Office of Inspector General
Audit Report
EPA'S TRAINING ASSISTANCE AGREEMENTS
E1XMF6-03-0224-8100070
March 4, 1998
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Inspector General Division
Conducting the Audit: Mid-Atlantic Audit Division
Philadelphia, PA
Program Offices Involved: Grants Administration Division
National Program Chemicals
Division
Office of Small and Disadvantaged
Business Utilization
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
THE INSPECTOR GENERAL
March 4, 1998
MEMORANDUM
SUBJECT: Audit Report on EPA' s
Training Assistance Agreements
Audit Report Number E1XMF6-03-0224-8100070
FROM: Michael Simmons
Deputy Assistant Inspector General for Internal Audits (2421)
TO: Alvin M. Pesachowitz
Acting Assistant Administrator
for Administration and Resources Management (3101)
Attached is our final audit report on EPA's Training Assistance Agreements. It incorporates
our original draft report, which was issued by our Mid-Atlantic Division on August 6, 1997, to the
Director, Grants Administration Division, OARM, and the Director, Chemical Management Division,
OPPTS.
The overall objective of this audit was to determine whether EPA training resources were used
economically and efficiently. Specifically, we wanted to identify the assistance agreements awarded for
training and determine if the cost to train students for similar courses was comparable.
This audit report contains findings that describe problems the Office of Inspector General
(OIG) has identified and corrective actions the OIG recommends. This audit report represents the
opinion of the OIG. Final determinations on matters in the audit report will be made by EPA managers
in accordance with established EPA audit resolution procedures. Accordingly, the findings contained
in this audit report do not necessarily represent the final EPA position, and are not binding upon EPA
in any enforcement proceeding brought by EPA or the Department of Justice.
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ACTION REQUIRED
In accordance with EPA Order 2750, you as the action official are required to provide us
a written response to the audit report within 90 days. Your response should address all
recommendations and include milestone dates for corrective actions planned, but not completed.
We have no objection to the release of this report to the public. Should you have any
questions about this report, please contact Michael Wall, Audit Manager, Mid-Atlantic Audit
Division, at (215) 566-5800.
Attachment
Audit Report No. E1XMF6-03-0224-8100070
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EXECUTIVE SUMMARY
PURPOSE
BACKGROUND
The purpose of our audit was to determine whether EPA training
resources were used economically and efficiently. Specifically, we
wanted to: (a) identify the assistance agreements awarded for training;
and, (b) determine if the cost to train students for similar courses was
comparable.
In 1994, according to Agency records, $4.9 million was authorized for
lead training and $341,000 was authorized for asbestos training
($100,000 for training agreements with small, minority, and women-
owned businesses and $241,000 for a nonprofit labor organization).
These funds were awarded in assistance agreements under Section 10 of
the 1976 Toxic Substances Control Act (TSCA).
RESULTS-IN-BRIEF EPA did not accurately code its fiscal year 1994 assistance agreements.
According to the Agency's Assistance Administration Manual, the
Grants Administration Division assigns specific codes to all agreements
based upon their purpose. We found that 21 of 34 agreements that
were purpose-coded as "Special Investigations, Surveys, or Studies"
were in fact for "Training." As a result, EPA did not know precisely
what it spent on training. Moreover, it was not clear whether EPA had
the authority to award lead assistance agreements under TSCA.
EPA awarded the 21 assistance agreements, but it did not monitor how
many students were being trained or the cost of training each student.
Without this information EPA could not assess how efficiently the
money was being spent under the agreements.
RECOMMENDATIONS
We recommend that the Acting Assistant Administrator for
Administration and Resources Management seek written clarification
should inconsistencies with statutory authority arise regarding the award
of future assistance agreements and ensure that grants specialists code
assistance agreements in accordance with EPA's Assistance
Administration Manual.
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AGENCY
COMMENTS AND
OIG EVALUATION
We recommend that the Director of the Grants Administration Division
require all recipients provide an estimate of the number of students they
plan to train, and use these estimates as a monitoring tool to determine
if the recipients are meeting these estimates. We also recommend that
project officers be required to complete written evaluations of the
recipients' performance. If performance is unsatisfactory, the
evaluation should be sent to the Grants Administration Division for
consideration when the recipient applies for additional training funds
from EPA.
We issued a draft report on August 6, 1997, and received the Agency's
response on September 16, 1997. We reviewed the response, held an
exit conference on September 23, 1997, and made changes to our report
as warranted. As a result of the response, it was not clear whether EPA
had the authority to award lead assistance agreements under TSCA.
Thus, on December 19, 1997, we issued a revised draft report and
received the Agency's response on January 30, 1998. We reviewed the
response and obtained clarification on February 12, 1998.
The Agency's response to the original draft audit report can be found in
its entirely in Appendix A. Appendix B is the OIG's evaluation of the
issues resolved from the original draft report. The Agency's response
to the revised draft audit report can be found in its entirety in Appendix
C. Our evaluation of the responses is contained at the end of each
chapter.
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TABLE OF CONTENTS
EXECUTIVE SUMMARY 3
CHAPTER 1 7
INTRODUCTION 7
Purpose 7
Background 7
Scope and Methodology 7
Prior Audit Coverage 9
CHAPTER 2 11
TRAINING COSTS WERE UNKNOWN 11
GAD Response and OIG Evaluation of Original Draft 12
Other Issues 13
Recommendations 14
OARM Response 15
OIG Evaluation 16
CHAPTER 3 17
MONITORING OF TRAINING AGREEMENTS WAS INADEQUATE 17
Asbestos Training 18
Lead Training 19
Conclusion 21
Recommendations 21
Agency Response 21
OIG Evaluation 22
APPENDIX A 25
Agency Response to Original Draft Audit Report 25
APPENDIX B 41
OIG Evaluation of Issues Resolved From the Original Draft Audit Report 41
APPENDIX C 45
Agency Response to Revised Draft Audit Report 45
APPENDIX D - DISTRIBUTION 50
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CHAPTER 1
INTRODUCTION
Purpose
The purpose of our audit was to determine whether EPA training
resources were used economically and efficiently. Specifically, we
wanted to: (a) identify the assistance agreements awarded for training;
and, (b) determine if the cost to train students for similar courses was
comparable.
Background
During fiscal year 1994, Congress authorized $4.9 million for lead
training. Of this amount approximately $2.8 million was earmarked for
nonprofit organizations engaged in lead-based paint abatement worker
training, with special emphasis on opportunities for minorities and low
income community residents. Another $1.9 million was used to fund
the National University Continuing Education Association and the
Regional Lead Training Centers. The remaining $200,000 was
reserved for small, minority, and women-owned businesses.
During fiscal year 1994, $341,000 was also authorized for asbestos
training with $100,000 designated for assistance agreements with small,
minority, and women-owned businesses. The remaining $241,000 was
provided to a nonprofit labor organization. Both the lead and the
asbestos training funds were awarded in assistance agreements under
Section lOofTSCA.
