AUDIT GUIDE 001B76100
FOR
EPA GRANTS
(OTHER THAN CONSTRUCTION GRANTS)
ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
FEBRUARY 1976
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TABLE OF CONTENTS
Chapter
1 INTRODUCTION 1.1
1.1 Purpose of Audit Guide 1.1
1.2 Program Background 1.1
1.3 Authority for Audit 1.1
1.4 Audit Standards 1.2
1.5 Audit Objectives l.;2
1.6 Matters Requiring Immediate Attention 1.2
1.7 Quality Control
2 PRELIMINARY PROCEDURES 2.1
2.1 Preliminary Planning 2.1"
2.2 Preparing for the Audit 2.1
2.3 Entrance Conference 2.2
2.4 Initial Field Audit Procedures 2.2
3 AUDIT OF COSTS 3.1
3.1 Basic Guidelines 3.1
3.2 Approach to Costs 3.1
3.3 Payroll Fringe Benefits 3.4
3.4 Subagreements 3.6
3.5 Equipment, Supplies, and Material 3.7
3.6 Travel 3.8
3.7 Other Direct Costs 3.8
3.8 Indirect Costs 3.9'
4 AUDIT OF OTHER MATTERS 4.1
4.1 Program Accomplishment 4.1
4.2 Cash 4.1
.4.3 Unpaid Obligations and Encumbrances 4.2
4.4 Grant Related Income 4.2
4.5 Property Management 4.3
4.6 Financial and Progress Reports 4.4
4.7 Programs Requiring Special Compliance Coverage 4.4
4.8 Matching Share 4.5
4.9 Computation of Federal Share 4.6
5 EXIT CONFERENCE 5.1
6 AUDIT REPORT 6.1
6.1 Introduction 6.1
6.2 Content and Format of Auditor's Report 6.1
6.3 Presenting the Findings 6.1
6.4 Auditor's Report on Subagreement Costs 6.1
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APPENDIX
A EPA FINANCIAL ASSISTANCE PROGRAMS A.I
B EPA AREA AUDIT OFFICES AND COGNIZANT GEOGRAPHIC AREAS B.I
C SURVEY OF GRANTEE'S MANAGEMENT SYSTEMS C.I
D REFERENCES D.I
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This document is not a replacement to the Acts, the regulations, the guidelines, or the
official EPA policy statements. It is a supplement to these documents, providing basic
audit guidance and showing example audit reports. Any clarifications and the specific
conditions of each audit should be discussed with the appropriate EPA audit Manager.
in
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CHAPTER 1: INTRODUCTION
1.1 PURPOSE OF AUDIT GUIDE
This guide is intended to assist the Environmental Protection Agency (EPA) auditors,
independent public accounts, and auditors of public agencies to understand the special
requirements for audit coverage of EPA grants, other than construction grants. The audit
steps in this guide are intended to provide general insight into the nature and scope of the
audit contemplated. This guide is not intended to be a complete manual of procedures, nor
is it intended to supplant the auditor's judgement of the work required to meet the audit
objectives outlined in this audit guide. The audit procedures contained in this guide may
not cover all circumstances or conditions encountered in auditing a particular grant, and
similarly not all of the audit procedures will apply to each grant audited. Auditors must
use their professional judgement to tailor the procedures to meet conditions at the audit
site so that the audit objectives set forth in.the guide may be achieved.
1.2 PROGRAM BACKGROUND
EPA was established under Presidential Reorganization Plan No. 3 of 1970. By this
Plan, the environmental functions and responsibilities of five different Federal agencies
were transferred to EPA. The responsibilities transferred included research, standard-
setting, monitoring and enforcement related to all six environmental hazards: air and
water pollution, solid waste disposal, radiation, pesticides and noise.
In each of these areas, EPA finances a variety of financial assistance programs.
Through grants, EPA provides assistance for:
• Research Projects. EPA sponsors research into all types of environmental problems
and their correction.
• 'Demonstration Projects. EPA sponsors demonstrations of new and improved methods
of handling environmental problems.
• Program Assistance. EPA provides a portion of the costs of governmental agencies'
operations of environmental programs. Such assistance is available under the EPA's
air, water and pesticides programs.
• Planning Projects. EPA grants provided a portion of the costs of preparing a water
pollution control plan at the basin or regional level. In addition EPA provides financial
assistance for solid waste planning.
• Training Projects. Through grants, EPA provides a portion of the costs of training
personnel^for environmental careers.
More complete information on each of the financial assistance programs for which EPA
makes grants is contained in Appendix A of this guide.
1.3 AUTHORITY FOR AUDIT
Each of the Public Laws authorizing EPA to make grants provides that EPA shall have
the authority to audit and examine the books and records of the parties receiving such
financial assistance. Paragraph 30.820 of EPA's Final Grant Regulations (May 8,1975)
provides that each grant will be subjected to final audit.
The EPA Office of Audit is responsible for all audits of EPA grant programs. The Area
Audit Manager (see Appendix B) may elect to have an individual audit conducted by his
staff, another Federal agency, state or local auditors, or an independent public account.
When the Area Audit Manager elects to have the audit performed by an independent
public accountant, he will notify the grantee as to which firm will perform the audit. It will
be the selected firm's responsibility to contact the grantee to arrange the start of the audit.
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1.4 AUDIT STANDARDS
Audits of EPA grants will be made in accordance with the Standards for Audit of
Governmental Organizations, Programs, Activities, and Functions promulgated by the
Comptroller General in 1972. The auditor will not be required to express an opinion as to
the efficiency and economy of operations or with respect to program evaluations, He may,
however, be requested by the Area Audit Manager to perform certain audit tests related to
these aspects and to report the results of his examination.
In performing audits of EPA grants, the auditor is expected to adhere to generally
accepted auditing standards. In addition, he should utilize those portions of the American
Institute of Certified Public Accountants' (AICPA) industry audit guides considered
applicable. Of particular importance is the guide Audits of State and local Governmental
Units.
1.5 AUDIT OBJECTIVES
The objectives of the audits of grants are:
• to determine whether the management controls exercised by the grantee through its
management system, accounting system, procurement system, and property control
system are adequate to provide assurance that costs claimed are reasonable, allowable
and allocable to the sponsored project under the grant terms and conditions, Federal
Management Circulars (FMC's) and applicable EPA regulations; and
• to review operations and report any noncompliance with applicable grant conditions or
EPA rules and regulations and, based upon the review, to provide recommendations for
improvement.
• to determine whether the costs claimed under the EPA grant are reasonable, allowable,
and allocable to the sponsored project.
1.6 MATTERS REQUIRING IMMEDIATE ATTENTION
During the course of the audit, the auditor may encounter suspected fruad, irregularity,
or collusion and insufficient evidence or inadequate systems.
1. Suspected Fraud, Irregularity, or Collusion
The purpose of audits performed in accordance with this guide is not to detect fraud,
although performance of the audits may minimize fraud loss, discourage irregularities,
and identify conditions of gross mismanagement. If, during the examination, instances of
possible fraud, gross mismanagement, or other irregularities are identified, the auditor
will:
• document the situation
• immediately notify the Area Audit Manager of the situation encountered; and
• proceed only in accordance with instructions provided.
2. Insufficient Evidence or Inadequate Systems
Auditors are expected to use professional judgment in arriving at conclusions
concerning the sufficiency of available supporting evidence. If additional guidance is
needed as to the acceptability of certain evidence, the auditor should contact the Area
Audit Manager or his designated representative. When insufficient evidence or
inadequate systems preclude the reaching of conclusions concerning the reasonableness,
allocability, and allowability of costs within a reasonable period of time, the auditor must,
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as a minimum:
• document tests and observations to support the auditor's conclusions regarding
insufficient evidence or inadequate systems.
• inform the Area Audit Manager by telephone and confirm by letter; and
• cease work until instructions are received.
1.7 QUALITY CONTROL
EPA retains the right to review audit work papers to evaluate the overall quality of the
audit. In this regard, EPA may require copies of the audit work papers to be forwarded,
along with the completed audit report, to the responsible Area Audit Manager or his
designated representative. The audit work papers will be returned to the auditor upon
completion of the EPA evaluation. Based on EPA's evaluation, the auditor may have to
return to the job site to perform additional work required. In this regard, the auditor
should retain the work papers applicable to the audit of any EPA grant or contract for
three years after completion of the assignment and submission of the required audit
report.
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CHAPTER 2: PRELIMINARY PROCEDURES
2.1 PRELIMINARY PLANNING
Once a request for audit is received from EPA grants officials, the Area Audit Manager
will obtain and review the grant project file to:
• determine whether a field audit will be performed; and
• make a preliminary determination as to the general scope of audit.
Based on this review, the Audit Manager will assemble an audit planning package for use
in determining the scope, schedule and resources needed for the audit. Normally this
package will contain the following information:
• Grant number
• Grantee name, address and telephone number
• Total project cost
• Federal share
• Narrative discussion of scope of audit contemplated.
In reviewing the project, the Audit Manager will determine if there are any areas
requiring special audit attention. The Manager will thus identify areas for which he
requires detailed audit coverage as well as areas requiring little or no coverage. In
addition, The Manager may want to expand the audit to cover certain aspects of
efficiency, economy, or program effectiveness. Whenever the scope is thus expanded, the
Manager will provide the additional audit guidance necessary for appropriate coverage of
the expanded areas.
2.2 PREPARING FOR THE AUDIT
In accepting any grant from EPA, the grantee agrees to comply with those conditions or
requirements inherent in the award or provided in grant or contract regulations. To audit
these grants, the auditor must become thoroughly familiar with those conditions and
requirements related to the individual grant. Once the auditor has been selected and the
preliminary audit planning has been completed, the Area Audit Manager will provide the
auditor with EPA's project files, as well as copies of the latest EPA audit reports
concerning the grantee. The auditor should:
• review in detail key grant material. Generally this will include:
• an executed copy of the grant agreement (and any amendments) for each grant
included in the scope of the audit; and
• the approved budget for each grant.
• identify, obtain and review those EPA regulations and Federal Management Circulars
applicable to the grants being audited; (see Appendix A for reference to EPA
regulations)
• identify any special grant conditions requiring audit attention;
• review correspondence contained in the project file for indications of potential problem
areas;
• determine whether the project file contains indications of satisfactory grantee
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performance. This may be expressed in terms of correspondence accepting the grantee's
product or in the form of periodic program evaluation reports; and
• review prior audit reports to identify potential or known problem areas to be examined
during the audit.
2.3 ENTRANCE CONFERENCE
After establishment of a mutually agreed upon date for starting the audit, an entrance
conference should be held with the grantee. During this conference, the grantee should be
advised of the purpose and scope of the audit. The results of the entrance conference
should be documented in the audit work papers, and this documentation should include a
list of entrance conference attendees.
2.4 INITIAL FIELD AUDIT PROCEDURES
In starting the audit, the auditor should:
• obtain background information on the grantee organization. This may be in the form of
charters, bylaws, incorporation documents, or public relations documents which
identify the nature of the organization's operations and key employees. In addition, the
auditor should obtain copies of the organization's financial reports as well as access to
any audit reports issued by the organization's internal or external auditors.
• identify any additional EPA or other Federal grants or contracts being performed by
the grantee. In this regard, the auditor will obtain the grant/contract number, the
amount of the agreement, the status of the grant/contract, and the Federal agency
involved. The auditor should promptly communicate this to the Area Audit Manager so
that a decision may be made as to whether the scope of the audit will be expanded to
cover these agreements.
• familiarize himself with the grantee's accounting, personnel, procurement, and
property management systems as they relate to grant expenditures. In this regard, the
auditor should initially obtain information regarding any established policies and
procedures governing these activities. He should then perform a limited survey to
identify significant weaknesses in the systems as they apply to the EPA grant,
utilizing, as a minimum, the survey questionnaire contained in Appendix C of this
audit guide. The survey should include sufficient testing of the records to validate the
information obtained in the survey.
• reconcile the reported expenditures as identified in the financial status report or final
voucher with those amounts shown on the grantee's official accounting records.
• obtain a breakdown of reported costs by program function and/or cost element. The
auditor should compare the breakdown with the amounts contained in the grant budget
(see Final Grant Regulations 30.610).
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CHAPTER 3: AUDIT OF COSTS
3.1 BASIC GUIDELINES
Each grant contains reference to those cost principles to be used in evaluating the
acceptability of costs. Generally, EPA grants will be subject to one of the following:
• FMC 74-4, Cost Principles for grants and contracts with state and local governments;
• FPR 1-15.2, Cost Principles for grants and contracts with commercial institutions; or
• OSAC-5, DHEW, Guide for grants with nonprofit institutions.
In addition to containing references to the allowability of individual types of costs, these
principles contain excellent background information and guidance as to the proper
treatment of costs, and the auditor should become thoroughly familiar with the
information contained in them.
3.2 APPROACH TO COSTS
In conducting an audit of EPA grants, the auditor will be attempting to reach a
conclusion as to the acceptability of costs claimed on reimbursement vouchers submitted
to EPA on the Reports of Expenditures/Financial Status Reports. When the grantee has
actually incurred costs in excess of the amounts claimed, the auditor may not increase the
amount of the grantee's claim. He should, however, disclose by means of footnotes the
extent of unclaimed costs, that might otherwise be considered allowable.
Under the terms of the grant, EPA's participation in a project is for a limited period. In
reviewing project costs, the auditor is evaluating each cost to determine whether it is
acceptable as a charge to the EPA project. Costs that are not acceptable will be
questioned.
Costs questioned normally fall under one or more of the following categories:
1. Unallowable costs. Costs which are specifically unallowable under the terms of the
grant or other cost principles cited in the grant or applicable EPA regulations.
2. Unreasonable costs. In determining the reasonableness of a given cost, considera-
tion shall be given to:
• Whether the cost is of a type generally recognized as ordinary and necessary for the
conduct of the grantee's (contractor's) business or the performance of the contract;
• The restraints or requirements imposed by such factors as generally accepted sound
business practices, arm's length bargaining, Federal and State laws and regulations,
and grant/contract terms and specifications;
• The action that a prudent businessman would take in the circumstances, considering
his responsibilities to the owners of the business, his employees, his customers, the
Government, and the public at large; and,
• Significant deviations from the established practices of the grantee/contractor which
may unjustifiably increase the grant/contract costs.
The auditor in conducting his examination should be cognizant of costs incurred which
indicate to him that they may be excessively high or even unwarranted. In making the
determination as to any costs which might be questioned as being unreasonable the
auditor would rely on his own judgment. In making these determinations the auditor is
not expected to make judgments on technical matters outside of his area of expertise.
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3. Unallocable costs. In reviewing the alienability of costs, the auditor will be guided
by the following criteria:
• A cost is allocable to a particular grant/contract to the extent of benefits received.
• Any cost allocable to a particular project or function may not be shifted to a Federal
grant/contract to overcome fund deficiencies, avoid restrictions imposed by law or
grant/contract agreements or for other reasons.
• Where an allocation of joint cost will ultimately result in charges to a grant/contract,
an indirect cost rate proposal will have to be prepared to justify the equitability of the
charge.
4. Undocumented costs. Costs for which detailed documentation is not available to
show that the costs claimed were in fact incurred under the EPA grant/contract.
5. Unapproved costs. Costs for which grant/contract provisions or applicable cost
principles require awarding agency approval, but for which the auditor finds no evidence
of such approval.
Figure 3-1 contains examples of questioned costs. The designation of a cost as
questionable by the auditor does not necessarily mean that the cost will be disallowed.
The final determination as to the acceptability of costs will be made by the appropriate
EPA grants administration official.
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Figure 3-1
EXAMPLES OF UNALLOWABLE COSTS
• Interest on bonds or other financing
• Fines and penalties resulting from violation of Federal, State, and local laws
• Personal injury compensation or damages as a direct result of construction of the
project
EXAMPLES OF UNREASONABLE COSTS
• Purchase of a six month's supply of materials during the last month of the grant except
under EPA program grants where Federal assistance is obtained on a continuing basis
• Purchase of expensive equipment needed only for a short period when a lease would
have been more economical
• Costs for which appropriate evidence is not available that the grantee employed those
controls necessary to assure that the price was reasonable
EXAMPLES OF IMPROPERLY ALLOCATED COSTS
• Costs already matched to another Federal program
• Inequitable allocation of indirect costs to the grant
• Costs allocated in total to the grant, which also benefited other grant programs
EXAMPLES OF IMPROPER DOCUMENTATION OF COSTS
• Lack of time and attendance records, invoices, etc.
• Lack of written contracts with consultants and/or subcontractors
• Non-Federal contributions recorded but not documented
EXAMPLES OF COSTS NOT PROPERLY APPROVED BY EPA
• Hire of consultants and/or subcontractors
• Purchase of capital equipment
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In reviewing costs, the auditor will be examining total project costs. Costs recorded as
the grantee's share and those recorded as EPA's share will be subjected to the same audit
procedures and tests for allow ability. Costs considered questionable will be treated as a
reduction in total costs claimed in determining costs accepted. The percentage of project
costs in which EPA is participating, per the grant agreement, will then be applied to total
cost accepted. This will show the Federal share earned.
3.3 PAYROLL/FRINGE BENEFITS
1. Objective
The objectives of the audit of payroll and fringe benefits costs are to determine whether:
• employee pay rates and benefits are commensurate with the type of work being
performed; and
• total labor and benefit costs charged to the EPA grant/contract are allocable and
reasonable.
2. References
• FMC 74-4; Attachment B; B.10
• OASC-5; Appendix I; G.6, G.25
• FPR 1-15.205-6
3. General Audit Procedures
Amounts charged to the EPA grant will be tested to determine that appropriate salary
rates were utilized for personnel working under the EPA grant, time charged was properly
supported, and fringe benefits claimed represent actual costs to the grantee.
4. Potential Areas Requiring Additional Audit
a. Compensation paid to key officials
In evaluating the reasonableness of compensation paid to owners of closely held
corporations, partners, sole proprietors or members of their immediate families, or persons
who are contractually committed to acquire a substantial financial interest in the
grantee's enterprise, the auditor should determine that such compensation is reasonable
for the actual personal services rendered and not a distribution of profits. Compensation is
reasonable to the extent that the total amount of compensation paid under the company's
established policy conforms generally to compensation paid by other firms of the same
size, in the same industry, or in the same geographic area, for similar services. In the
administration of this principle, it is recognized that not every compensation case need be
subjected ii derail to the above tests. Such tests need be applied only to those cases in
which a general review reveals amounts or types of compensation which appear
unreasonable or otherwise out of line.
The auditor should determine that incentive compensation for management employees,
cash bonuses, suggestion awards, and incentive compensation based on production, cost
reduction, or efficient performance are paid or accrued pursuant to an agreement entered
into in good faith between the grantee and the employees before the services were
rendered or pursuant to an established plan followed by the grantee.
