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*. U.S. Environmental Protection Agency	14-R-0032
# JfM^ \ Office of Inspector General	November 19, 2013

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At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency (EPA)
awarded American Recovery
and Reinvestment Act
cooperative agreement (CA)
2S-97842001 to the Colorado
Department of Public Health
and Environment (CDPHE).
The Office of Inspector General
(OIG) contracted with Ollie
Green & Company, an
independent public accounting
(IPA) firm, to audit the
agreement. The objectives of
the audit were to determine
whether CDPHE's
procurements and use offeree
account under the CA complied
with the applicable federal
requirements and whether the
objectives of the CA were met.
This report addresses the
following EPA themes:
•	Making a visible difference
in communities across the
country.
•	Protecting water: A
precious, limited resource.
•	Launching a new era of
state, tribal and local
partnerships.
The State of Colorado Did Not Fully Assure That
Funds Intended to Treat Mining Wastes and Remove
Contaminants from Water Were Effectively Spent
For further information,
contact our public affairs office
at (202) 566-2391.
The full report is at:
www.epa.aov/oia/reports/2014/
20131119-14-R-0032.pdf
What the IPA Auditor Found
CDPHE did not fully
comply with the CFR,
resulting in $2,593,495
of questioned costs
claimed under the CA.
The IPA found that CDPHE generally complied with
Colorado's state procurement policies and procedures
as required by Code of Federal Regulations (CFR)
under 40 CFR §35.6550(a). The IPA also found that
CDPHE substantially complied with 40 CFR Part 35,
Subpart O. The IPA determined that CDPHE did not
always comply with the cost or price analysis requirements and did not include
language in bid proposals designating the date, time and place of bid openings,
as required by State of Colorado Procurement Rule R-24-103-202a-08(b).
In addition, the IPA found CDPHE did not always ensure that 40 CFR Part 35,
Subpart O, required language was included in bid proposals and contracts.
The IPA is responsible for the content of the audit report. The OIG performed the
procedures necessary to obtain reasonable assurance about the IPA's
independence, objectivity, qualifications, technical approach and audit results.
Having done so, the OIG accepts the IPA's conclusions and recommendations.
Recommendations and Planned Corrective Actions
The IPA's report recommended that the Region 8 Regional Administrator recover
the questioned costs of $2,593,495, unless CDPHE provides documentation to
demonstrate that the prices for the contracts and subcontracts in question are fair
and reasonable. The IPA's report also recommended the region require CDPHE
to implement written procedures and controls, to ensure compliance for all future
request for proposals and contracts under 40 CFR, Subpart O, CAs, by requiring:
•	A cost or price analysis is conducted in accordance with Subpart O
requirements.
•	The date, time and place of all bid openings are designated in accordance
with state of Colorado procurement rules.
•	Subpart O contract language is included.
In addition, the IPA's report recommended that the region require CDPHE to
modify the construction manager contractor contract and the architectural and
engineering contracts awarded under the CA to include the 10-year records
retention requirement under 40 CFR §35.6705(b) and the contract language
requirement under 40 CFR §35.6550.
CDPHE agreed with the finding regarding omission of required contract language,
but has not proposed any corrective action. Region 8 did not provide a response
to the draft report.

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