Grants Management:

EPA Could Improve Certain Monitoring Practices

GAO-16-530: Published: Jul 14, 2016. Publicly Released: Aug 15, 2016.

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What GAO Found

The Environmental Protection Agency (EPA) generally awards three different categories of grants: formula, categorical, and discretionary. According to EPA data, in fiscal year 2015, EPA awarded the majority of its grant funds— $2.25 billion of $3.95 billion (57 percent)—as formula grants, primarily to states to support water infrastructure based on funding formulas prescribed by law. EPA awarded $1.09 billion (about 28 percent) of its grant funds as categorical grants. These grants were generally awarded noncompetitively, mostly to states and Indian tribes to operate environmental programs. EPA determines the amount of funding each grantee receives based on agency formula or program factors. EPA awarded $0.513 billion (about 13 percent) in discretionary grants for specific activities, such as research. EPA also awarded $0.09 billion (2 percent) in grant funds to special appropriations act projects for specific drinking water and wastewater infrastructure projects in specific communities.

Multiple federal and agency requirements and guidelines apply to monitoring grant and grant program results. For example, under EPA regulations, grantees must submit performance reports to EPA at least annually. EPA policies and guidance, such as its environmental results directive, call for EPA program officials to review performance reports to determine if the grantee achieved the planned results and for program offices to report on significant grant results through other processes, such as submissions to EPA databases. EPA incorporates requirements related to grantee reporting frequency, content, and reporting processes into grant terms and conditions.

EPA monitors performance reports and program-specific data from grantees to ensure that grants achieve environmental and other program results. However, GAO found that certain practices may hinder EPA's ability to efficiently monitor some results and increase administrative burden. For example, EPA collects some information from grantees twice—once in a performance report and once in a database—because EPA uses the information for different purposes. GAO's prior work and EPA analyses have shown that duplication of efforts can increase administrative costs and reduce the funds available for other priorities. By identifying grant programs where existing data reporting can meet EPA's performance reporting requirements, the agency can help reduce duplicative reporting for grantees. Also, GAO's review of grantee performance reports found issues that may hinder EPA's ability to efficiently identify factors affecting grantee results. For example, because grantees submit performance reports in a written format, there are no built-in quality controls to ensure these reports' consistency with EPA's environmental results directive. Rather, EPA officials must perform a manual review. A 2014 analysis of EPA's grants management processes found that EPA relied heavily on manual processes and could incorporate improvements into its new grants management database system. EPA officials said they plan to develop a web-based portal for grantees to submit documents, such as performance reports. By incorporating built-in data quality controls, such as required fields, for performance reports into its planned web-based portal, EPA could improve these reports' consistency with the environmental results directive and reduce the administrative burden of performing manual reviews.

Why GAO Did This Study

Grants comprised about half of EPA's budget in 2015, or about $4 billion. Through several grant programs, EPA headquarters and 10 regional offices award these grants to a variety of recipients, including state and local governments. EPA provides guidance through directives that seek to ensure the appropriate use of funds and achievement of environmental results or public health protection, among other purposes. GAO was asked to review how EPA monitors environmental and other grant results. This report examines (1) how EPA awards grants, (2) the federal and EPA requirements for monitoring grant and program results, and (3) how EPA monitors its grants to ensure that environmental and other program results are achieved. GAO analyzed relevant federal laws, regulations, and EPA guidance; reviewed processes for ensuring that environmental results are achieved for the three EPA program offices that award the majority of EPA grant dollars; and interviewed EPA officials and officials from eight state environmental agencies—selected based on the amount of environmental funding they receive from EPA.

What GAO Recommends

GAO is making six recommendations, including that EPA (1) reduce duplicative reporting by identifying grant programs where existing data reporting can meet EPA's performance reporting requirements and (2) incorporate data quality controls for performance reports into its planned web-based portal. In response, EPA agreed with GAO's findings, conclusions, and recommendations.

For more information, contact J. Alfredo Gómez at (202) 512-3841 or gomezj@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: In correspondence to GAO, EPA reiterated its agreement with this recommendation. EPA also stated that its vision for grants management includes having grant recipients submit performance reports and other information to the agency through a web-based portal. The portal would incorporate capabilities such as key word searches to allow for easier access to performance report information. However, the portal is a long-term initiative, subject to the agency's budget process, and dependent on the completion of the Next Generation Grants System, which EPA expects to fully deploy in fiscal year 2018. During fiscal year 2017, EPA officials stated that the agency has not started any work for the centralized grantee portal project, which is subject to available funds.

