United S'ates
Environmental Protec:icn
Agency
of '.Voter
Prcgra-r Ooer3n
Wash'pator DC 2U60
December 1983
0^;5 Clearance 2000-041 ' Exci ?? ,ur-.> 'SO,'986
vvEPA
Construction Grants
Delegation and
Overview Guidance
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27518
ACKNOWLEDGMENTS
This document was prepared by the Environmental
Protection Agency, Office of Water Program Operations,
with the assistance of a Regional work group.
The EPA staff was supported in this effort by The
Synectics Group, Inc., Contract No. 68-01-6629.
NOTE
The term "overview" is used in this guidance to follow
the terminology of 40 CFR Part 35, Subpart J, the
applicable Section 205(g) regulation. The Sept. 1983
Task Force Report on State/Federal Roles and the
Administrator's Policy on Delegation both use the term
"oversight". It is our intent that the two terms be
used interchangeably, without difference in meaning or
practice. However, the oversight policy to be issued
by EPA in January includes more than just review and
evaluation of State programs which is the basic thrust
and direction of this document.
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PREFACE
Over the past several years, EPA has aggressively pursued a policy of dele-
gating significant and real project-level authority in the construction grants
program to capable and willing States. To date, most States have signed
delegation agreements and are in various stages of completing delegation. The
challenge facing EPA is to maintain current and viable delegation agreements
and develop and improve overview of State performance that is not overly
intrusive in State activities and prerogatives.
The Construction Grants Delegation and Overview Guidance was developed to
provide information and offer suggestions on successfully delegating authority
to States and conducting effective, results-oriented overview. It reflects
EPA's experience in these matters gained over the past few years and attempts
to address and enlarge, where possible, the role of delegated States.
This guidance is the product of significant contributions of effort by indi-
viduals throughout the construction grants and related water programs. A
Regional work group added their considerable expertise to the original Head-
quarters draft. The document was extensively reviewed by Regions, States, and
various Headquarters offices. The resulting comments were carefully con-
sidered before this final version was completed.
I believe this guidance will become a valuable tool to managers and staff
throughout the construction grants program. I suggest that Regions and States
study this guidance to determine which provisions are applicable and useful.
Implementation may then begin immediately.
Helify'L". Longest II
Di rector
Office of Water Program Operations
Office of Water
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TABLE OF CONTENTS
PAGE
1, PURPOSE, USE, AND PRINCIPLES ............. 1
PURPOSE AND USE OF GUIDANCE ........... 1
SCOPE OF THE GUIDANCE .............. 2
ROLES AND RESPONSIBILITIES IN
A DELEGATED PROGRAM ............... 3
PRINCIPLES OF DELEGATION
MANAGEMENT AND OVERVIEW ............. 5
2, OVERVIEW OF PERFORMANCE ,. ....... , ...... 7
INTRODUCTION .................. 7
PLANNING THE ANNUAL PROGRAM ........... 9
DESIGNING THE PLAN FOR OVERVIEW ...... g
NEGOTIATING ANNUAL OUTPUTS AND
•COORDINATING WITH THE 205(G)
ASSISTANCE APPLICATION ........... 13
MONITORING AND EVALUATING PROGRAM
PERFORMANCE ................... 13
PERIODIC MONITORING OF PROGRESS^ ...... 13
CONDUCTING THE ANNUAL ON-SITE
EVALUATION ................. 13
BASIC EVALUATION METHODS USED
FOR OVERVIEW .................. 17
USING OTHER EVALUATION
TECHNIQUES ................. 20
5, DELEGATION AGREEMENT MANAGEMENT ........... 21
REVIEW OF EXISTING DELEGATION
AGREEMENTS ................... 21
REVISING THE AGREEMENTS ............. 21
THE UMBRELLA AGREEMENT ........... 22
THE FUNCTIONAL SUBAGREEMENTS ........ 24
STRIVING FOR FULL DELEGATION IN
FUNCTIONAL SUBAGREEMENTS ............ 27
PROJECTS WITH OVERRIDING FEDERAL
INTEREST
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PAGE
4, SPECIAL REGULATORY REQUIREMENTS 32
CERTIFICATION (SECTION 35,3020) 32
REVIEW OF STATE DECISIONS UNDER
DELEGATION (SECTION 35,3030) 33
CONSTRUCTION GRANTS ACTIVITIES
ELIGIBLE UNDER A SECTION 205(G)
CONSTRUCTION MANAGEMENT ASSISTANCE
AGREEMENT (SUBPART A) 35
PUBLIC PARTICIPATION (SECTION 35,3035) , , , ,- , 35
5, NATIONAL INFORMATION NEEDS AND REPORTING 33
PROJECT-SPECIFIC INFORMATION ,. 30
SUMMARY MANAGEMENT. AND PLANN.ING DATA 33
APPENDIX A: THE DELEGABILITY OF CONSTRUCTION
GRANTS ACTIVITIES A-l
APPENDIX E: CONSTRUCTION GRANTS PROGRAM AND
MANAGEMENT OBJECTIVES (REGION V) B-l
APPENDIX C: ALLOWABLE COSTS UNDER CONSTRUCTION
MANAGEMENT ASSISTANCE (CMA)
AGREEMENT ; c-1
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TABLE 1,1
TABLE 2,1
LIST OF TABLES AND FIGURES
PAGE
ROLES AND RESPONSIBILITIES
SUGGESTED EVALUATION METHODS:
FREQUENCY OF USE IN EACH PHASE
OF DELEGATION
19
FIGURE 2,1
FIGURE 2,2
FIGURE 2,3
THE OVERVIEW PROGRAM 8
DESIGNING THE PLAN FOR OVERVIEW 12
SAMPLE ANNUAL OUTPUTS AND PLAN
FOR OVERVIEW FOR ONE PERFORMANCE
AREA iu
111
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CHAPTER 1
PURPOSE, USE, AND PRINCIPLES
PURPOSE AND USE OF GUIDANCE
the process of delegating the construction grants program to the States,
EPA management has shifted emphasis from project-level decisionmaking to
assessing performance against overall program and management objectives. This
guidance document reflects that shift and is designed to provide information
and assistance on how to manage and oversee 'the construction grants program
under State delegation/J
The purpose of this document is to integrate into one package all the relevant
regulatory requirements, policy, and guidance for the management of the
construction grants program delegation under Section 205(g) of the Clean Water
Act. It supplements the delegation management regulations (40 CFR part 35,
Subpart J) and the regulations governing financial assistance for all con-
tinuing environmental programs (40 CFR Part 35, Subpart A).
This document does not set policy or requirements for managing the program
under delegation. Where policy and requirements are mentioned in the text,
their regulatory source is noted.
The last guidance written on delegation management (POM 78-5) was issued in
1978, and provided direction for managing a program in the early stages of
delegation. This document supercedes POM 78-5. The key change is the
addition of a methodology for reviewing the conduct of the delegated
construction grants program on a continuing basis. It also recommends a
simplified delegation agreement structure that will facilitate update of
agreements and management of the administrative aspects of delegation. The
changes should allow Regions and States sufficient flexibility to address
their individual circumstances while still meeting national requirements and
monitoring needs.
The guidance should not disrupt successful State programs in the 48 States
with 205(g) assistance agreements or increase the paperwork burden for any
State beyond that required by regulation. Procedures and approaches laid out
in this guidance package are consistent with the overall Regional approach to
delegation management across all programs.
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SCOPE OF THE GUIDANCE
This guidance document will address four major issues critical to construction
grants program operations under delegation. Each is discussed in a separate
chapter, as indicated below. The guidance is tailored for the.use of
operating level program staff.
o The Overview Process—As State delegation progresses, a
results-oriented overview approach is necessary to ensure
effective management of the program and protect federal
interests. Chapter 2 describes a workable EPA overview-
approach and provides recommendations on the process,
structure, and content of Region/State overview.
o Delegation Agreement Management—Delegation agreements are
the foundation of the Region/State relationship. Chapter 3
discusses the pur-poses of the agreement, the recent regula-
tory and policy changes, projects of overriding federal
interest, and the need to strive for full delegation.
Recommendations are made towards improving delegation
management in a fully delegated program.
o Special Regulatory Requirements--Several types of regula-
tions affect construction grants delegation and overview.
Chapter 4 summarizes the requirements for technical and
regulatory information on State certifications, reviews of
State decisions under Section 205(g), activities eligible
for a 205(g) assistance agreement, and public participation.
Administrative procedures for implementing those require-
ments are recommended. •
o National Information Needs and Reporting—While EPA Head-
quarters is no longer directly involved in many project
activities, it remains responsible for the national program.
Chapter 5 discusses the management information needed to
assess progress towards program goals, manage the national
program in a fiscally responsible manner, and respond to
information requests.
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ROLES AND RESPONSIBILITIES IN A DELEGATED PROGRAM
Management of a delegated program must respond to changes in roles and respon-
sibilities of both EPA and the States as delegation proceeds. The intended
relationship under delegation is best characterized as a partnership, with
control and responsibilities for program management placed where law, custom,
and operating efficiency deem most appropriate.
Both EPA and the States have continuing roles and responsibilities under the
delegated programs. States are most suited to address unique problems as they
arise on a day-to-day basis. The Regions should strive to strengthen and
assist these State programs. Although State delegations in no way relieve the
EPA Region of its statutory- responsibilities, these responsibilities are best
executed through a mutually supportive relationship.
The primary roles and responsibilities associated with the management of the
delegated construction grants program for each program participant are shown
in Table 1.1, and are defined under the broad categories of policy, program
management, and program operations. The central role of the State in managing
the program under delegation is reflected in each of these broad categories.
The Region provides the principal EPA leadership and support for the State,
and is responsible for overview of State performance. Headquarters, as
before, sets national policy and priorities and is the principal contact with
OMB and Congress.
To facilitate EPA's shift from project management to program' overview, two
actions may be necessary to adjust to a delegated situation. First, delega-
tion agreements should be amended, where necessary, to reflect the role of
both the Region and the State under full delegation. Second, Regional
managers should focus their effort on making this shift operational by
providing appropriate guidance to staff and ensuring that it is implemented.
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TABLE 1.1 ROLES AND RESPONSIBILITIES
EPA HEADQUARTERS
EPA REGIONAL OFFICE
-i-
STATE OFFICE
CORPS OF ENGINE-3
=1J1.;CT , • Developing ind overseeing tne
| "rolementation of national
I policies ind regulations Co
I achieve .legislative goals and
national program aojectives.
i
i Participating in the a»veloq-
uent of regulations and
policies as nail as national
objectives.
• Implementing policies and
regulations through amendments
to delegation agreements and
other action.
* Participating In the develop-
ment of program priorities,
policies, and regulations.
t Applying national and regional
policies and objectives while,
at tne same time, accommodat-
ing State and Jocal environ-
mental needs and priorities.
PH>GiU.M i t Developing national program
."SNASeMENT11 objectives and directions,
estaollshing priorities, and
! identifying measures of
national program achievement.
i Managing national Cerps [AS
and allocating resources to
each Region.
i Managing the National Construc-
tion Srants Budget.
• evaluating the results and
effectiveness of national
program accomplishments for
feedback to tne Aoministra-
:ion, OMB, and Congress.
• Coordinating responses to
information requests fron
within and outside Uie Agency.
• Developing annual Regional
program plans. Including
negotiation of State program
plans consistent with the
objectives or the Regional
program plan.
• Maintaining management systems
to track program plans.
• Developing, negotiating, and
executing basic State delega-
tion agreements with associ-
ated suoagreements and updates
thereto.
t Developing, negotiating, and
executing Regional EPA/Corps
Agreement.
