srAt
*. U.S. Environmental Protection Agency	09-x-oi36
Office of Inspector General	Apnl 9 2009
I I
At PRO"*4
At a Glance
Catalyst for Improving the Environment
Why We Did This Review
We reviewed open
recommendations from prior
Office of Inspector General
(OIG) audit reports that could
impact the U.S.
Environmental Protection
Agency's (EPA's) American
Recovery and Reinvestment
Act activities. These
recommendations involved
grants, contracts, and
interagency agreements.
Background
Open recommendations are
those for which EPA has not
completed corrective actions.
Recent Office of Management
and Budget guidance requires
the expediting of actions on
open recommendations to
preclude the continuance of
weaknesses or deficiencies
that can impact Recovery Act
funding.
For further information,
contact our Office of
Congressional, Public Affairs
and Management at
(202) 566-2391.
To view the full report,
click on the following link:
www.epa.aov/oia/reports/2009/
20090409-09-X-0136.pdf
Open Audit Recommendations
Affecting Recovery Act Activities
What We Found
We identified five open recommendations, from three EPA OIG reports, that
could have an impact on Recovery Act funding.
	In response to a 2008 report, EPA agreed to implement our
recommendation to distribute revised terms and conditions to regions in
June 2009 for spending brownfields grant funds more timely. EPA told
us these terms and conditions would be in place before EPA awarded any
Recovery Act grants.
	A 2008 OIG report found that EPA had no assurance that use of Cost-
Plus-Award-Fee contracts facilitates a higher level of performance than
other types of contracts, and contractors were given award fees without
sufficient support. To address these issues, the Office of Acquisition
Management completed revisions to the Contracts Management Manual
on April 7, 2009, and will have the information published by late April.
We also noted EPA Region 5 paid award fees in excess of limits, and
corrective action is still pending.
	A 2007 OIG report found that EPA often entered into interagency
contracts without conducting cost reasonableness assessments or
identifying alternatives, such as whether EPA's in-house staff should
acquire the services or products. EPA is not planning to conduct its
comprehensive review of interagency contracts to verify implementation
of the corrective action until September 2010. EPA needs to ensure other
corrective actions related to cost reasonableness assessments and
considerations of alternatives to interagency contracts are implemented
for Recovery Act interagency contracts.
We also have concerns that EPA is considering granting a waiver related to
several closed recommendations involving obtaining independent cost estimates
for interagency agreements with the U.S. Army Corps of Engineers.
We recommend that the Agency expedite corrective actions for the open
recommendations as they pertain to Recovery Act funds. EPA should let us
know within 30 days how it has acted, or plans to act, on these recommendations.

-------