U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Alleged Misuse of Tribal
Clean Water Act Section 106
Funds in EPA Region 8
Report No. 12-P-0453
May 4, 2012

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Report Contributors:
Patrick Gilbride
Erin Barnes-Weaver
Todd Goldman
Abbreviations
CWA
Clean Water Act
EPA
U.S. Environmental Protection Agency
FY
Fiscal year
OIG
Office of Inspector General
ROC
Regional Operations Committee
STAG
State and Tribal Assistance Grants
TAP
Tribal Assistance Program
USGS
U.S. Geological Survey
WQX
Water Quality Exchange
Hotline
To report fraud, waste, or abuse, contact us through one of the following methods:
e-mail:	OIG Hotiirie@epa.aov	write: EPA Inspector General Hotline
phone:	1-888-546-8740	1200 Pennsylvania Avenue NW
fax:	202-566-2599	Mail code 2431T
online:	http://www.epa.aov/oia/hotline.htm	Washington, DC 20460

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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
12-P-0453
May 4, 2012
Why We Did This Review
This review responds to a
hotline complaint on alleged
misuse of Clean Water Act
(CWA) Section 106 funds in
U.S. Environmental Protection
Agency (EPA) Region 8. The
complaint alleged that Region 8:
(1) withheld funds meant for
tribal programs; (2) provided
funds to the U.S. Geological
Survey and used funds for a
water quality database that
neither benefitted tribes nor had
their approval; and (3) provided
ineffective tribal support by
separating decision making
between two offices.
Background
CWA Section 106 authorizes
EPA to provide federal
assistance (in the form of water
pollution control program
grants) to Indian tribes to
establish and implement
ongoing water pollution control
programs. There are 23 tribal
governments in Region 8
eligible to receive CWA Section
106 water pollution control
program grants.
For further information, contact
our Office of Congressional and
Public Affairs at (202) 566-2391.
The full report is at:
www.epa.gov/oiq/reports/2012/
20120504-12-P-0453. pdf
Alleged Misuse of Tribal Clean Water Act
Section 106 Funds in EPA Region 8
What We Found
On the first allegation, we found that Region 8 funded tribal Section 106
programs based on the region's review of tribal work plans and did not
inappropriately withhold funds. Region 8 frequently determined that tribal work
plans did not warrant the level of funds requested and, therefore, did not award
all program funds to the tribes.
On the second allegation, Region 8 provided evidence that both the interagency
agreement and water quality database benefit the tribes. However, Region 8
does not have an effective method for gaining tribal approval to use Section 106
funds for special projects/associated program support costs.
On the third allegation, we found that Region 8 properly followed Agency
guidance by housing regional program managers separately from the regional
grants management office, but there were opportunities for improvement. The
region had taken steps to improve cross-office coordination and communication
before we started our review.
What We Recommend
We recommend that the Office of Water develop guidance on the use of
Section 106 tribal grants funds for associated program support costs, similar to
that developed by EPA's Office of Air and Radiation for Clean Air Act Section
105. We also recommend that Region 8 develop guidance to formalize the
process by which the region gains approval from tribes for associated program
support costs funded with Section 106 program funds. Further, we recommend
that Region 8 evaluate the effectiveness of the region's team approach to tribal
technical assistance—as part of regional guidance—by querying tribal Regional
Operations Committee members and making adjustments as needed based on
tribal feedback.
Planned Agency Corrective Actions
The Office of Water and Region 8 concurred with our recommendations and
described planned actions to address our recommendations. Our
recommendations remain unresolved pending planned completion dates on
actions to address our recommendations.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
May 4, 2012
MEMORANDUM
SUBJECT: Alleged Misuse of Tribal Clean Water Act Section 106 Funds in EPA Region 8
Report No. 12-P-0453
This is our report on the subject audit conducted by the Office of Inspector General (OIG) of the
U.S. Environmental Protection Agency (EPA). 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.
Final determinations on matters in this report will be made by EPA managers in accordance with
established audit resolution procedures.
Action Required
In accordance with EPA Manual 2750, you are required to provide a written response to this
report within 90 calendar days. You should include a corrective actions plan for agreed-upon
actions, including milestone dates. We will post your response on the OIG's public website,
along with our memorandum commenting on your response. Please 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. The final response should not contain data that you do
not want released to the public; if your response contains such data, you should identify the data
for redaction or removal. We have no objections to the further release of this report to the public.
