/ OFFICE OF INSPECTOR GENERAL
Audit Report
EPA Managers Did Not Hold
Supervisors and Project Officers
Accountable for Grants
Management
Report No. 2005-P-00027
September 27, 2005
51X3
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Report Contributors: Randy Holthaus
Matthew Sitnber
Khadija Walker
Abbreviations
EPA Environmental Protection Agency
GAO Government Accountability Office
OIG Office of Inspector General
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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
2005-P-Q0027
September 27, 2005
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EPA Managers Did Not Hold Supervisors and
Project Officers Accountable for Grants
Management
What We Found
Although the Agency has made some progress to establish accountability,
managers did not sufficiently hold supervisors and project officers accountable for
grants management because there is no process to measure most grants
management activity. Managers and supervisors generally did not discuss grants
management responsibilities during year-end evaluations. In the limited cases
where grants management weaknesses were identified, managers did not
effectively communicate these weaknesses to staff.
As a result, systemic grants management weaknesses that the Office of Inspector
General and the Government Accountability Office have reported on for the past
several years continue to exist.
What We Recommend
We recommend that the Assistant Administrator for Administration and
Resources Management work with Assistant Administrators and Regional
Administrators to: (1) establish a process to measure project officer, supervisor,
and manager performance against grant management requirements to form the
basis for performance ratings and discussions; (2) ensure managers and
supervisors review and discuss grants management during performance
evaluations as appropriate; and (3) ensure that the weaknesses identified in a
management review or self-assessment are communicated to the appropriate
project officer and supervisor.
EPA agreed with the recommendations and provided an outline of its action plan
in its response. EPA needs to provide more detail on specific actions it plans to
take to implement the recommendations and the milestone dates for completing
those actions.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
MEMORANDUM
SUBJECT:
FROM:
TO:
September 27, 2005
EPA Managers Did Not Hold Supervisors and Project Officers
Accountable for Grants Management
Report No. 2005-P-00027
Director for Assistance Agreement Audits
Luis A. Luna
Assistant Administrator for Administration and Resources Management
This is our final report on accountability in the Environmental Protection Agency's (EPA) grants
management process. This report contains findings and recommendations to help EPA hold
supervisors and project officers accountable for grants management responsibilities. Final
determinations on the findings in this report will be made by EPA managers according to
established procedures.
We revised some information in the Background of the report based on your response to our
draft report. We have included your response and our comments to it in Appendix C.
Action Required
In accordance with EPA Manual 2750, you are required to provide a written response by
December 27, 2005. While your response to our draft report indicated your agreement with the
recommendations and provided an outline of your action plan, your response to this report must
include additional detail on specific actions EPA plans to take to implement the
recommendations, and the milestone dates for completing those actions. For corrective actions
planned but not completed by the 90-day response date, please describe the actions that are
ongoing and provide a timetable for completion.
We appreciate the efforts of EPA officials and staff in working with us to develop this report. If
you or your staff have any questions regarding this report, please contact me at
(312) 886-3037 or Randy Holthaus at (214) 665-6620.
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Table of Contents
At a Glance
Purpose of Audit 1
Background 1
EPA Did Not Hold Staff Accountable 2
EPA Made Some Progress to Establish Accountability 2
EPA Did Not Have a Process Designed to Measure Project Officer Performance
of Grants Management Responsibilities 3
Managers and Supervisors Did Not Discuss Project Officer Responsibilities
During Year-End Evaluations 4
Managers Did Not Effectively Communicate Identified Weaknesses 5
Conclusion 6
Recommendations 7
Agency Response and OIG Comments 7
Appendix A - Scope and Methodology 8
Appendix B - Summary of Grants Management Weaknesses 10
Appendix C - Agency Response 11
Appendix D - Distribution 15
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Purpose of Audit
In Febmaiy 2005, the Chairman of the House Committee on Transportation and Infrastructure
requested that the Office of Inspector General (OIG) examine the issue of accountability in
EPA's grants management process. The Chairman requested that our work focus specifically on
project officers and mid-level managers. Our audit objective was to answer the following
question: Is EPA holding project officers and supervisors accountable for their grants
management responsibilities?
