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1^7 | U.S. ENVIRONMENTAL PROTECTION AGENCY
^ pro^ OFFICE OF INSPECTOR GENERAL
Operating efficiently and effectively
Regions 1 and 5 Need
to Require Tribes to Submit
More Detailed Work Plans
for Grants
Report No. 20-P-0335	September 29, 2020

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Report Contributors:	Debra Coffel
Michael Davis
Juliana Ilieva
Heather Layne
Cara Lindsey
DeTravion White
Abbreviations
C.F.R.	Code of Federal Regulations
EPA	U.S. Environmental Protection Agency
OIG	Office of Inspector General
PPG	Performance Partnership Grants
Cover Image: The EPA provides financial assistance to tribes to help them develop and
implement environmental programs. (EPA image)
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Washington. D.C. 20460
(888) 546-8740
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OIG Hotline@epa.gov
Learn more about our OIG Hotline.
EPA Office of Inspector General
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Washington, D.C. 20460
(202) 566-2391
www.epa.gov/oiq
Subscribe to our Email Updates
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* *.	U.S. Environmental Protection Agency	20-P-0335
§ jyi \	Office of Inspector General	September 29,2020
v	At a Glance
Why We Did This Project
The U.S. Environmental
Protection Agency provides
financial assistance to states
and tribes to help them develop
and implement environmental
programs. For example, the
EPA's Indian Environmental
General Assistance Program
awards grants to federally
recognized tribes and tribal
consortia for planning,
developing, and establishing
environmental protection
programs in Indian Country.
The Office of Inspector General
conducted this audit to
determine whether the costs
claimed under selected
individual Indian tribal grants
are reasonable, allocable, and
allowable in accordance with
applicable laws, regulations,
and grant terms and conditions.
This report addresses the
following:
•	Operating efficiently and
effectively.
This project addresses a top
EPA management challenge:
•	Overseeing states, territories,
and tribes responsible for
implementing EPA programs.
Regions 1 and 5 Need to Require Tribes to
Submit More Detaiied Work Pians for Grants
What We Found
EPA Region 1 and EPA Region 5 can improve internal
controls for determining whether grant costs are
reasonable, allowable, and allocable for the
Passamaquoddy Tribe and the Fond du Lac Band Tribe
by requiring them to submit more detailed work plans.
Inadequate work
plans in Regions 1
and 5 put tribal
grants at risk for
unsupported costs.
Federal law and EPA policies require detailed work plans in the management
and administration of grants. Without adequate controls and adherence to federal
requirements, regional tribal grants are at risk, and the regions have limited
assurance that costs charged to the grants were reasonable, allowable, and
allocable.
We found that work plans from these Tribes lacked adequate details regarding
supply-related components, such as laptops and computer services, or funding
amounts. We identified $22,868 in questioned costs. In Region 1, we identified
$16,533 in questioned costs for the Passamaquoddy Tribe grant. In Region 5, we
identified $6,335 in questioned costs for the Fond du Lac Band Tribe grant.
Recommendations and Planned Agency Corrective Actions
We recommend that the respective regional administrators require the
Passamaquoddy Tribe in Region 1 and the Fond du Lac Band Tribe in Region 5
to submit detailed work plans that include estimated funding amounts for each
work plan component, determine the allowability of unsupported costs identified
during our audit, and recover the costs as appropriate. Regions 1 and 5
concurred with our recommendations and provided acceptable planned
corrective actions and estimated completion dates. We consider the
recommendations resolved with corrective actions pending.
Address inquiries to our public
affairs office at (202) 566-2391 or
OIG WEBCOMMENTS@epa.gov.
List of OIG reports.

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
THE INSPECTOR GENERAL
September 29, 2020
MEMORANDUM
SUBJECT: Regions 1 and 5 Need to Require Tribes to Submit More Detailed Work Plans for Grants
Report No. 20-P-0335
This is our report on the subject audit conducted by the Office of Inspector General of the
U.S. Environmental Protection Agency. The project number for this audit is OA&E-FY19-0314. This
report contains findings that describe the problems the OIG has identified and corrective actions that the
OIG recommends. Final determinations on matters in this report will be made by EPA managers in
accordance with established audit resolution procedures.