We will post this report to our website at http ://www.epa. gov/oig.
FROM: Arthur A. Elkins, Jr.
TO:
Nancy K. Stoner
Acting Assistant Administrator for Water
James B. Martin
Regional Administrator, Region 8
If you or your staff have any questions regarding this report, please contact Melissa Heist at
(202) 566-0899 or heist.melissa@,epa.gov, or Patrick Gilbride at (303) 312-6969 or
gilbride.patrick@,epa. gov.

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Alleged Misuse of Tribal Clean Water Act	12-P-0453
Section 106 Funds in EPA Region 8
	Table of Contents	
Purpose	 1
Background	 1
Clean Water Act Section 106	 1
EPA Region 8 Organization	 2
Tribal and Regional Operations Committees	 2
Associated Program Support Costs	 3
Scope and Methodology	 3
Results of Review	 4
Allegation #1: Region 8 Withheld Funds Intended for Tribal Programs		4
Allegation #2: Region 8 Used Funds for Projects That Neither Benefitted
Tribes nor Had Their Approval	 5
Allegation #3: Region 8 Separated Decision Making Between Two Offices	 8
Recommendations	 9
Agency Comments and OIG Evaluation	 10
Status of Recommendations and Potential Monetary Benefits	 11
Appendices
A Agency's Response to Draft Report	 12
B Distribution	 16

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Purpose
On June 6, 2011, the U.S. Environmental Protection Agency (EPA) Office of
Inspector General (OIG) received a hotline complaint alleging misuse of tribal
Clean Water Act (CWA) Section 106 funds in Region 8. The complaint alleged that:
1.	Region 8 inappropriately withheld tribal grant funds.
2.	Region 8 used funds for activities that neither benefitted tribes nor had
their approval; these activities involved an interagency agreement with the
U.S. Geological Survey (USGS) and a contract with a service provider to
support the Water Quality Exchange (WQX) database.
3.	Region 8 separated tribal decision making between two different offices.
Our review addressed the three allegations by determining whether Region 8
followed appropriate guidance for funding activities other than tribal grants with
Section 106 tribal funds.
Background
Clean Water Act Section 106
Congress passed the CWA of 1972 to address growing environmental and public
health concerns related to water pollution. The Act created mechanisms to
regulate the discharge of pollutants and to ensure continuing water quality. CWA
Section 106 authorizes EPA to provide federal assistance (in the form of water
pollution control program grants) to states and Indian tribes to establish and
implement ongoing water pollution control programs.
On October 20, 2006, EPA published Final Guidance on Awards of Grants to Indian
Tribes under Section 106 of the Clean Water Act: For Fiscal Year 2007 and Future
Years. The goal of the guidance is to help tribal water quality program managers,
staff, and others design and implement effective and successful water quality
programs. The guidance also provides EPA regions procedures and guidelines for
awarding and administering grants to federally recognized tribes. Reporting
requirements and data management expectations for all tribal programs are a key
component of the guidance. As a grant requirement, tribes must submit annual Tribal
Assessment Reports that contain information about water quality on tribal land,
which is compiled by EPA to demonstrate national results for the Section 106 tribal
program. A Tribal Assessment Report must have (1) a description of the monitoring
strategy, (2) a water quality assessment, and (3) electronic copies of water quality
data. EPA's WQX database houses water quality monitoring data collected by water
resource management groups across the country.1
1 The guidance initially required that water quality monitoring data be submitted in an electronic format compatible
with the Agency's STORET system. WQX replaced STORET in 2009 as EPA's repository of water quality
monitoring data.
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EPA Region 8 Organization
EPA Region 8 serves the states of Colorado, Montana, North Dakota,
South Dakota, Utah, and Wyoming, as well as 27 federally recognized tribal
governments on 26 Indian reservations. There are 23 tribal governments in
Region 8 eligible to receive CWA Section 106 grants. Region 8's organization
includes four offices relevant to the hotline complaint (table 1).
Table 1: Relevant offices in Region 8
Office of Partnerships
and Regulatory
Assistance
Office of Ecosystems
Protection and
Remediation
Office of Technical
and Management
Services
Montana
Operations Office
This office's Tribal
Assistance Program
(TAP) acts as a liaison
for EPA offices, the 27
tribes within the region,
and other federal
agencies.
This office houses the
Wetlands and Tribal
Unit and provides
support functions for
tribal grants.
