i o
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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Financial Management
Costs of $1.2 Million for
Brownfields Cooperative
Agreement to Pioneer Valley
Planning Commission in
Massachusetts Questioned
Report No. 15-4-0072	February 2, 2015

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Report Contributors:
Janet Kasper
Doug LaTessa
Patrick Mclntyre
Mary Anne Strasser
Abbreviations
Agreement Cooperative Agreement BF97119201
CFR	Code of Federal Regulations
EPA	U.S. Environmental Protection Agency
PVPC	Pioneer Valley Planning Commission
RLF	Revolving Loan Fund
Cover photos: From left to right: The partially occupied City of Springfield Asylum Project
and the South Main Street School Brownfields Revolving Loan Fund site,
Town of Monson, Massachusetts. (EPA OIG photos)
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February 2, 2015
x-^tD sr^v^
*	 U.S. Environmental Protection Agency	15-4-0072
w "z Office of Inspector General
 I
At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency (EPA),
Office of Inspector General
(OIG), conducted this
examination to determine
whether the costs claimed
under a Brownfields Revolving
Loan Fund Cooperative
Agreement BF97119201
(the agreement), awarded to
the Pioneer Valley Planning
Commission (PVPC), are
reasonable, allowable and
allocable in accordance with
the applicable laws, regulations
and agreement conditions. The
OIG also sought to determine
whether the objectives of the
award were met.
PVPC is the regional planning
body for the Pioneer Valley
Region, which encompasses
43 cities and towns in the
Hampden and Hampshire
county areas of Massachusetts.
This report addresses the
following EPA goal or
cross-agency strategy:
 Cleaning up communities
and advancing sustainable
development.
Send all inquiries to our public
affairs office at (202) 566 2391
or visit www.epa.gov/oia.
The full report is at:
www.epa.gov/oig/reports/2015/
20150202-15-4-0072.pdf
Costs of $1.2 Million for Brownfields Cooperative
Agreement to Pioneer Valley Planning
Commission in Massachusetts Questioned
We found all of the
$1,261,665 drawn by PVPC to
be questionable, and PVPC
has already agreed to repay
$94,891 of that amount.
What We Found
PVPC did not follow federal requirements when
administering the agreement. Also, PVPC's
accounting system cannot provide an accurate,
current and complete disclosure of the financial
results. Of the $1,261,665 in funds drawn,
PVPC acknowledged that $94,891 involved
duplicate invoices, unverified costs, costs associated with another federal
assistance agreement, and ineligible indirect costs, and agreed to repay $94,891.
We consider the remaining $1,166,774 to also be questionable due to the other
accounting deficiencies. PVPC's accounting reports for the agreement do not
reconcile, PVPC did not implement a corrective action from a previous Single
Audit report, and PVPC is applying the wrong administrative requirements in its
internal policies and procedures because those procedures apply to non-profit
organizations and not governmental units such as PVPC.
PVPC achieved the intent of the agreement in that four brownfields were
remediated. Two of the four sites were also reused, while the other two sites
remained vacant due to market conditions and other factors.
Recommendations and Planned Corrective Actions
We recommend that the Regional Administrator, EPA Region 1:
	Place PVPC on a reimbursement basis for all EPA grants and agreements.
	Issue a stop work order for this agreement until PVPC is able to provide
accurate information on costs incurred for the agreement.
	Require PVPC to transfer $19,277 program income back to the Revolving
Loan Fund.
	Verify that PVPC has a financial management system that meets federal
standards prior to any future awards.
	Question and recover $1,261,665 of federal funds drawn at the time we
began our review.
EPA Region 1 agreed to all recommendations and provided corrective actions
and completion dates that meet the intent of the recommendations. Further,
PVPC has already agreed to repay $94,891 in questioned costs and transfer
$19,277 back to the Revolving Loan Fund.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
February 2, 2015
MEMORANDUM
SUBJECT: Costs of $1.2 Million for Brownfields Cooperative Agreement to
Pioneer Valley Planning Commission in Massachusetts Questioned
Report No. 15-4-0072
FROM: Arthur A. Elkins Jr.
TO:
Curt Spalding, Regional Administrator
Region 1
This is our report on the subject examination conducted by the Office of Inspector General (OIG) of the
U.S. Environmental Protection Agency (EPA). This report contains findings that describe the problems
the OIG has identified and corrective actions the OIG recommends. This report represents the opinion of
the OIG and does not necessarily represent the final EPA position. EPA managers, in accordance with
established audit resolution procedures, will make final determinations on matters in this report.
The purpose of our examination was to determine whether the amounts drawn by the Pioneer Valley
Planning Commission under Cooperative Agreement BF97119201 were reasonable, allowable and
allocable in accordance with federal requirements and terms and conditions for Brownfields Assessment
and Cleanup Cooperative Agreements and whether the results of the agreement were achieved.
Action Required
In responding to the draft report, Region 1 provided a corrective action plan, with milestone dates, for
addressing the recommendations. However, since the report requires resolution of more than $250,000
in questioned costs, EPA Manual 2750 requires Region 1 to submit a proposed management decision
within 120 days. To expedite the resolution process, please email an electronic version of your proposed
management decision to kasper.ianet@epa.gov.
Your response will be posted on the OIG's public website, along with our memorandum commenting on
your response. Your response should be provided as an Adobe PDF file that complies with the
accessibility requirements of Section 508 of the Rehabilitation Act of 1973, as amended. The final
response should not contain data that you do not want to be released to the public. If your response
contains such data, you should identify the data for redaction or removal.
This report will be available at http://www.epa.gov/oig.

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Costs of $1.2 Million for Brownfields Cooperative Agreement to
Pioneer Valley Planning Commission in Massachusetts Questioned
15-4-0072
Table of C
Chapters
1	Introduction		1
Purpose		1
Background		1
2	Independent Accountant's Report		4
3	PVPC Did Not Comply With Federal Requirements		6
PVPC Requested Reimbursement for Unallowable Costs		6
PVPC's Financial System Does Not Provide Accurate Disclosure of
Financial Results		7
PVPC Policy Refers to the Wrong Administrative Requirements		8
Recommendations		9
EPA and Recipient Comments and OIG Evaluation		9
4	Properties Have Been Remediated and Some Reused		12
Act Designed to Promote Cleanup and Reuse of Brownfields		12
Remediation Costs of $1.3 Million Incurred, and Two of Four
Properties Reused		12
Market Conditions and Other Factors Prevented Reuse of Two Sites		13
Status of Recommendations and Potential Monetary Benefits		14
Appendices
A PVPC Response to Draft Report		15
B Region 1 Response to Draft Report		47
C Distribution		51

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Chapter 1
Introduction
Purpose
The purpose of this examination was to determine whether the Pioneer Valley
Planning Commission (PVPC, or the recipient):
	Reported costs that are reasonable, allowable and allocable in accordance
with the applicable laws, regulations, and terms and conditions of
Cooperative Agreement BF97119201 (the agreement).
	Achieved the intended results of the agreement.
Background
The Small Business Liability Relief and Brownfields Revitalization Act1
authorized grants to eligible entities to capitalize a Revolving Loan Fund (RLF)
that provides loans and grants for the remediation of brownfield sites.2 Through
these awards, the U.S. Environmental Protection Agency (EPA) seeks to
strengthen the marketplace and encourage stakeholders to leverage the resources
needed to clean up and redevelop brownfields.
According to the Small Business Liability Relief and Brownfields Revitalization
Act: "The term brownfield site means real property, the expansion,
redevelopment, or reuse of which may be complicated by the presence or
potential presence of a hazardous substance, pollutant, or contaminant."
When loans are repaid, the loan amount is returned into the fund and re-lent to
other borrowers, providing an ongoing source of capital within a community.
Since 1962, PVPC has been the designated regional planning body for the
Pioneer Valley region, which encompasses 43 cities and towns in the Hampden
and Hampshire County areas in Massachusetts, as shown in Figure 1.
1	Public Law 107-118.
2	The Small Business Liability Relief and Brownfields Revitalization Act amended Sections 101 and 104 of the
Comprehensive Enviromnental Response, Compensation and Liability Act of 1980.
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Figure 1: Map of PVPC's designated planning area
The Pioneer Valley Metropolitan Planning Organization
Endorsed Sub-Regions
PLANHLL J
1,054
WOR HILTON
1,222
1.337
/ 2,180	,
BLANCFORD
1.233
1.775
41,034
I
r*
W1LLIAMSBURQ HATF1E10
2,482 3.279
- r-jt.
& 1,607 __	. .
y~	t
PEL MAM
1.321
37,819
1 & /gH
2010 Population
Sub-Region 1 248,238	39.94%
Sub-Region 2 107,425	17.28%
I'	1 Sub-Region 3 1 05.185	16.92%
I I Sub-Region 4 132,675	21.35%
I I Sub-Region 5 28,047	4.51%
Total: 621,570
NORTHAMPTON
28,549

