01, X-825837-01, X-828814-
01, and X-829178-01 and would notify the Financial Management Center
not to make further payments until EPA's concerns with the recipient's
grants management had been resolved. These included concerns with
potential unallowable costs leading to EPA's recommendations that the
Foundation reimburse the grants for the mis-charged indirect costs and
consultant costs that were above the limitation. EPA informed the
recipient that the suspension order required it to stop project work
and take all reasonable steps to minimize costs incurred on the
project. The suspension order was scheduled to be in effect for 45
days. Additionally, EPA forwarded a copy of its on-site report to the
OIG and requested that the OIG perform an audit of the Foundation. EPA
asked that the OIG perform tests on all grant related financial
transactions to confirm that the grant funds were being used properly
and noted there appeared to be acquisition versus assistance issues
with at least one of the grants.
Results of Corrective and Significant Actions, and Other Information:
EPA did not provide specific information regarding the status of a
number of the corrective actions requested of the Foundation. However,
EPA indicated that the Foundation provided documentation of hourly
rates for consultants over the allowable limit, and reimbursed the
grants for consultant costs above the limit before the suspension order
was lifted. EPA also noted that the Foundation was restructured, and
EPA placed special terms and conditions on the recipient on April 25,
2002. Also, the OIG indicated that the audit EPA requested was
completed in December 2003, and it is currently awaiting comments from
the recipient. The OIG expects to receive these comments in late
January 2004, and will issue the report soon afterwards.
Coordinating Committee for Automotive Repair:
In May 2002, the OIG issued a special report on the Coordinating
Committee for Automotive Repair's (the Committee) grants
management.[Footnote 15] The OIG identified a number of findings,
including that the Committee had not accounted for $2,026,837 in costs
claimed under its three grants, which led EPA to take four significant
actions against it: issuing a suspension order, issuing a payment hold,
disallowing costs, and imposing special conditions on the recipient.
The Committee disputed the suspension order in January 2003. The Grants
Administration Division and the Office of Enforcement and Compliance
Assurance are still working with the Committee to try to resolve the
issues identified in the OIG report.
Background:
The Committee is a nonprofit organization governed by a board of
directors with approximately 10 members. Also referred to as CCAR-
Greenlink, it is one of 10 compliance assistance centers funded by
EPA's Office of Enforcement and Compliance Assurance to provide
compliance assistance information to the automotive industry via the
Internet. This information is designed to assist members of the
industry to better understand their environmental responsibilities and
to help them achieve compliance with environmental program
requirements.
Grants Received:
* The Committee received a grant for $1,765,000 (CX82437601) in
September 1995 to, among other things, provide multimedia environmental
compliance information and pollution prevention ideas that can help
shop owners comply with environmental requirements. The grant resulted
in focus groups to identify the best ways to deliver information to
participants in the industry. The grant also funded baseline surveys to
document the level of compliance and measure the success of compliance
assistance efforts and the development of a Web site.
* The Committee received a grant for $90,000 (CX82573201) in October
1997 that resulted in the Committee's working with three states to
develop state-specific information relating to auto repair and make
this material available through the compliance assistance center's Web
site.
* The Committee received a grant for $333,945 (CX82836601) in September
2000 to conduct an outreach project to owners and technicians employed
in the automotive service and collision industry. The grant resulted in
maintaining and improving the center's Web site, continuing to conduct
outreach about the site and applicable environmental regulations,
developing educational modules, and responding to thousands of industry
and public inquiries regarding environmental compliance and pollution
prevention activities. EPA reported that the Web site has been
successful and comments from users have been positive.
Description of Problems and Corrective Actions:
The OIG found problems and made recommendations in the following areas:
Accounting:
* The Committee identified indirect costs in its budget; however, its
accounting system treated all costs as direct.
* The Committee did not appropriately distribute costs between federal
and nonfederal activities.
* The Committee's accounting system was deficient because it did not
have adequate controls to prevent the submission and reimbursement of
ineligible expenses for travel.
* The OIG was unable to reconcile the Committee's total program outlays
claimed with the recipient's accounting system. These differences
totaled $8,580 for the three grants.
* The OIG recommended that the Committee modify its financial
management system to meet federal regulations. Modifications were to
ensure that financial results are current, accurate, and complete;
include written procedures to determine reasonableness, allocability,
and allowability of costs; and include accounting records that are
supported by adequate source documentation. EPA agreed with the OIG's
recommendation and noted that it was requiring that the Committee have
its new financial management system certified by a third-party auditor.
Financial Expenditures:
* The Committee had not accounted for $2,026,837 in costs claimed under
its three grants. These included $149,509 in ineligible payroll costs,
such as a reduction in the number of hours for the executive director
without a similar reduction in salary; expenses paid to the executive
director in excess of the EPA-imposed ceiling; and holiday pay for the
recipient's employees for holidays, which were not authorized in its
written personnel policy. The remainder of the questioned amount
consisted of $1,877,328 in unsupported payroll, travel, equipment,
printing/postage, rent, telephone, outreach, administration, Web/
computer, and supply costs. Specifically, the OIG identified claims to
EPA for alcoholic beverages and trips for nonfederal activities on one
of the grants.
* The OIG recommended that the Committee reconstruct the accounting
records necessary to document its grant expenditures and that EPA
recover all funds that could not be supported by the Committee's
documentation. EPA agreed with this recommendation and asked the
recipient to provide documentation to substantiate the $1,877,328 in
unsupported costs. EPA noted that the recipient did not believe it was
going to be able to fully reconstruct all of the requested accounting
records, and responded that the individuals who claimed the unsupported
costs could submit notarized affidavits.
* The OIG recommended that EPA recover all ineligible costs that did
not meet Office of Management and Budget (OMB) requirements. EPA agreed
with this recommendation and asked the Committee to pay back the
$149,509 in ineligible costs.
Indirect Costs:
* The Committee did not prepare indirect cost proposals as required by
the terms and conditions of its grants. The OIG recommended that the
recipient submit indirect cost proposals for 1995 to the present. EPA
agreed with this recommendation.
Personnel/payroll:
* The Committee did not maintain adequate time records for all three
grants. The recipient's employees maintained weekly records of work
activity but did not usually identify the actual hours spent on the
activities. In some cases, employees identified nonfederal activities
but charged all salary costs to the grant. The OIG found that the
Committee needed to develop a time distribution (or timekeeping) system
that met federal regulations. EPA agreed with the OIG's recommendation
and noted that it was requiring that the recipient have its new time
distribution system certified by a third-party auditor.
EPA's Significant Actions:
EPA notified the Committee that, based on the OIG's findings, it was
suspending work on grant number CX82836601 and temporarily withholding
funds until the recipient had resolved EPA's concerns. The suspension
order required the Committee to stop project work and to take all
reasonable steps to minimize costs incurred on the project. The order
was scheduled to be in effect for 45 days. Additionally, the recipient
had to repay the $149,509 in ineligible costs and provide documentation
for the $1,877,328 in unsupported costs from the three grants.