For bonuses and incentive compensation paid in stock, the auditor should determine
that valuation placed on the stock transferred shall be the fair market value at the time of
transfer, determined upon the most objective basis available.
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b. Deferred compensation
The auditor should determine that any deferred compensation:
• is for services rendered during the grant period (except past service pension and
retirement costs);
• is paid pursuant to an agreement entered into in good faith between the grantee and
employees before the services are rendered or pursuant to an established plan followed
by the grantee so consistently as to imply, in effect, an agreement to make such
payment; and
• is made under a plan subject to approval by the Internal Revenue Service and falls
within the criteria and standards of the Internal Revenue Code and the regulations of
the Internal Revenue Service.
In determining the cost of deferred compensation allowable under a grant, the auditor
should ascertain whether appropriate adjustments have been made for credits or gains,
including those arising out of both normal and abnormal employee turnover, or any other
contingencies that can result in a forfeiture by employees of such deferred compensation.
The auditor should ascertain whether adjustments to deferred compensation for normal
employee turnover have been based on the grantee's experience and unforeseeable
prospects. If the grantee can demonstrate that his contributions take into account normal
forfeitures, such an adjustment will be unnecessary.
c. Overtime
When the grantee has claimed costs related to overtime, the auditor should:
(1) Determine whether the employee is, under company policy, entitled to receive
overtime, did work the overtime hours, and did receive payment. Wherever the
individual did work, but did not receive pay, appropriate adjustment should be made
to the employee's hourly or daily billing rates.
(2) Review the grantee's rationale for requiring overtime under the EPA project. Where
employees are working on more than one project, there could be some question as to
which project generated the overtime.
(3) Determine whether necessary justifications for overtime were prepared and
submitted for approval, where required under applicable grant terms and conditions
or cost principles.
d. Fringe Benefits
When a grantee has computed a fringe benefit rate, the auditor should identify the basis
used in computing the rate and determine that those elements making up the fringe
benefit pool have not been included as a part of direct labor charges.
To prevent the grantee from over recovering fringe benefit costs, special consideration
should be given to the annual or sick leave portion of fringe benefits. In this regard, the
auditor should determine whether annual and sick leave costs are claimed based on the
accrual or actual leave basis. Where leave costs are claimed on an accrual basis, the
auditor should examine the grantee's leave policies and leave administration in detail to
determine:
(1) whether there are established annual or sick leave ceilings which could cause
employees to lose accrued annual or sick leave
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(2) whether employees are actually paid for accrued annual or sick leave upon
termination or retirement.
In instances where ceilings prevent employees from utilizing accrued leave or employees
do not get reimbursed for annual or sick leave upon termination or retirement, grantees
should not be permitted to claim leave cost on an accrual basis. They may never incur the
costs. Instead, leave costs should be based on actual leave taken, not leave entitlement.
3.4 SUBAGREEMENTS
1. Objective
The objective of the audit of subagreement costs is to determine whether appropriate
controls were exercised to assure that the services were necessary, obtained at a
reasonable price, and that the procurement provided for free and open competition.
2. References
• FMC 74-7; Attachment O
• FMC 74-4; Attachment B; C-7
• OASC-5; Appendix I; G.31
• FPR 1-15-205-31
3. General Audit Procedures
The auditor should selectively review the rationale and documentation in support of
subagreements to determine that:
• the grantee evaluated his own resources to assure that the services or product could not
have been provided in house;
• the services or product was used under the EPA grant;
• the method of procurement was sufficiently competitive (see FMC 74-7);
• procurement techniques utilized by the grantee (competitive procurement or analysis of
the composition of costs) were sufficient to obtain a reasonable price;
• the grantee gave consideration to the type of subagreement most appropriate for the
services or product obtained. (Fixed price contracts are appropriate when the scope and
nature of work can be clearly defined. Where the scope or nature of work is more
indefinite, the cost type contract is more appropriate. The cost plus-a-percentage-of-cost
and percentage-of-cost type contracts may not be used under EPA grants);
• the nature, scope, time period, and costs were specific in the subagreement;
• the grantee was satisfied with the work performed;
• appropriate EPA approvals were obtained for all subagreements in excess of $10,000.
4. Potential Areas Requiring Additional Audit
The existence of subagreements means that a portion of the project cost records are not
available at the grantee's site. The auditor should, therefore, compile a list of the
subagreements. This list should identify the parties performing under the subagreement,
provide their address and telephone numbers, give a description of the nature of services
or products provided, and indicate the type and amount of each subagreement.
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a. Fixed price subagreements
Fixed price subagreements normally will not be audited. If these agreements were
obtained in such a way as to extablish the reasonableness of price and that the services
were needed, the related costs will be considered acceptable.
b. Cost-type subagreements
Cost-type subagreements may require audit. The auditor should determine whether the
grantee has audited the subagreements or requested that an audit be performed by the
cognizant Federal Audit Agency. Where such action has not been taken, the auditor
should furnish the Area Audit Manager with a list of the subagreements. The Manager
will decide whether an audit is needed and, if one is needed, who will perform the audit.
The auditor selected to perform the audit should advise the party performing work
under the subagreement that the review is being performed for both the grantee and EPA.
Thus, any information gathered during the course of the audit will be made available to
the grantee as well as to EPA.
If another agency will perform the audit, the Area Audit Manager will initiate the
request for audit and provide a copy of the request to the auditor performing the review of
the grant. The auditor does not have to wait for the results of an audit requested from
another Federal agency; he should prepare the audit report and set aside the requested
portions. The audit report should explain that the subagreement is being audited by
another audit agency and that the results will be transmitted as soon as received.
If the Area Audit Manager has determined that no other Federal audit agency is
cognizant and that the subagreement should be audited, the auditor should make
arrangements to audit the accounting records of the subagreement to determine that the
costs billed are allowable. The audit steps in this guide applicable to the particular types
of costs claimed should be followed, and the auditor should apply these cost criteria which
apply to the type of organization receiving the subagreement.
If no audit of the subagreement is considered necessary, the Area Audit Manager will so
advise the auditor reviewing the grant. In such cases, the costs claimed under the
subcontracts will be considered allowable if the costs were claimed in accordance with
subagreement provisions.
3.5 EQUIPMENT, SUPPLIES, AND MATERIAL
1. Objective
The objectives of the audit of equipment, supplies, and material costs are to determine
whether:
• such items were needed and used on the sponsored projects; and
• such items were obtained on a competitive basis.
2. References
• FMC 74-4; Attachment B; B.18, C.3
• OASC-5; Appendix I; G-7, G-22, G-45
• FPR 1-15.205.22, 1-15.205-32, 1-15.205-40, 1-15.205-45, 1-15.205-50
3. General Audit Procedures
For selected items the auditor should determine that:
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• procurement was made in accordance with normal procedures and that appropriate
supporting documentation was maintained;
• items purchased were not already available and were actually utilized under the EPA
grant
• these items were acquired through appropriate use of competitive purchasing
techniques
• appropriate approvals were obtained for the purchase of capital items; and
• costs related to these capital items properly represent direct rather than indirect
charges.
3.6 TRAVEL
1. Objective
The objective of the audit is to determine that the cost of travel is allowable and
allocable to the EPA grant.
2. References
• FMC 74-4; Attachment B; B.28
• OASC-5, Appendix I; G.46
• FPR 1-15.205-46
3. General Audit Procedures
The auditor should test travel charges to determine that:
• travel costs were incurred in accordance with the grantee's normal travel policies and
amounts do not appear grossly unreasonable as compared to Federal travel policies;
• travel charges are adequately supported by travel vouchers and other documentation;
• travel claimed was applicable to the EPA grant; and
• first-class transportation was not utilized without necessary justification.
3.7 OTHER DIRECT COSTS
1. Objective
The objective of the audit of other direct costs is to determine whether the related costs
are allowable and applicable to the EPA grant.
2. References
• FMC 74-4
• OASC-5
• FPR 1-15.205
3. General Audit Procedures
In general, the auditor must determine that:
• the types of expenditures involved were contemplated in the original budget and the
expenditures were adequately documented.
• in instances where the grantee has established separate pools for such costs as
computer services, reproduction, communications, etc., the methods used to calculate
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and distribute such costs are equitable.
• amounts claimed are properly supported as other direct costs and that similar costs are
not recovered through indirect costing methods.
• the grantee credits to the Government the applicable portion of any income, rebate,
allowance, and other credit relating to any allowable costs received by or accruing to
the grantee.
• when applicable, necessary approvals have been obtained from EPA. For example,
FMC 74-4 requires the specific approval for inclusion of costs related to the acquisition
of data processing equipment.
• such costs are allowable under applicable cost principles.
3.8 INDIRECT COSTS
The indirect costs of a project are those costs not readily identifiable with the project
itself but nevertheless incurred by an organization for the joint benefit of the project and
other activities carried on by the organization. To recover its indirect costs, an
organization must submit an indirect cost proposal showing its methods of determining
the portion of indirect costs each project should bear. Once this proposal is reviewed and
found to be equitable, the indirect cost rate is approved.
The auditor will be responsible for assuring that the amount of indirect costs claimed on
any grant administered by EPA is acceptable.
(1) Grants Awarded by EPA
(a) Grants to Profit-Making Institutions
The grants to profit-making institutions will utilize the indirect cost rate established
in the grant as a ceiling rate. This rate must be based on the indirect cost proposal, for
the fiscal year preceding the grant award, as audited and negotiated by a Federal
agency. The grantee will be expected to prepare indirect cost proposals annually.
• In instances where no such proposals were prepared, any indirect cost claims should
be questioned.
• In instances where the indirect cost proposals have been prepared, the auditor will be
expected to audit the proposals to establish the acceptability of rates proposed. This
audit should be conducted in accordance with the EPA "Audit Guide for Reviewing
Indirect Cost Allocation Plans and Rate Proposals." The rates considered allowable
by the auditor should be compared with the ceiling rate. Where the audited rate is
higher, the ceiling rate should be used in determining the indirect cost applicable to
the grant. Where the ceiling rate is higher, the audited rate should be used. Any
reduction in indirect costs resulting from this procedure should be treated as costs
questioned.
(b) Grants to Other Types of Institutions
It is EPA's policy that indirect costs on all grants to other types of institutions are
fixed in the grant. The indirect cost rate should have been computed based on fiscal data
applicable to the fiscal year preceding the date of grant award. The rate should have
been reviewed, audited, and negotiated by EPA or another Federal agency. In instances
where:
• the rate was not based on current proposal, the auditor should question all indirect
costs.
3.9
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• the rate was based on a current proposal but, no review or negotiation of indirect costs
has taken place; the auditor should audit the proposal of the applicable period in
accordance with EPA's "Audit Guide for Reviewing Indirect Cost Allocation Plans
and Rate Proposals" and adjust the grantee's claim to the audited rate.
(2) Grants Awarded by Other Agencies
EPA is administering a few grants awarded by predecessor agencies. Under these
grants, indirect costs should be handled on an actual basis. Indirect cost rates should be
adjusted up or down to the rates actually experienced. When the auditor encounters such a
situation, he shall be guided by the following ground rules.
(a) The auditor may find that EPA or another Federal agency has already audited and
negotiated the organization's indirect cost rate. The auditor may use this rate in making a
final determination of allowable indirect costs. The auditor should be careful, however,
not to increase costs above the amount of the grant award.
(b) In instances where the grantee has claimed indirect costs but has not prepared an
indirect cost proposal to justify his rate, any indirect costs claimed should be questioned.
(c) In instances where the indirect cost proposals have been prepared and submitted,
but not audited; the auditor will be expected to audit the proposals to establish the
acceptability of the rates proposed. This audit should be conducted in accordance with the
EPA "Audit Guide for Reviewing Indirect Cost Allocation Plans and Rate Proposals."
The rates considered allowable by the auditor should be used in determining allowable
indirect costs under grants awarded by EPA's predecessor agencies.
3.10
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CHAPTER 4: AUDIT OF OTHER MATTERS
During the course of the audit, the auditor will be examining the acceptability of the
grantee's controls as they relate to requiremer s contained in regulations, Federal
Management Circulars, and/or the terms of the i ividual grants. A failure to adhere to
grant requirements may result in questioning a , ..rtion or all of the grant costs.
In preparing this audit guide, we have examined in detail certain areas that should be
reviewed during all grant audits. These are discussed in the following paragraphs.
4.1 PROGRAM ACCOMPLISHMENT
In addition to the basic determinations of allowability, allocability, and reasonable-
ness, an integral part of the audit of EPA grants entails a determination of program
accomplishment. Simply stated, the auditor should address himself to the question "Did
the government receive what it has paid for?" Essentially this determination is made by
reviewing compliance with the terms and conditions of the government agreement.
Normally grants set forth certain milestones or objectives to be met during the course of a
project. In some instances, the grantee will be expected to submit a report or other product
of his work. The auditor should perform certain basic reviews to determine whether the
grantee accomplished the desired project. In this regard, the auditor will generally be
reviewing records maintained by the grantee, reports prepared for grantee management
or EPA, and correspondence between the grantee and EPA. Specific steps necessary to
determine program accomplishment will be provided by the Area Audit Manager on a
project-by-project basis.
4.2 CASH
Payments to EPA grantees are made in three ways: advance payment, after-the-fact
reimbursement, and National Institute of Health (NIH) letter-of-credit or (NIH) advance
payment. Depending on the method used, steps necessary to audit cash will vary.
1. Advance Payment
This method is currently used on all EPA grants, other than construction grants (see
Final Grant Regulations, 40 CFR 30.615). In auditing cash when advance payment has
been made, the auditor should:
• relate the advances to the grantee's expenditures to determine if cash was advanced
prematurely;
• determine if EPA received credit for any interest earned by the grantee on funds
advanced by EPA (unless the grantee is a state governmental organization, any
interest must be returned to EPA); and
• after reviewing the acceptability of costs claimed, compute the amount due to the
grantee.
2. After-the-Fact Reimbursement
This method is used for payment on older research and development grants, and
demonstration grants. In auditing cash when after-the-fact reimbursement has been
made, the auditor should:
• determine that vouchers were submitted based on the costs recorded on the grantee's
accounting records;
• determine the payments received under these vouchers; and
4.1
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• after reviewing the acceptability of costs claimed, compute the amount due the
government or the grantee.
3. NIH Letter-of-Credit or Advanced Payment
Older EPA air or solid waste grants were financed in this manner. However, EPA
stopped using this method of financing in July 1973. Since the NIH letter-of-credit or
advance payment methods do not permit the identification of cash payments to individual
grants, the auditor should make no attempt to try to determine the amount of cash paid
under the grant.
4. EPA Letter-of-Credit
This Section Reserved.
4.3 UNPAID OBLIGATIONS AND ENCUMBRANCES
In the audit of the grantee's unpaid obligations and/or encumbrances, a determination
must be made as to whether the obligation or encumbrance was valid on the last day of
the grant performance period. For the obligation or encumbrance to be considered to have
been valid on the last day of the grant performance period, the grantee must have incurred
a legal liability (for which payment was not made) to pay for goods or services utilized
during the grant period. In regard to costs claimed in this category, the auditor should:
• ascertain that the amounts claimed as unpaid obligations represented orders placed,
contracts and grants awarded, services received or other similar transactions as of the
end of the grant period.
• determine that the goods or services procured were received during the grant period and
in time to benefit the grant.
• ascertain that the grantee's accounting procedures provide for appropriate adjustments
to reported project costs to reflect any difference resulting between unpaid obligations
and actual costs incurred when paid.
• determine that unpaid obligations are liquidated on a timely basis. When obligations
are not promptly liquidated, the auditor should comment on this condition in the audit
report. Unpaid obligations outstanding in excess of one year should be questioned if no
valid reason exists as to why payment has not been made.
4.4 GRANT RELATED INCOME
Grant related income represents earnings by the grantee realized from grant supported
activities. Such earnings exclude interest income earned by states and any agency or
instrumentality of a state on grant-in-aid funds. All other grantees, however, are required
to return interest earned on advances of grant-in-aid funds to the Federal Government.
Examples of income for which a grantee would be held accountable are income from
service fees, proceeds from the sale or disposition of real and personal property, usage or
rental fees, sale of commodities, royalties on patents and copyrights, and any other type of
income generated from charges which are directly related to a principal project objective.
Revenue generated, however, under the governing powers of a State or local government
which may have been generated without grant support is not considered grant related
income. Such revenue shall include fines or penalties levied under judicial or penal power
and used as a means to enforce laws; license or permit fees for the purpose of regulation;
special assessments to abate nuisances and public irritations; inspection fees; and taxes.
See 40 CFR 30.620.
4.2
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In auditing EPA grants, the auditor should:
• review the terms and conditions of the grant to determine if there are any special
conditions relating to the use and/or disposition of grant related income;
• determine whether the grantee accounts for such program income in a manner that
readily identifies it to the program;
• determine whether royalties received from copyrights and patents produced under the
grant during the grant period have been either added to the funds committed to the
program or deducted from total allowable project costs for determining the net costs on
which the Federal share of costs will be based;
• determine for royalties received in excess of $200 annually after completion of the
grant, that the grantee has returned to EPA its share of royalties computed on the same
ratio basis as the Federal share of the total project cost;
• determine that all other program income earned during the grant period has either been
added to funds committed to the project by the grantor and grantee and used to further
eligible program objectives or deducted from the total project cost for the purpose of
determining the net costs on which the Federal share of costs will be based; and
• determine if the grant agreement specifically earmarks for a grant project certain
revenues (such as taxes, special assessments, levies, fines), that the grantee has
recorded the receipt and expenditure of these revenues as a part of grant project
transactions.
4.5 PROPERTY MANAGEMENT
The scope of audit of property management will vary significantly based on the type of
audit performed. When the audit is a final audit and EPA has no continuing work with the
grantee, the auditor should limit himself to determining that property was reported as
required and that appropriate disposition action was taken. However, review of the
adequacy of grantee property management systems should be emphasized when auditing
grants, such as those for air and water pollution control programs, which have been and
will be funded year after year.
The most important facets of grantee property management are set forth in EPA's Final
Grant Regulations, 40 CFR 30.810. In evaluating a grantee's property management
system, the auditor should:
a. determine whether the grantee maintains property records to account for equipment
purchased for use in EPA grant programs.
b. review the property records maintained and consider whether they contain necessary
information, such as:
• the manufacturer's serial number or other identification number, the acquisition
date, the cost, the source of acquisition, percentage of EPA equity, ultimate
disposition data (including sales price and the method used to determine fair
market value), and the location, use, and condition of the property.
• a description of the property.
c. ascertain whether the grantee takes a physical inventory of grant equipment and
reconciles the results with property records at least once every two years to verify the
existence, current utilization and continued need for the property.