Background
Assistance agreements' are the primary vehicle through which EPA accomplishes its mission. In
fiscal year 2004, EPA awarded $4.3 billion in assistance agreements, which represents about half
of EPA's budget. Project officers conduct competitions, evaluate proposals, and recommend and
oversee assistance agreements. As of September 2004, EPA had 2,383 active project officers
managing assistance agreements. Most project officers managed 5 or fewer assistance
agreements; 29 percent of project officers managed one. About one-third of the project officers
spent less than 10 percent of their time on project officer responsibilities.
In March 2003, the OIG reported that EPA leadership did not always stress the importance of
project officer duties and did not hold project officers accountable for conducting complete pre-
award reviews. As a result, there was insufficient assurance that proposed costs were reasonable,
that recipients were technically capable to perform the work, and ultimately that the projects
would accomplish program objectives or achieve desired environmental results. It is crucial, we
stated in our report, that EPA creates an environment where the management of assistance
agreements and the project officer function are considered vital to EPA's mission. Since that
time, the OIG and the Government Accountability Office (GAO) have continued to report on
EPA assistance agreement weaknesses.
In July 2004, EPA's then-Acting Assistant Administrator for Administration and Resources
Management testified before the House Transportation & Infrastructure Committee,
Subcommittee on Water Resources and Environment. He testified that EPA had begun to
address grants management weaknesses and one of EPA's goals was to increase accountability
among grants management staff.
In this report, we differentiate between the terms "manager" and "supervisor." We use
"manager" to define high-level EPA managers who are typically Assistant Administrators,
Regional Administrators, Senior Resource Officials, or Division Directors. We use "supervisor"
to define project officers' first-line supervisors, who typically are Branch or Section Chiefs.
1 Grants are a type of assistance agreement and we use the terms interchangeably in this report.
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EPA Did Not Hold Staff Accountable
Although the Agency has made some progress establishing accountability, managers did not
sufficiently hold supervisors and project officers accountable for grants management because
there is no process to measure most grants management activity. Managers and supervisors
generally did not discuss grants management responsibilities during year-end evaluations. In the
limited cases where grants management weaknesses were identified, managers did not
effectively communicate these weaknesses to staff.
Because EPA managers did not hold supervisors and their project officers accountable for grants
management, weaknesses in grants management continue. In recent EPA internal reviews (see
Appendix B), EPA identified seven reoccurring weaknesses in grants management These
weaknesses are the same weaknesses reported by the OIG and GAO over the past several years.
According to the audit reports, these weaknesses resulted in insufficient assurances that proposed
costs were reasonable, recipients were technically capable, and projects would accomplish
program objectives and achieve desired environmental results.
EPA Made Some Progress to Establish Accountability
EPA has made progress in some areas of accountability. According to the Office of Personnel
Management model on accountability, a system of accountability should include four elements:
establishing requirements, communicating the requirements, measuring employee performance
against those requirements, and rewarding or correcting employee performance. EPA has made
significant progress on the first two elements.
To establish and communicate grants management responsibilities, EPA has issued a number of
policy statements. For example, EPA's Assistance Administration Manual 5700 includes a roles
and responsibilities matrix that identifies about 140 grants management responsibilities for
project officers. Examples of these responsibilities include: preparing competition
announcements; reviewing applications for funding; preparing funding recommendations; and
monitoring recipient activities through progress reports, site visits, and desk reviews. Project
officers also ensure that all work is satisfactorily completed, reports are received and approved,
and that all technical and programmatic terms and conditions have been met. Grant Policy
Issuance-04-03, Performance Standards for Grants Management, requires supervisors to (1)
ensure that project officers timely and properly administer grants, (2) complete and document
grant monitoring, and (3) obtain adequate training and support.