The OIG also recommended that EPA withhold further funding from the
Committee until it received confirmation that the recipient had the
financial management capability to manage its grant funds in accordance
with federal regulations. EPA did not agree with this recommendation
and in fact provided an additional funding increment to the recipient.
EPA decided this on the basis that the Committee had accomplished
important and effective work in the past. EPA also noted that two of
the grants mentioned in the OIG report had been completed and the third
was nearing completion. However EPA decided to place special conditions
on the Committee. These included:
* requiring the recipient to submit all requests for reimbursement to
the project officer for approval, based on a detailed justification of
the costs, and:
* requiring the recipient to have appropriate staff take a grants
management course within 6 months.
Results of Corrective and Significant Actions, and Other Information:
According to EPA, the Committee disputed the suspension order in
January 2003, and the Grants Administration Division and the Office of
Enforcement and Compliance Assurance are still working with the
recipient to resolve the issues identified in the OIG report. The
Committee submitted one of the three required indirect cost proposals
in June 2002 and met one of the required special conditions when
personnel attended a grants management course in August 2002. The
recipient provided EPA with an independent auditor's report of its
financial and time management systems. EPA responded in December 2003,
requesting additional information or adjustments to the Committee's
financial system in order to be eligible for federal assistance. EPA
expects the Committee to respond to this request, in addition to
providing information on the status of the OIG's recommendations to
reconstruct accounting records and submit indirect cost proposals, by
the end of January 2004. EPA documentation also indicated it had
conducted an on-site review for grant number CX82836601, in June 2002.
The reviewers did not identify further problems with the recipient's
grants management but noted that progress of the work was falling
behind, largely due to efforts to respond to the OIG's findings and
recommendations.
In August 2002, the OIG issued another report related to the Committee
in which it described oversight issues identified during its
review.[Footnote 16] The OIG found that EPA's lack of oversight
contributed to the recipient's grants management problems. The project
officer and grants specialist did not provide the necessary oversight
to ensure the recipient managed its grants in accordance with federal
regulations. Specifically, the project officer and grants specialist
did not work together to monitor the Committee or follow recommended
procedures in grant guidance, and the grants specialist was not
responsive to repeated requests from the recipient for assistance in
developing an indirect cost rate. The OIG reported that the project
officer was aware that the recipient had not developed an indirect cost
rate but allowed the grants to continue. The OIG concluded that
adequate EPA oversight could have prevented reimbursing the Committee
for ineligible and unsupported costs.
Engineers' Society of Western Pennsylvania:
On April 8, 2002, EPA used contracted staff to conduct an on-site, in-
depth review of the Engineers' Society of Western Pennsylvania (the
Society). The reviewers found a number of problems, including
unallowable costs resulting from excessive salary expenses. The
reviewers made recommendations to correct these problems, and EPA
requested that the recipient submit a corrective action plan within 30
days. EPA noted that the Society was put on a corrective action plan
and completed it on July 26, 2002.
Background:
The Society is a nonprofit organization governed by a 12-member board
of directors, with eight consultants to the board. The organization is
a membership society with the purpose of advancing the professions of
engineering, architecture, and applied sciences through technical
activities and public service. The Society is affiliated with 30
organizations: Association for the Advancement of Cost Engineering
International; American Concrete Institute; Association for Facilities
Engineers; American Institute of Chemical Engineers; American Institute
of Mining, Metallurgy & Petroleum Engineers/Society of Mining; American
Iron and Steel Institute; Association for Iron and Steel Technology;
American Society of Civil Engineers; American Society of Heating,
Refrigeration & Air Conditioning Engineers; American Society for
Materials; American Society for Mechanical Engineers; American Society
for Professional Estimators; American Society for Quality; Air & Waste
Management Association; Construction Specifications Institute;
Institute of Electrical & Electronics Engineers; Institute of
Industrial Engineers; Institute of Packaging Professionals; Instrument
Society of America; National Association of Corrosion Engineers;
Project Management Institute; Pennsylvania Society of Professional
Engineers; Society for Analytical Chemists of Pittsburgh; Society of
Automotive Engineers; Society of American Military Engineers; Society
of Fire Protection Engineers; Society of Plastics Engineers;
Spectroscopy Society of Pittsburgh; Society of Women Engineers; and
Tri-State Construction Users.
Grants Received:
* The Society received a grant for $1,306,584 (827988-01) in September
1999 to disseminate social, economic, and statistical research. The
grant resulted in a conference to present Brownfields research. The
project has expired and is waiting for closeout as of January 2004.
* The Society received a grant for $600,000 (830661-01) in September
2002 to conduct a Brownfields research conference. The grant resulted
in a conference for the dissemination of technical, engineering, and
economic and social science research on the issue of contaminated
sites. The project has expired and is waiting for closeout as of
January 2004.
Description of Problems and Corrective Actions:
The reviewers found problems with the management of grant number
827988-01 and made recommendations in the following areas:
Accounting:
* The Society could not document that costs charged to the grant were
disbursed before it requested reimbursement from EPA. For example, in
one case the reviewers found a time sheet indicating that time was
being charged to the grant, but they could not find documentation to
support payment to the employee in the payroll register or a cancelled
check. The reviewers recommended that the recipient provide
documentation for the disbursement and ensure that expenditures for
grant activities are disbursed before asking EPA for reimbursement.
* The Society classified costs from one of its contracts for labor as
personnel. The reviewers recommended that the recipient reclassify
these costs to the appropriate budget line item and ensure that they
were allowable.
* In several instances, budgeted expenditures were exceeded by more
than 10 percent. The reviewers recommended that the Society revise its
procedures to ensure adherence to the approved budget, and receive
approval from EPA for deviations greater than 10 percent.
Financial Expenditures:
* The Society requested reimbursement for salaries at a rate greater
than the actual salary rate of some of the employees. The reviewers
concluded that the organization was reimbursed for more than the actual
costs incurred related to the grant. The reviewers recommended that the
recipient recalculate salary costs chargeable to all EPA grants based
on the actual rates paid to employees. The difference between actual
costs and the amount requested from EPA should be reimbursed. They also
recommended that the recipient revise its policies to ensure that only
the actual costs associated with federal grants were charged.
* The Society hired a professor at an hourly rate of $100 per hour,
which was higher than the allowable federal rate of $62.29 per hour.
The reviewers recommended that the recipient evaluate the amount paid
to the professor and adjust it to more closely reflect a reasonable
cost as defined in OMB regulations.
Indirect Costs:
* The Society charged indirect costs to its grant but did not have an
officially approved indirect cost rate from EPA. The reviewers
recommended that the recipient develop an indirect cost allocation plan
for EPA's review.
