*. U.S. Environmental Protection Agency	13-P-0341
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	 \ Office of Inspector General
At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency, Office of
Inspector General, conducted
this examination to determine
whether the costs claimed
under grant AB-83363501
awarded to the Lead
Remediation Association of
America are reasonable,
allowable and allocable in
accordance with the applicable
laws, regulations and grant
terms and conditions. The OIG
also sought to determine
whether the objectives of the
grant were met.
This report addresses the
following EPA Goal and
Cross-Cutting Strategy:
• Ensuring the safety of
chemicals and preventing
pollution.
Examination of Costs Claimed Under Grant
AB-83363501 Awarded to Lead Remediation
Association of America
What We Found
We found that LRAA's financial management system did not meet the standards
established under the Code of Federal Regulations at 40 CFR § 30.21. LRAA's
accounting system data was not updated timely. LRAA also made cash draws and
submitted its final federal financial report using the grant budget amounts rather than
actual costs incurred. In addition, LRAA did not maintain source documentation to
support the costs incurred or claimed.
Title 40 CFR § 30.21(b) requires the recipient's financial management systems to
provide accurate, current and complete disclosure of the financial results and to include
records that adequately identify the source and application of funds for federally
sponsored activities. Title 2 CFR Part 230, Appendix A, Paragraphs A.2(a) and (g), also
require costs to be allocable and adequately documented to be considered allowable
under an award. LRAA did not meet these requirements.
We also found that LRAA did not meet the grant objectives as outlined in the approved
work plan. The work plan requires LRAA to produce and distribute lead safety work
practice DVDs, provide lead safety training and workshops, distribute brochures, and
carry out other duties to promote lead safety practices in low-income communities. As of
the date of our report, 2 years after the grant period end date of June 30, 2011, LRAA
has not produced the required DVDs, provided evidence of brochure distribution, or
completed the required training and workshops.
As a result of the issues noted above, we questioned the $249,870 claimed and
recommended recovery of the $249,882 drawn under the grant.
Recommendations
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/20131
20130806-13-P-0341.pdf
We recommend that the director of the Office of Grants and Debarment question
$249,870 claimed and recover $249,882 drawn under the grant. We also recommend
that the director verify that LRAA has a financial management system that meets the
federal standards established under 40 CFR § 30.21 prior to any future awards.
LRAA generally agreed that it did not have the documentation to meet the federal
requirements. However, LRAA disagreed with our recommendation to question the
$249,870 claimed under the grant. LRAA stated that it is entitled to the claimed costs
because it has done work under the grant and its general ledger showed incurred costs.
Costs recorded in the general ledger without the supporting source documentation do not
meet CFR requirements; therefore, we will continue to question the costs.

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