Region l's Mission Support Division's Grants Management Office and Region 5's Mission Support
Division's Acquisition and Assistance Branch are primarily responsible for the subjects covered in this
report.
In accordance with EPA Manual 2750, Regions 1 and 5 provided acceptable corrective actions and
estimated milestone dates in response to OIG recommendations. All recommendations are resolved, and
no final response to this report is required. However, if you submit a response, it will be posted on the
OIG's website, along with our memorandum commenting on your response. Your response should be
provided as an Adobe PDF file that complies with the accessibility requirements of Section 508 of the
Rehabilitation Act of 1973, as amended. The final response should not contain data that you do not want
to be released to the public; if your response contains such data, you should identify the data for redaction
or removal along with corresponding justification.
FROM: Sean W. O'Donnell
TO:
Dennis Deziel, Regional Administrator
Region 1
Kurt Thiede, Regional Administrator
Region 5
We will post this report to our website at www.epa.gov/oig.

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Regions 1 and 5 Need to Require	20-P-0335
Tribes to Submit More Detailed
Work Plans for Grants
		Table of C	
Purpose		1
Background		1
Responsible Offices		3
Scope and Methodology		3
Prior Reports		5
Results		5
Work Plans Lacked Information Needed for Evaluation of Grant Performance...	6
Questioned Costs		7
Conclusions		7
Recommendations		7
Agency Response and OIG Assessment		8
Status of Recommendations and Potential Monetary Benefits		10
Appendices
A Internal Control Assessment		11
B Region 1 Response to Draft Report 		12
C Region 5 Response to Draft Report 		15
D Distribution 		21

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Purpose
The U.S. Environmental Protection
Agency's Office of Inspector General
conducted an audit of the EPA's
Indian tribal grants. The objectives of
our audit were to determine whether
the costs claimed under the selected
Indian tribal grants were allowable,
allocable, and reasonable in
accordance with applicable laws,
regulations, and grant terms and
conditions.
Background
Congress passed a law authorizing the Indian Environmental General Assistance
Program in 1992. This law authorized the EPA to provide grants to federally
recognized tribes and tribal consortia to plan, develop, and establish
environmental protection programs in Indian Country and to develop and
implement solid and hazardous waste programs on tribal lands. The EPA awarded
approximately $63 million in General Assistance Program grants to tribes in 2019
to help achieve the Agency's mission of protecting human health and the
environment.
Under traditional environmental program grants (sometimes called "categorical"
grants), states receive funds to implement various water, air, waste, pesticides,
and toxic substances programs. Environmental program grant funds can only be
spent on activities that fall within the statutory and regulatory boundaries of that
program.
States and tribes wanted greater flexibility in
how they use and manage the grant funds they
receive from the EPA. In 1996, Congress
authorized the EPA to award Performance
Partnership Grants, or PPGs, which allow
states, certain interstate agencies, and tribes to
combine two or more environmental program
grants into a single grant.
Grant Work Plans Establish Grant Terms and Conditions
A work plan forms the basis for negotiating grant terms and conditions. It
identifies how and when the applicant will use funds from environmental program
grants and is the foundation from which to manage and evaluate performance
under the grant agreement to produce specific outputs and outcomes.
Top Management Challenge
This audit addresses the following top
management challenge for the Agency, as
identified in OIG Report No. 20-N-0231, EPA's
FYs 2020-2021 Top Management Challenges,
issued July 21, 2020:
• Overseeing states, territories, and tribes
responsible for implementing EPA
programs.
A PPG offers financial assistance for
several environmental programs
with greater flexibility. These
grants provide tribes the ability to
allocate the resources to their most
pressing environmental needs.
