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U.S. Environmental Protection Agency
Office of Inspector General
At a Glance
2005-4-00120
September 21, 2005
Catalyst for Improving the Environment
Why We Did This
Examination
We conducted this examination to
determine whether (1) the reported
outlays fairly present, in all
material respects, the allowable
costs incurred under EPA
cooperative agreements
CX82546101, CX82675101 and
XA83033101; and (2) the recipient
was managing its EPA cooperative
agreements in accordance with
applicable requirements.
Background
EPA awarded three cooperative
agreements to the recipient totaling
$3,260,467. Grant CX82546101
was awarded for storm water
education, and grants CX82675101
and XA83033101 were market
transformation grants awarded to
encourage developing and
purchasing energy-efficient
products. The project period for
the storm water education grant
was from December 15, 1996, to
October 31, 2001. The project
periods for the market
transformation grants ran
consecutively from September 1,
1998, to December 31, 2005.
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/2005/
20050921-2005-4-00120.pdf
Natural Resources Defense Council Reported
Outlays Under EPA Cooperative Agreements
CX82546101, CX82675101, and XA83033101
What We Found
In our opinion, because of the effects of the questioned outlays discussed
below, the reported Federal outlays on the Financial Status Reports/Federal
Cash Transaction 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 $1,419,548 of reported
outlays because the recipient did not maintain the necessary documentation to
fully support the reported costs, as required by Federal regulations.
Specifically, the recipient did not (1) obtain required Federal approval for
indirect and fringe benefit costs, and (2) perform required cost or price reviews
to support the reasonableness for contract costs.
What We Recommend
We recommend that EPA (1) obtain sufficient documentation to support the
outlays of $1,419,548 in accordance with EPA regulations or disallow the costs
from Federal grant participation, and (2) negotiate fringe benefit and indirect
cost rates in accordance with Office of Management and Budget Circular
A-122.
The recipient disagrees with the questioned outlays, but plans to submit for
negotiation the required fringe benefit and indirect cost rate proposals.

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