4.3
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d. determine whether:
• differences between the property-record balances and physical balances are
investigated and fully documented;
• property records are adjusted as a result of the inventory;
• the grantee takes action to dispose of an item of equipment if it is no longer needed;
and
• periodic inspections and routine maintenance are performed on equipment.
e. select, from the property records, a sample of equipment items purchased for EPA
grants and physically inventory the equipment to see whether the system is adequate in
terms of c above.
f. determine whether the grantee has established procedures for disposing of equipment
that is no longer necessary. If he has, are the procedures adequate to ensure that EPA's
equity is protected when property is sold or used as a trade-in? If the grantee has disposed
of grant equipment, the auditor should ascertain whether written approval was obtained
from EPA prior to the disposition and whether the net proceeds of the sale or fair market
value at the time of sale, whichever was greater, were paid to EPA in proportion to EPA's
participation in the grant project.
4.6 FINANCIAL AND PROGRESS REPORTS
In accordance with Final Grant Regulations 40 CFR 30.635, grantees are required to
prepare and submit to EPA an acceptable final report and such progress, financial, and
other reports relating to the conduct and results of the approved project as may be
specified in the grant agreement. As might be expected, the content and frequency of these
reports vary from grant to grant. Reporting requirements for grantees to report financial
information to Federal agencies have been standardized by FMC 74-7, Attachment H. For
some older grants, the financial reports will be different for each type.
During the final audit of grants, the auditor will be most concerned with the financial
expenditure report which the grantee is required to submit within 90 days of the end of the
budget period. This report is the grantee's official claim for expenditures incurred during
the grant budget period. The costs claimed on this document are what the auditor must
verify during the audit. A final audit cannot be completed until a grantee has submitted a
final financial expenditure report for the grant budget period.
For progress and other reports, the auditor should review the grant agreement or
regulations to determine the reporting requirement for the grant being audited. An
evaluation will also have to be made to determine whether (1) the grantee submitted the
required reports and (2) EPA was satisfied with the reports. The auditor should in the
course of his audit be alert for indications that information contained in these reports was
incorrect or invalid.
4.7 PROGRAMS REQUIRING SPECIAL COMPLIANCE COVERAGE
1. Air Program Grants
In auditing air program grants (see EPA Regulations, 40 CFR 35.530), the auditor
should determine that the sum rf*~ on-Federal recurrent expenditures made by the grantee
in the budget period for which ti. , grant was awarded is equal to or greater than the sum
of the grantee's recurrent expenditures during the fiscal year immediately preceding the
beginning of the current budget period. Recurrent expenditures are those expenditures not
considered nonrecurrent as defined by 40 CFR 35.501-8.
4.4
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In some instances, prior to Fiscal Year 1973, EPA designated a certain amount of the
total non-Federal program budget as nonmatchable. This amount is stipulated on the
grant award document. In determining total allowable costs eligible for EPA participa-
tion, the nonmatchable non-Federal costs should be excluded.
The auditor should determine that the matchable non-Federal recurrent costs of the
program are not less in any year than the total non-Federal recurrent expenditures were
for the applicant's air pollution control program in the applicant's fiscal year immediately
preceding the beginning of the support period. (The support period is identified in the
grant award.)
2. Water Program Grants
In auditing water program grants (see EPA Interim Regulations 40 CFR 35.559-6), the
auditor should determine that recurrent non-Federal funds expended by the grantee
during the fiscal year in carrying out its water pollution control program as accepted by
audit, are not less than the recurrent non-Federal expenditures made during Fiscal Year
1971 or the first year of Federal support, if such Federal support was initiated subsequent
to the fiscal year ending June 30, 1971. EPA Office of Audit will provide the Fiscal Year
1971 expenditures that should be used as the base. When the grantee did not distinguish
between expenditures under the incentive grant and basic grant, the auditor should
determine whether the Fiscal Year 1971 base has been met by performing the following
calculation:
Total allowable expenditures per audit $
Less: EPA base grant
EPA incentive grant
Non-Federal expenditures $__
Non-Federal Expenditures in Base year $
EPA awards incentive grants to fund key programs identified by the EPA annual
guidance. Generally, the state or interstate agency commits to produce certain outputs in
those key areas for which incentive funds have been provided. The auditor should
determine, by review of EPA program evaluations, that programmed outputs have been
completed or substantially completed. In addition, the auditor should determine if EPA
made any adjustments to incentive grants as a result of the grantee's failure to
substantially produce those outputs programmed.
4.8 MATCHING SHARE
Generally, program funding will be provided by both EPA and its grantees. EPA Final
Grant Regulations, 40 CFR 30.720 require mandatory cost sharing for all projects for
which EPA grants are awarded. Except as required by statute, contributions made by the
grantee can be no less than 5 percent of the allowable actual project costs. Contributions
(non-Federal matching share) from the grantee may consist of direct, in-kind contribu-
tions (see FMC 74-7, Attachment F), and allowable indirect costs. For grants awarded by
EPA, the cost sharing to be provided by grantees will vary depending on the type of grant
program.
In performing the audit of project costs as described in Chapter 3: Audit of Costs, the
auditor will be reviewing both the grantee's and EPA's portion of the project. In reviewing
the grantee's portion, the auditor should ascertain the source of the non-Federal matching
share. Unless specifically authorized by law, expenditures incurred with Federal funds
may not be considered a part of the non-Federal matching share.
4.5
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In addition, the auditor should be alert for instances where the non-Federal matching
share for the program under audit has been included as a matching share on any other
Federally assisted program.
When volunteer services have been claimed as in-kind contributions, the auditor should
determine whether:
• volunteer services were provided to accomplish a normal part of the project;
• documentation has been maintained to support the number of hours charged to the
grant and the type of service provided;
• rates charged are consistent with the regular rates paid for similar work in other
activities;
• rates charged for services required for Federally assisted activities and not found in the
other activities of the grantee are consistent with those paid for similar work in the
labor market in which the grantee competes for the kind of services involved; and
• rates charged for services furnished by an employer other than the grantee are valued
at the employee's regular rate of pay (exclusive of fringe benefits and overhead cost)
provided that the services are in the same skill for which the employee is normally paid.
In addition, the auditor should determine whether the prices assessed to contributed
materials are not more than the cost of the materials to the donor or current market prices,
whichever is less, at the time they are charged to the project.
The auditor should determine that the value of donated equipment or buildings was
based on the donor's cost less depreciation or the current market price of similar property,
whichever is less.
When land or use of space has been claimed as an in-kind contribution, the auditor
should determine whether the value charged has been established by an independent
appraiser (i.e., private realty firm or General Services Administration representatives)
and certified by the responsible official of the grantee.
Finally, the auditor should determine whether the other charges claimed as in-kind
contributions were incurred specifically for and in direct benefit to the grant program and
were adequately supported and permissible under the law.
4.9 COMPUTATION OF FEDERAL SHARE
The Federal share for any given grant can be defined as the percentage of total grant
expenditures in which EPA participates. This participation is usually in the form of
Federal funds awarded to a grantee, however, it could include some other form of
contribution to a grant program, such as personnel, equipment, or services, paid for by
EPA and provided to the grantee. The maximum percentage of Federal participation in a
particular type of grant usually can be found in the Federal legislation under which the
grant was authorized. The maximum Federal share allowed by law, however, is not
necessarily the percentage which a grantee is authorized to receive. Accordingly, the
auditor will have to determine what the Federal share is for the particular grant being
audited. In the case of grants where the Federal share is set forth in the grant agreement
(award), the determination will be relatively easy. The auditor will only have to determine
that the Federal share stipulated is the same as or less than the maximum share allowed
by law. However, the auditor will encounter a number of grants where the Federal share is
not stipulated. In such instances, the auditor will have to calculate the Federal share.1 To
make this calculation, the auditor should first obtain a copy of the most recent grant
award document for the grant being audited. Using the information on the award
document, the auditor should perform the following Federal share computation:
4.6
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CHAPTER 5: EXIT CONFERENCE
Through the course of the audit, the auditors are expected to discuss deficiencies
disclosed during audit, their effect, and possible corrective actions with responsible
officials of the audited parties. The primary purpose of these discussions is to ensure that
the audited parties had an opportunity to provide additional data with respect to the
problem areas identified during audit.
5.1 For audits with no findings or audits without significant findings the auditor should
notify the Area Audit Manager and then hold an exit conference with the audited party
(at the site or by telephone). When the audited party is a subcontractor, a separate or joint
exit conference may be held with the grantee and the subcontractor. If the audited parties
desire to provide written comments with respect to matters raised in the audit, they should
be furnished a copy of the draft report and afforded the opportunity to provide written
comments.
5.2 For audits with significant findings the auditor should initially discuss the findings
with the Area Audit Manager by telephone. The auditor should then hold a preliminary
exit conference with the audited party to discuss the factual information disclosed during
the audit. It should be emphasized that the audit results and findings are tentative at that
point, and that they will be included in a draft report forwarded to the audited party for
written comment.
The auditor should prepare his draft audit report, highlighting the costs considered
unallowable and other deficiencies disclosed during the audit. The Area Audit Manager
should be promptly furnished a preliminary copy of the draft report. If after reviewing the
draft report, the Area Audit Manager agrees that the deficiencies are significant, he will
meet with the responsible EPA program officials to brief th<-m of the situation. In addition
he shall require that the grantee and other audited parties (such as those performing
under subagreements) be furnished a copy of the draft audit findings and conclusions to
enable review and written comment prior to the exit conference.
After receipt of written comments from the audit td parties, the auditor will conduct an
exit conference with each of the responsible parti' s involved. Thus, exit conferences must
be held with the grantee and other parties having subagreements whose operations andlor
costs were audited.
5.3 The auditor's workpapers shall contain the name of the auditor who conducted the
exit conference, the names and positions of grantee representatives, details of the matters
discussed, and a summary of the reactions of the audited parties.
A synopsis of the audited parties reactions to the conclusions and findings will be
included in the section of the audit report entitled, "Comments on Compliance,
Performance, and Internal Controls." When written comments are obtained, they may be
included as an attachment to the report. The auditor may also include any rebuttal
considered appropriate in light of the audited parties comments.
5.1
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CHAPTER 6: THE AUDIT REPORT
6.1 INTRODUCTION
Audits of EPA grants may result in findings and recommendations concerning costs
questioned or deficiencies in the administration of the grant. For effective administration
of the grant program, it is imperative that audit reports contain all findings, observations,
conclusions, and recommendations resulting from the audit.
6.2 CONTENT AND FORMAT OF AUDITORS' REPORT
The audit report will be prepared in accordance with the following instructions and in
the formats shown in the Example Accountant's Reports and Exhibits and Schedules
contained at the end of this chapter.
1. Scope Paragraph
a. The scope paragraph will identify the grant audited and the period audited.
b. The scope paragraph will also include a statement that the examination was made
in accordance with the EPA "Audit Guide for EPA Grants (Other Than Construction
Grants)" and the GAO "Standards for Audit of Governmental Organizatior s, Programs,
Activities, and Functions." If conditions were encountered which preclude the inclusion of
such a statement, an appropriate statement will be prepared explaining the nature of
conditions which required a deviation.
2. Opinion
The report will contain an opinion as to the costs claimed under the EPA grant. Based
on the review of the reasonableness, allowability, and allocability of costs claimed in
conjunction with grant terms and conditions and applicable Federal regulations, the
auditor will classify costs as "accepted" or "questioned" in a separate schedule in the
report.
3. Comments on Compliance, Performance, and Internal Controls
The report will include a separate section relating to the compliance, performance and
internal control reviews made during the examination. The report should include a
discussion of any deficiencies identified during the course of the audit. In addition, the
report must contain comments as to the adequacy of the accounting system and
procurement system.
6.3 PRESENTING THE FINDINGS
Audit findings, whether they relate to costs questioned or grant administration
procedures, will be presented in sufficient written detail to ensure that report recipients
may readily:
• understand the finding;
• understand the basis for the finding;
• grasp the significance of findings not directly related to the costs questioned; and
• include management improvement recommendations as applicable.
6.4 AUDITOR'S REPORT ON SUBAGREEMENT COSTS
Findings and recommendations concerning costs questioned or deficiencies disclosed in
the audit of subagreement costs will be reported on in a separate Schedule.
6.1
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EXAMPLE AUDITOR'S REPORTS
6.2
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EXAMPLE AUDITOR'S REPORT
8-
o
GO
Area Audit Manager
Office of Audit
Environmental Protection Agency
Any City, U.SA.
We have examined the statement of costs claimed (Exhibit A) by the City of Anywhere,
U.S.A. under EPA Grant No. XXXX for the period (month, day, year) to (month, day,
year). Our examination was made in accordance with the "Standards for Audit of
Governmental Organizations, Programs, Activities, and Functions" the "Audit Guide for
EPA Grants (Other Than Construction Grants)" issued in February 1976 by EPA, and
accordingly included such tests of the accounting records and such other auditing
procedures as we considered necessary in the circumstances.
As part of our examination, the allowability of costs claimed under the Grant was
determined in accordance with the provisions of the Grant and applicable Federal
regulations. Schedule A-I sets forth the costs which we questioned in this regard and
includes an explanation of the reason such costs were questioned.
o
•a
•a
o
In our opinion subject to the effects, if any, on Exhibit A of the ultimate resolution by the
Environmental Protection Agency of the questionable expenditures referred to in the
preceding paragraph, Exhibit A presents fairly the financial information contained
therein in accordance with the financial provisions of the Grant and generally accepted
accounting principles.
II
In addition, in connection with our examination of the statement of costs claimed, we
have reviewed the Grantee's system of internal control and compliance with provisions of
the Grant and applicable Federal regulations. Our report thereon appears as Exhibit B.
This report is intended for use in connection with the grant to which it refers and should
not be used for any other purpose.
DATE
SIGNATURE
6.3
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EXHIBIT A
City of Anywhere, U.SA.
Statement of Costs Claimed Under EPA Grant No. XXXX
For the Period (month, day, year) Through (month, day, year)
Costs
Claimed
Personnel $1,225,373
Indirect Costs 122,537
Equipment 368,848
Subcontracts 94,473
TOTAL COSTS $1,811,231
FEDERAL SHARE: 44 Percent $ 796,941
EPA Grant No. XXXX was awarded to the City of Anywhere, U.S.A. on (month, day,
year). The grant provided for " ". Work under the grant began
on (month, day, year) and was completed (month, day, year). See Schedule A-I through A-
3 for costs accepted and questioned during the audit.
6.4
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Schedule A-l
City of Anywhere, U.S.A.
EPA Grart No. XXXX
Statement of Costs Claimed, Accepted and Questioned
For the Period (month, day, year) Through (month, day, year)
Description
Personnel
Indirect Costs
Equipment
Subcontracts
Total Costs
Audit Recommendation
Costs Costs Costs
Claimed Accepted Questioned
$1,225,373
122,537
368,848
94,473
$1,225,373
-0-
291,196
86,770
$ -0-
122,537
77,652
7,703
Reference
Notes
1
2
3
$1,811,231 $1,603,339 $207,892
Federal Share -
44 Percent
$ 796,941 $ 705.469 $ 91,472
Federal Funds
Provided
$ 814,000
Amount due to Government
or Grantee
$ 108,531
Reference Notes
1. The 10 percent indirect cost rate included in the grant was based on an indirect cost
rate proposal prepared, audited and negotiated with the Department of Health, Education
and Welfare for FY 1969. Since that date, the City had not prepared any indirect cost
proposals. The DHEW Guide for Local (government Institutions required local grantees to
prepare indirect cost proposals annually. Such proposals should be retained for future
audit. Since the City had prepared no such proposals, it has not complied with Federal
requirements and accordingly is not entitled to indirect costs.
Grantee officials indicated that they were unaware of the requirement to prepare
indirect cost proposals annually.
2. For an explanation of the amounts questioned, see comments included in property
management section of the comments on Compliance, Performance, and Internal
Controls. Exhibit B.
3. Amounts accepted and questioned were based on an audit of the subcontractor's
records. See Schedule A-2.
6.5
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Schedule A-2
XYZ Corporation
Subcontract XXXX Under EPA Grant No. XXXX
Statement of Costs Claimed, Accepted, and Questioned
For the Period (month, day, year) Through (month, day, year)
Audit Recommendation
Costs Costs
Description Claimed Accepted Questioned
Personnel
Fringe Benefits
Indirect Costs
Travel
Total Costs
Fee
Costs
Claimed
$48,712
13,152
20,859
5,000
$87,723
6,750
Reference
Notes
$45,797
10,067
19,620
4,536
$80,020
6,750
$2,915
3,085
1,239
464
$7,703
-0-
ScheduleA-3
1
2
3
Total Costs Plus
Fixed Fee
Funds Provided
$94,473
Amount Due Grantee
$ 7,703
Reference Notes
1. The Corporation claimed fringe benefits at a rate of 27 percent of direct payroll costs.
This rate covered vacation, sick leave, holidays, and the company's portion of payroll
taxes. In analyzing this rate, we noted that the company included the 13 days of sick leave
accrued each year. Since Corporation employees are not paid for sick leave unless it is
taken, the accrual does not represent an actual cost. Accordingly, we adjusted the fringe
benefit rate by removing the accrual and adding in the actual sick leave taken. This
reduced the Corporation's fringe benefit rate to 22 percent. We then calculated allowable
fringe benefits as follows:
6.6
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Schedule A-2
Claimed: 27 percent of $48,712 $13,152
Accepted: 22 percent of $45,761* 10,067
Questioned $ 3,085
* Amount of accepted personnel costs.
Corporation officials agreed with the adjustment to the fringe benefit rates.
2. Indirect costs were claimed at the fixed rate of 42 percent of direct labor included in the
subcontract. Amounts questioned were computed as follows:
Claimed: 42 percent of $48,712 $20,459
Accepted: 42 percent of $45,761* 19,220
Questioned $1,239
* Accepted personnel costs
3. The Corporation's administrative procedures provide a per diem rate of $25 for
overnight travel. In several instances, travelers were reimbursed for actual subsistence
expense which exceeded the per diem allowance. The subsistence costs in excess of the per
diem are unallowable in that the costs were not incurred in accordance with the
Corporation's normal practices. The total of $464 of unallowable travel costs were charged
to the EPA subcontract.
Details of the unallowable claims are shown as follows:
Maximum Unallowable
No. of Using Travel
Employee Date of Trip Days Subsistence Per Diem Cost
A May 1-5, 1973 4% $166.82 $118.75 $ 48.07
B May 24-30, 1973 6 382.54 150.00 232.54
C Mar 20-25, 1974 5V6 291.66 137.50 154.16
D Mar 14-16, 1974 2% 85.70 56.25 29.45
Total $926.72 $462.50 $464.22
Corporation officials told us that the maximum per diem was not applied because trips
were made to high cost areas.