Internal Controls:
* The Society's general manager was responsible for approving all
expenditures related to the grant, including authorizing his own
timesheets and approving travel expense reports. The reviewers
recommended that the recipient develop a policy to ensure that all
expenditures receive approval from someone other than the person
incurring the cost.
Personnel/payroll:
* The Society's time sheets contained a number of problems. At least
one employee failed to sign time sheets for work conducted under the
grant; in several instances time sheets had no supervisor's signature,
indicating approval of the time charged to the grant; several time
sheets were missing both the employee's and supervisor's signatures;
and the time sheets of one individual were accumulated and submitted at
one time for several months of activity associated with the grant. The
reviewers recommended that the recipient implement new policies and
procedures to ensure that the payroll system and time sheets met the
requirements of OMB regulations.
Procurement:
* The Society entered into several sole-source contracts without having
adequate justification. In one instance, the recipient did not request
competing bids for audit services; in another, the recipient contracted
with a local organization without providing a justification for the
contract or maintaining evidence that it had conducted a cost or price
analysis. The reviewers recommended that the recipient ensure
compliance and proper documentation in accordance with federal
regulations for all procurements.
* The Society's contract with one organization to obtain the services
of an employee was not documented with a written agreement. The
reviewers recommended that the recipient execute a written agreement
with all consultants.
* The Society had not documented nor submitted the required reports to
indicate compliance with disadvantaged business requirements. The
reviewers recommended that the recipient document the steps taken to
ensure compliance with these requirements and submit the necessary
reports.
Subagreements:
* The Society did not require vendors and subcontractors to maintain
records for the appropriate length of time. The reviewers recommended
that the recipient ensure the compliance of subgrantees' policies and
procedures.
Terms and Conditions:
* The Society was delinquent in filing at least one of its required
financial status reports. The reviewers recommended that the recipient
ensure compliance with its financial reporting requirements.
Written Procedures:
* The Society did not maintain a written policies and procedures manual
for accounting, reporting, record retention, and other functions
related to the administration of the grant. The reviewers recommended
that the recipient develop and update policies and procedures to ensure
compliance with grant requirements.
EPA's Significant Actions:
EPA requested that the recipient identify the actions it would take to
address the findings and recommendations in the contractor's report,
and the associated time frames of each action, in a corrective action
plan provided to EPA within 30 days. While not specifically identified
in the letter to the recipient, the contract's report stated that these
corrective actions should include addressing the unallowable costs
related to the excess salaries paid to some of the Society's employees.
Results of Corrective and Significant Actions, and Other Information:
Documentation provided by EPA indicated that the Society repaid the
unallowable costs as part of its corrective action plan, which was
completed on July 26, 2002; the grant is awaiting closeout as of
January 2004.
Geothermal Heat Pump Consortium:
On March 7 and 8, 2002, officials from EPA's Office of Grants and
Debarment conducted an on-site, in-depth review of the Geothermal Heat
Pump Consortium (the Consortium). The reviewers stated that there were
too many indicators of poor grants management and allowable cost issues
to complete the review. These problems led EPA to take three
significant actions against the Consortium: issuing a suspension order,
issuing a payment hold, and requesting that the OIG audit the
recipient. The OIG published an audit of the Consortium in September
2003 in which it questioned $1,153,472 in costs claimed by the
recipient.[Footnote 17] The project is in the audit resolution process
as of January 2004.
Background:
The Consortium is a nonprofit organization, founded in 1994, to
implement the National Earth Comfort Program. This program is a
collaborative effort between the Department of Energy, EPA, and private
sector organizations interested in promoting the growth of energy-
efficient, environmentally friendly heating and cooling technology. The
Consortium has offices in Washington, D.C., and Columbia, Maryland, and
is governed by a 14-member board of directors. The Consortium is a
membership organization; its members include electric utilities,
equipment manufacturers, architects, engineers, contractors, builders,
energy service companies, and others. Members also include many
national organizations, such as the Edison Electric Institute, Electric
Power Research Institute, International Ground Source Heat Pump
Association, National Rural Electric Cooperative Association, and the
Association of Energy Engineers. According to EPA, the benefits of
membership in the Consortium include, among other things, the
opportunity to increase the awareness of GeoExchange (geothermal heat
pump) technology, and member support through a variety of services and
programs. EPA noted that the Consortium's Web site advertised the
lobbying experience of its staff.
Grants Received:
* The Consortium received a grant for $712,500 (X-828299-01) in June
2000 to provide financial support for increasing awareness of
GeoExchange technology through public outreach and information
dissemination. Activities under the grant included operation of the
GeoExchange Information Center, maintenance of the Consortium's Web
site, publication of a newsletter, attendance at conferences, and
production of a national teleconference. The OIG published an audit of
this grant in September 2003.
* The Consortium received a grant for $748,300 (X-82880201-0) in
September 2001 to increase awareness of the benefits of geothermal heat
pump technology by providing information to the public and conducting
outreach to the educational sector. The OIG published an audit of this
grant in September 2003; the project is in the audit resolution process
as of January 2004.
* The Consortium received a grant for $750,000 (X-83055901-0) in
December 2002 for emission reductions with GeoExchange technology. EPA
did not provide the results and current status of this grant.
Description of Problems and Corrective Actions:
The reviewers found problems in the following areas:
Accounting:
* The lack of financial accounts set up to track the flow of funds made
it impossible to determine the allowability and allocation of many
charges.
Conflict of Interest:
* The Consortium entered into contracts for services paid for by EPA
funds with companies whose employees sat on the recipient's board of
directors.
Financial Expenditures:
* A bonus plan was available to all management personnel at the
Consortium (all of the employees at the time of the review were
management). Consortium staff earned the bonus by obtaining industry
memberships as well as other funding (such as federal grants). These
bonuses appeared to be paid with funds generated from the sale of
memberships because the income all went to an unrestricted account.
This was also the account out of which the lobbying tax and lobbying
activity charges were paid. The reviewers believed that if it were
determined that the membership revenues were program income, many of
the charges to the grant would be unallowable.
Indirect Costs:
* The Consortium did not have an approved indirect cost allocation plan
as required by the terms and conditions of the grant agreement.
Instead, the recipient was charging a flat 30 percent of salaries and
wages to the grant.
Procurement:
* The Consortium's procurement files did not contain needed
documentation (such as a cost or price analysis) for all contracts and
for contracts with companies in which the recipient's staff had more
than a minimal financial interest; the recipient needed to document
that it had followed a competitive process.
Program Income:
* The reviewers noted that many of the benefits the Consortium offers
to its members resulted from grant-related activities. Therefore, they
were concerned that membership dues could be partially considered
program income.
EPA's Significant Actions:
As a result of the concerns identified during the on-site review, EPA
informed the Consortium that it was suspending work on the project and
temporarily withholding funds. EPA notified the Financial Management
Center not to make payments until EPA's concerns with the recipient's
grants management had been addressed. The suspension order required the
Consortium to stop project work and take all reasonable steps to
minimize project costs. This order was scheduled to be in effect for 45
days. EPA also forwarded a copy of the preliminary report to the OIG,
requesting an audit of the Consortium. EPA requested that the OIG
perform tests on all grant-related financial transactions to confirm
that the recipient was properly using federal funds.
