U.S. Environmental Protection Agency	14-R-0278
\ Office of Inspector General	June 4,2014
 J	_
At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency (EPA)
awarded American Recovery
and Reinvestment Act
cooperative agreement
2L-97234209 to the
New Jersey Department of
Environmental Protection
(NJDEP). The EPA Office of
Inspector General (OIG)
contracted with Ahmad
Associates Limited, an
independent public accounting
(IPA) firm, to audit the
agreement. The objectives of
the audit were to determine
whether NJDEP's costs
incurred and procurements
under the cooperative
agreement complied with the
applicable federal requirements
and whether NJDEP met the
Recovery Act requirements and
cooperative agreement
objectives.
This report addresses the
following EPA goals or
cross-agency strategies:
	Cleaning up communities
and advancing sustainable
development.
	Launching a new era of
state, tribal, local and
international partnerships.
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.aov/oia/reports/2014/
20140604-14-R-0278.pdf
New Jersey Department of Environmental Protection
Needs to Meet Cooperative Agreement Objectives and
Davis-Bacon Act Requirements to Fully Achieve
Leaking Underground Storage Tank Goals
What the IPA Auditor Found
NJDEP did not fully meet
cooperative agreement
objectives or ensure
compliance with Davis-
Bacon Act requirements.
The IPA auditor found that NJDEP did not fully
meet the cooperative agreement objectives and
could not demonstrate compliance with the
Buy American and Davis-Bacon Act provisions
of the Recovery Act. However, the OIG later
determined that the agency and NJDEP had
reasonable basis for their determination that the Buy American requirements
do not apply to the projects under the cooperative agreement. As a result, the
OIG has removed the recommendation relating to the Buy American issue.
The IPA auditor found that NJDEP under-reported the number of jobs created
and retained for one of the quarters sampled.
The IPA auditor found that NJDEP had adequate financial management systems
to ensure that costs claimed were in accordance with the federal requirements.
The IPA also found that NJDEP complied with New Jersey's state procurement
policies and procedures, as required under the Code of Federal Regulations
(CFR) in 40 CFR 31.36(a).
The IPA auditor is responsible for the content of the audit report, with the
exception of the EPA's comments to the draft report and the OIG's evaluation of
those agency comments. The OIG performed the procedures necessary to obtain
reasonable assurance about the IPA auditor's independence, qualifications,
technical approach and audit results. Having done so, except for the Buy
American issue as described above, the OIG accepts the IPA auditor's
conclusions and recommendations.
Recommendations and Planned Corrective Actions
The IPA auditor's report recommends that the Region 2 Regional Administrator
require NJDEP to establish internal controls to ensure that modifications to the
cooperative agreement work plan are in accordance with 40 CFR 31.30 and
31.40. The report also made recommendations relating to Davis-Bacon Act
compliance and reported job creation/retention.
NJDEP and Region 2 concurred with the job reporting issue and have provided a
summary and explanations for the job reporting error. The issue is resolved.
NJDEP and Region 2 disagreed with the remaining findings and
recommendations in their draft responses. However, during subsequent
discussions, Region 2 agreed that NJDEP will ensure that the sites that meet the
criteria established in its Office of Underground Storage Tanks Recovery Act
guidance meet the Davis-Bacon Act requirements.

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