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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
SOUTHERN DIVISION, SUITE 278
1375 PEACHTREE STREET, N.E.
ATLANTA, GEORGIA 30309
(404) 347-3623 AUDIT
(404) 347-2398 INVESTIGATIONS
REGIONAL. OFFICE:
144S ROSS AVENUE, SUITE 1200
DALLAS, TEXAS 75202-2733
(214) 6S54C21 AUDIT
(214) 655-W10 INVESTIGATIONS
March 13, 1989
MEMORANDUM
Subject:
From:
To:
Audit Report No. E5cGN8-04-0329-9300028, Costs Claimed
Under Cooperative Agreement VO04477-02 by the
Department of Health and Environmental Control,
Columbia, South Carolina
D. Michael Bea
Acting Divisional Inspector General fozf Audit
Greer C. Tidwell
Regional Administrator
Region IV
SCOPE AND OBJECTIVES
We have performed an audit of Cooperative Agreement No. V004477-02
between the EPA and the South Carolina Department of Health and
Environmental Control (DHEC). Our objective was to determine if
costs claimed were reasonable, allowable, and allocable under the
terms of the agreement and applicable EPA regulations. The cost
principles contained in OMB Circular A-87 were used to determine
the acceptability of the cost claimed.
To accomplish our objective, we examined the project files for
fiscal years 1986 and 1987, files generated during our previous
audit (see Audit Report No. E5cG4-04-0100-70767, February 19,
1987), and DHEC's Finance and Accounting Records.
Our examination was made in accordance with the Standards for Audit
of Governmental Organizations, Programs. Activities and Functions,
issued by the Comptroller General of the United States, and
accordingly included such tests of the accounting records and other
auditing procedures as we considered necessary in the circum-
stances. We did not specifically review the DHEC's system of
internal controls; however, nothing came to our attention that
indicated noncompliance with respect to the items not reviewed.
Field work was accomplished during the week of November 14, 1988
and covered the period of performance from June 28, 1982 through
December 31, 1987.
WASHINGTON. U. 2MB
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SUMMARY OF FINDINGS
In our opinion, subject to the effects of EPA's ultimate resolution
of the questionable expenditures summarized below and presented in
Exhibit A, the costs claimed fairly present the financial informa-
tion in accordance with the financial provisions of the cooperative
agreement and applicable EPA regulations. The results of audit
are:
CLAIMED
Total Cost SI.259.735
ACCEPTED
$889.101
QUESTIONED
$370.634
FINDINGS AND RECOMMENDATION
Our review disclosed the DHEC claimed excessive and unsupported
costs totaling $370,634 as discussed in the following paragraphst
1• Contractor Change Order.
a. Finding. The DHEC claimed $249,367 more for change order
costs than Region IV had authorized in the final determination
letter. Region IV limited the Federal portion of the contractor's
proposed change orders to $54,000 based on EPA's technical
evaluation of the contractor's claim. The Region amended the
Cooperative Agreement adding $60,000, of which EPA would fund 90
percent. However, the DHEC claimed $309,367. Under EPA's general
grant regulations 40 CFR 31.70(c), EPA'8 notice of decision is
final after 30 days unless the grantee requested a review. The
DHEC did not appeal the final determination letter, therefore, the
amount in excess of the $54,000 EPA agreed to pay represents an
overpayment and should be recovered (see Site History for further
details}.
b. Grantee'a Comments. The Commissioner, South Carolina
Department of Health and Environmental Control, provided the
following comments (the Commissioner's complete comments are
attached to this report):
"The contractor submitted a request for change orders in
the amount of $542,302 which were dismissed by the State.
The contractor then appealed to the State Procurement
Officer, who rendered no decision. The State was then
forced to negotiate a settlement or face a lengthy court
battle with the contractor. The decision was made to
negotiate a settlement and $309,367 in change order cost
was approved. Concurrence was sought and obtained from
the U.S. EPA Region IV Regional Administrator in the
settlement. It was agreed that although EPA would only
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fund an additional $54,000 of the $209,367 Federal
portion of the payment, DHEC had additional unclaimed
costs of approximately $150,000 to make up the dif-
ference. The State has now claimed $140,006 in addition-
al costs, all of which has been disallowed by the
auditors [see following finding].
"Interim Audit No. E5CM4-04-0283-50360 was subsequently
conducted and $275,018 of the amount negotiated by the
parties was accepted, subject to technical review by EPA.
