STA?.
.* *. U.S. Environmental Protection Agency	12-P-0407
£ &M \ Dffiro r»f Incnprtnr	April 9, 2012
^ (fcjl z Office of Inspector General
iSIE*1
' At a Glance
Why We Did This Review
We conducted this audit to
determine whether the U.S.
Environmental Protection
Agency (EPA) has adequate
controls over various financial
aspects of the Great Lakes
Legacy Act of 2002 (GLLA)
funding and payments, and to
determine whether project
agreements contain goals that
tie to the Agency's strategic
plan, hold parties accountable,
and ensure that nonfederal
sponsors meet their obligations.
Background
Under GLLA, the Great Lakes
National Program Office
(GLNPO) performs sediment
remediation using partnerships
with nonfederal sponsors to
accomplish the work. The
nonfederal sponsor is required
to provide a minimum of
35 percent of the effort in cash
or in-kind contributions to the
project.
Great Lakes National Program Should
Improve Internal Controls to Ensure
Effective Legacy Act Operations
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!
20120409-12-P-0407. pdf
What We Found
GLLA program funding has increased five-fold over the last 7 years; however,
the program has not established needed internal controls to ensure effective
operations. For example, while GLLA project agreements contain environmental
goals that tie to EPA's strategic plan:
•	GLNPO is not timely forwarding project agreements to the EPA Finance
Center.
•	EPA is not tracking and recording actual in-kind contributions.
•	GLLA project agreements do not always include exact due dates and
amounts for payments from nonfederal sponsors.
•	GLNPO has not been performing final accounting timely and does not
keep adequate documentation of the reviews.
•	GLNPO does not verify a nonfederal sponsor's financial capability or
whether the nonfederal sponsor maintains an adequate accounting
system prior to entering into a cost-sharing agreement.
Because of limited staffing at the beginning of the program, GLNPO's initial
strategy was to focus on hiring essential technical staff (engineers and scientists)
and leveraging the resources of other offices to help administer the program.
The program has grown in terms of resources and staffing, but the focus on
programmatic over financial activities negatively affected GLNPO's
development of internal controls and led to many of the findings in this report.
Without adequate internal controls, funds owed from nonfederal sponsors may
not be collected timely, costs invoiced on GLLA projects may not be reasonable
and allowable, and nonfederal sponsors with whom GLNPO enters into project
agreements may not be able to meet their commitments.
What We Recommend
We recommend that EPA develop and implement policies and procedures for
GLNPO that address the establishment of accounts receivable, recording of
in-kind contributions, completion of final accounting, and reviews of the
financial capability of nonfederal sponsors. EPA took action to address most of
the recommendations and provided an action plan to address the remaining
recommendation.

-------