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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Special Report
EPA Recovery Act
Recipient Reporting and
Data Review Process
Report No. 10-R-0020
October 29, 2009
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Report Contributors: Rudolph M. Brevard
Cheryl Reid
Neven Morcos
Abbreviations
ARRA American Recovery and Reinvestment Act
EPA U.S. Environmental Protection Agency
OMB Office of Management and Budget
Cover Illustration: The logo for the American Recovery and Reinvestment Act.
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\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
| WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
October 29, 2009
The Honorable Earl Devaney
Chairman
Recovery Accountability and Transparency Board
Washington, DC
Dear Chairman Devaney:
Attached are the results of our limited review of the U.S. Environmental Protection Agency's
(EPA's) process for performing data quality reviews of recipient-reported data, as required by
the American Recovery and Reinvestment Act (ARRA, or Recovery Act) of 2009. The
Recovery Act awarded $7.2 billion to EPA. We conducted this review to determine whether
EPA established a process to perform limited data quality reviews intended to identify material
omissions and/or significant reporting errors, and to notify the recipients of the need to make
appropriate and timely changes. In the attachment, we provide details for the six specific areas
for which you requested information.
Office of Management and Budget (OMB) Memorandum 09-21 requires Federal agencies to
develop internal policies and procedures for reviewing reported data and to highlight certain data
elements for review. In addition, the memorandum provides a timeline and guidance for (1)
recipients to register and report required data, and (2) Federal agencies to review and comment
on reported information. The memorandum defines the scope of those data quality reviews, with
a focus on material omissions and significant reporting errors, and requires Federal agencies to
continuously evaluate recipient efforts to meet Recovery Act reporting requirements.
We performed this audit during October 2009 at EPA Headquarters in Washington, DC. We
performed this audit in accordance with generally accepted government auditing standards.
These standards require that we plan and perform the audit to obtain sufficient and appropriate
evidence. The evidence is to provide a reasonable basis for our findings and conclusions. We
believe that the evidence obtained provides a reasonable basis for our findings and conclusions.
We reviewed EPA's policies and procedures for reviewing quarterly Recovery Act data and met
with the Agency's Recovery Act governing officials to discuss those policies and procedures in
addition to the review questions. We had not performed prior reviews/audits related to Recovery
Act data quality reviews.
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Although we did not test implementation of EPA's procedures for reviewing quarterly Recovery
Act data, we believe the Agency sufficiently designed its internal controls to detect material
omissions and significant reporting errors.
We shared our results with EPA officials and they generally agreed with the results of this
review.
If you or your staff have any questions regarding this report, please contact me at (202) 566-0894
or hill.patricia@epa.gov: or Rudolph M. Brevard, Director, Information Resources Management
Assessments, at (202) 566-0893 or brevard.rudy@epa.gov.
Sinnerelv
Patricia H. Hill
Assistant Inspector General for Mission Systems
Attachment
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10-R-0020
Attachment 1
RECOVERY ACT REPORTING
Data Quality Review Guide
For the Inspector General Community
U.S. Environmental Protection Agency
1) Obtain the Federal agency's policy and procedures for reviewing quarterly Recovery
Act data pursuant to OMB Memorandum 09-21 (section 3.12).
The Agency provided us with the following five documents, one of which is still in draft format.
The first two documents listed below discuss the Agency's process for reviewing quarterly
Recovery Act data. In response to our question as to when the EPA draft Procedure for Review
of Recovery Act data will be finalized, Agency officials indicated it is a "living document" that
will keep changing to meet OMB requirements, and no date has been set to issue the final
procedure. In addition, the Agency later indicated that based on discussions with OMB and the
Recovery Accountability and Transparency Board, there will be a "lessons learned" review of
this initial reporting cycle and adjustments may be made. This will require agencies, including
EPA, to modify how and what they are reviewing.
> EPA Procedure for Review of ARRA Section 1512 Recipient Reported Information
(DRAFT - V4, October 2009)
> EPA ARRA Reviewer Guidance (October 2009)
> Management Action Plan I (May 2009)
> Management Action Plan II (October 2009)
> EPA Stewardship Plan (July 2009)
2) Determine how the Agency plans to ensure that all prime recipients have filed the
required quarterly reports pursuant to section 1512 of the Recovery Act and how the
Agency will ensure that it conducts the required reviews of the reported data.
