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\ Office of Inspector General
At a Glance
Why We Did This Project
We conducted an audit of the
U.S. Environmental Protection
Agency's (EPA's) contract
billing controls for EPA
Contract No. EP-W-11-019,
Task Order 12, which was
awarded in 2011. This audit
was initiated in response to an
anonymous hotline complaint
regarding possible irregularities
with contract invoicing and
payments.
The purpose of this audit was
to determine whether the EPA's
contract administration of EPA
Contract No. EP-W-11-019,
Task Order 12, had effective
controls over billing and funding
to prevent fraud, waste and
abuse. Although the contract
ended in 2017, the contract is
open until the indirect rates are
finalized and related cost
differences are paid.
This report addresses the
following:
• Operating efficiently and
effectively.
EPA Overpaid Invoices Due to Insufficient
Contract Management Controls
Address inquiries to our public
affairs office at (202) 566-2391 or
OIG WEBCOMMENTS@epa.oia.
List of OIG reports.
What We Found
Contract management controls were insufficient
for expired EPA Contract No. EP-W-11-019.
We identified the following issues:
All 11 invoices tested
did not comply with
contract requirements.
•	Required contractor performance reports were not finalized.
•	There were no official contract or task order modifications for some of the
Contracting Officer and Contracting Officer's Representative changes.
•	Contracting Officer's Representative appointment memorandums were
missing.
•	Contracting Officers did not perform required periodic invoice reviews.
The issues occurred due to various reasons, such as staffing issues, high
turnover within the EPA's Office of Acquisition Solutions (i.e., multiple contracting
officers during the contract), contract management file disorganization, and
inadequate oversight. As a result, there was a lack of available contractor
performance information, reduced accountability for the EPA's contract
management responsibilities, an increased risk of unauthorized acts, and a
reduced assurance that costs were billed in accordance with contract
requirements.
Also, the invoices for Task Order 12 did not comply with specific contract
requirements to manage the task order effectively. Despite requirements for
invoices to be thoroughly reviewed prior to payment, the invoices reviewed under
Task Order 12 were not adequately reviewed and documentation of any reviews
prior to approval, such as completed invoice review checklists, did not exist. As a
result, the EPA did not have reasonable assurance that costs or a fee billed
under Task Order 12 were allowable, allocable and reasonable. Our limited
review of invoices under Task Order 12 found that a subcontract fixed fee totaling
$5,158.29 was overbilled.
Recommendations and Planned Agency Corrective Actions
This report makes seven recommendations to the Assistant Administrator for
Mission Support. Most of our recommendations require actions to improve
contract management, internal controls and oversight. We make no
recommendations related to some of the findings in this report because the
contract has expired.
The EPA concurred with all seven recommendations. The EPA's proposed
corrective actions and planned completion dates meet the intent of the
recommendations. The EPA completed corrective actions for two
recommendations; the other five are resolved with corrective actions pending.

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