• Managing the Regional Construc-
tion Srants Budget. Including
support to national budget
preparation.
• Evaluating the State and Corps
progress toward annual outputs
and their compliance with
delegation agreement require-
ments and conditions.
a Preparing responses to informa-
requests.
« Developing a comprehensive
State program plan that
addresses the national objec-
tives and reflects State-
specific objectives and
regulatory requirements.
• Maintaining a management
system that Includes communi-
catlon procedures to reflect
the status of program accom-
plishments.
t Participating in the develop-
ment, negotiation, and execu-
tion of tne basic delegation
agreement and associated
suoagreements, and revisions
thereto.
* Participating In an advisory
capacity In development of the
Regional EPA/Corps Agreement.
t Managing the State Construction
Srants Budget, including data
support for EPA budget process.
• Assisting In tne preparation
of responses to Information
requests to EPA.
• Maintaining a management
system to crack and regort
status of program functions
assigned by tne EPA/Coras
Agreenent.
• Participate in development,
negotiation, and ?cution of
»e Regional EPA/Coras Agree-
ment .
• Participate with tne Segion in
tne evaluation of selected
programs t.lrougn :ce C"£ and
otr.er techniques.
i Assisting in tne preparation
of responses to information
requests to EPA.
• Performing program functions
••serves :o Headquarters (AT
projects «IM incremental cost
>s;.l, MO assistance agreement
tancurrencej.
• Serving it i clearinghouse for
tecrnicil ana aaninistritive
•nromatian and directives and
providing ocrar technical
assistance as requested.
e Monitoring State operations and
responding to requests for
guidance.
t Performing the non-oelegaole
functions or tne program ana
t.ie not yet delegated portion
of tne orcgram. including
involvement in projects of
overriding federal interest.
• Managing day-to-day operations
in accordance with provisions
of delegation agreement.
e funding and administering nign
Quality projects to neet pro-
gram ind management 30jec:ives.
i Providing technical assistance i i Providing tee.-.nical assistance
to State or oar am staff and to '! ta ree-.oients af EPA funcs.
recipients of ErA '-aids «nen |
requested. ,
• Performing assigned program
'unctions ana isoc'.ai assign-
ments -men tave '.at 3»en
ceieqatM :o :ne State.
• Providing tee.imcal assistance I
ana trjinirg :j State :tir-s.
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PRINCIPLES OF DELEGATION MANAGEMENT AND OVERVIEW
The varipus regulations and policy related to construction grants delegation
(primarily Subpart J and the Administrator's policy on delegation and over-
view) define a set of operating principles that serve as the foundation for
delegation management and overview of program performance. The underlying
purpose of all the operating principles is to ensure that funded projects are
environmentally sound, of high quality, and that their management is free of
waste, fraud, and abuse. The principles presented in the following section
address (1) what and how much should be delegated; (2) which agencies have
accountability under full delegation; and (3) the contents, structure, and
relationship among the parties of a results-oriented overview system.
Extent of Delegation (See 40 CFR Part 35, Subpart J)
1. States should be encouraged to undertake all project-level activities,
including preliminary determinations for nondelegable requirements. (A
suggested list of delegable activities is contained in Appendix A.)
2. Delegation requests should be denied only when a State clearly lacks the
minimum legal authority and technical capability necessary to achieve program
assumption or has insufficient staff to begin to perform the delegated
functions.
3. EPA and the States should ensure that the State does all possible work on
each delegated function. Where EPA maintains a review role, the State should
prepare all documentation in anticipation of EPA's approval and signature.
4. The Corps of Engineers may continue to perform key program activities and
undertake special assignments in support of State management under delegation.
However, it is EPA's long-term intention, as confirmed in the national Corps
interagency agreement, to have delegated States assume those activities now
being performed by the Corps as soon as the State is able to do so.
5. Official project files are to be maintained by the State.
6. The Grants Information Control System (GICS) data collection and entry
should be handled by the entity who has most of the data, the delegated
States.
Accountability (See 40 CFR Part 35, Subpart J)
7. Under full delegation, the State is accountable for management of the
program, even if certain activities are performed by EPA Regions (grant
offer), the Corps of Engineers (interim inspections), or other entities.
8. EPA has overall responsibility for assuring that federal requirements are
adhered to and progress toward national goals and objectives is maintained.
Accordingly, EPA will establish overview procedures to ensure that the program
is operating properly.
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Management and Overview
9. EPA's overview of the construction grants program should focus on overall
performance, including environmental and fiscal results, national standards,
and legislatively mandated requirements. Basic overview principles are:
o The overview program should be comprehensive, covering
State, EPA and Corps activities.
o Overview and evaluation will be based on integrated, multi-
year objectives, negotiated with each State and designed to
achieve both environmental and management results.
o The overview program will be results-oriented and will
encourage State flexibility to achieve goals in the most
cost-effective fashion.
o Measures of program performance should be established in
advance after collaboration and agreement between EPA and
State program managers.
o Monitoring and evaluation of program performance will
include input from program "clients" (recipients, the
public, State elected officials, etc.)
o Feedback to improve and ultimately to optimize program
performance will be emphasized, as will early warning of
emerging problems.
o An overview finding of serious and sustained State non-
performance may, if negotiation fails, lead to modification
or withdrawal of the delegation agreement and termination of
205(g) financial assistance (40 CFR 35.150).
10. EPA should ensure that States have maximum latitude to determine how they
meet the requirements of delegation, consistent with applicable laws and
regulations.
11. When a new program responsibility is imposed, the States should
participate in the development of procedures and administer the new delegable
activities from the start. Interim procedures can be used, if necessary,
until a new subagreement can be incorporated into the delegation agreement.
12. EPA will strive to build and maintain State capability to manage
authorized environmental programs through the provision of training and in-
house expertise.
13. After a function has been delegated, State certification and technical
judgments should generally be acceptable to EPA without extensive review of
supporting documents. The scope of the Regional review should vary according
to the size, environmental significance and controversy of the project.
14. EPA will consult with States to solicit review and comment on regulatory,
policy, and procedural documents having an impact on the delegation process or
State interests.
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CHAPTER 2
OVERVIEW OF PERFORMANCE
INTRODUCTION
Overview of the program under delegation will work effectively only if
accountability for. performance is clear and the specific monitoring and
evaluation activities are well conceived and systematically implemented. At a
minimum, overview should be tailored to the individual Region-State situation
using a mixture of activities, be jointly agreed to between the Region and
State, be known in advance, and be integrated into day-to-day Regional
management of delegation. The overview program described here is designed to
meet these needs.
Overview, as defined in this guidance document, includes all activities under-
taken by EPA in planning and reviewing program performance under a delegated
situation. The revised delegation regulation (40 CFR Part 35 Subpart J,
Section 35.3025) is the basis, for overview, and the individual Region/State
process agreed to in the delegation agreement should contain all the relevant
requirements for overview. The term "overview" specifically excludes the
project level decisions made by EPA for non-delegable or not yet delegated
activities.
The annual overview process described in this chapter is comprised of annual
program planning, which culminates in the documentation of a work program for
tne year, and monitoring and evaluation activities, which constitute the
implementation stage. The activities involved in each (see Figure 2.1) are:
b Annual Program Planning
-- Designing the Plan for Overview
-- Negotiating Annual Outputs and Coordinating with the
205(g) Assistance Agreement
o Monitoring and Evaluation
-- Periodic Monitoring of Progress and On-Site Evaluations
While the specific features of the overview program may vary from State to
State, each Regional office should ensure compatibility • with schedules
currently observed in the Agency and as stipulated in the annual operating
guidance. For example, establishment of priority objectives by the Region and
State should follow issuance of the national guidance and resource targets set
in March, and development of the annual outputs should coincide with Headquar-
ters' request for, and acceptance of, the Regional program plan in September.
In this way, the national monitoring and evaluation activities that support
Agency management and the needs of OMB and the Congress are consistent with
the same kind of activities at the Region/State level.
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FIGURE 2.1 THE OVERVIEW PROGRAM
PLANNING THE ANNUAL PROGRAM
DESIGN PLAN
HOH OVERVIEW
Priority Objectives
Key Measures
Monitoring &
Evaluation
Activities
NEGOTIATE ANNUAL OUTPUTS
AND COORDINATE WITH 205(g)
ASSISTANCE APPLICATION
(Combine annual outputs, both
quantitative and qualitative, with (he
plan lor overview Include outputs in
Ihe 205(g) assistance application )
March-April
August-October
00
MONITORING AND EVALUATION
PERIODIC MONITORING
OF PROGRESS
• Use ol GICS
• Informal Contacts
• Informal Assessments
ON-SITE EVALUATIONS
• Performance Against
Measures
• Policy & Special Case
Evaluations
• Program Management
Reviews
• Technical Review of
Subagreemenls '.
Monthly/Quarterly Mid- Year and/or Year-End
Nole The dales and lime elements in (Ins Mow charl are suggested only, lo indicate the time of year or Irequency at which
each part ol Ihe process is expected lo take place The March-April time period lor designing the plan lor ove.view K,
conststoiti with Ihe issuance ol Ihe Annual Operating Guidance to Ihe Regions
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PLANNING THE ANNUAL PROGRAM
Designing the Plan for Overview
The planning process for the upcoming year starts with the development of
the proposed plan for overview. This planning effort is intended to determine
what is important for overview in the comming year, how a successful program
will be measured, and what the Region will do to assess program accomplish-
ments. The results of this effort should be described in a written plan for
overview that is initially drafted by the Region and jointly discussed and
agreed to by the State and the Region early in the planning process. The plan
has three parts:
Part 1. The identification of priority objectives to be
pursued.
Part 2. The specification of key measures of performance by
which progress toward those ojectives will be evalu-
ated.
Part 3. The outlining of monitoring and evaluation mechanisms
(including State "reportingtoEPA)thatwTTlbe
employed during implementation.
The planning process should reflect the national directions published in the
annual operating guidance, the feedback from prior years' performance, and a
joint assessment of issues and problems for the upcoming year for each
specific State.
Figure 2.2 shows the process followed in designing the plan for overview and
gives an example of each of these three parts for one priority objective,
including the key measures and preliminary monitoring and evaluation activi-
ties.
Part 1. Identifying Priority Objectives
The basis of the overview program is a list of priority objectives, developed
through collaboration by States and -the Region, and other interested parties.
This list should be reviewed annually and -updated as needed for continued
relevance and for consistency with national directions identified in the
annual operating guidance. Attention should be devoted to completing the
yearly review and appropriate updating of the previous year's priority objec-
tives before proceeding with further development of the annual overview
process.
Priority objectives are also the basis for evaluating program performance, and
for this reason they should embody a performance expectation (e.g., to improve
compliance rate by 25%). Priority objectives should be results-oriented, and
although they should focus on one area of performance, they should not be so
specific as to constitute "bean-counting." Such specificity should be
reserved for key'measures of performance (see following section). The three
examples presented below show (1) an objective that is too vague, (2) one that
is too specific, and (3) one that is appropriate in tone:
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1. Complete anc closeout Step 3 and 4 projects.
2. Complete 9 projects and closeout 6 by mid-year and complete
and closecui 4 more by August 23, 1983 in New Jersey.
3. Eliminate all existing backlog of projects requiring
administrative completion by the end of FY 1983.
