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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF INSPECTOR GENERAL
Catalyst for Improving the Environment
Audit Report
EPA Submitted Accurate
and Timely Recovery Act
Financial Reports
Report No. 10-R-0151
June 22, 2010
RECOVERY.GOV

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Report Contributors:	Paul Curtis
Arthur Budelier
Sheree James
Demetrios Papakonstantinou
Javier Negron
Abbreviations
EPA
U.S. Environmental Protection Agency
FACTS II
Federal Agency Centralized Trial-Balance System II
IFMS
Integrated Financial Management System
OCFO
Office of the Chief Financial Officer
OEI
Office of Environmental Information
OIG
Office of Inspector General
OMB
Office of Management and Budget
RAT
Recovery Accountability and Transparency
TAFS
Treasury Appropriation Fund Symbol

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\ Office of Inspector General
At a Glance
Catalyst for Improving the Environment\
Why We Did This Review
We performed this review to
determine whether (1) the U.S.
Environmental Protection Agency's
(EPA's) financial reporting for the
American Recovery and
Reinvestment Act of 2009
complied with Office of
Management and Budget (OMB)
guidance and Recovery Act
requirements; (2) the amounts EPA
reported to OMB reconciled to
EPA's financial system; and
(3) EPA submitted the reports in a
timely manner.
Background
The Recovery Act provided EPA
with $7.22 billion for specific
programs. OMB issued guidance
on how federal agencies should
manage and report on Recovery
Act activities. OMB's guidance
requires EPA to report, on a weekly
basis, the cumulative Recovery Act
funds obligated and expended.
OMB provides for Recovery Act
funds transparency and
accountability by requiring that
EPA's reports be posted on the
Internet for public access.
EPA Submitted Accurate and Timely
Recovery Act Financial Reports
What We Found
EPA complied with OMB guidance and Recovery Act requirements in its
weekly financial activity reporting. EPA submitted accurate and timely
financial reports. EPA ensured its financial reporting was transparent to the
public by posting data to the EPA Recovery Act Website and submitting data
to the Recovery and Accountability Transparency Board for posting to the
government-wide Website.
Our review assures EPA and the public that EPA's weekly Recovery Act
financial activity reports are accurate, timely, and transparent.
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.qov/oiq/reports/2010/
20100622-10-R-0151.pdf

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
INSPECTOR GENERAL
June 22, 2010
MEMORANDUM
SUBJECT: EPA Submitted Accurate and Timely
Recovery Act Financial Reports
Report No. 10-R-0151
V/\Vv\
FROM: Melissa M. Heist
Assistant Inspector General for Audit
TO:	Barbara J. Bennett
This is our report on the American Recovery and Reinvestment Act of 2009 financial reporting
review conducted by the Office of Inspector General of the U.S. Environmental Protection
Agency.
The estimated cost of this report - calculated by multiplying the project's staff days by the
applicable daily full cost billing rates in effect at the time - is $104,776.
Action Required
We made no recommendations; therefore, no action is required. We will close out the report in
our tracking system upon issuance. We have no objections to the further release of this report to
the public. This report will be available at http://www.epa.gov/oig.
Chief Financial Officer
If you have any questions, please do not hesitate to contact me at 202-566-2523 or
curtis.paul@epa.gov. or Arthur Budelier at 312-353-9529 or budelier.arthur@epa.gov.

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EPA Submitted Accurate and Timely
Recovery Act Financial Reports
10-R-0151
Table of C
Purpose		1
Background		1
Scope and Methodology		1
Results of Review		2
EPA Complied with OMB Guidance and Recovery Act Requirements		2
EPA Submitted Accurate Financial Reports		3
EPA Submitted Timely Financial Reports		3
Agency Comments and OIG Evaluation		3
Status of Recommendations and Potential Monetary Benefits		4
Appendix
A Distribution	 5

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10-R-0151
Purpose
The Office of Inspector General (OIG) performed this review to determine whether the U.S.
Environmental Protection Agency's (EPA's) financial reporting for the American Recovery and
Reinvestment Act of 2009 complied with Office of Management and Budget (OMB) guidance
and was accurate and timely.
The objectives of our review were to determine whether:
•	EPA's financial reports complied with OMB guidance and Recovery Act
requirements;
•	Amounts EPA reported to OMB reconciled to EPA's financial system; and
•	EPA submitted the Recovery Act reports in a timely manner.
Background
The purpose of the Recovery Act is to create and save jobs and spur economic activity and
investment in long-term growth. The Recovery Act provided EPA $7.22 billion for specific
programs. The Recovery Act requires stringent accountability for performance and results, as
well as unprecedented transparency. The Recovery Accountability and Transparency (RAT)
Board provides transparency in the use of Recovery Act-related funds.
OMB memoranda M-09-10, dated February 18, 2009, and M-09-15, dated April 3, 2009,
published guidance to federal agencies for implementing Recovery Act programs and activities.
The guidance requires agencies to report to the RAT Board, on a weekly basis, all cumulative
Recovery Act obligations and gross outlays (expenditures) in a standard reporting format. The
financial information that agencies report must use the same U.S. standard general ledger
account balances that they report to the Federal Agency Centralized Trial-Balance System II
(FACTS II). OMB Bulletin 09-02, dated February 25, 2009, requires agencies to use separate
Treasury Appropriation Fund Symbols (TAFSs) to track and report Recovery Act obligations
and disbursements. Federal agencies report the cumulative activity through Friday and submit
their weekly reports the following Tuesday before 5:30 p.m. The weekly reports include a list of
the major Recovery Act actions completed to date and the major planned actions. Senior
accountable officials clear these communications before their release.
Several EPA offices coordinate to prepare and submit EPA's weekly reports. EPA's Office of
the Chief Financial Officer (OCFO) prepares the financial section of the reports. The Office of
Environmental Information (OEI) prepares the "Major Actions Completed" and "Major Actions
Planned" sections. The Recovery Act Accountable Official in the Office of Administration and
Resources Management reviews and approves the weekly reports. OEI transmits the reports, and
the RAT Board posts the reports to www.recovery.gov and provides them to OMB.
Scope and Methodology
We conducted this audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
1