6.7
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Schedule A-3
XYZ Corporation
Subcontract XXXX Under EPA Grant No. XXXX
Analysis of Payroll Costs
Payroll Payroll Payroll
Costs Costs Costs Reference
Individual Claimed Accepted Questioned Notes
A $14,897 $13,428 $1,469 1
B 14,911 14,430 481 2
C 11,043 10,225 818 3
D 3,199 3,052 147 4
E 3,257 3,257 -0-
F 1,405 1,405 -0-
Total $48,712 $45,797 $2,915
Reference Notes
1. Mr. A was employed full time at a salary of $10,500 per annum. Mr. A is a professional
employee who receives no overtime. His salary was charged to the subcontract at $5.05 an
hour, $10,500 -: 2080 hours. Our analysis of Mr. A's salary claims for FY 1973 and FY 1971
are as follows:
FY 1973
Claimed: 2,350 Hours @ $5.05/Hr., $11,867
Accepted: Total Salary Paid Mr. A 10,500
FY 1973 Questioned $1,367
FY 1974
Claimed: 600 Hours @ $5.05/Hr., $3,030
Accepted: During 1974 Mr. A worked 2,150 hours, by
dividing 2,150 hours into Mr. A's salary,
$10,500, we computed an actual salary of
$4.88/hr - 600 Hours @ $4.88/Hr., 2,928
FY 1974 Questioned $ 102
Total Questioned $1,469
2. In FY 1973, Mr. B's time records showed only 1,450 hours spent on the subcontract. We
have questioned the 100 hours claimed in excess of that amount using the hourly salary
rate claimed by the subcontractor.
100 Hours @ $4.81/Hr., $ 481
3. In FY 1974, Mr. C's time records showed only 1,300 hours spent on the subcontract. We
have questioned the 200 hours claimed in excess of that amount using the hourly salary
rate claimed by the subcontractor.
200 Hours @ $4.09/Hr., $ 818
6.8
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4. Mr. D was employed full time at a salary of $9,500 per annum. Mr. D is a professional
employee who receives no overtime. His salary was charged to the subcontract at $4.57 an
hour, $9,500 -: 2080 hours. Our analysis of Mr. D's salary claims are as follows:
FY 1973
Claimed: 700 hours @ $4.57/Hr., $3,199
Accepted: During 1973 Mr. D worked 2180 hours,
by dividing 2180 hours into Mr. D's salary,
$9,500, we computed an actual salary of
$4.36/hr. - 700 hours @ $4.36/Hr.,
Questioned
Corporation officials indicated that Mr. A and Mr. D had put in extra time and that they
did intend to pay them for this time. They agreed however that the claims for Mr. B and
Mr. C had inadvertently been overstated.
(While the Corporation may have intended to pay Mr. A and Mr. D for their overtime, no
action had been taken to do so. There were no accruals of other liabilities established to
indicate that payment would be made.)
6.9
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EXHIBIT B
CITY OF ANYWHERE, U.S.A.
EPA GRANT NO. XXXXX
COMMENTS ON COMPLIANCE, PERFORMANCE,
AND INTERNAL CONTROLS
As part of our examination, we reviewed and tested the grantee's system of internal
accounting controls to the extent we considered necessary to evaluate the system as
required by generally accepted auditing standards. Under these standards the purpose of
such evaluation is to establish a basis for reliance thereon in determining the nature,
timing, and extent of other auditing procedures that are necessary for expressing an
opinion on the financial reports. The objective of internal accounting control is to provide
reasonable, but not absolute, assurance as to the safeguarding of assets against loss from
unauthorized use or disposition, and the reliability of financial records for preparing
financial statements and maintaining accountability for assets. The concept of
reasonable assurance recognizes that the costs of a system of internal accounting controls
should not exceed the benefits derived and also recognizes that the evaluation of these
factors necessarily requires estimates and judgments by management.
There are inherent limitations that should be recognized in considering the potential
effectiveness of any system of internal accounting controls. In the performance of most
control procedures, errors can result from misunderstanding of instructions, mistakes of
judgment, carelessness, or other personal factors. Control procedures whose effectiveness
depends upon segregation of duties can be circumvented by collusion. Similarly, control
procedures can be circumvented intentionally by management either with respect to the
execution and recording of transactions or with respect to the estimates and judgments
required in the preparation of financial statements. Further, projection of any evaluation
of internal accounting controls to future periods is subject to the risk that the procedures
may become inadequate because of changes in conditions and that the degree of
compliance with the procedures may deteriorate.
The Audit Guide for EPA Grants (Other Than Construction Grants) issued February
1976 by the -Environmental Protection Agency requires a review and evaluation of the
adequacy of the accounting system and internal controls to safeguard assets, check the
accuracy and reliability of the accounting data, promote operating efficiency, and
encourage compliance with prescribed management policies and such additional fiscal,
accounting, and administrative requirements as EPA may establish. We understand that
procedures in conformity with the criteria referred to in the aforementioned Audit Guide
are considered by EPA to be adequate for its purposes in accordance with the Audit Guide
and that procedures that are not in conformity therewith indicate some inadequacy for
such purposes. Based on this understanding and on our study, we believe that the City's
procedures were inadequate for the purposes of EPA because of the conditions described
below, which we believe are material weaknesses in relation to the grant to which this
report refers. In addition to such weaknesses, other conditions which we believe are not in
conformity with the criteria referred to above are described on the following pages.
6.10
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GRANTEE'S PERFORMANCE
In June 19XX, EPA terminated this grant. The close-out report prepared by program
officials stated:
"Because of the poor performance record and because continuation of this program did
not support the immediate objectives of the FY 19XX program, we determined that we
could not justify continuation of this program. It was decided to inform the grantee that
the project would be terminated and that a final report should be submitted
documenting all data and progress to date.
"This office requested that the grantee submit a final technical report including the
Phase I interim report updated to include a description of all field work conducted and
data collected. The Phase I report, as submitted, covers project planning and
preliminary laboratory analysis in preparation for the field studies. Record-keeping and
reporting on the field activities is totally inadequate. It appears that with the exception
of the Phase I report the grantee dumped out his files, correspondences and all, and
bound them with a cover titled final report. Unfortunately, adequate technical records of
the field work are not believed to exist and personnel connected with the project left the
grantee's organization before or within several weeks after the 'Final Report' was
submitted. It is recommended that the 'Final Report' not be published."
Since the EPA grant was awarded to accomplish specific objectives, the acceptability of
the work performed becomes critical in the determination of whether or not the grantee
has earned his grant. In this instance, the program official's close-out report raised
considerable doubt as to the acceptability of work performed. The report did not, however,
indicate whether the grantee's "Final Report" was acceptable or sufficient competent
work was performed by the grantee to earn the total EPA grant.
Recommendation: We recommend that EPA obtain a determination as to the
acceptability of the grantee's work under this grant from responsible program officials
prior to closing out the grant. If EPA decides that the work was not acceptable, they
should establish the value of work actually performed.
GRANTEE'S ACCOUNTING SYSTEM
Several improvements to the accounting system are necessary in order for it to be
considered adequate. Specifically, these are the maintenance of time and attendance
records, and initiation of a procedure to provide an appropriate review and authorizing
signature on all "memo invoices" forwarded to the accounting division for payment.
There were no formal procedures for maintenance of time and attendance records at the
time of our audit. Even though the personnel working at the Agency are employed solely
for grant work, a record of time and attendance is necessary for annual and sick leave
purposes and as a matter of good business practice.
The personnel working under the grant were hired as independent consultants. As such,
a "memo invoice" was prepared for each employee every pay period by the administrative
assistant. These "memo invoices" were then forwarded to the accounting division where
individual pay checks were prepared and the expenditures recorded on the accounting
records. At the time of our audit, there was no procedure in effect for a review of these
invoices, or an authorizing signature by the Administrator of the Agency. As a result, the
administrative assistant was preparing the documentation for payment of all pay checks,
including her own, as well as other miscellaneous payments, and the accounting division
made payment without further verification. In order to ensure proper internal control and
6.11
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protect all employees involved, "memo invoices" should be reviewed by the Administrator
and an authorizing signature affixed, prior to payment.
Recommendation: We recommend that the grantee be required to implement procedures
to assure that time and attendance records are maintained to strengthen internal controls
over processing of "memo invoices."
Grantee's Comments: Grantee officials indicated a willingness to make the suggested
changes.
GRANTEE'S PROCUREMENT SYSTEM
The City did not go through a competitive selection process in hiring their
subcontractor. Instead, they simply hired the XYZ Corporation with whom they had done
previous business. In addition, no reviews were made to determine whether the $100,000
cost proposed by the Corporation under their cost plus fixed fee contract was reasonable.
Thus, the procurement was not made in accordance with FMC 74-7.
Recommendation: We recommend that the grantee be informed of the necessity of
adhering to the procurement requirements contained in FMC 74-7. In this regard, they
should be made aware that in the future the failure to adhere to such requirements may
result in the total costs of subcontracts being disallowed.
Grantee's Comments: Grantee officials indicated that they would request a copy of
FMC 74-7 and assure the adequacy of their procurement methods.
GRANTEE'S PROPERTY MANAGEMENT
At the termination of the grant, the grantee did not properly account for $368,848 of
luioment purchased with oroiect funds.
equipment purchased with project funds.
On September 21, 19XX, EPA's Grants Administration Division sent a letter to the
grantee concerning the actions needed with respect to the termination of the project. The
letter stated:
"In accordance with Agency Interim Grants Regulations, you are required to submit to
this office ... a listing of all items of equipment acquired with grants funds with an
acquisition cost of $300 or more and having a useful life of more than one year. This
listing should include a complete description of the equipment, original date of
purchase, original cost, an estimate of the current value and condition as well as your
recommendation as to the disposition of each item of equipment. A negative report
would aid in closing out your project if there are no applicable equipment items."
On November 12, 19XX, responsible representatives of the grantee responded that:
"To the best of my knowledge, there is nothing on inventory that would meet the
requirements of your letter of September 21."
In reviewing the City's accounting records, we found, however, that this response was
incorrect. As shown on Exhibit B, the City had actually acquired 14 such pieces of
equipment with $368,848 of project funds. At the time of our review they had already
disposed of 11 pieces of the equipment. In this regard we noted that one piece of equipment
had been scrapped; three pieces of equipment had been sold for $3,275; and seven pieces of
equipment valued at $62,376 have been traded in on new equipment.
By relating EPA's portion of the project costs to the total project costs, we determined
that EPA provided 44 percent of the project costs. Thus, EPA's interest in the property, as
computed in accordance with Paragraph 3c of FMC Circular 74-7 would be 44 percent of
the equipment's current fair market value of $77,652.
6.12
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Recommendation: We recommend that EPA take appropriate action to recover the
Federal share of the fair market value of the equipment purchased with project funds.
Grantees Comments: We discussed this matter with representatives of the grantee who
indicated that they had misinterpreted GAD's letter and actually believed that the listing
of equipment was to be furnished to the auditor at the time of audit. In addition, they
pointed out that the equipment still on hand, as well as the equipment acquired under the
trade-in, was being used at other municipal landfills.
SUBCONTRACTOR'S PERFORMANCE
The Corporation completed its work and submitted its final report to the City of
Anywhere, U.S.A. on May 15, XXXX. According to correspondence, City officials accepted
this report and thanked the Corporation for its excellent work.
SUBCONTRACTOR'S ACCOUNTING SYSTEM
Several improvements in the Corporation's accounting system are needed in order for it
to be considered fully adequate.
The Corporation must establish procedures to adjust the payroll billing rates to reflect
the actual cost of work performed. When professional employees are not paid for overtime
hours, the salary charges should be computed by dividing the employees salary by the
hours actually worked.
Improved reconciliation procedures are needed to assure that salary charges are based
upon labor distribution records which tie with the Corporation's payroll. This will help
prevent unsupported or inappropriate salary charges.
In computing its fringe benefits rate, the Corporation should include only the costs of
sick leave actually expended. This will help prevent the over-recovery of fringe benefits
costs.
Recommendation: We recommend that the contractor implement procedures to assure
that:
(1) Salary charges are based on actual salary costs divided by actual hours worked;
(2) salary costs are properly supported by appropriate time records; and
(3) fringe benefits rates be computed exclusive of accrued sick leave.
Subcontractor's Comments: Subcontractor officials gave no indication as to whether or
not they would take the required corrective actions.
Grantee's Comments: The grantee concurred with the audit finding and recommenda-
tion.
SUBCONTRACTOR'S PROCUREMENT SYSTEM
Since no items were purchased under this subcontract, no review was made of the
Corporation's procurement system.
SUBCONTRACTOR'S PROPERTY MANAGEMENT
Since no equipment has been purchased under Federal grants or contracts, no review
was made of the Corporation's property management system.
6.13
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EXAMPLE AUDITOR'S REPORT
Area Audit Manager
Office of Audit
Environmental Protection Agency
Any City, U.S.A.
We have examined the statement of costs claimed (Exhibit A) by the City of Anywhere,
U.S.A. under EPA Air Program Grant No. XXXX for the period (month, day, year) to
(month, day, year). Our examination was made in accordance with the "Standards for
§• Audit of Governmental Organizations, Programs, Activities, and Functions" and "Audit
Guide for EPA Grants (Other Than Construction Grants)" issued February 1976 by EPA,
and accordingly included such tests of the accounting records and such other auditing
procedures as we considered necessary in the circumstances.
As part of our examination, the allowability of costs claimed under the Grant was
determined in accordance with the provisions of the Grant and applicable Federal
regulations. Schedule A-l sets forth the costs which we questioned in this regard and
includes an explanation of the reason such costs were questioned.
In our opinion subject to the effects, if any, on Exhibit A of the ultimate resolution by the
§ Environmental Protection Agency of the questionable expenditures referred to in the
preceding paragraph, Exhibit A presents fairly the financial information contained
therein in accordance with the financial provisions of the Grant and generally accepted
accounting principles.
In addition, in connection with our examination of the statement of costs claimed, we
have reviewed the Grantee's system of internal controls and compliance with provisions
§ i3 of the Grant and applicable Federal regulations. Our report thereon appears as Exhibit B.
'53 fa This report is intended for use in connection with the Grant to which it refers and should
«! g not be used for any other purpose.
-On
DATE
SIGNATURE
6.14
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EXHIBIT A
City of Anywhere, U.S A.
EPA Grant No. XXXX
Statement of Costs Claimed
For the Period (month, day, year) Through (month, day, year)
Costs
Claimed
Personnel $ 937,562
Equipment 46,462
Supplies 31,813
Travel 14,099
Consultation & Services 48,984
Alterations & Rennovations 4,241
Tuition 1,262
Other 56,261
TOTAL COSTS $1,140,684
FEDERAL SHARE: $ 657,814
EPA Air Program Grant No. XXXX was awarded to the City of Anywhere U.S.A. on
(month, day, year). The grant provided for " ". This project grant covers the
period from (month, day, year) through (month, day, year). See Schedule A-l for costs
accepted and questioned during the audit.
6.15
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Schedule A-l
City of Anywhere, U.S.A.
EPA Grant No. XXXX
Statement of Costs Claimed, Accepted, and Questioned
For the Period (month, day, year) Through (month, day, year)
Auditor's Recommendations
Costs Costs Costs Reference
Description Claimed Accepted Questioned Notes
Personnel $ 937,562 $ 937,562 $
Equipment 46,462 46,462
Supplies 31,813 31,813
Travel 14,099 14,099
Consultation & Services 48,984 48,984
Alteration & Renovations 4,241 4,241
Tuition 1,262 1,262
Other 56,261 43,895 12,366 1
Total $1,140,684 $1,128,318 $12,366
Federal Share $ 657,814 $ 595,978 $ 6,532 2
Federal Funds Provided $ 660,000
Amount Due Government $ 64,022
Reference Notes
1. The costs questioned under the"Other" category consist of $12,166 in refunds of fees and
$200 paid to a real estate firm.
In our opinion, the fees refunded should be considered as a reduction of income from fees
received and not as project maintenance expense.
The amount paid to the real estate firm is considered a real estate acquisition cost which is
an unallowable charge under FMC 74-4. Grantee officials agreed with costs questioned.
2. The Federal share reported by the grantee of $657,814 represented 57.67 percent of total
costs reported. The grant agreement, however, limited the Federal share to 52.82 percent of
total approved costs, resulting in the Federal share questioned as shown.
Grantee officials disagreed with our calculation of Federal share. They pointed out that
the law permitted a grant of up to 60 percent of total eligible costs. We explained that the
grant was offered and accepted with the percentage limitations. Also, that the Office of
Audit has no authority to change the conditions of the grant. Such authority may only be
exercised by those officials responsible for the award and administration of the grant.
6.16
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EXHIBIT B
City of Anywhere, U.S.A.
EPA Grant No. XXXX
COMMENTS ON COMPLIANCE, PERFORMANCE, AND
INTERNAL CONTROLS
As part of our examination, we reviewed and tested the grantee's system of internal
accounting controls to the extent we considered necessary to evaluate the system as
required by generally accepted auditing standards. Under these standards the purpose of
such evaluation is to establish a basis for reliance thereon in determining the nature,
timing, and extent of other auditing procedures that are necessary for expressing an
opinion on financial reports.
The objective of internal accounting control is to provide reasonable, but not absolute,
assurance as to the safeguarding of assets against loss from unauthorized use or
disposition, and the reliability of financial records for preparing financial statements and
maintaining accountability for assets. The concept of reasonable assurance recognizes
that the costs of a system of internal accounting controls should not exceed the benefits
derived and also recognizes that the evaluation of these factors necessarily requires
estimates and judgements by management.
There are inherent limitations that should be recognized in considering the potential
effectiveness of any system of internal accounting controls. In the performance of most
control procedures, errors can result from misunderstanding of instructions, mistakes of
judgement, carelessness, or other personal factors. Control procedures whose effectiveness
depends upon segregation of duties can be circumvented by collusion. Similarly, control
procedures can be circumvented intentionally by management either with respect to the
execution and recording of transactions or with respect to the estimates and judgements
required in the preparation of financial statements. Further, projection of any evaluation of
internal accounting controls to future periods is subject to the risk that the procedures may
become inadequate because of changes in conditions and that the degree of compliance
with the procedures may deteriorate.
The Audit Guide for EPA Grants (Other Than Construction Grants) issued February
1976 by the Environmental Protection Agency requires a review and evaluation of the
adequacy of the accounting system and internal controls to safeguard assets, check the
accuracy and reliability of the accounting data, promote operating efficiency, and
encourage compliance with prescribed management policies and such additional fiscal,
accounting, and administrative requirements as EPA may establish. We understand that
procedures in conformity with the criteria referred to in the aforementioned Audit Guide are
considered by EPA to be adequate for its purposes in accordance with the Audit Guide and
that procedures that are not in conformity therewith indicate some inadequacy for such
purposes. Based on this understanding and on our study, we believe that the County's
procedures were adequate for the purposes of EPA except for the conditions described
below, which we believe are material weaknesses in relation to the grant to which this
report refers. In addition to such weaknesses, other conditions which we believe are not in
conformity with the criteria referred to above are described on the following pages.
