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• U.S. Environmental Protection Agency	11-R-0700

|	\ Office of Inspector General	September 23, 2011
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At a Glance
Catalyst for Improving the Environment
Why We Did This Review
The U.S. Environmental
Protection Agency, Office of
Inspector General, conducts
site visits of American
Recovery and Reinvestment
Act of 2009 (Recovery Act)
clean water and drinking water
projects. The purpose of the
visits is to confirm compliance
with selected Recovery Act
requirements. We selected the
wastewater treatment plant
project in the City of Ottawa,
Illinois, for review.
Background
The city received a $7,720,293
loan from the State of Illinois
under the Water Pollution
Control Loan Program. The
loan included $3,860,147 in
Recovery Act funds. The city
will use these funds to
rehabilitate and improve the
city's wastewater treatment
plant.
For further information,
contact our Office of
Congressional, Public Affairs
and Management at
(202) 566-2391.
The full report is at:
www.epa.qov/oiq/reports/2011/
20110923-11 -R-0700.pdf
American Recovery and Reinvestment Act Site
Visit of Wastewater Treatment Piant—Phase II
Improvements Project, City of Ottawa, Illinois
What We Found
We conducted an unannounced site visit of the wastewater treatment plant project
in the City of Ottawa, Illinois. As part of our site visit, we toured the project,
interviewed city representatives and engineering and contractor personnel, and
reviewed documentation related to Recovery Act requirements.
The city could not provide sufficient documentation to support that some
manufactured goods used on the project met the Buy American requirements of
Section 1605 of the Recovery Act. In these instances, the documentation did not
demonstrate clearly that items were either manufactured in the United States or
substantially transformed in the United States. As a result, the state's use of over
$3.8 million of Recovery Act funds on the Ottawa project is prohibited by
Section 1605 of the Recovery Act, unless a regulatory option is exercised.
What We Recommend
We recommend the Regional Administrator, Region 5, employ the procedures set
out in Title 2 of the Code of Federal Regulations (CFR) to resolve the
noncompliance on the Ottawa project. In the event that the region decides to retain
foreign-manufactured goods in the Ottawa project under 2 CFR § 176.130 (c)(3),
the region should either "reduce the amount of the award by the cost of the steel,
iron, or manufactured goods that are used in the project or . . . take enforcement or
termination action in accordance with the agency's grants management
regulations/'
Neither the region nor the city agreed with our conclusion that the documentation
was not sufficient to support Buy American compliance for some items. Based on
additional documentation provided by the city, we agree that some items are now
sufficiently supported, and we have revised the report accordingly. However,
documentation is still insufficient in four instances.

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