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10-R-0151
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives. We conducted our audit from January 25 to
June 2, 2010.
We reviewed EPA's weekly Recovery Act financial reports and the process for preparing them.
We tested the compliance and accuracy of EPA's weekly financial activity reports by comparing
them to reports that we independently generated from the Integrated Financial Management
System (IFMS). We tested 5 reports from a universe of 49 reports dated from March 3, 2009,
through February 2, 2010. We selected report dates that provided representative audit coverage
for the entire reporting period. We tested the timeliness of reporting by examining e-mail
confirmations of report submissions, and we traced report postings to www.recovery.gov. We
examined the EPA senior accountable official's written approval of the reports.
We assessed EPA's internal controls related to the weekly financial activity reporting. We
gained an understanding of the reporting process and internal controls through interviews of
OCFO and OEI personnel and examination of OCFO's report preparation instructions. We did
not review the internal controls over IFMS from which we obtained data reports, but relied on
the review conducted during the audit of EPA's Fiscal Year 2009 financial statements.
We found no prior OIG or U.S. Government Accountability Office reports with findings or
recommendations related to EPA's Recovery Act financial reporting.
Results of Review
EPA submitted accurate and timely Recovery Act financial reports in compliance with OMB
guidance and Recovery Act requirements.
EPA Complied with OMB Guidance and Recovery Act Requirements
EPA complied with OMB guidance and Recovery Act requirements for submitting its financial
activity reports by:
•	Submitting weekly reports of its cumulative Recovery Act obligations and gross
outlays in the prescribed format.
•	Using separate TAFSs for Recovery Act funds.
•	Using the same U.S. standard general ledger accounts that it reported to FACTS II.
•	Including in the weekly reports a list of the major Recovery Act actions completed to
date and the major planned actions.
•	Obtaining approval of the EPA senior accountable official to release the
communications.
•	Ensuring Recovery Act financial reporting is transparent to the public by posting data
to the EPA Recovery Act Website and submitting data to the RAT Board for posting to
the government-wide Website.
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10-R-0151
EPA Submitted Accurate Financial Reports
We found that EPA submitted accurate weekly reports of cumulative Recovery Act obligations
and gross outlays. We verified the accuracy of EPA's reports by matching them to reports that
we independently developed. We generated data from EPA's IFMS accounting system and
tested five EPA reports. All five reports were accurate. However, OCFO's written instructions
for preparing the weekly financial reports contained a misstatement about reporting Recovery
Act funds transfers within EPA. The instructions stated that vendor code type 9 transactions
representing funds transfers within EPA should be excluded from the weekly financial reports.
However, OMB guidance states that weekly reports should include transfers within an agency
from one TAFS account to another. Because EPA's reports correctly included transfers within
EPA, there was no inaccurate accounting, only a misstatement in the written instructions. OCFO
provided us corrected internal instructions on April 7, 2010.
EPA Submitted Timely Financial Reports
We found that EPA submitted timely financial reports to the RAT Board. The reports include
obligation and gross outlay activity through the prior Friday. EPA transmits the weekly reports
to the RAT Board through an e-mail to a General Services Administration feed. OMB requires
federal agencies to transmit the reports each Tuesday by 5:30 p.m., but will allow an extension
until 10:00 a.m. Wednesday. The RAT Board includes, in its weekly posting to
www.recovery.gov. the reports of agencies transmitted by 10:00 a.m. Wednesday. Of the five
reports reviewed, EPA submitted one report to the RAT Board after the deadline, on Tuesday,
February 2, 2010, at 10:48 p.m. However, the RAT Board included the posting to
www.recovery.gov due to its extension policy. EPA's late transmission had no effect on the
timely posting of Recovery Act activity for public access.
Agency Comments and OIG Evaluation
In an e-mail dated June 11, 2010, the Agency stated it had no comments on our report.
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10-R-0151
Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
POTENTIAL MONETARY
BENEFITS (In $000s)
Rec.
No.
Page
No.
Subject
Status1
Action Official
Planned
Completion
Date
No recommendations
Claimed
Amount
Agreed To
Amount
1 O = recommendation is open with agreed-to corrective actions pending
C = recommendation is closed with all agreed-to actions completed
U = recommendation is undecided with resolution efforts in progress
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10-R-0151
Appendix A
Distribution
Office of the Administrator
Chief Financial Officer
Deputy Assistant Administrator for Environmental Information and
Deputy Chief Information Officer
Assistant Administrator for Administration and Resources Management
Agency Follow-up Coordinator
General Counsel
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Audit Follow-up Coordinator, Office of the Chief Financial Officer
Audit Follow-up Coordinator, Office of Environmental Information
Acting Inspector General
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