Results of Corrective and Significant Actions, and Other Information:
As requested, the OIG conducted an audit of the Consortium's management
of grant numbers X828299-01 and X828802-01, and published its findings
on September 30, 2003. The OIG questioned $1,153,472 of claimed costs
because the Consortium did not comply with the federal rules,
regulations, and terms of the agreements. Specifically, the OIG found
that the Consortium's financial management system was inadequate
because the Consortium did not separately identify the costs for all
direct activities, account for program income generated by the
activities funded by the grants, prepare or negotiate indirect cost
rates, prepare written procedures for allocating costs to final cost
objectives, maintain an adequate labor distribution system, provide
adequate support for direct cost allocations, competitively procure
contractual services or perform any of the required cost or pricing
analyses, and comply with all reporting requirements. Regarding the
finding that the Consortium's financial management system did not
separately identify costs for direct activities, the OIG reported that
the Consortium operated a membership organization that provided
lobbying support for its members. The Consortium's lobbying effort
included costs for outside legal counsel and legislative consultants,
and the salary and expenses for Consortium employees involved in
lobbying activities. However, the OIG noted that the Consortium's
financial management system was not structured to allow membership and
lobbying activities to be treated as direct costs. The Consortium's
employee time sheets did not include separate categories for either
membership or lobbying labor, and the general ledger either did not use
or include all accounts needed to accumulate all expenses related to
membership and lobbying activities.
The OIG recommended that EPA evaluate the need for the grants with the
Consortium, taking into consideration the fact that the recipient had
other income to support these activities, and if the grants were not
necessary, to annul the grants. If EPA determined that the grants were
necessary, the OIG recommended that EPA recover the $1,153,472 in
unsupported costs, suspend work under the grants, and make no new
awards until the Consortium demonstrated that its accounting practices
were consistent with federal regulations, require the grantee to submit
an indirect cost rate proposal, require the grantee to provide detailed
documentation supporting its use of program income, and factor the
program income into the reimbursement of any costs EPA determined were
allowable from the two grants. The Consortium did not agree with the
OIG's findings; its comments were included in the final report. EPA has
indicated that the project is in the audit resolution process as of
January 2004. Additional documentation provided by EPA noted that as a
result of the issues identified by the OIG, EPA is (1) requiring the
Consortium to submit all payment requests for EPA approval, and (2)
holding additional funding until the audit issues are resolved.
National Association of Local Government Environmental Professionals:
On September 26, 2002, officials from EPA's Office of the Administrator
met to discuss grant progress with an official from the National
Association of Local Government Environmental Professionals (the
Association). The EPA officials told the recipient that nonperformance
of the activities within the scope of the grant and irregular
submission of progress reports was unacceptable. EPA recommended
negotiating new activities and targets and warned the recipient that if
these activities were not completed and the targets were not met, the
Office of the Administrator would turn the issue over to EPA's Grants
Administration Division for appropriate action. Additional information
provided by EPA indicates that the grant work has progressed on
schedule since this meeting.
Background:
The Association, located in Washington, D.C., is a nonprofit
organization governed by a 12-member board of directors. The
Association represents local government personnel responsible for
ensuring environmental compliance, and developing and implementing
environmental policies and programs. The organization is affiliated
with Spiegel and McDiarmid, Washington, D.C.
Grants Received:
* The Association received a grant for $610,000 (827183-01) in
September 1998 for the Showcase Community network project. The grant
resulted in technical assistance and support for the Brownfields
'Showcase Communities' project. The grant is scheduled to expire in
January 2004.
* The Association received a grant for $160,000 (829111-01) in January
2002 to support transportation community partnerships for clean air.
The grant provided for clean air innovation at the community level by
supporting participants in a clean air transportation partnership
program. The grant is scheduled to expire in January 2004.
* The Association received a grant for $200,000 (830592-01) in
September 2002 for a community revitalization initiative. The grant
supported research for the promotion of new approaches in the cleanup
and redevelopment of hazardous waste sites. The grant is still active
as of January 2004.
* The Association received a grant for $200,000 (831388-01) in
September 2003. Additional funding is expected to bring this grant to a
total award of $1,400,000. The purpose of the grant is Brownfields
training, research, and technical assistance. The grant has resulted in
the creation of a Brownfields communities network providing technical
assistance and training to local government officials and other key
stakeholders. The grant is active as of January 2004.
* The Association received a grant for $75,000 (GX828550-01-0). EPA
expects work on this grant to be completed by March 2004.
Description of Problems and Corrective Actions:
The reviewers identified problems with the Association's management of
grant number GX828550-01-0 in the following areas:
Financial Expenditures:
* The Association had spent a large portion of the grant funds in
relation to the amount of work that it had completed.
Progress Reports:
* The Association was not submitting progress reports on a timely
basis.
Technical Issues:
* The Association was not on schedule with the progress of its work.
EPA's Significant Actions:
According to the documentation EPA provided, the reviewers told the
Association that the September 26, 2002, meeting was a "last warning."
They emphasized that the recipient had received several prior warnings,
but EPA had not seen an improvement in performance. The reviewers said
that they would negotiate new activities and target dates with the
recipient, but if these were not met, the matter would be turned over
to EPA's Grants Administration Division for appropriate action.
Results of Corrective and Significant Actions, and Other Information:
Additional information provided by EPA indicates that work on this
grant has progressed on schedule since the September 2002 meeting.
However, EPA also noted that a contractor performed a review of the
Association's financial management system. EPA expects the review to be
completed in late January 2004, and early indications are that the
contractor identified problems that will require corrective action by
the recipient.
National Environmental Education and Training Foundation:
From January 22 through 25, 2002, EPA contractor staff conducted an on-
site, in-depth review of the National Environmental Education and
Training Foundation (the Foundation). The reviewers found a number of
problems, including an unallowable and duplicate travel expense in the
amount of $1,584.24, and made recommendations concerning these issues.
EPA requested that the Foundation submit a corrective action plan
within 30 days. A February 26, 2002, on-site review conducted by
officials from EPA's Office of Grants and Debarment indicated that
Foundation was generally in compliance with its administrative
requirements and terms and conditions.
Background:
Located in Washington, D.C., the Foundation is a nonprofit organization
founded in 1990 and governed by a board of directors with nine members
and six honorary members. According to EPA, the Foundation's mission is
to extend the contribution of environmental education and training to
meet critical environmental protection needs.
Grants Received:
* The Foundation received a grant for $150,000 (828935-01) in April
2001 for watershed and television weather reporting. The grant resulted
in helping the public to understand watersheds and the role they play
in the health of aquatic ecosystems. The grant is in the closeout phase
as of January 2004.