EPA agreed to support only $54,000 of the payment as
stated above.
"The State did not appeal the decision at the time
because it was felt an appeal would jeopardize it's
position in the court proceedings against the generators
which was in process."
c. Additional Audit Comments. On September 27, 1985, the
Region amended the Cooperative Agreement increasing the Federal
portion by $54,000 (90% of $60,000). The State disregarded this-
amendment and withdrew from their letter-of-credit an additional
sum of $209,367 to complete payment of the negotiated settlement
with the contractor.
The $150,000 of unclaimed cost the State indicates would offset
the over-withdrawal is not supported. The State has recorded .an
additional $9,500 of incurred cost since the interim audit of this
cooperative agreement. The disallowed costs of $140,006 the state
refers to are discussed in the following findings.
2.
Labor Coats.
a. Finding. The DHEC claimed $121,267 as State matching
costs for salary, fringe benefits, and indirect coats. However,
the costs were not properly supported by the State's method of
labor coat accounting. To arrive at the $121,267, the DHEC
subtracted budgeted Federal funding for Bluff Road labor costs in
the State'a Financial Management System (FMS) from labor costs
charged to Bluff Road as recorded in the State's Personnel Coat
and Accountability System (PCAS). However, the budgeted FMS and
the actual PCAS are not reconciled by the State. Therefore, the
$121,267 merely represents labor costs incurred on Bluff Road in
excess of what was originally budgeted for Federal funding. Since
PCAS is not reconciled to FMS, the State cannot establish the
$121,267 was not already paid by some other Federal grant.
Federal funding may have already occurred because the State uses
the FMS as its official accounting record for preparing the
Financial Status Report. Thus, Federal grants are charged coat
baaed on budgeted figures rather than actual. Without reconciling
the two accounting systems, the State cannot determine the actual
labor costs paid with State funds.
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b. Grantee's Comments. The Commissioner, South Carolina
Department of Health and Environmental Control, provided the
following comments:
"The State utilizes the Personnel Cost Accounting System
PCAS to account for all direct labor costs incurred in
its Environmental Programs. The Financial Management
System is a budgeting tool used for distributing the
various State and Federal funds to cost centers for
accounting purposes. The budget limits the amount of
Federal funds which can be spent to the amount specified
in the Cooperative Agreement; however, State and Federal
funds are not distinguished by line item.
"The State agrees to provide a certain number of full
time equivalent man years in the Cooperative Agreements.
The State is not required to identify each individual by
FTE, so it is possible that one FTE in the Agreement may
be made up by several individuals. The PCAS is used to
accumulate FTE's as well as labor costs in each program.
"The PCAS system is directly related to actual payroll.
Actual labor costs are distributed based on each in-
dividual's time sheet. Therefore, actual distributed
cost cannot exceed budgeted cost. It is possible for
budgeted costs to exceed actual costs, if, for instance,
the Cooperative Agreement contain no State Matching
Funds. But the State would not be able to claim the
excess costs on the Financial Status Report, resulting
in the lapse of the Federal funds.
"The Auditors question the State's process of reconcil-
ing budgeted FMS payroll costs and actual PCAS costs.
The State's process of reconciliation determines that
the level of effort is sufficient to meet requirements
of the Cooperative Agreement. We can find no requirement
in circular A-87 which requires each individual to be
reconciled to this budgeted cost.
"Further, our Cooperative Agreements contain the fol-
lowing special condition:
This Award and resulting ration of funding la
based on estimated cost requested in the
application. Final allowable cost for EPA
participation shall not exceed 60% (appropri-
ate statutory limitation) of total eligible
cost or total funds awarded.
"We feel the State has met the requirements of circular A-87
4
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and EPA in accounting for actual labor costs. The total
cost identified by PCAS balances to the total budgeted FMS
costs. The reconciliation process has been further descri
bed in our response to EPA audit, Report No. E3BW8-04-0333.
We feel these controls are adequate to meet established
requirements and provide controls to protect both State and
Federal interests.
"Disallowing State Matching Funds under these conditions
is not justified."
c. Additional Audit Comments. The State cannot provided
documentation to support the questioned $121,267. Without recon-
ciling the two accounting systems, the State can neither establish
that the $121,267 was not already paid under some other Federal
grant, nor determine that actual labor costs were paid using State
funds. The State's concern over budgeted full-time equivalents is
not at issue.
