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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Examination of Costs Claimed
Under EPA Cooperative
Agreements 2A-96104501 and
2A-96107201 Awarded Under
the Recovery Act to
Chelsea Collaborative Inc.,
Chelsea, Massachusetts
Report No. 13-R-0353
August 22, 2013

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Report Contributors:
Jean Bloom
Cara Lindsey
Shannon Schofield
Abbreviations

CA
Cooperative Agreement
CCI
Chelsea Collaborative Inc.
CFR
Code of Federal Regulations
DERA
Diesel Emissions Reduction Act
EPA
U.S. Environmental Protection Agency
FFR
Federal Financial Report
FY
Fiscal Year
NEPC
New England Produce Center
OIG
Office of Inspector General
OMB
Office of Management and Budget
Recovery Act
American Recovery and Reinvestment Act of 2009
TRU
Trailer Refrigeration Unit
Cover photo: Old and new transportation refrigeration units at the New England Produce
Center in Chelsea, Massachusetts. (EPA OIG photo)
Hotline
To report fraud, waste, or abuse, contact us through one of the following methods:
email: OIG Hotline@epa.gov	write: EPA Inspector General Hotline
phone: 1-888-546-8740	1200 Pennsylvania Avenue, NW
fax:	202-566-2599	Mailcode 2431T
online:
http://www.epa.gov/oiq/hotline.htm
Washington, DC 20460

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*	- U.S. Environmental Protection Agency	13-R-0353

i	\ Office of Inspector General	August 22,2013
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At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency awarded
Chelsea Collaborative Inc.
cooperative agreements
2A-96107201 and
2A-96104501 in 2009, under
the American Recovery and
Reinvestment Act of 2009, in
the amounts of $1,563,480 and
$357,946, respectively. The
EPA Office of Inspector
General conducted this review
to determine whether CCI
complied with federal
requirements and the terms
and conditions for Diesel
Emissions Reduction Act
grants awarded under the
Recovery Act.
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.aov/oia/reports/2013/
20130822-13-P-0353.pdf
Examination of Costs Claimed Under
EPA Cooperative Agreements 2A-96104501 and
2A-96107201 Awarded Under the Recovery Act to
Chelsea Collaborative Inc., Chelsea, Massachusetts
What We Found
CCI's financial management system supports that funds drawn under the two
cooperative agreements are reasonable, allocable and allowable in accordance
with federal requirements and the terms and conditions for the Diesel Emissions
Reduction Act. However, the system does not meet certain federal requirements
under the Code of Federal Regulations in 40 CFR 30.21, as it was unable to
provide timely financial information and reporting. As a result, there was limited
assurance that the recipient claimed all eligible costs or the financial
management system and Federal Financial Reports reflect the actual costs.
CCI generally complied with the applicable Recovery Act requirements.
We reviewed CCI's compliance with select Recovery Act requirements and
determined that:
	The Buy American requirements under Section 1605 of the Recovery Act
were not applicable.
	The Wage Rate requirements under Section 1606 of the Recovery Act
were met.
CCI's methodology for calculating its estimate of the number of jobs created or
retained with Recovery Act funding did not meet Office of Management and
Budget reporting guidance for Section 1512 of the Recovery Act.
Recommendations and Planned Corrective Actions
We recommend that the regional administrator, Region 1, require CCI to
establish controls to ensure its financial management system complies with the
requirement of 40 CFR 30.21 to provide accurate, current and complete
disclosure, and attend future grant recipient training. We recommend that
Region 1 ensure CCI's calculations for number of jobs created or retained meets
OMB guidance on Recovery Act reporting, and that CCI correct and submit the
number of jobs created or jobs retained documentation. Lastly, we recommend
that Region 1 report the findings in the Grantee Compliance Finding Database.
Region 1 agreed to all the recommendations and provided corrective actions and
completion dates. The recommendations remain open with corrective actions
ongoing. No further response to the report is required.
Noteworthy Achievements
CCI exceeded the expected outcome by repowering 98 diesel transportation
refrigeration units with electric units rather than the 79 originally proposed.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
August 22, 2013
MEMORANDUM
SUBJECT: Examination of Costs Claimed Under EPA Cooperative Agreements
2A-96104501 and 2A-96107201 Awarded Under the Recovery Act to
Chelsea Collaborative Inc., Chelsea, Massachusetts
Report No. 13-R-0353
FROM: Arthur A. Elkins Jr.
TO:	Curt Spalding, Regional Administrator
Region 1
This is our report on the subject examination conducted by the Office of Inspector General of the
U.S. Environmental Protection Agency. This report contains findings that describe the problems the OIG
has identified and corrective actions the OIG recommends. This report represents the opinion of the OIG
and does not necessarily represent the final EPA position.
We performed this examination as part of our responsibility under the American Recovery and
Reinvestment Act of 2009. The purpose of our examination was to determine whether the amounts
drawn by Chelsea Collaborative Inc. under Cooperative Agreements 2A-96104501 and 2A-96107201
were reasonable, allocable and allowable in accordance with federal requirements and terms and
conditions for Diesel Emission Reduction Act grants awarded under the Recovery Act. CCI received
$1,921,426 in Recovery Act funds under the EPA awards.
Action Required
You are not required to provide a written response to this final report because you agreed to all
recommendations and provided corrective actions and completion dates that meet the intent of the
recommendations. The recommendations remain open with corrective actions ongoing. Should
you choose to provide a response to this final report, we will post your response on the OIG's
public website, along with our memorandum commenting on your response. You should provide
your response as an Adobe PDF file that complies with the accessibility requirements of
Section 508 of the Rehabilitation Act of 1973, as amended. We will post this report to our website
at http://www.epa.gov/oig.
If you or your staff have any questions regarding this report, please contact Richard Eyermann, acting
assistant inspector general for the Office of Audit, at (202) 566-0899 or evermann.richard@epa.gov;
or Robert Adachi, product line director, at (415) 947-4537 or adachi.robert@epa.gov.
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Examination of Costs Claimed Under EPA Cooperative Agreements
2A-96104501 and 2A-96107201 Awarded Under the
Recovery Act to Chelsea Collaborative Inc., Chelsea, Massachusetts
13-R-0353
Table of C
Chapters
1	Independent Attestation Report		1
2	Introduction		4
Purpose		4
Background		4
Noteworthy Achievements		5
Follow-Up on Prior Audit Issues		5
3	Financial Management System Does Not Meet
Certain Federal Requirements		6
Recommendations		7
EPA and Recipient Comments		7
OIG Response		8
4	Job Reporting Not In Accordance With OMB Guidance		9
Recommendations		10
EPA and Recipient Comments		10
OIG Response		10
Status of Recommendations and Potential Monetary Benefits		11
Appendices
A CCI Comments on Draft Report		12
B Region 1 Comments on Draft Report 		20
C Region 1 Corrective Milestone Dates 		24
D Distribution		26