In 1995, EPA issued Order No. 1130.2A, which established the role of Senior Resource Official
as EPA's primary point of accountability charged with strengthening Agency-wide fiscal
management practices. Senior Resource Officials are Senior Executive Service managers who
are typically Deputy Assistant Administrators or Assistant Regional Administrators. Senior
Resource Officials are required to ensure an effective system of accountability for fiscal resource
management. Senior Resource Officials are also required to ensure that program or regional
project officers and their supervisors maintain Agency-required training, and have appropriate
resource management responsibilities in their performance standards. Senior Resource Officials'
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accountability, like the accountability of other EPA managers and officials, cannot be delegated,
regardless of the extent functions are delegated.
In addition to defining roles and responsibilities, EPA has established several new policies for
awarding and managing grants. For example, EPA has issued orders on competing and
monitoring grants, obtaining environmental results from grants, and assessing grants
management capabilities of non-profit applicants. In response to OIG recommendations, the
Agency required all program and regional offices to review grants management staff's
performance standards and ensure that the agreements included language representing their
grants management responsibilities. EPA also requires all new project officers to attend a 3-day
training course and to complete an online refresher training every 3 years. In 2005, EPA
provided training to project officers on the revised Competition Order.
EPA Did Not Have a Process Designed to Measure Project Officer Performance of
Grants Management Responsibilities
EPA did not have a process to measure individual project officer performance of grants
management responsibilities. According to EPA's roles and responsibilities matrix, the project
officer is responsible for performing about 140 grants management tasks. However, EPA has no
methodology to measure whether the project officer performs these tasks effectively. Effective
project officer performance increases the likelihood mat the grant will be successful. While EPA
officials believe that measurement information exists in current systems, or will be enhanced by
new systems, these systems are either not fully implemented or have not been effectively used.
Supervisors did not gather information on project officer performance; supervisors relied on
project officers to inform them of grants management weaknesses. A supervisor in the Office of
Water stated mat he does not check his project officers' files or focus on the grants management
process with his employees because "micromanaging is just not an effective strategy." An
Office of Enforcement and Compliance Assurance supervisor stated that he relies on his project
officer to update him on grants management policies and procedures.
When supervisors relied on project officers to inform them of grants management responsibilities
and weaknesses, those supervisors, in some cases, were not aware of grants management issues.
For example, an Office of Water supervisor should have known that a project officer - who she
had supervised and evaluated for two years - was a board member of a grantee. The supervisor
was not aware of the apparent conflict of interest and the extent to which the project officer was
involved with the grantee. The project officer has been a board member for the last ten years and
attended the meeting when the board decided what work they would do and decided to request
EPA's support for the project. This project officer did not consult an ethics official concerning
his role as an EPA project officer and a grant recipient board member.
Office of Administration and Resources Management officials stated that the new Performance
Appraisal and Recognition System will help measure project officer performance of grants
management responsibilities. The new system includes five possible ratings and replaces a
pass/fail rating system. The new system is expected to increase supervisors' communication of
expectations to their employees, ensure that employees' standards link to the Agency strategic
plan and goals, and move the Agency toward an outcome and results-based organization.
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However, EPA has not stated how project officer performance of grants management
responsibilities will be measured under this new system.
Office of Administration and Resources Management officials also believe much of the
information needed to measure project officer performance is included in the Integrated Grants
Management System. This system has not been rolled out Agency-wide, so many managers do
not have access. In cases where managers do have access, they are either not comfortable using
computer systems or do not know about the system features available to them. Without
performance data on project officer grants management responsibilities, supervisors could only
base their determinations in project officer evaluations on assumptions not measurements.
Managers and Supervisors Did Not Discuss Project Officer Responsibilities
During Year-End Evaluations
Supervisors generally did not discuss project officer responsibilities during year-end evaluations.
If grant issues were addressed, the discussion focused on the recipient's performance, rather than
specific project officer tasks. Out of 26 project officers, only 5 said their supervisor had a
discussion with them about their project officer responsibilities during their year-end evaluation.