Program managers may find it helpful to distinguish between two types of
objectives associated with program performance. Program objectives describe
desired impacts of water media programs on the environment and community, and
the goals of the Clean Water Act. Management objectives focus on those
activities that are necessary to ensure effective program management and to
protect Federal funds. Program objectives are likely to remain relatively
constant over time, while management objectives may change to reflect new
initiatives as conditions change. Both types of objectives—formulated with
input from Headquarters, Regional and State program managers, and feedback
from the prior year's evaluation—will drive the overview program for the
coming year. They will serve as benchmarks for program direction and evalua-
tion.
A list of objectives, developed by Region V, is provided in Appendix B.
Region IV and North Carolina managers found this list helpful in developing
the prototype work program that accompanies this guidance. All Regions need
not prepare such a detailed list, but Appendix B can serve as a foundation for
documenting Region/State specific objectives, and its use can save a great
deal of time.
Part 2. Specifying Key Measures of Performance
Key measures of performance are the qualitative and quantitative indicators
that will be used to assess" progress toward fulfillment of each objective.
The key measures will later form the basis for the annual State outputs
negotiated in the work program, and be the line of inquiry in the monitoring
and evaluation activities to take place during the ye.ar. It is important that
these measures be identified and discussed with the State well in advance of
the year. When specifying key measures of performance:
o Address those measures that are identified in the Office of
Water Operating Guidance and Accountability System to evalu-
ate the national program, although the addition of others
tailored to the individual Region and State is both expected
and encouraged.
o Focus on measures that gauge pivotal activities and pro-
cesses, rather than simply trying to describe all the
outputs of the program (i.e., select measures that indicate
progress toward results, rather than simply those that
describe resource usage).
Key measures are commonly presented in the form of evaluative questions, as
shown in Figure 2.2. At least one key measure, qualitative or quantitative,
should be identified for each priority objective.
10
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The principal source of national data for monitoring progress for the key
measures is the Grants Information Control System. Each Region and State
should establish a process to"monitor performance against each measure through
existing information systems wherever possible. This should be identified in
the monitoring and evaluation activities included in the plan for overview.
Part 3. Outlining Monitoring and Evaluation
Monitoring and evaluation activities should be selected to thoroughly and
appropriately assess performance for each priority objective. Making this
selection at the same time the priority objectives and key measures are iden-
tified is important to ensure that the plan for overview is achievable within
resource limits and not burdensome.
The activities and methods chosen should:
o Mesh with current Agency reporting requirements and informa-
tion systems;
o Concentrate on activities that assist the State in improving
future program performance; and
o Include methods appropriate to the extent of delegation
undertaken by each State and past program performance (i.e.,
tailor the activities to the specific situation in each
year).
Regional managers can use an array of evaluative techniques in measuring
progress toward fulfillment of priority objectives. Four basic techniques, as
well as auxiliary tools, are described in the last section of this chapter,
and should be reviewed for their applicability to the specific Region situa-
tion before developing the plan for overview.
The key aspects of defining the mix of activities are that they (1) are
selected based on an analysis of what techniques are most effective to address
areas of vulnerability and provide clear insight into performance, (2) 'all
link to a specific priority objective, and (3) be agreed to in advance. The
mix of activities should be appropriate to the phase of delegation and to past
performance. The example in Figure 2.2 is for a State that has significant
delegation, but still requires procedural review for a complete assessment
(i.e., review of a specified percentage of actions related to the delegation
subagreement on physical completion).
11
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FIGURE 2.2 DESIGNING THE PLAN FOR OVERVIEW
PART 1: Determine Priority Objective
Eliminate any existing- backlog of projects requiring administrative
completion.
PART 2: Specify Key Measures
Quantitative Measures (plan vs. actual FY'83):
• % of closeouts to backlog at beginning of year
t # of physical completions
• # of administrative completions
• # of project closeouts.
Qualitative Measures:
• Were projects administratively completed in a timely manner
(generally 6 months after physical completion)?
• Were projects closed out in a timely manner (generally 3 months
after physical completion)?
t Is a strategy being developed to eliminate the Step 1 and Step 2
backlogs?
PART 3: Outline Monitoring and Evaluation Activities
• Obtain quantitative ccmnitments, assess progress quarterly. Obtain
qualitative commitments, assess progress at the on-site evaluation.
• Conduct case study of administrative completion process, to deter-
mine various office responsibilities, paper flow, and effectiveness
of State management.
• Review State staffing levels for backlog elimination, including
skill mix and training needs.
t Review 5% of all actions related to physical completion (subagree-
ment B-3).
12
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Negotiating Annual Outputs and Coordinating
with the Z05(g) Assistance Application
Once the plan for overview is agreed to and the funding and program assump-
tions for the upcoming year are relatively clear, the Region should negotiate
annual outputs with the State. Outputs may be both quantitative and qualita-
tive, and should be based on the key measures identified for each priority
objective. Outputs should indicate the level of performance that the State
and/or Region is expected to achieve in the upcoming fiscal year. These out-
puts then serve as benchmarks against which program progress is measured.
Once negotiated, these annual outputs may be combined for convenience with the
plan for overview (Figure 2.3).
The annual overview planning process provides the forum to negotiate the work
program included in the Section 205(g) assistance application. The work
program required as part of the Section 205(g) assistance application contains
many of the same elements as both the annual overview program (i.e. negotiated
annual outputs) and the delegation agreements (i.e. staffing, delegation
schedule, and cost estimates). Where the assistance application covers a
budget period beyond the annual overview program period, the assistance award
may be made for the full budget period, contingent on future negotiation of
outputs for annual overview of subsequent years of the budget period.
While the annual overview program is the focal point for planning, reporting,
and evaluating the delegated States (including performance under the
assistance agreement), the awarding of assistance should not be delayed
because of schedule conflicts. Where the application for Section 205(g)
assistance precedes the completion of the negotiation of outputs in the annual
overview program, an award may be made in accordance with the requirements of
Subpart A. The application must include a work program and outputs, which may
be duplicative of the annual overview program process. To avoid such a
problem, it is highly recommended that -the overview program process be
designed to complete negotiation of outputs before or simultaneously with the
assistance application. In this way, duplication of effort is avoided and
funds are provided in a timely manner.
MONITORING AND EVALUATING PROGRAM PERFORMANCE
Periodic Monitoring of Progress
This ongoing process consists of discussing general program issues and
reviewing management reports generated through the Grants Information and
Control System (GICS) and other sources. Information on the quarterly outputs
and quantitative data will be used as a measure of program progress and as a
vehicle for detecting potential problems and providing early feedback.
Conducting the Annual On-site Evaluation
On-site evaluation provides a structured forum for evaluating program perfor-
mance, identifying issues, and discussing feedback to program operations.
This personal interaction between State and EPA personnel is vital to
fostering an effective delegation relationship and to ensuring feedback to all
13
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FIGURE 2.3 SAMPLE ANNUAL OUTPUTS FOR ONE PERFORMANCE AREA*
PERFORMANCE AREA 3: COMPLETIONS/CLOSEOUTS
Priorily Objective: Eliminate any existing backlog of projects requiring administrative completion.
Quantitative Outputs
The State will complete the following during the fiscal year 1983 (cumulative by quarter):
Quarter 1 Quarter 2 Quarter 3 Quarter 4
• Steps 2+3/3 Physical Completion 1 3 6 ' 7
• Administrative Completion 5 10 20 26
• Project Closeouts 3 8 9 10
Qualitative Outputs
• Projects will be administratively completed within 6 months after the COE final inspection unless
additional work is authorized by the State in accordance with Its contingency policy. Efforts
will be made to do administrative completions of all existing backlog by September 30, 1983.
0 The State will provide assistance as requested and as necessary to ensure projects are closed out
within 3 months after the audit exceptions are resolved.
• The State will provide Region IV with a strategy for eliminating the Step 1 and 2 backlog by the
end of the year.
Assumptions
• Requests by EPA for assistance for points 1 & 3 in the qualitative commitments above will be
made in a timely manner (generally allowing State 30 days).
• One request for mid-course correction will be pennitted upon request of State.
*"Performance area" is the convenient term used to refer to a priority objective and the measures and
monitoring and evaluation activities that support it. Performance areas are often denoted by a number
or short title such as "obligations/outlays."
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FIGURE 2.3 (cont'd) SAMPLE PLAN FOR OVERVIEW FOR ONE PERFORMANCE AREA
PRIORITY
OBJECTIVE
MONITORING AND EVALUATION ACTIVITIES*
PROGRESS AGAINST
MEASURES
POLICY AND SPECIAL
CASE EVALUATION
PROGRAM MANAGEMENT
REVIEW
TECHNICAL REVIEW
OF SUBAGREEMENTS
Eliminate any exist-
ing backlog of pro-
jects requiring
administrative
action.
Quantitative
Output
Monitored quarterly,
plan vs. actual
Qualitative
Output
Discussed at on-site
evaluation
Special analysis of
State efforts to
eliminate backlog
during the past
year, to be per-
formed in conjunc-
tion with first
quarter management
meeting.
Review adequacy of
State staffing
devoted to elimi-
nating backlogs,
prior to annual
on-site evaluation.
Review 5% of all
actions related to
physical completion
for compliance with
subagreement B-3.
* The four monitoring and evaluation methods used in this sample work program are defined on pages 18 and 19.
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parties. The basis for this evaluation is the negotiated outputs, the plan
for overview and the assistance application. The latter provides the subject
matter, measures, and methods for monitoring and evaluation. Both the progress
in each priority objective and the technical aspects of the delegation
agreement are covered in the evaluation. Detailed preparation by both parties
is essential to the success of an on-site evaluation, as is close follow-up.
Planning
The frequency, participants, scope, contents, and procedures of an on-site
evaluation will vary depending on management approach and individual circum-
stances. These topics should be planned before the visit and discussed in
advance with State personnel. A review of State progress, activities, and
data reports over the past year should be undertaken in preparation for the
evaluation.
This advance planning will enhance the effectiveness of the on-site visit in
several ways. First, it will assure that the ground rules defining a success-
ful program are clear and jointly determined. Second, it will sharpen the
focus of the evaluation by pinpointing areas needing evaluation. Third, those
questions that can be answered by information on file will not need to be
asked of State personnel. Fourth, the structure of the evaluation report will
take shape as the directions to-be pursued are clarified.
Frequency and Scope
The delegation regulation requires that an on-site evaluation occur at least
once a year and cover—at a minimum—performance of State commitments toward
fulfillment of agreed-upon priority objectives (Subpart J, Section 35.3025
(c)). It should include technical aspects of the individual delegation.
agreements, as appropriate, and a review of overall program management.
Requirements under Subpart A for evaluating 205(g) assistance agreement
performance (Section 35.150) should also be addressed at the same time. The
timing of this annual visit is up to the Region and State, though coordination
with the annual evaluation of the Regional Office by the Office of Water is
suggested. More frequent visits may be conducted if it is considered
necessary to meet management needs and in fact are suggested for those States
in early phases of delegation.
Methods
As described above, the appropriateness of evaluation methods will vary with
the extent of delegation undertaken by the State (see Table 2.1 in the
following section, "Suggested Evaluation Methods: Frequency of Use in Each
Phase of Delegation"). The on-site evaluation provides an excellent oppor-
tunity for the assessment of qualitative measures of performance, which may
not be addressed through other channels (e.g., reporting requirements,
monitoring). Evaluation of program management and technical reviews are also
best performed during an on-site visit.
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Implementation
The on-site evaluation may be performed solely by EPA Regional staff, or--if
appropriate—by a mixture of Regional, State, and Corps staff. Several
Regions have successfully employed peer review, using a special team approach.
Team members are staff from both technical and program management areas.