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Chapter 1
Independent Attestation Report
As part of our oversight of cooperative agreement awards by the
U.S. Environmental Protection Agency, we have examined Chelsea Collaborative
Inc.'s compliance with the requirements of the Code of Federal Regulations under
Title 2 Part 230, Cost Principles for Non-Profit Organizations; Title 40 CFR
Part 30, Uniform Administrative Requirements for Grants and Agreements with
Institutes of Higher Education, Hospitals, and Other Non-Profit Organizations;
and the American Recovery and Reinvestment Act of 2009 applicable to the
outlays for CAs 2A-96104501 and 2A-96107201. By accepting the funding
provided through the CAs, CCI has responsibility for complying with these
requirements. Our responsibility is to express an opinion on CCI's compliance
based on our examination.
Our examination was conducted in accordance with generally accepted
government auditing standards issued by the Comptroller General of the United
States and the attestation standards established by the American Institute of
Certified Public Accountants. We examined, on a test basis, evidence supporting
management's assertion, and performed such other procedures as we considered
necessary in the circumstances. We believe that our examination provides a
reasonable basis for our opinion.
We made site visits to CCI's office and the New England Produce Center located
in Chelsea, Massachusetts, where the grant activities were carried out, and
performed the following steps:
	Reviewed the grant applications and work plan to determine the scope of
the projects and the budget planned for the project.
	Reviewed award documents and amendments for financial information
and terms and conditions relevant to our review objective for this
Recovery Act grantee.
	Interviewed CCI's personnel to obtain an understanding of the
organization's accounting system, internal controls, Federal Financial
Report preparation process, and costs reported under the CAs.
	Reviewed costs claimed by the recipient on the FFRs to obtain reasonable
assurance that costs complied with the applicable federal laws and
regulations and the CAs' terms and conditions.
	Reconciled CCI's FFRs to its accounting records, profit and loss statement
and reviewed support for cash draws.
	Reviewed documentation to verify the destruction of diesel engines and
conducted an unannounced inventory count to verify the electric engine
replacements at the NEPC.
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	Reviewed CCI's procurement procedures to determine compliance with
40 CFR Part 30. Obtained a list of contractors, subcontractors and vendors
used and reviewed the request for proposals to determine whether
contracts were advertised and awarded in an open and free competitive
process.
	Selected a judgmental sample of four drawdowns for the NEPC grant and
four drawdowns for the Diesel Retrofit grant. We reviewed supporting
documentation for the samples to determine whether the drawdowns were
reasonable, allocable, allowable and properly supported.
	Reviewed CCI's FFR preparation process to ensure FFRs were prepared in
accordance with the applicable laws, regulations and special grant
conditions.
	Obtained and reviewed information to determine whether CCI complied
with Recovery Act requirements, including the Buy American
requirements under Section 1605, Wage Rate requirements under
Section 1606, and report requirements under Section 1512.
As part of obtaining reasonable assurance that the grantee's cost claimed under
the CAs are free of material misstatement, we performed tests of its compliance
with the requirements of 2 CFR Part 230, 40 CFR Part 30, and the terms and
conditions of the CAs. We also considered the grantee's internal controls over
cost reporting to determine our examination procedures and to express our
opinion on the costs claimed. Our consideration of internal control would not
necessarily disclose all internal control matters that might be material weaknesses.
A material weakness is a deficiency, or combination of deficiencies, in internal
control such that there is a reasonable possibility that a material misstatement will
not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that
is less severe than a material weakness yet important enough to merit attention by
those charged with governance.
We conducted our audit work between October 2011 and April 2013.
We determined that the funds drawn under the two CAs (2A-96104501 and
2A-96107201) are reasonable, allocable and allowable in accordance with federal
requirements and the terms and conditions for the Diesel Emissions Reduction
Act. We also determined that the Buy American requirements under Section 1605
of the Recovery Act were not applicable, and that the Wage Rate requirements
under Section 1606 of the Recovery Act were met.
Our examination disclosed internal control weaknesses with CCI's financial
management system and a reporting error. In particular, CCI's:
	Financial management system could not provide timely information and
reporting to ensure compliance with 40 CFR 30.21.
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Reporting of the number of jobs created or retained with Recovery Act
funds did not follow Office of Management and Budget reporting
guidance.
Robert K. Adachi
Director for Forensic Audits
August 22, 2013

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Chapter 2
Introduction
Purpose
The EPA Office of Inspector General conducted this review to determine whether
the amounts drawn under CAs 2A-96104501 and 2A-6107201 are supported by
costs which are reasonable, allocable and allowable in accordance with applicable
laws, regulations and special grant conditions awarded under the Recovery Act
and to obtain reasonable assurance about whether CCI has complied with the
grant requirements and applicable regulations.
Background
DERA was signed into law in August 2005 under Title VII, Subtitle G, of the
Energy Policy Act of 2005. DERA authorized $200 million per year from fiscal
years 2007 to 2011 (a total of $1 billion) for the EPA to fund programs to achieve
significant reduction in diesel emissions in terms of tons of pollution produced
and diesel emission exposures, particularly from fleets operating in areas
designated by the agency as poor air quality areas. Of the authorized DERA
amount, 70 percent is authorized for competitive national grant and low cost
revolving loans, as determined by the EPA Administrator. The remaining
30 percent is for state grant and loan programs. Congress appropriated funds for
the first time under DERA in FY 2008, in the amount of $49.2 million. EPA then
awarded $120 million for FYs 2009-2010 and $49.9 million in FY 2011.
EPA awarded CA 2A-96104501 to CCI on July 10, 2009, to conduct 14 retrofit
and four engine upgrades to city-owned vehicles. EPA awarded CA 2A-96107201
to CCI on July 10, 2009, to repower privately owned stationary cold storage
trailers at the NEPC, the second4argest produce market in the United States.
Under the latter CA, 79 Tier 0 trailer refrigeration units burning off-road diesel
24 hours/day were to be scrapped and 79 new electric-only TRUs, supplied by
new conduit, were to be deployed in their place.
According to the limited review performed for EPA's Office of Grants and
Debarment, CCI was established in 1988 as the Chelsea Human Services
Collaborative. It operates as a Section 501(c)(3) non-profit organization,
incorporated in the Commonwealth of Massachusetts. CCI is a civil rights, human
empowerment and grassroots organizing force for the community of Chelsea,
Massachusetts. CCI's stated purpose is to enhance the social, environmental and
economic health of the community and people. It has created programs to meet
the current needs of the Chelsea community. One such program is called Green
Space, which works to achieve environmental justice by engaging residents,
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environmentalists and health advocates in increasing and improving the amount
and quality of open space, creating public access and educational opportunities
along Chelsea Creek, planting trees, and reducing pollution-related health issues.
The limited review also stated that CCI has about 1,000 regularly involved
members and is governed by a board of directors. The general operations and
programs are managed and performed by an executive director and supporting
staff of nine full-time and 16 part-time employees and interns.
Table 1 provides basic information about the two awards CCI received.
Table 1: DERA awards under the Recovery Act awarded to CCI
Agreement number
and title
Project description
and budget period
Amount of
Recovery Act
funds awarded
CCI's
contribution
2A-96007201
National Diesel
Northeast Produce
Refrigeration
Electrification
Repower privately-
owned stationary
cold storage trailers
June 1, 2009, to
June 30, 2011
$1,563,480
$699,037
2A-96104501
Northeast Diesel
Collaborative
Emissions Reduction
Program
Provide 14 retrofits
and four engines
upgrades
May 1, 2009, to
September 30, 2011
357,946
125,941
Total