;hamptoi/ /Lxjtw GR"fflv
16,053,' /MAOLFV 6,240
SOUTHAMPTON j i 17,514'
I 5,792 "J' \	
r HOLYOKE y
39,880
  - ' r CMCOPEE
55,298
	i	\
WEST V ^
SPRINOFIEU? <
28,391 ' SPRINGPCLO
, V	N 153.060
/-	EAST
' LONG- LONG
AGAWAM
9,502
28,438 / MMOOW^ meadow ^ S13g	, 		
2.	15 7^, . J.5,720		l	_
BELCHERTOWN
14,649
21.103
12.140
BRIM- HID
fc,609!^M
14,219
8,560
m n
Source: PVPC.
According to its Schedule of Expenditures of Federal Awards identified in the
Single Audit for the period ending June 30, 2012, PVPC administered numerous
awards from several federal agencies. The EPA Region 1 awarded PVPC the
agreement on April 17, 2008, with a total approved project cost of $1,621,244.
As of March 12, 2014, PVPC had drawn $1,261,665 of those funds.
The purpose of the assistance agreement was to provide funding to PVPC to
develop a RLF and clean up brownfield sites in Springfield, Chicopee, Holyoke,
and Westfield, Massachusetts. Under the agreement, the EPA is to contribute
80 percent of all approved budget costs incurred, up to and not exceeding total
federal funding of $1,351,037, while PVPC is to pay a cost share of at least
20 percent of total federal funds awarded.
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Prior Audit Reports
Table 1 identifies the three Single Audits we reviewed pursuant to our audit
objectives.
Table 1: Prior audit reports reviewed by auditors
Date of Single
Audit report
Significant findings
March 15, 2011
	Improve controls over journal entries.
	Improve general grant management and accounting.
	Request reimbursement in accordance with grant
provisions and maintain support for expenses reported.
July 12, 2012
	Improve indirect cost rate management and accounting.
	Improve controls over journal entries.
	Improve general grant management and accounting.
	Maintain support for expenses reported - Brownfields
Revolving Loan Program.
March 11, 2013
None. The audit report stated that findings from the previous
year were satisfactorily resolved. However, there were no
disbursements from the Brownfields Revolving Loan Fund
during the audit period.
Source: OIG analysis of Single Audits.
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Chapter 2
Independent Accountant's Report
As part of our oversight of assistance agreement awards made by the EPA, the
EPA's Office of Inspector General (OIG) examined the costs claimed under
Cooperative Agreement BF-97119201 awarded to PVPC. The OIG conducted the
examination to determine whether the costs claimed under the agreement were
reasonable, allowable and allocable in accordance with the Code of Federal
Regulations (CFR) under 40 CFR Part 31, Uniform Administrative Requirements
for Grants and Cooperative Agreements to State and Local Governments; 2 CFR
Part 225, Cost Principles for State, Local, and Indian Tribal Governments; and
the terms and conditions of the agreement. We examined costs claimed by the
recipient of $1,261,665 covering the period from April 17, 2008, to March 12,
2014. We also reviewed PVPC's accomplishment of the agreement's objectives.
In accepting the award, PVPC is responsible for complying with the requirements
listed above. Our responsibility is to express an opinion on PVPC's compliance
and costs claimed based on our examination.
Our examination was conducted in accordance with the Government Auditing
Standards issued by the Comptroller General of the United States, and the
attestation standards established by the American Institute of Certified Public
Accountants. We examined, on a test basis, evidence supporting the amount
claimed under the agreement and performed other procedures we considered
necessary under the circumstances. We believe our examination provides a
reasonable basis for our opinion.
We conducted our examination from March 12 to September 23, 2014. We
performed the following steps:
	Reviewed and analyzed EPA project files, grant files and data systems.
	Interviewed the recipient to obtain an understanding of the recipient's
internal controls, accounting system and project management.
	Interviewed the EPA's Office of Brownfields and Land Revitalization, and
EPA Region l's grants and project managers for the agreement, to obtain
an understanding of the recipient's history.
	Reviewed Single Audit information from 2010 to 2012 for unresolved
audit findings.
	Verified deposits of EPA payments to the recipient's bank statements.
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	Reviewed costs claimed by the recipient to obtain reasonable assurance
that the costs complied with the applicable federal laws and regulations
and the terms and conditions of the agreement.
	Determined whether the recipient met its cost share match.
	Conducted project site visits to determine whether the work specified in
the agreement was accomplished.
PVPC is responsible for establishing and maintaining effective internal control
over compliance with the requirements of 40 CFR Part 31,2 CFR Part 225, and
the terms and conditions of the agreement. We considered PVPC's internal
controls over compliance with the requirements listed above as a basis for
designing our examination procedures, but not for the purpose of expressing an
opinion on the effectiveness of internal control over compliance. Our
consideration of internal controls would not necessarily disclose all internal
control matters that might be material weaknesses.
Our examination disclosed the following significant deficiencies in internal
controls over compliance with the requirements of 40 CFR Part 31,2 CFR
Part 225, and the terms and conditions of the agreement:
	Unallowable costs were charged to the agreement.
	Errors, such as drawing funds for the same invoice multiple times, were
not identified and corrected by PVPC.
	PVPC's accounting records cannot provide reliable information on the
financial results of the agreement.
As a result, we questioned total costs claimed under the agreement as of March 12,
2014, of $1,261,665, and recommend that the EPA recover that amount.
In our opinion, the costs claimed do not meet, in all material respects, the
requirements of 40 CFR Part 31,2 CFR Part 225, and the terms and conditions of
the agreement for the project period ending December 31, 2014.
Janet Kasper
Director for Contracts and Assistance Agreement Audits
September 23, 2014
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Chapter 3
PVPC Did Not Comply With Federal Requirements
PVPC did not adhere to federal requirements when administering the agreement.
PVPC charged costs to the agreement that were unallowable, were incurred for
another EPA award, and were prohibited by the agreement's terms and
conditions. PVPC's accounting system cannot produce accurate reports on the
costs incurred under the agreement. PVPC did not maintain required
documentation, and referred to the wrong administrative requirements in its
internal procedures. Federal regulations require costs charged to federal awards to
be reasonable, allowable and allocable; and require accurate and complete
disclosure of the financial results of financially assisted activities. Due to the
numerous errors we identified and our inability to reconcile PVPC's accounting
reports, we are questioning the $1,261,665 claimed under the agreement at the
time of our review. PVPC has agreed to repay $94,891 of that amount.
PVPC Requested Reimbursement for Unallowable Costs
PVPC requested reimbursement for the same invoices as part of two separate
draw requests. The total value of the duplicate invoices was $71,709, as shown in
Table 2. Cost Principles for State, Local, and Indian Tribal Governments - 2 CFR
Part 225 - establishes principles and standards for determining costs for federal
awards. Appendix A to Part 225 at Section C(l) sets out the factors affecting the
allowability of costs.
Table 2: Summary of duplicate draws
Draw dates
Amount of draw duplicated
2/17/2010
1/26/2010
$65,360
10/6/2010
9/20/2010
6,349
Total
$71,709
Source: OIG analysis of PVPC data.
PVPC requested reimbursement for two invoices that were not allocable to the
agreement. The invoices were for services rendered by PVPC on behalf of the
town of Monson for a contract signed in November 2005, pursuant to EPA
assistance agreement BF97131101. The value of those two invoices was $6,053
as shown in Table 3. Cost Principles for State, Local, and Indian Tribal
Governments - 2 CFR Part 225 - establishes principles and standards for
determining costs for federal awards. Appendix A to Part 225 at Section C(3)
defines allocable costs. Per that section, costs incurred by PVPC for services
performed pursuant to another federal assistance agreements are not allocable to
the agreement.
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Table 3: Invoices incurred for services rendered for EPA award BF97131101
Draw date
Amount of invoice
9/22/2009
$5,783
9/20/2010
270
Total
$6,053
Source: OIG analysis of PVPC data.
PVPC requested and received reimbursement for indirect costs for at least 18 of
the 32 draws of federal funds we examined. The value of ineligible indirect costs
was $19,589. Both the approved budget and the terms and conditions of the
agreement prohibit indirect costs. PVPC self-identified that it was not in full
compliance with the charging of ineligible indirect costs. PVPC stopped
requesting reimbursement for indirect costs once it realized this violated the
agreement's terms and conditions. According to our analysis, the last draw for
which PVPC requested reimbursement for indirect costs occurred in September
2010.
PVPC also transferred $19,277 of program income from the RLF to its general
checking account for unidentified and unspecified administrative expenses. The
agreement's terms and conditions do not allow program income to be used for
administrative expenses. PVPC self-identified that it was not in full compliance
with the charging of program income. PVPC stopped transferring program
income once it realized this violated the agreement's terms and conditions. The
last transfer of program income occurred in February 2011. In responding to the
draft report, PVPC stated it would return the program income to the RLF.
PVPC's Financial System Does Not Provide Accurate Disclosure of
Financial Results
PVPC's accounting system cannot provide an accurate, current and complete
disclosure of the financial results of the agreement. We asked PVPC to provide a
transaction report identifying all revenues and expenditures for the agreement.
PVPC provided two reports: (1) Revenue and Expenses Report by Project; and
(2) Project/Element Charge Listing. In comparing these two reports, we noted
differences between the reports for several line items. For example:
	PVPC recorded 89 percent of the RLF expenses to the "revolving loans"
account. The amount of this account varied by $154,321 between the two
reports. PVPC did not include details on how the funds were used in its
accounting system. Detailed information on how the funds were used was
contained in a separate manual ledger. As a result, PVPC's accounting
system cannot be relied upon to produce accurate financial reports.
	The loan repayments/recapture account had a $203,798 difference
between the reports. PVPC's accountant stated that loan repayments may
not have been recorded. As a result, it is unclear whether all loan
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repayments were returned to the RLF as required by the terms and
conditions of the agreement.
We noted other accounts with differences between the two accounting reports, as
shown in Table 4. The differences indicate that PVPC's accounting system cannot
be relied upon to provide information on the cost incurred for RLF projects.
Table 4: PVPC accounting report variances