PERFORMANCE
According to Region I's evaluation of the Grantee's air program, the City has one of the
best air pollution control programs in the Region. No significant weaknesses were
discussed in the Region's evaluation report.
6.17
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ACCOUNTING SYSTEM
Based upon our review, we have determined that the Grantee's accounting system is
adequate to account for costs incurred under the EPA grant.
PROCUREMENT SYSTEM
The procurements made under the grant were handled in accordance with the City's
normal procurement practices and such practices were found to be in conformance with
FMC 74-7.
PROPERTY MANAGEMENT
In reviewing property management, we found that the Grantee's procedures were in
accordance with EPA regulations. Our tests indicated that these procedures were being
followed.
6.18
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APPENDIX A
EPA FINANCIAL ASSISTANCE PROGRAMS
A.I
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ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF AIR AND WASTE MANAGEMENT
66.001 AIR POLLUTION CONTROL PROGRAM GRANTS
FEDERAL AGENCY: OFFICE OF AIR AND WASTE MANAGEMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Sections 105 and 106, Clean Air Act of 1963; Public Law 88-206 as
amended by Public Law 91-604; 42 U.S.C. 1857c.
OBJECTIVES: To assist State, municipal, intermunicipal, and interstate agencies in
planning, developing, establishing, improving, and maintaining adequate programs
for prevention and control of air pollution or implementation of national primary and
secondary air quality standards.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Grant funds may be used for costs specifically
incurred in the conduct of a project in accordance with the purposes enumerated in the
approved application. These include personnel costs, supplies, equipment, training of
personnel, travel, and other necessary expenditures during the approved project period.
Funds may not be used for construction of facilities, nor for expenses incurred other
than during each approved award period.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Any municipal, intermunicipal, State, or interstate agency with
legal responsibility for air pollution control is eligible for grant support provided such
organization furnishes funds for the current year in excess of its expenditures for the
previous year for its air pollution program.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: The application must supply evidence of legal
authority for air pollution control; evidence of the availability of non-Federal matching
funds; and a workable program officially adopted for the agency. A State Plan,
coordinated with the Governor's office, is required under Part III of OMB Circular No.
A-95 (revised).
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Prior to approval of any grants, the official State air
pollution control agency must coordinate local efforts. The standard application forms
as furnished by the EPA and required by FMC 74-7 must be used for this program.
Application Procedure: Requests for application forms and completed applications
should be submitted to the appropriate EPA Regional Grants Administration Branch.
Application must meet the requirements of the grant regulations and will be reviewed
to determine merit and relevancy of the proposed project.
Award Procedure: Notification of grant award must be made to the State Central
Information Reception Agency and Department of Treasury on SF 240.
Deadlines: None.
Range of Approval/Disapproval Time: 90 to 120 days.
Appeals: None.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: For State, interstate and intermunicipal
programs with an approved applicable State Implementation Plan may receive up to 75
percent Federal, others 66 2/3 percent Federal. The amount of Federal share of grant
costs should be determined by reference to the entitlement criteria set forth in Section
A.2
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105 of the Act. Not more than 10 percent of the funds available shall be granted for air
pollution control programs in any one-State.
Length and Time Phasing of Assistance: The term of grant shall be determined at
time of grant award.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interim and final progress and
expenditure reports).
Audits: Subject to inspection and audit by EPA and Comptroller General.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3 years
after the end of each budget period, and if questions still remain, such as those raised as
a result of audit, related records should be retained until the matter is completely
resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0108-0-1-404.
Obligations: (Grants) FY 73 $46,800,000; FY 74 est $48,500,000; and FY 75 est
$48,500,000.
Range and Average of Financial Assistance: $5,000 to $2,515,000; $201,700.
PROGRAM ACCOMPLISHMENTS: During fiscal year 1973, 232 grants, totaling
$46,800,000 were awarded to State, local, and regional air pollution control agencies to
develop, establish, improve and maintain air pollution control programs.
REGULATIONS, GUIDELINES, AND LITERATURE: Air Pollution Control
Program Grants, EPA Federal Register, Vol. 39, No. 41, 40 CFR 35; General Grant
Regulations and Procedures, EPA, Federal Regulations, Vol. 36, No. 228, 40 CFR 30.
INFORMATION CONTACTS:
Regional or Local Office: Contact appropriate EPA Regional Administrator.
Headquarters Office: For program information: Control Programs Development
Division, Air Quality Planning and Standards, Air and Waste Management,
Environmental Protection Agency, Research Triangle Park, NC 27711.
RELATED PROGRAMS: 66.002, Air Pollution Fellowships; 66.003, Air Pollution
Manpower Training Grants; 66.501, Air Pollution Control Research Grants; 66.005,
Air Pollution Survey and Demonstration Grants; 11.404, Weather Forecasts and
Warnings.
66.002 AIR POLLUTION FELLOWSHIPS
FEDERAL AGENCY: OFFICE OF AIR AND WASTE MANAGEMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Section 103 of the Clean Air Act, 42 U.S.C. 1857b. Public Law 88-
206, as amended by Public Law 91-604.
OBJECTIVES: To encourage and promote the specialized training of individuals as
practitioners in pollution abatement and control. Agency fellowships for full-time
study are awarded to present or prospective employees of a regional, State or local
t environmental pollution control or regulatory agency to provide training for and
upgrading of personnel in the areas of pollution abatement and control. Agency
fellowships for part-time study are awarded only to personnel presently employed in
an Agency. Special fellowships are awarded to individuals for study in specialty areas
which are supportive of pollution abatement and control efforts.
TYPES OF ASSISTANCE: Project Grants.
A.3
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USES AND USE RESTRICTIONS: Recipients of assistance under this part shall be
entitled to tuition and fees, an allowance for books and supplies up to a maximum of
$250, and the normal student holidays observed by an academic institution. In
addition, full-time fellows who are employees of regional, State or local environmental
pollution control or regulatory agencies may receive a stipend in an amount not to
exceed $6,500 from EPA. Part-time fellows may receive a small stipend when justified
by needs related to the purpose of the fellowship.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: All applicants for fellowships under this part must be (a)
citizens of the United States, its territories, or possessions, or lawfully admitted to the
United States for permanent residence, and (b) accepted by an accredited educational
institution for full- or part-time enrollment for academic credit in an educational
program which, for agency fellowships, directly relates to pollution abatement and
control, and for special fellowships, directly relates to, or is supportive of, pollution
abatement and control. Applicants for agency fellowships must be present or
prospective employees of a regional, State, or local environmental pollution control or
regulatory agency. Present employees must be recommended for a fellowship by their
employing agency. Priority in award of fellowships to prospective agency employees
will be given to those applicants who provide evidence of having explored by direct
agency contact, opportunities for employment. Such evidence may include written
appraisal of their employment potential and statement of probability of employment
with the agency upon completion of the training.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: Applicant must submit evidence of past academic
achievements (official transcripts of grades and degrees awarded), scores from
graduate record exams, and pertinent experience, as well as evidence of having made
necessary prior acceptance arrangements at the institution of his choice and with a
sponsor who will guide his studies.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: None.
Application Procedure: Requests for application forms and completed applications
should be submitted to the Washington, DC, Grants Administration Division
headquarters office.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine adequacy of the application in relation to grant regulations and to
technical and program evaluation to determine merit and relevancy of the project.
Deadlines: Applications should be submitted six months in advance of the academic
period in which the study would begin. Agency fellows may commence study at any
semester or quarter of the academic year. Fellowships study must be initiated within
six months of award or will be terminated. Special fellows may commence study only
at the fall semester or quarter.
Range of Approval/Disapproval Time: 90 to 120 days prior to the desired
commencement date.
Appeals: None.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: None.
Length and Time Phasing of Assistance: The term of grant shall be determined at
time of award.
POST ASSISTANCE REQUIREMENTS:
Reports: Such reports as specified in grant agreement.
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Audits: Fellowships are subject to inspection and audit by representatives of EPA and
the Comptroller General.
Records: None.
FINANCIAL INFORMATION:
Account Identification: 20-00-0108-0-1-404.
Obligations: (Grants) FY 73 $370,000; FY 74 est $400,000; and FY 75 est $400,000.
Range and Average of Financial Assistance: $1,000 to $10,000; $6,250.
PROGRAM ACCOMPLISHMENTS: In fiscal year 1973, 59 fellowships were funded
and 17 individuals completed graduate studies. During fiscal year 1974, EPA expects
to fund 40 full-time and 20 part-time agency fellows and 10 new and 5 continuations
in specialty areas.
REGULATIONS, GUIDELINES, AND LITERATURE: All information included in
application kit. Training Grants and Fellowships (Final Regulations), Environmen-
tal Protection Agency No. 778 (40 USC 45, 46); General Grant Regulations and
Procedures, EPA Federal Register, Vol. 36, No. 2286 (40 CFR 30). Vol. 38, Federal
Register.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact Environmental Protection Agency, Grants Administration Division, Wash-
ington, DC 20460. For program information contact Control Programs Develop-
ment Division, Office of Air Quality Planning and Standards, Office of Air and Waste
Management, Environmental Protection Agency, Research Triangle Park, NC 27711.
Telephone: (919) 549-8411, Ext. 2492.
RELATED PROGRAMS: 66.001, Air Pollution Control Program Grants; 66.003, Air
Pollution Manpower Training Grants; 66.501, Air Pollution Control Research Grants;
66.005, Air Pollution Survey and Demonstration Grants.
66.003 AIR POLLUTION MANPOWER TRAINING
GRANTS
FEDERAL AGENCY: OFFICE OF AIR AND WASTE MANAGEMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Section 103 of the Clean Air Act; Public Law 88-206, as amended
by Public Law 91-604; 42 U.S.C. 1857b.
OBJECTIVES: To develop career-oriented personnel qualified to work in pollution
abatement and control. Grants are awarded to assist in planning, implementing, and
improving environmental training programs; increase the number of adequately
trained pollution control and abatement personnel; upgrade the level of training
among State and local environmental control personnel; bring new people into the
environmental control field.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: In addition to the EPA general grant conditions 40
CFR 45, each training grant is subject to the following conditions: (a) The grantee
shall not require the performance of personal services by individuals receiving
training as a condition for assistance, (b) Recipients of assistance under training
grants shall be entitled to the normal student holidays observed by an academic
institution or the holiday and vacation schedule applicable to all trainees at a
nonacademic institution, (c) Recipients of assistance under training grants must be
citizens of the U.S., its territories, or possessions or lawfully admitted to the U.S. for
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permanent residence, (d) Generally training grants will provide for student only
through scholarships. Stipends are permitted when, in the judgement of the grantee,
they are needed to attract qualified students provided that not more than $20,000 may
be used for such stipends within a budget period and further provided that no stipend
may be less than $1,000 or more than $3,000. For additional statement of conditions,
see Vol. 38, Federal Register, June 20, 1973.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Section 103(b)(3): Air Pollution control agencies, public and
non-profit private agencies, institutions, organizations, and individuals. Section
103(b)(5): Personnel of air pollution control agencies and other qualified persons. No
grant may be made under this Act to any profit-making organization.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: The standard application forms are furnished by
EPA. Standards of FMC 74-7 only apply to State and local governments.
Application Procedure: Requests for application forms and completed applications
should be submitted to the Washington, DC Grants Administration Division
headquarters office listed below.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine the adequacy of the application in relation to grant regulations and to
technical and program evaluation to determine the merit and relevancy of the project.
Deadlines: None.
Range of Approval/Disapproval Time: 90 to 120 days.
Appeals: None.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost sharing is
required.
Length and Time Phasing of Assistance: The term of grant shall be determined at
time of award.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure reports).
Audits: Grants are subject to inspection and audit by representatives of EPA and the
Comptroller General.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0108-0-1-404.
Obligations: (Grants) FY 73 $1,750,000; FY 74 est $1,600,000; and FY 75 est $1,300,000.
Range and Average of Financial Assistance: $10,000 to $164,000; $45,000.
PROGRAM ACCOMPLISHMENTS: In fiscal year 1973, the program graduated ilO
technicians and specialists and 240 trainees with graduate degrees. For fiscal year
1974,180 trainees will be funded for graduate degrees, and 18 institutions will receive
support.
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REGULATIONS, GUIDELINES, AND LITERATURE: All information included in
application kit. Training Grants and Fellowships (Final Regulations), Environmen-
tal Protection Agency, Federal Register, Vol. 38, No. 118 (40 U.S.C. 45, 46); General
Grant Regulations and Procedures, EPA, Federal Register, Vol. 36, No. 228 (40 CFR
30).
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact Environmental Protection Agency, Grants Administration Division, Wa-
shington, DC 20460. For program information contact Control Programs Develop-
ment Division, Office of Air Quality Planning and Standards, Office of Air and Waste
Management, Environmental Protection Agency, Research TrianglePark, NC 27711.
Telephone (919) 549-8411, Ext. 2492.
RELATED PROGRAMS: 66.001, Air Pollution Control Program Grants; 66.002, Air
Pollution Fellowships; 66.501, Air Pollution Control Research Grants; 66.005, Air
Pollution Survey and Demonstration Grants.
66.005 AIR POLLUTION SURVEY AND
DEMONSTRATION GRANTS
FEDERAL AGENCY: OFFICE OF AIR AND WASTE MANAGEMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Sections 103 and 104 of the Clean Air Act; Public Law 88-206, as
amended by Public Law 91-604; 42 U.S.C. 1857b and 1857b-l.
OBJECTIVES: To assist applicants in: (1) demonstrating innovative control strategies
and program operations necessary to achieve National Ambient Air Quality
Standards and (2) demonstrating new or improved methods for air pollution control.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Funds may be used for expenses necessary to
carry out the approved projects including, but not restricted to, personnel costs,
supplies, equipment, travel, and contractual services. Funds may not be used for
expenses incurred outside the approved project.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Air pollution control agencies, appropriate nonprofit organiza-
tions and institutions.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: Not applicable.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: By letter including information on objectives and
methods of project investigators and budget information. Submit to the appropriate
EPA Regional Office and to the Control Programs Development Division in Research
Triangle Park, NC. Standards of FMC 74-7 only apply to State and local
governments. Applications should be reviewed under Procedures in Part I of OMB
Circular No. A-95 (revised), for projects dealing with demonstrations.
Application Procedure: Requests for application forms and completed applications
should be submitted to the Grants Administration Division, Environmental
Protection Agency, Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine the adequacy of the application in relation to grant regulations and to
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technical and program evaluation to determine the merit and relevancy of the project.
Notification of grant award to a State or local government must be made by EPA to
the designated State Central Information Reception Agency and Department of the
Treasury on SF 240.
Deadlines: None.
Range of Approval/Disapproval Time: 30 to 90 days.
Appeals: There are no appeals procedures as such. If application is rejected, the
reasons for refusal are stated, and applicant may make necessary changes and
reapply.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: Negotiable. Maximum Federal share is 95
percent.
Length and Time Phasing of Assistance: Length of project is negotiable—usually 1
to 3 years. Grants are made in budget period basis (usually 12 months). Funds must
be encumbered within the approved budget period. Grant may be paid by letter of
credit or monthly cash demand.
POST ASSISTANCE REQUIREMENTS:
Reports: Progress reports are required. Final progress report due 90 days after
completion of the project. Annual expenditure report due 90 days after end of each
budget period.
Audits: Expenditures are subject to audit by EPA and Comptroller General.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0107-0-1-404.
Obligations: (Grants) FY 73 $214,000; FY 74 est $324,000; and FY 75 est $500,000.
Range and Average of Financial Assistance: Three grants funded in fiscal year of
1974 ($24,000, $50,000, and $250,000).
PROGRAM ACCOMPLISHMENTS: In fiscal year 1974, the program awarded 3
grants totaling $324,000 to demonstrate new or improved methods for abatement and
control of air pollution.
REGULATIONS, GUIDELINES, AND LITERATURE: Research and Demonstra
tion Grants, Interim Regulations, EPA, Federal Register, Vol. 38, No. 93 (40 CFR 40);
General Grant Regulations and Procedures, EPA, Federal Register, Vol. 36, No. 228
(40 CFR 30).
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures,
contact Environmental Protection Agency, Grants Administration Division, Wa-
shington, DC 20460. For program information, contact Control Programs Develop-
ment Division, Office of Air Quality Planning and Standards, Office of Air and Waste
Management, Environmental Protection Agency, Research Triangle Park, NC 27711.
Telephone: (919) 549-8411, Ext. 2492.
RELATED PROGRAMS: 66.002, Air Pollution Fellowships; 66.003, Air Pollution
Manpower Training Grants; 66.501, Air Pollution Control Research Grants.
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66.026 SOLID WASTE TRAINING GRANTS
FEDERAL AGENCY: OFFICE OF AIR AND WASTE MANAGEMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Solid Waste Disposal Act, Sections 204 and 210, as amended;
42 U.S.C. 3253 and 3254d.
OBJECTIVES: To develop, expand, or carry out programs for training persons for
occupations involving management, supervision, design, operation, or maintenance
of Solid Waste Disposal and Resource Recovery Equipment Facilities.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Full support is provided for training projects.
Allowable costs are determined by EPA, Office of Solid Waste Management
Programs. Grants cannot be awarded to profitmaking organizations. Due to limited
appropriations and EPA'S annual plans, Training grants are awarded only to State
agencies. (Normally such solicitations are announced in the "Commerce Business
Daily.")
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Any public or private nonprofit institution or agency.
Individuals to be trained apply directly to grantee.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: Cost will be determined in accordance with General
Services Administration FMC 74-4 for entities that are State and local government.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: The standard application forms are furnished by
EPA. Standards of Services Administration FMC 74-7 only apply to State and local
governments, however, applications from State and local governments will be
accepted on either General Services Administration FMC 74-7 forms or EPA Form
5700-12.
Application Procedure: Requests for application forms and completed applications
should be submitted to EPA Grants Administration Division, Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine adequacy of application in relation to grant regulations and to technical
and program evaluation to determine the merit and relevancy of project.
Deadlines: None.
Range of Approval/Disapproval Time: None.
Appeals: None.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of five percent of cost sharing is
required.
Length and Time Phasing of Assistance: Term of grant shall be determined at time
of award.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure reports).
Audits: Grants are subject to inspection and audit by representatives of the
Comptroller General of the United States and EPA.
Records: Financial records, including all documents to support entries on the
accounting records and to substantiate charges to each grant must be kept available
to personnel authorized to examine EPA grant accounts in an institution. All records
must be maintained for three years after the end of each budget period, and if
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questions still remain, such as those raised as a result of audit, related records should
be retained until the matter is completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0108-0-1-304.