$1,921,426
$824,978
Source: EPA CA project files.
Noteworthy Achievements
Under CA 2A-96007201, CCI expected to repower and replace 79 diesel-powered
TRUs at the NEPC. CCI exceeded it expected outcome by repowering 98 TRUs.
Follow-Up on Prior Audit Issues
We reviewed the limited-scope Administrative and Financial Management
System Report issued by Leon Snead & Company, P.C., on behalf of the EPA
Office of Grants and Debarment, dated May 2010. The auditors determined that
there were no written policies and procedures for record retention, code of
conduct and cost share. Their review of the draft policies and procedures found
improvements were needed in the areas of financial management and
procurement. We reviewed CCI's response to the report and verified that the
finalized policies and procedures were approved by the Board of Directors on
June 21, 2010
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Chapter 3
Financial Management System
Does Not Meet Certain Federal Requirements
CCI's financial management system does not meet certain federal requirements
under 40 CFR 30.21 because it was unable to provide timely financial information
and reporting related to its federally sponsored projects. Although CCI ultimately
supported the claimed amounts in its FFRs, its financial management system did
not maintain all information necessary to support the FFRs in a timely manner.
This occurred because CCI:
	Lacked established policies and procedures for recording, processing and
reporting federal funds.
	Had limited experience with federal grant requirements.
	Lacked communication between the financial director and associate
executive director regarding the accounting of grant costs.
As a result, there was limited assurance CCI claimed all eligible costs it incurred
under the CAs, nor that its financial management system and FFRs reflect actual
costs. We reconciled the costs drawn and reported on the FFRs under the CAs to
CCI's financial management system, and found the costs to be compliant with the
applicable federal requirements under the CAs.
Title 40 CFR 30.21 (b) (1), (2) and (3) require recipients to maintain a financial
management system that provides:
	Accurate, current and complete disclosure of the financial results of each
federally-sponsored project or program.
	Records that identify adequately the source and application of funds for
federally sponsored activities. These records shall contain information
pertaining to federal awards, authorizations, obligations, unobligated
balances, assets, outlays, income and interest.
	Effective control over and accountability for all funds, property and other
assets.
CCI's financial management system does not meet certain federal requirements
because it does not provide current (timely) information and complete reporting
of financial results. CCI prepared its FFRs based on financial information and
external documentation maintained outside its accounting system (e.g., Excel
spreadsheet, memorandum records, etc.). Two different employees maintained the
financial and external memorandum records. CCI believed it could manage the
two systems to adequately account for and report federal funds. Only after
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multiple attempts and delays were we able to reconcile the memorandum records
to the FFRs.
Although CCI had written policy and procedures, CCI did not establish written
policies and procedures for recording, processing and reporting federal funds.
Written policies and procedures are an integral component of any internal control
system. CCI acknowledges both the absence and need for written procedures.
Other than the associate executive director and the financial director, no one at
CCI knew how the amounts were calculated and reported on the FFRs. The
associate executive director maintained the Excel spreadsheets and the financial
director maintained the accounting system records. Insufficient communication
between the financial director and executive director regarding the accounting of
grant costs complicated the reconciliation of total costs.
These CAs were CCI's first federal awards under the DERA program and
Recovery Act. Therefore, CCI had limited experience with federal grant
requirements. Since CCI received additional federal funds, it should plan to attend
future training for grantees offered by EPA Region 1, which conducts annual new
grant recipient training.
Recommendations
We recommend that the regional administrator, Region 1:
1.	Prior to awarding CCI any future grants, require CCI to update written
policies and procedures to ensure the use of funding provided under the
agreement is in compliance with 40 CFR Part 30.21. The controls should
ensure:
a.	Accurate, current and complete disclosure of the financial results
of the program funded under the C A.
b.	Records that identify adequately the source and application of
funds provided under the CA.
2.	Require CCI to complete the agency's mandatory non-profit recipient
online training upon award of a future grant.
3.	Report the finding in the Grantee Compliance Findings database.
EPA and Recipient Comments
Region 1 and CCI provided written responses to the draft report on May 23, 2013.
Region 1 supplemented its response with a corrective action plan with estimated
completion dates on June 13, 2013. We held exit conferences with Region 1 and
CCI to discuss the draft report comments and their impact on our final report.
13-R-0353
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The agency agreed with recommendations 1 and 3 and initially disagreed with
recommendation 2. Upon further discussion and additional information, the
agency subsequently agreed that the recipient should be required to take the
agency's mandatory non-profit training upon award of any future grants.
EPA's complete written response is in appendix B, and the corrective action plan
is in appendix C.
CCI's written response did not agree or disagree with findings. However, CCI did
state that it takes the findings seriously and is engaged with the EPA Region 1
grants compliance officer to address OIG recommendations to ensure full
compliance with all requirements of 40 CFR 30.21. CCI's complete written
response is in appendix A.
OIG Response
We agree with the agency's corrective action plan submitted on June 13, 2013,
and believe that, when implemented, the plan should address the
recommendations. We have modified the report accordingly to address the
agency's and recipient's comments to the draft report.
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Chapter 4
Job Reporting Not In Accordance With
OMB Guidance
CCI's methodology for calculating its estimate of the number of jobs created or
retained with Recovery Act funding was not in accordance with OMB reporting
guidance for Section 1512 of the Recovery Act. CCI included non-Recovery Act-
funded hours in its calculations because it did not understand OMB's guidance.
Consequently, CCI did not accurately report the number of jobs created or
retained with Recovery Act funds.
Recovery Act Section 1512 requires recipients to report an estimate of the number
of jobs created and jobs retained by project or activity. OMB is responsible for
providing guidance to federal agencies to improve the quality of data reported
under Section 1512 of the Recovery Act. On December 18, 2009, OMB issued
M-10-08, Updated Guidance on the American Recovery and Reinvestment Act -
Data Quality, Non-Reporting Recipients, and Reporting of Job Estimates. This
update required jobs created or retained to be calculated based on the work hours
funded by the Recovery Act. Recipients of Recovery Act funds should maintain
in their administrative files corrections for erroneous and missing data submitted
in prior quarterly reports. Further, Section 1512 requires Recovery Act fund
recipients to report the estimated number of jobs created and jobs retained by
projects. These reports are due each quarter. The guidance requires recipients to
report job estimates by dividing the hours worked in the reporting quarter by the
hours in a full-time schedule in that quarter.
The number of jobs created or retained by CCI did not follow OMB reporting
guidance. According to OMB guidance, the calculation of jobs created or retained
should only include work hours funded with Recovery Act funds. CCI's
methodology included non-Recovery Act-funded in-kind hours. For the fifth
quarter Diesel Retrofit 1512 and sixth quarter New England Produce Center 1512
report, CCI included 65 and 120 hours, respectively, of non-Recovery Act-funded