Revenue & expenditure
report by project
Project/element
charge listing report
Variance
Interest Income
$58,402
$31,701
$26,701
T ravel-Gas/Mileage/Parking
846
804
42
Conferences
3,194
2,655
539
Subcontractors
15,054
2,726
12,328
Due to Other PVPC Grant
22,310
0
22,310
Source: OIG Analysis of PVPC data.
Standards for financial management systems - 40 CFR 31.20(b)(1) and (b)(2) -
require recipients to have a financial management system that provides for
accurate, current and complete disclosure of the financial results of financially
assisted activities; and requires recipients to maintain records which adequately
identify the source and application of funds. Based on the variances between the
two reports, PVPC's accounting system cannot provide an accurate, current and
complete disclosure of the financial results of the agreement. Because PVPC has
not reconciled the brownfields accounts, PVPC cannot provide accurate
information on the costs incurred under the agreement. Therefore, we are
questioning the $1,261,665 drawn as of March 12, 2014.
The Single Audit report for the period ending June 30, 2010, reported significant
deficiencies in internal control over major programs. Specifically, the report
stated that PVPC did not retain any documentation to support either the amounts
claimed for reimbursement or the amounts reported on the quarterly progress
reports filed with the EPA for salaries and indirect costs. In its corrective action
plan, PVPC stated that it would be "reconciling all support documentation for the
Brownfields RLF Program..." This corrective action was never implemented.
Office of Management and Budget Circular A-133, Subpart C 300(f), states that
auditees shall follow up and take corrective action on audit findings.
PVPC Policy Refers to the Wrong Administrative Requirements
PVPC is applying the wrong administrative requirements as it refers to Uniform
Administrative Requirements for Grants and Agreements with Institutions of
Higher Education, Hospitals, and other Non-Prof t Organizations throughout its
Financial Control Policy and Procedures. These requirements are not applicable to
governmental units such as PVPC. Title 2 CFR Part 225, Appendix A, Section
B.16 defines a local government as a "county, municipality, city, town, township,
local public authority, school district, special district, intrastate district, council of
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governments (whether or not incorporated as a nonprofit corporation under state
law), any other regional or interstate government entity, or any agency or
instrumentality of a local government." PVPC's Operations Manual states that
PVPC is a public sector agency, and PVPC's Executive Director told auditors that
PVPC is a governmental unit, not a non-profit. As a result of our review, PVPC
modified its Financial Control Policy and Procedures, although these have not yet
been adopted by PVPC's Executive Committee.
Recommendations
We recommend that the Regional Administrator, EPA Region 1:
1.	Place PVPC on a reimbursement basis for all EPA grants and agreements.
2.	Issue a stop work order for this agreement until PVPC is able to provide
accurate information on costs incurred for the agreement.
3.	Require PVPC to transfer $19,277 of program income back to the RLF.
4.	Verify that PVPC has a financial management system that meets federal
standards established under 40 CFR  31 prior to any future awards.
5.	Question and recover the $1,261,665 of federal funds drawn as of
March 12, 2014.
EPA and Recipient Comments and OIG Evaluation
PVPC and EPA Region 1 both provided written responses to the draft report
(Appendices A and B, respectively). We held an exit conference with EPA
Region 1 and PVPC to discuss the draft report comments and their impact on our
final report. PVPC generally agreed with our findings regarding the unallowable
costs that it claimed, but disagreed that its financial system did not provide accurate
disclosure of financial results. EPA Region 1 provided comments and a corrective
action plan. Where we agreed with the comments, we made changes to the report.
Their responses are summarized below, as well as our evaluation of their responses.
In response to Recommendation 1, EPA Region 1 placed PVPC on a
reimbursement basis for its grants starting September 18, 2014. EPA Region l's
actions addressed the recommendation.
For Recommendation 2, the OIG proposed issuing a stop work order for the
brownfields revolving loan agreement. The project period ended on December 31,
2014. Rather than issuing a stop work order, Region 1 staff stated that they did not
renew the agreement. EPA Region l's action will addresses the intent of the
recommendation.
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In regard to Recommendation 3, PVPC agreed that the program income needs to be
moved back into the RLF and proposed to Region 1 that it would repay the funds
by the 2nd quarter of FY 2015. Region 1 will confirm the amount is accurate. PVPC
and Region l's action, when implemented, will address the recommendation.
In regard to Recommendation 4, PVPC stated in its response that the accounting
system allows PVPC to track all contractsincluding federal awardsseparately
and independently. While the system may allow PVPC to track the costs associated
with the award, the reports from PVPC's accounting system that it provided during
the review were not accurate or complete. For example, the accounting system did
not include detailed information on how funds were used. Also, the accountant was
not sure whether all loan repayments had been recorded in the system.
The records PVPC provided in response to the audit report did not match up with
the data in EPA's accounting system. In response to the draft report, PVPC
provided a spreadsheetnot from its Grants Management System accounting
systemshowing total funds drawn of $1,257,551.54. The EPA accounting system
records show PVPC received $1,261,665.44 of funds paid to PVPC under the
agreement. PVPC did not explain the difference in the response to the draft report.
During the audit, PVPC could not provide accurate information on the financial
results of the agreement. In responding to the draft report, PVPC provided a
spreadsheet from outside its accounting system that it says represents the total
funds drawn but does not reconcile to EPA accounting system records. In
responding to the draft report, PVPC has not provided the information necessary to
show that its financial management system meets the federal standards under
40 CFR Part 31.
In responding to Recommendation 4, Region 1 stated that it will meet with PVPC
and verify that it has a financial system that meets federal standards. PVPC
proposed to EPA Region 1 a completion date of the 4th quarter of FY 2015.
Region l's planned action, when implemented, will address the recommendation.
In responding to Recommendation 5, PVPC agreed that it was responsible for
repaying to the EPA $94,890.63. Details are in Table 5.
Table 5: Amounts PCPC agreed to repay
Item
Amount
Duplicate invoices
$71,709.00
Unverified costs (identified by PVPC in response to draft report)
539.72
Cost associated with another federal assistance agreement
6,053.00
Ineligible indirect costs
16,588.91
Total to be repaid
$94,890.63
Source: PVPC
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Because PVPC cannot provide accurate information on the costs incurred under the
agreement, the remaining $1,166,774 remains questioned. The OIG continues to
recommend that these funds be recovered. In responding to the draft report, EPA
Region 1 stated that it will meet with PVPC to review the supporting
documentation for the eligible agreement expenses. PVPC proposed to Region 1 a
completion date of the 4th quarter of FY 2015. The region's proposed action, when
implemented, will address the recommendation. Since more than $250,000 in costs
were questioned, EPA Region 1 will need to provide the OIG with a proposed
management decision on the questioned costs before issuing the final decision to
PVPC.
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Chapter 4
Properties Have Been Remediated
and Some Reused
PVPC achieved the intended results of the agreement, as four properties were
remediated. Two of the four properties were also reused, which the Small
Business Liability Relief and Brownfields Revitalization Act is designed to
promote. The Act authorized grants to eligible entities to capitalize an RLF to
provide financial assistance for the remediation and revitalization of brownfield
sites. Original plans for redevelopment of the other two properties have not been
achieved due to market conditions and other factors.
Act Designed to Promote Cleanup and Reuse of Brownfields
The Act promotes the cleanup and reuse of brownfields by establishing a program
to provide grants to eligible entities to be used for capitalization of an RLF for
brownfields remediation. RLF recipients provide loans and grants to carry out
remediation activities at brownfield sites. The EPA's Brownfields program is
designed to empower states, communities and other stakeholders in economic
redevelopment to work together in a timely manner to prevent, assess, safely
clean up, and sustainably reuse brownfields. Through these grants, the EPA seeks
to strengthen the marketplace and encourage stakeholders to leverage the
resources needed to clean up and redevelop brownfields.
Remediation Costs of $1.3 Million Incurred, and Two of Four
Properties Reused
The agreement provided funding to PVPC to develop a revolving loan fund and to
clean up brownfield sites. PVPC achieved the intended results of the agreement,
as its RLF was used to remediate the following four Massachusetts properties:
1.	Town of Ware.
2.	Town of Monson.
3.	Springfield Redevelopment Authority Chapman Valve.
4.	City of Springfield Asylum Project.
In addition, two of the four properties have been reused. Original plans for the
Town of Monson, Springfield Redevelopment Authority Chapman Valve, and
City of Springfield Asylum Project called for the space to be used as housing, a
light-industrial park with pad-ready sites, and office space for the Springfield
Parking Authority, respectively. Two of the projects (Town of Monson and
Springfield Redevelopment Authority Chapman Valve) are now remediated
vacant lots available for reuse. The City of Springfield Asylum Project in
downtown Springfield is partially occupied. The Town of Ware project completed
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the removal of contaminated soils from a former landfill and farm equipment
facility, and is now reused as a fire station.
Top row, from left: The Town of Ware project that is now a fire station and the Town of
Monson vacant lot. Bottom row, from left: The Springfield Redevelopment Authority
Chapman Valve vacant lot and the partially occupied City of Springfield Asylum Project,
Table 6: Remediation cost of properties paid for by the agreement
Recipient
RLF cost
Loan
amount
Subgrant
amount
Town of Ware
$50,000
$40,000
$10,000
Town of Monson
205,276
123,166
82,110
Springfield Redevelopment Authority Chapman Valve
740,781
444,468
296,313
City of Springfield Asylum Project
345,550
207,330
138,220
Total
$1,341,607
$814,964
$526,643
Source: PVPC data.
Market Conditions and Other Factors Prevented Reuse of Two Sites
The original redevelopment plans for two projects have not been achieved for the
following reasons:
	Original plans for the Town of Monson project called for the building to be
rehabilitated for use as housing, but the collapse of the housing market and
structural deterioration of the building forced the town to raze the building.
	Redevelopment plans for the Springfield Redevelopment Authority
Chapman Valve project were put on hold indefinitely due to unexpected
levels of contamination at a key adjacent property.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
No.
Subject
Status1
Planned
Completion
Action Official	Date
Place PVPC on a reimbursement basis for all EPA
grants and agreements.
Issue a stop work order for this agreement until
PVPC is able to provide accurate information on
costs incurred for the agreement.
Require PVPC to transfer $19,277 of program
income back to the RLF.
Verify that PVPC has a financial management
system that meets federal standards established
under 40 CFR  31 prior to any future awards.
Question and recover the $1,261,665 of federal
funds drawn as of March 12, 2014.
Regional Administrator, 9/18/14
EPA Region 1
Regional Administrator, 12/30/14
EPA Region 1
Regional Administrator, 3/31/15
EPA Region 1
Regional Administrator, 9/30/15
EPA Region 1
Regional Administrator,
EPA Region 1
Claimed
Amount
Ag reed-To
Amount
$19.2
1,261.7
$19.2
1 0 = Recommendation is open with agreed-to corrective actions pending.
C = Recommendation is closed with all agreed-to actions completed.
U = Recommendation is unresolved with resolution efforts in progress.
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Appendix A
PVPC Response to Draft Report
Pioneer Valley Planning Commission
Response to U.S. Environmental Protection Agency
Office of Inspector General Report on Examination of Costs
Cooperative Agreement BF9 7119201
Project No. OA-FY14-0170	November 7, 2014
Fire Department Headquarters, Ware, Massachusetts (formerly Ware Farm Equipment)
160Q Main International Biergarten, Springfield, Massachusetts (formerly the Asylum Club)
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Pioneer Valley Planning Commission
Response to U.S. Environmental Protection Agency
Office of Inspector General Report on Examination of Costs
Cooperative Agreement BF9 7119201
Project No. OA-FY 14-0170	November 7, 2014
In calendar year 2014, the U.S. Environmental Protection Agency (EPA), Office of the Inspector General
(OIG) conducted an examination of costs for Cooperative Agreement BF97119201 (Agreement) awarded
to the Pioneer Valley Planning Commission (PVPC). During the course of the EPA OIG's site visits and
subsequent verbal and electronic communication, the PVPC provided exhaustive records, information and
explanations concerning the OIG's requests.
As part of this examination, the EPA OIG made the following findings:
	Federal Requirements were not followed when administering the Agreement.
	PVPC's accounting system cannot provide an accurate, current, and complete disclosure of
accounting results.
	Reimbursement was requested for ineligible indirect costs.
	Program income was used for administrative expenses.
	Duplicate invoices (drawdowns) were submitted by the PVPC.
	PVPC's accounting reports do not reconcile.
	Davis-Bacon Act documentation not maintained.
	Corrective action from previous audit report not implemented.
	The wrong administrative requirements in PVPC's internal policies and procedures are referenced.
	Although the PVPC met the intent of the Agreement concerning remediation, not all sites were
developed and reused.
This formal response provides further detail on the PVPC's efforts to clarify statements made by the EPA
OIG. As there is overlap in some of the issues raised and subsequent explanation, the PVPC is categorizing
its response according to general comments, financial issues, accounting software, administrative issues
and project concerns.
General Comments
The PVPC feels that the title of the EPA OIG's report is very misleading and derogatory and is not an
accurate portrayal of the review by the OIG. Furthermore the inference that the remediated sites were not
re-used should be removed. The perception shown is inaccurate, misleading and doesn't focus on the
accomplishments of the PVPC, which could not have been accomplished if funds were misused. The OIG
report cover and general statement that $1.2 million in grant costs are "questioned" is inaccurate as the
PVPC has provided documentation for its expenses and has tracked over $1.257 million in draws. The
PVPC feels that its costs were reasonable, allocable, and allowable but for those limited exceptions detailed
later in this response. Based on the information provided to the OIG, the PVPC feels that this report does
not reflect accurately the results of the audit. The OIG failed to acknowledge the support documentation
provided or the corrective actions taken to address any issues. Furthermore, the PVPC is confident that it
has a strong financial accounting system in place. The PVPC looks forward to continuing to be able to do
good work in the future. The OIG's report, as written, unfairly impedes that ability, despite the fact that
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we've undeniably made a concerted, good faith effort to address and correct all known deficiencies in a
satisfactory manner..
Financial Issues
	Federal requirements were not followed when administering the Agreement.
	Reimbursement was requested for ineligible indirect costs.
	Program income was used for administrative expenses.
	Duplicate invoices were submitted by the PVPC.
	PVPC's accounting reports do not reconcile.
1. Federal requirements, ineligible indirect costs, program income. Although the PVPC did follow
federal requirements pursuant to the administration and implementation of the Agreement, it recognizes
that it unknowingly did not fully adhere to all requirements pertaining to administrative indirect costs and
the use of program income for administrative costs at the time that those costs were incurred. Previous
PVPC assigned Brownfields staff, through discussions with EPA, interpreted the use of a flat rate inclusive
of total cost as compliance with the administrative cost prohibition. In addition, program staff at the time
were not fully cognizant of the change in regulations pertaining to the use of program income for
administrative expenses until significant charges had been made.
PVPC self-identified that it was not in full compliance with the charging of ineligible indirect and use of
program income and the practice immediately stopped. Further, the PVPC engaged the services of a
contractor to audit it's records to determine the outstanding amount due back to the EPA. As a draft audit
was not complete until July 2013, the PVPC opted to wait until the OIG's examination was complete so as
to comply with the amount to be transferred back into the appropriate accounts. This was fully disclosed
to the EPA OIG at the time of the examination, including estimated monetary amounts expected to be
transferred.
The PVPC generally concurs with the $22,237 of indirect costs identified by the OIG as drawn during the
period of 5/31/08 through 8/31/10. (Note: The OIG rounded the indirect rate to the nearest whole number.
The actual indirect as fully calculated is $22,458.43) However, the fringe portion of this amount is an
eligible expense under EPA's Regulations. Pursuant to OMB Circular A-87 and PVPC's approved terms
and conditions, "fringe" is an allowable expense under the terms of the agreement and is outlined in the
PVPC approved work plan and budget. PVPC's indirect rate is established annually through its independent
audit with the actual fringe benefit rate and indirect cost rate within the approved indirect cost pool being
set by a U.S. EPA Rate Negotiator in its Financial Analysis and Oversight Service Center. See Attachment
A.
The actual ineligible indirect costs totals $16,588.91, as shown below. This is based on the $22,458.43 of
indirect less the $5,869.52 of eligible fringe.
Draw Period
Direct Labor
Amount
Indirect
Rate
Indirect ($)
Eligible Fringe*
(%)
Eligible
Fringe ($)
5/31/08-6/30/08
$735.95
110.8%
$815.43
34.86
$256.55
7/1/08-6/30/09
$8,524.95
110.8%
$9,445.64
33.66
$2,869.49
7/1/09-6/30/10
$10,185.61
118.3%
$12,049.58
26.61
$2,710.39
7/1/10-6/30/11
$124.92
118.3%
$147.78
26.49
$33.09
Total
$19,571.43
NA
$22,458.43
NA
$5,869.52
* See Attachment A for OMB Circular A-87 Cognizant Agency Negotiation Agreements.
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OIG Response 1.
We agree with PVPC that fringe benefits are an eligible expense. After our exit conference,
PVPC provided support for the $19,571.43 in direct labor identified in the table above, and we
were able to verify the calculation of eligible fringe benefit. We agree with PVPC's
calculation of ineligible indirect costs of $16,588.91.
In addition, the PVPC has calculated the transferred program income amount for the period of 7/2008
through 2/2011 to be $24,704.41 and not the lesser $19,277 as identified by the OIG.
Complete records of these draws, transfers and expenses are on file and available for review at the PVPC.
The following table details the transferred administrative program income payments that PVPC between
July 2008 and February 2011.
Date
Check #
Principal
Interest
Bank Interest
Disbursement
07/08/08
1010
$2,152.19
$3,200.00
$75.23
$5,427.42
02/26/09
1013
$1,774.77
$1,685.73
$85.49
$3,545.99
02/07/09
1016
$2,195.24
$2,769.56
$33.24
$4,998.04
02/12/10
1021
$1,810.59
$1,327.51
$66.81
$3,204.91
07/08/10
1026
$2,239.14
$2,330.51
$57.07
$4,626.72
02/28/11
1042
$1,847.14
$962.05
$92.14
$2,901.33