Obligations: (Grants) FY 74 $100,000; FY 75 $325,000; and FY 76 est $150,000.
Range and Average of Financial Assistance: $25,000 to $100,000; $35,000.
PROGRAM ACCOMPLISHMENTS: These grants are providing technically trained
personnel for solid waste management and resource recovery systems. Grants have
primarily been awarded to States and public interest groups over the past several
years.
REGULATIONS, GUIDELINES, AND LITERATURE: Interim Regulations, Grant
Programs, Environmental Protection Agency, Federal Register, Vol. 36, No. 299, P.
22716. "Federal Assistance Programs of the Environmental Protection Agency," no
charge. Federal Register, Vol. 38, No. 118 (40 CFR 45,46), EPA, Training Grants and
Fellowships.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact Environmental Protection Agency, Grants Administration Division, Wash-
ington, DC 20460. For program information contact Program Analysis State Office of
Solid Waste Management Programs, EPA, Washington, DC 20460.
RELATED PROGRAMS: 66.027. Solid Waste Demonstration and Planning Grants;
66.504, Solid Waste Research Grants.
66.027 SOLID WASTE DEMONSTRATION AND
PLANNING GRANTS
FEDERAL AGENCY: OFFICE OF AIR AND WASTE MANAGEMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Solid Waste Disposal Act, Sections 204 and 207, as amended; 42
U.S.C. 3251 et seq.
OBJECTIVES: To assist State, interstate, municipal, and intermunicipal agencies and
organizations in development of plans and programs leading to the solution of solid
waste management problems.
TYPES OF ASSISTANCE:
USES AND USE RESTRICTIONS: For making surveys of solid waste disposal
practices and problems within the jurisdictional areas of eligible agencies; developing
and revising solid waste disposal plans as part of regional environmental protection
systems for such areas. Providing for recycling or recovery of materials from wastes
whenever possible and including planning for the reuse of solid waste disposal areas
and studies of the effect and relationship of solid waste disposal practices on areas
adjacent to waste disposal sites, or planning programs for the removal and processing
of abandoned motor vehicle hulks. Federal support up to 66 2/3 percent of the cost of
planning programs including only one municipality, and not to exceed 75 percent of
the cost in any other case. Full restrictions are contained in procedures for applicants,
available upon request. Due to limited appropriations and EPA's annual plans,
planning grants are awarded only to State agencies. Demonstration grants are
awarded only to State agencies and grantees solicited for special projects designed to
meet those annual plans (Normally such solicitations are announced in the
"Commerce Business Daily").
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ELIGIBILITY REQUIREMENTS:
Applicant eligibility: Nonprofit institutions such as universities and colleges,
hospitals, laboratories. State and local government departments, other public or
private nonprofit institutions, and individuals who have demonstrated unusually
high scientific ability.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: A State Solid Waste Management Plan coordinated
with the Governor's office, is required under Part III of OMB Circular No. A-95
(revised) for Section 207 Grants. Cost will be determined in accordance with General
Services Administration FMC 74-4.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Preproposals should be submitted to the appropriate
EPA Regional Office. Instructions for preproposals are available from the Regional
Office. Applications should be reviewed under procedures in Part I of OMB Circular
No. A-95 (revised). Environmental assessment required with application. The
standard application forms are furnished by EPA. The standard application forms as
furnished by the Federal agency and required by General Services Administration
FMC 74-7 only apply to State and local governments, however, applications from
State and local governments will be accepted on either General Services Administra-
tion FMC 74-7 forms or EPA Form 5700-12.
Application Procedure: Application should be submitted to the appropriate EPA
Regional Office. The Solid Waste Management Representative of the appropriate EPA
Regional Office (listed in the appendix) is available to a isist in preparation of the
application.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine adequacy of application in relation to grant regulations and to technical
and program evaluation to determine the merit and relevancy of project. Notification
of grant award must be made to the designated State Central Information Reception
Agency and the Department of the Treasury on SF 240.
Deadlines: None.
Range of Approval/Disapproval Time: 90 days.
Appeals: None.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: Up to two-thirds of project costs for one
municipality, and up to three-fourths of the cost in any other case.
Length and Time Phasing of Assistance: Grants are normally funded on a 12-
month basis (yearly). Total project period varies according to program requirements.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure report)
Audits: Grants are subject to inspection and audit by representatives of the
Comptroller General of the United States and EPA.
Records: Financial records, including all documents to support entries on the
accounting records and to substantiate charges to each grant, must be kept available
to personnel authorized to examine EPA grant account in an institution.
FINANCIAL INFORMATION:
Account Identification: 20-000-0108-0-1-304.
Obligations: (Grants) FY 74 $3,600,000; FY 75 $3,000,000; and FY 76 est $4,000,000.
Range and Average of Financial Assistance: $5,000 to $230,000; $36,200.
PROGRAMS ACCOMPLISHMENTS: Planning and demonstration grants have been
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awarded to 50 State agencies. District of Columbia, Puerto Rico, Guam, and.American
Samoa. Solid Waste Management Plans, staffs, and active programs now exist in
these agencies for solution of solid waste problems. Several demonstration grants
have been awarded to local communities to evaluate waste disposal control
technology and to speed the process of implementing resources recovery systems.
REGULATIONS, GUIDELINES, AND LITERATURE: Interim regulations. Grant
Programs. Environmental Protection Agency. Federal Register. Vol. 36, No. 229, P.
22716. Federal Assistance Programs of the Environmental Protection Agency, no
charge. Interim Regulations. Research, and Demonstration Grants. EPA, Federal
Register, Vol. 38, No. 83. P12781. State and local assistance. 40 CFR Part 35.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact GAD. EPA. Washington, DC 20460 For program information contact
Program Analysis Staff, Office of Solid Waste Management Programs, EPA.
Washington, DC 20460.
RELATED PROGRAMS: 66.026. Solid Waste Training Grants; 66.504. Solid Waste
Research Grants.
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OFFICE OF WATER AND
HAZARDOUS
MATERIALS
66.419 WATER POLLUTION CONTROL-STATE AND
INTERSTATE PROGRAMS GRANTS
(Section 106 Grants)
FEDERAL AGENCY: OFFICE OF WATER AND HAZARDOUS MATERIALS,
ENVIRONMENTAL PROTECTION AGENCY
AUTHORIZATION: Section 106 of the Federal Water Pollution Control Act, as
amended; Public Law 92-500; 33 U.S.C. 1256.
OBJECTIVES: To assist State and interstate agencies in establishing and maintaining
adequate measures for prevention and control of water pollution.
TYPES OF ASSISTANCE: Formula Grants.
USES AND USE RESTRICTIONS: Broad support for the prevention and abatement
of water pollution including permitting, pollution control studies, planning,
surveillance and enforcement; advice and assistance to local agencies; training; and
public information. Funds cannot be used for construction, operation, or maintenance
of waste treatment plants, nor can they be used for costs financed by other Federal
grants or by funds used for matching other Federal grants.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: State and interstate water pollution control agencies as defined
in the Federal Water Pollution Control Act. Agencies making application for funds
must submit annually their pollution-control program to the appropriate Regional
Administrator, EPA for approval. Requirements of the program are based on Section
106 of the Act, and 40 CFR Part 35.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation. A State Plan is required under Part III of OMB
Circular No. A-95 (revised).
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Informal meetings are held between regional office
and State applicant agency concerning program preparation.
Application Procedure: Submit State Program Grant Application Form or Interstate
Agency Program Grant Application Form to EPA, Grants Administration Branch
(regional office).
Award Procedure: Program plan is reviewed, and if approvable, signed by the
Regional Administrator. Notification of grant award must be made by EPA to the
designated State Central Information Reception Agency and Department of the
Treasury on SF 240.
Deadlines: June 15 deadline for grant application.
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Range of Approval/Disapproval Time: 30 days.
Appeals: None.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: Appropriated funds are prorated among the
States and interstate water pollution control agencies on the basis of the extent of the
water pollution problem in the respective States but an amount not less than its FY 73
grants.
Length and Time Phasing of Assistance: 1 year; payments are approved quarterly
and disbursed monthly.
POST ASSISTANCE REQUIREMENTS:
Reports: Annual expenditure reports; Semi-Annual program report; revised budget
following reallocation of funds.
Audits: Periodic audit conducted for each year of Federal assistance.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0108-0-1-404.
Obligations: (Grants) FY 73 $22,600,000; FY 74 est $40,000,000; and FY 75 est
$40,000,000.
Range and Average of Financial Assistance: $65,000 to $2,368,770; $150,000.
PROGRAM ACCOMPLISHMENTS: The program started in 1957 with an annual
authorization of $2,000,000. The annual figure has grown to an estimated $40,000,000
and the State and interstate agency expenditures have increased more than seven
times during that period. Many of these agencies have substantially strengthened
their programs. There were 60 grants awarded in fiscal year 1974.
REGULATIONS, GUIDELINES, AND LITERATURE: General Grant Regulations
and Procedures> Environmental Protection Agency; Federal Register, Vol. 36, No.
229, 40 CFR 30, Digest oi fiscal year 1972 State Program Plans; Handbook of
Procedures, State and Interstate Program Grants; Federal Assistance Programs of
the Environmental Protection Agency (no charge); Environmental Protection
Agency, State and Local Assistance Program, Interim Regulations, Federal Register,
Vol. 38, No. 125 (40 CFR 35).
INFORMATION CONTACTS:
Regional or Local Office: EPA Regional Administrator.
Headquarters Office: Chief, State Program Branch, Water Planning Division,
Environmental Protection Agency, Office of Water and Hazardous Materials,
Washington, DC 20460. Telephone: (202) 755-2114.
RELATED PROGRAMS: 66.424, Water Quality Management Technical Planning
Assistance; 15.950, Additional Water Resources Research.
66.420 WATER POLLUTION CONTROL-STATE AND
LOCAL MANPOWER DEVELOPMENT
FEDERAL AGENCY: OFFICE OF WATER AND HAZARDOUS MATERIALS,
ENVIRONMENTAL PROTECTION AGENCY
AUTHORIZATION: Section 104(g)(l), Federal Water Pollution Control Act as
amended; Public Law 92-500; 33 U.S.C. 1254 (g)(l).
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OBJECTIVES: To design and carry out innovative and imaginative training programs
which complement existing manpower development and training programs; to
provide advanced teacher training to those involved in conducting operator training
programs, and to train operators in advanced waste treatment technology.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Funds are basically used for the design and
implementation of innovative training courses and teaching techniques in water
pollution control and abatement. Funds may not be used for construction.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: State, local, or district water pollution control agencies, or
private nonprofit institutions.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Applicants for this program should apply on
application form required by Federal Management Circular 74-7 furnished by EPA.
Standards of Federal Management Circular 74-7 only apply to State and local
governments.
Application Procedure: Training applications submitted under Section 104(g)(l) of the
Federal Water Pollution Control Act will be submitted as follows, (a) State Operator
Training, appropriate EPA Regional Office, and (b) National Impact and Special
Project, U.S. Environmental Protection Agency, Grants Administration Division,
Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation to
determine adequacy in relation to grant regulations and to technical and program
evaluation to determine merit and relevancy of the project. Notification of grant
award to a State or local government must be made by EPA to the designated State
Central Information Reception Agency and Department of the Treasury on SF 240.
(State operator training only.)
Deadlines: None.
Range of Approval/Disapproval Time: 90 to 120 days.
Appeals: None.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost sharing is
required.
Length and Time Phasing of Assistance: Term of grant shall be determined at time
of award.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure reports).
Audits: Grants are subject to inspection and audit by representatives of the
Comptroller General and EPA.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0108-0-1-404.
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Obligations: (Grant) FY 73 $1,041,692; FY 74 est $1,483,000; andFY 75 est$ 1,505,000.
Range and Average of Financial Assistance: $3,000 to $130,000; $35,000.
PROGRAM ACCOMPLISHMENTS: 2,000 operators were trained in fiscal year 1974.
To date 50 States have received training grant funds.
REGULATIONS, GUIDELINES, AND LITERATURE: General Grant Regulations
and Procedures, Environmental Protection Agency; Federal Register, Vol. 36, No.
229, (40 CFR 30); OMB A-87; FMC 74-4; OMB A-27; OMB Circular No. A-27; "Grant
Assistance Programs of the Environmental Protection Agency" (no charge). Training
Grants and Fellowships, Final Regulations, EPA, Federal Register, Vol 38, No. 118,
(40 CFR 45, 46).
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with
appropriate EPA Regional Administrator.
Headquarters Office: For program information contact EPA, OWPO, Chief, Water
Quality Control Training Branch, Municipal Permits and Operations Division,
Washington, DC 20460. Telephone: (703) 557-2242.
RELATED PROGRAMS: 66.417, Water Pollution Control-Direct Training; 66.421,
Water Pollution Control-Training Grants; 66.423, Water Quality Control Information
System-Orientation and Training Seminars.
66.421 WATER POLLUTION CONTROL TRAINING
GRANTS
FEDERAL AGENCY: OFFICE OF WATER AND HAZARDOUS MATERIALS,
ENVIRONMENTAL PROTECTION AGENCY
AUTHORIZATION: Sections 104(g)(3), 109,110, and 111 of the Water Pollution Control
Act as amended; Public Law 92-500; 33 U.S.C. 1254, 1259, 1260, 1261.
OBJECTIVES: To improve training and education for professional, scientific, and
technical personnel in the causes, control, and prevention of water pollution.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: In addition to the EPA general grant conditions
(Appendix A to Subchapter B of 40 CFR), each training grant shall be subject to the
following conditions: (a) The grantee shall not require the performance of personal
services by individuals receiving training as a condition for assistance, (b) Recipients
of assistance under training grants shall be entitled to the normal student holidays
observed by an academic institution, or the holiday and vacation schedule applicable
to all trainees at a nonacademic institution, (c) Recipients of assistance under
training grants must be citizens of the United States, its territories, or possessions, or
lawfully admitted to the United States for permanent residence, (d) Generally
training grants will provide for student support only through scholarships. Stipends
are permitted when, in the judgment of the grantee, they are needed to attract
qualified students provided that no more than $20,000 may be used for such stipends
within a budget period and further provided that no stipend may be less than $1,000
or more than $3,000. (e) Training grants awarded under Section III of the Federal
Water Pollution Control Act will be subject to the following condition: Grantees must
obtain the following agreement in writing from persons awarded scholarships under
Section III for undergraduate study of the operation and maintenance of treatment
works: I agree to enter and remain in an occupation involving the design, operation,
or maintenance of waste treatment works for a period of 2 years after the satisfactory
completion of my studies under this program. I understand that if I fail to perform
this obligation I may be required to repay the amount of my scholarship. The grantee
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agrees to take such action as may reasonably be required to enforce the foregoing
agreement. Any sums received by the grantee shall be credited or paid to the United
States in accordance with 40 CFR 30.603.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Public and private agencies, municipalities, educational
institutions, and individuals.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: The standard application forms required by FMC 74-7
are furnished by EPA. Standards of FMC 74-7 only apply to State and local
governments.
Application Procedure: Requests for application forms and completed applications
should be submitted to the Grants Administration Division headquarters office.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine adequacy in relation to grant regulations and to technical and program
evaluation to determine merit and relevancy of the project. Applicant must agree to
administer the grant in accordance with EPA Grant Policies and procedures in effect
at time of award.
Deadlines: None.
Range of Approval/Disapproval Time: 90 to 120 days.
Appeals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost-sharing is
required.
Length and Time Phasing of Assistance: Term of grant shall be determined at time
of award.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure reports).
Audits: Grants are subject to inspection and audit by EPA and the Comptroller
General.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0108-0-1-404.
Obligations: (Grants) FY 73 $5,973,252; FY 74 est $3,440,000; andFY 75 est $2,770,000.
Range and Average of Financial Assistance: $1,000 to $110,000; $43,576.
PROGRAM ACCOMPLISHMENTS: The Office of Water Program Operations and
predecessor organizations, during the last 10 fiscal years, have supported 4,843
graduate students, 228 are in the pipeline, that is, still being supported by WQO
training grants on June 30,1974. Of the others, 3,518 have received graduate degrees
in water quality control, 176 are going on for further education, and 40 are employed
but did not receive graduate degrees. The program has supported almost 50,000
months of graduate student education (nearly 7,200 student years), with an average
of 13 months per student and about 14 months per degree. There were 215 grants
awarded in fiscal year 1973. A total of 87 grants are to be awarded in fiscal year 1974;
and up to 33 may be awarded in fiscal year 1975.
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REGULATIONS, GUIDELINES, AND LITERATURE: General Grant Regulations
and Procedures, Environmental Protection Agency; Federal Register, Vol. 36, No. 229
(40 CFR 30); Federal Assistance Programs of the Environmental Protection Agency
(no charge). Federal Register, Vol. 38, No. 118, (40 CFR 45, 46). Environmental
Protection Agency, Training Grants and Fellowships.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact Environmental Protection Agency, Grants Administration Division, Wa-
shington, DC 20460. For program information contact Chief, Academic Training
Section, Water Quality Control Training Branch, Municipal Permits and Operations
Division, Office of Water and Hazardous Materials, Environmental Protection
Agency, Washington, DC 20460. Telephone: (703) 557-2242.
RELATED PROGRAMS: 66.417, Water Pollution Control-Direct Training; 66.420,
Water Pollution Control-State and Local Manpower Development; 66.423, Water
Quality Control-Information System Orientation and Training Seminars; 15.951,
Water Resources Research-Assistance to States for Institutes; 15.952, Water
Resources Research Matching Grants to State Institutes.
66.426 WATER POLLUTION CONTROL-AREA WASTE
TREATMENT MANAGEMENT PLANNING GRANTS
FEDERAL AGENCY: OFFICE OF WATER AND HAZARDOUS MATERIALS,
ENVIRONMENTAL PROTECTION AGENCY
AUTHORIZATION: Federal Water Pollution Control Act Amendments of 1972, Section
208, Public Law 92-500; 33 U.S.C. 1288.
OBJECTIVES: To encourage and facilitate the development and implementation of
areawide waste treatment management plans in designated areas.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Funds are provided to designated planning
agencies for a period of up to 24 months to develop an initial areawide waste
treatment management plan for the area.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: An applicant agency must be designated by the Governor or
appropriate local officials in conformance with 40 CFR 126.11 or 126.16 and approved
by the Administrator of EPA as the official areawide waste treatment management
planning agency for the area and must agree to develop a plan and a continuing
planning process meeting the requirements of 40 CFR 35, Subpart F for the entire
designated area.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: In the case of an area designated by the Governor(s),
the grant application must include a statement of certification or refusal or
certification by the chief official(s) of the reviewing agency(ies) wherein the area is
located.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Preapplication coordination with appropriate Region-
al Office recommended. Must comply with all requirements of Part 1, OMB Circular
No. A-95. In the case of an area designated by the Governor(s), the application and
supporting data must be submitted by the State reviewing agency(ies) designated by
the Governor(s) prior to submission to EPA. Additionally in interstate cases, the
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application must be submitted to the Governor of the State wherein the greatest
portion of the planning area resides. The standard application forms required by
FMC 74-7 are furnished by EPA.