* The Foundation received a grant for $10,000 (828015-01) in December
1999 for a resource guide to educate and train journalists and others
in public education on consumer confidence reports involving drinking
water. This grant is in the closeout phase as of January 2004.
* The Foundation received a grant for $1,638,848 (827026-01) in
September 1998 to target pesticides education to health care providers.
The grant resulted in educating health-care providers and other
professionals on pesticide related exposures and illnesses. This grant
is in the closeout phase as of January 2004.
* The Foundation received a grant for $195,780 (827807-01) in August
1999 for research and development of resources to advance environmental
mentoring. The grant resulted in an enhancement of environmental and
economic performance through linking the expertise of corporate
environmental leaders. This grant is in the closeout phase as of
January 2004.
* The Foundation received a grant for $65,000 (826903-01) in September
1998 for an education backdrop on clean and safe water programs. The
grant resulted in the development of an initiative to fill existing
gaps in educational opportunities. This grant is in the closeout phase
as of January 2004.
Description of Problems and Corrective Actions:
The reviewers found problems and recommended corrective actions in the
following areas:
Accounting:
* The Foundation's "cash on hand end of period" and "cash on hand
beginning of period," as reported to EPA in the recipient's Federal
Cash Transaction Report, did not agree with the general ledger. The
Transaction Report cited a balance of $0 for both periods, while the
general ledger noted balances of $18,689 and minus $2,664,
respectively. The reviewers recommended that the Foundation reconcile
its general ledger accounts to ensure that its records and reporting
amounts were correct within 30 days.
Financial Expenditures:
* The Foundation incorrectly charged a travel expense of $792.12 to its
EPA grant. However, while attempting to correct the error, the
Foundation instead charged the expense twice. The reviewers recommended
that EPA disallow these expenses and that the recipient refund the
amount of $1,584.24 to the EPA grant.
Indirect Costs:
* The Foundation did not have an approved indirect cost allocation
plan, as required by the terms and conditions of the grant. The
reviewers recommended that the recipient submit an indirect cost
proposal within 60 days for approval, and negotiate its indirect cost
rate with EPA.
Internal Controls:
* The Foundation did not have proper separation of duties in the
payroll, personnel, and accounts payable functions. The vice president
of finance and administration was performing personnel and payroll
functions. He also had check-signing authority, access to blank checks,
and conducted bank reconciliations. The reviewers recommended the
recipient separate these duties by having the president review the
payroll each pay period and the bank reconciliation each month.
Progress Reports:
* The progress reports for two out of the six grants were not filed at
the appropriate times during the previous year. The terms and
conditions of the grant agreement required quarterly submission of
progress reports within 30 days of the reporting period. The reviewers
recommended that the Foundation establish procedures to ensure timely
submission of progress reports within 30 days.
EPA's Significant Actions:
EPA requested that the Foundation provide EPA with a list of corrective
actions to resolve the problems identified during the review, along
with associated time frames for each action, within 30 days. As part of
these corrective actions, the recipient was required to repay the grant
$1,584.24 for the amount charged to it in error.
Results of Corrective and Significant Actions, and Other Information:
Additional information provided by EPA indicated that the Foundation
repaid the mis-charged amount and completed its corrective action plan.
Also, a February 26, 2002, on-site review conducted by officials from
EPA's Office of Grants and Debarment indicated that the Foundation was
generally in compliance with administrative requirements and the terms
and conditions of its grants.
National Environmental Policy Institute:
On January 15 and 16, 2002, officials from EPA's Office of Grants and
Debarment conducted an on-site, in-depth review of the National
Environmental Policy Institute (the Institute). The reviewers found a
number of problems with the Institute's grants management, which led
EPA to take two significant actions against it: issuing a payment hold
and a suspension order. EPA also learned that the Institute was going
to cease operations, and due to concerns about the proper expenditure
of the remaining grant funds and the Institute's financial instability,
EPA placed special conditions on the recipient to ensure that remaining
grant funds were spent in an allowable manner. EPA reported that the
Institute has ceased operations and that it transferred the remaining
funds, amounting to $381,353, to another recipient in February 2003.
Background:
The Institute was established as a nonprofit organization in 1993. The
Institute's mission was to provide a framework for improving
environmental policy and management; however, it has ceased operations.
Grants Received:
* The Institute received a grant for $2,000,000 (828769-01-0) in
November 2000 to develop a telework and emissions trading study. The
grant was transferred to the Global Environment and Technology
Foundation in February 2003.
Description of Problems and Corrective Actions:
The reviewers found problems and recommended corrective actions in the
following areas:
Accounting:
* The Institute's accounting records did not identify the source and
use of funds. EPA recommended that the recipient maintain a system of
accounting records that adequately identified the source and use of
funds provided for grant activities.
* The Institute did not have budget controls in place. EPA recommended
that the recipient compare actual expenditures or outlays with budgeted
amounts for each grant or subgrant.
Financial Expenditures:
* The Institute was unable to provide adequate documentation to
determine the allocability of a number of costs totaling at least
$1,237. For example, the reviewers noted one invoice for "Shirazi Dr.
Cobb" in the amount of $198.20. The reviewers could not obtain an
explanation for the 25 lunches charged on this invoice and could not
determine if the money was spent for a grant purpose. In another
instance, the reviewers found an invoice for "Shirazi Sheraton Hotels"
in the amount of $260.91. However, they found no source documentation
for this invoice and could not determine if the money was spent for a
grant purpose. EPA recommended that the recipient provide source
documentation and explanations for the transactions.
Missing Required Audit:
* The Institute had not obtained its required Single Audit. EPA
recommended that the recipient obtain this audit.
Personnel/payroll:
* The Institute received funding from multiple sources, but it did not
maintain records (such as time sheets) to track the staff time that it
allocated to its grants. EPA recommended that the recipient develop and
use timekeeping records that meet the standards outlined in federal
regulations.
Procurement:
* The Institute had not filed reports of its efforts to select
disadvantaged businesses for grant activities. These reports were
specifically required as a term and condition in the grant agreement.
EPA recommended that the recipient file its required reports by
February 15, 2002.
Property Management:
* The Institute did not have a fixed asset control system. EPA
recommended that the recipient implement a fixed asset threshold or
adopt the federal standard. EPA also recommended that the recipient
maintain a fixed asset control system (1) providing detailed property
records for assets acquired under a grant or subgrant, and (2)
including procedures to provide reasonable assurance that safeguards
are present to prevent or detect unauthorized use of these assets.
Written Procedures:
* The Institute did not have written policies or procedures for
accounting, codes of conduct, procurement, travel, or record retention.
EPA recommended that the recipient develop written policies and
procedures that met the standards outlined by federal regulations.
EPA also recommended that the Institute require an employee to get
training in grants management and that it provide additional financial
support personnel to help ensure that new policies and procedures are
enforced.