This office houses
the Grants, Audits,
Procurement
Program and the
Fiscal Management
and Planning
Program.
Some of
Region 8's
federally
recognized tribes
are in Montana,
and some Montana
staff help review
tribal grant work
plans.
Source: OIG summary of relevant Region 8 offices based on Region 8 organizational charts and
interviews with Region 8 staff.
While the Office of Ecosystems Protection and Remediation, TAP, and the
Montana Operations Office provide support functions for tribal grants, TAP
manages the General Assistance Program and air, waste, and water grants
(including CWA Section 106). TAP also serves as the main point of contact on
tribal issues, including acting as a liaison to the tribal Regional Operations
Committee (ROC).
Tribal and Regional Operations Committees
On February 17, 1994, then EPA Administrator Carol M. Browner created the
Tribal Operations Committee to help EPA establish a national co-regulatory
partnership by providing a forum for enhancing tribal environmental protection.
Region 8 then formed a ROC to help maintain a government-to-government
relationship between the region and tribes. The ROC issued a charter in March
2011 that describes the ROC as a liaison between the national Tribal Operations
Committee, tribes, and Region 8 on national policy issues. The ROC includes one
representative from each tribe in Region 8, each of which has one vote. The
charter provides that the ROC maintains open and consistent communications
with the Regional Administrator and staff on matters of regional significance to
tribal governments, and that the ROC is to enhance and improve EPA tribal
operations. The ROC charter describes EPA's role and responsibility to listen to
ROC members and fully consider the perspectives and views of the tribes they
represent. The ROC holds quarterly meetings. The ROC charter provides that
voting—taken through roll call at meetings—requires a quorum consisting of nine
members, one of which must be an officer.
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Associated Program Support Costs
In EPA's FY 1999 appropriation and in each year thereafter, Congress added
authority for "associated program support costs" that permits EPA to use a portion
of funds available for tribes for activities that benefit all or a portion of tribal
grant recipients. Region 8 entered into an interagency agreement with USGS to
conduct tribal water quality monitoring in August 2006. Region 8 also entered
into a contract to facilitate tribes entering water quality data into WQX.
Region 8's Office of Regional Counsel considers services provided through the
interagency agreement with USGS and through the WQX contract to be
associated program support.
In the absence of specific guidance from EPA's Office of Water on using CWA
Section 106 funds for associated program support, Region 8's TAP has relied on
guidance from the Office of Air and Radiation on funding associated program
support activities under Clean Air Act Section 105. EPA's Guidance on the Office
of Air and Radiation (OAR) Assistance Authorities and Allowable FY 2009 State
and Tribal Assistance Grant [STAG] Funded Activities states that, for EPA to use
STAG resources as associated program support, an activity must (a) be the
inherent responsibility of a state, tribal, or local air pollution control agency; and
(b) be of primary benefit to these agencies and not EPA. The Office of Air and
Radiation guidance also requires that EPA must also get the prior approval of
these agencies before such funding can be used for associated program support
activities. According to the Office of Air and Radiation guidance, associated
program support costs should promote administrative efficiency and cost savings
to the recipients, and EPA can provide funding for such costs through a grant,
contract, or interagency agreement.
Scope and Methodology
We performed our field work from July 2011 to March 2012 in accordance with
generally accepted government auditing standards. Those standards require that
we plan and perform our review to obtain sufficient, appropriate evidence to
provide a reasonable basis for our findings and conclusions based on our
objectives. We believe the evidence obtained provides a reasonable basis for our
findings and conclusions.
We reviewed relevant laws, regulations, policies, procedures, and guidance
governing CWA Section 106. We conducted interviews with Region 8 personnel
responsible for administering and managing Section 106 funds, including
personnel from the Office of Partnerships and Regulatory Assistance/TAP, Office
of Ecosystems Protection and Remediation, Office of Technical and Management
Services, Montana Operations Office, and Office of Regional Counsel. We also
interviewed EPA headquarters Office of Water personnel on national
guidance/policies. Further, we interviewed USGS personnel and reviewed ROC
2 Public Law 105-276 (October 21, 1998).
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meeting minutes to determine if there was tribal approval of the region's use of
Section 106 funds for program support activities. We also reconciled grant funds
used for the interagency agreement with USGS. We did not review or evaluate the
performance of the person conducting work under the EPA-USGS interagency
agreement mentioned by name in the hotline complaint. We do note in our report,
however, the positive observations by some tribes with regard to work performed
under the interagency agreement. To address the allegations raised in the
complaint, our review focused on the process by which Region 8 used funds to
put the interagency agreement in place.