in-kind hours.
CCI's associate executive director acknowledged it improperly included 65 hours
in the calculation of jobs created and retained for the Diesel Retrofit Grant, and
included 120 hours for the New England Produce Center Grant. This happened
because CCI often found OMB's guidance on jobs created and retained confusing
and unclear. Further, the guidance was updated a number of times throughout the
course of the CAs. CCI believed all hours worked on the project, regardless of
funding, were to be included in the calculation. As a result, the inclusion of the
in-kind hours in the calculation of the number of jobs created or retained with
Recovery Act funding was not accurately reported in the 1512 quarterly reports.
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Recommendations
We recommend that the regional administrator, Region 1:
4.	Assist CCI with developing a methodology for calculating the number of
jobs created or retained for quarterly reports that meets OMB guidance on
Recovery Act reporting.
5.	Direct CCI to review the calculation of jobs created or retained for all
periods reported and correct those erroneous periods.
6.	Direct CCI to maintain the corrected jobs documentation in administrative
records and submit the correction to the federal government after a
schedule has been established by future Recovery Act guidance.
7.	Report the finding in the Grantee Compliance Findings database.
EPA and Recipient Comments
Region 1 and CCI provided written responses to the draft report on May 23, 2013.
Region 1 supplemented its response with a corrective action plan with estimated
completion dates on June 13, 2013. We held exit conferences with Region 1 and
CCI to discuss the draft report comments and their impact on our final report.
The agency agreed with recommendations 4, 5, 6 and 7, and suggested we modify
the report to include additional language for the issuance of the guidance after
award of the Recovery Act funds and the frequent changes to the guidance by the
agency. The agency also suggested we modify the report to note CCI's
compliance with the Recovery Act reporting requirements with the exception of
the job created and retained calculation. EPA's complete written response is in
appendix B, and the corrective action plan is in appendix C.
CCI agreed it improperly included hours of individuals working on projects paid
for with federal dollars and partner cost share and stated it will correct any job
creation and retention documents required by the EPA. CCI noted in its response
that OMB's guidance on determining the number of jobs created was often
confusing and unclear, and that guidance was updated throughout the course of
the grants. CCI's complete written response is in appendix A.
OIG Response
We agree with the agency's corrective action plan submitted on June 13, 2013,
and believe that, when implemented, it should address the recommendations.
We have modified the report accordingly to address the agency's and recipient's
comments to the draft report.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
Claimed
Amount
Ag reed-To
Amount
7 Prior to awarding CCI any future grants, require
CCI to establish written policies and procedures to
ensure the use of funding provided under the
agreement is in compliance with 40 CFR Part
30.21. The controls should ensure:
a.	Accurate, current and complete disclosure of
the financial results of the program funded
under the CA.
b.	Records that identify adequately the source
and application of funds provided under
the CA.
7 Require CCI to complete the agency's mandatory
non-profit recipient on-line training upon award of a
future grant.
7 Report the finding in the Grantee Compliance
Findings database.
10 Assist CCI with developing a methodology for
calculating the number of jobs created or retained
for quarterly reports that meets OMB guidance on
Recovery Act reporting.
10 Direct CCI to review the calculation of jobs created
or retained for all periods reported and correct
those erroneous periods.
10 Direct CCI to maintain the corrected jobs
documentation in administrative records and
submit the correction to the federal government
after a schedule has been established by future
Recovery Act guidance.
10 Report the finding in the Grantee Compliance
Findings database.
Regional Administrator,
Region 1
December
2013
Regional Administrator,
Region 1
Regional Administrator,
Region 1
Regional Administrator,
Region 1
Regional Administrator,
Region 1
Regional Administrator,
Region 1
Regional Administrator,
Region 1
December
2013
March 2014
December
2013
March 2014
March 2014
June 2014
O = recommendation is open with agreed-to corrective actions pending
C = recommendation is closed with all agreed-to actions completed
U = recommendation is unresolved with resolution efforts in progress
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Appendix A
CCI Comments on Draft Report
\ Chelsea Collaborative
Jifif * Empowering People,
&uildin$ Our Community,
May 23, 2013
Mr. Robert K. Adachi
Director of Forensic Audits
Ms. Jean Bloom
US EPA Office of Inspector General
5 Post Office Square, Suite 100
OIG 15-1
Boston, MA 02109-3912
Dear Mr. Adachi and Ms. Bloom:
On behalf of the Board of Directors and staff of the Chelsea Collaborative, Inc., we thank you for this
opportunity to share our written response to the Office of Inspector General's (OIG) Draft Report
Examination of Costs Claimed Under EPA Cooperative Agreements 2A-96104501 and 2A-96107201
Awarded Under the Recovery Act to Chelsea Collaborative, Inc., Project Number OA-FY11-0061.
We're pleased that the Office of Inspector General (OIG) found the Chelsea Collaborative's "costs to be
compliant with the applicable federal requirements" and that the Chelsea Collaborative "exceeded the
expected outcomes by repowering 90 diesel transportation refrigeration units with electric units rather
than the 79 originally proposed."1 The Chelsea Collaborative offers the following correction to the OIG
report. The total number of transportation refrigeration units repowered through the two projects
was 98 rather than 90. The Chelsea Collaborative's success with the two diesel emissions reductions
projects has been recognized by the EPA as a 2012 Breathe Easy Award Recipient, as the highlighted
success story for EPA Region 1 Recovery Act Projects and through site visits from the US EPA and US OIG
national offices.
The Chelsea Collaborative takes this report's findings seriously and is engaged in a process with the US
EPA Region 1 Grants Compliance Officer to address OIG recommendations to ensure full compliance
with all requirements of 40 CFR 30.21. The Chelsea Collaborative also will correct any job creation and
retention documents required by the US EPA.
1 Examination of Costs Claimed Under EPA Cooperative Agreements 2A-96104501 and 2A-96107201 Awarded Under the Recovery Act to Chelsea
Collaborative, Inc. OA-FY11-A-0061 At a Glance
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Background on Chelsea Collaborative
The Chelsea Collaborative, Inc. (the Collaborative), founded in 1988, is a not-for-profit organization
dedicated to the needs of the community of Chelsea. Our mission is to enhance the social,
environmental and economic health of the community and its people. We achieve our mission through
community organizing and education. The Collaborative sees organizing as a way to build community
and achieve lasting change.
The Collaborative's environmental justice work is carried out by the Chelsea Green Space and Recreation
Committee (Green Space), a grassroots community committee that receives staffing support from the
Collaborative. Green Space votes on and carries out its own work plan. It was established in 1994 when
precious open space was built upon for the construction of new schools in Chelsea. In 1996, Green
Space became engaged in large-scale environmental justice and public health campaigns. The work
supported by the two economic stimulus grants 2A-96104501 (diesel retrofit grant) and 2A-96107201
(New England Produce Center grant) were efforts to reduce diesel air emissions and to bring about a
cleaner and healthier environment for all in Chelsea.
Chelsea: Environmental Injustice and Compromised Public Health
Chelsea, at 1.8 square miles, is the smallest city in the state of Massachusetts and one of the most
densely populated in the nation. With almost 40,000 residents living within just over a third of the city's
total land (only 37.6% of the city is zoned for residential uses), one can see that there is limited open