EPA's Significant Actions:
As a result of the concerns identified during the on-site review, EPA
informed the Institute that it was suspending work on the project and
temporarily withholding funds. EPA indicated that it was notifying the
Financial Management Center not to make further payments until EPA's
concerns with the recipient's grants management had been addressed and
a corrective action plan was in place. The suspension order required
the Institute to stop project work and take all reasonable steps to
minimize project costs. This order was scheduled to be in effect for 45
days, and EPA requested that the recipient submit a corrective action
plan identifying the actions to be taken and associated time frames
within 30 days.
EPA learned that the Institute was considering ceasing operations.
Based on this information, EPA informed the recipient that it was
considering the issuance of another suspension order and requested a
discussion of these concerns. After the Institute's decision to
formally cease operations, EPA notified the organization that it was
concerned about the proper expenditure of the remaining grant funds and
the Institute's financial instability. These concerns led EPA to place
special conditions on the Institute. Specifically,
changing the method of payment from advance to reimbursement;
requiring the recipient to submit all reimbursement requests for EPA
approval and including a list of expenditures identifying task,
vendors, and supporting documentation to show that the costs were
authorized by the scope of work for the grant; and:
requesting that the recipient continue to submit Financial Status
Reports.
Results of Corrective and Significant Actions, and Other Information:
EPA provided information indicating that the Institute was unable to
formulate a corrective action plan to resolve the findings from the on-
site review and that the Institute dissolved shortly after the
suspension order was put in place. EPA reported that the Institute's
remaining funds, amounting to $381,353, were transferred to the Global
Environment and Technology Foundation in February 2003.
Self Reliance Foundation:
On October 16 and 17, 2002, officials from EPA's Office of Grants and
Debarment conducted an on-site, in-depth review of the Self Reliance
Foundation (the Foundation). The reviewers identified a number of
problems with the Foundation's grants management practices, which led
EPA to take two significant actions against it: issuing a payment hold
and classifying the Foundation as a high-risk recipient with special
conditions on future grant work. EPA reported that while the Foundation
has taken some corrective actions, it still has not complied with
several terms and conditions; and as a result, the Grants
Administration Division sought to terminate grant number X-82851401 as
of December 31, 2003.
Background:
The Foundation is a nonprofit organization founded in 1979 to help
Hispanics take advantage of opportunities for personal and community
empowerment in the areas of health, women's issues, education, economic
opportunities, science, environmental protection and access to new
technologies. The Foundation operates the Hispanic Community Resource
Helpline, the only national, multiservice, bilingual information and
referral service in the United States. The organization is
headquartered in Washington, D.C., and is governed by a board of
directors with six members. It is affiliated with the Hispanic Radio
Network.
Grants Received:
* The Foundation received a grant for $75,000 (X-82851401) in September
2000 to provide outreach and education of pesticide exposure hazards to
the Spanish-speaking agricultural community including farm workers,
their families, growers, and the general public. The results of the
grant are incomplete and EPA is seeking to terminate the agreement.
* The Foundation received a grant for $50,000 (X-83041801-0) in
September 2002 to create a Spanish language educational mass media and
outreach program focusing on radon and asthma. The results of the grant
are incomplete because work was just beginning when EPA imposed
sanctions on the Foundation.
* The Foundation received a grant for $21,232 (NE-98364501-0) in June
2002 to develop a bilingual exhibit to educate children about asthma
and its environmental causes. EPA is waiting for a final progress
report for this grant.
Description of Problems and Corrective Actions:
The reviewers found problems and recommended corrective actions in the
following areas:
Accounting:
* The Foundation did not have a system in place to produce required
financial reports or to reconcile the amount reported as disbursements
to EPA with the general ledger. EPA recommended that the recipient
develop a system within 60 days.
The Foundation drew budgeted amounts at the beginning of the award
periods before actually incurring the expenses. EPA recommended that
the recipient immediately begin following EPA's guidelines for cash
advances.
Internal Controls:
* The Foundation's operations lacked adequate segregation of duties.
Specifically, one contractor had control over processing accounting
transactions, balancing the general ledger, the checking account, the
payroll log, and other financial and nonfinancial duties. EPA
recommended that the recipient divide these responsibilities among
various individuals within 60 days.
Missing Required Audit:
* The Foundation had not obtained its required Single Audit for 2001
and 2002. EPA recommended that the recipient immediately arrange to
have these audits conducted.
Personnel/payroll:
* The Foundation's time sheets showed a number of problems: at least
one employee failed to sign the time sheets related to grant activity;
in several instances the time sheets did not show supervisory approval;
none of the time sheets signatures' were dated; and one employee was
paid without a time sheet so the reviewers were unable to determine if
the employee's time was allocable to the grant. EPA recommended that
the recipient implement new policies and procedures to ensure that its
payroll system met the appropriate standards within 60 days.
Procurement:
* The Foundation did not document its efforts toward the selection of
disadvantaged businesses for grant activities. EPA recommended that the
recipient develop a system to ensure adherence to procurement policies
regarding these vendors (including documentation) within 90 days.
* The Foundation was using EPA grant funds to make oral contracts and
had no written contracts, no documentation of preaward review, and no
contract monitoring system. EPA recommended that the recipient
implement procedures to ensure adherence to procurement policies,
including requests for proposals, and general procurement standards for
sole-source solicitation within 30 days.
* The Foundation entered into a sole-source contract without providing
an adequate written justification or evidence of a cost or price
analysis. EPA recommended that the recipient immediately begin ensuring
it made and documented grant procurements in accordance with federal
regulations.
Progress Reports:
* The Foundation did not include required financial information in its
programmatic reports. EPA recommended that the recipient immediately
begin including this financial information in its reports.
Property Management:
* The Foundation's property management system did not include all fixed
assets owned, and the reviewers were unable to determine if equipment
had been purchased with federal funds. EPA recommended that within 120
days the recipient complete and update its property management system
to include all of its fixed assets and other information required by
EPA. EPA also recommended that the recipient take an accurate inventory
and compare it with the general ledger and other records.
Written Procedures:
* The Foundation had not developed a formal and comprehensive policies
and procedures manual. EPA recommended that, within 120 days, the
recipient develop policies and procedures covering, among other things,
accounting and reporting, budget, fixed assets, procurement, and a code
of conduct.
EPA's Significant Actions:
As a result of these problems, EPA placed a payment hold on the
Foundation's account by instructing the Financial Management Center not
to make further payments until the concerns had been resolved. EPA also
classified the Foundation as high-risk and placed the following special
conditions on it:
* changing the method of payment from advance to reimbursement;
* requiring the recipient to submit written procurement and contract
administration procedures for EPA approval;
* requiring the recipient to submit the procedures it would follow to
ensure that professional service contracts are awarded competitively
for EPA approval; and:
* requiring the recipient to submit a code of conduct and procedures
for EPA's approval.