    Recommendation: The EPA Administrator should direct the Office of Grants and Debarment (OGD) and program and regional offices, as appropriate, as part of EPA's ongoing streamlining initiatives and the development of a grantee portal, to incorporate expanded search capability features, such as keyword searches, into its proposed web-based portal for collecting and accessing performance reports to improve their accessibility.

    Agency Affected: Environmental Protection Agency

  2. Status: Open

    Comments: In correspondence to GAO, EPA reiterated its general agreement with this recommendation and stated it will work with recipient partners to identify where duplicative reporting can be reduced. However, EPA also noted that program-specific data cannot be relied upon to meet all grants management requirements, and performance reports often contain other information that allows project officers to monitor a recipient's progress. Further, EPA will need to consider the feasibility of expanding project officer access to certain program databases to enhance grant performance monitoring. During fiscal year 2017, EPA officials said that the agency is on track to complete the process for identifying where duplicative reporting can be reduced.

    Recommendation: The EPA Administrator should direct OGD and program and regional offices, as appropriate, as part of EPA's ongoing streamlining initiatives and the development of a grantee portal, to identify grant programs where existing program-specific data reporting can meet EPA's performance reporting requirements for grants management purposes to reduce duplicative reporting by grantees.

    Agency Affected: Environmental Protection Agency

  3. Status: Open

    Comments: In correspondence to GAO, EPA reiterated its general agreement with this recommendation and stated that it will apply it, where appropriate and cost effective, to program-specific databases, not only the Office of Water databases. EPA noted that not all data from program-specific databases may be appropriate for direct electronic transfer to the national performance system; some individual grant data may need to be analyzed before being rolled up into national data. Additionally, implementation of this recommendation will depend upon the agency's program offices modifying their databases to interface with the new performance system. Further, implementation of this recommendation is dependent upon completion of EPA's new performance system, currently under development. During fiscal year 2017, EPA officials said that continued work on this effort was subject to the availability of funds.

    Recommendation: The EPA Administrator should direct OGD and program and regional offices, as appropriate, as part of EPA's ongoing streamlining initiatives and the development of a grantee portal, once EPA's new performance system is in place, to ensure that the Office of Water adopts software tools, as appropriate, to electronically transfer relevant data on program results from program-specific databases to EPA's national performance system.

    Agency Affected: Environmental Protection Agency

  4. Status: Open

    Comments: In correspondence to GAO, EPA reiterated its agreement with this recommendation and stated that it will make conforming changes to the implementation guidance for the Environmental Results Order (directive). During fiscal year 2017, EPA officials said that they agency is on track to make the necessary changes.

    Recommendation: The EPA Administrator should direct OGD and program and regional offices, as appropriate, as part of EPA's ongoing streamlining initiatives and the development of a grantee portal, to clarify the factors project officers should consider when determining whether performance reports are consistent with EPA's environmental results directive.

    Agency Affected: Environmental Protection Agency

  5. Status: Open

    Comments: In correspondence to GAO, EPA reiterated its agreement with this recommendation and stated that it will make conforming changes to existing policy. During fiscal year 2017, EPA officials said that this effort will be completed in fiscal year 2018.

    Recommendation: The EPA Administrator should direct OGD and program and regional offices, as appropriate, as part of EPA's ongoing streamlining initiatives and the development of a grantee portal, to expand aspects of EPA's policy for certain categorical grants, specifically, the call for an explicit reference to the planned results in grantees' work plans and their projected time frames for completion, to all grants.

    Agency Affected: Environmental Protection Agency

  6. Status: Open

    Comments: In correspondence to GAO, EPA reiterated its general agreement with this recommendation. However, EPA emphasized that identifying and deploying appropriate data quality controls is a long-term effort subject to budgetary considerations, completion of the Next Generation Grants System, and extensive collaboration with internal and external stakeholders. Specifically, the report's vision for built-in data quality controls involves the use of electronic templates and reduced reliance on manual data entry--which would require standardized work plan and performance report formats subject to clearance by the Office of Management and Budget. Further, EPA noted that both grant recipients and EPA program offices generally have not supported standardizing the format of work plan and progress reports in the past. Accordingly, as a first step, EPA will seek feedback from the recipient and program office community. During fiscal year 2017, EPA officials said that it plans to complete the first phase of its work within the year.

    Recommendation: The EPA Administrator should direct OGD and program and regional offices, as appropriate, as part of EPA's ongoing streamlining initiatives and the development of a grantee portal, to incorporate built-in data quality controls for performance reports into the planned web-based portal based on EPA's environmental results directive.

    Agency Affected: Environmental Protection Agency

 

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