*	' U.S. Environmental Protection Agency	n-p-0170
| jDL \ Office of Inspector General	March 15 2011
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At a Glance
Why We Did This Review
The U.S. Environmental
Protection Agency (EPA)
oversees water program
assistance agreements as part of
its efforts to protect human health
and the environment. Our
objectives were to determine
whether EPA has adequate
controls in place to identify and
deobligate unneeded funds for
water program assistance
agreements, and to determine the
amount of unliquidated
obligations for selected states that
could potentially be deobligated.
Background
To achieve clean and safe water
goals, EPA provides funds
through assistance agreements to
states, local governments, and
tribes under the water program.
Timely review and deobligation
of unneeded funds allows these
funds to be used on other
environmental projects.
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/
20110315-11 -P-0170.pdf
Catalyst for Improving the Environment
EPA Region 3 Reduced Unliquidated Obligations
Under Water Program Assistance Agreements
What We Found
We identified $6,130,166 of unneeded funds for three assistance agreements
awarded by EPA Region 3 to the District of Columbia, and the region
deobligated those funds during the course of the audit. An EPA official said
the unneeded funds could not be deobligated sooner because of a
construction dispute, nonperformance issues, technical issues, or equipment
problems. Further, an EPA project officer and a District of Columbia Water
and Sewer Authority official stated that they had not deobligated the
unneeded funds because they directed most of their resources to projects
related to the American Recovery and Reinvestment Act of 2009. As the
funds on these three grants were not needed, they could have been
deobligated earlier and awarded to the District of Columbia for other
environmental projects.
Because Region 3 deobligated funds remaining on the assistance agreements
during the course of our audit, we have no recommendations.
During our audit, we determined that Region 3's escalation process for
addressing project delays should be considered a best practice. While EPA
has policies for baseline monitoring of assistance agreements, Region 3
accelerates the award or dispute resolution process, and directly contacts the
recipient expressing concerns about lack of progress and requests they
perform specific tasks to move the project. For example, Region 3 sent a
letter informing the recipient of its concern regarding the lack of work
progress under the assistance agreement and required the recipient to take
specific actions. The letter also informed the recipient that EPA would
terminate the assistance agreement if the recipient did not take the required
actions. As a result, the recipient took actions to resolve the issues and the
project proceeded to construction.

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