3. Security Costs. In our draft report, we questioned $18,739
for certain security costs for which the State could not support.
In responding to the draft, the State located the appropriate
documentation.
RECOMMENDATION
We recommend that Region IV not participate in the dollar amounts
questioned. In addition, Region IV should recover funds due EPA
in accordance with established guidelines.
ACTION REQUIRED
In accordance with EPA Directive 2750, the action official is
required to provide this office with a copy of the proposed
determination on the findings within 90 days of the audit report
date.
BACKGROUND
Section 104(c)(3) of the Federal Comprehensive Emergency Response
Compensation and Liability Act of 1980 commonly referred to as
Superfund, provides that no remedial action can be taken unless
the State in which the hazardous release occurs first enters into
a contract or cooperative agreement with EPA, ensuring that the
State will, (1) assume the operation and maintenance responsibil-
ity* (2) provide a facility for off-site disposal, and (3) share
in the cost of the remedial action taken.
On June 28, 1982, the EPA awarded Cooperative Agreement Number
V004477-02 to the South Carolina DHEC to clean up the South
Carolina Recycling and Disposal site commonly known as the Bluff
Road site. This cleanup was necessary to help control surface and
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ground water pollution and eliminate an environmental hazard
resulting front improper disposal of hazardous wastes. The planned
remedial action used a two-phased approach. The first phase was
to remove and dispose of the remaining surface drums and other
contaminated waste chemicals stored on site that remained after the
original removal action was completed. The second phase was to
conduct a field investigation to determine remaining problems and
to determine the most cost effective remedial action to be taken.
SITE HISTORY
The DHEC's attention to the Bluff Road site was drawn by an
incident in October 1977. Following a rain, water seeped into and
reacted with the contents of several 55-gallon drums on site. The
reaction formed a dense corrosive vapor cloud over State Highway
48. The cloud prompted about 50 persons, including motorists,
police, and fire department personnel to seek medical attention.
The DHEC requested South Carolina Recycling and Disposal to compile
an inventory of the materials stored on site. After a review of
the inventory, State officials began negotiating with the company
to remedy site problems. After failing to negotiate any positive
actions, DHEC filed suit against South Carolina Recycling and
Disposal in May 1979. The State's suit was not successful.
In March 1980, the EPA performed an environmental study of the area
surrounding the site. Samples were taken from soil, surface water,
sediments in nearby drainage ditches, several water supply wells,
and Myers creek. Samples taken from Myers creek and the water
wells were considered inconclusive. However, levels of contamin-
ants in the drainage ditches were significant and corresponded to
the contaminants found on site. This study concluded that contam-
inated runoff was probably leaving the site during rainfall periods
and contaminating shallow groundwater near the site. As a result
of this study, EPA filed suit in July 1980 to: (1) halt further
acceptance of waste at the Bluff Road site, (2) abate the environ-
mental problems caused by the existing waste, and (3) properly
dispose of all waste at the site. This suit was successful.
In early 1981, the Bluff Road site was evaluated for inclusion on
EPA's National Priority List (NPL) of hazardous waste sites. The
site, identified by the State as its number one priority, was later
included on the NPL as the 83rd ranked site in the Nation. In late
1981, the State, in conjunction with EPA Region IV, applied for
CERCLA Trust Fund monies to cleanup the site. On December 24, 1981
the funds were approved and plans got underway to begin the
cleanup. However, a number of companies, which had generated some
of the wastes stored at the site, expressed interest in funding
cleanup of the area. The companies negotiated a settlement to fund
the removal of 75 percent of the waste on the site at a cost of
$1,865,360. The EPA intents to recover the remaining cost from
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responsible parties that did not agree to participate in the
cleanup.
Following the foregoing cleanup, the EPA and the State began the
remainder of the surface cleanup under Cooperative Agreement No.
V004477.02. In January 1983, bids were received. The successful
bidder was Defender Vactor Systems, Inc. (Defender), with a bid
$519,586.