EPA will conduct a limited review of recipient-reported information associated with the six
Agency programs with related Recovery Act resources. Agency-specific recipient submission
data will be supplied by FederalReporting.gov via a data feed to EPA no later than the 21st day
following quarter end. The data shall be composed of all submitted recipient data received on or
before the 10th day following quarter end. The Agency later indicated that they have
implemented an informal review beginning on day 11 of the cycle. This involves obtaining an
extract from federal reporting.gov, producing the identified exception reports and posting on the
Agency's management dashboard, and informally contacting recipients to discuss and clarify any
identified issues. Extracted data will be used to assist reviews in two areas of emphasis. The
first area will be those data elements subject to a central, macro (Agency-wide) review across all
programs. The second area will be a review locally by National Program Managers and regional
staff. After completing the macro and local reviews, omissions and errors will be noted and
comments provided in the Federal reporting solution.
To ensure prime recipients submit required reports for the first reporting cycle, Agency officials
indicated EPA completed a cross check of all DUNs1 numbers associated with EPA stimulus
assistance and contracts against FederalReporting.gov registrants. The Agency's process for
1 A Dun &Bradstreet® D-U-N-S® Number is a unique nine-digit sequence recognized as the universal standard for identifying
and keeping track of over 100 million businesses worldwide.
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10-R-0020
RECOVERY ACT REPORTING
Data Quality Review Guide
For the Inspector General Community
U.S. Environmental Protection Agency
ensuring that reviews were completed consists of an established feedback loop where recipient
programs report to a lead person within their geographical area. When reviews are completed,
the lead person reports to the Acting Deputy Assistant Administrator for Environmental
Information, who then reports to the Assistant Administrator for Administration and Resources
Management/Recovery Act Senior Accountability Official. Further, Agency officials indicated
that, in many cases, they rely on the prime recipients to ensure reviews are completed for
subrecipients.
suprecipients.
3) Conduct a walk-through of the agency's process to perform limited data quality
reviews.
1 CV1CW8.
The Agency's process was designed in accordance with OMB Memorandum 09-21. See
response to question 1 above for a description of the Agency's process.
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10-R-0020
RECOVERY ACT REPORTING
Data Quality Review Guide
For the Inspector General Community
U.S. Environmental Protection Agency
We asked Agency officials about their process for elevating systemic or chronic problems to the
governing body. They indicated that each recipient program is required to report to the Recovery
Accountability and Transparency Board. They have not yet identified the form in which
problems will be reported. They indicated that these details are on the governing body's agenda
and will be addressed in the near future.
6) With the understanding that OMB Memorandum 09-21 is a reporting tool rather than
a management tool, determine whether the agency anticipates that it will be able to use
the reported information as a tool for:
a) assessing compliance with the terms and conditions of award agreements,
b) assessing risk, and
c) determining when to release remaining funds.
EPA has developed a series of exception reports as part of its review process. These reports will
allow the Agency to identify material omissions or significant reporting errors by grant and
contract recipients. Under the terms of EPA's Stewardship Plan, the Agency will use these
reports, along with other information generated during post-award monitoring, to assess
compliance with grant and contract terms and conditions. The Agency will also use the reports
to identify/mitigate risks associated with providing the public misleading or confusing
information or jeopardizing OMB accountability objectives.
We asked Agency officials if they have found the Recovery Act's recipient reporting and review
process to be useful. They indicated that this process has promoted consistency with its program
and regional offices and promoted emerging controls. It has allowed the Agency to learn about
their existing processes where they are doing things correctly, and how to improve where
needed. They indicated that they will use reports created for compliance checks with other grant
and contract systems in checking accuracy of information.
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10-R-0020
Appendix A
Distribution
Office of the Administrator
Acting Assistant Administrator for Environmental Information and Chief Information Officer
Acting Deputy Assistant Administrator for Environmental Information
Assistant Administrator for Administration and Resources Management
Director, Office of Acquisition Management, Office of Administration and Resources Management
Agency Follow-up Official (the CFO)
Agency Follow-up Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Acting Inspector General
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