Scope and
Methodology
We performed this audit according to the Government Auditing
Standards (1994 Revision) issued by the Comptroller General of the
United States as they apply to economy and efficiency audits. We
began our fieldwork on September 4, 1996 and finished on July 21,
1997. We issued a draft report on August 6, 1997, and received a
response on September 16, 1997. We reviewed the response, held an
exit conference on September 23, 1997, and made changes to our
report as warranted. As a result of the response, it was not clear
whether EPA had the authority to award lead assistance agreements
under TSCA. Thus, on December 19, 1997, we issued a revised draft
report to the Office of Administration and Resources Management
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(OARM) to which we received the Agency's response on January 30,
1998. We reviewed the response and obtained clarification on
February 12, 1998.
The Agency's response to the original draft audit report can be found in
its entirety in Appendix A. Appendix B is the OIG's evaluation of the
issues resolved from the original draft report. The Agency's response
to the revised draft audit report can be found in its entirety in Appendix
C. Our evaluation of the responses is contained at the end of each
chapter.
To accomplish our objectives we attempted to identify all training
assistance agreements issued by EPA Headquarters during fiscal year
1994. We selected 1994 to ensure that the projects/agreements were
completed. We found that at least 21 of the 34 assistance agreements
coded as "Special Investigations, Survey, or Studies" should have been
coded as "Training." We judgementally selected 21 (19 lead and 2
asbestos) of these 34 assistance agreements for review.
We conducted a site visit to Washington, DC and interviewed
personnel from the National Program Chemicals Division (Office of
Prevention, Pesticides, and Toxic Substances), as well as personnel
from the Grants Administration Division (Office of Grants and
Debarment). We also interviewed personnel affiliated with nonprofit
organizations and with the Regional Lead Training Centers. We
reviewed 21 project files containing materials such as preproposals,
proposals, work plans, quarterly progress reports, and final progress
reports. We also reviewed several lead training course manuals, the
TSCA of 1976, the Title X-Residential Lead-Based Paint Hazard
Reduction Act of 1992, the Code of Federal Regulations applicable to
assistance agreements, EPA's Assistance Administration Manual, the
Federal Register, and printouts from the Grants Information Control
System (GICS).
Our audit included an evaluation of management controls and
procedures specifically related to the audit objectives. Specifically, we
reviewed the Agency's Assistance Administration Manual and the
progress reports submitted to EPA by the recipients of the assistance
agreements. We did not review the internal controls associated with
the input and processing of information into GICS.
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Prior Audit Coverage Several past EPA Office of the Inspector General audit reports have
addressed assistance agreements.
• Audit Report E1FMF4-03-0141-5100513, issued on
September 28, 1995, discussed inadequacies in the
management of assistance agreements by EPA project
officers and grants specialists.
• Audit Report E3BEL4-03-0476-5100485, issued on
September 18, 1995, was a financial audit for two
cooperative agreements, one being the National
Environmental Training Center for Small Communities.
The report found the federal share of $96,043 ineligible
and $4,729 unsupported out of the $2,259,755 incurred.
Audit Report E3FMP2-03-0364-3400017, issued on
January 25, 1993, concluded that training provided by
the National Association for Minority Contractors could
have been obtained from other nonprofit organizations
at a lower cost.
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CHAPTER!
TRAINING COSTS WERE UNKNOWN
According to Agency records, in fiscal year 1994, EPA Headquarters
awarded $22.4 million under 119 training assistance agreements.
Based on the title descriptions however, it appeared that there were
additional training assistance agreements. Specifically, there were 34
such agreements, worth $6.6 million, with the word "Training" in the
title that were coded as "Special Investigations, Surveys, or Studies."
We reviewed 21 of the 34 agreements and found that they should have
been coded as "Training."
As a result, the Agency's training costs were understated and the actual
amount of money spent for training is unknown. Moreover, we also
noted several instances where EPA paid more than once to have similar
training materials developed.
According to the Agency's Assistance Administration Manual, the
Grants Administration Division (GAD) is responsible for assigning
numbers to all assistance agreements administered by EPA
Headquarters. The manual provides specific program codes to be used
to identify the assistance program under which each agreement is
awarded.
Examples of Program Codes
CODE
R
S
T
U
X
PROGRAM
Research
Demonstration
Training
Fellowships
Special Investigations,
Surveys or Studies
The 34 assistance agreements covered a variety of EPA programs such
as the American Indian Air Quality Training Program, or Radon
Training for Small, Minority, and Women-owned Businesses. In an
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GAD Response and
OIG Evaluation of
Original Draft
effort to determine if they had been miscoded, we reviewed 21 of the
agreements (19 lead-related and 2 asbestos-related). We also
interviewed personnel within the Grants Administration Division, the
lead program, and the asbestos program. Although none of the EPA
personnel could provide explicit explanations, some did speculate on
what may have happened. For example, grants personnel said they
vaguely recalled program personnel requesting that the lead and
asbestos training agreements be coded as "X" rather than "T," but they
could not remember who made the request. Discussions with the
program personnel yielded a similar response; the lead agreements were
coded "X" to conform with the asbestos agreements, but it was
unknown who made this decision or why it was made. We believe it is
important to code training assistance agreements correctly so that
Agency personnel can determine what training courses are being
developed.
In response to our original draft report, GAD concurred with the
recommendation that grants specialists adhere to the grants numbering
criteria contained in EPA's Assistance Administration Manual.
However, GAD asserted the assistance agreements identified in the
audit report were in fact properly coded because the activities
performed under these grants included a variety of tasks including the
development of training materials, analysis of materials, delivery of
training in the classroom, and testing and evaluation of both students
and materials. Thus, GAD believed the projects funded by the grants
properly supported "development" under TSCA Section 10 and were
appropriately coded. As a result of the response, we reviewed TSCA
Section 10 and the Federal Register Notice under which the Agency
solicited preproposals for lead assistance agreements.
TSCA Section 10 is entitled "Research, Development, Collection,
Dissemination, and Utilization of Data." It stipulates that the
Administrator may make grants for research, development, and
monitoring; the only training it authorizes is that for the training of
Federal laboratory and technical personnel in existing or newly
developed screening and monitoring techniques.
The Agency's notice soliciting preproposals for lead training grants was
included in the Federal Register of April 20, 1994. Here, EPA
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explained that it had received 1994 congressional add-on funds to
provide training grants to nonprofit organizations engaged in lead-
based paint abatement worker training and education activities. The
Agency planned to award a total of $2.8 million through cooperative
agreements to eligible organizations. The award recipients could use
the monies to deliver lead-based paint abatement worker courses and to
deliver train-the-trainer courses. The preproposals would be evaluated
based on experience in the development and delivery of training
courses, and applicants were instructed to provide copies of any course
material already being used. However, because EPA had already
funded the development of a model course curriculum for workers, the
monies "may not be used for ... development of new training course
curricula for workers."