Total
$24,704.41
OIG Response 2.
The difference between the OIG-calculated amount of transferred program income ($19,277)
and the amount reported by PVPC ($24,704.41) is $5,427.41or the amount equal to the draw
on July 8, 2008 (rounded). The difference was discussed at the exit conference and PVPC
agreed that the amount was associated with another EPA cooperative agreement. PVPC agreed
with the OIG original calculation of $19,277 of program income.
Finally, the PVPC also recognizes that it incorrectly drew funds for administrative activities for another EPA
funded activity. These monies totaled $6,053.
PVPC Corrective Action: The PVPC is well aware that it must transfer monies back into the program income
account and that it is required to absorb the cost of the identified ineligible indirect. The PVPC has
repeatedly communicated to EPA officials that it has always fully intended to do so once the amount due
was clearly and concisely identified. The PVPC will transfer all ineligible indirect and program income, plus
all applicable interest back into the appropriate accounts. This will result in $16,588.91 being paid back to
the grant and $24,704.41 being transferred from the PVPC general operating account to the RLF program
income account.
In addition, the PVPC will reimburse the grant $6,053 for the EPA administrative funds used on a related,
but separately funded contract.
2. Duplicate invoices (drawdowns) were submitted by the PVPC. Upon compiling a spreadsheet for
the EPA OIG's office showing a detailed listing of drawdowns and associated expenses for the PVPC RLF
Program, it was determined that 2 duplicate draws occurred in the winter and fall of 2010 totaling $71,709.
These funds were deposited in the PVPC general fund and not expensed to the RLF Program.
The PVPC hired a new Accounting Manager in February 2009 due to retirement of the previous accounting
manager. After an acceptable first year of performance, the actions and abilities of the Accounting Manager
deteriorated due to a combination of not fully understanding governmental finances, inability to learn the
agency's financial software program and steadily deteriorating health. Actions in 2010 including failure to
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keep proper back-up records, failure to enter regular journal entries, missed deadlines and other serious
concerns led to a very poor annual evaluation with clear benchmarks for improvement, changes in internal
procedures for monitoring, an Action Plan for Employment ("last chance agreement") and eventually, formal
termination in December 2011, effective in January 2012. The behavior of the Accounting Manager which
resulted in such poor performance and inappropriate actions such as the EPA duplicate draws were directly
related to his severely deteriorating health, and at that time, no accounting staff assistance. In mid-to-late
2011, temporary accounting assistance was put in place as well as procedures to monitor overall
accounting activity. These are reflected in the FY10 and FY11 PVPC Audit Management Responses (see
elsewhere in this response). The health of the Accounting Manger had declined to such a degree where
he was relieved of many of his duties prior to his termination or had most of his work reviewed by
management. Unfortunately he died shortly after being notified of his termination but while officially still in
the employ of the PVPC.
PVPC Corrective Action: With the hiring of a new Accountant in late January 2012, the formal establishment
of an Accounting Assistant position, the implementation of a number of financial checks and balances
including oversight by the Deputy Director of Operations of all financial activity, the PVPC has the protocols
in place to prevent similar duplication activity from occurring. The PVPC fully recognizes the draw error, is
in agreement that this amount totals approximately $71,709, and will transfer these funds from the PVPC
general operating account back into the RLF Grant.
3. PVPC Accounting Records Do Not Reconcile. Independently and as accurately maintained, the
PVPC accounting records do reconcile. The circumstance concerning the PVPC RLF account was
impacted by actions as described above concerning the PVPC's previous Accounting Manager. In addition,
the poor decision to combine the old RLF account, PI account and new RLF account over multiple fiscal
years and varying indirect rates resulted in the inability to use the PVPC's main financial software program
to solely identify the sources and uses. However, as expenditures were paid out of and tracked in a
separately maintained account within the Agency's Community Development Section, the drawdowns and
expenditures can and have been tracked. Using the latter, according to PVPC records, the total amount of
funds drawn from 6/30/08 through 3/12/14 totals $1,257,551.54, which varies by $4,113.90 from the
$1,261,665.44 noted by the EPA OIG. This difference directly related to the circumstances described in #2
above. The $1,257,551.54 amount documented by the PVPC includes the duplicate draws ($71,709)
detailed in #2 above and $539.72 in unverifiable direct costs. This totals $76,362.62 in documented costs
that the PVPC is responsible for paying back to the grant. Records of these draws and expenditures are
on file and available for review at the PVPC. A spreadsheet summary is provided as Attachment B.3
PVPC Corrective Action: The PVPC recognizes the cost discrepancy and will transfer these funds plus all
applicable interest back into the RLF Grant. This totals $76,362.62 which includes the duplicate draws and
unverified costs.
OIG Response 3
The records PVPC provided in response to the audit report did not match up with the data in
EPA's accounting system. In response to the draft report, PVPC provided a spreadsheet, not
from its accounting system, showing total funds drawn of $1,257,551.54. EPA accounting
system records show PVPC received $1,261,665.44 of funds paid to PVPC under the
cooperative agreement.
3 Attachment B not include in OIG final report because it was not readable.
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Accounting Software
 PVPC's accounting system cannot provide an accurate, current, and complete disclosure of
accounting results.
1. PVPC Accounting System. The EPA OIG has claimed that the PVPC accounting system cannot
provide accurate, current, and complete disclosures and therefore cannot be relied upon to produce
accurate financial reports. As noted above in Financial Issues, very unique circumstances including human
error, human health and poor record-keeping led to the inability to provide specifically what the OIG wanted
using solely the PVPC financial software program. This is the extreme exception and not the norm. The
extraction of information for comparison purposes shown as Table 4 in the EPA OIG report is not clear to
the PVPC. It is not known what the intent of shown values, the period of performance nor the accuracy of
the comparison. Without more specificity, the PVPC cannot comment on the purpose of the Table 4
presentation. Apart from the circumstances described above, once a contract or agreement is entered into
the financial software system, it clearly tracks all expenditures and revenues. Further it can provide detailed
vendor payment history by month as well as timesheet charges and reimbursements. This accounting
system allows PVPC to track all contracts, including all federal awards, separately and independently.
The PVPC has engaged the use of this software program due to the program's ability to handle multiple
contracts and budgets. The current Accountant, unlike the previous Accounting Managers, has purchased
additional modules for the software, which even further enhances the PVPC's financial tracking and
reporting abilities.
PVPC's GMS Accounting Software is designed to handle activity accounting. It is specifically designed to
account, report, and monitor budgets for multiple grants, contracts and activities. It is an integrated
accounting system that performs all accounting activities such as; General Ledger, Cash Receipts, General
Journal, Budget Preparation, Cost Allocation, Accounts Receivable & Payable, Payroll, Timesheet
Accounting, Financial Reporting, & Security. It is capable of cost allocation for common costs, general and
administrative costs, indirect costs, fringe benefits, leave costs, and various specialized cost pools. It
complies with all state and federal requirements, audit standards, and reporting required for the Board of
Directors and management team, and GASB 34 (the Governmental Accounting Standard Board
requirement as state and local government follow). The GMS Accounting Software program is used by
hundreds of comparable agencies to the PVPC which exist across the country, many of whom are EPA
recipients. This includes four regional planning agencies in Massachusetts who receive a variety of state
and federal funding similar to that of the PVPC.
As previously noted, every contract/project is assigned a project code and a revenue and expenses budget
is entered into GMS. Staff time is charged to the project code and entered into Payroll. All direct expenses
are entered into Expense reimbursements (travel/mileage) and Accounts Payable. These amounts are
tracked and reported on Timesheet Charges by Activity and Project Expense/Element Charge Listing
reports. These amounts follow through onto the Revenue/Expense Report which represents the total
summary of the project. The Revenue/Expenses reports identifies total revenue received, total salaries,
indirect cost, and all direct expenses. It shows the original budget and the total amount spent in each
budget category and what is unspent. All activity is reflected on this report. Sample GMS financial software
reports are provided in Attachment C.
PVPC Corrective Action: No further action required.
OIG Response 4
During the audit, PVPC could not provide accurate information on the financial results of the
agreement. In responding to the draft report, PVPC provided a spreadsheet from outside its
accounting system that it says represents the total funds drawn but does not reconcile to EPA
accounting system records. In responding to the draft report, PVPC has not provided the
information necessary to show that its financial management system meets the federal
standards under 40 CFR Part 31.
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Administrative Issues
	The wrong administrative requirements in PVPC's internal policies and procedures are referenced.
	Corrective action from previous audit report not implemented.
1.	PVPC Internal Policies and Procedures. As a result of recommendations from PVPC's auditor, the
PVPC revised its Operations Manual as it pertained to certain financial controls and operations. These
documents and revisions were sent to U.S. EPA Region I for review and comment. Working directly and
cooperatively with Region I in July/August 2013, the PVPC incorporated very specific language pertaining
to federal compliance including accounting guidance, cost allocation, and charging of costs to federal
awards. A clear miscommunication between PVPC and EPA Region I resulted in the use of CFR references
as it pertains to Non-Profit Organizations as opposed to State and Local Governments. The PVPC is
recognized as a form of local government as a "political subdivision of the Commonwealth of
Massachusetts" and has always operated in that manner including financial compliance.
PVPC Corrective Action: The PVPC has reviewed the 9-page Section III Financial Control Policies and
Procedures of its Operations Manual and has corrected the twelve incorrectly cited OMB Circular and CFR