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Per 40 C.F.R. § 35.507, Work Plans, specific regulatory requirements for work
plans include:
•	Components to be funded under the grant.
•	Estimated work years and funding amounts for each work plan
component.
•	Commitments or tasks associated with each work plan component and a
time frame for accomplishment, as established in the grant agreement.
Allowable Grant Costs
Federal grant awards are governed by 2 C.F.R. Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards.
According to Section 200.403, Factors affecting allowability of costs, allowable
grant costs under federal awards must meet the following general criteria:
•	Be necessary and reasonable for the performance of the federal award.
•	Conform to any limitations or exclusions outlined in these principles or
the federal award.
•	Be consistent with the policies and procedures that apply.
•	Be accorded consistent treatment.
•	Be determined in accordance with generally accepted accounting
principles, except as otherwise provided for state and local governments
and Indian tribes.
•	Not be included as a cost or used to meet cost sharing or matching
requirements of any other federally financed program in either the current
or prior period.
•	Be adequately documented.
Reasonable Grant Costs
Under 2 C.F.R. § 200.404, Reasonable costs:
A cost is reasonable if, in its nature and amount, it does not exceed
that which would be incurred by a prudent person under the
circumstances prevailing at the time the decision was made to
incur the cost.
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Allocable Grant Costs
Per 2 C.F.R. § 200.405, Allocable costs:
A cost is allocable to a particular Federal award or other cost
objective if the goods or services involved are chargeable or
assignable to that Federal award or cost objective in accordance
with relative benefits received.
In addition, an allocable cost must be:
•	Incurred specifically for the federal award.
•	Beneficial to both the federal award and other work of the nonfederal
entity and distributed in proportions that may be approximated using
reasonable methods.
•	Necessary to the overall operation of the nonfederal entity and assignable
in part to the federal award in accordance with the principles in the
regulations.
Responsible Offices
The Office of Grants and Debarment within the Office of Mission Support and the
regional EPA offices oversee the management of grants.
The Office of International and Tribal Affairs leads the EPA's international and
tribal engagements, working across the Agency's programs and regions to
develop and implement the policies and programs that protect public health and
the environment. Within that office, the American Indian Environmental Office
leads the EPA's efforts to protect human health and the environment of federally
recognized tribes by supporting the implementation of federal environmental laws
consistent with the federal trust responsibility, the government-to-government
relationship, and the EPA's 1984 Indian Policy.
Region l's Mission Support Division's Grants Management Office and
Region 5's Mission Support Division's Acquisition and Assistance Branch are
responsible for the management and oversight of grants within their respective
regions.
Scope and Methodology
We conducted this performance audit from September 2019 to July 2020 in
accordance with generally accepted government auditing standards. Those
standards require that we plan and perform the audit to obtain sufficient
appropriate evidence to provide a reasonable basis for our findings and
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conclusions based on our audit objectives. We believe the evidence obtained
provides a reasonable basis for our findings and conclusions based on our audit
objectives.
As detailed in Appendix A, we assessed the internal controls necessary to satisfy
our audit objectives.1 In particular, we assessed the internal control components
and underlying principles—as outlined in the U.S. Government Accountability
Office's Green Book—significant to our audit objectives. Any internal control
deficiencies we found are discussed in this report. Because our audit was limited
to the internal control components and underlying principles deemed significant
to our audit objectives, it may not have disclosed all internal control deficiencies
that may have existed at the time of the audit.
At the beginning of our audit, as of September 6, 2019, the EPA had 1,261 open
regional tribal grants totaling $521,568,905. We analyzed the universe of open
tribal grants provided by the Office of Grants and Debarment and categorized the
regions based on the total amount of open grants awarded. We selected Region 1
and Region 5 grants for review because the grants these regions awarded were a
lower dollar amount than the grants awarded by the other regions. We did not
review grants that were involved in an OIG Hotline complaint, part of an open
OIG investigation, awarded through the Superfund program, or considered high
risk. From the remaining grants, we selected tribes with PPG grants where most
of the awarded amount was expended. As shown in Table 1, we reviewed grants
awarded to two tribes.