Their assignment is temporary, and members must often maintain their regular
duties. For the purpose of continuity, it is recommended that the constitution
of the team remain stable, and that the team visit all States in the Region.
This approach has at least two advantages: it provides a fresh look at per-
formance without the inherent biases formed from day-to-day contact with the
State program, and it provides greater opportunity for cross-fertilization of
ideas from one State program to another. All observations, recommendations,
and new approaches should, however, be fed back to the appropriate Regional
and State staff for action if the on-site evalution is to be effective.
Follow-Up
The results of the on-site evaluation should be documented in a timely follow-
up report, which can assume whatever format is most useful to the individual
Region and State. The report should include the results of the on-going
monitoring taking place throughout the year; it should also cover all program
and delegation issues necessary to identify problems, assign accountability
for follow-up, and indicate how findings can be used to improve future program
performance. Progress against priority objectives should be a principal
topic, although its importance will vary based on extent of delegation and
other factors. In those instances where the State has already satisfied the
requirements of a particular priority objective, the Region can choose to
downplay its evaluation and use the opportunity to evaluate another, more
relevant, aspect of the program agreed upon by both parties.
Feedback
Feedback from the annual on-site evaluation should stress program improvement,
rather than sanctions. EPA should provide a forum for feedback that both
includes and addresses all parties in the program. Feedback must be timely
and effective if it is to have a positive impact on program performance.
Sanctions should only be considered for serious and sustained State non-
performance. If the recipient's performance under the delegation agreement
and annual outputs is not satisfactory, negotiation should be attempted before
the imposition of sanctions. If deemed necessary, sanctions should be consis-
tent with the criteria specified in the delegation agreement. Modifying the
agreement may be necessary to revise schedules, procedures or State authority.
In addition, the Regional Administrator may terminate or annul the 205(g)
assistance agreement (40 CFR 35.150 and Part 30). A Region considering
termination or annulment of the agreement should consult with the national
program manager on a case by case basis.
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BASIC EVALUATION METHODS
USED FOR OVERVIEW
The mix of activities chosen to monitor and evaluate program performance
should be tailored to the needs of the State and Region, the extent of
delegation, and the management approaches common to the specific State and
Region relationship. At a minimum, however, activities should be included
that are particularly appropriate to evaluating the State's performance in
fundi-ng and administering sound, high-quality projects. The evaluation
methods most commonly employed in the construction grants program can be
categorized into four basic methods. The mix of methods chosen to assess each
priority objective should consider the following points.
o Performance Against Quantitative/Qualitative Measures—This
method uses key measures of performance to assess construc-
tion grants results against priority objectives. Its use in
evaluation increases as States assume increasing program
responsibilities and EPA's role moves away from project
level decisions. The plan for overview provides for peri-
odic review of performance in these critical areas. Often
this review consists of periodically comparing actual
performance to front end commitments negotiated in the work
program. Analysis of progress through these indicators will
give an early warning of potential problems in performance
and allow for adjustment as circumstances change.
o Policy and Special Case Evaluations—This method consists of
an intensive review of one aspect of existing Region, State
and Corps policies and practices to determine their effec-
tiveness in achieving the priority objectives. It is used
to delve deeply into an issue or subject that cannot be
properly evaluated through routine performance monitoring.
A single issue should normally be addressed only once every
several years, although prior performance may affect its
frequency. Such evaluations are particularly useful if
focused on policies or activities that cut across organiza-
tional, functional, and hierarchical lines of responsibil-
ity. Examples include case studies of special initiatives
(e.g. completions/closeouts, innovative/alternative tech-
nology) or major management and/or program responsibilties
(e.g. CME's, outlay management analysis) to test their
effectiveness.
o Program Management Reviews—This method assesses the
adequacy of EPA, State, and Corps program management towards
achieving priority objectives. Its use depends on the
amount of time the State has had delegation, the stability
of the program, and prior performance. Significant changes
in staffing, skill mix, priorities, or other institutional
aspects may change the use of this method. The review may
include an assessment of organizational structure and
coordination responsibilities, use of 205(g) budget funds,
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training, information systems, conformanca wi;h :ns aelega-
tion agreement, fiscal management, and otr.ers. Tne scope of
this method will be determined by the priority objective
being addressed, but will generally be more narrowly focused
than a policy/special case evaluation.
o Technical Review of Subagreements—This method consists of a
review and detailed assessment of selected delegation
subagreements directly related to the priority objectives.
The extent of use of this method is directly related to the
age of the subagreement and the relative confidence the
Region and State have in the management of the specific
activity.. Such technical reviews of procedures usually
require specialized training and knowledge and may be
facilitated by the development of an evaluation guide for
each subagreement (the Region IV prototype provide example
subagreement evaluation guides). Included are functions
such as facility plan review and environmental document
preparation.
As delegation proceeds, the monitoring and evaluation methods employed should
shift away from hands-on, process-oriented methods towards program perfor-
mance-oriented methods. No evaluation method should be reduced to zero, how-
ever. Extent of delegation may be described in four phases: pre-delegation,
initial delegation, delegation phase-in, and full delegation.* Table 2.1
shows the levels of appropriateness for each of the four methods in each of
the four phases.
TABLE 2.1 SUGGESTED EVALUATION METHODS: FREQUENCY
OF USE IN EACH PHASE OF DELEGATION
Phase 1 Phase 2 Phase 3 Phase 4
Pre- Initial Delegation Full
Delegation Delegation Phase-In Delegation
Performance Against
Quantitative/Qualita-
tive Measures
Policy and Special
Case Evaluations
Program Management
Reviews
Technical Review of
Subagreements
Low
Low
High
High
Medium
Medium
High
High
Medium
Medium
Medium
Medium
High
Medium
Low
Low
*These phases are described in detail in the Revised Construction Grants
Resource Model, Final Report (July 2, 1982).
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Using Other Evaluation Techniques
The four basic methods described above can be supplemented, as appropriate, by
other evaluation techniques available to the Region and State managers. Their
use, like all monitoring and evaluation activities, should be well justified,
agreed to by the Region and State, and be designed to give feedback to
improved program performance. These other techniques include special
analyses, quality reviews, and evaluations by other groups (Inspector General,
General Accounting Office). If planned ahead of time, use of these tools
should be documented in the plan for overview. If they are applied sponta-
neously, in response to changing circumstances, the methodologies and results
should be documented for future Region/State reference.
Special analyses are short-term, fact-finding exercises. Analysis may be
required when .a new priority objective (such as eliminating backlogs) is
identified, or when a program requirement has resulted in a problem (e.g.,
facility plan reviews, processing change orders).
Quality reviews are spot checks of how a State is operating the program.
Regions should choose two or three sample projects and review the major
decisions involved in them, as well as their results. If the need arises,
procedures should be examined as well. In a fully delegated mode, certifica-
tions should be accepted at face value, but"periodic reviews are desirable to
ensure continued high quality.
Evaluations by other groups provide additional valuable information to the
overview process. Inspector-General audits often raise issues about program
operations. GAO audits raise issues of particular interest to Congress and
the legislation. Similarly, Construction Management Evaluations (CME) are
case studies of particular projects that may provide detailed insight into
State project management. Finally, day-to-day contact between Regional and
State staff provides a wealth of information that may be used in a successful
overview program. Through this informal contact, problems may be resolved,
ideas exchanged, and successful new procedures communicated among Regions and
States.
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CHAPTER 3
DELEGATION AGREEMENT MANAGEMENT
REVIEW OF EXISTING DELEGATION AGREEMENTS
The delegation agreement documents the contractual relationship between a
Region and each of its States. Existing delegation agreements and the manage-
ment activities related to them may need review because:
o The construction grants program is changed significantly by
the new regulations.
o Delegation agreement procedures and management are modified
by the regulation governing financial assistance for all
continuing environmental programs (subpart A) and the
construction grants delegation (subpart J) regulations.
o Many States now have considerable experience under delega-
tion and will operate more effectively with an agreement
that is more reflective of the shift in roles.
The above reasons indicate how important it is for each Region to take a close
look at its delegation agreements and associated operating procedures. The
following sections offer recommendations that will bring agreements into line
with regulatory requirements, encourage full delegation, and streamline agree-
ment management.
REVISING THE AGREEMENTS
The basic purposes of the delegation agreement are (1) to serve as the
"contractual" basis of the relationship specifying the responsibilities of
each party, (2) to provide direction on the performance of the various
functions, and (3) to act as a blueprint for achieving and maintaining full
delegation.
The existing agreements are generally divided into three distinct parts:
o The Umbrella Agreement (also called "agreement in princi-
ple," "basic agreement." "front agreement"), which contains
the basic commitment and framework for the agreement,
including scheduling, cost information, hiring and training,'
accounting information, maintenance of the FY 1977 State
level of effort, and other aspects necessary to define the
Region/State relationship under delegation.
o Functional Subagreements (also called "functions." "appen-
dices" or "supplements"), which detail the process, formats,
roles, and evaluation criteria for each of the individual
functions the State is to assume.
21
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o Standard Operating Procedures, (also documented in Memoranda
of Understanding) in the Regions that maintain them separate
from the functional subagreements, contain the most detail
on procedures the State should follow in performing the
delegated functions. SOPs should decline significantly in
importance as the State becomes fully delegated.
Guidance on reviewing and revising, if appropriate, the umbrella agreement and
functional subagreements is provided in the following sections. The goal is
to streamline the process through wh.ich revisions and additions are incor-
porated and approved. The umbrella agreement will contain all the durable
elements of the agreement, and so will have to be approved only once by top
management (sign-off by the Regional Administrator and the State Agency head).
The functional subagreements, if designed in a skillful and consistent manner,
can be expanded and revised easily; each time delegation moves forward, its
documentation can be approved by the EPA Water Division directors or construc-
tion grants branch"chiefs and their counterparts in the related State offices.
The Umbrella Agreement
Regulatory Changes
The significant program changes embodied in new regulations relating to
delegation, suggest that the umbrella agreements for most States be closely
reviewed and, if necessary, revised or supplemented. The most significant
changes from 40 CFR 35, Subpart J are as follows:
1. The overview process has been significantly revised,
including new requirements for annual program planning and
overview. Consequently, existing procedures for overview
in delegation agreements may be incomplete. Overview
should be based on results-oriented evaluation of State
performance against priority objectives and measures agreed
to in advance. (35.3005, 35.3025)
2. Delegable activities are no longer prescribed in the regu-
lations; the list has been replaced by a general statement
which allows States greater flexibility. (35.3015)
3. The delegation agreement should acknowledge the State's
status regarding the "Sufficient Authority" provision under
Section 219 of the Act (added by the 1981 Amendments).
This is important to ensure that project certifications by
eligible States receive prompt review -by the Region.
(35.3020)
4. Grantees must request State review of a project-level
decision before contacting EPA with an appeal. (35.3030)
5. Public participation requirements may be satisfied by
informal consultation with interested and affected groups.
Resources for public participation overview and formal
meetings need no longer be designated. (35.3035)
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Revising the Umbrella Agreement
The goal of the revised umbrella agreement should be to set forth concisely
the elements of the "contractual" relationship only, leaving management
approaches or new program emphases to be covered under the functional "agree-
ments. The umbrella agreement should endure without change throughout the
evolution of the State's delegation. Scheduling, staffing, training, and
budget details may change, but updates are part of the assistance application,
rather than changing the umbrella agreement. Once completed, this umbrella
agreement should rarely require revision (e.g. respond to changes in statute
or major changes in Agency policy). Thus, the approval and signature of the
State Agency director and Regional Administrator must be secured only once.