Results of Review
Allegation #1: Region 8 Withheld Funds Intended for Tribal Programs
Region 8 funded Section 106 programs based on the region's review of tribal
work plans and did not inappropriately withhold funds for special projects or
associated program support costs. Tribes submitted detailed work plans when
applying for grants under CWA Section 106. The Office of Water affords regions
flexibility on awarding the allocation. The national CWA Section 106 coordinator
in the Office of Water said that most regions allocate 100 percent of program
funds. However, the Final Guidance on Awards of Grants to Indian Tribes under
Section 106 of the Clean Water Act: For Fiscal Years 2007 and Beyond does not
require that regions allocate all funds as part of the regional process to administer
grants.3
Region 8 has a four-step process for reviewing tribal grant applications and
making funding decisions:
1.	The project officer reviews the proposal and provides recommendations.
2.	A peer reviewer reviews the proposal and provides comments.
3.	Technical reviewers review the proposal and provide comments and
funding recommendations.
4.	The management team reviews the comments generated by the above
steps and makes final funding decisions.
Region 8's TAP awards grants to tribes based on a review of their work plans,
past performance, and the ability of the tribes to meet the goals specified in their
work plans. TAP may determine that tribal work plans do not warrant the level of
funds requested and, therefore, the region may not award all program funds to the
tribes. Table 2 lists Region 8's annual allocations and remaining funds for
FYs 2008-2011.
3 The regulations for "EPA Action of Applications" for tribal grants, 40 Code of Federal Regulations 35.516,
35.517, and 35.518, appear to contemplate that there can be circumstances when all allocated grant funds might not
be awarded to tribes.
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Table 2: Annual allocations and remaining funds
FY
Total
allocation *
Funds remaining after awards
(percent of total allocation)
2008
$5,569,062
$396,527 (7.12)
2009
5,032,557
329,895 (6.56)
2010
4,743,646
464,404 (9.79)
2011
5,376,900
309,040 (5.75)
Source: OIG analysis of Region 8 tribal funding allocations.
* includes annual allocation and recertified funds
According to Region 8 project managers, rigorous review and fine-tuning of work
plans helps assure success for tribes and provides appropriate funding based on
achievable goals. This process may result in the region not awarding all of its
Section 106 tribal allocation; the region can use any unawarded or unobligated
Section 106 funds for special projects/associated program support costs.
Allegation #2: Region 8 Used Funds for Projects That Neither
Benefitted Tribes nor Had Their Approval
Region 8 provided evidence that both the interagency agreement with USGS and
the contract on WQX support benefit the tribes rather than EPA. However,
Region 8 does not have an effective method for gaining tribal approval to use
Section 106 funds for associated program support.
Region 8's Associated Program Support Activities
In 2006, Region 8 entered into an interagency agreement with USGS for technical
review and technology transfer activities associated with water quality monitoring
and assessment. In 2010, Region 8 entered into a contract to provide tribes with
support related to WQX. A Region 8 project manager said that the contractor
created a template that all Region 8 tribes can use to load data into a virtual
warehouse (EPA's Ambient Water Quality Monitoring System). The contractor
can then upload that data to WQX.
According to the Region 8 water quality team lead, tribal environmental program
staff frequently change, which historically has made it difficult to aggregate water
quality data. The Region 8 water quality team lead said that the contractor reviews
tribal data to ensure security of cultural and other confidential information for
sacred tribal and similar sites, provides technical support, and organizes a peer-
training network. Services provided by the USGS (through the interagency
agreement) and by the contractor supporting WQX are considered non-grant
program support. In the absence of specific Office of Water guidance, Region 8's
TAP has relied on the Office of Air and Radiation's Clean Air Act guidance as
support for using grant funds for non-grant program support activities.
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Guidance on Requirements for Associated Program Support Costs
The Office of Air and Radiation guidance for using STAG resources for
associated program support costs includes three requirements:
1.	The activity must be the inherent responsibility of a state, tribal, or local
air pollution control agency;
2.	The activity must be of primary benefit to these agencies and not EPA;
and
3.	EPA must get the prior approval of these agencies before using funding
for associated program support.