and green space for residents to recreate, relax and enjoy the environmental benefits that so many
other communities take for granted.
Approximately 75% of Chelsea residents identify as Hispanic, Black or African American, American
Indian, Alaskan Native, Asian and Native Hawaiian or other Pacific Islander. Chelsea's economic reality is
stark. The median household income for Chelsea is $40,487 compared to a statewide median of
$64,509. Similarly, 24% of Chelsea people live below the poverty level compared to 10.5% for the State
of Massachusetts.
The Executive Office of Environmental Affairs Environmental Justice Policy classifies every single
neighborhood in Chelsea as an environmental justice population.2 According to Dr. Daniel R. Faber and
Dr. Eric Krieg, Chelsea is the 3rd most intensively overburdened community in Massachusetts.3
Along the Chelsea Creek, more than 123 million gallons of petroleum product are stored for regional
use. All of the jet fuel used at Logan International Airport and 70-80%4 of the New England Region's
heating needs are stored in tanks owned by Global, Gulf Oil and Conoco Philips. In addition to the
numerous sources of pollution located along the Chelsea Creek, Chelsea residents must deal with
elevated levels of air emissions. Chelsea's level of diesel exhaust exceeds the EPA's reference
concentration by 20%.5 According to the Clean Air Task Force (CATF), Chelsea is in the highest category
for expected lifetime cancer cases from diesel pollution. More than 501 people in Chelsea are likely to
develop cancer from diesel pollution, compared to locations like Nantucket which could expect
2 www.mass.gov/envir/ej
Faber, Dr. Daniel R., and Dr. Eric J. Krieg, Unequal Exposure to Ecological Hazards 2005: Environmental Injustices in the Commonwealth of
Massachusetts, page 48, October 12, 2005.
4 Boston Harbor Association
www.epa.gov/ne/eco/airtox/diesel.html
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anywhere from zero to 30 cancer cases.6 Chelsea has the highest rate of strokes, heart disease and
major cardiovascular disease when compared to Boston, Medford, Everett, Maiden, Revere, Somerville,
Winthrop and Cambridge. These rates are statistically significantly higher than all cities and towns
within Route 128 and statistically significantly higher than the state of Massachusetts as a whole.7
Chelsea's rate of hospitalizations for all respiratory illnesses for children ages 0 -14 is 54% higher than
the state of Massachusetts; and likewise is 53% higher for seniors ages 65 and older.8
Background on How the Collaborative Sought EPA Funding
Living and working in Chelsea, Green Space members understood that Chelsea was not the model of
good health and a clean environment. However, when a dirty diesel power plant was proposed for the
banks of the Chelsea Creek, members learned just how bad Chelsea's ambient air was - even before the
introduction of a new major source of air pollution. Using Mass Chip data, state air quality data and EPA
non-attainment information, activists became even more aware of just how dire Chelsea's air quality
problem was. Green Space organized a successful grassroots campaign with widespread support to stop
the permitting and construction of the power plant. Green Space and the entire community of Chelsea
celebrated the victory; however the revel was short-lived. Given the bleak air quality data, Green Space
immediately launched an air quality campaign to reduce pollutants, particularly those caused by diesel
engines.
In June 2008, working with health institutions, businesses, community partners and other key
stakeholders in Chelsea, Green Space decided to apply to the EPA's Diesel Emissions Reduction Act
(DERA) National Funding Assistance Program to retrofit municipal vehicles in Chelsea. Unfortunately
that initial application was denied.
Green Space members continued to work on diesel emission reductions and identified the New England
Produce Center (NEPC) as a significant source of diesel air pollution. NEPC is the second largest produce
distribution center in the nation. With more than 35 companies, the NEPC provides produce to much of
New England and the Mid-Atlantic States. Working with the NEPC Management and Board of Directors,
Green Space identified stationary cold storage trailers as a significant source of diesel emissions. The
trailers, also known as Transportation Refrigeration Units (TRUs), are cab-less, non-road worthy trucks
that provide additional storage space for produce. The TRUs must be temperature controlled. Prior to
our work, this climate control was provided through the use of diesel engines. The engines typically
were tier 0 engines utilizing red fuel, or diesel fuel with the highest content of sulfur. The fuel is dyed
red to ensure it is not used for on-road vehicles. These engines would operate twenty-four hours a day,
every day of the year to cool or warm the trailers.
Seeing the TRUs as significant contributors to air pollution and understanding Green Space members'
concerns, the Collaborative decided once again to apply for funding from the EPA's DERA funding
6 Clean Air Task Force database used The Lingering Threat Report (2005)
MassCHIP, Massachusetts Department of Public Health, Rote of Hospitalizations for Circulatory Conditions, 1990 - 2003 prepared by Professor
Neenah Estrella-Luna, PhD
8 MassCHIP, Massachusetts Department of Public Health, Rate of Hospitalizations for Respiratory Illnesses, 1990-2003 prepared by Professor
Neenah Estrella-Luna, PhD
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initiative. At this time in April 2009, economic stimulus funding was made available to achieve further
reaching goals with the DERA program. The Collaborative was successful in its application to repower
TRU engines at NEPC (EPA project No. 2A-96107201). In addition, EPA staff reached out to the
Collaborative to invite us to re-apply for funding for the retrofit grant that was denied the prior year. In
April 2009, the Collaborative sent a revised proposal requesting funding to retrofit municipal and private
vehicle fleets in Chelsea. That retrofit grant was favorably awarded (EPA project No. 2A-96104501).
Both grants began in July 2009.
Grant Management, Oversight and Results
The Collaborative is a small non-profit that focuses on community organizing and empowerment
projects to make lasting changes in Chelsea. Though the organization has grown since its inception in
1988, it remains a small community-based agency. Presently, the Collaborative has a team of nine full
time staff. During the implementation of the two EPA grants, the Collaborative had even fewer full time
staff. The Collaborative's annual operating budget for the past five years has not exceeded $1,598,089.
This encompasses all of the various programs, full and part-time staff and a summer youth employment
initiative which hires 250 youth each summer.
The two DERA grants far exceeded the total organizational budget of the Collaborative. The sum of the
federal share of the two grants totaled $1,921,426. Further, the original goals for project match totaled
$494,870. The Collaborative completed both DERA projects with 100% success and far exceeded
original goals. The Collaborative secured $322,722 in additional project match for the two projects
resulting in final cost share of $817,592. Rather than repower 79 TRU engines as proposed in April 2009,
the Collaborative completed 98 TRU engine repowers at NEPC; implemented emission control
technology and repowered engines on eleven vehicles owned privately and publicly (by the City of
Chelsea); and leveraged diesel emissions control technology on five additional vehicles. More than forty
individual pieces of equipment (delivery trucks, construction vehicles, marine vessels and TRUs) from
twelve fleets were evaluated for inclusion in our project.
The projects also leveraged additional air quality benefits in Chelsea through the following outcomes: 1)
Eastern Minerals converted its non-road fleet to ultra-low sulfur diesel; 2) Eastern Minerals made fleet
improvements and overhauls of its non-road fleet; and 3) five additional vehicles were retrofitted with
diesel oxidation catalysts with funding provided by NESCAUM (mentioned above).
In short, our efforts were successful and achieved lasting results. The tables below demonstrate the
qualitative air quality improvements of these two projects.
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CHELSEA COLLABORATIVE - TRU REPOWER PROJECT