The special conditions also included statements that:
* No contractor or consultant of the recipient may participate in the
selection, award, or administration of a contract awarded to their
firm;
* The recipient must take steps to make its relationship with all
consultants or contractors funded by EPA grant money clear to EPA
officials involved in overseeing the grants;
* The recipient's procurement files must contain documentation of a
cost or price analysis for all contracts awarded with EPA grant funds;
* The recipient must establish written procedures to ensure that all
costs being charged to the grants are properly controlled and
documented and that the procedures must include an independent review
of expenses incurred by consultants or contractors; and:
* The recipient must comply with the terms and conditions of its grant
agreements regarding selection of disadvantaged businesses.
EPA requested that the Foundation submit a corrective action plan and
provide documentation that it had an adequate financial management
system in order for the special conditions to be discontinued.
Results of Corrective and Significant Actions, and Other Information:
Documentation provided by EPA noted that in May 2003, the Foundation
issued accounting and financial management policies and procedures that
addressed many of the findings identified in the on-site review.
However, EPA also reported that the Foundation still had not complied
with several terms and conditions and failed to submit requested items
and required reports. Specifically, the Foundation had not submitted
the following items for approval: the annual progress report for grant
number X-82851401; contract administration policies and procedures;
procedures to ensure that all costs are reasonable, allocable, and
allowable; a utilization report for disadvantaged business activities;
a sole-source procurement policy requiring that written justification
for selections be included in the file; procedures to solicit quotes
from disadvantaged businesses and documentation of their selection; and
procedures to ensure timely submission of progress reports. EPA
reported that as a result of these deficiencies, the Grants
Administration Division sought to terminate grant number X-82851401 as
of December 31, 2003.
Tribal Association on Solid Waste and Emergency Response:
On July 1, 2002, EPA received a report contractor staff who conducted
an on-site, in-depth review of the Tribal Association on Solid Waste
and Emergency Response (the Association). The reviewers found a number
of problems with the Association's grants management, which led EPA to
take three significant actions against it: issuing a suspension order,
issuing a payment hold, and requesting that the OIG audit the
Association. The OIG published its audit in September 2003 and
questioned all costs claimed by the Association as
unsupported.[Footnote 18] EPA reported that the grantee has taken
measures to correct the deficiencies identified during the on-site
review and the audit, and it lifted the suspension order. The project
is in the audit resolution process as of January 2004.
Background:
The Association is a nonprofit organization located in Washington, D.C.
Its purpose is to preserve and restore the health and environment of
Indian and Alaskan native communities. The Association also has as its
purpose ensuring that environmental policies address the needs and
values of tribes, with respect to solid waste, emergency response, and
Superfund issues. The Association is a membership organization
consisting of over 100 federally recognized tribes and is governed by a
12-member board of directors.
Grants Received:
* The Association received a grant for $3,360,000 (CR82718101-0) in
September 1998 to research the effects of waste contamination on human
health and the detection of hazardous substances in tribal communities.
The Association is still conducting work for this grant.
Description of Problems and Corrective Actions:
The reviewers found problems and recommended corrective actions in the
following areas:
Accounting:
* The Association did not have a system in place to produce required
financial reports or to reconcile the amount reported as disbursements
to EPA with the general ledger. The reviewers recommended that, within
60 days, the Association develop a system that includes line items for:
annual budget, monthly and year-to-date disbursements, and unused or
overexpended balances. The reviewers further recommended that the
Association use this information to produce the required financial
reports and make any adjustments necessary to reconcile the general
ledger amounts.
The Association advanced annual budgeted amounts to contractors at the
beginning of the contract periods. The reviewers recommended that the
Association limit cash advances to contractors to the minimum amount
necessary to carry out required activities.
Internal Controls:
* The Association's financial operation and other functions lacked
adequate segregation of duties. Specifically, one employee had control
over processing, authorizing, and approving accounting transactions.
This individual also managed procurement and grant activities,
maintained the general ledger, and performed other duties. The
reviewers recommended that the Association assign responsibility for
approval and authorization of accounting transactions to someone other
than this employee. Additionally, the reviewers recommended that the
Association hire other personnel to perform certain functions, such as
grants management, procurement, and financial reporting.
Personnel/payroll:
* The Association's personnel files did not include all necessary and
updated information about its employees. The reviewers recommended that
the Association maintain personnel files that are complete and updated
for current and terminated employees.
Procurement:
* The Association did not have documentation supporting its efforts to
select disadvantaged businesses. The reviewers recommended that the
Association implement procedures to document its efforts for selecting
these vendors within 90 days.
* The Association awarded a contract for a multiyear research project
using a sole-source solicitation, without documenting a preaward
review. The reviewers recommended that the Association implement
procedures to ensure compliance with procurement policies and EPA
requirements within 90 days.
Progress Reports:
* The Association did not prepare or submit in a timely way the various
reports required by EPA, such as its annual progress report. The
reviewers recommended that the Association follow EPA's guidelines in
preparing and submitting required reports.
Property Management:
* The Association's property management system did not account for all
fixed assets, nor had it conducted a physical inventory. The reviewers
recommended that the Association complete and update its property
management system to account for these deficiencies within 30 days.
Technical Issues:
* The Association did not properly prepare or submit in a timely way
the various reports required by EPA, such as the semiannual Federal
Cash Transaction Reports and quarterly Financial Status Reports. The
reviewers recommended that the Association follow EPA's guidelines in
preparing and submitting required reports.
Written Procedures:
* The Association did not have a formal and comprehensive policies and
procedures manual. The reviewers recommended that the Association
develop a manual within 120 days that included, among other things,
accounting and reporting policies and procedures, budget policies,
fixed asset policies, and procurement policies.
EPA's Significant Actions:
As a result of the findings identified during the on-site review, EPA
notified the Association that it was suspending work and temporarily
withholding funds and would notify the Financial Management Center not
to make further payments until EPA had resolved its concerns with the
recipient's grants management. EPA requested that the Association
submit a corrective action plan, with associated time frames, within 30
days. EPA informed the Association that the suspension order required
it to stop project work and take all reasonable steps to minimize costs
incurred on the project. The order was scheduled to be in effect for 45
days. Additionally, EPA forwarded a copy of its on-site report to the
OIG and requested that the OIG audit the Association. EPA asked that
the OIG perform tests on all grant related financial transactions to
confirm that the grant funds were being used properly.
Results of Corrective and Significant Actions, and Other Information:
As requested, the OIG conducted an audit of the Association's
management of grant number CR827181-01 and published its findings on
September 19, 2003. The OIG questioned $2,357,376 of claimed costs
because the Association did not comply with the federal rules,
regulations, and terms of the agreement. Specifically, the OIG found
that among other things, the Association could not or did not (1)
reconcile claimed costs to its general ledger, (2) support its salaries
and wages with the appropriate timesheets, and (3) competitively
procure contractual services or perform any of the required cost or
pricing analyses. Regarding the finding that the Association did not
competitively procure contractual services, the OIG reported that a
former Association board member was instrumental in soliciting a
university for a contract. However, before the Association awarded the
contract, the former board member was hired by the university.