The interagency agreement with USGS met the first and second requirements of
the Office of Air and Radiation guidance given that Tribal Assessment Reports
are a grant requirement, and they must include a water quality assessment. USGS
provided training and water quality data interpretation to tribes and retrospective
analyses of tribal water quality. Similarly, the WQX contract met the first and
second requirements. The activity under the WQX contract is the inherent
responsibility of the tribe because grant-required Tribal Assessment Reports
contain electronic copies of water quality data, and the contract addressed this by
helping to generate and upload this data into WQX. Activities under the WQX
contract are the primary benefit of the tribe because the contractor streamlined
data entry and provided tribes with technical support and training.
However, neither the interagency agreement nor the WQX contract met the
requirement to obtain prior approval from tribal recipients, which Region 8 could
have accomplished during ROC meetings. Region 8's ROC charter states that
membership consists of one representative from each Region 8 tribe, each of
which has one vote. The ROC charter further provides that voting—taken through
roll call at quarterly meetings—requires a quorum of nine members, one of which
must be an officer. While the ROC minutes from 2008 through 2011 contained
some discussion of both the interagency agreement and WQX, the minutes did not
demonstrate that quarterly meetings were held each year nor that any meeting had
a quorum until June 2011. Moreover, the ROC minutes did not contain any
evidence that the IAG or contract was ever presented "for approval." Table 3
summarizes the results of the ROC meeting discussions on the interagency
agreement and WQX.
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Table 3: 2008-2011 Region 8 ROC meetings
Date and type of ROC
Discussion topics:
Quorum/attendance
Interagency
agreement
WQX
contractor
March 2008
tribal caucus
Yes
Yes
No evidence
March-April 2010
tribal caucus
Yes
Yes
No evidence
March 2011
conference
Yes
No
No evidence
June 2011 meeting
Yes
No
Yes - per hotel records
(no roll call taken)
18 attendees/9 tribes*
October 2011 meeting
Yes
No
Yes - roll call
15 Attendees/11 tribes
November 2011
monthly call
No
No
Yes - roll call
17 attendees/12 tribes
Source: OIG analysis of ROC meeting minutes.
* Absent a roll call we could not discern an accurate number of tribes that participated. We
assumed a quorum of 9 tribes based on the 18 attendees.
Members at the March 2011 ROC conference supported work completed under
the interagency agreement, and the ROC chairperson drafted a letter to EPA on
March 24, 2011, stating tribal support. However, at a subsequent June 2011 ROC
meeting, members indicated that they did not benefit from the interagency
agreement and did not want to sign the letter. Despite the draft March letter in
support of the interagency agreement, Region 8 decided not to extend it beyond
early 2012, in part because of the hotline complaint and in part because of
difficulties in funding the interagency agreement in 2011.4
According to the Office of Water's national Section 106 coordinator, the Office of
Water has not issued national guidance on the use of unobligated Section 106
funds due to the high utilization rate of Section 106 funds by states and tribes.
Absent CWA Section 106 guidance, Region 8 has used the Office of Air and
Radiation guidance that requires prior approval before using funds for associated
program support. The Region 8 TAP Director stated that the region uses a quorum
at ROC meetings to determine approval, but ROC minutes did not consistently
document either a roll call or the existence of a quorum that would show formal
approval of a matter before the ROC, such as on the interagency agreement and
WQX contract. A Region 8 TAP tribal program manager said that over the past
2 years, the region took roll during monthly ROC calls but not at ROC meetings
(although our review found that they took roll at the October 2011 meeting). The
4 In October 2011, EPA adopted a new automated financial system. While the Agency transferred data from the
Integrated Financial Management System to the new Compass Financials system, neither the old nor the new system
was available. As a result, TAP was precluded from using leftover, unobligated funds for the interagency agreement
as previously planned.
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region informed us it did not take roll call at all meetings, but believed it had a
quorum in FY 2011 based on other information, such as attendee lists from hotels
housing tribal members. Results from ROC meetings do not clearly demonstrate
whether Region 8 makes decisions on the use of remaining funds via ROC
majority/quorum. Thus, the region cannot demonstrate prior, formal tribal
approval before using funds remaining, as required by the Office of Air and
Radiation guidance.
Allegation #3: Region 8 Separated Decision Making Between
Two Offices
Region 8 administered the tribal Section 106 program via two separate offices—
Office of Ecosystem Protection and Remediation and Office of Partnerships
Regulatory Assistance TAP,5 per Agency guidance. EPA's Indian Environmental
General Assistance Program — Guidelines on the Award and Management of
General Assistance Agreements for Indian Tribes (March 9, 2000) designates the
Regional Administrator as the General Assistance Program manager. Per the
guidelines, the Regional Administrator can delegate responsibilities and establish
program managers separate from grants managers. Managers and staff responsible
for providing technical support can be housed in one office while managers and
staff supporting grant functions can be in another.
