At a Glance: Borough of Carteret, New Jersey - Unallowable Costs Claimed Under EPA Grant XP98247001


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Office of Inspector General
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At a Glance
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Catalyst for Improving the Environment
Why We Did This Review
The U.S. Environmental
Protection Agency (EPA)
Office of Inspector General
(OIG) conducted a review of
earmarked grants known as
Special Appropriation Act
Projects issued to State and
tribal Governments. The
Borough of Carteret, New
Jersey, was selected for
review.
Borough of Carteret, New Jersey - Unallowable
Costs Claimed Under EPA Grant XP98247001
What We Found
The Borough of Carteret, New Jersey (grantee), did not meet the Title 40 Code
of Federal Regulations Part 31 requirements for financial management systems.
Based on directions from EPA, the grantee claimed $1,360,429 in costs for
reimbursement for work that was not within the scope of the original project.
The grantee also claimed up to $214,962 in unallowable pre-award costs. The
final Financial Status Report did not accurately reflect the project's cumulative
total outlays. The grantee also incurred additional project costs that EPA has not
reviewed for eligibility and could have been claimed.
Background
What We Recommend
In 2001, the Borough of
Carteret received an EPA
Special Appropriation Act
Project grant, XP98247001.
The purpose of the grant was
to provide Federal assistance
of $1,451,800 for constructing
sanitary and stormwater sewer
system improvements. The
Borough of Carteret was
required to provide local
matching funds equal to
45 percent of the EPA-
awarded funds
We recommend that the Regional Administrator, EPA Region 2:
1.	Sustain the questioned costs of $1,575,391, consisting of:
a.	$1,360,429 in out-of-scope project costs.
b.	$214,962 in unallowable pre-award costs.
The Region can consider amending the grant period or the scope of work
during the resolution of questioned costs.
2.	Request that the grantee provide a revised final Financial Status Report that
reflects the actual amount of cumulative total outlays.
3.	Review unclaimed costs of $ 1,286,668 for potential eligibility.
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/2008/
20080220-08-2-0084. pdf

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