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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
2007-4-00065
June 25, 2007
Catalyst for Improving the Environment
Why We Did This Review
We conducted this
examination to determine
whether the (a) reported
outlays for five U.S.
Environmental Protection
Agency (EPA) assistance
agreements were reasonable,
allocable, and allowable in
accordance with the terms and
conditions of the agreements
and applicable regulations;
and (b) The Environmental
Careers Organization
(Recipient) achieved the
intended results of the grant.
Background
EPA awarded five assistance
agreements to the Recipient to
provide internships to students
in the environmental field.
The Environmental Careers Organization Reported
Outlays for Five EPA Cooperative Agreements
What We Found
The Recipient did not comply with the financial and program management
standards promulgated in Title 40 Code of Federal Regulations (CFR), Subchapter
B and OMB Circular A-122. We questioned $6,027,814 of claimed costs because
the Recipient (1) could not support the indirect general and administrative, and
"mission and placement" outlays; (2) did not maintain support for distributing
salaries and wages claimed as indirect general and administration, and "mission
and placement"; (3) could not support relocation outlays; and (4) drew EPA funds
in excess of those needed to meet immediate needs. The Recipient did not have
written accounting procedures for identifying direct and indirect costs, and the
basis for allocating such costs to projects. The Recipient also did not complete the
required single audit for fiscal year 2005 or comply with financial reporting
requirements.
The purpose of the grants was to provide undergraduate and graduate students
with exposure to environmental programs through training and experiences in
conducting research projects at EPA facilities. As of September 30, 2006, the
Recipient recruited 1,423 interns.
What We Recommend
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/
20070625-2007-4-00065.pdf
We recommend that the Director for the Grants and Interagency Agreements
Management Division address the questioned costs by (1) recovering payments of
$4,750,342 unless the recipient can modify its accounting system to meet the
requirements of Title 40 CFR 30.21 to 31.28; (2) recover payments of $1,277,472
incurred for ineligible costs; (3) rescind the final indirect cost rate approved for the
fiscal year ended December 31, 2004; and (4) require the Recipient to establish
policies and procedures for relocating interns that comply with OMB Circular
A-122. To address the reporting issues, the Recipient should be required to
complete and submit its single audit for the fiscal year ended December 31, 2005,
and prepare and submit overdue SF 272 Federal Cash Transactions Reports. Due
to the significance of these findings, we also recommend that EPA stop work on
all active agreements and not award any new agreements until the Recipient meets
minimum financial management requirements and repays all disallowed costs.
The Recipient responded to the draft report on June 5, 2007, but did not provide
additional information that would change the findings and recommendations.

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