Consequently, we still believe that the agreements in our review should
have been coded as training rather than development, and that EPA's
training costs were understated. We disagree with GAD that the
assistance agreements reviewed were properly coded with an "X." The
Agency's Assistance Administration Manual stipulates that the "X"
code is to be used for investigations, surveys or studies; the manual
specifically excluded the use of this code for activities such as research,
demonstration, or training. The examples that GAD offers to support
its position are all related to training. The only "development" cited
was the development of training materials. Moreover, because the only
training mentioned under TSCA Section 10 was for the training of
Federal workers, it appears that there was a problem with the statutory
authority under which the agreements were awarded.
Other Issues We also found several instances where EPA paid different
organizations to develop similar products. On 3 of the 19 lead training
assistance agreements, EPA paid to have a "train-the-trainer manual"
developed. We obtained two of these manuals and concluded that
much of the content was duplicative, i.e., they explained generically
how to conduct workshop sessions. (We had also noted a similar
situation on a prior audit whereby the recipient of water program funds
subcontracted to have two "train-the-trainer" manuals developed).
Rather than paying for "train-the-trainer" manuals needed by various
EPA programs under multiple agreements, we believe it would be more
economical to select a single generic manual to cover all EPA
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programs. In any event, we believe that the lead program should have
only one manual.
Finally, the process by which similar materials were developed was
somewhat complicated. The two manuals we reviewed were paid for
under two separate assistance agreements. In one instance, EPA
awarded the agreement to a nonprofit organization, which in turn
subcontracted the development of the manual to a University that was a
Regional Lead Training Center. In the second case, EPA awarded the
agreement to a nonprofit organization, which in turn subcontracted the
development of the manual to a University that was a Regional Lead
Training Center, which again subcontracted the manual to a profit-
making organization. In our opinion, the Agency should avoid such
subcontract layering because it increases costs.
We also believe that it would be beneficial if all training materials, such
as the "train the trainer" manuals, were located in a central location
available for use by all EPA programs. By doing so the Agency could
help eliminate duplication. For example, rather than task recipients to
create new manuals under future assistance agreements, program
personnel could use manuals already developed under past agreements.
Recommendations We recommend that the Acting Assistant Administrator for
Administration and Resources Management:
2-1. Seek written clarification should inconsistencies arise
regarding the statutory authority for the award of future
assistance agreements.
2-2. Ensure that grants specialists adhere to the grants
numbering criteria contained in EPA's Assistance
Administration Manual.
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OARM Response Recommendation 2-1:
We concur that GAD should seek written clarification should
inconsistencies arise regarding the statutory authority for the award of
future assistance agreements. It is GAD's practice to work with the
Program Office and the Office of General Counsel (OGC) to ensure
that the scope of work is statutorily authorized.
One way GAD ensures the correct use of statutory authorities is
through pre-solicitation review and/or meetings with Program Offices
during the pre-award phase. Program Offices may forward to GAD,
for their review and comment, a copy of their solicitation notice before
it is published. It is during the solicitation review that GAD has the
opportunity to examine the proposed objectives and to determine if
EPA has the statutory authority to fund the activities. If GAD believes
the activities to be performed are not consistent with the intent of the
statutory authority, written clarification from the Program Office is
requested. Once written clarification is obtained from the Program
Office, the information is reviewed by GAD and, if necessary,
forwarded to OGC for their review and opinion.
GAD also ensures the correct citation of statutory authority on
assistance agreements during the review of the assistance funding
package in the award phase. As a component of the assistance funding
package, the decision memorandum must cite the statutory authority
which authorizes the proposed grant activities. The Grants Specialist
reviews the decision memorandum to ensure the proposed project
objectives are consistent with the intent of the statutory authority. If
there are inconsistencies or questions, the Grants Specialist, along with
the Award Official, will re-review the application and contact the
Program Office for written clarification. Once written clarification is
obtained from the Program Office and if GAD still has concerns, the
written clarification along with the original grant application and the
decision memorandum are forwarded to OGC for their review and
opinion.
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Recommendation 2-2:
We concur that grants specialists adhere to the grants numbering
criteria contained in Chapter 4 of EPA's Assistance Administration
Manual.
The program code X, as documented in the Catalogue of Federal
Domestic Assistance, was developed to include all authorized activities
for which no specific program code exist, such as survey, studies,
investigations, development, experiments, and monitoring.
Unfortunately, the Assistance Administration Manual does not indicate
this. Currently, GAD is looking into viable alternatives to revising the
Assistance Administration Manual.
As previously mentioned in our September 16, 1997, audit response,
GAD is developing a new Integrated Grants Management System
(IGMS) which will replace the current Grants Information and Control
System (GICS) by the end of CY 2000. During the development of
IGMS, GAD will be reviewing the numbering system of applications as
well as the need for specific Agency tracking and analytical identifiers
to improve the ease and accuracy of reporting. System features which
allow specialists to select from a textual list of options rather than a
code will also support improved data accuracy.
OIG Evaluation Recommendation 2-1:
OARM's concurrence to have GAD seek written clarification should
inconsistencies arise regarding the statutory authority for the award of
future assistance agreements meets the intent of the recommendation.
Thus, no further action is required.
Recommendation 2-2:
In a follow-up conversation, we confirmed that OARM agreed with
GAD's assertion that the assistance agreements were in fact properly
coded as "development" rather than as "training." We disagree that the
agreements were properly coded for the reasons previously stated, i.e.,
EPA solicited recipients to provide training not development. Thus,
our original recommendation remains unchanged.
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CHAPTERS
MONITORING OF TRAINING AGREEMENTS WAS INADEQUATE
We reviewed 21 training assistance agreements totaling $4.6 million
and found that EPA did not always know how many students were
being trained, or how much it was costing to train each student. The
Agency did not require the recipients of the agreements to provide
estimates of the number of students they expected to train. And, even
in the instances where estimates were provided, EPA project officers
did not compare these estimates to the actual numbers of students
being trained. Had they done so, the project officers would have been
able to measure and compare the success rates of the various training
grant recipients. This condition occurred due to a perception on the
part of some project officers that they were not required to actively
monitor the agreements. As a result, recipients were never questioned
why they trained only a small portion of the estimated number of
students contained in their proposals. Also, the Agency was unaware
of the wide disparities among the agreements in the cost to train the
students.
Two of the 21 assistance agreements in our review were awarded to
provide asbestos abatement training. The other 19 agreements were
awarded to provide lead abatement training. Based on progress reports
provided by the project officers, we compared the cost to train students
under the various agreements we reviewed. We found that the cost of
the asbestos training ranged from $285 to $1,493 per student, while the
cost of the lead training ranged from $500 to $3,431 per student. We
noted no instance where a project officer ever questioned why such
disparities existed, or why the recipient was not training the number of
students it was paid to train.