NEPC TRU
REDUCTION
Annual
(tons/yr)
EMISSION
S (98 eTRUs)
10 year
Value
[S/ton)1'2
TOTAL
Annual
VALUE
10-year
PM
5.5
54. S
$1,400,000
$7,670,395
$76,703,951
NOx
32.3
322.5
$3,900
$125,790
$1,257,398
VOC
8.8
88.0
$1,700
$14,961
$149,612
CO
23.9
239.3
$0
$0
$0
coz
954.9
9,549.3
$7
$6,685
$66,845
TOTAL
$7,817,831
$78,178,305
x U.S. Department of Transportation, National Highway Traffic Safety Administration, Draft
Environmental (mpact Statement, Corporate Average Fuel Economy Standards, Passenger
Cars and Light Trucks, Model Years 2011-2015, June 2008, Appendix C, Table VHI-B (Emission
Damage Costs) (For NOx, VOC, CO & COz)
' PM Emission Damage Costs came from the EPA Diesel Emission Quantifier specifically for
Suffolk County, MA
CHELSEA COLLABORATIVE - DPW, Fire Engine and Eastern Mineral Repower and Retrofits

Annual
Reduction
[ton]
TOTAL
REDUCTION [ton]
Value
TOTAL VALUE

Chelsea
Retrofits
Annual
10
year
[$/ton]1,2
Annual
10-year
PM
0.72
0.7
7.2
$1,400,000
$1,013,600
$10,136,000
NOx
4.65
4.6
46.5
$3,900
$18,119
$181,194
VOC
1.41
1.4
14.1
$1,700
$2,400
$24,004
CO
16.27
16.3
162.7
$0
$0
$0
C02
78.00
78.0
780.0
$7
$546
$5,460
TOTAL
$1,034,666
$10,346,658
1	U.S. Department of Transportation, National Highway Traffic Safety Administration, Draft
Environmental Impact Statement, Corporate Average Fuel Economy Standards, Passenger
Cars and Light Trucks, Model Years 2011-2015, June 2008, Appendix C, Table Vlll-B (Emission
Damage Costs) (For NOx, VOC, CO & C02)
2	PM Emission Damage Costs came from the EPA Diesel Emission Quantifier specifically for
Suffolk County, MA
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The success of these grants was celebrated by the US EPA with a visit from Deputy Administrator Bob
Perciasepe in September 2010. Accompanying Mr. Perciasepe were Region 1 Administrator Curt
Spalding, MA Department of Environmental Protection (DEP) Commissioner Laurie Burt, Jeffrey Simon
Director of Massachusetts Recovery and Reinvestment Office and other elected officials. The NEPC
project was highlighted in a video entitled "Chelsea New England Produce Center EPA Clean Diesel TRU
Project" and featured on EPA's website http://www.epa.gov/regionl/eparecovery/.
Photo from US EPA Headquarters Check Presentation
From L- R:
Mark DeMichaelis, NEPC Vice President, Jeffrey Simon Director, MA Recovery and Reinvestment Office, MA Senator Sal
DiDomenico, Peter D'Arrigo, NEPC President, Chelsea City Manager Jay Ash, Roseann Bongiovanni, US EPA Deputy
Administrator Bob Perciasepe, Green Space member Cate Maas, US Region 1 Administrator Curt Spalding and MA DEP
Commissioner Laurie Burt
In addition, the Collaborative was a recipient of the US EPA's Breathe Easy Award in April 2012 for its
success on these two important projects; and the US EPA has highlighted this work as the Top Recovery
Project Success Story for Region 1.
Response to OIG Chapter 3: Financial Management System Does Not Meet Federal Requirements
The Collaborative feels strongly that this chapter is improperly titled and unnecessarily harsh. The
Collaborative underwent pre-award certification from the EPA regarding our administrative procedures;
and we had an Advance Monitoring Review of our administrative systems. That Review was successfully
closed due to our administrative capabilities being compliant with EPA requirements.
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Though the title of this section alludes to a complete failure by the Collaborative's financial
management system, the main statement of this section proves that the Collaborative's costs were fully
justified and the grant was carried out appropriately and correctly. The OIG states that the Collaborative
did "support [...] the claimed amounts in the FFRs" and [the Collaborative's] "costs [were] compliant
with the applicable federal requirements under the CAs."
The OIG's criticism focused on not having the documentation in a timely manner. While the
Collaborative agrees that the documentation may not have been provided as quickly as the OIG may
have liked, all appropriate documentation was provided to the auditors as quickly as possible. As stated
earlier, the Collaborative is a small organization with few staff who carry out multiple roles on many
different projects and administrative duties. The Financial Director works part-time and the Associate
Executive Director, who was the primary manager of the grants, works in office three days per week and
began working with the OIG auditors on her first day back to work after a three-month maternity leave.
All staff involved in the audit worked expeditiously and thoroughly to meet the requests of OIG auditors.