Table 1: PPG grants selected
Region
Awarded
amount
Obligation
amounta
Percent
drawdown
Location
Tribe
1
$815,560
$702,560
86%
Maine
Passamaquoddy
5
1,124,030
1,070,090
95%
Minnesota
Fond du Lac Band
Total
$1,939,590
$1,772,650

Source: OIG analysis of active Office of Grants and Debarment tribal grants. (EPA OIG table)
a For federal awards, payments made against the grant during the grant period.
To address our objectives, we reviewed relevant laws, regulations, procedures,
and guidance. We reviewed electronic files for the grants selected in the EPA's
Integrated Grants Management System. We also reviewed hard copy grant files
from Regions 1 and 5. We analyzed award documents, work plans, progress
reports, and other relevant documents. We consulted with EPA grant specialists
and project officers regarding questions that arose based on our grant file reviews
1 An entity designs, implements, and operates internal controls to achieve its objectives related to operations,
reporting, and compliance. The U.S. Government Accountability Office sets internal control standards for federal
entities in GAO-14-704G, Standards for Internal Control in the Federal Government (also known as the "Green
Book"), issued September 10, 2014.
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and site visits to the Tribes. We interviewed the Tribes' grants management and
staff.
Prior Reports
We reviewed the following EPA OIG reports for background purposes:
• Report No. 2007-4-00078. Cheyenne River Sioux Tribe Outlays Reported
Under Five EPA Assistance Agreements, issued September 24, 2007. The
Tribe's internal controls were not sufficient to ensure that the outlays
reported complied with federal cost principles, regulations, and grant
conditions. In some instances, the Tribe also was not able to demonstrate
that it had completed all work under the agreements and achieved the
intended results of the agreements. In March 2020, the Agency indicated
that "all work under the agreements in question from the 2007 audit were
completed." The OIG has not independently verified this. In addition, to
close the audit, the Agency executed an exception from the "provisions in
40 CFR Part 31, 40 CFR Part 35, Subpart O, and Office of the
Management and Budget Circular A-87 codified at 2 CFR 225 to resolve
questioned costs."
•	Report No. 15-2-0165, Walker River Paiute Tribe Needs to Improve Its
Internal Controls to Comply with Federal Regulations, issued June 11,
2015. Walker River Paiute Tribe's accounting system and written policies
and procedures complied with federal regulations. Testing disclosed
multiple instances where the Tribe's actual practices did not comply with
federal regulations related to personnel costs, indirect costs, and in-kind
contributions. The audit also found incomplete grant tasks remaining from
an EPA General Assistance Program grant from fiscal years 2008 through
2012. The Agency indicated that all corrective actions were completed
subsequent to the issuance of the report.
•	Report No. 15-P-0166, Improved Oversight of EPA 's Grant Monitoring
Program Will Decrease the Risk of Improper Payments, issued June 11,
2015. Advanced administrative monitoring oversight was not always
effective for ensuring grant recipient costs are allowable, allocable, and
reasonable. EPA guidance and reference materials do not clearly state that
advance administrative monitoring reviews are to assess whether the
reviewed costs meet the requirements of applicable federal cost principles.
The Agency indicated that all corrective actions were completed
subsequent to the issuance of the report.
Results
Work plans from Region l's Passamaquoddy Tribe and Region 5's Fond du Lac
Band Tribe lacked adequate details on the supply-related components, such as
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laptops and computer services, or funding amounts. Insufficiently detailed work
plans in Regions 1 and 5 put grants at risk for unsupported costs. Without
adequate work plans, there is limited assurance that the costs charged to the grants
are in accordance with the terms and conditions of the grants.
Our audit of the costs claimed under the tribal grants identified $22,868 in
questioned costs. We identified $16,533 in questioned costs for the Region 1
Passamaquoddy Tribe grant and $6,335 in questioned costs for the Region 5 Fond
du Lac Band Tribe grant.
