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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.
Open
As of April 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. In addition, EPA launched its electronic grants file management system in March 2021, which will improve grants managers' access to performance information. We are in the process of collecting additional information from EPA officials about the extent to which these actions meet 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 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 April 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 officials expect the templates to be deployed in May 2021. Following their deployment, we will assess the extent to which the templates meet 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 clarify the factors project officers should consider when determining whether performance reports are consistent with EPA's environmental results directive.
Open
As of April 2021, EPA's implementation of this recommendation is ongoing. Specifically, EPA is in the process of revising its guidance to clarify the factors project officers should consider when determining whether performance reports are consistent with EPA's environmental results directive. EPA expects to complete its revisions by the end of September 2021. At that time, we will assess the extent to which those revisions meet 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 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 April 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. EPA plans to assess and evaluate a web-based portal for collecting performance information from grantees as a post-deployment enhancement to the system, by the end of December 2021, and any solution developed will cover all grantees. After the portal is developed and deployed, we will assess the extent to which it meets 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.
Open
As of April 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. EPA plans to assess and evaluate a web-based portal for collecting performance information from grantees as a post-deployment enhancement to the system, by December 31, 2021. Data quality standards--including those for submitting performance reports--would be established as part of the assessment of enhancements to NGGS. After the portal is developed and deployed, we will assess the extent to which it meets this recommendation.

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