The Collaborative partially agrees that it had limited experience with federal grant requirements. While
the Collaborative did have experience with federal grants; the Collaborative did not have any experience
with the additional requirements of the economic stimulus funded grants. Collaborative staff
participated in all required trainings and worked with grant officers to ensure full compliance with all
grant requirements. The Recovery Act required many more staff hours to complete two sets of quarterly
reports per grant and jobs analysis in addition to the standard EPA forms and reports. The Collaborative
is proud of its work in meeting all deadlines and completing the required reports timely and accurately.
Response to OIG Chapter 4: Grantee Did Not Comply With Recovery Act and OMB Reporting
Requirements
The Collaborative recognizes that it did improperly include, on two quarterly reports (out of seven total
reports), hours of persons working on the two projects who were paid for with federal dollars and
partner cost share (rather than the hours just covered by federal dollars). However, the OMB guidance
on determining the number of jobs created was often confusing and unclear. In addition, the OMB
issued guidance on how grantees were to determine the job creation seven months after the grants
were awarded. Further, there were a number of updates made to this guidance throughout the course
of the Collaborative's grants. While minor errors may have been made in this area, it is again
unnecessary and harsh to suggest that the Collaborative "did not comply with Recovery Act and OMB
Reporting Requirements." This statement simply is not true and negatively characterizes the
Collaborative and the great work it accomplished.
Response to OIG Recommendations:
Though most of the recommendations in the report are for EPA Region 1, the Collaborative takes the
OIG report and recommendations seriously and will work with all parties, as it has in the past, to ensure
the Collaborative is fully compliant with all grant requirements. As stated above, the Collaborative is
engaged in a process with the US EPA Region 1 Grants Compliance Officer to address OIG
recommendations to ensure our financial management system complies with all requirements of 40 CFR
30.21. In addition, the Collaborative also will correct any job creation and retention documents required
by the US EPA.
Conclusion:
The OIG does little to highlight the Collaborative's achievements in implementing two significant DERA
projects. The Collaborative achieved ambitious results on time and on budget; and accomplished more
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aggressive air quality benefits than originally projected. As stated above, the US EPA and the
Massachusetts Office of Reinvestment and Recovery underscored this great work through various
accolades, awards and with their visit in September 2010. The OIG also came to Chelsea to see the
accomplishments of the NEPC Project.
The board and staff of the Collaborative find it necessary to stress the fact that we carried out these two
impressive projects with limited staffing resources. Of the more than $1.9 million in federal funding,
only $81,730 of the total was used for personnel and fringe to manage and implement these projects
and complete all reporting requirements. That totals 4.25% of the total federal share of the projects.
The Collaborative feels that one of the reasons why our grant proposals were successful was due to the
fact that DERA grant scoring criteria favored applications with slender administrative budgets in order to
maximize funds dedicated to equipment upgrades. As you can see from the above numbers, the
Collaborative's administrative budget was in fact slender. In general, ARRA DERA recipients began their
projects with relatively slender personnel budgets, and in Chelsea's specific case we worked under
budget to comply with reporting requirements and other administrative tasks that were imposed (and
periodically tweaked) after the grants were awarded and closed out including the lengthy and time
consuming process of the OIG audit. A main section of the OIG report focuses on not having information
from the Collaborative in a "timely manner." The Collaborative; however, has been awaiting the OIG
draft report for more than eight months.
In closing, we strongly believe we accomplished great results with very limited staffing resources. The
OIG's draft report, if not amended, will negatively impact future federal funding opportunities for the
Collaborative. Thank you for this opportunity to provide a written response to the OIG draft report.
Sincerely,


