Grants Management: EPA Could Improve Certain Monitoring Practices

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

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.

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Recommendations

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.

Recommendations for Executive Action

Agency Affected Recommendation Status
Environmental Protection Agency 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.
Closed – Implemented
Based in part on our work, EPA completed its migration to a new, comprehensive web-based IT application Next Generation Grants System (NGGS), which replaced its legacy grants management system in December, 2020. NGGS includes expanded search capability features for EPA staff to use, such as a keyword search. In addition, EPA launched its electronic grants file management system in March 2021. Both of these initiatives should improve grants managers' access to performance information, which could facilitate EPA's ability to assess and report environmental and program results achieved through its grants by reducing the need to manually open and review each performance report to identify relevant information.
Environmental Protection Agency 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.
Closed – Implemented
In response to our recommendation, in May 2018, EPA's OGD requested input from state grantees on duplicative reporting through the Environmental Council of the States (ECOS), a national non-partisan association of state and territorial environmental agencies. In February 2020, ECOS provided OGD with state grantees' responses describing examples of duplicative grant reporting requirements. As a result of this input, OGD has identified several programs where duplicative reporting requirements could be reduced and is collaborating with its regional operations to develop a strategy to work with program offices to eliminate duplication, where feasible, which could help EPA reduce grantee's administrative burden.
Environmental Protection Agency 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.
Open
As of December 2021, EPA's implementation of this recommendation is ongoing. Following its adoption of a new IT system for budget performance data in December 2017, EPA began developing the capability for program offices to import data from their program-specific databases electronically, via a machine-readable template. EPA deployed the Performance Results Data Entry Import feature in April 2021 and trained EPA staff on its use. EPA provided initial use statistics in December 2021, indicating that some offices had used the import feature and at least one office had reported that it had saved their staff significant time on data entry. We are following up with EPA for additional clarity on the number of offices using the import feature.
Environmental Protection Agency 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.
Closed – Implemented
In response to our recommendation, EPA issued revised guidance in October 2021 that clarifies the factors project officers should consider when evaluating performance reports according to EPA's environmental results directive. For example, the revised guidance provides extensive examples of outputs and outcomes under various types of program grants, which can help EPA staff assess whether grantees' proposed results align with EPA's expectations for grantee results. Additionally, the guidance provides further instruction to EPA staff about additional steps to take if the grantee's performance report does not include a sufficient explanation for why results were not achieved. The updated guidance should help EPA improve the consistency of the information describing environmental results in grantee performance reports. In turn, this may help EPA demonstrate results from its grants and help project officers better identify or report patterns in factors that are affecting grantee performance.
Environmental Protection Agency 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.
Open
As of December 2021, EPA's implementation of this recommendation is ongoing. In December 2020, EPA completed its migration to a new, comprehensive web-based IT application Next Generation Grants System (NGGS), which replaced its legacy grants management system. As part of this effort, EPA plans to assess and evaluate a web-based portal for collecting performance information from grantees as a post-deployment enhancement to the system, and any solution developed will cover all grantees. However, EPA officials told us that implementation of such a portal is still several years away. We will continue to monitor EPA's progress implementing this recommendation.
Environmental Protection Agency 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.
Closed – Implemented
Based in part on our work, in December 2020 EPA completed its migration to a new, comprehensive web-based IT application Next Generation Grants System (NGGS), which replaced its legacy grants management system. As part of NGGS, EPA incorporated built-in data quality controls for performance reports. For example, NGGS features include drop-down and required fields for whether grantees are submitting performance reports, including an auto-generated required explanation field that appears when users select "no" as their response to questions. These built-in data quality controls should help EPA ensure that grantee performance reports are consistent with EPA's environmental results directive. In turn, this may help EPA project officers to more efficiently identify or report patterns in factors that are affecting grantees' achievement of their agreed-upon results.

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