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OFFICE OF THE INSPECTOR GENERAL
Catalyst for Improving the Environment
Audit Report
Brownfields Competition
Process for Awarding Grants
Complied With Act
Report No. 2005-P-00009
March 7, 2005

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Report Contributors:	LeahNikaidoh
Sabrina Berry
Khadija Walker
Richard Howard

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
March 7, 2005
MEMORANDUM
SUBJECT: Brownfields Competition Process for Awarding Grants Complied With Act
Report No. 2005-P-00009
This is our final 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
problems the OIG has identified and corrective actions the OIG recommends. We discussed our
findings with your staff and issued a draft report. We have summarized your comments in this
final report and included your complete response in Appendix A. This report represents the
opinion of the OIG and the findings do not necessarily represent the final EPA position. The
final determination on matters in this report will be made by EPA managers in accordance with
established audit resolution procedures.
The audit objective was to determine whether the Office of Brownfields Cleanup and
Redevelopment (Brownfields Office) established a competition process that complied with the
Small Business Liability Relief and Brownfields Revitalization Act of 2002, Public Law 107-118
(Brownfields Act), and EPA policy and guidance.
Results of Review
EPA's competition process for awarding grants complied with the requirements of the
Brownfields Act. EPA was required to award grants to eligible organizations that have the
highest rankings under the 10 ranking criteria established in the law. These requirements applied
to all three Brownfields grant programs: (1) assessment, revolving loan fund, and cleanup;
(2) training, research, and technical assistance; and (3) job training.
/S/
FROM: Michael A. Rickey, Director
Assistance Agreement Audits
TO:
Thomas P. Dunne
Acting Assistant Administrator
Office of Solid Waste and Emergency Response
Purpose
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EPA, in awarding the Brownfields grants, assessed whether the entities were eligible for the
grant. EPA used the 10 ranking criteria in the Act to the extent they were applicable. The Act
included a provision that if information about 1 of the 10 criteria were not available or applicable
to a particular grant, EPA did not have to include the ranking criteria in its decision to award the
grant. For example, for a research grant, information on use or reuse of infrastructure would not
be available because the grant was not for a site-specific activity.
EPA Policy for Documenting Cost Reviews Not Followed
In awarding grants, the Brownfields Office generally complied with EPA policies and
procedures, with the exception of the cost review policy. EPA Grants Policy 00-5, "Cost Review
Guidance," requires EPA staff to perform a cost review for every project selected for funding
and to include documentation of the review in the grant files. However, cost reviews were
documented in only 4 of 24 grants we reviewed. As shown in the table below, in many cases,
project officers stated they performed cost reviews but did not document them. The number of
cost reviews reportedly performed but not documented represented 50 percent of the awards we
reviewed.

Number
Percent
Cost Reviews Not Performed
8
33%
Cost Reviews Reportedly Performed But Not Documented
12
50%
Cost Reviews Performed and Documented
4
17%
Total Number of Grants Reviewed
24

