^tDS7X" U.S. Environmental Protection Agency	14 P 0131
% \ Office of Inspector General	March 10,2014
W I
At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency (EPA)
Office of Inspector General
(OIG) reviewed the funds
drawn by the National
Association of State
Departments of Agriculture
Research Foundation
(NASDARF)
under EPA Cooperative
Agreement No. 83456201.
The award provided
$3.6 million to:
•	Evaluate and improve
existing pesticide safety
training programs and
materials.
•	Identify areas in the program
where additional pesticide
safety education is needed.
The purpose of our
examination was to determine
whether costs incurred were
allowable in accordance with
federal requirements and the
agreement and whether
NASDARF conducted
procurements in accordance
with federal regulations and
the agreement.
This report addresses the
following EPA themes:
•	Embracing EPA as a high
performing organization.
•	Taking action on toxics
and chemical safety.
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.aov/oia/reports/2014/
20140310-14-P-0131.pdf
National Association of State Departments of Agriculture
Research Foundation Needs to Comply With Certain
Federal Requirements and EPA Award Conditions to Ensure
the Success of Pesticide Safety Education Programs
We questioned
$571,626 of potentially
unallowable costs.
What We Found
NASDARF's financial management system did not
meet certain federal requirements and conditions of
the EPA award. Specifically, NASDARF incorrectly
calculated and applied indirect cost rates, reported
outlays for indirect costs in excess of recorded expenses, and drew funds that
exceeded its cash needs. As a result, we questioned $275,650.
NASDARF did not document its procurement selection process or provide
documentation to support any cost or price analysis performed on its project
management subcontract as required by the Code of Federal Regulations
(CFR) in 40 CFR Part 30. NASDARF did not determine the reasonableness of
costs for two subgrants as required by conditions of the award. In addition,
NASDARF's written procurement policy lacked procedures to ensure
compliance with 40 CFR Part 30. As a result, we questioned $295,976.
The OIG also identified an unresolved issue pertaining to potentially
unallowable costs of $118,324 drawn under a prior EPA award. The costs,
recorded as a refundable advance, represent funds received as of year-end but
not yet earned.
Recommendations and Responses
We recommend that the EPA disallow and recover $571,626 pertaining to the
financial management and procurement issues. We also recommend that the
EPA require NASDARF to recalculate its indirect cost rates to be consistent
with 2 CFR Part 230 and establish controls to ensure that its financial
management and procurement systems comply with federal requirements and
conditions of the award. Further, we recommend that certain special conditions
be included for all active and future EPA awards until NASDARF meets all
applicable federal financial and procurement requirements. For the $118,324 of
potentially unallowable costs, the EPA should review and recover costs
determined to be unallowable. NASDARF generally did not agree with the OIG
findings and recommendations. The EPA agreed with the OIG
recommendations and stated it would work with NASDARF to resolve the
issues.
Noteworthy Achievements
In response to OIG finding outlines, NASDARF modified its subcontract for
project management services and its written procurement procedures to include
OIG-recommended requirements pertaining to 40 CFR Part 30.

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