For example, the Office of the Administrator received management review results and conducted
an internal review in 2004, both of which identified a project officer who did not fulfill his grants
management responsibilities. The project officer recommended a $3 million award over 5 years
to a recipient that only proposed an initial budget of $50,000 for 1 year. However, the file
contained no documentation to support how the remaining $2.95 million would be used. The
office's Junior Resource Official informed us that the project officer still has not documented his
file adequately to include the complete award application, the workplan, and evidence of a
preaward review. In 2004, the project officer was given a successful rating, and he stated that his
grants management responsibilities were not discussed during his year-end evaluation.
Managers did not discuss grants management during supervisors' year-end evaluations. Of 22
supervisors, 18 did not have a discussion of their project officers' grants management
responsibilities. For example, the Office of Prevention, Pesticides and Toxic Substances' self-
assessment stated: "3 active assistance agreements reviewed during the [self-assessment] no
longer had a project officer assigned to them for management and administration." The project
officer, who was assigned to at least six grants, left to work in another office. The supervisor,
who also left temporarily to work in another office at the same time, stated that she knew of the
problem prior to her departure, and that the reassignment of the grant responsibilities to another
project officer "fell ihrough the cracks." After the self-assessment was complete, and at least
four months after the project officer left the office, the office assigned a project officer to the
grants. The supervisor stated that this issue - not reassigning the work - was not mentioned in
her year-end evaluation.
In the Office of International Affairs, supervisors missed an opportunity to obtain information
about project officer performance from an assistance team. The assistance team helped project
officers understand new grants management policies and examined funding packages. While
relying heavily on the assistance team to help project officers understand and execute their grants
management responsibilities, supervisors did not use the assistance team to obtain performance
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information. The continual interactions between team members and project officers would be
valuable information to consider when preparing performance evaluations.
Supervisors provided various reasons for rating project officers as successful without discussing
grants management responsibilities. For example, supervisors stated that the year-end evaluation
should focus on problems or issues with grantee performance; project officer responsibilities
should be discussed at staff meetings or at other times throughout the year. Other supervisors
stated that the focus of performance evaluations should be on EPA program accomplishments
and not on project officer duties. One supervisor stated that he expects his project officers to
notify him of any problems with grants management. Another supervisor stated that because
grants management was such a small portion of an employee's job, a project officer would need
to be negligent of their grants management responsibilities before the supervisor would rate the
project officer unsuccessful.
Managers Did Not Effectively Communicate Identified Weaknesses
Managers did not effectively communicate weaknesses to supervisors; supervisors were not
aware of the identified weaknesses and could not ensure their project officers corrected them. Of
22 supervisors, 19 were not aware of their project officers' weaknesses identified in the 2004
management reviews and self-assessments. The types of weaknesses included, but were not
limited to, grants with: no documentation of cost reviews, no documentation of baseline
monitoring, and no documentation of a technical review.
The Director of EPA's Office of Grants and Debarment told us that EPA uses three tools to
review implementation of grants management policies: Comprehensive Grants Management
Review (management review), Grants Management Self-Assessment (self-assessment), and
Grantee Compliance Review. According to EPA policy, the purpose of the management review
and the self-assessment is to identify grants management weaknesses in program and regional
offices. EPA's Grants Administration Division conducts the management reviews while the
program or regional offices perform self-assessments. During these reviews, EPA selects grants
and examines project officer performance of grants management responsibilities. In many cases,
EPA identified project officer performance weaknesses in the management reviews and self-
assessments. We did not include the Grantee Compliance Review in our work because these
reviews focused on recipient performance and not project officer responsibilities.
A Grants Administration Division senior management analyst stated that the purpose of the
management reviews and self-assessments was to identify systemic weaknesses throughout the
regional and program offices and there was never any intent to provide specific feedback to
project officers concerning their grants management deficiencies. While we recognize that these
reviews were not intended to highlight individual project officer performance, EPA could use the
data collected during these reviews to enhance Agency efforts to correct grants management
weaknesses.
