&	U.S. Environmental Protection Agency	10-2-0054
i JUL, \ Office of Inspector General	January 6,2010
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At a Glance
Catalyst for Improving the Environment
Why We Did This Examination
The U.S. Environmental
Protection Agency (EPA) Office
of Inspector General is
examining grants awarded to
nonprofit grantees. We selected
Walker Lake Working Group
(grantee) for examination.
Background
EPA Region 9 awarded grant
X96906001 on September 30,
2004. The grant provided
federal assistance of $842,100
for developing a conservation
plan for Walker Lake that will
sustain the native freshwater
ecosystem. The plan will be
based on scientific and social
studies of the basin to show
where water can be acquired or
saved. The grant specifies that
EPA will contribute 100 percent
of the approved allowable
project costs up to the awarded
amount.
Examination of Costs Ciaimed under EPA Grant
X96906001 Awarded to Walker Lake Working
Group, Hawthorne, Nevada
For further information,
contact our Office of
Congressional, Public Affairs and
Management at (202) 566-2391.
To view the full report,
click on the following link:
www.epa.aov/oia/reports/2010/
20100106-10-2-0054.pdf
What We Found
The grantee did not meet financial management requirements specified by Title 40
Code of Federal Regulations Part 30 and Title 2 Code of Federal Regulations
Part 30. In particular, the grantee claimed:
•	Contract costs that were not allowable because analysis and administration
requirements were not met.
•	Travel and other direct costs that were not allowable because
documentation requirements or cost principles were not met.
The grantee's Financial Status Report was also not supported by accounting system
data.
Because of these issues, EPA should recover $384,678 in questioned costs under
the grant. These issues also indicate that the grantee may not have the capability to
manage the grant and future EPA awards.
What We Recommend
We recommend that the Regional Administrator, EPA Region 9, disallow and
recover $384,678 in questioned costs under the grant if the grantee is unable to
provide adequate documentation to meet the appropriate federal financial
management and procurement requirements.
We also recommend that the Region 9 Regional Administrator require the grantee
to improve its procurement process and internal controls, and establish procedures
to ensure that future Financial Status Reports are properly supported by accounting
system data. Further, the Region 9 Regional Administrator should establish special
conditions for the grant and future EPA awards to the grantee that require payment
to the grantee on a reimbursement basis and review and approval by the EPA
project officer of reimbursement requests, including all supporting documentation
for the claims prior to payment.

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