»
The revised umbrella agreement should contain the following information:
o Basic Responsibilities
- State Unit Responsible for Implementation
- Term of Agreement
- Scope and Roles
- Mechanism for Revising Delegation Agreements
- Maintenance of the FY 1977 State Level of Effort
- Definition of Sufficient Authority and Certification
Procedures
- Circumstances Necessitating Withdrawal of Delegation
o Delegation of Functions
- Delegable and Nondelegable Activities
- Delegation Schedule*
- List of Subagreements
*The items on the above list denoted by an asterisk are subject to periodic
revision with the 205(g) assistance application. The initial application
should include a schedule to achieve full delegation and a summary budget
covering at least the first year's delegated functions but otherwise not
duplicate material in the umbrella agreement. Subsequent applications,
however,.need only reference the original agreement and therefore updated
material relating to grant administration should be submitted. This
includes:
o An updated schedule of the assumption of delegated functions (the
Headquarters-maintained delegation matrix may be used for this
purpose);
o An updated State staffing and hiring plan; and
o An updated budget and expenditure data for 205(g) funds, in a format
that will assist the Regions in preparing data for the Headquarters
205(g) tracking system.
23
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o Program Administration
- Staffing, Hiring, and Training Needs*
- Records to be Kept
- Program Costs by Year for the Term of the Agreement (in
constant dollars or a formula applied across all States
within a Region)*
- Additional Allowable Activities under 205(g)
- Public Participation
- Appeals of State Decisions
o Overview
- Overview Procedures
- Information Management
- Procedures for Determining Projects of Overriding
Federal Interest
- Procedures for Revising" or Terminating Agreement Due to
State Non-performance
Before proceeding with revisions to the umbrella agreement, Regional managers
should carefully assess each State umbrella agreement and decide whether it
would be better to draft it anew or to amend what exists. The result need not
be a long document: it should be possible to detail all the required informa-
tion in 10 to 20 pages.
The Functional Subagreements
Statutory and Regulatory Changes
The recent statutory and regulatory changes make certain specific revisions
necessary to the functional subagreements. Generally, a distinction must be
made between all grants made prior to May 12, 1981 (when the Subpart I regula-
tion was issued in interim final) and those awarded after that date. The
earlier grants will continue to be bound by existing requirements and law.
Those that follow, however, will be treated under the revised statute and
regulations. All functional subagreements should clearly reference which
regulations apply.
Where appropriate, delegation agreements should be revised to reflect the
following regulatory changes and developments (from 40 CFR 35 Subpart I, and
AnnanHiv &\•
1. The elimination of Step 1 and Step 2 grants (after enact-
ment of the 1981 amendments on December 29, 1982), which
effectively prohibits federal involvement during the
facilities planning and design stages. (35.2025, of 40
CFR 35 Subpart I and Appendix B)
2. The establishment of planning and design allowances which
may accompany Step 2 & 3 and Step 3 grant agreements.
(35.2025, 40 CFR 35 Subpart I, Appendix B)
24
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3. Advances of the planning and design allowance which now
may be offered to small communities from a State grant
reserve, should also be reflected in delegation agree-
ments. (35.2025(b), 35.2020(e))
4. Water quality management planning (205 j) grants to States
(from reserved funds) are to be used in part for the
development and use of a Priority List System that
reflects water quality criteria. (35.2023, 35.2020(d))
5. Grant assistance from any funds appropriated under Section
201(n)(2) of the Clean Water Act may be available to
municipalities for correction of combined sewer overflow
problems in marine bays and estuaries. Funding will be
based on the State's demonstration that impaired uses and
public health risks can be effectively addressed by the
project and the extent to which the project satisfies
regulation criteria. (35.2024)
6. The increase in the reserve for innovative/alternative
(I/A) projects, mandated by the 1981 Amendments, has been
reflected in the new regulations. ' Increased • resources
will be devoted to completing I/A reviews. (35.2032)
7. States with "sufficient authority" must now furnish
written certification of compliance with all federal
requirements on grant applications, and EPA must approve
or disapprove the grant within 45 days. Certification
must be supported by documentation specified in the
Delegation Agreement. (35.2042)
8. Grant assistance for advanced treatment may be awarded
only after an AT review has been conducted. EPA recom-
mends that potential grant applicants obtain this review
prior to initiation of design. (35.2101)
9. Water quality standards must be reviewed and revised by
States as per Section 303(c) of the Clean Water Act prior
to 12/29/84 in order for the State to remain eligible for
grant assistance. (35.2111)
10. NEPA determinations are no longer required during the
planning phase (formerly Step 1), but applicants are
encouraged to confer with review agencies (State or EPA)
and request in writing that the necessary NEPA
determinations be made during an early stage of the
project. (35.2113)
11. User charge systems must now include a financial manage-
ment system that will accurately account for revenues
generated by the system annd expenditures for operation,
maintenance and replacement of treatment works. To
receive Step 3 grant assistance, unless solely for acqui-
sition of eligible land, an applicant must obtain approval
of it's user charge system. (35.2122)
25
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12. Grant assistance for reserve capacity is being phased-out.
Step 3 grants approved prior to 12/29/81 may receive funds
for up to 40 years reserve capacity. Step 3 grants
awarded between 12/29/81 and 10/1/84 may include funds for
20 years of reserve capacity. All grants made after
9/30/84 shall fund only capacity necessary to serve
existing needs, but in no case greater than existing needs
on October 1, 1990. (35.2123)
13. Grantees must certify, one year after the initiation of
project operation, that the project is capable of meeting
performance standards. If the project does not yet meet
these standards the grantee must submit a corrective
action report and begin taking steps to remedy problems
under EPA or State overview. (35.2218(c) and (d))
14. The new regulations encourage States to give priority to
completion and closeout of phased/segmented projects.
(35.2015)
15. The grantee shall not acquire real property determined
allowable for grant assistance until the Regional
Administrator has determined that applicable provisions of
40 CFR Part 4 have been met. (35.2210)
Revising the Functional Subagreements
The functional subagreements prepared by most Regions were never expected to
endure periodic statutory, regulatory, and administrative changes without
revision. A cursory review of Regional experience has shown that, in some
cases, the volume and nature of the needed changes has either (1) been
considered too much work to keep current and resulted in the circumvention of
the subagreement formally or informally, or (2) the changes have been made
piecemeal, resulting in subagreements "bandaged" beyond the point where they
are useful management tools.
To address this problem, Regional managers should revise functional subagree-
ments to both include activities required by the new regulations and policy,
and be more responsive to the administrative, fiscal, and technical directives
on program operations issued by various EPA Headquarters offices. To facili-
tate this, subagreements should be as consistent as possible between all
States in a Region. Lack of consistency among State agreements can be a
significant hindrance to Regional delegation management, particularly updating
and revising the functional subagreements, which are identified in the
umbrella agreement, and evaluating State performance based thereon. Consis-
tency promotes more current agreements because they are easier to revise
across the board and encourage equal treatment of States. Where Regional
staff find a great deal of variety in format and content among the subagree-
ments for their States, it would appear to be in the Region's own interest to
make them as consistent as possible.
26
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To ease the addition and deletion of subagreements (or material within
subagreements) In accordance with the subpart I regulation and new Agency
policy, and keep the functional subagreements current and consistent, Regions
have developed several approaches to accomplish this.
o Region VI maintains an ongoing task force that proposes
revisions as needed. These are then circulated among all
States. If the States agree that the revisions constitute
an improvement, then the subagreements for al1 States change
accordingly. Currently the Regional Administrator and a
State cabinet officer must approve each change,"but this is
under review for possible change, too.
o Region VIII has undertaken a major revision to subagreements
•by having each State attempt to draft one or more. These
are then circulated to the other States and the Region for
feedback. Final agreement is then hammered out at a meeting
of all parties. This approach incorporates extensive input
from the States, and the result is consistent across all
States.
o Region IV accepts requests from States to revise functional
subagreements and circulates the revisions to all States for
concurrence. The changes may be ratified by signature of
the Water Management Division Director and each State
program manager.
Despite this emphasis on maintaining current and consistent subagreements, the
anticipated revisions will not be beneficial if they have a negative impact on
the usefulness and value of the subagreements. The revised subagreements
should continue to contain sufficient detail to assure that all federal
requirements discussed in the delegation agreement are met, with the State
performing as much of the preparatory work as legally possible. All subagree-
ments should detail the relative responsibilities of each party in completing
the larger program function. If an EPA review role exists, it should be
referenced.
STRIVING FOR FULL DELEGATION
IN FUNCTIONAL SUBAGREEMENTS
It is the goal of EPA for States to achieve full delegation of the construc-
tion grants program. If this is to happen, the functional subagreements must
convey full appropriate authority to the States. In the case of many program
activities, this has been done with minimal problems. There remain, however,
lingering questions as to the definition of "full delegation" and significant
divergence of opinion on how much delegated authority may be reflected in the
functional subagreements for certain activities.
Delegation of the construction grants program is completed when 100% of the
delegable responsibilities are assumed by the State, including preliminary
determinations and staff work for those activities shared with EPA, as
required by statute or regulation. EPA recognizes the present use of the
Corps in the program. It is EPA's long-term to have delegated States assume
27
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those activities now being performed by the Corps as soon as the State is abla
to do so.
Once delegation is completed, EPA's involvement in project-level activities
should be limited to those functions required to discharge its national
responsibility; to ensure the quality and direction of overall program
performance (management and overview); and to those activities required by
legislation or Agency regulation (shared activities).
Certain project-level activities are completely delegable to the States.
While EPA originally performed these activities and may have shared respon-
sibilities with the State during phase-in, Regions should have no role in
project-level activities once full delegation has been achieved other than
overview or review of particularly significant projects with our Overriding
Federal Interest.
Other project-level activities are "shared" in that all requirements in the
activity cannot be delegated to the States, even under full delegation, and
responsibility for their execution is split between EPA and the State. For
example, the State may process all Step 3/2+3 payments and amendments, while
EPA retains the administrative workload of processing payment request forms
and sending to Treasury for payment. Thus, Step 3/2+3 payments and amendments
(a shared activity listed in Appendix A on page A-4) is considered fully
delegated when a State is performing all delegable aspects of the activity.
EPA retains a share of the responsibility for conducting this and other shared
activities either because delegation is restricted by legislation or regula-
tion (e.g., grant award) or because of the Agency's overall responsibility for
program results (e.g., inquiry response). As a rule, responsibility for final
determination of shared activities remains with EPA (as per Subpart J, Section
35.3015 of the regulations), but the individual steps necessary to ready these
activities for final determination are delegable to the States. In this
manner, EPA Regions and the States 'maintain a careful balance of responsi-
bility for these activities.
•
A summary chart containing completely delegable and shared activities, their
legal or administrative citations, and brief comments on State/EPA roles under
full delegation, appears in Appendix A.
The following section identifies selected activities whose delegability has
been the source of disagreement or confusion among the Regions, Headquarters,
and States. It identifies of those aspects of a direct activity that the
State assumes under full delegation, and those which EPA normally retains.
EPA's role would be different for projects identified as having an overriding
federal interest or on those rare occasions when EPA intervention is necessary
to prevent waste, fraud, and abuse. Needless to say, EPA and State roles are
not limited to those controversial activities described below. For a compre-
hensive description of the Agency's overview and program management responsi-
bilities, as well as the States' program and project roles, see Chapter 1.
28
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o Minority Business Enterprise
Requirements (33.240)
Delegable Functions: MBE is a delegable function in which the State indicates
six positive steps have been taken towards procuring minority and women-
enterprises, when federal funds are used.