On July 1, 1983 Defender submitted a letter of substantial com-
pletion and a notice of intent to request change orders. The
request for change orders was submitted in August 1983. These
change orders were first dismissed as being submitted in an
untimely manner. After a request for reevaluation, the State
declared 20 of the change orders as submitted untimely and the
remaining five as lacking merit. Defender then filed a complaint
with the State's procurement officer and an evidentiary hearing
was held in Columbia. The hearing officer ordered the parties to
negotiate a settlement. The original change order requests totaled
$542,302. Defender and the State negotiated a settlement of
$309,367. The EPA, through a technical evaluation of the change.
orders, agreed that $60,000 was eligible and issued a grant
modification for an increase in funding of $54,000 for the 90
percent Federal portion of the change order costs. However, the
State paid $100,000 of the settlement from State funds and the
balance by withdrawing $209,367 from its letter of credit with the
EPA.
In the interim audit of this Cooperative Agreement (see Audit
Report No. E5cG4-04-0100-70767, February 19, 1987), we reported
that the Contractor and the State had agreed to settle for
$309,367, that the State paid Defender $100,000 from state funds
and paid the remaining $209,367 using funds from the EPA letter of
credit. The EPA, in a final determination notice dated December
20, 1985, agreed to fund only $54,000 of the settlement. Since the
State did not appeal the final determination, we questioned the
excess of $155,367 over the $54,000 as an overpayment in accordance
with 40 CFR 30.1200(c).
Region IV concurred with the audit finding that EPA's participation
was limited to $54,000 and the difference of $155,367 was unallow-
able. However, since this was an interim audit, and the DHEC had
informed the Regional Administrator that it had incurred some
$150,000 of personnel, fringe benefits, and operational costs which
it had not yet claimed, the Region did not require repayment. DHEC
recorded only $9,500 in additional costs since the interim audit.
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EXHIBIT A
SUMMARY OF COSTS CLAIMED, ACCEPTED, AND QUESTIONED
COOPERATIVE AGREEMENT NO. VO04477-02
June 28, 1982 to December 31, 1987
Classification
Salaries $
Fringe Benefits
Travel
Indirect Cost
Contractual Services:
Task I
Task II
Other Cost
Claimed Accepted Questioned
Total
143,026
24,496
6,149
18,359
837,436
210,106
20.163
$ 50,002 $ 93,024
8,606 15,890
6,149
6,006 12,353
588,069
210,106
20.163
Federal Sharet
Task II** at 100%
Remainder at 90%
Less EPA Payments
Amount Due EPA
$210,106
611.096
$821,202
998.102
$176.900
249,367
Ref
Note 1
Note 2
Note 2
Note 3
$1.259.735 $889.101 $37
Per the cooperative agreement, Task II costs were 100
percent funded by the EPA.
Note 1: Cost questioned represents salary costs of individuals
assigned to other Federal or State programs. The costs
for these individuals have already been claimed on other
programs; therefore, to allow DHEC to claim these costs
as part of its state matching costs would result in a
double payment. The State has not adjusted or removed
the salary costs from the programs in which these
individuals are assigned. The accepted amount is that
cost actually recorded in DHEC's official accounting
records.
Note 2i Cost questioned represents fringe benefits and indirect
cost applicable to the salary cost questioned in Note 1.
8
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Note 3: Cost questioned represents the difference between what
DHEC agreed to pay the cleanup contractor for change
order costs and the change order costs the EPA agreed to
participate in. After a technical evaluation of the
change orders submitted by Defender Vactor, the EPA
agreed, to participate in $60,000 of the added charges.
However, the State's negotiated a settlement with Defen-
der for $309,367 and claimed the full amount under the
cooperative agreement. However, the EPA had issued a
letter of decision on December 20, 1985, indicating the
amount eligible would be $60,000 and gave the State 30
days to appeal. The State did not appeal. Therefore,
according to 40 CFR 31.79(c), EPA's notice of decision
is final.
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South Carolina Department of Health
and Environmental Control
f
m '
MAR 2 1989
2600 Bull Street
Columbia, S.C. 29201
Commissioner
Michael D. Jarrctt
February 23, 1989
OFFICE OP INSPECTOR
AUDIT
CSKZRAL
Board
Toney Graham, Jr., M.D., Chairman
Henry S. Jordan, M.D., Vice-Chairman
John B. Pate. M.D., Secretary
William E. Applegate
Oren L. Brady. Jr.
John Hay Bumss
Euta M. Colvin, M.D.
0. Michael Beard
Acting Divisional Inspector General for Audit
United States Environmental Protection Agency
Office of Inspector General, Southern Division
1375 Peachtree Street, N.E.
Atlanta, Georgia 30309
RE: Draft Audit Report E5cGN8-04-0329
Dear Mr. Beard:
Enclosed you will find a response prepared by our Environmental
Quality Control staff to the above referenced draft audit report.