references within Section. These will be formally adopted at an upcoming PVPC Executive Committee
meeting. See Attachment D for modified policies.
2.	Corrective Action From Previous Audit Report Not Implemented. The EPA OIG Reports states the
following:
"The Single Audit Report for the period ending June 30, 2010 reported significant deficiencies in internal
control over major programs. In its corrective action plan, the PVPC stated that it would be reconciling all
support documentation for the Brownfields RLF Program. This corrective action was never implemented".
This corrective action, was, in fact, implemented. Due to the issues detailed in Financial Issues above, the
ability to initiate the corrective action was significantly delayed. PVPC Single Audits prior to FY2010 were
exceptional with no findings or significant deficiencies. PVPC's FY13 Single Audit, that being the first audit
under the PVPC Accountant hired in January 2012, also resulted in no findings or significant deficiencies
with only minor recommendations (ie enhance inventory records, change passwords more often, obtain
additional software licenses, etc.). The PVPC Single Audits for FY2010, 2011, and 2012 were subject to
the financial actions of the previous PVPC Accounting Manager who was put on notice and ultimately
terminated due to poor job performance including adherence to PVPC financial policy as it related to record-
keeping, attention to details, retention of records, etc. as well as inadequate annual audit preparation. As
a result of the latter, the PVPC's Single audits were substantially delayed each fiscal year such that by the
time a fiscal year audit was completed, the entirety of the subsequent fiscal year had already passed,
rendering it impossible to correct the prior year identified issues in that subsequent fiscal year. This was
further complicated by the circumstances previously described concerning the PVPC's previous Accounting
Manager due to health-related performance issues as much of the corrective actions required was the
responsibility of the Accounting Manager. See timeline for audits below.
	Single Audit FY10 (7/1/09 - 6/30/10) - completed late Spring 2011 (90% of FY11 passed)
	Single Audit FY11 (7/1/10 - 6/30/11) - completed late June 2012 (100% of FY12 passed)
The PVPC's FY10 management response to the Single Audit was made after the entirety of FY11 had
passed. Thus, although the response and intent was to correct the identified issues for FY11, it was not
feasible to do so. These issues carried over to FY11 and were further complicated by the health and
performance issues of the previous Accounting Manager.
The PVPC has, in fact, put into place numerous changes as a result of the FY10 and FY11 Single Audit
concerns and these changes have been discussed and shared with the EPA Region I office prior to the
EPA OIG site visit(s). This includes:
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	Hiring of a new Accountant w/public sector and financial software experience.
	Hiring a 30-hr per week Accounting Assistant.
	Adopting new Financial Control Policies and Procedures.
	Adopting new checks and balances for oversight, disbursement of checks, and related financial
activity which involves direct interaction and approval from the Deputy Director of Operations.
	Hiring a contractor to review all Brownfields Programs to identify any discrepancies, required
adjustments, and reconciliations.
The above actions were all developed and implemented prior to the EPA OIG site visit(s). As noted
previously, the contractor report concerning this audit was in draft form on mid 2013 and not completed
until early 2014. As a result, the PVPC opted to wait until the OIG's examination was complete so as to
confer with any amounts that may have been required to be transferred back into the appropriate accounts.
This was fully disclosed to the EPA OIG at the time of the examination, including estimated monetary
amounts expected to be transferred.
PVPC Corrective Action: The PVPC has fully addressed all issues which were identified in its FY10 and
FY11 Single Audits.
OIG Response 5
We disagree that the corrective action was implemented at the time of our review. The fiscal
year 2010 Single Audit's corrective action plan stated, "The Commission will also back-up all
payment reimbursement and quarterly reports to EPA with proper support documentation
reflecting all allowable costs." Instead, vendor invoices and timesheets were maintained in
different locations and invoices did not reconcile to individual payment requests.
Project Concerns
	Davis-Bacon Act documentation not maintained.
	Although the PVPC met the intent of the Agreement concerning remediation, not all sites were
developed and reused.
1. Davis-Bacon Compliance. The EPA OIG states in its report that the PVPC bid not obtain payroll
documentation for demolitions services provided by a subcontractor for the Town of Monson, South Main
Street Project as "sampled by an invoice from the subcontractor". The PVPC has a designated "payroll
compliance officer" who works with project staff to review certified payrolls and identify any issues that need
to be resolved. Payroll compliance records are maintained in separate lose-leaf notebooks for each project
and includes the state and federal wage rates (as applicable), wage interviews, certified payrolls,
correspondence, and a summary sheet of actions. The South Main Street Project Bid Document contained
the applicable federal wage rates. A notebook was maintained for this project throughout its entirety
including the submitted certified payrolls. The payroll compliance notebook was in off-site storage at the
time of the EPA OIG site visit and therefore not available for its review. The OIG requested payroll
information from staff who was not in the employ of the PVPC when the Monson South Main Street Project
took place and therefore that staff person was not aware that these records were transferred to off-site
storage. The OIG made no requests for such records to PVPC management staff or other project staff who
were present when the Monson project occurred. Based upon a review of the five
contractors/subcontractors involved in this project, it appears that all were paid according to federal wage
requirements. Complete records are on file and available for review at the PVPC. A sample payroll and
compliance review is provided as Attachment E.
PVPC Corrective Action: No further action required.
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OIG Response 6
We reviewed the documentation provided to us in PVPC's response, and conclude that it
shows compliance with the Davis-Bacon Act. We therefore removed this finding from the
report.
2. Site Develooement and Reuse. The EPA OIG states in its report that although the intended results of
the Agreement were met as four properties were remediated, three of these have not been reused. PVPC's
Agreement with the EPA does not mandate it as the responsibly party to insure actual site redevelopment.
The four properties listed by the OIG include those in the Town of Ware, Town of Monson, and two in the
City of Springfield. The actual status of these sites is as follows:
Ware - The Ware site was remediated and now serves as the site for town's new fire station. (See cover
photo).
Monson - Due to the rapidly deteriorating condition of the building originally slated for asbestos and related
clean-up, the original plan to rehabilitate the existing structure was deemed infeasible. As a result, the
building was abated, and a portion of the site contained through asphalt encapsulation. A RAO-P closure
was filed under the MA DEP Clean-up Program. Due to the site's proximity to an abutting stream and small
size of the remaining developable land, redevelopment options are extremely limited. The Town of
Monson's efforts to market this property were sidetracked in June 2011 due to the occurrence of a tornado
through its downtown which severely impacted or destroyed numerous businesses and private homes. The
town's municipal office building was also severely affected and deemed unsafe with a new facility currently
being built. At the present time, the site is being used by the town for temporary storage. When the town
has fully recovered from the effects of the tornado and when the market conditions improve, the PVPC
stands ready to assist the Town in accordance with the requests of its chief elected officials to advance the
redevelopment of this property.
Springfield (Asylum property) - The Asylum property has been fully remediated and redeveloped. The
building on the site was fully rehabilitated with most of the first floor serving as a restaurant/banquet facility
operated in partnership with one of the city's most popular restaurants. Since its conversion, this site has
hosted regular and numerous downtown events. A smaller portion of the 1st floor remains unoccupied with
the intended reuse being a smaller food establishment. There remains limited development options on the
partial and very small second floor. The property owner is considering housing as a possible option for that
space. The remaining portion of the site is a fully paved parking lot for the building users and occupants
and adjacent restaurant. This parking lot is also available to serve as space for a farmer's market during
the late spring - early fall months. (See cover photo).
Springfield (Chapman Valve) - This site contains multiple parcels of which only one was assisted using EPA
RLF funds. Collectively these parcels were to serve as the basis for a larger urban redevelopment plan.
Based on recent discussions with a developer interested in installing solar panels throughout the former
Chapman property , the City of Springfield is currently finalizing an RFP for sale and redevelopment of this
site. But for the use of EPA RLF monies, this redevelopment RFP for reuse of this site would not be moving
forward.
PVPC Corrective Action: No further action required.
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PVPC Comment on EPA OIG Report Recommendations
and Potential Monetary Benefits
Rec.
No.
Page
No.
Subject
Claimed
Amount
Comment
1
7
Place PVPC on a reimbursement
basis for all EPA grants.
NA
The PVPC has contacted
EPA Region I and is
submitting all pay
requisitions to Region I
for advance approval.
Once approval is
obtained, a draw can be
made, funds received
and payment made in
the exact amount
authorized.
2
7
Issue a stop work order for this CA
until PVPC reconciles its accounting
records and is able to provide
accurate information on costs
incurred for the grant.
NA
The PVPC has active
loans and sub grants in
process as discussed
with Region I. The
PVPC has
documentation for costs
incurred with exception
to that detailed in
PVPC's response to the
OIG.
3
7
Require PVPC to transfer program
income back to the RLF.
$19,000
PVPC concurs to
transfer the agreed
amount of program
income back to the RLF
account.
4
7
Verify that PVPC has a financial
management system that meets
federal standards established under
40 CFR s31 prior to any future
awards.
NA
PVPC's financial
management system
complies with all state
and federal
requirements. This
accounting system
allows PVPC to track all
contracts, including all
federal awards,
separately and
independently.
5
7
Question and recover the $1,261,665
of federal funds drawn at the time we
began our review.
$1,261
million
PVPC recognizes that
there is a total of
$76,362.62 in
unverifiable costs
(duplicate draws,
incorrect charge); $6,053
in charges to a separate
contract; and $16,588.91
of ineligible indirect
expense that will be paid
back to the RLF grant.
15-4-0072
24

