*. U.S. Environmental Protection Agency	12-R-0321
| jDL \ Office of Inspector General	March 8 2012
s v\|/v S
At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency Office of
Inspector General conducts site
visits of American Recovery
and Reinvestment Act of 2009
(Recovery Act) clean water
projects. The purpose of this
review was to determine
whether amounts claimed by
the Botanic Garden of Western
Pennsylvania are eligible and
allowable in accordance with
the Recovery Act and the terms
of the funding agreement.
The Botanic Garden received
$1,368,894 with 100 percent
federal loan forgiveness from
the Pennsylvania Infrastructure
Investment Authority
(Pennvest) under the Clean
Water State Revolving Fund
program. The purpose of the
project, funded with Recovery
Act funds under the Green
Project Reserve, was to install
three permanent irrigation
ponds to supply the Botanic
Garden's future irrigation
For further information, contact
our Office of Congressional and
Public Affairs at (202) 566-2391.
The full report is at:
American Recovery and Reinvestment Act Site Visit
of the Botanic Garden of Western Pennsylvania
What We Found
The Botanic Garden used Recovery Act funds to construct ponds that are not
being used for their stated purpose. The Botanic Garden's funding agreement
with Pennvest states that the Botanic Garden will build irrigation ponds to
collect, store, and recycle water for future irrigation needs. However, the ponds
are being used as sediment ponds to capture runoff from a mining reclamation
operation. Therefore, amounts claimed by the Botanic Garden for building the
ponds are not eligible or allowable project costs under the Recovery Act and the
terms and conditions of the funding agreement between the Botanic Garden and
Additionally, the Botanic Garden is operating, through a contractor, a for-profit
surface mining reclamation operation that will generate revenue for the Botanic
Garden. The Recovery Act funds were used to construct required mine sediment
ponds that allow the mine to operate. The Botanic Garden's funding agreement
with Pennvest contains an addendum that states that the recipient must comply
with all relevant federal regulations. The Code of Federal Regulations (CFR), at
2 CFR 215.24(b)(3), requires all federal assistance agreement award recipients to
deduct program income from the total cost of a project or program funded with
federal monies. The revenue generated by the mining activity would be program
income that must be used to offset the Recovery Act-funded project costs. By not
offsetting the project costs with the program income, Recovery Act funds are
reducing mining operation costs and thereby increasing the Botanic Garden's
potential mining revenue.
What We Recommend
We recommend that the Regional Administrator, Region 3, recover from
Pennvest all Recovery Act funds, totaling $1,368,894, awarded to the Botanic
Garden of Western Pennsylvania. We also recommend preventing the continued
use of Clean Water State Revolving Fund funding for this project. If the full
Recovery Act funds are not recovered, we recommend that the Regional
Administrator reduce the project costs to be funded by the Recovery Act by the
amount of program income earned by the Botanic Garden from mining
operations and recover the amount earned in program income. Region 3, the
Botanic Garden, and the commonwealth of Pennsylvania did not agree with the
findings and recommendations in the report.