We believe that this draft audit basically deals with two main
issues.
The first and most important issue deals with documentation of our
labor costs through our Personnel Cost Accounting System (PCAS).
By letter of January 10, 1989, to Michael D. Simmons, then Acting
Divisional Inspector General for Audit, we feel that we have
adequately responded to this matter and corrective action has been
implemented (Draft Audit Report E3bW8-04-0333).
The second issue contained in this draft audit report deals with
circumstances surrounding the necessary clean-up of the Superfund
site located on Bluff Road in Columbia. Our Environmental Quality
Control staff felt that it would be beneficial to list a chronolo-
gy of the events surrounding this clean-up from our perspective,
because of the length of time this issue has been outstanding.
We are interested in resolving these matters as quickly as possi-
ble. We believe that the end result will be a recognition of the
fact that EPA has received full benefit for the dollars that it
has invested in this agency.
Please let me know if further information is desired.
Sincerely,
Michael D.
Commission
«DJ/br
Appendix I
Page 1 of 8
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RESPONSE TO EPA AUDIT ESCGN8-04-0329
A. Change Orders
The Bluff Road disposal site of the South Carolina Recycling and
Disposal Company (SCRDC) has been a concern of the Department for almost
twelve years. From the time that DHEC's attention was first drawn to the
site, much effort has been expended by State DHEC and Federal EPA to ensure
that the most thorough clean-up possible was attained at the lowest
possible cost. Although this effort was expended in good faith, the
ditors have disallowed certain claims as frivolous on purely technical
"grounds and have not considered all the circumstances involved in the
decisions that had to be made by the State and EPA.
After initial efforts to get SCRDC to clean up the site failed,
other avenues were explored. An evaluation of the site under CERCLA
(Superfund) criteria resulted in the site being designated as the State's
number 1 priority and also being placed on the EPA's National Priority
List. EPA Region IV urged the State in 1981 to apply to EPA in Washington,
D.C., for Superfund monies to clean-up the site. The funds were approved
in December 1981.
At about the same time, approximately three-fourths of the
Ferators responsible for the waste at the site initiated a voluntary
Appendix I
Page 2 of 8
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action to clean-up their portion of the waste. The contributions amounted
to $1,579,760 for the surface clean-up and $91,140 for groundwater
remediation. The S.C. D.H.E.C. contributed an additional $6,000.00. One
of the generators, RAD Services, Inc., provided the clean-up services in
lieu of payment.
The majority of the funds were received by March 19, 1982, and
the clean-up was begun.
On March 23, 1982, a partial consent decree was entered in the
United States District Court for the District of South Carolina, Columbia
Division, between the United states of America and the State of South
rolina, plaintiffs, and the responsible parties agreeing to contribute to
the clean-up. The consent decree absolved those responsible parties from
liability under C.E.R.C.L.A., and provided for the timely disposition of
their portion of the waste. Those generators not a party to the decree,
also called the Settlement Agreement, remained liable for treble damages
under the Act.
The U.S. Justice Department, representing EPA, brought action
under the Act to require the remaining responsible parties to pay for the
remainder of the clean-up. The State, represented by the Legal Department
of S.C. D.H.E.C., also joined in the suit to recover any costs incurred by
the State.
The clean-up proceeded rapidly from this point and the action
covered by the Settlement Agreement was substantially completed by the end
Appendix I
Page 3 of 8
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the year. RAD Services did an excellent job and carried out their
responsibility as agreed without incident.
On May 6, 1982, the State applied for a Cooperative Agreement for
action at the site to clean-up the remaining 25% of the waste. The
application was approved, and Cooperative Agreement number V004477-02 was
awarded on June 28, 1982. This document was unprecedented in its
complexity, containing 33 special conditions. The usual agreement
contains an average of three special conditions.
The State was in favor of allowing Rad Services to complete the
clean-up, because they were on site and could complete the work at the
est cost and in the shortest period of time. However, the State was
required to competitively bid the job.
Because of the complexity of the Law and the Cooperative
Agreement, neither the State nor EPA was competent to develop a request for
proposals. A private contractor was engaged for this purpose. The bidders
were not successful in understanding the resulting bid document, having
their initial bids thrown out by the State at the request of EPA.