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Closing
The Pioneer Valley Planning Commission takes its role as a public agency working with local, state and
federal governments very seriously and strives to insure that public funds are spent properly and in a
manner which truly serves the best interests of the public. Although we clearly recognize that to some
degree, much in part due to reasons not readily controllable, we did not fully achieve that with our
Agreement with the U.S. EPA. We have identified those practices and areas needing modifications and
have put all the necessary protocols in place to address identified issues and to insure that replication does
not occur.
I sincerely trust that this response comprehensively and satisfactorily addresses the issues outlined in the
EPA OIG's report. If you have further questions, please do not hesitate to contact me. Thank you for your
ongoing guidance and support.
Sincerely,
Timothy {w/ Brennan, Executive Director
Attachments
Attachment A
Attachment B
Attachment C
Attachment D
Attachment E
OMB Circular A-87 Cognizant Agency Negotiation Agreements
Spreadsheet Summary of PVPC Drawdowns and Associated Expenses4
Sample GMS Financial Software Reports
PVPC Financial Control Policies and Procedures (as modified)
Sample Payroll Compliance Review and Monitoring5
4	Not included in OIG final report because the information was not readable.
5	Not included in OIG final report because it included confidential business information.
15-4-0072	25

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Attachment A: OMB Circular A-87
Cognizant Agency Negotiation Agreements

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A-t*;	~** i<- tt.* ilusttatlout CiSRt*IIMi*	flK-ily to t* mm-sl that fund* a**
iiwstliJsie, Jteceptaace cf Use rates  subject to the Mbmiw
corxlitiaot: ;:; 3'aSv ccsts incurred 3* tfc* dtparuwnt/agency or
aUo&atad to tba	by an approved coat allocation pin
 isciai ii tMm, iastiist cost pool as fiiwJI? tceeptwli web
coat# are iep.1 obligations c-i its* . < .	y
*hic:b wm **! to MtaiSUsfc t,fc r*ts is fist iater fownd to be
MWfUliy ifcCif*i or i*e-erat ty tfca r
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contract * otnar	only * tna xtiMVf ihm turn* #r*
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 Only cat tfert'#*f fey !,	m
aUo-catad to tint a*-pmetmnmt/*fmcf ty itfl ttppJTOV90 coat	pift
* includa* in tha tiiclii? Mt f#I * flftsilly Aeea^w sd'.
co*t are lagal t> ligations ef th* dapart'/*Kf ami ara ill
tt!Khr fowiS-niftf coal ptumripla*/ at Th* * * Mint haw.
 ttMSiMC't ees hava not	as diract e8i !
Smilm tyj&a# of	h,** l*fc $nsi}rma conaialant *eoi>tinf
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|%5e.pl*te * inaccurate fcy ttw fe
-------
fmnmi Valley	*
Conn I tslcwi
It*
9We|0rs i;h#	tw ub?*rt to renegotiation m, %im
mmmttm erf tft* ro*rl mmttumm,.
it, otAXCES. 7h#	tut# eent.atwf in tin* aqtm*mn% 1 baaad on
tt 9itational eruecur and ih# mcrnmnm mmm  et i
w pvepoMl w	ctmrif* 1b t* ipnitirtiewil
atrw*ur r change* in tft method of	fw a which
eha amount of	mmiumi tern mm M fm mm in
thu rMM*nt, iw.fw.iM  prior approval of turn awthoiriMd
of itrn pciwlW negotiation *f*ncy. fiiIttM t#
eij-fciiiis siseh apprw*} ny rMuU t ub#pfrt audtt tiMllMUKM.
C, fill fllli iiJift coitta	mm 1* *  
#1 tne we Khtch will to# immtm tfuring ttw pari<* fa.r wtiteft tM
rata Ufi.l#*, Mfte* the actual maim for such  pmU
an	t tt* aa**t*tion follotfii*
aueft determination to conpoftttio tec th Hiffmmm mxmm tlie east:
- i 			 w that wnich A tow mmt m*4
mm the mtml eoirtt ktrnwrn  th* ti.
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...	Jj.- - - - I--' ' not trying tlw* e* 
8mmmnl contained haeelft.
s menu,	mm,
if en* Scat* Agency:
, fv  ** a, ii#* f
y Che federal Agency*
&
Jxcji,itiise smith, lose Negotiator
financial	end
C"tlflK a*vica Cante*
o.a, fcnvironmntJ
Protection Agency
fteftiM 21, Mil
*got Uead feyj rncqm-lm* S
Telephone: 12-321 5-##SSS>
15-4-0072
29

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ccKtsacts sdtfi. itm	Oovmt-rmemi to which Office of	t
>! Sjstitt Circulax A-S"? -3ffjli.es,, tafej-ect to thm iiiutrations contained
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15-4-0072

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the mtmim mmU e i&jci: to ewiitfeiMf.i^fi at ttw
of tin
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, r#c|u,i ra tlw prio*	of t)w irtfls
r*prMftCUw *i b napMwtbla r*fstlati aacy. r,iui t
obtain #iefc approve. my raault ia	audit diUah tft* fi** mi
:				

Omcmimx II, 2618
15-4-0072
31

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iK camfGfS, 11ms iima. rate mUiwrt Ar$ tMs mtvmmmnt is basest en
th f>ff.aiRt2,st%vtis 1 stavimt	tirif yttf;!t Ir, ~ffect t
th timm tfcii proposal was siifciiittke-ii. Ctwwwfes in tlw organizational
strtwrtvae 	in tltrt tmtrna of osxowitirtg for costs which
affact tl JHKWfit of reieimxitmmsiii resuitin? from -use #1 the rale in
this e-jreewent,	* prt^r Jipifiratnt 1 of th author! z<*
ir*f.ris#ftfan;n or t.i*t ei|tmiM iMK|otsatioii mmnsf. fttitere to
fbtam s-acte approval wy fwlt **>	audi I	i4w*ftoa*.
C. i>-K	;	in Ifis* rnqzammmt %	cn an
of tM tasif liftieh will I* incurred faufi the petiod Cor which the
rate applies. wm tH* actual etj for ch  plocl tiwt* been
4:#t#ift4r4. *a adjust	in the rwKjotiation Coiim?xj
iraefc dete minotion to	far itm ie jta I ^^*4a ^^  -	 		- ^  ~ ~  	~i then a i the
a-fressent contained fwwis,
8. SPECIAL amMSi mmm.
By the federal Agency:
smith r Rate negotiator
iiMlfiiiii and
Service Center
Hateft S Mt
~
15-4-0072
33

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15-4-0072
34

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Attachment C: Sample GMS Financial Software Reports
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15-4-0072