Region's Role Under Full Delegation; Program overview.
o Procurement Protests (40 CFR 33
Subpart G. 35.3015(c))
Delegable Functions: When State or EPA determinations are subjects of bid
protests, the State prepares the necessary documentation of its decision-
making process, and other pertinent information, to the grant recipient in
order to assist the bid protest determination. (This applies to MBE, WBE,
EEO, and other disputes/protests).
Region's Role Under Full Delegation: EPA retains the responsibility for
making final determinations for all procurement protests.
o Financial Management System Review
(35.2020, 35.2104. 35.2122)
Delegable Functions: State reviews financial and management capability of
applicant. This includes ensuring that the user charge system will require
users to pay their proportionate share and that the sewer use ordinance meets
regulatory requirements.
Region's Role Under Full Delegation: Program overview.
o GICS: Data Collection and Entry
Delegable Functions: The State collects project information on an ongoing
basis, and enters data into the Grants Information Control System (GICS) in
response to semi-annual data requests. In addition, the State assists EPA in
the management of the data base, including use of reports and updating.
Region's Role Under Full Delegation: EPA retains ultimate responsibility for
management of the GICS system. In addition, EPA provides ongoing technical
assistance.
29
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o Environmental Review (40 CFR 6,
35.2113. 35.2030 and 35.3015
Delegable Functions: States review all documentation submitted by grantee to
ensure that all federal requirements related to NEPA are satisfied and all
environmental considerations are discussed in the selection of the proposed
plan. States also prepare the documentation for EPA concurrence and issuance
of the FNSI, including the draft environmental assessment.
Region's R-ole in Full Delegation: EPA is responsible for making deter-
minations under NEPA including: ("1) issuance of findings of no significant
impact (FNSI), (2) need for an Environmental Impact Statement (EIS), (3)
preparation .of an EIS, and (4) final ElS-based decision and follow-up.
o Facility Plan Review (I/A and Land
Acquisition) (35.2032 and 35.2210)
Delegable Functions: As part of the facility plan review delegated States
conduct an I/A analysis and a review of any land acquisitions. The I/A review
is needed to re-verify that the project or its components qualify for the
Innovative/Alternative designation. The land acquisition review is conducted
to certify that the actions taken to acquire any land for the project comply
with EPA regulations.
Region's Role Under Full Delegation: Under full delegation EPA plays no
automatic role in the facility plan review. EPA review would only be
necessary to assure that no potential for waste, fraud, and abuse exists, and
to prevent funding if any is found.
o AT Review (35.2101)
Delegable Functions: States provide staff work, conduct reviews, and make
preliminary determinations of approvability of applications for advanced
treatment projects. States may fully approve projects with AT costs less than
$3 million when delegated the authority and provided the State has responsi-
bility for facility planning.
Region's Role Under Full Delegation: For incremental AT costs of more than S3
million, the Region reviews State documents, and if in order, sends them to
Headquarters. In accordance with Congressional direction, the EPA
Administrator retains responsibility for making the final determination for
projects with AT costs greater than $3 million.
o Audit Resolution (30.540, 30.802(c).
40 CFR 30 Subpart L. 35.3015(c))
Delegable Functions: In cases where there are construction grant audit excep-
tions, States perform all staff work, including preliminary decisions, and
provide these to EPA. States also prepare amendments to grants and change
orders as necessary.
30
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Region's Role Under Full Delegation: EPA remains responsible for reviewing
the State findings and issuing the final determination on audit exceptions.
EPA is responsible for resolution of appeals (and to act as witness),-to
provide technical support and coordination with legal branch. EPA processes
any changes to grants.
PROJECTS WITH OVERRIDING FEDERAL INTEREST
The need for EPA involvement in selected project-level decisions is recognized
in Section 35.3015 as a necessary corollary-to national program management and
overview of the States. Although the delegation policy is to- turn over all
project administration to the States, certain projects, particular project
aspects, or a specific project-level decision may continue to require federal
involvement. This is particularly true of projects that are interstate in
nature or are of special Congressional or Executive Branch interest. As a
rule, however, the Regions should limit involvement in State decisions.
A partial listing of project conditions which may precipitate an overriding
federal interest includes the following:
o Projects subject to an Environmental Impact Statement;
o Projects subject to special and/or complex eligibility
considerations;
o Projects subject to Congressional inquiry;
o Projects involved in federal court cases or subject to other
directives--e.g., consent decrees, Ocean dumping restric-
tions, international agreements—that EPA must administer
despite delegation;
o Projects involved in law enforcement investigations or in
allegations of waste, misuse, or mismanagement of federal
funds;
o Projects involving AT Reviews;
o Projects affected by Marine Discharge waivers under Section
301(h); and
o Projects having interstate or international impacts that go
beyond State jurisdiction, interest, or influence.
Where statutory requirements call for direct EPA involvement in project
decisions which have been delegated to the States, such involvement will be
early in the process and be designed to assist and improve State management
and to prevent unnecessary duplication or delay in the State process. EPA
will also make its technical expertise available to States which request such
assistance in complex cases.
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CHAPTER 4
SPECIAL REGULATORY REQUIREMENTS
The construction grants delegation regulation (40 CFR Part 35, Subpart J)
includes several specific requirements pertaining to EPA/State management of a
delegated program. This chapter proposes a set of administrative procedures
and definitions that are appropriate to implementing a number of these
requirements. Where applicable, alternative approaches are suggested and
examples given.
CERTIFICATION (SECTION 35.3020)
Change From Existing Requirements
As stated in the interim final Subpart I regulation, States are required to
certify within the scope of their delegated authority that a project, or
project component, meets the applicable federal requirements. Certification
of State approval action will be provided on a project-by-project basis.
The revised construction grants delegation regulation (Subpart J, Section
35.3020) incorporates a concept of sufficient authority for certification from
Section 219 of the 1981 Amendments. For States with such authority, EPA is
required to act on applications within 45 days. If the Agency fails to do so,
the grant is automatically approved. The current delegation agreement may
need to be amended to show any changes in the EPA/State responsibilities for
application review and documentation.
In order for a State to qualify for sufficient certification authority, the
following pre-award activities should be fully delegated: Facilities Plan
Review, Plans and Specifications Review, Engineering Subagreement Review,
Environmental Review, Step 3 Application Review, and Financial Capability
Review (for a regulatory reference for each of these, see Appendix A).
Guidance: Content and Format
of the Certification
Certification serves as a formal approval and notification, documenting within
the scope of authority delegated to the State that all applicable federal and
State requirements have been met.
States with sufficient authority under Section 35.3020 need to forward only
the relevant certifications and other documentation (such as the assistance
application) required by the delegation agreement to the Region. Ordinarily,
the application should have sufficient project-related information to satisfy
any need of the Region.
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Guidance: Record*eeping and Project
Documentation For States With
Sufficient Authority
States with sufficient authority to certify that all federal requirements have
been met should be maintaining the official project file. As States approach
full delegation, less documentation should be routinely requested by EPA.
Under full delegation, Regions should receive from the States only those
project documents necessary for nondelegable determinations (e.g., NEPA docu-
ments, assurance of compliance with Title VI of Civil Rights Act, advanced
-treatment project information). Correspondence and individual project infor-
mation (e.g., user charge systems, sewer use ordinances, facilities plans,
plans and specifications, checklists, review forms, and other review documen-
tations) which do not require action by the Regions, should not be forwarded
with the grant application.
If the project is subject to special review because it is of overriding
Federal 'interest, a specific request for additional documentation should be
agreed to in advance by the Region and State.
REVIEW OF STATE DECISIONS
UNDER DELEGATION (SECTION 35.3030)
Change From Existing Requirements
Aggrieved municipal applicants, grantees, and other affected parties may
currently request the EPA Regional Administrator to review a State agency's
action under delegation, without first requesting the State agency to
reconsider its decision. Under the revised regulations, recourse to EPA by
applicants, grantees, and participating municipalities will no longer be
'permitted unless the State has first been given an opportunity to review its
initial decision.
This change in the handling of request for review of State decisions is meant
to underscore the State's responsibility in project-level decisions and
encourage the State to resolve most issues without EPA involvement.
Guidance: Process for Review of a
State Decision and EPA's Function"
Requests for State review may be handled as informally or as formally as
dictated by applicable State statutes and other State requirements. A number
of States, such as California and Pennsylvania, already have a process in
place to re-review initial State decisions. States should consult with the
Regions in determining the appropriate process for resolution. Although no
specific process is prescribed, the State procedures should not require
multiple levels of State administrative review beyond the State agency which
made the initial decision, nor should they require State judicial review prior
to providing the petitioner the opportunity to request the EPA Regional
Administrator's review. Also, the procedures must be set forth in, or as an
amendment to, the delegation agreement.
33
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The State agency should normally be able to review the petition and issue its
decision within 45 days of the date of receipt of the petition. However, this
standard may be exceeded with good cause. In cases where 45 days is imprac-
tical because of institutional constraints, a normal time period should be
agreed to in the delegation agreement. The State must write the specific
reasons for its decision, label the decision as final, and inform the peti-
tioner that it may request EPA Regional Administrator review under Section
35.3030 of the delegation regulation.
These requirements do not impose a duplication of effort at the State level
but assure that the State thoroughly addresses the issue(s) raised and
provides in writing a record of the legal and factual basis- for its action or
omission before the Regional Administrator becomes involved. Labeling the
State decision as final notifies the recipient that no further State action is
necessary before an EPA review may be requested. These requirements are to
preserve the State's role under delegation, and failure of the State to
address the disputed action or omission will not. prevent review by the EPA
Region.
The State decision should present the factual and legal (statutory and/or
regulatory) basis for the decision and any precedents set by other similar
projects or management activities, if applicable. Precedents may be set by
EPA or State findings or EPA Regional Administrators' resolution of analogous
situations. Regions should supply States with examples of appropriate prece-
dents and other applicable information (e.g., allowable cost data addressed in
handbooks, manuals, and Regional Administrator review decisions of State
actions under delegation).
The petitioner must request EPA Regional Administrator review within 30 days
of receipt of the State agency's final decision. It is recommended that the
Region request that the petition contain the following information:
(1) Name and address of petitioner.
(2) Copy of the final decision of the State agency which the
Regional Administrator is requested to review, and the
date when the petitioner received it.
(3) The basis for the petitioner's request (manner in which
the petitioner has been adversely affected).
(4) The specific action by the Regional Administrator which
the petitioner requests.
(5) A statement of the evidence presented to the State agency
prior to its final decision. Any evidence not presented
to the State agency should be identified and accompanied
by an explanation as to why it was not previously
provided.
If the petition is incomplete and does not contain the information in (1)
through (5) above, the Regional Administrator may at his/her discretion notify
the petitioner what information is necessary to complete the petition, and the
time within which an amended petition may be filed. If a properly amended
34
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oetit'.on is not received by the Regional Administrator within the time
allowed, the petition may be dismissed unless good cause is shown for an
extension of time.
Upon tne receipt of a proper petition, the Regional Administrator may take the
following actions:
o Refuse to review the State agency's final decision if the
petition is late or raises issues which are not appropriate
for Regional Administrator review; or
o After review of the petition and the State agency's final
decision:.
- Deny the petition upon finding the State agency deci-
sion was proper;
- Set aside or modify the State agency decision; or
- Request the State agency to take appropriate action.
Before making a final decision, the Regional Administrator may provide for an
informal meeting as soon as possible between the petitioner, representatives
of the concerned State agency, the EPA Region, and other concerned persons to
resolve the dispute.