Rosalba Medina	Gladys Vega	Roseann
Bongiovanni
Collaborative Board President	Executive Director	Associate
Executive Director
Cc: Curt Spalding, EPA Region 1 Administrator
Ira Leighton, EPA Region 1 Deputy Regional Administrator
Valerie Marshall, EPA Region 1 Grants Compliance Office
Abby Swaine, EPA Region 1 Grant Project Officer
Marge Miranda, EPA Region 1 Grant Project Officer
Chelsea Collaborative Board of Directors
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Appendix B
Region	1 Comments
Q
W
 	 \
MEMORANDUM
FROM: Michael Kenyon, EPA Region 1, Assistant Regional Administrator
TO: Arthur A. Elkins, Jr. Inspector General
DATE: May 23, 2013
OIG Project Number: OA-FY11-A-0061
SUBJECT: Examination of Costs Claimed Under EPA Cooperative Agreements 2A-96104501 and
2A-96107201 Awarded Under the Recovery Act to Chelsea Collaborative Inc., April 8, 2013
Thank you for the opportunity to respond to the issues and recommendations in the above
referenced OIG Draft Audit Report.
Below is a summary of the Agency's overall position, along with its position on each of the draft
Audit Report recommendations. For those report recommendations with which the agency
agrees, we have provided the status of the recommendation, the Agency's explanation and
proposed alternatives. For those report recommendations with which the agency does not
agree, we have explained our position and proposed alternatives to the recommendations.
AGENCY'S OVERALL POSITION
The R1 AFC gathered regional input on the draft Audit report and held a conference call with
the OIG Auditors to discuss the Region's concerns regarding this report. She presented the
general view of the Region that Chelsea Collaborative is one of the Region's show case
recipients and that the regional staff was concerned that the recipient needs to be accurately
portrayed in the report because this report will be made public and the region does not want to
see this recipient negatively impacted from this report. She mentioned that this is one of the
recipients that has been able to do more with less and that we want to continue to support the
work they do.
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OIG'S OVERALL RESPONSE TO THE REGION'S CONCERNS
After hearing the Region's concerns, the Auditor's agreed that there are several instances
where the report needs to have a more balanced approach and that word-smithing is
appropriate to change the tone of the report. They agreed that the recipient needs to develop
some procedures, but, that they were in a general a good recipient and the report did not
reflect that there were procedures in place. The OIG was very receptive to the Region's
concerns and was open to amending the report to reflect the Region's concerns.
AGENCY'S RESPONSE TO REPORT RECOMMENDATIONS:
AGREEMENTS-The proposed alternatives have been shared with the OIG Auditors. The OIG was
open to working with the Region and the OIG indicated that the final report would address a
vast majority of the regional concerns. This agreement was documented in a memo. The Region
is not submitting the memo at this time. It may submit the memo as a technical document to
the final report depending on how well the Region's concerns are addressed in the final report.
No.
Recommendation
Status
Agency
Explanation/
Response
Proposed
Alternative
1
Prior to awarding CCI any future grants,
require CCI to establish written policies
and procedures to ensure the use of
funding provided under the agreement is
in compliance with 40 CFR Part 30.21 The
controls should ensure:
a.	Accurate, current, and complete
disclosure of the financial results of
the program funded under the CA.
b.	Records that identify adequately
the source and application of funds
provided under the CA.
0
The Regional Grants
Compliance Officer
is working with CCI
to assist them with
amending its written
accounting
procedures to
address the OIG
recommendations.
Language should
be added to the
OIG draft report to
reflect that CCI
had written
procedures.
However, the
procedures need
to be revised to
address this
recommendation.
3
Report the finding in the Grantee
Compliance Findings database.
0
This is standard
protocol required
under the 2750
manual.

4
Assist CCI with developing a methodology
for calculating the number of jobs created
or retained for quarterly reports that
meets OMB guidance on Recovery Act
reporting.
0
CCI has corrected
this problem.
Language should
be added to the
report to reflect
that the ARRA
funds were
awarded prior to
the Agency issuing
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guidance.
Moreover, the
guidance that was
issued was
frequently
amended or
revised by the
Agency. The
report should
reflect that CCI
complied with all
the ARRA
reporting
requirements
except this one.
5
Direct CCI to review the calculation of jobs
created or retained for all periods
reported and correct those erroneous
periods.
0
CCI has corrected
this problem.

6
Direct CCI to maintain the corrected jobs
documentation in administrative records
and submit the correction to the federal
government after a schedule has been
established by future Recovery Act
guidance.
0
The Agency's Grants
Compliance Officer
will work with CCI to
address this
recommendation

7
Report the finding in the Grantee
Compliance Findings database.
0
This is standard
protocol required
under the 2750
manual.

D
SAGREEMENTS
2
Prior to awarding CCI any future grants,

CCI did attend the
CCI should be

require CCI to attend future grant

mandatory non-
awarded future

recipient training.

profit training.
grants and the
Agency will
encourage CCI to
attend training
that is made
available to non-
profit recipients
This
recommendation
should be changed
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to reflect that the
recipient did
participate in the
required
mandatory grant
training
O = recommendation is open with agreed-to corrective actions pending
C = recommendation is closed with all agreed-to actions completed
U = recommendation is unresolved with resolution efforts in progress
CONTACT INFORMATION:
If you have any questions regarding this response, please contact Valerie Marshall, EPA Region 1
Audit Follow-up Coordinator.
cc: Jean Bloom: OIG Project Auditor
Cara Lindsey, OIG Project Auditor
Abby Swaine, EPA R1 Project Officer
Jean Crocker, EPA R1 Grants Specialists
Valerie Marshall, EPA R1 Audit Follow-up Coordinator
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Appendix C
Region 1 Corrective Milestone Dates
^EDSrx
* M \
MEMORANDUM
FROM: Michael Kenyon, EPA Region 1, Assistant Regional Administrator
TO: Arthur A. Elkins, Jr. Inspector General
DATE: June 13, 2013
OIG Project Number: OA-FY11-A-0061
SUBJECT: Examination of Costs Claimed Under EPA Cooperative Agreements 2A-96104501 and
2A-96107201 Awarded Under the Recovery Act to Chelsea Collaborative Inc., April 8, 2013
This memo is a follow-up to the Agency's response submitted on May 23, 2013. Based on our
discussions with the OIG during the exit conference, the Agency was able to develop a
Corrective Action Plan for the recommendations identified in the above referenced draft
report.
The agency agrees with the report recommendations as amended per our discussion during the
exit conference and is submitting the high-level intended corrective actions and estimated
completion dates. The following Corrective Action Plan supplements the Agency's response
submitted on May 23, 2013:
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No.
Recommendation
Estimated Completion by
Quarter and FY
1
Prior to awarding CCI any future grants, require CCI to establish
written policies and procedures to ensure the use of funding
provided under the agreement is in compliance with 40 CFR
Part 30.21 The controls should ensure:
a.	Accurate, current, and complete disclosure of the
financial results of the program funded under the CA.
b.	Records that identify adequately the source and
application of funds provided under the CA.
1st Quarter FY 2014
2
**Require CCI to complete the Agency's mandatory non-profit
recipient training, upon award of any future grants.
1st Quarter FY 2014
3
Report the finding in the Grantee Compliance Findings
database.
2nd Quarter FY 2014
4
Assist CCI with developing a methodology for calculating the
number of jobs created or retained for quarterly reports that
meets OMB guidance on Recovery Act reporting.
1st Quarter FY 2014
5
Direct CCI to review the calculation of jobs created or retained
for all periods reported and correct those erroneous periods.
2nd Quarter FY 2014
6
Direct CCI to maintain the corrected jobs documentation in
administrative records and submit the correction to the federal
government after a schedule has been established by future
Recovery Act guidance.
2nd Quarter FY 2014
7
Report the finding in the Grantee Compliance Findings
database.
3rdQuarter FY 2014
** Recommendation amended based on discussions with the OIG. It may not reflect the exact
language used by the OIG in the final report, due to the OIG clearance yet to occur for the final
report.
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Distribution
Regional Administrator, Region 1
Deputy Regional Administrator, Region 1
Director, Grants and Interagency Agreements Management Division,
Office of Administration and Resources Management
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
Audit Follow-Up Coordinator, Region 1
Public Affairs Officer, Region 1
Executive Director, Chelsea Collaborative Inc.
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