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K U.S. Environmental Protection Agency	2007-4-00026
^ 4JL, \ Office of Inspector General	November 28,2006

At a Glance
Why We Did This Review
In response to a Grants
Administration referral, we
conducted this examination to
determine whether (1) the
reported outlays of $9,871,025
fairly present the allowable costs
incurred under the U.S.
Environmental Protection
Agency (EPA) cooperative
agreements audited; and
(2) the recipient managed its
EPA cooperative agreements in
accordance with applicable
requirements.
Background
EPA awarded seven cooperative
agreements to the International
City/County Management
Association (recipient) totaling
$9,916,441 for the following
purposes: radon and indoor air
pollution reduction and
education; establishing the local
government environmental
assistance network; base closure
and land reuse research;
maintenance of the smartgrowth
network; support of entities
affected by hazardous waste
sites, including brownfields
conferences and research; and
water security training.
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.qov/oiq/reports/2007/
20061128-2007-4-00026.pdf
Catalyst for Improving the Environment
International City/County Management Association Reported
Outlays Under Seven Selected Cooperative Agreements
What We Found
In our opinion, the reported Federal outlays by the International City/County
Management Association (recipient) on the Financial Status Reports do not present
fairly, in all material respects, the allowable outlays incurred in accordance with the
terms and conditions of the grants and applicable EPA regulations. We questioned
$1,007,858 of the $9,871,025 in reported outlays because the recipient claimed
unallowable outlays for contractual services, subgrant costs, indirect labor and
facilities costs, and in-kind costs. Specifically, the recipient:
•	Did not compete contracts, justify sole-source procurement, or perform
cost analysis of contracts;
•	Did not oversee or maintain documentation for subgrants;
•	Did not maintain adequate documentation for in-kind costs used as
recipient match; and
•	Claimed indirect costs that were prohibited by law.
What We Recommend
We recommend that EPA: (1) disallow the questioned outlays of $78,298 that were
prohibited by law; (2) obtain sufficient documentation to support the remaining
questioned outlays of $929,560 in accordance with EPA regulations or disallow the
costs from Federal grant participation; and (3) direct the recipient to establish
procedures to address issues relating to procurement of contracts, management of
subrecipients, and documentation of in-kind costs.

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