Application Procedure: The grant application must be submitted in duplicate to the
appropriate Regional Administrator of EPA on such forms as the Administrator may
prescribe.
Award Procedure: Grant application is reviewed by appropriate EPA Regional Office
and if approvable, the grant is awarded by the Regional Administrator. Notification
of grant award must be made to the State Central Information Reception Agency and
Department of the Treasury on SF 240.
Deadlines: Grant applications must be received within one year after the planning
area and agency have been designated.
Range of Approval/Disapproval Time: 45 days.
Appeals: Within one year after date of designation.
Renewals: Not applicable.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: The Federal rate of assistance is 100 percent
of eligible costs for all grant awards made through fiscal year 1975.
Length and Time Phasing of Assistance: 24 months.
POST ASSISTANCE REQUIREMENTS:
Reports: Semi-annual progress report must be submitted by grantee.
Audits: Grants are subject to inspection and audit by representatives of the
Comptroller General of the U.S. and EPA.
Records: Grantee financial management systems must comply with provision of FMC
74-7.
FINANCIAL INFORMATION:
Account Identification: 20-00-0108-0-1-404.
Obligations: (Grants) FY 73 $0; FY 74 est $100,000,000; and FY 75 est $150,000,000.
Range and Average of Financial Assistance: $300,000 to $3,000,000; $1,250,000.
PROGRAM ACCOMPLISHMENTS: Not applicable - new program.
REGULATIONS, GUIDELINES, AND LITERATURE: 40 CFR 126; 40 CFR 35,
SubpartF; 40 CFR 30.
INFORMATION CONTACTS:
Regional or Local Office: EPA Regional Administrator.
Headquarters Office: Director, Water Planning Division, EPA, Washington, DC
20460.
RELATED PROGRAMS: 66.419, Water Pollution Control - State and Interstate
Program Grants; 66.418, Water Pollution Control - Grants for Construction of
Treatment Works.
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OFFICE OF RESEARCH
AND DEVELOPMENT
66.500 ENVIRONMENTAL PROTECTION-
CONSOLIDATED RESEARCH GRANTS
FEDERAL AGENCY: OFFICE OF RESEARCH AND DEVELOPMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Sections 103 and 104 of the Clean Air Act as amended; Public Law
88-206; 42 U.S.C. 1857b and 1857b-l. Sections 104, 105, 107, 108,113 of the Federal
Water Pollution Control Act as amended; Public Law 92-500;
U.S.C. 1254, 1257, 1258, 1263; Public Health Service Act as amended, Public
Law 78-410; 42 U.S.C. 242b. Public Health Service Act as amended; 42
U.S.C. 241 and 246. Section 204 and 205 of the Solid Waste Disposal Act as
amended; Public Law 89-272; 42 U.S.C. 3253.
OBJECTIVES: To support research to explore and develop strategies and mechanisms
for those in the economic, social, governmental and environmental systems to use in
environmental management.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Available for allowable direct cost expenditures
incident to research performance plus allocable portions of allowable indirect costs of
the institutions, in accordance with the established policies of EPA.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Nonprofit institutions such as universities and colleges,
hospitals, laboratories, State and local government departments, other public or
private non-profit institutions and individuals who have demonstrated unusually
high scientific ability.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Discussion with program office advisable. Environ-
mental impact assessment required with application. Standards of FMC 74-7 only
apply to State and local governments.
Application Procedure: Request for application forms and completed applications
should be submitted to the Environmental Protection Agency, Grants Administration
Division, Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine the adequacy of the application in relation to grant regulations and to
program evaluation; technical and extramural review determines the merit and
relevance of the project.
Deadlines: None.
Range of Approval/Disapproval Time: Approximately 90 days.
Appeals: No appeals procedure; however, revised proposals may be resubmitted in
light of "Award Procedure."
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Renewals: None. Standard grant application should be prepared and submitted. It will
be reviewed in same manner as a new application and will compete for available
funds.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost sharing is
required except for programs where matching funds are required by statute.
Length and Time Phasing of Assistance: Grants normally funded on a 12-month
basis (yearly). Total project period varies according to program requirements.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant agreement (usually quarterly and final progress and
expenditure reports).
Audits: Grants are subject to inspections and audit by representatives of the
Comptroller General of the United States and EPA.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate changes to each grant, must be kept available to
personnel authorized to examine EPA grant accounts. All records must be maintained
for 3 years after the end of each budget period and if questions still remain, such as
those raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0107-0-1-404.
Obligations: (Grants) FY*73 $1,171,000; FY 74 est $1,455,000; andFY 75 est$1,449,000.
Range and Average of Financial Assistance: $5,000 to $94,160; $40,969.
PROGRAM ACCOMPLISHMENTS: In fiscal year 1973, 27 research projects were
funded. Studies are being conducted which provide an understanding of the total
effects of environmental policy.
REGULATIONS, GUIDELINES, AND LITERATURE: Interim Regulations, Grant
Programs, Environmental Protection Agency; Federal Register, Vol. 36, No. 229, p.
22716; Interim Regulations. Research and Demonstration Grants; Environmental
Protection Agency; Federal Register, Vol. 38, No. 93, p. 12784; Federal Assistance
Programs of the Environmental Protection Agency, no charge.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate EPA Regional Administrator listed in the appendix.
Headquarters Office: For information on grant applications and procedures contact
Environmental Protection Agency, Grants Administration Division, Washington, DC
20460. For program information contact Chief, Project Processing Staff, Office of
Research and Development, Environmental Protection Agency, Washington, DC
20460. Telephone: (202) 426-2275.
RELATED PROGRAMS: 66.501, Air Pollution Control Research Grants; 66.502,
Pesticides Research Grants; 66.503, Radiation Research Grants; 66.504, Solid Waste
Research Grants; 66.505, Water Pollution Control-Research, Development, and
Demonstration.
66.501 AIR POLLUTION CONTROL RESEARCH
GRANTS
FEDERAL AGENCY: OFFICE OF RESEARCH AND DEVELOPMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Sections 103 and 104 of the Clean Air Act, as amended; Public Law
88-206; 42 U.S.C. 1857b and 1857b-l.
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OBJECTIVES: To support and promote research and development projects relating to
the causes, effects, extent, prevention and control of air pollution.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Available for allowable direct cost expenditures
incident to research performance plus allocable portions of allowable indirect costs of
the institutions, in accordance with the established policies of EPA.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Nonprofit institutions such as universities and colleges,
hospitals, laboratories, State and local health departments, and other public or
private nonprofit institutions. Grants may also be awarded to individuals who have
demonstrated unusually high scientific ability.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Discussion with program office advisable. Environ-
mental assessment required with application. Standards of FMC 74-7 apply only to
State and local governments.
Application Procedure: Requests for application forms and completed applications
should be submitted to the Environmental Protection Agency, Grants Administration
Division, Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine the adequacy of the application in relation to grant regulations and to
program evaluation; technical and extramural review determines the merit and
relevance of the project.
Deadlines: None.
Range of Approval/Disapproval Time: Approximately 90 days.
Appeals: No appeals procedure; however, revised proposals may be resubmitted in
light of "Award Procedure."
Renewals: None. Standard grant application should be prepared and submitted. It will
be reviewed in same manner as a new application and will compete for available
funds.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost sharing is
required except for programs where matching funds are required by statute.
Length and Time Phasing of Assistance: Grants normally funded on a 12-month
basis (yearly). Total project period varies according to program requirements.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure reports).
Audits: Grants are subject to inspection and audit by representatives of the
Comptroller General of the United States and EPA.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0107-0-1-404.
Obligations: (Grants) FY 73 $5,537,000; FY 74 $3,726,000; and FY 75 est $4,950,000.
Range and Average of Financial Assistance: $3,300 to $182,383; $44,478.
PROGRAM ACCOMPLISHMENTS: In fiscal year 1972, 96 grants were funded.
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REGULATIONS, GUIDELINES, AND LITERATURE: Interim Regulations; Grant
Programs; Environmental Protection Agency; Federal Register, Vol. 36, No. 229, p.
22716; Interim Regulations. Research and Demonstration Grants; Environmental
Protection Agency; Federal Register; Vol. 38, No. 93, p. 12784; "Federal Assistance
Programs of the Environmental Protection Agency," no charge.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact Environmental Protection Agency, Grants Administration Division, Wash-
ington, DC 20460. For program information contact Chief, Project Processing Staff,
Office of Research and Development, Environmental Protection Agency, Washington,
DC 20460. Telephone: (202) 426-2275.
RELATED PROGRAMS: 66.001, Air Pollution Control Program Grants; 66.002, Air
Pollution Fellowships; 66.003, Air Pollution Manpower Training Grants; 66.005, Air
Pollution Survey and Demonstration Grants.
66.502 PESTICIDES RESEARCH GRANTS
FEDERAL AGENCY: OFFICE OF RESEARCH AND DEVELOPMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Section 20 of the Federal Insecticide, Fungicide and Rodenticide
Act, as amended; Public Law 92-516; 7 U.S.C. 136r.
OBJECTIVES: To support and promote the coordination of research projects relating to
human and ecological effects from pesticides, pesticide degradation products, and
alternatives to pesticides.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Available for the allowable direct cost expendi-
tures incident to research performance plus allocable portions of allowable indirect
costs of the institutions, in accordance with the established policies of EPA.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Universities or others as may be necessary.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Discussion with program office advisable. Environ-
mental assessment required with application. Standards of FMC 74-7 apply only to
State and local government.
Application Procedure: Requests for application forms and completed applications
should be submitted to Environmental Protection Agency, Grants Administration
Division, Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine the adequacy of the application in relation to grant regulations, and to
program evaluation; technical and extramural review determines the merit and
relevance of the project.
Deadlines: None.
Range of Approval/Disapproval Time: Approximately 90 days.
Appeals: No appeals procedure; however, revised proposals may be resubmitted in
light of "Award Procedure."
Renewals: None. Standard grant application should be prepared and submitted. It will
be reviewed in same manner as a new application and will compete for available
funds.
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ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost sharing is
required except for programs where matching funds are required by statute.
Length and Time Phasing of Assistance: Grants normally funded on a 12-month
basis (yearly). Total project period varies according to program requirements.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure reports).
Audits: Grants are subject to inspections and audit by representatives of the
Comptroller General of the United States and EPA.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate changes to each grant, must be kept available to
personnel authorized to examine EPA grant accounts. All records must be maintained
for 3 years after the end of each budget period, and if questions still remain, such as
those raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0107-0-1-404.
Obligations: (Grants) FY 73 $904,000; FY 74 est $1,140,000; andFY 75 est $1,202,000.
Range and Average of Financial Assistance: $13,850 to $300,000; $48,924.
PROGRAM ACCOMPLISHMENTS: In fiscal year 1973, 18 grant applications were
awarded.
REGULATIONS, GUIDELINES, AND LITERATURE: Interim Regulations, Grant
Programs, Environmental Protection Agency; Federal Register, Vol. 36, No. 229, p.
22716; Interim Regulations, Research and Demonstration Grant, Environmental
Protection Agency; Federal Register, Vol. 38, No. 93, p. 12784; "Federal Assistance
Programs of the Environmental Protection Agency," no charge.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact Environmental Protection Agency, Grants Administration Division, Wash-
ington, DC 20460. For program information contact Chief, Project Processing Staff,
Office of Research and Development, Environmental Protection Agency, Washington,
DC 20460. Telephone: (202) 426-2275.
RELATED PROGRAMS: 10.053, Dairy Indemnity Payments; 15.604, Fishery
Research-Information; 15.607, Pesticide Appraisal and Monitoring; 15.610, Wildlife
Research Information.
66.503 RADIATION RESEARCH GRANTS
FEDERAL AGENCY: OFFICE OF RESEARCH AND DEVELOPMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Public Health Service Act, as amended; Public law 78-410; 42
U.S.C. 241 and 246.
OBJECTIVES: To support and promote research relating to the exploration of
environmental radiation hazards and reduction of the resultant risk to health. "
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Available for the allowable direct cost expendi-
tures incident to research performance plus allocable portions of allowable indirect
costs of the institutions, in accordance with the established policies of EPA.
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ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Universities, hospitals, laboratories, other public or private
institutions, or individuals.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Discussion with program office advisable. Environ-
mental assessment required with application. Standards of FMC 74-7 apply only to
State and local governments.
Application Procedure: Requests for application forms and completed applications
should be submitted to the Environmental Protection Agency, Grants Administration
Division, Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine the adequacy of the application in relation to grant regulations, and to
program evaluations; technical and extramural review determines the merit and
relevance of the project.
Deadlines: None.
Range of Approval/Disapproval Time: Approximately 90 days.
Appeals: No appeals procedure; however, revised proposals may be resubmitted in
light of "Award Procedure."
Renewals: None. Standard grant application should be prepared and submitted. It will
be reviewed in the same manner as a new application and will compete for available
funds.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost sharing is
required except for programs where matching funds are required by statute.
Length and Time Phasing of Assistance: Grants normally funded on a 12-month
basis (yearly). Total project period varies according to program requirements.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure reports).
Audits: Grants are subject to inspection and audit by representatives of the
Comptroller General of the United States and EPA.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0107-0-1-404.
Obligations: (Grants) FY 73 $284,000; FY 74 est $158,000; and FY 75 est $149,000.
Range and Average of Financial Assistance: $15,170 to $52,800; $38,809.
PROGRAM ACCOMPLISHMENTS: In fiscal year 1973, seven grants were funded for
research work.
Regulations, guidelines, and literature: Interim Regulations, Grant Programs,
Environmental Protection Agency; Federal Register, Vol. 36, No. 229, p. 22716;
Interim Regulations, Research and Demonstration Grants, Environmental Protection
Agency; Federal Register, Vol. 38, No. 93, p. 12784; "Federal Assistance Programs of
the Environmental Protection Agency," no charge.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
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appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact Environmental Protection Agency, Grants Administration Division, Wash-
ington, DC 20460. For program information contact Chief, Project Processing Staff,
Office of Research and Development, Environmental Protection Agency, Washington,
DC 20460. Telephone: (202) 426-2275.
RELATED PROGRAMS: None.
66.504 SOLID WASTE RESEARCH GRANTS
FEDERAL AGENCY: OFFICE OF RESEARCH AND DEVELOPMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Solid Waste Disposal Act, Section 204 & 205, and as amended;
Public Law 89-272; 42 U.S.C. 3253.
OBJECTIVES: To support and promote the coordination of research and development
in the area of collection, storage, utilization, salvage or final disposal of solid waste.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Available for the allowable direct cost expendi-
tures incident to research performance plus allocable portions of allowable indirect
costs of the institutions, in accordance with established EPA policies.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Public or private agencies and institutions and individuals.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Discussion with program office advisable. Environ-
mental Assessment required with application. Standards of FMC 74-7 apply only to
State and local governments.
Application Procedure: Requests for application forms and completed applications
should be submitted to EPA Grants Administration Division, Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine adequacy of application in relation to grant regulations, and to program
evaluation; technical and extramural review determines the merit and relevance of
the project.
Deadlines: None.
Range of Approval/Disapproval Time: Approximately 90 days.
Appeals: No appeals procedure; however, revised proposals may be resubmitted in
light of "Award Procedure."
Renewals: None. Standard grant application should be prepared and submitted. It will
be reviewed in same manner as a new application and will compete for available
funds.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost sharing is
required.
Length and Time Phasing of Assistance: Term of grant shall be determined at time
of award.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
expenditure reports).
Audits: Grants are subject to inspection and audit by representatives of the
Comptroller General of the United States and EPA.
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Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0107-0-1-404.
Obligations: (Grants) FY 73 $464,000; FY 74 est $295,000; and FY 75 est $418,000.
Range and Average of Financial Assistance: $13,667 to $158,295; $58,696.
PROGRAM ACCOMPLISHMENTS: Studies are being conducted to determine means
of recovering materials and energy from waste materials and methods for the
reduction, neutralization, recovery and disposal of solid waste. In fiscal year 1973, 8
research grants were awarded.
Regulations, Guidelines and Literature: Interim Regulations, Grant Pro-
grams, Environmental Protection Agency; Federal Register, Vol. 36, No. 229, p.
22716; Interim Regulations, Research and Demonstration Grants, Environmental
Protection Agency, Federal Register, Vol. 38, No. 93, p. 12784; Federal Assistance
Programs of the Environmental Protection Agency, no charge.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact Environmental Protection Agency, Grants Administration Division, Wash-
ington, DC 20460. For program information contact Chief, Project Processing Staff,
Office of Research and Development, Environmental Protection Agency, Washington,
DC 20460. Telephone: (202) 426-2275.
RELATED PROGRAMS: None.
66.505 WATER POLLUTION CONTROL-RESEARCH,
DEVELOPMENT, AND DEMONSTRATION
FEDERAL AGENCY: OFFICE OF RESEARCH AND DEVELOPMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Sections 104, 105, 107, 108, 113 of the Federal Water Pollution
Control Act as amended; Public Law 92-500; 33 U.S.C. 1254, 1255, 1257, 1258, 1263.
OBJECTIVES: To support and promote the coordination and acceleration of research,
development, and demonstration projects relating to the causes, effects, extent,
prevention, reduction and elimination of water pollution.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Available for allowable direct cost expenditures
incident to research performance plus allocable portions of allowable indirect costs of
the institution, in accordance with established EPA policies.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Nonprofit institutions such as universities and colleges,
hospitals, laboratories, State and local government departments, other public or
private nonprofit institutions. Grants may also be awarded to individuals and
persons who have demonstrated unusually high scientific ability.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
A.27
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APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Discussion with program office advisable; environ-
mental assessment required with application. Applications should be reviewed under
procedures in Part I of OMB Circular No. A-95 (revised). Standards of FMC 74-7 apply
only to State and local governments.
Application Procedure: Requests for application forms and completed applications
should be submitted to the Environmental Protection Agency, Grants Administration
Division, Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine the adequacy of the application in relation to grant regulations and to
program evaluation; technical and extramural review determines the merit and
relevance of the project.
Deadlines: None.
Range of Approval/Disapproval Time: Approximately 90 days.
Appeals: No appeals procedure; however, revised proposals may be resubmitted in
light of "Award Procedure." Standard grant application should be prepared and
submitted. It will be reviewed in same manner as a new application and will compete
for available funds.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost sharing is
required, except for programs where matching funds are required by statute.