Of 26 project officers we interviewed, only 8 were aware of their weaknesses identified in the
management reviews and self-assessments, and only 2 corrected their identified weaknesses. In
both cases where the project officer corrected the weaknesses, the supervisor was also aware of
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the weaknesses. Among the reasons cited by the six project officers who did not correct the
deficiencies were: they were no longer going to serve as a project officer, and they did not think
the criteria against which they were measured pertained to their award.
Some project officers would have corrected their weaknesses, if informed. Two project officers
told us that they were concerned that EPA identified weaknesses with their grants, but they were
not told. The first project officer, from Region 3, said he dedicates over 75 percent of his time to
manage 20 grants. According to EPA, project officers manage on average 5.2 assistance
agreements. The project officer was sure that the management review would find issues
concerning his grants, because he did not believe he had sufficient time to manage 20 grants
effectively.2 Although the management review identified weaknesses with his grants, the project
officer stated that he did not receive any feedback. For the second project officer, from the
Office of Water, the management review identified that environmental outcomes were not
included in the workplan and there was no evidence of baseline monitoring of the grant. This
project officer felt that she would have benefited greatly from the management review if she had
been provided feedback. She stated she constantly tries to improve her performance and does
not understand why she would not be notified of individual grants management weaknesses.
Conclusion
EPA has made some progress establishing accountability for grants management by defining
roles and responsibilities for project officers, supervisors, and managers. However, EPA has not
measured project officer performance of grants management responsibilities nor has it routinely
provided performance results of these activities to project officers. Measuring employee
performance against requirements and rewarding or correcting employee performance are two
key components of the Office of Personnel Management's accountability model EPA has stated
that the new Performance Appraisal and Recognition System will address this shortfall; however,
EPA has not stated how performance will be measured under this new system.
EPA identified a limited number of project officer weaknesses using management reviews and
self-assessments. Generally, these weaknesses were not communicated to the responsible project
officer or supervisor. If project officers are not made aware of their particular deficiencies, they
cannot be expected to correct them.
The management reviews and self-assessments were designed to assess general compliance with
grants management policies and procedures by various EPA organizations and groups. These
two types of reviews were not sufficient to measure project officer performance due to the
limited number of grants examined - about 310 assistance agreements in 2004. During this same
period, the Agency processed more than 10,000 assistance agreement actions which include
awards and amendments.
2 According to an April 2005 study by LMI Government Consulting titled: Management of 'Assistance Agreements
at the Environmental Protection Agency a project officer who manages 20 to 50 grants will spend 106.3 hours
managing each project grant and 118.2 hours managing each continuing environmental program grant in a year. For
example, a project officer who managed 20 project grants would need to spend 2,126 hours in a year; there are only
2,080 hours available in a standard work year.
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Because EPA has not completely established a system of accountability for grants management,
the systemic weaknesses that have plagued the Agency for several years continue to exist.
Recommendations
We recommend that the Assistant Administrator for Administration and Resources Management
work with Assistant Administrators and Regional Administrators to:
1. Establish a process to measure project officer, supervisor, and manager performance
against grant management requirements to form the basis for performance ratings and
discussions.
2. Ensure managers and supervisors review and discuss grants management during
performance evaluations as appropriate.
3. Ensure that the weaknesses identified in a management review or self-assessment are
communicated to the appropriate project officer and supervisor.
Agency Response and OIG Comments
EPA agreed with our recommendations and provided general steps it will take to address them.
However, EPA needs to provide additional detail on specific actions it plans to take to implement
the recommendations, and the milestone dates for completing those actions. EPA's response to
the draft report and our detailed comments are included in Appendix C.
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Appendix A
Scope and Methodology
We interviewed officials from the Office of Grants and Debarment and the Grants
Administration Division to learn about the management review and self-assessment processes.
We interviewed program and regional office staff to understand how they implemented the
review processes. We also reviewed project officer performance agreements to determine
whether the agreements were in accordance with EPA's Policy on Performance Standards for
Grants Management
Based on the management reviews and self-assessments EPA conducted or completed in 2004,
we conducted our work in the following Headquarters' and regional offices.