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Asbestos Training
Recipient
1
2
Training Cost
$209,530
$100,000
Estimated
Students
533/900
N/A
Actual
Students
734
67
Cost Per
Student
$285
$1,493
Recipient 1
Recipient 2
The assistance agreement provided the recipient $209,530 to train an
estimated 533 people in asbestos abatement. However, in December
1993 the recipient increased its estimate to a total of 900 people. In its
final progress report dated December 1996, the recipient explained it
had trained a total of 734 people. Although the final report was two
years late, and the recipient did not achieve its amended estimate, the
cost per student compared favorably to the other recipient that
provided asbestos training.
An amendment to the assistance agreement provided this recipient
$100,000 to deliver three asbestos abatement training courses for
minority contractors and workers. The recipient did not estimate the
number of students expected per class. According to the quarterly
progress reports, only 67 students were trained for an average cost of
$1,493 per student, or more than five times the amount charged by
Recipient 1.
LEAD PROGRAM
The majority of the 19 lead training recipients used EPA's lead model
worker course as a basis for their training. Therefore, we did not
expect to find a large range in the cost per student. However,
inexplicably the cost per student for lead training ranged from $500 to
$3,431. Eleven of the lead training assistance agreements provided an
estimate in the proposal of the number of students to be trained and
eight did not. Four of the eleven recipients met or surpassed the
number of students estimated, four trained above half the estimated
students, and three trained less than 50 percent of the estimates in their
proposal. The project officers did not know which of the recipients had
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met or had not met their goals. We questioned the project officers
about EPA's recourse if a recipient failed to train the number of
students estimated in their proposal. Their overall response was that
the recipients did the best they could, but if they did not meet the
estimates it may have been because they were too optimistic in their
proposals. We reviewed each of the agreements and provided details
on several of the higher cost per student agreements.
Lead Training
Recipient
A
B
C
D
E
F
G
H
I
J
J
K
Training
Cost
$28,000
$138,000
$705,000
$708,000
$300,000
$164,000
$129,000
$206,000
$106,000
$160,000
$130,000
$175,000
Estimated
Students
80
360
1,560
1,000
156
200
60
400
75
600
180
180
Actual
Students
56
248
1,257
1,044
294
159
106
166
75
57
44
51
Cost Per
Student
$500
$556
$561
$678
$1,020
$1,031
$1,217
$1,241
$1,413
$2,807
$2,955
$3,431
Recipient I
The assistance agreement provided $106,000 to the recipient to train
75 students in lead-based paint abatement, the same number budgeted
in the proposal. Our concern was the cost per student was $1,413. By
comparison, Recipient A also provided lead-based paint abatement
training, but at a cost of only $500 per student.
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Recipient J
In September 1994, the assistance agreement provided $160,000 for
the recipient to train 50 students a month (according to the recipient's
proposal). Thus, during the first year of the agreement the recipient
planned to train a total of 600 students. After the first quarter of the
year the recipient reported that it was decreasing its estimate from 50
to 10-20 students per month. Moreover, by the third quarter this
estimate dropped to 5-15 students per month. However, this lower
estimate was overly optimistic because by the end of the year the
recipient had trained only 57 students, rather than the 600 originally
proposed. Had the recipient achieved the proposed amount, the
average cost per student would have been $267 ($160,000/600
students), rather than the actual cost of $2,807 per student
($160,000/57 students).
We contacted the EPA project officer to ask about the shortfall in
students and whether the increased cost per student was a concern.
The project officer recalled that, although the recipient had not gotten
the response anticipated, EPA advised the recipient to do the best it
could.
Recipient K
In September 1995, without ever questioning why there had been so
few students trained during the first year, EPA amended the assistance
agreement to provide the recipient with $130,000 for a second year.
Although the recipient estimated it would train between 10-20 students
per month (or an average of 180 students per year), according to
quarterly progress reports it actually trained a total of only 44 students.
Thus, the cost per student was $2,955 ($130,000/44 students) rather
than $722 per student ($130,000/180 students). As of 1997, the
recipient had yet to submit an acceptable final progress report despite
requests from both the project officer and the grants specialist.
The assistance agreement provided the recipient with $175,000 to train
an estimated 180 students. According to the final progress report only
51 students were actually trained. The recipient informed us that the
plan was to have the 51 students train others, but could not supply us
with any information as to how many additional people may have been
trained. Also, although the recipient's budget included supplies for 180
students, the final report failed to address what happened to the unused
supplies. There was no evidence that EPA ever questioned why only
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28 percent of the students were trained, or what happened to the excess
supplies.
Conclusion
EPA did not always know the number of students being trained or the
cost per student. It did not require recipients to provide estimates, or,
where estimates existed, compare them to the actual number of
students being trained. As a result, the Agency did not question why
recipients did not accomplish the intent of the assistance agreements,
and was unaware of the disparities in training costs among the
recipients. Moreover, this problem was not new. OIG Audit Report
E3FMP2-03-0364-3400017, issued on January 25, 1993, concluded
that the training provided by one of the recipients discussed in this
report could have been obtained from other nonprofit organizations at a
lower cost.
Recommendations
We recommend that the Director of the Grants Administration
Division:
3-1. Prior to approving training assistance agreements, require the
recipients to provide an estimate of the number of students they
plan to train. Project officers and grant specialists can use these
estimates as a monitoring tool to determine if the recipients are
meeting the purposes of the agreements.
3-2. Require project officers to complete written evaluations at the
end of the project of the recipients' performance. If
performance is unsatisfactory, the evaluation forms should then
be sent to the Grants Administration Division for consideration
when the recipient applies for additional training funds from
EPA.
Agency Response
Recommendation 3-1:
We agree that accurate and timely information regarding the number of
students trained and project costs is necessary for project officers to
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monitor the performance of recipients of training grants and
cooperative agreements. Nonetheless, we take issue with the draft
report's finding that variances in training costs, in and of itself, is a
valid indicator of lax oversight. We also take issue with the report's
contention that the Agency's oversight was inadequate because
administrative sanctions were not imposed when training estimates
were not met. Nonetheless, the National Program Chemicals Division
will consider OIG's recommendation that the Agency require recipients
to agree to binding estimates of the number of students to be trained
and milestones to measure progress toward meeting these estimates.
