Environmental Protection:

EPA's Oversight of Nonprofit Grantees' Costs Is Limited

GAO-01-366: Published: Apr 6, 2001. Publicly Released: Apr 30, 2001.

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The Environmental Protection Agency (EPA) provides millions of dollars to grantees to conduct research, demonstrate pollution control techniques, and perform other activities. Oversight of this large pool of grantees has proven to be difficult. EPA's post-award grant management policy provides few guarantees that unallowable costs for nonprofit grantees will be identified. Identifying such costs is important for effective oversight of EPA's nonprofit grantees. EPA's on-site grantee visits could provide agency officials with a valuable opportunity to test for unallowable costs while they are testing the adequacy of the grantees' financial and administrative systems. Although more time may be required to test for unallowable costs and additional training may be required for regional personnel, the tests would provide greater assurance that grant funds are spent in accordance with Office of Management and Budget (OMB) requirements. The single audit is an important tool for ensuring that federal funds are properly spent. EPA has taken several steps to identify grantees that need a single audit, but it is difficult to identify them definitively because information on total federal expenditures by each grantee is unavailable. As a result, EPA is using other information sources to identify grantees that are required to have a single audit. One of these sources is the Federal Audit Clearinghouse Internet site. This source could be used more effectively if EPA officials were better trained in using the site.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: EPA has drafted a new post-award management policy incorporating the recommendation to to include transaction testing as a suggested practice. This policy is scheduled to become effective November 1, 2002.

    Recommendation: To provide greater assurance that EPA grant funds are spent in accordance with OMB requirements, the Administrator of EPA should direct the Assistant Administrator for Administration and Resources Management to revise the 1998 post-award management policy to provide that transaction testing focused on identification of unallowable costs be included as a suggested practice during on site reviews of grantees.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: EPA will has increased training for grants specialists and project officers in Single Audit Act requirements and the Federal Audit Clearinghouse database. This training was provided to grants specialists in June 2002 and during a national grant conference in November 2001. Additional training was incorporated into EPA's project officer training course which is held six times per year.

    Recommendation: To provide greater assurance that EPA grant funds are spent in accordance with OMB requirements, the Administrator of EPA should direct the Assistant Administrator for Administration and Resources Management to increase the amount of training provided to grants specialists and project officers on accessing and using the Federal Audit Clearinghouse database to enhance their capabilities for obtaining single audit information.

    Agency Affected: Environmental Protection Agency

 

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