Length and Time Phasing of Assistance: Grants normally funded on a 12-month
basis (yearly). Total project period varies according to program requirements.
POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure reports).
Audits: Grants are subject to inspection and audit by EPA and the Comptroller
General.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0107-0-1-404.
Obligations: (Grants) FY 73 $16,773,429; FY 74 est $15,053,000; and FY 75 est
$13,000,000.
Range and Average of Financial Assistance: Research Grants: $2,750 to $502,354;
$47,536; Demonstration Grants: $5,000 to $487,788; $127,169.
PROGRAM ACCOMPLISHMENTS: Significant projects include research and
demonstration of methods for the control and treatment of wastewaters discharged
from the urban environment. Efforts are also directed toward new or improved
treatment of wastes from agricultural activities, oil and hazardous material spills,
industrial manufacturing, and mining operations. Projects also include research to
increase the understanding of the aquatic ecosystem and eutrophication process. In
fiscal year 1973, 231 grants were awarded.
REGULATIONS, GUIDELINES, AND LITERATURE: Interim Regulations, Grant
Programs, Environmental Protection Agency; Federal Register, Vol. 36, No. 229, p.
22716; Interim Regulations, Research and Demonstration Grants, Environmental
Protection Agency; Federal Register, Vol. 38, No. 93, P.12784, "Federal Assistance
A.28
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Programs of the Environmental Protection Agency," (no charge).
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contract Environmental Protection Agency, Grants Administration Division, Wash-
ington, DC 20460. For program information contact, Chief, Project Processing Staff,
Office of Research and Development, Environmental Protection Agency, Washington,
DC 20460. Telephone: (202) 426-2275.
RELATED PROGRAMS: 15.950, Additional Water Resources Research; 66.418,
Construction Grants for Wastewater Treatment Works.
66.506 WATER SUPPLY RESEARCH GRANTS
FEDERAL AGENCY: OFFICE OF RESEARCH AND DEVELOPMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Section 301 of the Public Health Service Act; 42 U.S.C. 241.
OBJECTIVES: To support research aimed at establishing health criteria for organic,
inorganic and microbiological contaminants of drinking water and to establish safe
recreational water quality standards.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Available for the allowable direct cost expendi-
tures incident to research performance plus allocable portions of allowable indirect
costs of the institutions, in accordance with the established policies of EPA.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Universities, hospitals, laboratories, and other public or
private institutions, or individuals.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: None.
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Discussion with program office advisable. Environ-
mental assessment required with application. Standards FMC 74-7 apply only to
State and local governments.
Application Procedure: Requests for application forms and completed applications
should be submitted to the Environmental Protection Agency, Grants Administration
Division, Washington, DC 20460.
Award Procedure: Each application shall be subjected to administrative evaluation
to determine the adequacy of the application in relation to grant regulations and to
program evaluation, technical and extramural review to determine the merit and
relevance of the project.
Deadlines: None.
Range of Approval/Disapproval Time: Approximately 90 days.
Appeals: No appeals procedure as such. However, revised proposals may be
resubmitted according to instructions above.
Renewals: None. Standard grant application should be prepared and submitted. It will
be reviewed in same manner as a new application and will compete for available
funds.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: A minimum of 5 percent cost sharing is
required except for programs where matching funds are required by statute.
Length and Time Phasing of Assistance: Grants normally funded on a 12-month
basis (yearly). Total project period varies according to program requirements.
A.29
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POST ASSISTANCE REQUIREMENTS:
Reports: As specified in grant award (usually quarterly interims and final progress
and expenditure reports).
Audits: Grants are subject to inspection and audit by representatives of the
Comptroller General of the United States and EPA.
Records: Financial records, including all documents to support entries on accounting
records and to substantiate charges to each grant, must be kept available to personnel
authorized to examine EPA grant accounts. All such records must be maintained for 3
years after the end of each budget period, and if questions still remain, such as those
raised as a result of audit, related records should be retained until the matter is
completely resolved.
FINANCIAL INFORMATION:
Account Identification: 20-00-0107-0-1-404.
Obligations: FY 73 $87,571; FY 74 est $128,000; and FY 75 est $182,000.
Range and Average of Financial Assistance: $8,843 to $54,579; $29,190.
PROGRAM ACCOMPLISHMENTS: Projects have been started for the effective and
economical control of drinking water contaminants during storage, treatment, and
distribution. Studies also include the biological effects resulting from the presence of
infectious agents and toxic contaminants. In fiscal year 1973, 3 research grants were
awarded.
REGULATIONS, GUIDELINES, AND LITERATURE: Interim Regulations, Grant
Programs, Environmental Protection Agency; Federal Register, Vol. 36, No. 229, p.
22716; Interim Regulations, Research and Demonstration Grants, Environmental
Protection Agency; Federal Register, Vol. 38, No. 93, p. 12784; "Federal Assistance
Program of the Environmental Protection Agency," no charge.
INFORMATION CONTACTS:
Regional or Local Office: Individuals are encouraged to communicate with the
appropriate EPA Regional Administrator.
Headquarters Office: For information concerning grant applications and procedures
contact Environmental Protection Agency, Grants Administration Division, Wash-
ington, DC 20460. For program information contact, Chief, Project Processing Staff,
Office of Research and Development, Environmental Protection Agency, Washington,
DC 20460. Telephone: (202) 426-2275.
RELATED PROGRAMS: 15.950, Additional Water Resources Research, 66.505, Water
Pollution Control-Research, Development, and Demonstration.
A.30
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OFFICE OF PLANNING
AND MANAGEMENT
66.600 ENVIRONMENTAL PROTECTION-
CONSOLIDATED PROGRAM GRANTS
FEDERAL AGENCY: OFFICE OF PLANNING AND MANAGEMENT, ENVIRON-
MENTAL PROTECTION AGENCY
AUTHORIZATION: Including but not limited to: Section 105 of the^Clean Air Act, 42
U.S.C. 1857c. Section 106 of the Federal Water Pollution Control Act Amendments of
1972,33U.S.C. 1151. Section 207 or 208 of the Solid Waste Disposal Act, 42U.S.C. 3251
et seq.
Objectives: To enable States to coordinate and manage environmental approaches to
their pollution problems. Consolidated grants are alternate grant delivery mecha-
nisms. These mechanisms provide for consolidating into one grant instrument those
grants awarded separately to States for management of environmental protection
activities including but not limited to air pollution control, water pollution control,
and solid waste management.
TYPES OF ASSISTANCE: Project Grants.
USES AND USE RESTRICTIONS: Grant funds may be used for costs specifically
incurred in the conduct of a project in accordance with the purposes enumerated in the
approved application.
ELIGIBILITY REQUIREMENTS:
Applicant Eligibility: Any State with a single agency eligible to receive and
administer funds made available through the applicable statutory authorizations.
Such an agency is eligible even though it may not be currently receiving funds under
one of the grant authorities.
Beneficiary Eligibility: Same as applicant eligibility.
Credentials/Documentation: States and EPA Regional Offices together have
flexibility in developing the format of the application so long as funding sources are
indicated, and the State presents an interdisciplinary approach to its pollution
problems. States are encouraged to describe all their environmental protection
activities. The application should include quantified State objectives. If possible, the
State should include critical path/strategy charts of its pollution control decision-
making efforts. The applicant's program should complement the applicable EPA
Regional Office program plans and priorities. Information contained in the
application should not duplicate information already provided or to be provided by
the State to satisfy other EPA requirements such as air implementation plan
documentation. A State Plan is required under Part III of OMB Circular No. A-95
(revised).
APPLICATION AND AWARD PROCESS:
Preapplication Coordination: Preapplication communications should be directed to
the appropriate EPA Regional Administrator. Environmental assessment required
with application. Applicants for State and local entities should use standard
A.31
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application forms as required by FMC 74-7 and furnished by EPA.
Application Procedure: The application should be submitted to the appropriate EPA
Regional Office.
Award Procedure: Notification of grant award must be made by EPA to the
designated State Central Information Reception Agency and Department of Treasury
on SF 240.
Deadlines: Grant must be approved by EPA prior to beginning of State's fiscal year.
Range of Approval/Disapproval Time: Minimum review time is 7 days.
Appeals: None.
Renewals: None.
ASSISTANCE CONSIDERATIONS:
Formula and Matching Requirements: See applicable program descriptions.
Length and Time Phasing of Assistance: The terms of the grant agreement shall be
determined by the State and EPA at time of award.
POST ASSISTANCE REQUIREMENTS:
Reports: Only final expenditure reports are required. State-regional office grantee
program performance evaluation meetings may be scheduled 60 days after initiation
of the grant and approximately every 90 days thereafter. After each meeting, the
regional office will prepare an evaluation report and submit a copy to the State. A
semi-annual evaluation is required. Both State and EPA performance should be
evaluated at the meetings. The final quarterly report should be an annual report. The
State will not be required to submit written progress reports during the course of the
grant cycle. The State must be provided with the evaluation format early enough to be
prepared for the scheduled evaluation conferences.
Audits: Subject to inspection and audit by EPA and the U.S. Comptroller General.
Records: See EPA Grant Programs, Interim Regulations, Subchapter B, Appendix A.
FINANCIAL INFORMATION:
Account Identification: 20-00-0108-0-1-404.
Obligations: See applicable program descriptions.
Range and Average of Financial Assistance: See applicable program descriptions.
PROGRAM ACCOMPLISHMENTS: Nine grants totaling $12,300,000 were awarded to '
States for support of their fiscal year 1974 activities.
REGULATIONS, GUIDELINES, AND LITERATURE: EPA Grant Programs,
Interim Regulations, 40 CFR Part 30; EPA, General Grant Regulations and
Procedures, State and Local Assistance, 40 CFR Part 35.
INFORMATION CONTACTS:
Regional or Local Office: Contact appropriate EPA Regional Administrator.
Headquarters Office: Director, Grants Administration Division, Environmental
Protection Agency, Washington, DC 20460.
RELATED PROGRAMS: 66.001, Air Pollution Control Program Grants; 66.419, Water
Pollution Control-State and Interstate Program Grants.
A.32
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APPENDIX B
EPA AREA AUDIT
OFFICES AND
COGNIZANT
GEOGRAPHIC AREAS
B.I
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EPA AREA AUDIT OFFICES AND
COGNIZANT GEOGRAPHIC AREAS
Geographic Area
Pennsylvania, Delaware, Maryland, Vir-
ginia, West Virginia, and Washington,
D.C.
Maine, Connecticut, New York, Massa-
chusetts, Rhode Island, Vermont, New
Hampshire, New Jersey, Puerto Rico, and
Virgin Islands
Ohio, Michigan, Wisconsin, Minnesota,
Indiana, Illinois, Iowa, Nebraska, Missou-
ri, and Kansas
Colorado, Utah, Nevada, Hawaii, Wash-
ington, Oregon, California, Idaho, Monta-
na, Wyoming, Arizona, North Dakota,
Alaska, and South Dakota
Alabama, North Carolina, South Caroli-
na, Florida, Georgia, Mississippi, Texas,
Arkansas, Tennessee, Kentucky, Oklaho-
ma, New Mexico, and Louisiana
Address of Cognizant EPA Area
Audit Office
Mr. Juan Soto, Jr.
Area Audit Manager
Environmental Protection Agency
Mid-Atlantic Area Audit Group
401 M Street, S.W., Rm. 3708
Washington, D.C. 20460
(202) 755-0953
•
Mr. Joseph J. DeRosa
Area Audit Manager
Eastern Area Audit Group
90 Church St. - Suite 802
New York, New York 10007
(212) 264-5730
Mr. Roger Smith
Area Audit Manager
Northern Area Audit Group
1 North Wacker Drive
Chicago, Illinois 60606
(312) 353-7910
Mr. Truman R. Beeler
Area Audit Manager
Environmental Protection Agency
Western Area Audit Group
100 California Street
San Francisco, California 94111
(415) 556-1954
Mr. Leslie M. Buie
Area Audit Manager
Southern Area Audit Group
Suite 921
1720 Peachtree Road, N.W.
Atlanta, Georgia 30309
(404) 526-3623
B.2
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APPENDIX C
SURVEY OF GRANTEE'S
MANAGEMENT
SYSTEMS
c.i
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Survey of Grantee's
Management Systems
System
Accounting
1. Has the grantee established project accounting
records to record the costs applicable to EPA
grants or contracts?
2. Are all costs of a project recorded on these records?
3. Are the costs in these records used as the basis for
the grantee's financial status reports or vouchers?
4. Are the costs recorded on these records reflected on
and reconciled with control accounts contained in
the grantee's general ledger?
5. Are project accounts broken into subaccounts by
program element or cost objective?
6. Are approvals requested for significant deviations
from amounts contained in the grant proposals?
7. Is appropriate documentation maintained to
support the costs of:
a. personnel?
b. consultants?
c. fringe benefits?
d. purchases of material, supplies, and equip-
ment?
e. travel?
f. other costs?
8. Before being recorded, are the costs contained in
the project accounting records subjected to review
as to their reasonableness, allowability, and
allocability to the EPA grants?
9. Are controls established to assure that the grantee
does not claim costs incurred prior to or subse-
quent to the established grant period?
10. Are the controls or procedures exercised in
administering federal expenditures the same as
those utilized in the expenditure of the grantee's
funds? (When the grantee's requirements are more
stringent than EPA requirements, it is expected
that the grantee will treat federal funds as he
would treat his own.)
Yes
No
N/A
W/P Ref.
C.2
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System
11. Are the grantee's accounting records subjected to
an independent audit at least every two years?
Cash
12. Are appropriate controls in effect to assure that
vouchers or requests for advances are based on
actual expenditures recorded on the grantee's
project accounting records?
Personnel
13. Are procedures established to assure that em-
ployees working under federal grants are paid at
rates comparable to the rates paid other em-
ployees?
14. Do the personnel and/ or payroll records provide
support for time and attendance, leave, and
earnings for all employees?
15. Are time distribution records maintained to show
the amount of time spent on federal grants as well
as the time spent on other activities?
16. Are controls in effect to assure that personnel
costs are distributed in accordance with the time
reflected on time distribution records, i.e., reconcil-
iation of labor distribution and payroll records?
17. Have controls been established to assure that
overtime is appropriate for the project approved in
accordance with grantee policies, and acceptable
under the terms of the grant and applicable
Federal Regulations?
18. When personnel are working on projects other
than that sponsored by the federal grant, is the
cost of overtime:
a. charged to the federal project on which the
overtime was spent?
b. allocated over the individual's total work
during that period?
c. treated as an indirect cost?
d. other?
Yes
No
N/A
W/P Ref.
C.3
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System
Personnel (continued)
19. Have procedures been established governing the
charges of personnel time related to partners or
principles in closely held corporations?
20. Are formal procedures established with respect to
bonuses, retirement plans, and/ or profit sharing?
Procurement
21. Are procedures established to assure that profes-
sional services, equipment, material and/ or sup-
plies requested are really needed?
22. Are existing supplies or inventories reviewed to
assure that items requested are not already
available?
23. Are formal procurement procedures established to
assure that equipment, material, and supplies are
obtained on a competitive basis?
24. Are solicitations obtained from several sources so
that the grantee has assurance of obtaining the
most qualified party to perform needed profession-
al services?
25. Are quotations obtained and reviewed to assure
that the price proposed is reasonable to the
grantee and EPA?
26. Are procedures established to assure that the type
of contract utilized is appropriate for the procure-
ment being undertaken?
27. Are controls in effect to assure that the grantee
does not utilize types of contracts unacceptable to
the Federal Government?
28. Are internal controls utilized to assure that
contracts contain all required clauses:
a. access to records?
b. ownership of data?
c. termination?
d. applicable cost principles?
e. defective pricing (in fixed price contracts)?
Yes
No
N/A
W/P Ref.
C-4
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System
No
N/A.
W/PIUC
Procurement (continued)
29 Are procedures in effect to assure that the grantee
requests and obtains all required approvals:
a. subcontracts?
b. equipment purchases?
c. other capital expenditures?
Travel
30. Does the grantee have adequate established
policies governing reimbursement for travel?
31. Do these policies:
a. require the submission of travel vouchers
showing the time and purpose of travel?
b. clearly indicate the nature of expenses being
claimed?
c. require the submission of supporting documen-
tation?
Obligations
32. Are procedures established to assure that obliga-
tions reported are supported by appropriate
purchase orders, contracts, etc?
Obligations (continued)
33. Do these procedures require that obligations are
periodically reviewed with regard to their validi-
ty?
34. Do the procedures require the timely liquidation of
the obligations and the updating of information
contained on financial status reports?
Indirect Costs
35. Has the grantee established procedures indicating
which costs are considered direct costs as opposed
to indirect costs?
36. Is the grantee claiming indirect costs under
federal grants and contracts?
37. Has the grantee been submitting the required
indirect cost proposals to the federal agencies or
retaining them for review during audit?
C.5
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System
38. Have these proposals been audited and negotiat-
ed?
Property Management
39. Has the grantee established an equipment inven-
tory system for controlling property obtained
under federal grants?
40. Does this inventory system show:
a. a description of the item?
b. a related property tag number?
c. the federal equity in the equipment?
d. the location of the equipment?
e. the condition of the equipment?
41. Are periodic inventories made to validate invento-
ry information?
42. Are procedures established governing the use and
disposition of property acquired with federal
funds?
43. Do these procedures assure that EPA is notified of
any change in the use of the property?
44. Do the procedures assure that EPA receives its
appropriate share of any proceeds from disposi-
tion of the property?
Grant-Related Income
45. Have procedures been established to assure that
any income generated under the grant is identified
and that EPA will receive appropriate benefit from
such income?
Yes
No
N/A
W/P Ref.
C.6
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APPENDIX D
^ERENCES
REFERENCES
1. GAO "Standards for the Audit of Governmental Organizations, Programs,
Activities, and Functions"
2. FMC 74-4 Cost Principles Applicable to Grants and Contracts with State and Local
Governments
3. FPR Section 15.2 Cost Principles Applicable to Grants and Contracts with
Commercial Organizations
4. FMC 74-7 Uniform Administrative Requirements for Grants-in-Aid to State and
Local Governments
5. 40 CFR 30 Interim General Grant Regulations issued November 1971
6. 40 CFR 30 Final General Grant Regulations issued May 1975
7. 40 CFR 35 Interim Regulations State and Interstate Grant Programs
8. 40 CFR 40 Interim Regulations Research and Demonstration Grants
9. 40 CFR 45, 46 Interim Regulations EPA Training Grants and Fellowships
10. 40 CFR 126 Interim Regulations EPA Water Planning Grants
11. OASC-8, DHEW "A Guide for Local Governmental Agencies"
12. OASC-6, DHEW "A Guide for State Agencies"
13. OASC-5, DHEW "A Guide for Non-Profit Institutions"
•D.I
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