The job was re-bid in January 1983. The State was of the opinion
that the successful bidder. Defender Vactor Systems, was not qualified, and
that their bid of $519,506 was too low. However, the State was forced to
accept the bid in the interest of completing the work. Payments to
[fender were $828,953 after change orders. Rad Services original bid was
$685,908. Appendix I
Page 4 of 8
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Defender's progress at the site was closely monitored by the
State. Although the relationship between the state and the contractor was
somewhat strained, resulting from a lack of experience on both sides, the
surface clean-up was substantially completed by July 1, 1983. The
contractor submitted a request for change orders in the amount of
$542,302 which were dismissed by the State. The contractor then appealed
to the State Procurement Officer, who rendered no decision. The State was
then forced to negotiate a settlement or face a lengthy court battle with
the contractor. The decision was made to negotiate a settlement and
$309,367 in change orders were approved. Concurrence was sought and
obtained from the U.S. EPA Region IV Regional Administrator in the
settlement. It was agreed that although EPA would only fund an additional
^4,000 of the $209,367 Federal portion of the payment, DHEC had additional
unclaimed costs of approximately $150,000 to make up the difference. The
State has now claimed $140,006 in additional costs, all of which has been
disallowed by the auditors (See Section B and C).
Interim Audit No. ESCM4-04-0283-50360 was subsequently conducted
and $275,018 of the amount negotiated by the parties was accepted, subject
to technical review by EPA. EPA agreed to support only $54,000 of the
payment as stated above.
The State did not appeal this decision at the time because it was
felt an appeal would jeopardize it's position in the court proceedings
against the generators which was in process.
aoai
Appendix I
Page 5 of 8
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B. State Matching Cost
The State utilizes the Personnel Cost Accounting System to
account for all direct labor costs incurred in its Environmental Programs.
The Financial Management System is a budgeting tool used for distributing
the various State and Federal funds to cost centers for accounting
purposes. The budget limits the amount of Federal funds which can be spent
to the amount specified in the Cooperative Agreement. The budget is based
on each line item in the Cooperative Agreement; however, State and Federal
funds are not distinguished by line item.
The State agrees to provide a certain number of full time
Jfejuivalent man years in the Cooperative Agreements. The State is not
required to identify each individual by FTE, so it is possible that one FTE
in the Agreement may be made up by several individuals. The PCAS system is
used to accumulate FTE's as well as labor costs in each program.
The PCAS system is directly related to actual payroll. Actual
labor costs are distributed based on each individual's time sheet..
Therefore/ actual distributed cost cannot exceed budgeted cost. It is
possible for budgeted costs to exceed actual costs, if, for instance, the
Cooperative Agreement contained no State Matching Funds. But the State
would not be able to claim the excess costs on the Financial Status Report,
resulting in the lapse of the Federal funds.
The Auditors question the State's process of reconciling budgeted
FMS payroll costs and actual PCAS costs. The State's process of
reconciliation Appendix I
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'determines that the level of effort is sufficient to meet the requirements
of the Cooperative Agreement. We can find no requirement in circular A-87
which requires each individual to be reconciled to this budgeted cost.
Further, our Cooperative Agreements contain the following special
condition:
This Award and resulting ration of funding is based on estimated
cost requested in the application. Final allowable cost for EPA
participation shall not exceed 60% (appropriate statutory
limitation) of total eligible program cost or total funds
awarded.
This condition indicates EPA bases its determination of Federal
participation on total effort and actual cost. An after the fact
determination of Federal participation by percentage of cost does not
support methods which would reconcile budgeted costs at the beginning of
the grant.
We feel the State has met the requirements of circular A-87 and
EPA in accounting for actual labor costs. The total cost identified by
PCAS balances to the total budgeted FMS costs. The reconciliation process
has been further described in our response to EPA audit E3BW8-04-0333. We
feel these controls are adequate to meet established requirements and
provide controls to protect both State and Federal interests.
Disallowing State Hatching Funds under these conditions is not
' *r
justified. Appendix I
7 of 8
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C. Questioned cost represent funds expended for security services by
a private contractor at the Bluff Road site. The State has documentation
to substantiate these costs.
Appendix I
Page 8 of 8
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Appendix II
DISTRIBUTION
Chief, Financial, Management Branch
Chief, Grants & Contracts Administration Unit
Chief, Facilities Construction Section
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