Review Initiated or Completed irt
2004
Office of Environmental Information
Office of International Affairs
Office of Solid Waste and
Emergency Response
Office of Water
Region 3
Region 8
Office of the Administrator
Office of Enforcement and
Compliance Assurance
Office of Prevention, Pesticides and
Toxic Substances
Office of Administration and
Resources Management
Grants Administration Division
Region 1
Region 10
Type of Review
Management Review
Management Review
Management Review
Management Review
Management Review
Self-Assessment
Management Review
Self-Assessment
Self-Assessment
Self-Assessment
Self-Assessment
Self-Assessment
Self-Assessment
Self-Assessment
Selected for
Audit :
S
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supervisors and managers in the project officers' chains of command. The following table
provides the offices from which we interviewed project officers, and the number in each office:
i : : •: ,;;:: . . : $ \ -: '= "v; 1 ' :& -. : : Office^ ••• ••?£ '• ' :- ^ '• £•' ; ; & ' : :
Office of the Administrator
Office of Enforcement and Compliance Assurance
Office of Environmental Information
Office of International Affairs
Office of Prevention, Pesticides and Toxic Substances
Office of Solid Waste and Emergency Response
Office of Water
Region 3
Region 8
TOTAL
:; PiroJecit::Offte«rs iRjervle^ecK :
4
3
1
3
3
1
4
3
4
26
During our fieldwork, we provided each person interviewed an opportunity to review and
comment on our record of conversation and included their comments in our supporting
documentation.
We assessed EPA's internal controls for collecting review data and distributing review results.
We gained an understanding of the internal controls through interviews with: (1) Office of
Administration and Resources Management managers, (2) staff that conducted management
reviews and self-assessments, (3) Senior Resource Officials and their staff, and (4) grants
management office staff. We also reviewed supporting documentation for the management
reviews and self-assessments. We identified deficiencies in internal controls and recommended
improvements.
We performed this audit in accordance with Government Accounting Standards, issued by the
Comptroller General of the United States. We conducted preliminary research work from
January 2005 through April 2005, and fieldwork from May 2005 through June 2005.
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Appendix B
Summary of Grants Management Weaknesses
The following table provides the seven recurring weaknesses EPA identified in the most recent
management reviews and self-assessments:
OARM's SMmmary of Grants
: Management Areas Needing
Improvement
O1G or <3AQ Reports That Also Identified tHe tesue
Documentation of Cost Reviews
EPA Must Emphasize Importance of Pra-AuiarJ Reviews for Assistance
Agreements, OIG Report No. 2003-P-00007, igiueJ MarcK 31, 2003
Brownfielae Competition Process for Awarding Grants complied teith Act,
OIG Report No. 2005-P-00009, JMueJ Marcli 7, 2005
Documentation of Baseline
Monitoring
Procurements Made by Assistance Agreement Recipients Should Bo
Competitive, OIG Report No. 2002-P-00009, i«ue«l Marck 28, 2002
Additional Efforts Needed to Improve EPA's Oversight of Assistance
Agreements, OIG Report No. 2002-P-00018, inuea September 30, 2002
Justification for Contracts vs. Grants
EPA Needs to Bettor Document Its Decisions for choosing batwoon Grants
and Contracts, GAP Report No. GAO-04-459, imueJ MarcK 2004
Statutory Authority
EPA'e Training Assistance Agreements, OIG Report No. E1XMF6-03-
0224-8100070, iseueJ Marcli 4, 1998
Statutory Authority for EPA Assistance Agreements, OIG Report No.