Recommendation 3-2:
Unlike acquisitions, for which the Agency has authority to use
unsatisfactory past performance to decline to award a contract, the
Agency's authority to use past performance in assistance award
decisions is more limited. When an assistance recipient has a history of
unsatisfactory performance, the Agency is authorized to impose special
conditions on awards. However, recipients must receive notice of the
Agency's intent to impose special conditions, an opportunity to
respond, and the conditions must be removed once the situation is
corrected. Within the confines of EPA's authority discussed above,
OIG's recommendation that past performance be considered has some
merit. Past performance will be considered as an evaluation factor for
future awards. Preparation of performance reports in situations in
which performance was satisfactory may not be a wise use of Agency
staff. OPPTS will consider requesting that project officers provide
written reports of unsatisfactory performance. Further, the
recommendation will be considered in the context of GAD's efforts to
improve assistance administration practices throughout the Agency.
OIG Evaluation Recommendation 3-1:
We did not intend to imply that variances in the cost per student alone
was the cause of inadequate management of the training agreements.
As explained in the finding, EPA was unaware of these variances and
unaware of why recipients failed to train the number of people they had
planned to train. The intent of our recommendation is for the Agency
to become aware of these issues, and for the project officers and grant
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specialists to monitor the recipients' progress. Consequently, we are
recommending that recipients be required to provide estimates, and that
project officers and grant specialists compare these estimates to actual
numbers.
Recommendation 3-2
We agree that notifying GAD of unsatisfactory performance may be a
more efficient method. Accordingly, we have modified our
recommendation to address documenting performance and then
notifying GAD only when performance is unsatisfactory.
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APPENDIX A
Agency Response to Original Draft Audit Report
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
ADMINISTRATION
AND RESOURCES
MANAGEMENT
September 16, 1997
MEMORANDUM
SUBJECT: Response to OIG's Draft Report of Audit on EPA Training
Assistance Agreements, Audit Report No. E1XMF6-03-0224
FROM: Gary M. Katz, Director [Signed by M.Lee for G.M.K.]
Grants Administration Division (3903R)
John W. Melone, Director [Signed by John W. Melone]
National Program Chemicals Division (7404)
TO:
Carl A. Jannetti
Divisional Inspector General for Audit
Mid-Atlantic Division (3A100)
This memorandum responds to OIG's August 6, 1997, Draft Report
of Audit on EPA Training Assistance Agreements. As discussed
below, we find that some of the recommendations made by OIG are
reasonable, in whole or in part. However, other OIG
recommendations may indicate a misunderstanding of what the audited
grants were intended to do, the variability and differences between
the grants, the legal relationship the Agency has with grant
recipients generally, and the implications the recommendations
would have on the Agency. We are particularly concerned about the
resources that would be required to implement some of the
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recommendations not only for NPCD and GAD, but for the Agency as a
whole. Our concerns with the draft OIG report are discussed
below.l
I. OIG Findings and Recommendations.
A. The Agency did not assign "training" codes to 21 grants that
OIG determined to be training grants.
On this basis, OIG recommends that EPA code Assistance
Agreements according to criteria contained in Chapter 4 of EPA's
Assistance Administration Manual.
B. The Agency did not adequately oversee the recipient's
performance of the agreements because project officers were
not always aware of the number of students trained or the cost
per student, the cost per student trained varies widely, and
recipients were not "penalized" for not training the number of
students that recipients were "paid to train".
On this basis, OIG recommends that:
1. EPA require training assistance agreement recipients to
provide an estimate of the number of students they expect to
train and to ensure that agreed upon milestones are
established to assist the recipients in meeting these
estimates.
2. EPA project officers (POs) complete written evaluations at the
end of the project period and indicate whether a recipient's
performance was satisfactory or not. OIG further recommends
that the evaluation forms be sent to GAD for consideration
when the recipient applies for additional training funds from
EPA.
C. The costs of the training grants were increased because the
Agency paid for the development of duplicative training
Recipient J as noted in the OIG Draft Report of Audit was referred to the IG for further investigation.
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manuals, and allowed recipients to "layer" subcontracts for
development of training manuals.
On this basis, OIG recommends that:
1. EPA request that recipients forward all training materials
developed under past assistance agreements, in automated form
if possible, to the Agency's Information Resource Center (IRC
or EPA Library).
2. The Agency require that all future training assistance
agreements include special conditions that ensure training
materials developed as a part of the agreement are forwarded
to the Agency's IRC.
3. The Agency instruct POs to contact the IRC before developing
any new training materials in order to avoid the needless
duplication of existing materials.
II. NPDC and GAD Responses.
Overview.
NPCD and GAD agree with the Office of Inspector General that
effective oversight of training assistance agreements awarded under
TSCA § 10 is important. We do not question the validity of the
findings which indicate that the Agency could do a better job
assisting training providers to complete their projects in a cost-
effective manner. However, we are concerned that the report does
not adequately take into account the need to ensure that the Agency
complies with the Federal Grant and Cooperative Agreement Act
(FGCAA), which precludes the Agency from treating assistance
agreement recipients as contractual service providers.
The report implies that EPA project officers should be faulted
for failing to give detailed direction to assistance recipients.
We base this observation on statements in the draft audit report
such as "[OIG] found instances where EPA paid different
organizations to develop similar products. . . . Rather than pay
for train-the-trainer manuals needed by various EPA programs under
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multiple agreements, [OIG believes] it would be more economical to
select a generic manual to cover all EPA programs." (P. 6). The
draft report also states "[OIG did not note] any instance where a
recipient was penalized for not training the number of students it
was paid to train." (P. 9). In this regard, the draft audit report
notes that recipients who did not meet their estimates of the
number of students they would train "failed to accomplish the
intent of the assistance agreements [and] suffered no
consequences." (P. 13). These statements appear to be based on an
assumption that OPPT is acquiring training services and products
rather than stimulating and supporting training projects carried
out by independent organizations with EPA financial assistance.
On March 22, 1994, EPA issued EPA Order 5700.1, Policy for
Distinguishing Between Assistance and Acquisition, to provide
general guidance for ensuring compliance with the FGCAA. It
clarified the criteria that EPA program offices should use to
determine when to employ contracts or financial assistance
agreements. EPA Order 5700.1 was issued in response to, among other
things, concerns raised by OIG audit reports regarding the apparent
use of financial assistance to obtain services which directly
benefit the Agency. Project Officer training, which has also been
enhanced as result of the findings of OIG audits, emphasizes
compliance with EPA Order 5700.1.
EPA Order 5700.1 states that in order to determine that
financial assistance is being properly used for public purposes of
support and stimulation, the Agency must "find that the project is
being performed by the recipient, for its own purposes, which EPA
is merely supporting with financial or other assistance." EPA
Order 5700.1, p. 7. We have been advised by EPA's Office of
General Counsel that the "for its own purposes" requirement
precludes the Agency from directing assistance recipients to
perform tasks in a manner similar to the detailed direction project
officers give to Agency contractors. Indeed, an example of an
activity that EPA Order 5700.1 indicates must be performed through
a contract is a training project "where EPA directs the selection
of the trainers or trainees, or the content of the curriculm". EPA
Order 5700.1, p. 9. (Emphasis in original). Further, financial
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assistance can be used to train non-Federal personnel when the
recipient, not EPA, specifies the training plan. Id. at p. 8.
