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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
2007-4-00068
July 31, 2007
Catalyst for Improving the Environment
Why We Did This Review
We conducted this examination
to determine whether (1) the
incurred costs of $9,042,706
fairly present the allowable costs
under the U.S. Environmental
Protection Agency (EPA)
assistance agreements audited;
(2)	the amounts claimed by the
recipient under EPA grants were
reasonable, allocable, and
allowable in accordance with the
terms of the agreements and
applicable regulations; and
(3)	the recipient achieved the
intended results of the grants.
Background
EPA awarded four assistance
agreements to the recipient for
the following purposes: to
coordinate Northeastern States"
efforts to assess the degree of
ozone transport, and strategies
for mitigating interstate
pollution; and to develop State
implementation plans for
reducing regional haze.
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/
20070731-2007-4-00068.pdf
Ozone Transport Commission incurred Costs Under
EPA Assistance Agreements XA98379901, OT83098301,
XA97318101, and OT83264901
What We Found
In our opinion, with the exception of the questioned costs discussed below, the
outlays reported in the Financial Status Reports present fairly, in all material
respects, the allowable outlays incurred in accordance with the terms and
conditions of the agreements and applicable laws and regulations. We questioned
$2,723,706 of the $9,042,706 in reported outlays because the recipient claimed
unallowable outlays for contractual services, indirect costs, and in-kind costs.
Specifically, the recipient:
•	Did not compete contracts, justify sole-source procurements, or perform cost
analysis of contracts;
•	Claimed indirect costs without approved indirect rates; and
•	Did not maintain adequate documentation for in-kind costs used as recipient
match.
We did not identify any concerns with the deliverables required by the grants.
What We Recommend
We recommend that EPA recover questioned outlays of $2,723,706 unless the
recipient provides sufficient documentation to support the related claimed costs in
accordance with Federal regulations. We also recommend that EPA direct the
recipient to implement procedures to address issues relating to procurement of
contracts, indirect cost rates, and documentation of in-kind costs, and monitor the
recipient's subrecipient and procurement activities until EPA is assured that the
recipient is consistently meeting Federal requirements.

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