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U.S. Environmental Protection Agency	08-2-0062
$	\	Dffiro nf Incnortnr ^onoral	January 23, 2008
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Office of Inspector General
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At a Glance
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Why We Did This Review
The U.S. Environmental
Protection Agency (EPA)
Office of Inspector General
conducted a review of
earmarked grants known as
Special Appropriation Act
Projects issued to State, local,
and tribal governments. The
City of Elizabeth, New Jersey
(grantee) was selected for
review.
Background
The grantee received EPA
Special Appropriation Act
Project grant number
XP98241301, which provided
Federal assistance of
$1,451,800. The grantee was
responsible for matching, at a
minimum, 45 percent of the
eligible project costs. The
grantee fulfilled its matching
requirement with loans from
the New Jersey Department of
Environmental Protection.
The loans were funded
through the Clean Water State
Revolving Fund.
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/2008/
20080123-08-2-0062.pdf
Catalyst for Improving the Environment
City of Elizabeth, New Jersey - Excess Clean
Water State Revolving Funds Claimed
What We Found
The grantee claimed and was reimbursed under its Clean Water State Revolving
Fund loan $335,232 in excess of actual costs incurred, contrary to the
requirements of Title 40, Code of Federal Regulations, Section 35.3155 (d)(2).
The grantee initially paid for all project construction costs using its internal
service funds, and was reimbursed with draws from either the State loans or from
the EPA grant. The grantee did not associate all reimbursements with contract
invoice payments. The over reimbursement was associated with a State of New
Jersey loan that was 50-percent funded from the Clean Water State Revolving
Fund. These funds could have been made available for use by other potential loan
recipients.
What We Recommend
We recommend that the Regional Administrator, EPA Region 2, coordinate with
the State to ensure that the grantee immediately repays $335,232 drawn in excess
of actual costs incurred.

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