While Region 8's approach to housing regional program managers separate from
the regional grants management office followed the 2000 guidelines, the hotline
complaint asserted that this structure was ineffective in making program decisions
and providing program administration. Our interviews with Region 8 staff
c onfirmed the region had difficulties in meeting the technical needs of tribes with
the dual-office structure. Region 8 had also recognized this deficiency prior to the
hotline complaint, noting that the demand for technical assistance exceeded the
level of dedicated staff in any one office assigned to perform those tasks.
Region 8 believes the Office of Ecosystems Protection and Remediation, TAP,
and the Montana Operations Office have a shared role and responsibility to
provide technical and programmatic expertise to tribal grantees. As such, in
spring 2011, the region adopted a team approach to facilitate better service.
Region 8 now assigns each tribe a specific team with personnel from four
program areas: technical water quality, watershed, quality assurance, and TAP.
During the most recent grant solicitation cycle, each team reviewed the technical
and programmatic merits of their assigned tribes' work plan and budget, and
provided written comments. The steering committee (a result of the new team
approach), comprising five senior Region 8 staff members, reviewed tribal work
plans and comments from the technical support team and made final funding
recommendations. The steering committee submitted its recommendations (which
5 Some Montana staff help review tribal grant work plans; however, the hotline allegation focused on two offices -
Office of Ecosystem Protection and Remediation and Office of Partnerships Regulatory Assistance/TAP. Therefore,
our findings focused on the two offices mentioned in the hotline allegation.
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include comments from the technical support team as well as its own) to the
Region 8 management team. The management team (made up of managers from
TAP, Office of Ecosystems Protection and Remediation, and the Montana
Operations Office) made final funding decisions and shared those decisions with
the tribes. According to regional staff, the new process provides tribes additional
opportunities to negotiate their funding levels. Also, tribes can work with the
region throughout the process to provide additional information or clarify
outstanding issues.
Also, Region 8 compiled a list of programmatic and technical contacts and
provided contact lists to each tribe. The region expects tribes to direct
programmatic requests to the TAP lead whereas most technical issues should be
directed to the water quality lead. The contact list includes three other areas of
expertise, including a watershed lead (non-point source), a quality assurance lead,
and additional water quality resources (water quality standards, and support from
the interagency agreements with USGS). The list provides each tribe with a quick
reference in each of the program areas.
Cross-office personnel from Region 8 meet monthly to discuss tribal matters.
Since September 2008, the Office of Communications and Public Involvement
and TAP have hosted meetings with staff across the region to improve internal
communications on work with tribes.
Region 8 believes its new team approach will provide a broader set of skills and
more effectively address tribal needs. Through its team approach, the region
hopes it will be able to provide the support similar to that previously provided by
the interagency agreement with USGS. To this end, the region will not be funding
the interagency agreement beyond spring 2012. The region also implemented a
new process for awarding Section 106 grants that includes multiple review steps
to ensure better-informed decisions. According to the region, while long-term
effects remain to be seen, the immediate results of the team approach are
improved communication and transparency within the region.
Recommendations
We recommend that the Assistant Administrator for Water:
1. Develop guidance for CWA Section 106 associated program support costs.
Guidance should incorporate specific requirements to use state and tribal
assistance grants for associated program support, and a process to obtain
approval from recipients for associated program support costs funded with
Section 106 program funds. Alternatively, formally adopt Office of Air
and Radiation's guidance on associated program support costs.
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We recommend that the Regional Administrator, Region 8:
2.	Develop regional guidance to formalize the process by which the region
gains approval from tribes for associated program support costs funded
with Section 106 program funds. Guidance should include requiring that a
roll call be taken indicating the presence of a quorum, and voting records
be kept, as a standard part of ROC meetings and minutes.
3.	Evaluate the effectiveness of the region's team approach to tribal technical
assistance—as part of the guidance developed in recommendation 2—by
periodically querying ROC members and making adjustments as needed
based on tribal feedback.
Agency Comments and OIG Evaluation
The Office of Water and Region 8 concurred with our recommendations.