The OIG recommended that EPA recover the $2,357,376 in unsupported
costs, suspend work under the grant, make no new awards until the
Association demonstrated that its accounting practices were consistent
with federal regulations, and require the Association to modify its
financial management system to include, among other things, financial
reports that are current, accurate, complete, and supported by
accounting records and an adequate time distribution system that could
account for total hours worked and identify specific activities. The
Association did not agree with the OIG's findings, and its comments
were included in the final report. EPA reported that the Association
has taken measures to correct the deficiencies identified during the
on-site review and the audit, and it has lifted the suspension order.
The project is currently in the audit resolution process, and the
Grants Administration Division is scheduled to respond to the OIG in
January 2004.
Washington Heights Environmental Coalition:
In May 2002, Region 6 officials returned a request for reimbursement
from the Washington Heights Environmental Coalition (the Coalition) in
the amount of $352 for multiple reasons, including a lack of grant
funds remaining in the account and an ineligible expenditure. Region 6
officials also conducted an on-site, in-depth review of the Coalition
on July 9, 2002. The officials found that the project was not on
schedule. Additional documentation provided by EPA indicated that the
agency had noted problems with the Coalition, such as late submission
of a progress report and a lack of grants management skills. EPA found
the Coalition to be in noncompliance and determined that it must
produce deliverables before receiving advanced payment funds.
Information EPA provided noted that the Coalition has not received
additional grants.
Background:
The Coalition is a nonprofit group of citizens affected by the Hudson
Refinery site in Cushing, Oklahoma, that is on the Superfund National
Priority List. The Coalition is located in Cushing and is governed by a
four-member board of directors.
Grants Received:
* The Coalition received a grant for $50,000 (1-98677501-0) in August
2001 to hire independent technical advisors to help interpret and
comment on site-related information generated by the state agency or
EPA. The grant resulted in few analysis documents from the technical
adviser; EPA is waiting for further deliverables.
Description of Problems and Corrective Actions:
EPA documentation identified problems in the following areas:
Financial Expenditures:
* A Coalition request for reimbursement was denied for three reasons:
(1) the amount of the request was $352, but the recipient had only $346
remaining in its checking account, (2) $2.70 of this $352 was
ineligible for repayment because the claimed cost was incurred on April
28, 2001, which was before the grant was awarded, and (3) the remaining
$3.30 over the $346 was too small a request for EPA to process.
Personnel/payroll:
* The Coalition did not have staff with the skills necessary to manage
its grant and prepare required reports or forms correctly. EPA
requested a special training session with the recipient to assist it in
managing its grant.
Progress Reports:
* The Coalition had been late in submitting a progress report.
Technical Issues:
* The Coalition was behind in hiring its technical advisor, which
affected the submission of analysis documents. The reviewers noted that
a major barrier to accomplishing the work was the recipient's lack of
administrative skills.
EPA's Significant Actions:
EPA did not process the Coalition's ineligible expenditure.
Results of Corrective and Significant Actions, and Other Information:
Additional information provided by EPA indicated that the Coalition has
produced few of its analysis documents. EPA found the recipient to be
in noncompliance and determined that it must produce deliverables
before drawing further funds. EPA noted that it has not awarded any
more grants to the Coalition.
(360422):
FOOTNOTES
[1] Federal financial assistance includes grants, cooperative
agreements, loans, loan guarantees, scholarships, and other forms of
assistance. For simplicity, we are referring to all financial
assistance as "grants."
[2] 40 C.F.R. Part 30 contains grant management requirements for
recipients including nonprofit organizations.
[3] The Single Audit Act Amendments of 1996, Pub. L. No. 104-156, 110
Stat. 1396 (codified at 31 U.S.C. §§ 7501-7507), requires grantees to
have an audit of their financial statements and federal awards or a
program specific audit if they spend $300,000 or more in federal awards
in a fiscal year. The Office of Management and Budget (OMB), as
authorized by the act, increased this amount to $500,000 in federal
awards as of June 23, 2003.
[4] U.S. General Accounting Office, Grants Management: EPA Needs to
Strengthen Efforts to Address Persistent Challenges, GAO-03-846
(Washington, D.C.: Aug. 29, 2003).
[5] For additional information on nonprofit grantees and EPA's oversight
of them, see, U.S. General Accounting Office, Environmental Protection:
EPA's Oversight of Nonprofit Grantees' Costs Is Limited, GAO-01-366
(Washington, D.C.: Apr. 6, 2001).
[6] EPA refers to these in-depth reviews as advanced monitoring. EPA
conducts these reviews either at the grantee's location (on-site) or at
EPA's office or another location (off-site). In 2002, EPA also
contracted with private firms to perform reviews of a limited number of
grantees as part of a pilot program.
[7] For detailed methodology, see GAO-03-846, app. I.
[8] In 2002, EPA conducted 135 reviews of the nonprofit recipients on-
site and 110 off-site.
[9] OMB has issued three circulars defining allowable costs for
different types of grant recipients: A-21, A-87, and A-122.
[10] EPA noted that for some of the cases with questionable costs still
in the audit resolution process, grant recipients have challenged the
OIG's findings under EPA's grant dispute procedures.
[11] GAO-03-846.
[12] These problems were those with corrective actions outstanding after the
February 2002 review by officials from the Office of Grants and
Debarment. They do not represent all of the grants management
deficiencies identified during the Region 3 October 2001 review.
[13] EPA Office of Inspector General, Costs Claimed by Central States
Air Resource Agencies Association Under EPA Assistance Agreement Nos.
X996940-01 and X986516-01, Report No. 2003-1-00087 (Washington, D.C.:
Mar. 31, 2003).
[14] The OIG findings presented represent those identified in its final
report for grant numbers X-996940-01 and X-986516-01, see EPA Office of
Inspector General, Report No. 2003-1-00087.
[15] Region 6 official conducted on-site reviews of this recipient on
March 22, April 12, and August 9, 2002, and an off-site review on
September 5, 2002.
[16] EPA Office of the Inspector General, EPA's Lack of Oversight
Contributed to Coordinating Committee for Automotive Repair's Grant
Management Problems, Report No. 10960-2002-M-000031 (Washington, D.C.:
Aug. 22, 2002).
[17] EPA Office of the Inspector General, Geothermal Heat Pump
Consortium, Inc. Costs Claimed Under EPA Assistance Agreement Nos.
X828299-01 and X828802-01, Report No. 2003-4-00120 (Washington, D.C.:
Sept. 30, 2003).
[18] EPA Office of the Inspector General, Costs Claimed by the Tribal
Association on Solid Waste and Emergency Response Under EPA Assistance
Agreement No. CR827181-01, Report No. 2003-4-00119 (Washington, D.C.:
Sept. 19, 2003).
