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*	- U.S. Environmental Protection Agency	13-r-0367

i	\ Office of Inspector General	August 30 2013
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At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency Office of
Inspector General conducted
this examination of the costs
claimed by Grace Hill
Settlement House under
American Recovery and
Reinvestment Act cooperative
agreement 2A-97706701.
The OIG conducted this
examination to determine
whether the costs claimed were
reasonable, allocable, and
allowable in accordance with
applicable federal requirements
and the terms and conditions of
the CA. The OIG also reviewed
GH's compliance with selected
Recovery Act requirements and
accomplishment of the
objective of the CA.
This report addresses the
following EPA Goal or
Cross-Cutting Strategy:
 Taking action on climate
change and improving air
quality.
For further information, contact
our Office of Congressional and
Public Affairs at (202) 566-2391.
The full report is at:
www.epa.qov/oiq/reports/2013/
20130830-13-R-0367.pdf
Examination of Costs Claimed Under
American Recovery and Reinvestment Act
Cooperative Agreement 2A-97706701 Awarded to
Grace Hill Settlement House, St. Louis, Missouri
What We Found
GH's financial management system did not meet federal standards. In particular:
	Procurements did not meet the competition or cost and price analysis
requirements of the Code of Federal Regulations in 40 CFR 30.43 and
30.45.
	The contract administration system did not meet the requirements of
40 CFR 30.47.
	Unallowable costs were not segregated and financial management data
were not properly supported as required under 40 CFR 30.21 and
2 CFR Part 230.
	Labor charges did not comply with the requirements of 2 CFR Part 230.
	Cash draws did not meet immediate cash needs requirement and were
not properly documented as required under 40 CFR 30.22 and 30.21.
As a result of the issues noted, we questioned $1,615,343 of the $2,250,031
claimed under the CA. In addition, due to lack of adequate documentation from
GH, we were unable to determine whether GH accomplished the objective of the
CA or met the job reporting requirements of Recovery Act Section 1512.
Recommendations
We recommend that the Region 7 regional administrator disallow questioned
costs of $1,615,343 and recover $1,423,028 of that amount under the CA. We
also recommend that, prior to any future EPA awards, the regional administrator
verify that GH has adequate controls related to such issues as procurement,
contract administration, cost allowability, labor charges, and cash draws. In
addition, we recommend that the regional administrator verify that GH reported
the number of jobs created and retained in accordance with Recovery Act
requirements and Office of Management and Budget guidance. We also
recommend that the regional administrator verify that the vehicles GH reported
as retrofitted under the CA were completed in accordance with workplan.
GH disagreed with our recommendations. GH believed the contract costs were
fair and reasonable, no federal funds were over-drawn, and it has exceeded the
emission objective of the CA. GH believed no costs should be recovered, with an
exception to a limited amount of personnel costs. Region 7 did not comment on
the draft report.

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