Appendix A contains the Agency's full response to our draft report and planned
actions by both the Office of Water and Region 8 to address our
recommendations. We believe planned actions by the Office of Water and
Region 8 address the intent of our recommendations. Our recommendations
remain unresolved pending planned completion dates on actions to address our
recommendations.
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Status of Recommendations and
Potential Monetary Benefits
POTENTIAL
MONETARY
BENEFITS
RECOMMENDATIONS	(in $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned Agreed-
Completion Claimed To
Date Amount Amount
1
9
Develop guidance for CWA Section 106 associated program
support costs. Guidance should incorporate specific
requirements to use state and tribal assistance grants for
associated program support, and a process to obtain
approval from recipients for associated program support
costs funded with Section 106 program funds. Alternatively,
formally adopt Office of Air and Radiation's guidance on
associated program support costs.
U
Assistant Administrator
for Water

2
10
Develop regional guidance to formalize the process by
which the region gains approval from tribes for associated
program support costs funded with Section 106 program
funds. Guidance should include requiring that a roll call be
taken indicating the presence of a quorum, and voting
records be kept, as a standard part of ROC meetings and
minutes.
U
Regional Administrator,
Region 8

3
10
Evaluate the effectiveness of the region's team approach to
tribal technical assistance—as part of the guidance
developed in recommendation 2—by periodically querying
ROC members and making adjustments as needed based
u
Regional Administrator,
Region 8

on tribal feedback.
1 0 = 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
Agency's Response to Draft Report
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D C 20460
APS 1 6 2012
office Of WATER
MEMORANDUM
SUBJECT: Review and Comment on the Office of Inspector Genera! Draft Report on the
OiG Hotline Complaint Alleged Misuse of Tribal Clean Waier Aci Section 106
Funds in EPA Region 8. Assignment No. OA-FY 13-0444
I appreciate the opportunity to review and comment on the Office of Inspector General Draft
Report on the OIG Hotline Complaint Alleged Misuse of Tribal Clean Water Act Section 106
Funds in FFA Region 8, which you provided on March 8, 2012. As stated in the draft report, the
objective of the review was to determine wh ether Region 8 follows guidance for funding "special
projects" with Section 106 tribal funds.
The Office of Water and Region 8 have reviewed the draft report including the draft
recommendations. We agree in laige part with the findings and recommendations in the OIG's
draft report. Our comments are as follows:
RESPONSE TO SPECIFIC RECOMMENDATIONS
OIG Recommendation 1: Develop guidance for CWA Section 106 associated program support
costs. Guidance should incorporate specific requirements to use state and tribal assistance grants
for associated program support, and a process to obtain approval from recipients for associated
program support costs funded with Section 106 program funds. Alternatively, foimally adopt
Office of Air and Radiation's guidance on associated program support costs.
EP A Response: The Office of Water will conduct a review of Regional use of the associated
program support costs authority for assisting tribal programs. In response to this
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FROM: Nancy K. Stoncr
Acting Assistant t
TO:
Melissa M. Heist
Assistant Inspector General lor Audit
Office of the Inspector General

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recommendation, the Office of Water will assess approaches and may, as appropriate, develop
new guidance or formally adopt existing guidance (e.g., the applicable sections of the Guidance
on the Office of Air and Radiation (OAR) Assistance Authorities and Allowable FY 2009 State
and Tribal Assistance Grant [STAG) Funded Activities) currently applicable to other programs.
OIG Recommendation 2: Develop regional guidance to formalize the process by which the
Region gains approval from tribes for associated program support costs funded with Section 106
program funds. Guidance could include requiring that a roll call be taken indicating the presence
of a quorum, and voting records be kept, as a standard part of ROC meetings and minutes.
EPA Response: Region 8 plans to address this recommendation by following the Regional
Operations Committee (ROC) guidelines dated March 17, 2011, regarding roll call, a voting
quorum, and minutes that document the voting decision process. When a decision is required,
Region 8 tribes or the EPA will request the ROC Chair to call for a vote on the specific issue.
The vote results will be recorded in the ROC minutes.
OIG Recommendation 3: Evaluate the effectiveness of the region's team approach to tribal
technical assistance -as part of the guidance developed in recommendation #2 -by querying ROC
members and making adjustments as needed based on tribal feedback.
