EPA Needs To Improve Its Oversight of Air Pollution Control Grant Expenditures

RCED-84-163: Published: Sep 28, 1984. Publicly Released: Oct 11, 1984.

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Pursuant to a congressional request, GAO reviewed the Environmental Protection Agency's (EPA) air pollution control grant program authorized by the Clean Air Act.

Section 105 of the act authorizes EPA to award grants to state and local agencies to develop plans and implement programs to prevent and control air pollution or to address national air quality standards. GAO examined the EPA procedures and regulations for ensuring grantee compliance with section 105 provisions and EPA regulations and reviewed whether grantees are, in fact, meeting these requirements. GAO found that the three EPA regions reviewed were consulting with state officials and were satisfied that grantees were using the federal funds to supplement, not supplant, nonfederal funds for air pollution control. However, two of the regions had not ensured that all grantees complied with the level-of-effort requirement of the act or with EPA reporting requirements. GAO found numerous instances where unliquidated obligations were reported in final financial reports, in violation of reporting instructions. Of six grantees reviewed within the three EPA regions, four had submitted inaccurate or incomplete financial reports. Inspector General officials stated that they do not have the resources to audit the grantees' financial reports, and grant program officials stated that they lack the resources as well as the expertise to perform such audits.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The EPA Office of Inspector General (OIG) is performing audits on the section 105 grant program. A draft report covering EPA Region VII was prepared by OIG in May 1986, with a final report pending additional review. Three other OIG audits are in progress, with draft reports due to be completed this year. Such activity reflects OIG concern that the section 105 grant program needs attention.

    Recommendation: The Inspector General, EPA, should reconsider the priority assigned to the section 105 grant program, based on the GAO review findings and, if appropriate, conduct audits of specific grants to determine whether grantees' financial reports to EPA contain accurate and reliable information.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: Louisiana revised its FY 1982 Financial Status Report by adding $241,670 to its total actual nonfederal expenditures. That was the precise amount GAO found to be underreported. In Maryland, EPA takes the position that certain pass-three expenditures to subgrantees may not have to be reported. If the EPA General Counsel agrees, Maryland may not have to report local expenditures to EPA.

    Recommendation: To ensure that section 105 grant funds are properly spent and/or reported, the Administrator, EPA, should direct the regional administrators in Regions III and IV to work with the Office of General Counsel to resolve the underreporting of expenditures in Maryland and Louisiana.

    Agency Affected: Environmental Protection Agency

  3. Status: Closed - Implemented

    Comments: The San Antonio grantee reimbursed EPA for $5,144, which was the agreed-upon amount needed to meet its level-of-effort. The Knox County grantee revised its FY 1980 Financial Status Report by $10,833 in increased expenditures to show that it had exceeded the level-of-effort needed to continue receiving EPA grants. That revised amount then became the base for future spending level requirements.

    Recommendation: The Administrator, EPA, should ensure that the regional administrators in Regions IV and VI take appropriate action with respect to the grantees in Knox County and San Antonio, respectively, concerning their reductions in levels of effort.

    Agency Affected: Environmental Protection Agency

  4. Status: Closed - Implemented

    Comments: The EPA Director, Grants Administration Division, sent a memo to all regional administrators stating that regions must not award any grants unless the state is committed to meet its required level-of-effort. The memo also addressed the unliquidated obligations issue, by stating that unliquidated obligations could not be accepted by EPA as final expenditures on financial status reports.

    Recommendation: To ensure that all EPA regions determine whether grantees are complying with the level-of-effort requirement of the section 105 grant program, the Administrator, EPA, should establish procedures for regional administrators to follow in monitoring grantee expenditures. The procedures should emphasize that all obligations must be liquidated before financial reports can be accepted by EPA as final and should require the regions to examine grantees' past financial reports to ensure that levels of effort are maintained.

    Agency Affected: Environmental Protection Agency

  5. Status: Closed - Implemented

    Comments: In March 1985, EPA Region III informed the District of Columbia that it accepted all but $518.90 of the expenditures GAO questioned. EPA received a $518.90 check from the District. In Texas, EPA indicated that an agreement was reached with the Texas grantee to reimburse EPA for an identified overpayment. The EPA Region did not disclose the amount to GAO, nor has payment been received.

    Recommendation: To ensure that section 105 grant funds are properly spent and/or reported, the Administrator, EPA, should direct the regional administrators in Regions III and VI to work with the District of Columbia and Texas, respectively, to resolve inappropriate spending or erroneous reporting of grant funds in fiscal year 1982.

    Agency Affected: Environmental Protection Agency

 

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