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15-4-0072
38

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Attachment D: PVPC Financial Control Policies
and Procedures (as modified)
S. III. PVPC FINANCIAL CONTROL POLICIES AND PROCEDURES
GENERAL
1.	The Executive Director formulates financial policies, delegates administration of the
financial policies and daily oversight to the Deputy Director for Operations, and reviews
operations and activities.
2.	Financial duties and responsibilities are separated so that no one employee has sole
control over cash receipts; disbursements; payroll; reconciliation of bank accounts; etc.
3.	The Financial Section consists of the Accountant, Accounting Assistant and Payroll
Coordinator as overseen by the Deputy Director and who report to the Executive Director.
4.	Contracts in the amount of $5,000 or more require approval from the PVPC Executive
Committee authorizing the Executive Director to negotiate and execute.
Project Oversight
1.	Project staff shall meet with the PVPC Accountant and/or reconcile financial records
on a quarterly basis, or more if required, to insure that financial records correspond
between project records and the Accountant's financial records.
2.	Financial notebooks shall be created by project managers for all major contracts and/or
multi-year contracts and contracts and will contain contracts, amendments, extensions,
budget information, work plans and scope, subcontracts, and all other relevant
information that can assist with project oversight and budget management. The
Accountant will keep his/her own project folder on the same.
3.	Contracts involving cash matches and/or restrictions on eligible expenses shall require
separate documentation by project staff including relevant support documentation, as
appropriate and/or required. The Accountant makes any necessary journal entries to a
project in the financial software system and maintains evidence of Executive Committee
approval and vote of a cash match.
4.	Monthly reviews of the Revenue and Expenditure Reports of all open PVPC project
contracts will be conducted by the Accountant and Deputy Director for Operations to
identify any potential concerns, unusual spending trends, cost overruns or required
reallocations.
Cash Receipts
1. The Agency Receptionist/Administrative Assistant opens all checks received in the
mail and records on a log sheet all relevant check information including payment from,
amount, date, check number and to whom the check goes. All checks are immediately
brought to the Accountant or if a program check, to the respective Financial Coordinator.
15-4-0072
39

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2.	All receipts will be deposited intact. No disbursements will be made from cash or
check receipts prior to deposit.
3.	The Accountant or Accounting Assistant will record each cash payment received.
Checks and cash shall be locked in a secure location until taken to the bank.
4.	Checks are scanned upon receipt and deposited electronically. Paper checks are held
in a secure location for 60-90 days and then shredded.
5.	Both the Executive Director and Deputy Director receive a copy of account history
(deposits, checks issued, payments made) for review.
Cash/Check Disbursements
1.	All satisfactory invoices/check requests will be approved (indicated by
initialing/signature) by the appropriate Project or Section Manager, with an appropriate
project number.
Only original invoices should be submitted for payment. Sales tax will be deducted from
the amount to be reimbursed. No reimbursement for alcohol or tobacco is allowed.
Proper procurement procedures must be followed in order for a check or reimbursement
to be issued. See Section V.
2.	All approved invoices will be forwarded to the Deputy Director who will review all
invoices for mathematical accuracy, validity, conformity to the budget and compliance
with contract requirements.
3.	Approved invoices will be assigned a General Ledger (GL) code by the Accounting
Assistant as reviewed and approved or modified by the Deputy Director.
4.	Upon completion of Steps 1-3 above, final approval of the Executive Director is
required for all invoices.
5.	Approved invoices will be entered into the PVPC financial software program in
Accounts Payable.
6.	All entered outstanding invoices will appear on an Accounts Payable listing. Check
disbursement and actual release of payment is determined by the Deputy Director.
7.	The Accountant will prepare checks on a bi-weekly basis or as otherwise required and
issue payment as authorized.
8.	After the checks are printed, individual voucher labels listing the vendor name, voucher
#, amount of check, invoice # and check date are also printed and are affixed on the
corresponding A/P invoice and filed.
15-4-0072
40

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9.	Authorized check signers include the PVPC Executive Director, Executive Committee
Chair, Executive Committee Vice-Chair, Executive Committee Treasurer, and Executive
Committee Assistant Treasurer.
10.	Checks in the amount of $5,000 or more require a two-party signature.
11.	In no event will:
a)	invoices be paid unless approved by an authorized signer.
b)	blank checks (checks without a date or payee designated) be signed in
advance.
c)	checks be made out to "cash" or "bearer," etc.
d)	checks be prepared on verbal authorization, unless approved by the Executive
Director.
12.	Blank checks are locked in a fireproof cabinet in the Accountant's office.
13.	Subsequent check #'s are always verified by confirming with the check register book.
Bank Reconciliations
1.	The Accounting Assistant will reconcile the bank statements monthly.
2.	The PVPC Executive Committee will receive statements of checks issued on a regular
basis.
3.	The Deputy Director shall verify the reconciliation of the bank accounts on at least a
quarterly basis.
4.	On all checks outstanding over 120 days, the Accountant will take appropriate action.
Petty Cash
1. Petty Cash is maintained and tracked by the Administrative Support Section and
reconciled regularly by the Accounting Assistant. Petty Cash Requests and Petty Cash
Reimbursement Forms must be used to receive funds in advance or for reimbursement
of a purchase made. These forms require Section Manager authorization, a project code
designation and a strict accounting of the funds used/requested. See Section IV -
Miscellaneous Practices and Guidelines.
Accounts Receivables
1.	The Accountant prepares invoices monthly, quarterly or as deemed necessary.
2.	Invoice amounts are reconciled with the financial software program's Revenue and
Expenditure Reports.
15-4-0072
41