Work Plans Lacked Information Needed for Evaluation
of Grant Performance
The grant work plans from the Passamaquoddy Tribe in Region 1 and the Fond du
Lac Band Tribe in Region 5 lacked sufficient detail, which negatively impacts the
Agency's ability to fully evaluate whether the intent and the performance of the
grants have been achieved.
The EPA Assistance Agreement Almanac requires that applicants for EPA
nonconstruction grants submit:
•	A detailed budget narrative that describes proposed costs by object class,
such as personnel and travel, and provides detailed information supporting
these costs.
•	A work plan narrative that justifies the financial, facility, equipment, and
other resource needs requested in the application and provides technical
and other information required by program-specific regulations and
requirements.
The Almanac also requires that program offices conduct cost reviews to assess
whether proposed costs are allowable, reasonable, and allocable. Project officers
must conduct cost reviews of all competitive and noncompetitive applications.
The offices that manage grants in the regions and headquarters have the final
responsibility for ensuring that budget information is complete and that costs are
consistent with federal cost principles and applicable federal and EPA policies,
including whether costs are allowable, reasonable, and allocable.
The work plan submitted for the Passamaquoddy Tribe lacked the required details
for supply-related components. In accordance with 40 C.F.R. § 35.507, items such
as supplies to be purchased under grants must include the specific work plan
components to be funded under the grant. However, the Passamaquoddy Tribe did
not specify laptops, computers, and cell phones, along with related charges, as
expenses in the work plan. The Tribe explained that it categorized related cell
phone charges as utilities and categorized laptops and computers as office
supplies. The Tribe stated that Region 1 did not require these details. The Tribe's
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environmental director did say, however, that the Region 1 project officer said
that in future applications, the expenses would need to be listed in the work plan
according to the regulatory requirements. Yet, our analysis of the Tribe's
subsequent grant application, which covers fiscal years 2019-2021, noted that the
work plan again lacked details for supply-related components.
The Fond du Lac Band Tribe's work plan did not contain estimated funding
amounts for any of the work plan components. According to the Region 5 project
officer, regional staff had not been enforcing the regulatory requirements. Also, as
far as the Region 5 project officer knew, those work plans are what the tribes in
Region 5 had been accustomed to submitting.
The work plans submitted by both Tribes did not include all the components
required by 40 C.F.R. § 35.507. In addition, neither region fully adhered to the
Almanac when conducting cost reviews of grantee applications. As a result, the
regions cannot determine whether proposed costs are allowable, allocable, and
reasonable.
Questioned Costs
The Passamaquoddy Tribe charged the grant $16,533 worth of items that were not
specified in the approved budget and work plan, such as meals, cell phones,
computer equipment, and supplies. The Fond du Lac Band Tribe did not have
adequate supporting documentation for some expenditures that were charged to
the grant, such as contractual services and fuel costs. Those expenditures totaled
$4,297. We also questioned two invoices totaling $2,038 incurred for previous
grant expenditures under the PPG period from April 1, 2015 through March 31,
2017, but charged to the PPG period from April 1, 2017 through September 30,
2019.
Conclusions
We found that Region 1 and Region 5 need to improve their review of work plans
for the Passamaquoddy Tribe and the Fond du Lac Band Tribe as well as require
the Tribes to provide detailed work plans. Without adequate work plans and
adherence to federal requirements, regional tribal grants are at risk, and the
regions have limited assurance that costs charged to the grants are reasonable,
allowable, and allocable.
Recommendations
We recommend that the Region 1 regional administrator:
1. Determine the allowability of the $16,533 in unsupported costs claimed by
the Passamaquoddy Tribe and recover costs as appropriate.
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2.	For future grants, require the Passamaquoddy Tribe to submit detailed
work plans that include estimated funding amounts for each work plan
component.
We recommend that the Region 5 regional administrator:
3.	Determine the allowability of the $6,335 in unsupported and ineligible
costs claimed by Fond du Lac Band Tribe and recover costs as
appropriate.