The Regional Administrator will issue a written final disputes determination
as quickly as possible, which will inform the petitioner of the right to
appeal to the EPA Administrator under CFR Part 30 (General Grant Regulations
and Procedures).
CONSTRUCTION GRANTS ACTIVITIES ELIGIBLE
UNDER A SECTION 205(g) CONSTRUCTION
MANAGEMENT ASSISTANCE AGREEMENT (SUBPART A)
Guidance: Current Interpretation
of Eligible Activities
EPA has construed "administration" of the construction grants program in the
regulation (40 CFR 35, Subpart A) very broadly in line with the intent of
Congress. For the construction grants program, the definition of adminis-
tration encompasses all activities that are necessary to assure that a
wastewater treatment plant is planned, designed, and built in the most cost-
effective manner in accordance with all applicable federal requirements to
achieve the goals of the Clean Water Act. (See Appendix C for a suggested
list of activities allowable under a construction management assistance grant.
The list is limited to construction grants and is not necessarily all
inclusive.)
This broad interpretation of what constitutes construction grants management
by the del-egated States has made a specific listing of eligible activities
inappropriate in the delegation management regulation. Activities necessary
for "administration" of the program may vary depending on the management
35
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approach of the State and Region or the priorities and emphasis of the
Administrator. Eligibility determinations are based on the regulatory
requirements contained in Subpart A and the administrative history of the
program. These determinations may be subject to interpretation and may be
subject to audit.
Because of this broad-based approach, examples of eligible activities are
detailed in Appendix C. These activities will generally fall within the
categories shown below.
Categories of Eligible Construction
Grant Activities
o Program Management—General activities that are needed to
plan and implement the requirements of the construction
grants program in a particular State (i.e., developing
funding priorities, public participation, program
coordination, effective management practices, and staff
supervision).
o Project Management--All activities related to (1) the
funding of high-priority projects that enhance water quality
and public health and (2) the administration of those
projects in a manner that assures it is designed and
constructed to meet the highest level of engineering
standards and preserves fiscal integrity.
o Indirect Costs—The application of an overhead expense is
allowable under an approved indirect cost flow developed in
accordance with OMB Circular A-87.
PUBLIC PARTICIPATION (SECTION 35.3035)
Change from Existing Requirements
Public participation requirements are changed somewhat to permit more
flexibility while continuing to assure that Regional and State efforts to
inform the public are appropriate. Public notice requirements during the
development of important documents was retained and expanded to include the
overview program. The old regulations required delegated States to provide
resources to oversee public participation, to hold a public meeting or
workshop in conjunction with EPA's annual review of State program
accomplishments, and to prepare fact sheets and responsiveness summaries.
These specific requirements were removed and replaced with a requirement for
public notice and a determination of public interest prior to scheduling a
meeting. EPA and the States however, should jointly seek innovative ways to
continue to provide for, encourage, and assist public participation in
construction grants delegation.
36
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Guidance: Process for Meeting Public
Participation Requirements
The Regional Administrator and the State agency director should consult
informally with any .interested or affected groups when preparing or
substantially amending delegation agreements and developing the annual
overview program. These informal consultation mechanisms may include but are
not limited to review groups, ad hoc committees, task forces, workshops,
seminars, and informal personal communications with individuals and groups
that have indicated an interest.
X
A public meeting, rather than the current, more formal hearing, will be held
only if the Regional Administrator or the State agency director determines
that significant interest exists. To determine whether or not there is
significant interest, EPA or the State must notify the public (1) when the
initial delegation agreement is being developed, (2) when substantially
changing the agreement, and (3) when the annual overview program is being
developed. A copy of the proposed documents must be made available at the
Regional and State Agency Offices sufficiently in advance of EPA execution to
a'llow for timely comment. The public meeting, which may be held in
conjunction with the State/EPA agreement, should precede Regional Office
approval by at least 30 days.
Public meetings are less formal than public hearings and do not require formal
presentations, scheduling of presentations, or a record of proceedings.
However, the notice of the public meeting should be provided no less than 30
days before the meeting is scheduled. Also, the notice should identify the
matters to be discussed and should include or be accompanied by a discussion
of the tentative determination of major issues (if any) in the delegation
agreement or amendment, information on the availability of any relevant
materials (if appropriate), and procedures for obtaining further information.
Also, the meeting should be held at times and places which, to the maximum
extent feasible, facilitate public attendance. Public transportation and
evening and weekend scheduling should be considered.
The State's performance of delegated construction grants program functions and
activities shall comply with all applicable federal public participation
requirements. Requirements and suggestions for public participation are
provided in Construction Grants-82 for facilities planning (Part 3.1, Public
Participation, and Part 7.10, Views of the Public "and Concerned Interests).
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CHAPTE?. 5
NATIONAL INFORMATION NEEDS AND REPORTING
In order to fulfill the mandate as national program manager of the construc-
tion grants program, EPA has a continual need for management information. The
sources for most of this information remain the delegated States, which under
full delegation retain the project files and manage the program on a
day-to-day basis. Routinely, EPA Headquarters has a need for two types of
information:
o Project-specifie information that is used to meet management
requests for project-level and summary program.data, and
o Summary management and planning data, which is used for
projections in subsequent fiscal years.
In both cases, the form, content, and frequency of information requests should
be clearly set forth in the delegation agreement.
Aside from.routine data needs, it is inevitable that unanticipated information
requests will be made. Often, these data will be used to comply with requests
from Agency management, OMB, and the Congress. The delegation agreement
should address the responsibilities of each party when this circumstance
arises. Specific procedures for responding to unanticipated data requests
should be included in the delegation agreement, as necessary, to avoid delay
or confusion when requests to States become necessary,
The OMB information collection clearance Number 2000-0417, provided for under
the Paperwork Reduction Act, and the expiration date of June 30, 1986 should
be placed in the upper right hand corner of all information requests under
Subpart J and this guidance. This signifies that the Office of Management and
Budget has reviewed the information collection requirements for this regula-
tion and issued a clearance for three years. The clearance covers requests
made under Subpart J by both EPA and the States.
PROJECT-SPECIFIC INFORMATION
Ongoing project-specific information is assimilated into the Grants
Information Control System (GICS), and involves a continual data collection
process. GICS provides information to users at all management levels. The
integrity and reliability of GICS can only be maintained through the ongoing,
prompt, accurate, and continuous collection and entry of all required data
elements. Consequently, GICS data collection and entry should be a mandatory
delegable function, and the data responsibilities of the parties should be
clearly delineated in the subagreements.
38
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SUMMARY MANAGEMENT AND PLANNING DATA
Summary management and planning data are collected through a data request that
Is issued twice annually, coinciding with, the beginning and midpoint of the
federal fiscal year. This information is primarily used to plan and prepare
the Agency's annual budget proposal to OMB. The resulting data also provide
input for the EPA Administrator's Accountability System and is used to respond
to various information requests from within EPA, and from other Federal
agencies and Congress. The information collection burden has been reviewed
and approved by OMB under the terms of the Paperwork Reduction Act of 1980.
Summary management and planning data requested are generally of three types:
o Delegation Schedule—The delegation schedule contains a
standard list of delegable activities for all States and
Territories.
o Workload Data--Workload data are requested, by State, for
three years (the current year, planning year, and budget
year) on priority program activities (awards, completions,
etc.).
o 205(g) Budget Data—Budget" and resource planning data for
Section 205(g) funds are requested for each State.
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APPENDIX A
THE'DELEGABILITY OF
CONSTRUCTION GRANTS ACTIVITIES
-------
APPENDIX A
THE DELEGABILITY OF CONSTRUCTION GRANTS ACTIVITIES
Model Activities
1. PRE-STEP 3 ACTIVITIES
A. Steps 1 ami 2 Payments and
Amendments
Legal/Administrative
Authority
35.2300 35.2204
35.2206 35.3015(a)(c)
Ability to
Delegate
Shared
B. Facility Plan Review**
35.2030 35.2032
35.2034 35.2102
35.2118 35.2120
35.2210 35.3035
Delegable
Roles Under
Full Delegation
State processes payments and
amendments, while EPA must
accept state certification of
payment form, and direct
Treasury to pay. EPA must
also make final determination
and process amendment awards.
State reviews facility plan,
including I/A analysis, SSES.
I/I, CSO project review, land
acquisition, and public parti-
cipation.
SOURCES: 40 CFR 30, 40 CFR 33. 40 CFR 35, "Draft Activity Definitions for the Construction Grants Resource
Model" (April 1982), "Construction Grants 1982" (July 1982), and Interviews with HQ and Regional
officials.
*"Procedure" indicates an actual program activity without a regulatory citation, but one which may facilitate
the performance of another activity which is prescribed by regulation.
"Indicates those activities for which a detailed breakdown of State and EPA roles under full delegation appears
in Chapter 3.
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Undo! Activities
1. PRE-STEP 3 ACTIVITIES, continued
C. AT Rev it:i/**
ro
D. Environmental Rev levy
E. Step 2».l Application Review
and Award
F. B&C Review
G. Technical/Administrative
Review of Plans & Specs
Legal/Administrative
Authority
35.2101
Ability to
Delegate
Shared
35.2113 35.2030
35.3015(c)
40 CFR 6
35.2109 35.2040(a)
35.2202 35.3015(c)
Shared
Shared
35.2040
35.2040 33.255
Delegable
Oelegable
Roles Under
Full Delegation
State performs complete review
for projects with less than $3
million in incremental AT
costs. For the larger AT pro-
jects, State performs initial
review, while EPA retains
responsibility for making the
final determination of the
approvability of AT costs.
State accepts delegation for
everything except NEPA-related
decisions, which must remain
with EPA.
State reviews technical and
administrative application
docunents, and processes docu-
ments, necessary for assis-
tance award. EPA must make
final review of the applica-
tion, and final determination
of award.
State conducts all activities.
State conducts alj activities.
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Model Activities
2. CERTIFICATION REVIEW & STEP 3 AWARD
A. Step 3 Application Review
and Award
CO
B. Financial Management System
Review**
C. Engineering Suhagreement
Review**
D. Engineering Subagreement
Self-Certification Review
Legal/Administrative
Authority
35.2024 35.3015(c)
35.2020 35.2024
35.2122 35.2104
35.2042(a) 33.240
35.115
33.110 33.115
Ability to
Delegate
Shared
Delegable
Delegable
Del egable
Roles Under
Full Delegation
State reviews technical and
administrative application
documents and processes docu-
ments necessary for assistance
award. EPA must make final
review of the application, and
final determination of award.
State conducts all activities.
State conducts all activities,
including MBE/UBE.
State conducts all activities.
3. STEP 3 PROJECT ACTIVITIES
A. Preconstruction Conference
and Bid Package Review
B. Procurement Protests/
Appeals**
33.115 33.240
40 CFR 30 and 33
(Subpart G) &
35.30l5(c)
Delegable
Shared
State conducts all activities,
including MBE/UBE.
Protests: State prepares
necessary documentation and
resolution of MBE, WBE. EEO,
and other protests. EPA makes
final determinations on all
protests that cannot be
resolved by the State.
Appeals: States provide all
necessary information ami
support to EPA for use in its
own deliberations on assis-
tance appeals.
