U.S. Environmental Protection Agency	2007-4-00045
Office of Inspector General	February 20 2007

At a Glance
Catalyst for Improving the Environment
Why We Did This Review
We conducted this
examination to determine
whether the total costs
incurred for three U.S.
Environmental Protection
Agency (EPA) assistance
agreements were fairly
presented, in all material
respects, and the incurred
costs were allowable in
accordance with the terms and
conditions of the agreements
and applicable regulations.
Background
EPA awarded three assistance
agreements to the America's
Clean Water Foundation
(Foundation) to perform
environmental risk
assessments at agricultural
facilities and to assist States,
tribes, and territories in
complying with the Clean
Water Act.
For further information,
contact our Office of
Congressional and Public
Liaison at (202) 566-2391.
To view the full report,
click on the following link:
www.epa.aov/oia/reports/2007/
20070220-2007-4-00045.pdf
America's Clean Water Foundation Incurred Costs
for EPA Assistance Agreements X82835301,
X783142301, and X82672301
What We Found
The Foundation did not comply with the financial and program management
standards and the procurement standards promulgated in Title 40 Code of Federal
Regulations (CFR), Part 30. Specifically, the Foundation (1) could not provide
support for any of its general journal entries; (2) included duplicate transactions in
its accounting system; (3) recorded labor charged to EPA grants incorrectly;
(4) could not support the recorded indirect costs; (5) claimed unallowable
preaward costs; (6) recorded EPA cash draws inaccurately; (7) did not submit
required indirect cost proposals to EPA; (8) did not complete the required single
audits for fiscal years ended June 30, 2003, June 30, 2004, and June 30, 2005; and
(9) did not submit a Federal Cash Transactions Report when required.
The Foundation's procurement practices and procedures did not comply with the
grant regulations. The Foundation awarded sole source contracts without
performing the cost/price analysis required by Title 40 CFR 30.45. It also
awarded a contract to a member of its Board of Directors, contrary to the conflict
of interest provisions at Title 40 CFR 30.42, and reimbursed a contractor for
billings above contractual ceilings. Because the Foundation did not adequately
document its costs and did not comply with the EPA regulations, we questioned
the Federal share claimed of $25,372,590.
What We Recommend
We recommend that the Director for the Grants Administration Division:
(1) disallow the Federal share claimed of $25,372,590, and recover payments
made of $25,173,266, unless the Foundation reconstructs its accountings records
to meet the financial management standards required by Title 40 CFR 30.21
through 30.28; (2) rescind provisional indirect rates for fiscal years ended June 30,
2005, and June 30, 2006; (3) require the Foundation to obtain single audits for
fiscal years ended June 30, 2003, June 30, 2004, and June 30, 2005; (4) require the
Foundation to prepare and submit overdue Standard Form 272 Federal Cash
Transactions Reports; (5) disallow contract costs procured, claimed, and
administered in violation of the requirements in Title 40 CFR Part 30; (6) disallow
contract costs that were not authorized under the contract terms; (7) stop work on
all active grants; and (8) not award any new grants until the Foundation meets
minimum financial management requirements and repays all disallowed costs.

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