Generally, project officers said they were aware that cost reviews needed to be performed but
were unaware that they needed to be documented. In those instances where no cost reviews were
performed, the project officers said they thought the grants management offices or proposal
reviewers had performed the cost reviews. As a result, EPA risked the possibility of reimbursing
recipients for costs that were unreasonable, unallowable, or unrelated to agreed-upon activities.
The lack of documentation for cost reviews is not a new issue or only isolated to Brownfields
grants. In a prior OIG report on grants EPA-wide (Report No. 2003-P-00007, "EPA Must
Emphasize Importance of Pre-A ward Reviews for Assistance Agreements," dated March 31,
2003), the Inspector General reported that project officers did not document cost reviews for
79 percent of the grants reviewed. EPA guidance states that cost reviews must be performed and
documented; consequently, Brownfields and regional offices need to ensure that the guidance is
followed in the future.
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Other Matters
During our review, we observed that the 2003 and 2004 national competition processes for
assessment, cleanup, and revolving loan fund grants were complex, due both to the nature and
design of Brownfields competition. Specifically, we found that:
Multiple concurrent competitions were held annually.
A high volume of applications were received for the competitions.
Both regional and national panels scored applications.
According to EPA staff, the competition process was time-consuming and impeded their ability
to perform their other responsibilities related to managing grants. For example, some members
of the evaluation panels, who were also project officers, informed us that their regular workload
suffered due to the additional responsibilities and strict deadlines. Also, when reviewing
applications, we found several instances where work plans were not well developed and/or had
missing information. One project officer indicated he did not have sufficient time to correct the
work plan, but would follow up with the grantee.
The Brownfields Office has taken steps to streamline the competition process. We encourage the
Brownfields Office to continue to periodically assess the competition process, and look for ways
to streamline this process, to ensure that adequate resources are available for post-award grant
management activities.
Recommendation
We recommend that the Acting Assistant Administrator for Solid Waste and Emergency
Response remind project officers to document cost reviews, in accordance with EPA policy,
prior to grant award.
Agency Comment and OIG Evaluation
The Agency agreed with the draft report recommendation. In its response, the Agency indicated
that the Brownfields Office Director has sent e-mail instructions to all Brownfield Office staff,
including project officers, and discussed the need for cost reviews during Brownfields Office
staff meetings. In addition, during our exit conference with Agency officials, the Agency
indicated the Brownfields Office Director will prepare an e-mail, to go out no later than the end
of April 2005, to notify Brownfields regional coordinators of the responsibility all project
officers have to conduct cost reviews of their grants. In the e-mail, Agency officials said
Director will instruct the coordinators to inform all of the Brownfields project officers of this
duty. Agency officials said the Director will request that each regional Brownfields coordinator
respond back to the Brownfields Office with an e-mail acknowledging this task has been
completed in the region. We concur with the Agency's response and corrective action plan.
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Action Required
Your response to the draft report included corrective actions and an estimated completion date
of April 30, 2005. As a result, no further response to this report is necessary, but we ask that you
provide us with the status of your corrective actions and whether all actions were completed by
April 30, 2005. We have no objections to the further release of this report to the public. For
your convenience, this report will be available at http://www.epa.gov/oig.
We want to express our appreciation for the cooperation and support provided by your staff
during this audit. If you or your staff have any questions about this report, please contact me at
(312) 886-3037, or Leah Nikaidoh, Assignment Manager, at (513) 487-2365.
Scope and Methodology
We performed our audit in accordance with Government Auditing Standards, issued by the
Comptroller General of the United States. We reviewed how EPA used the new Brownfields Act
requirements, and other Agency policies, to select and award the Brownfields grants for the
fiscal year 2003 competition, and relevant changes made in the fiscal year 2004 competition.
We reviewed Brownfields grants and competition files from Regions 1, 5, and 10, and from
Headquarters. We selected a sample of 39 applications from all three competitive grant
categories in 2003. Of the 39 applications, 24 were awarded grants. The 24 awards represented
10 percent of the total competitive EPA Brownfields grant awards in 2003.
As part of our audit, we assessed the control EPA established for the competition and award of
Brownfields grants. Instances of noncompliance with Agency policy were identified and
included in our report.
We issued a draft report to the Agency on February 16, 2005, and the Agency responded to our
draft report on March 2, 2005. We held an exit conference with the Acting Director of the Office
of Brownfields Cleanup and Redevelopment and obtained additional information regarding the
implementation of the Agency's recommendation.
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Appendix A
Agency Response
March 2, 2005
MEMORANDUM
SUBJECT: OSWER Response to OIG Draft Audit Report "Brownfields Competition
Process"
Assignment No. 2003-000964
FROM: Thomas P. Dunne/s/
Deputy Assistant Administrator
TO:	Michael A. Rickey, Director
Assistance Agreement Audits
The Office of Solid Waste and Emergency Response (OSWER) appreciates the
opportunity to provide comments in response to the Inspector General's draft report
"Brownfields Competition Process" (Assignment No. 2003-000964).
We agree with the Inspector General's recommendation that project officers be reminded
of the requirement to document cost reviews, in accordance with EPA policy, prior to grant
award. The Office Director for the Office of Brownfields Cleanup and Redevelopment (OBCR)
has sent e-mail instructions to all OBCR staff, including project officers, and discussed the need
for cost reviews during OBCR staff meetings. OBCR will also provide Brownfields regional
staff with e-mail instructions.
If you have any questions on OSWER's response, please contact Linda Garczynski,
Director, Office of Brownfields Cleanup and Redevelopment on 202-566-2731.
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Distribution
Appendix B
Office of the Administrator (1101 A)
Acting Assistant Administrator for Solid Waste and Emergency Response (5101T)
Director, Office of Brownfields Cleanup and Redevelopment (5105T)
Audit Followup Coordinator, Office of Solid Waste and Emergency Response (5101T)
Agency Followup Official (the CFO) (271 OA)
Agency Audit Followup Coordinator (2724A)
Associate Administrator for Congressional and Intergovernmental Relations (1301 A)
Associate Administrator for Public Affairs (1101 A)
General Counsel, Office of General Counsel (401 OA)
Director, Office of Regional Operations (1108A)
Director, Office of Grants and Debarment (3901R)
Director, Grants Administration Division (3903R)
Inspector General (2410)
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