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•f*
Model Activities
Legal/Administrative
Authority
3. STEP 3 PROJECT ACTIVITIES, continued
C. Interim Inspection 35.2216
0. Interim Audit Resolution
E. Change Orders
F. Step 3/2+3 Payments and
Amendments
G. On-Site Presence
II. O&M Manual Review and Plan
of Operation Review
35.3015(c) 30.540
30.fl02(c)
35.2204 33.1030
35.2103 35.2204
35.2300 35.3015(c)
35.2216
35.2206(a)
Ability to
Delegate
Delegable
Shared
Delegable
Shared
Delegable
Delegable
Roles Under
Full Delegation
State conducts all activities.
State assists in determining
the validity of audit excep-
tion, and writes responses to
audit. EPA retains responsi-
bility to issue the final
determination and review state
findings.
State conducts all activities.
State processes payments and
amendments, while EPA retains
the administrative workload of
processing payment request
forms and sending to Treasury
for payment.
State conducts all activities.
State conducts all activities.
4. PROJECT COMPLETIOHS/CLOSEOUTS
A. Final Inspection and
Project Completion
B. Engineering Performance
Certification Review
35.2216
35.2214
Delegable
Delegable
State conducts all activities,
State conducts all activities,
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I
en
Model Activities
Legal/Administrative
Authority
4. PROJECT COMPLETIOHS/CLOSEOUTS, continued
C. Administrative Completion 35.2212
D. Final Audit Resolution and
Appeals Process**
35.3015(c) 30.540
30.802(c)
Ability to
Delegate
Shared
Shared
E. Grant Closeout
40 CFR 30 Subpart H Shared
Roles Under
Full Delegation
EPA must review for complete-
ness, process final assistance
agreement, and transmit to
audit.
State assists in determining
the validity of audit excep-
tion, and writes responses to
audit. EPA retains responsi-
bility to issue the final
determination and review state
findings.
State conducts all activities,
except that EPA must offi-
cially close the financial and
administrative files.
5. REGIONAL PROGRAM MANAGEMENT
A. Inquiry Response
(procedure)*
Shared
B. Data Collection and Entry for
Delegated Activities**
(procedure)
Delegable
Both state and EPA may respond
to project and non-project
requests for information. EPA
maintains full role in
responding to congressional
requests, and those with over-
riding federal interest.
State conducts all activities.
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APPENDIX B
REGION V
CONSTRUCTION GRANTS PROGRAM
AND MANAGEMENT OBJECTIVES
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APPENDIX 3
REGION V
CONSTRUCTION GRANTS PROGRAM AND MANAGEMENT OBJECTIVES
The following list of programmatic and management objectives may be useful in
the development of Regional plans for overview. It was extracted from a
comprehensive list of objectives prepared by Region V. This list is included
as a sample, and does not necessarily reflect all portions of this guidance.
Those objectives marked with an asterisk are Regional priority objectives for
FY'83.
Program Objectives
* 1. To ensure that the highest priority treatment facilities are expedi-
tously constructed to achieve the maximum environmental benefit.
* 2. To-ensure that municipalities evaluate feasible alternatives for treat-
ment facilities and select the most cost-effective alternative to meet
water quality and public health requirements.
* 3. To ensure planning, design and Construction of treatment works that can
be operated and maintained by municipalities to meet permit effluent
limitations and public health requirements.
* 4. To ensure that the potential environmental effects of construction grant
projects are described and considered by municipal," regional, State and
EPA project decisionmakers to minimize potential adverse impact of
projects on the environment and the public.
5. To ensure that construction of advanced treatment facilities will
produce significant water quality and public health improvement.
6. To identify and encourage the use of innovative and alternative treat-
ment technologies that reduce costsj conserve energy and recycle and
recover waste.
7. To encourage the planning of integrated facilities that treat, disoose
of or utilise industrial and municipal wastes to maximize the benefits
of funds expended for wastewatar treatment facility construction.
* 3. To ensure that municipalities have self-sufficient financial management
systems to support municipal treatment facility construction and opera-
tion.
Management Objectives
* 1. To ensure that the public is informed and has the opportunity to provide
input on issues related to treatment facilities projects, and that this
input is considered by decisionmakers.
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* 2. To delegate responsibility and develop the capability for management of
the construction grants program to States that are willing and able to
assune delegation.
* 3. To improve the construction grants program planning and implementation.
* 4. To maintain 'and provide Federal/State expertise necessary to address
high priority environmental/program problems.
* 5. To ensure the construction grant program operates as an integral part of
a total water media program which includes water quality standards,
water quality planning, NPOES permits, ambient and compliance
monitoring, and enforcement functions, in order to improve municipal
compliance with permit effluent limitations.
6. To prevent fraud, abuse, waste and mismanagement and identify and
correct causal activities.
* 7. To accurately project outlays in order to ensure the validity of the
national budget for construction grants.
8. To provide financial assistance to State pollution control agencies to
manage the construction grants program.
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APPENDIX C
ALLOWABLE COSTS UNDER CONSTRUCTION
MANAGEMENT ASSISTANCE (CflA) AGREEMENT
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APPENDIX C
ALLOWABLE COSTS UNDER CONSTRUCTION
MANAGEMENT ASSISTANCE (CMA) AGREEMENT
This Appendix proposes a list of potential assistance eligible functions and
activities under 205(g), based on an analysis of the construction grants
regulation (40 CFR 35, Suboart I including 40 CFR 33), the construction grant
program management delegation regulation (Subpart J), the Clean Water Act, EPA
policy, and reasonableness. It supplements the appropriate Federal cost
principles under 40 CFR 30, Section 30.410 provided in OMB Circular A-87.
The eligible functions and activities apply to federal assistance awarded on
or after the effective date of the construction grants program delegation
regulation. This list is for construction grants only, and is not necessarily
all inclusive. Allowable costs under the Subpart J regulations are not
limited to the items listed in this Appendix. Additional cost determinations
based on applicable law and regulations must be made on individual items which'
must be included in.the delegation agreement.
The bulk of the activities listed fall under project management; "those marked
with an asterisk are program management activities.
FEDERAL ACTIVITIES DELEGATED
These are construction grants-related activities which EPA has responsibility
for performing and which can be delegated to States.
Pre-Step 3 Activities
• Review facilities planning, covering plan contents as
provided by 35.2030.
• Ascertain applicable statutory and regulatory requirements
within the scope of delegation (including Part 6) for
facility planning have been met prior to award. (Section
35.2030)
• Make early determinations under Part 6 of the aporopriate-
ness of a categorical exclusion, scope of EID, or early
preparation of an EIS, if reauestad bv'potential aoplicant.
(Sections 35.2030 i 35.2113)
• Ascertain facilities planning related to project has been
substantially ccmoleted, and" condidate project for award
will not be significantly affected by completion of the
facilities plan and will be a comoonent part of the comolete
treatment system (for Step 2*3 award). (Section 35.2030)
t Review and determine that aoplicant completion schedule for
facilities plan is acceptable and is a special condition of
the assistance agreement. (Section 35.2030)
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• Review assistance application for adequacy of information
required in Part 30, Subpart B. (Section 35.2040)
• Review Step 2+3 application to determine if all requirements
of Part 35, Section 35.2040(a) have been met.
• Review Step 3 application to determine if all requirements
of Section 35.2040(b) have been met.
• Review projects using I/A technology. (Section 35.2032)
• Review projects for privately ' owned individual systems
(Section 35.2034)
• Review applications for awards for preliminary Step 3 work
in emergencies or to prevent significant cost increases.
(Section 35.2118)
• Execute preliminary reviews and 'determinations of approva-
0? advanced treatment (AT) projects. (Section
Final determinations are reserved to EPA.
• Prepare assistance agreement offer and amendment forms (EPA
forms 5600-20A and 5700-208) .
• Review recipient offer price on real property for qrant
award. (Section 35.2210)
• Review applications for end results of field testing
(Section 35.2262).
• Review applications for relocation assistance under Section
4.502(c) in accordance with Parts 30 and 35 (Subpart I).
(Section 35.2300) '
• Review I/I and system rehabilitation information from
grantees.
• Review plans and specifications for conformance to federal
requirements.
• Review facility plans and plans and" specifications (designs)
for.operability.
• Review compatible industrial waste information unaer Section
35.2125.
• Review and approve prerreatment programs.
• Review applications for a marine waiver discharge under
Section 301(h) . (Section 35.2112)
• Estimate Federal share of project cost. (Section 35.2152)
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t Review the adequacy of.the proposed training and operations
supervision as a part of the Step 3 application review.
(Section 35.221
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• Review change orders for operabil ity.
Step 3 Completions and Closeouts
• Receive, recipient notice of project completion; perform
« !}2,*!nspect1oris Wlthin 60 da?s of receipt. . (Section
35.2216)
• Receive refunds, rebates, credits, and other receipts by
recipient. Transfer to EPA for crediting to the current
ica.te allotment. Review and approve recipient's reasonable
expenses in securing such funds. (Section 35.2300)
• Review recipient certifications of project capability to
meet its performance standards one year after initiating
operation. Review recipient submissions that are required
if project fails to meet its performance standards. -Oversee
recipient corrective actions. (Section 35.2214)
• Review and approve follow-up A-E efforts during the year
lOllowing operation start-up. (Section 35.2214(c)J
• Initiate remedial action in case recipient fails to carry
out its obligations. (Section 35.2214)
Other
•
Perform one-time O&M inspection prior to recipient certifi-
cation of performance.
• Review O&M at individual completed (assistance agreement
funded) plants to support permit or assistance agreement
condition enforcement.
• Coordinate permit and enforcement activities with construc-
tion grants program (Municipal Management Strategy).
• Technical assistance for appeals in bid protests and
assistance appeal actions.
* Maintain data base for GICS as applicable.
STATE-SPECIFIC ACTIVITIES
These are construction assistance agreements- related activities which -the
States only have responsibility for performing.
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Project Planning Oversight
* Develop and revise priority system and annual project
priority list, and conduct required public participation.
(Section 35.2015) ' •
* Establish reserves from State's allotment and request
approval of uniform reduction of Federal share of State
assistance, if desired. (Sections 35.2020'& 35.2152)
* Review and determine whether'project could be dropped from
the priority list if improvements were made in O&M at exist-
ing facilities. Provide technical assistance as necessary.
(Section 35.2030(b)(3)(iii)
Pre-Step 3 Activities
• Prepare assistance applications for combined sewer overflow
(CSO) projects in priority water quality (WQ) areas,
including marine areas. (-Section 35.2024)
• Demonstrate WQ benefits of the proposed CSO project in
priority WQ areas, including marine areas (Section 35.2024)
• Prepare State application for advances of allowance to
potential applicants (including small communities) for
facilities planning and design; handle payments to recipi-
ents; recover advances, if necessary. (Section 35.2025.)
• Certify adequate public participation based on State and
local laws in projects .for which Step 2+3 and Stap 3 appli-
cations are submitted. (Section 35.2040)
Project Certification
• Prepare project funding priority certifications. (Section
35.2042)
• Prepare project-by-project certifications that applicable
Federal requirements within the delegated authority have
been met. Retain support docimentacion, as soecified in the
delegation agreement, and make it availasle to the Regional
Acministrator, upon recuest. (Section 35.2CK2)
OTHER ELIGIBLE STATE ACTIVITIES
* Conduct State construction grant program that is f'jnded
without Federal assistance, if the Regional Administrator
determines the program is administered consistent with the
Federal requirements (40 CFR 35 Subparts, F and I).
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* Manage delegation agreement, including staffing and
training.
* Prepare State applications for training facilities and
training program assistance under Section 109(b) and for
State advances of 109 allowances under Section 201(1) of the
Act. (Section 35.0225) '
* Develop program outputs, direct the accomplishment of the
outputs, and track output status.
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