Our responses to the specific findings and recommendations of
the draft audit report are based on the limitations that the FGCAA
and EPA Order 5700.1 place on EPA's legal relationship with
assistance recipients. We recognize that an assistance
relationship does not absolve the Agency of its fiduciary
responsibility to ensure that Federal funds are spent properly. A
balance is required. However, we are concerned that the draft
report may inadvertantly undermine the efforts of OPPTS, GAD, OGC
and OIG to promote compliance with the FGCAA and EPA Order 5700.1
by EPA project officers.
A. Incorrect coding of the Assistance Agreements.
GAD concurs with the recommendation that grants specialists
adhere to the grants numbering criteria contained in Chapter 4 of
EPA's Assistance Administration Manual. However, GAD believes the
assistance agreements identified in the audit report are properly
coded with the identifier X. The assistance agreements are coded
as X because the activities performed under these grants include a
variety of tasks. Such activities include, but are not limited to,
development of training materials, analysis of materials, delivery
of training in the classroom, and testing and evaluation of both
students and materials. We believe the projects funded by the
grants properly support "development" under TSCA § 10 and are
appropriately coded.
GAD recognizes the need to properly identify the types of
assistance agreements that are awarded. Currently there are more
than 60 program codes many of which were created after the last
printing of the Assistance Administration Manual in 1984. GAD is
developing a new Integrated Grants Management System (IGMS) which
will replace the current Grants Information and Control System
(GIGS). During the development of IGMS, GAD will be reviewing the
numbering system of applications as well as the need for specific
Agency tracking identifiers. Program codes and other tracking
Audit Report No. E1XMF6-03-0224-8100070
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fields are currently being discussed by the IGMS work group. GAD
will continue to use appropriate codes.
B. Inadequate Oversight of Assistance Agreements.
1. Requiring estimates of the number of students to be trained
and milestones.
We agree that accurate and timely information regarding the
number of students trained and project costs is necessary for
project officers to monitor the performance of recipients of
training grants and cooperative agreements. Nonetheless, we take
issue with the draft audit report's finding that variances in
training costs among recipients, in and of itself, is a valid
indicator of lax oversight. Labor market conditions in areas in
which recipients carry out their activities vary widely as do the
demographics of groups targeted for training. Variances in
training costs are attributable, at least in part, to factors that
cannot be controlled by either the recipient or EPA.
The recommendation to establish binding milestones for
recipients is sound in theory and would have the desirable effect
of forcing grantees to perform within certain parameters. However,
negotiating binding milestones (such as the number of workers to be
trained by a certain date) may not always be the best approach for
programmatic reasons. For example, in the case of the lead
training program, the grants studied for the Draft Report of Audit
were issued prior to and during the promulgation by EPA and States
of a number of important lead regulations. The market for lead
training was uncertain at the time of the awards, but NPCD (and the
grantees) believed that the promulgation of lead regulations would
result in increased demand for training. NPCD did not consider the
proposed number of trainees for the lead worker training grants to
be binding because of the uncertainty of demand for such training.
Indeed, as noted in the Draft Report of Audit, (pg. 11) some
grantees trained more students than estimated in their proposals.
It should be noted that the lead worker training grants were funded
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by Congressional budget line items which specified that the funds
be used for that purpose.
The organizations which received these training grants were
not delivering a single, standardized training module. Many of the
programs included extensive cross-training, job placement
components, apprenticeships or other special training. Some
grantees were delivering training to populations which had low
education levels, poor language skills, no means of transportation,
and other similar barriers. These and other variables contributed
to differing costs per student in the training programs. EPA never
required or expected the costs per student to be uniform.
The Congressional budget line items which designated money to
be used by EPA for lead worker training left the Agency a great
deal of latitude in determining what type of programs to fund. The
grant application review panels used this flexibility to select a
wide variety of programs for funding, resulting in the
corresponding variability in the costs per worker. One goal of a
training grant program may be to train the largest number of
workers possible. Consequently, cost per worker could be included
as a ranking factor in the Notice of Funds Availability. However,
as noted, this was not the case for the grant agreements examined
by the OIG audit. NPCD will explore means of sharing variances in
cost per student among NPCD POs.
We also take issue with the report's contention that the
Agency's oversight was inadequate because administrative sanctions
were not imposed when training estimates were not met. The
Agency's enforcement authority under regulations applicable to
assistance agreements is limited to ensuring that the recipient
materially complies with the specific terms and conditions of the
agreement. 40 CFR 30.900 (1983); 40 CFR 30.62(a) (1996). EPA
cannot "penalize" recipients for falling short estimates of the
number of students that will be trained unless meeting the
estimate, or a percentage thereof, is a term and condition of the
agreement. Terms and conditions of this nature cannot be imposed
unilaterally. Nonetheless, NPCD will consider OIG's reccomendation
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that the Agency require recipients to agree to binding estimates of
the number of students to be trained and milestones to measure
progress towards meeting these estimates during negotiations for
future TSCA § 10 training agreements.
2. Written evaluations which indicate whether a recipient's
performance was satisfactory be sent to GAD for consideration
in connection with future awards.
As discussed above, a TSCA § 10 recipient's failure to meet a
non-binding estimate of the number of students to be trained does
not rise to the level of noncompliance with the terms and
conditions of its assistance agreement. Moreover, the issue of how
to ensure that past performance is properly taken into account in
awarding assistance agreements extends beyond the TSCA § 10 grant
program.
Unlike acquisitions, for which the Agency has authority to use
unsatisfactory past performance to decline to award a contract, the
Agency's authority to use past performance in assistance award
decisions is more limited.2 When an assistance recipient has a
history of unsatisfactory performance, the Agency is authorized to
impose special conditions on awards. 40 CFR 30.14. Recipients must
receive notice of the Agency's intent to impose special conditions,
an opportunity to respond, and the conditions must be removed once
the situation is corrected. EPA cannot engage in illegal defacto
debarments by refusing to award a grant based on poor performance
reports.3
Within the confines of EPA's authority discussed above, OIG's
recommendation that past performance be considered has some merit.
NPCD will consider past performance as an evaluation factor for
future awards. Preparation of performance reports in situations in
which performance was satisfactory may not be a wise use of the
2The Agency can find a prospective contractor "non-responsible" under 48 CFR 9.104-1 due to
unsatisfactory performance and decline to make an award pursuant to 48 CFR 9.103 (b).
3Our response is based on the assumption that the recipient's performance problems are not sufficiently
serious to give rise to a cause for debarment under 40 CFR 32.205(b).
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Agency's limited staff. OPPTS will consider requesting that POs
provide written reports of unsatisfactory performance to be used by
OPPTS's POs to consider special conditions. Further, the
recommendation will be considered in the context of GAD's efforts
to improve assistance administration practices throughout the
Agency.