E3AMF8-11-0008-8100209, U»ueJ Septemter 18, 1998
Advanced Monitoring Reports
Aaditinnal Efforts Neeaoa to Improve EPA'e Oversight of Assistance
Agreements, OIG Report No. 2002-P-OOO18, iMueJ SeptemLer 30, 2002
EPA Needs to Strengthen Efforts to Address Persistent Challenges, GAO
Report No. GAO-03-846, Uaueil August 2003
Documentation of Competition
Process
EPA's Competitive Practices for Assistance Awards, OIG Report No. 2001-
P-00008, is«u«l May 21, 2001
EPA NeeJs to Strengthen Efforts to Aftdraes Persistent Challenges, GAO
Report No. GAO-03-846, iMueJ August 2003
EPA NeoJs to Compete More Assistance Agreements, OIG Report No.
2005-P-OQ014, issued Marck 31. 2005
Documentation of Environmental
Results and Outcomes
Pre-award Management of EPA Assistance Agreements, OIG Report No.
E1FMB8-11-0001-8100256, i»ueJ Septemter 30, 1998
Surveys, Studies, Investigations, anJ Special Purpose Grants, OIG Report
No. 2002-P-00005, JS.ueJ Marcli 21, 2002
EPA Must Emphasize Importance of Pra-Awara Roviotes for Assistance
Agreements, OIG Report No. 2003-P-00007, inueJ Marck 31, 2003
10
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Appendix C
Agency Response
September 20, 2005
MEMORANDUM
SUBJECT: Response to Office of Inspector General Draft Audit Report,
"EPA Managers Did Not Hold Supervisors and Project Officers
Accountable for Grants Management"
FROM: Luis A. Luna /s/
Assistant Administrator
TO: Michael A. Rickey
Director for Assistance Agreement Audits
Thank you for the opportunity to provide comments on the Office of Inspector General's
(OIG) draft audit report (draft report) entitled, EPA Managers Did Not Hold Supervisors and
Project Officers Accountable for Grants Management dated August 18, 2005. The draft report
concludes that although the Agency has made some progress to establish accountability,
managers did not sufficiently hold supervisors and project officers accountable for grants
management because there is no process to measure most grants management activity.
I am pleased to note that the draft report recognizes the progress EPA has made to
strengthen accountability, including the development of a roles and responsibilities matrix, the
requirement that the performance standards of individuals managing grants include their grants
management responsibilities, and the issuance of new/revised policies on competition, pre-award
reviews and environmental results.
The Agency's comments on the findings and recommendations of the draft report are
summarized below.
Findings
Based on interviews of 26 project officers, the draft report finds that supervisors
generally did not discuss project officer responsibilities during year-end evaluations. This
finding may not be representative of the Agency as a whole. For example, 78% of the 330
project officers who completed a survey conducted by the Office of Grants and Debarment
(OGD) indicated that they discussed grants management responsibilities with their supervisors
during performance evaluations (versus 19% in the OIG survey).
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OIG comment: During interviews, we asked project officers whether grants
management responsibilities were discussed during their year-end evaluations.
When project officers told us the subject was discussed, we probed further and
asked them to describe the nature of those discussions. Based on additional
questioning we determined that such discussions focused on recipient
performance and not project officer responsibilities.
Our own surveys also show that whether grants management responsibilities are
discussed in performance evaluations depends on the percentage of time that the project
officer/supervisor spends on grants management. Specifically, our surveys have found that
where project officers and/or supervisors spent 10% or less of their time on grants management,
they were much less likely to discuss these responsibilities with their supervisors during
performance evaluations. Since about one-third of our project officers spend 10% or less on
grants management, this is a significant issue for the Agency.
It appears that the summary statistics on grant project officers in the background section
of the draft report were derived from our workload analysis study. These statistics include the
workload for both grants and Interagency Agreements. To reflect the grants-only workload, the
background section should be revised as follows:
"As of September 2004, EPA had 2,383 active project officers that managed assistance
agreements. Most project officers manage 5 or fewer assistance agreements, 29 percent
of project officers manage one grant. About one-third of the project officers spend less
than 10 percent of their time on project officer responsibilities."
OIG comment: We revised some information in the Background of the report
based on EPA's response.