EPA Response: Region 8 plans to comply with this recommendation by following the review and
evaluation criteria outlined in the Region 8 Tribal Support Work Plan. This process calls for
ongoing review and feedback on the programmatic and technical assistance provided by the EPA
staff. At the annual Spring ROC meeting, the Regional Administrator or designee will query
ROC members about the Region's team approach. Feedback will be documented and used to
make necessary adjustments to our approach.
TECHNICAL CLARIFICATION TO THE DRAFT REPORT
On page seven of the draft report there is a sentence that states, "According to the Office of
Water's national Section 106 coordinator, the Office of Water has not issued national guidance
on the use of unobligated Section 106 funds because the office has not identified this issue as an
area of concern." The Office of Water believes it is important to clarify the context in which this
statement was offered and is proposing alternative report language. In discussions with your
staff, EPA's Coordinator for the 106 Program was making the point that Section 106 funds are
provided to states and tribes to manage their base programs, and as such, are largely utilized in
the year in which they are awarded. Historically, the 106 Program has not experienced
significant issues with unobligated funds. Therefore, the Office of Water requests the IG modify
the sentence above to reflect that intent. Specifically, we request the following alternative
language be used: "According to the Office of Water's national Section 106 coordinator, due to
the high utilization rate of Section 106 funds by states and tribes, the Office of Water has not
issued national guidance on the use of unobligated Section 106 funds because the office has not
identified this issue as an area of concern." We would further note that the Office of Water is
currently working with the Office of the Chief Financial Officer to analyze the status of
unliquidated obligations by grant program, including the Section 1 06 program. The goal of the
analysis is to identify areas of improvement for awarding grants in a timely manner and may
result in updating guidelines for awarding grants.
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On behalf of the EP A's Office of Water and Region 8,1 want to thank the Office of Inspector
General for its recommendations that are aimed at improving the decision process associated
with using CWA Section 106 grant funds for associated program support costs to tribes. Region
8 concurs on this response (please see the attached letter from James B. Martin, dated March 29,
2012). If you have any questions or concerns, please contact me, or your staff may contact
Felicia Wright, Office of Water Tribal Coordinator at (202) 566-1886, or
wright.felicia@,epa. gov.
Attachment
cc: James B. Martin
Howard M. Cantor
Callie A. Videtich
Alfreda Mitre
Randy Brown
Michael Boydston
Felicia Wright
Robyn Delehanty
Marilyn Ramos
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 8
1595 Wynkoop Street
DENVER, CO 80202-1129
Phone 800-227-8917
http://www.epa.gov/region08
8P-TA
March 29, 2012
MEMORANDUM
SUBJECT: Region 8 Concurrence on Draft OIG Report OA-FY11-044, dated March 8, 2012
I hereby concur on the OIG Draft Report on the Alleged Waste and Misuse of Tribal Clean
Water Act Section 106 Funds in Region 8. The report contained three recommendations. The
action official for the first recommendation is the Acting Assistant Administrator for Water and
the second and third are assigned the Region 8 Regional Administrator or designee.
Region 8 plans to address the second recommendation by following the Regional Operations
Committee, (ROC) guidelines dated March 17, 2011, regarding roll call, a voting quorum, and
minutes that document the voting decision process. When a decision is required, Region 8
tribes or EPA will request the ROC Chair to call for a vote on the specific issue. The voting
results will be captured in the ROC minutes.
Region 8 plans to comply with the third recommendation by following the review and
evaluation process outlined in the Region 8 Tribal Support Work Plan. This process calls for
ongoing review and feedback on the programmatic and technical assistance provided by EPA
staff. At the annual Spring ROC meeting, the Regional Administrator or designee will query
ROC members about the Region's team approach. Feedback will be documented and used to
make necessary adjustments to our approach.
Thank you for the opportunity to respond. If you have any questions or concerns, please
contact me or your staff may contact Alfreda Mitre, Tribal Assistance Program Director at
(303) 312-6343, or mitre, alfreda@epa.gov.
cc: Howard M. Cantor
Callie A. Videtich
Alfreda Mitre
Randy Brown
Michael Boydston
Felicia Wright
Robyn Delehanty
Marilyn Ramos
FROM: James B. Martin /s/
Regional Administrator
TO:
Nancy K. Stoner
Acting Assistant Administrator
Office of Water
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Distribution
Office of the Administrator
Acting Assistant Administrator for Water
Regional Administrator, Region 8
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for External Affairs and Environmental Education
Audit Follow-Up Coordinator, Office of Water
Audit Follow-Up Coordinator, Region 8
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