Internal Controls:

EPA Needs To Improve Controls Over Change Orders and Claims

RCED-88-16: Published: Nov 17, 1987. Publicly Released: Nov 17, 1987.

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GAO provided information on the Environmental Protection Agency's (EPA) internal controls over its Construction Grants Program and the actions taken to correct three grants management weaknesses that GAO identified.

GAO found that, while EPA has alleviated three identified grants management weaknesses: (1) many of the change orders and claims that GAO reviewed had missing or incomplete documentation; (2) reviewing agencies misinterpreted and inconsistently applied EPA guidance; and (3) EPA was not monitoring the reviewing agencies.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: EPA issued the directive on May 11, 1988.

    Recommendation: The Administrator, EPA, should direct the Director, Office of Municipal Pollution Control, to issue a memorandum directive on the change orders and claims guidance to clearly explain what the intent of the guidance is and what documentation is required to support the need for the work and the reasonableness of the costs.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: EPA regional offices were instructed by the May 11, 1988 directive to carry out their monitoring and oversight responsibilities of reviewing agencies' review and processing of change orders and claims through their annual reviews of reviewing agencies.

    Recommendation: The Administrator, EPA, should direct EPA's regional offices to carry out their monitoring and oversight responsibilities of reviewing agencies' review and processing of change orders and claims.

    Agency Affected: Environmental Protection Agency

  3. Status: Closed - Implemented

    Comments: EPA has completed an Internal Control Review in which EPA regions were asked to oversee the states' change order controls. EPA headquarters completed a report on the results of the review and provided GAO a copy on November 29, 1989.

    Recommendation: The Administrator, EPA, should direct the Director, Office of Municipal Pollution Control, to perform follow-up reviews of the corrective actions to ascertain that the internal controls are in place, being implemented, and are effective in providing reasonable assurance that change orders and claims are adequately supported and properly evaluated.

    Agency Affected: Environmental Protection Agency

  4. Status: Closed - Implemented

    Comments: EPA considers this weakness to be non-material and therefore did not report it as a material weakness in the annual FMFIA report. EPA will, however, track this as a non-material weakness until corrective actions are completed.

    Recommendation: The Administrator, EPA, should include the weaknesses in the annual Financial Integrity Act (FMFIA) report to the President and Congress.

    Agency Affected: Environmental Protection Agency

 

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