C. Increased costs associated with duplicative training manuals,
and "layered" subcontracts.
Before addressing the merits of OIG's recommendations, we must
again take issue with the assumptions which appear to underly the
audit report. The limitation on the Agency's authority to direct
assistance recipients to follow a specified curriculum contained in
EPA Order 5700.1 is cited above. The audit report also criticized
EPA for allowing two grantees to subcontract for the development of
"train-the-trainer" manuals. In the first instance, EPA awarded a
grant to a non-profit organization which, in turn, subcontracted
manual development to a University (a two-tiered arrangement). In
the second instance, EPA awarded a grant to a non-profit
organization which subcontracted for manual development to a
University which, in turn, subcontracted to a for-profit
organization (a three-tiered arrangement). The basis for the OIG's
criticism is that such tiering arrangements increase overall costs
to the government.
Historically, EPA has discouraged staff involvement in grantee
subcontracting matters. In a September 24, 1992, OARM memorandum
states that "while EPA has the responsibility to manage grants and
cooperative agreements, EPA employees must make certain they do not
become involved in certain areas of personnel and recipient
procurement." EPA employees are warned in this memo to avoid even
the appearance of undue influence over the recipient's specific
procurement decisions. Rather, the Agency relies on regulations
governing the recipient's overall procurement system to ensure that
assistance funds are properly spent. See 40 CFR Part 33 (1983); 40
CFR 30.40 through 30.48 (1996).
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While we understand the OIG's concern that we exercise prudent
financial oversight of grantees, we do not believe this oversight
should necessarily include questioning grantee subcontracting
decisions. We also do not agree that tiering arrangements, of
necessity, increase overall costs to the government. Acquiring
specialized skills where the recipient does not have required
expertise might actually be accomplished at lower cost through the
judicious use of subcontractors.
We do not agree with the implication in the draft audit report
that duplicative training materials is a widespread problem in TSCA
§ 10 training grants. The grantees which were audited varied in
their knowledge of lead-based paint issues, in the education and
experience of the people that were to be trained under the grants,
and in the scope of activities to be performed under the grants.
The grantees ranged from organizations with many years of
experience in training to local community groups which focused on
unemployed workers with little experience and toward specific local
concerns, including job placement skills. Hence, while training
materials, including train-the-trainer manuals, may be similar,
they may also be developed with a specific audience in mind and
geared toward the experience, education levels, and specific
requirements of the grantee. We do not believe that a single set
of training materials, including train-the-trainer manuals, was
necessarily the best approach given these differences.
1. Requesting that recipients forward all training materials
developed under past assistance agreements to the IRC.
We agree that the Agency has the authority to require that the
assistance recipient forward previously developed training
materials to EPA. Nonetheless, we do not concur with this
recommendation.
The Agency has a royalty free, non-exclusive and irrevocable
right to reproduce, publish, or otherwise use training materials
developed under assistance agreements for Federal purposes. 40 CFR
30.1130 (1983); 40 CFR 30.36(a) (1996). We agree that materials
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previously developed by grantees or others could be shared and used
by future grantees, reducing duplicative development of materials.
However, we must again point out that the implications of this
recommendation are not limited to the TSCA § 10 training program.
Further, these records may not be available as the recordkeeping
storage requirements have lapsed for many grants.
We fully agree that avoiding duplication of effort among
training grants is desirable. However, EPA has awarded thousands of
assistance agreements since its inception and no one knows, at this
point, how many training manuals have been developed over the years
with assistance funding. Identifying all such materials could well
prove to be a Herculean effort, and would likely require
coordination across all Headquarters programs offices as well as
with the Regional offices. To implement this recommendation, EPA
staff would first have to review thousands of grant files some of
which have long since been closed out and archived. Further, it is
likely most training materials under past grants would be out-of-
date. Other training materials might be for now-defunct programs,
and still others might have little or no cross-program relevance.
The physical housing of all training materials produced under
past grants is another issue that needs to be explored. No
determination can be made as to whether EPA ICR has the space
necessary to accommodate this influx of new materials until we have
some idea of the volume of the materials. Then, there is the
matter of staff time (within OIRM, who manage the IRC, and within
the programs and regions for those staff tasked with locating old
training manuals) plus contractor time and expense, since the
operation of the IRC is contracted out almost in its entirety.
Before launching an effort to centralize training materials, the
Agency must calculate the time and expense associated with
identifying and cataloguing the backlog, converting it into
automated format so that it is accessible to EPA personnel not
located in Headquarters, and performing ongoing maintenance of the
new information repository. We need to ensure that public access
is limited to documents that contain CBI (such as proprietary,
copyrighted training materials or other information not appropriate
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for distribution to the general public). The WSM IRC facility is
currently open, without restrictions, to the public. There would be
other costs associated with setting up and maintaining this
operation, and we need to question whether the potential benefits
outweigh these costs.
Note: We discussed the above and the following two
recommendations made by OIG with Lois Ireland, employee
of Garcia Consulting services. Inc., and Site Manager
for the Agency's information services contract (Lois was
also interviewed by the OIG); Leesa Dickinson, Project
Officer for the information services contract (not
interviewed by the OIG) ; and Jonda Byrd, program
manager for the EPA's library network (not interviewed
by the OIG). All three agree that the three OIG
recommendations warrant further study.
2. Requiring that all future training assistance agreements
include special conditions that ensure training materials
developed as a part of the agreement are forwarded to the IRC.
As noted above, we agree that the Agency has the authority to
impose such a condition. However, OGC has advised that this
authority must be exercised consistent with the FGCAA's principal
purpose of the "public support and stimulation" standard. Any
Agency use of materials that training assistance recipients develop
must be incidental to the principal purpose of the award -- to
enable the recipient to carry out its own training project.
Financial assistance cannot be used to develop training products
for EPA's direct use and benefit. Further, we again question
whether the IRC is the appropriate mechanism for maintaining and
cataloging training materials developed under grants.
Nonetheless, we also recognize that training materials developed by
one recipient can be provided to another recipient as a form of in-
kind assistance. See EPA Order 5700.1, p. 12. Resource
constraints, however, limit the extent to which this recommendation
can be implemented, therefore we do not concur.
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3. Instructing POs to contact the IRC before developing any new
training materials.
As noted above, recipients rather than POs develop training
materials. While we strongly support the notion of avoiding any
duplication of effort among assistance recipients, we do not concur
with this recommendation since it is premature to plan for future
use of a central information base administered by IRC before
exploring the feasibility of establishing one.
GAD believes as IGMS (GAD's new grants system) develops and as
Envirofacts evolves, GAD will be able to address the OIG
recommendations for grants information collection and storage. EPA
Project Officers and the general public can obtain grant
information on EPA's Envirofacts web page on the Internet.