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3. Generated invoices are issued to the respective client with copies given to the
appropriate PVPC Project Manager and the Accounting Assistant. Upon receipt, the
Accounting Assistant enters the invoice information into Accounts Receivable module of
the financial software program.
Files
1. Financial records are maintained in the PVPC Accountant's office for 2 years upon
project close-out and thereafter placed in off-site storage. Stored files shall be maintained
for a period of seven (7) years from the date of Program Close-out, or if such records
become the subject of audit findings, they shall be retained until such findings have been
resolved, whichever is later.
FEDERAL COMPLIANCE
Accounting Guidance
The following are procedural and compliance guidelines to be followed by the PVPC
financial and accounting personnel in the administration on federal funds:
	Identify source and application of funds
	Maintain controls and accountability of funds and property
	Compare outlays with budgeted amounts
	Minimize time between receiving fed funds and issuing payments
	Adhere to procedures to insure reasonableness, allocability and allowability of
costs
	Insure that records are supported by source documents
	Do not exceed SES4 level for payment of consultants for EPA grants
	Cash advances should be limited to amount needed (31.21)
	Payments should be made within 5 business days of grant draws - 31 CFR 205
(Dept of Treasury applies)
	Must be able to account for the receipt, obligation and expenditure of funds
	Maintain advances in interest bearing accounts
	Cost sharing shall be verifiable (40 CFR 31.24)
	Volunteer services can be used (at their regular rate or comparable rate in
grantees organization) along with fringes, no indirect costs though
	Volunteer services shall be documented in same manner as grantees employees
	Program income should be added to project funds, used to finance the non Fed
share or deducted from the total project cost (40 CFR 31.25)
	Budgets developed in accordance with 40 CFR 31.20
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	Grantees are required to report budget deviations. Grantees to get prior approval
for certain conditions
	Annual A133 audits must be done when receiving >$500,000 of Fed funds (40
CFR31.26)
	Grant participation for individual consultant charges follows MGL C30B
	Record retention per 40 CFR 31.42. At a minimum, keep documents for 3 years
after final pay.
	Federally funded equipment with a useful life of more than one year and with an
acquisition cost of $5,000 or more per unit will be identified in the PVPC's
Inventory Log.
	A physical inventory of PVPC equipment with a remaining useful life value
(excluding furnishings) shall be conducted on a biennial basis.
Cost Allocation
Direct Costs
Costs that can be identified specifically with a particular funding source or grant are
directly charged.
Shared costs are prorated individually as direct costs to each award, contract, or funding
activity using a base appropriate to the cost being prorated. A spreadsheet is developed
that lists the basis and calculates a fair distribution of shared cost.
Examples of types of shared costs are:
	general administration expenses of the organization, such as salaries and
expenses of executive officers, personnel administration, and accounting;
	costs of operating and maintaining facilities (for buildings shared by more than
one program or by administrative staff and program staff), such as utilities,
janitorial; and
	costs of shared program staff and equipment.
Program Costs
Program costs include, but are not limited to:
(1)	Personnel and non-personnel costs directly related to the provision of program
services, training, and transportation for staff, parents and volunteers.
(2)	Costs of functions directly associated with the delivery of program services through
the direction, coordination or implementation of a specific program area.
(3)	Costs of the salaries of program specialists and managers, program staff, janitorial
and transportation staff involved in program efforts, and the costs associated with
parent involvement and volunteers.
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(4) Expenses related to program staff functions, such as the allowable costs of fringe
benefits, travel, per diem and transportation, training, food, center/classroom supplies
and equipment, parent activities funds, insurance, and the occupation, operation and
maintenance of program component space, including utilities.
Dual benefit costs
Some costs benefit the programs as well as the development and administrative functions
within the Pioneer Valley Planning Commission. In such cases:
(1)	The Pioneer Valley Planning Commission must identify and allocate appropriately the
portion of the costs that are for development and administration.
(2)	Dual benefit costs include, but are not limited to, salaries, benefits and other costs
(such as travel, per diem, and training costs) of staff that perform both program and
development and administrative functions. The Pioneer Valley Planning Commission
must determine and allocate appropriately the part of these costs dedicated to
development, program and administration.
(3)	Space costs and costs related to space, such as utilities, are frequently multiple
benefit costs. The Pioneer Valley Planning Commission must determine and allocate
appropriately the percentage of space dedicated to development and administration
and program.
Charging of Costs to Federal Awards
Overview
It is the policy of the Pioneer Valley Planning Commission that only costs that are
reasonable, allowable and allocable to a Federal award shall be charged to that award
directly or indirectly. All unallowable costs shall be appropriately segregated from
allowable costs in the general ledger in order to assure that unallowable costs are not
charged to Federal awards.
Segregating Unallowable From Allowable Costs
The following steps shall be taken to identify and segregate costs that are allowable and
unallowable with respect to each federal award:
1.	The budget and grant or contract for each award shall be reviewed for costs
specifically allowable or unallowable.
2.	Accounting personnel shall be familiar with the allowability of costs provisions of
OMB Circular A-87, "Cost Principles for State and Local Governments",
particularly:
a. The list of specifically unallowable costs found in Attachment B (Selected
Items of Cost), such as alcoholic beverages, bad debts, contributions, fines
and penalties, lobbying, etc.
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b. Those costs requiring advance approval from Federal agencies in order to
be allowable in accordance with Attachment B, such as foreign travel,
equipment purchases, etc.
3.	No costs shall be charged directly to any Federal award until the cost has been
determined to be allowable under the terms of the award and/or OMB Circular A-
87.
4.	All items of miscellaneous income or credits, including the subsequent write-offs
of uncashed checks, rebates, refunds, and similar items, shall be reflected for grant
accounting purposes as reductions in allowable expenditures if the credit relates
to charges that were originally charged to a Federal award or to activity associated
with a Federal award. The reduction in expenditures shall be reflected in the year
in which the credit is received (i.e. if the purchase that results in the credit took
place in a prior period, the prior period shall not be amended for the credit.)
Criteria for Allowability
It is the policy of the Pioneer Valley Planning Commission that all costs must meet the
following criteria in order to be treated as allowable direct or indirect costs under a Federal
award:
1. The cost must be "reasonable" for the performance of the award, considering the
following factors:
a.	Whether the cost is of a type that is generally considered as being
necessary for the operation of the organization or the performance of the
award;
b.	Restraints imposed by such factors as generally accepted sound business
practices, arm's length bargaining, Federal and state laws and regulations,
and the terms and conditions of the award;
c.	Whether the individuals concerned acted with prudence in the
circumstances;
d.	Consistency with established policies and procedures of the Organization,
deviations from which could unjustifiably increase the costs of the award.
2.	The cost must be "allocable" to an award by meeting one of the following criteria:
a.	The cost is incurred specifically for a Federal award;
b.	The cost benefits both the Federal award and other work, and can be
distributed in reasonable proportion to the benefits received; or
c.	The cost is necessary to the overall operation of the Organization, but,
where a direct relationship to any particular program or group of programs
cannot be demonstrated.
3.	The cost must conform to any limitations or exclusions of OMB Circular A-87 or
the Federal award itself.
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4.	Treatment of costs must be consistent with policies and procedures that apply to
both federally financed activities and other activities of the Organization.
5.	Costs must be consistently treated over time.
6.	The cost must be determined in accordance with generally accepted accounting
principles.
7.	Costs may not be included as a cost of any other federally financed program in the
current or prior periods.
8.	The cost must be adequately documented.
Cost Sharing and Matching
It is the policy of the Pioneer Valley Planning Commission to value contributed services
and property that are to be used to meet a cost sharing or matching requirement at their
fair market values at the time of contribution, unless award documents or Federal agency
regulations identify specific values to be used.
The Pioneer Valley Planning Commission shall claim contributions as meeting a cost
sharing or matching requirement of a Federal award only if all of the following criteria are
met:
1.	They are verifiable from records.
2.	They are not included as contributions for any other federally assisted project or
program.
3.	They are necessary and reasonable for proper and efficient accomplishment of
project or program objectives.
4.	They are allowable under OMB Circular A-87.
5.	They are not paid by the Federal government under another award, except where
authorized by Federal statute to be used for cost sharing or matching.
6.	They are provided for in the approved budget when required by the Federal-
awarding agency.
7.	They conform to all provisions of OMB Circular A-102.
8.	In the case of donated space, the space is subject to an independent appraisal or
market survey to establish its value.
Contributed services used for cost sharing or matching purposes shall be valued at rates
consistent with those rates paid for similar work in the Commission (match up experience
and skill level), including an estimate of reasonable fringe benefits. In cases in which the
required skills are not found in the Commission, rates used shall be consistent with those
paid for similar work in the labor market in which competes.
It is the policy of the Pioneer Valley Planning Commission to require volunteers, when
necessary, to document and account for their contributed time.
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Appendix B
Region 1 Response to Draft Report
Q
PRO^
o
2
LU
C3
T
FROM: Michael Kenyon, EPA Region 1, Assistant Regional Administrator
TO: Arthur A. Elkins, Jr. Inspector General
DATE: November 7, 2014
OIG Project Number: OA-FY14-0171
SUBJECT: Pioneer Valley Planning Commission Needs to Improve Its Compliance with
Federal Requirements, as $1.2 Million in Grant Costs Are Questioned
Below please find Region l's comments concerning the above referenced IG draft report.
General Comments:
The AFC coordinated with the Program Office and the Grants Management Office to gather the
Agency's comments regarding the Inspector General's draft report for the review of Pioneer
Valley Planning Commission (PVPC. The Region has worked with this Cooperative Agreement
recipient (CAR) for a long time and does feel that this CAR has made significant
accomplishments in reducing human health risks in New England with the work they have
supported and completed.
Specific Comments on Draft Report Sections:
 Title Page:
S R1 Comment: There should be consistency with the titles used on IG reports.
The majority of other Audits/Reviews conducted by the IG for reviewing
Assistance Agreements are titled "Examination of costs claimed under EPA
Grants The IG should consider changing the title to be consistent with other
Attestation reviews conducted for grantees to "Examination of costs claimed
under EPA Brownfields Grant 97119201".
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	At a Glance -What We Found
S Brownfields Program Comment: The last sentence in this section states that the
goal of the EPA's Brownfields program is not achieved when remediated sites are
not redeveloped and reused. The Regional Brownfields program does not agree
with this statement made by the IG because the grantee achieved the goals of the
Brownfields program by getting contaminated land ready for reuse. This is
explained further in the comments to Chapter 4 below.
	Chapter 3- PVPC did not comply with Federal requirements
S PVPC Requested Reimbursement for Unallowable Costs- R1 Comment: The
Draft IG report does not identify that PVPC had identified some of the
unallowable costs prior to the commencement of this review and had indicated to
the Region that PVPC had hired a financial consultant to reconcile and balance
the EPA RLF financial through 6/30/2012. PVPC had also indicated that a final
report with recommendations of actions would be forthcoming prior to the IG's
review.
S PVPC did not maintain required documentation: The Draft IG report states
that PVPC did not obtain payroll documents showing contractor's compliance
with the Davis-Bacon Act for demolition services provided by a subcontractor for
the Town of Monson, South Main Street School project.
Brownfields Program comment: Region 1 received the following comment
form the National Brownfields program *1, which the Regional Brownfields
program also supports:
"EPA is aware of the challenges of adhering to Davis-Bacon wage rate
requirements. This often comes up as an issue among our RLF grantee
community, so we have covered Davis Bacon compliance requirements on
two webinars in the past year in an effort to address these concerns and bring
about a more consistent approach to complying with Davis Bacon.
Additionally, this topic has been discussed in sessions with RLF grantees at
the past several Brownfields Training Conferences, as well as a Davis-Bacon
one-pager that was developed in 2009 to assist RLF grantees."
	4- Properties have been remediated, but not reused
S Goal of the Brownfields Program is to cleanup and reuse: Brownfields
Program comment: Region 1 received the following comment form the National
Brownfields Program *2, which the Regional Brownfields program also supports:
"There is an entire chapter (p9) dedicated to the statement first seen in the
summary that "the goal of the EPA's Brownfields program is not achieved
when remediated sites are not redeveloped and reused." The Brownfields
Program does not set a goal to reuse sites - we say our goal is to empower
communities with tools and information to reuse sites. The comment implies
that we have control over what the market wants to do with a brownfield site
when we do not. The RLF funds cleanups, not redevelopments, and the
Pioneer Valley Planning Commission RLF funded four cleanups, so from the
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program's perspective the grantee achieved the goals of our program by
getting contaminated land ready for reuse."
(Footnotes* 1 and *2 - Both of these comments were submitted by Megan Quinn the National
Brownfields RLF Coordinator.)
 Status of Recommendation and Potential Monetary Benefits
The Agency is submitting Attachment A, the high-level intended corrective actions and
estimated completion dates, for review and concurrence by the IG.
Please contact Valerie Marshall, the Region 1 Audit Follow-up Coordinator, of my staff at 617-
918-1674, if you have any questions concerning this memorandum.
cc: Janet Kasper, US EPA Office of Inspector General
Mary Anne Strasser, US EPA Office of Inspector General
Mega Quinn, US EPA National Brownfields RLF Coordinator
Frank Gardner. US EPA Region 1 Brownfields Program
Cheryl Scott, US EPA Region 1 Grants Management Officer
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ATTACHMENT A
No.
Recommendation
Status
Comments
Planned Completion
Date
Claimed
Amount
Agreed
to
Amount
1
Place PVPC on a
reimbursement basis
for all EPA grants.
C
All active EPA Assistance
Agreements (4) are now on
reimbursement.
September 18, 2014.


2
Issue a stop work
order for this CA until
PVPC reconciles its
accounting records
and is able to provide
accurate information
on costs incurred for
the grant.
0
The CAR has agreed that it
will work with Region 1 to
provide the necessary support
documentation to reconcile
PVPC's accounting records
for this grant award.
The CAR has
proposed a completion
date for 3rd quarter
FY2015.


3
Require PVPC to
transfer program
income back to the
RLF.
0
The CAR has proposed that
the agreed amount for
program income to be repaid
should be $24,704.41. Once
the Region has reviewed the
necessary back up
documentation, it will
determine if this amount is
accurate.
The CAR has
proposed to repay the
amount agreed to by
the 2nd quarter
FY2015.
$19,000

4
Verify that PVPC has
a financial
management system
that meets federal
standards established
under 40 CFR  31
prior to any future
awards.
U
The Region will need to meet
with the CAR and verify that
PVPC has a financial system
that meets federal standards.
The CAR has
proposed a completion
date for 4th quarter
FY2015.


5
Question and recover
the $1,261,665 of
federal funds drawn at
the time we began our
review.
U
The Region will need to meet
with the CAR to review the
support documentation and
identify what costs the CAR is
able to reconcile and verify as
eligible grant expenses under
this grant award.
The CAR has
proposed a completion
date for 4th quarter
FY2015.
$1,261,665

O = Recommendation is open with agreed-to corrective actions pending.
C = Recommendation is closed with all agreed-to actions completed.
U = Recommendation is unresolved with resolution efforts in progress.
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Distribution
Regional Administrator, Region 1
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
Deputy Regional Administrator, Region 1
Director, Grants and Interagency Agreements Management Division,
Office of Administration and Resources Management
Audit Follow-Up Coordinator, Region 1
Public Affairs Officer, Region 1
Executive Director, Pioneer Valley Planning Commission
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