Recommendations
The draft report recommends that the Assistant Administrator for Administration and
Resources Management work with the Assistant Administrators and Regional Administrators to:
1. Establish a process to measure project officer, supervisor and manager performance
against grants management requirements to form the basis for performance ratings
and discussions.
2. Ensure managers and supervisors review and discuss grants management during
performance evaluations as appropriate.
3. Ensure that weaknesses identified in a management review or self-assessment are
communicated with the appropriate project officer and supervisor.
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OIG Comment: We believe the recommendations, when implemented, will
help EPA hold supervisors and project officers accountable for grants
management responsibilities. While the response to our draft report indicated
EPA's agreement with the recommendations and provided an outline of its
action plan, EPA needs to provide additional detail on specific actions it plans to
take to implement the recommendations, and the milestone dates for completing
those actions.
We agree with these recommendations and believe that the Agency's new Performance
Appraisal and Recognition System (PARS) will play a major role in addressing the OIG's
concerns. PARS will enhance communications between supervisors and employees, help
employees understand the criticality of their work in the context of the Agency's Strategic Plan,
and provide clear standards of performance for critical j ob elements. In implementing PARS,
the Agency's Program Offices, in consultation with the Office of Grants and Debarment and the
Office of Human Resources, will develop and put in place a set of measures for grants
management to assess project officer performance.
In addition to our work under PARS, we will be taking three other steps to implement the
draft report's recommendations. First, in June 2005, the Agency required each Region and
Headquarters Program Office to develop a Project Officer Workforce Plan to document the
strategy they are using to manage their project officer workforce. Offices must submit draft
Plans for review to the Office of Grants and Debarment (OGD) by October 31, 2005 and issue
final plans in January 2006. In reviewing the draft Plans, we will focus on whether they promote
accountable grants management, especially for offices that have large numbers of project officers
who spend a small percentage of their time on grants management. Our expectation is that there
will be clear points of accountability in each office to ensure that project officers comply with
grants management policies and procedures. If the Plans, in conjuction with PARS, do not
achieve the desired result, the Agency will explore options for fundamentally restructuring how
it manages grants.
Second, we will require that the results of management reviews and self assessments be
communicated to the appropriate project officers and supervisors.
Third, we will explore ways to provide incentives for good grants management through
programs that recognize and reward project officers and other employees who substantially
exceed grants management performance targets. This may include an expansion of our existing
"Excellence in Grants Management" and "Assistance Management Award" programs.
Again, thank you for the opportunity to comment on the report, and for helping us
promote a culture of accountable grants management. If you have any questions, please contact
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Howard Corcoran, Director, Office of Grants and Debarment, at (202) 564-1903 or Richard
Kuhlman, Director, Grants Administration Division, at (202) 564-0696,
cc: Nikki Tinsley
Melissa Heist
Assistant Administrators
Regional Administrators
Deputy Regional Administrators
Dave O'Connor
Senior Resource Officials
Howard Corcoran
Richard Kuhlman
Bruce Binder
David Osterman
Grants Management Officers
Junior Resource Officials
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Appendix D
Distribution
EPA Headquarters
Office of the Administrator
Assistant Administrator, Office of Administration and Resources Management
Assistant Administrator, Office of Air and Radiation
Assistant Administrator, Office of Enforcement and Compliance Assurance
Assistant Administrator, Office of Environmental Information
Assistant Administrator, Office of International Affairs
Assistant Administrator, Office of Prevention, Pesticides, and Toxic Substances
Assistant Administrator, Office of Research and Development
Assistant Administrator, Office of Solid Waste and Emergency Response
Assistant Administrator, Office of Water
Director, Office of Grants and Debamient
Director, Grants Administration Division
Director, Office of Regional Operations
Agency Followup Official (the CFO)
Agency Audit Followup Coordinator
Audit Followup Coordinator, Office of Administration and Resources Management
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
General Counsel
Inspector General
EPA Regions
Regional Administrators (1-10)
Audit Followup Coordinators, Regions (1-10)
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