Envirofacts is a data base of environmental data being made
available to the public by EPA. Included as part of this data base
is information on all active grants awarded by the Agency. Access
to selected data in Envirofacts is provided through the "on-line
query" forms. These forms execute predefined queries for the types
of facilities selected by filling out the form. Although the
information is limited, GAD plans to expand the data to include the
project title along with a summary. The expansion of information
will take place when GAD begins to implement IGMS. This expansion
will allow all Envirofacts users to seek information on similarly
funded projects.
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APPENDIX B
OIG Evaluation of Issues Resolved From the Original Draft Audit Report
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OIG Evaluation of Issues Resolved From the Original Draft Audit Report
In the original draft report, we had recommended that training materials, such as the train-the-
trainer manual, be forwarded to a central depository such as the Agency's Information Resource Center
(IRC) at EPA Headquarters. In its response GAD:
Did not believe that prudent financial oversight should necessarily include questioning
grantee subcontracting decisions, and disagreed that subcontracting tiering
arrangements, of necessity, increase overall costs to the government.
Asserted that duplicative training materials was not a widespread problem.
Argued that identifying the training materials could well prove to be a Herculean effort,
because EPA staff would have to review thousands of grant files, some of which have
long since been closed out and archived.
Questioned whether the IRC is the appropriate mechanism for maintaining and
cataloging training materials developed under grants.
During the exit conference, we explained that we did not recommend questioning grantee
subcontracting decisions; we merely wished to remind the Agency that tiered subcontracting can
increase cost. We recognized that duplicative materials was not necessarily a widespread problem. As
explained in the finding, EPA paid to have "train-the-trainer manuals" developed on 3 of the 19 Lead
training agreements. Moreover, it was not our intention for the Agency to undertake a Herculean effort
to send such manuals to a central depository. Rather, we intended for the current project officers to
forward such training materials about which they were aware. Finally, during the exit conference,
GAD suggested that the Information Resource Center issue be raised with the Agency's Resource
Management Committee by the OIG's Senior Resource Official. We agreed to do so and deleted the
original recommendations to forward past and future training materials to the Resource Center.
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APPENDIX C
Agency Response to Revised Draft Audit Report
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MEMORANDUM
SUBJECT:
FROM:
TO:
Response to OIG's Draft Report on Audit on
EPA's Training Assistance Agreements
Audit Report Number E1XMF6-03-0224
Alvin M. Pesachowitz /signed by John Chamberlin for/ 1-30-98
Acting Assistant Administrator
for Administration and Resources Management (3101)
Michael Simmons
Deputy Assistant Inspector General for Internal Audits (2421)
Thank you for your memorandum of December 19, 1997, providing the draft report of Audit on EPA's
Training Assistance Agreements. Attached are OARM's comments regarding the specific
recommendations addressed in Chapter 2 of the draft report.
If you or your staff have any questions or need additional information, please contact Mildred Lee on
(202) 564-5359.
Attachment
cc: BernieDavis(3102)
Carl Jannetti, MAD
Michael Wall, MAD
Carol Jacobson (2421)
Richard Hall (2421)
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RESPONSE TO RECOMMENDATIONS
All recommendations are presented as written in the final report. Each is followed by the OARM
response.
CHAPTER 2
OIG Finding: Training Costs Were Unknown.
OIG Recommendations: We recommend that the Acting Assistant Administrator for Administration
and Resources Management:
2-1 Seek written clarification should inconsistencies arise regarding the statutory authority for the
award of future assistance agreements.
OARM RESPONSE: We concur that GAD should seek written clarification should inconsistencies
arise regarding the statutory authority for the award of future assistance agreements. It is GAD's
practice to work with the Program Office and the Office of General Counsel (OGC) to ensure that the
scope of work is statutorily authorized.
One way GAD ensures the correct use of statutory authorities is through pre-solicitation review and/or
meetings with Program Offices during the pre-award phase. Program Offices may forward to GAD,
for their review and comment, a copy of their solicitation notice before it is published. It is during the
solicitation review that GAD has the opportunity to examine the proposed objectives and to determine
if EPA has the statutory authority to fund the activities. If GAD believes the activities to be performed
are not consistent with the intent of the statutory authority, written clarification from the Program
Office is requested. Once written clarification is obtained from the Program Office, the information is
reviewed by GAD and, if necessary, forwarded to OGC for their review and opinion.
GAD also ensures the correct citation of statutory authority on assistance agreements during the review
of the assistance funding package in the award phase. As a component of the assistance funding
package, the decision memorandum must cite the statutory authority which authorizes the proposed
grant activities. The Grants Specialist reviews the decision memorandum to ensure the proposed
project objectives are consistent with the intent of the statutory authority. If there are inconsistencies or
questions, the Grants Specialist, along with the Award Official, will re-review the application and
contact the Program Office for written clarification. Once written clarification is obtained from the
Program Office and if GAD still has concerns, the written clarification along with the original grant
application and the decision memorandum are forwarded to OGC for their review and opinion.
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2-2 Ensure that grants specialists adhere to the grants numbering criteria contained in EPA's
Assistant Administration Manual.
OARM RESPONSE: We concur that grants specialists adhere to the grants numbering criteria
contained in Chapter 4 of EPA's Assistance Administration Manual.
The program code X, as documented in the Catalogue of Federal Domestic Assistance, was developed
to include all authorized activities for which no specific program code exist, such as survey, studies,
investigations, development, experiments, and monitoring. Unfortunately, the Assistance
Administration Manual does not indicate this. Currently, GAD is looking into viable alternatives to
revising the Assistance Administration Manual.
As previously mentioned in our September 16, 1997, audit response, GAD is developing a new
Integrated Grants Management System (IGMS) which will replace the current Grants Information and
Control System (GICS) by the end of CY 2000. During the development of IGMS, GAD will be
reviewing the numbering system of applications as well as the need for specific Agency tracking and
analytical identifiers to improve the ease and accuracy of reporting. System features which allow
specialists to select from a textual list of options rather than a code will also support improved data
accuracy.
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APPENDIX D - DISTRIBUTION
HEADQUARTERS
Office of Inspector General (2421)
Special Assistant to the Deputy Administrator for Administrative Issues (1103)
Director, Grants Administration Division (3903R)
Director, National Program Chemicals Division (7404)
Director, Office of Policy and Resources Management (3102)
Agency Audit Follow-up Coordinator (2724)
Agency Audit Follow-up Official (2710)
Audit Follow-up Coordinator for OPPTS (7101)
Audit Follow-up Coordinator for the Office of the Administrator (1104)
Audit Follow-up Coordinator for OARM (3102)
Audit Follow-up Coordinator for GAD (3903R)
Associate Administrator for Congressional & Legislative Affairs (1301)
Associate Administrator for Communications, Education & Public Affairs (1701)
EPA Library (3404)
OTHER
Office of Inspector General - Divisional Offices
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