4.	For future grants, require the Fond du Lac Band Tribe to submit detailed
work plans that include estimated funding amounts for each work plan
component.
Agency Response and OIG Assessment
Regions 1 and 5 concurred with our recommendations and provided acceptable
planned corrective actions and estimated completion dates.
Region 1 Response
For Recommendation 1, Region 1 agreed to request and review "additional
documentation from the tribe to support the charges cited in the draft report ... to
determine whether the charges were allowable, allocable, and reasonable in
accordance with applicable laws, regulations, and grant terms and conditions, and
initiate cost recovery if deemed appropriate." The OIG agrees with the proposed
corrective actions, and Recommendation 1 is resolved with corrective actions
pending.
For Recommendation 2, Region 1 agreed to "continue to assist tribes in
improving the level of detail provided within an approved workplan while also
allowing for flexibilities outlined in grant regulations ... provide a targeted
training session for tribes to improve their workplan submissions, with a specific
focus on alignment of workplan components with budgeted costs." The OIG
agrees with the proposed corrective actions, and Recommendation 2 is resolved
with corrective actions pending. Region l's full response is in Appendix B.
Region 5 Response
Our draft report identified $11,308 in unsupported costs claimed by the Fond du
Lac Band Tribe. In our draft report, we recommended that Region 5 determine the
allowability of these unsupported costs and recover costs as appropriate. Based on
the Agency's response and our subsequent discussions with Region 5, we agree
that $4,973 of the costs questioned in our draft report were supported or eligible.
Thus, we recommend that Region 5 determine the allowability of $6,335 in
questioned costs and recover costs as appropriate. Region 5 concurred with these
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amounts and plans to recover these costs by March 31, 2021. The OIG agrees
with the proposed corrective actions, and Recommendation 3 is resolved with
corrective actions pending.
For Recommendation 4, Region 5 stated:
In addition to ensuring workplan requirements are met for Fond du
Lac, Region 5's Tribal & Multi-media Programs Office is
committed to regularly educating all grantees on grant rules and
requirements and had planned to provide a training specifically on
workplan component costs in March 2020. This training was
cancelled due to COVID-19 but will be rescheduled in FY2021.
The OIG agrees with the proposed corrective actions, and Recommendation 4 is
resolved with corrective actions pending. Region 5's full response is in
Appendix C.
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Status of Recommendations and
Potential Monetary Benefits
RECOMMENDATIONS
Rec. Page
No. No.
Subject
Status1
Action Official
7	Determine the allowability of the $16,533 in unsupported costs
claimed by the Passamaquoddy Tribe and recover costs as
appropriate.
8	For future grants, require the Passamaquoddy Tribe to submit
detailed work plans that include estimated funding amounts for
each work plan component.
8 Determine the allowability of the $6,335 in unsupported and
ineligible costs claimed by the Fond du Lac Band Tribe and
recover costs as appropriate.
8 For future grants, require the Fond du Lac Band Tribe to submit
detailed work plans that include estimated funding amounts for
each work plan component.
Planned
Completion
Date
R Regional Administrator 12/30/20
Region 1
R Regional Administrator 2/28/21
Region 1
R Regional Administrator 3/31/21
Region 5
R Regional Administrator 3/31/21
Region 5
Potential
Monetary
Benefits
(in $000s)
$17
1 C = Corrective action completed.
R = Recommendation resolved with corrective action pending.
U = Recommendation unresolved with resolution efforts in progress.
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Appendix A
Internal Control Assessment
This table identifies which internal control components and underlying principles are significant
to our audit objectives.
Wh
si9
ich internal control components are
nificant to the audit objectives?
Wh
ob
ich internal control principles are sianificant to the audit
ectives?

Control Environment
The foundation for an internal control
system. It provides the discipline and
structure to help an entity achieve its
objectives.

1. The oversight body and management should demonstrate
a commitment to integrity and ethical values.

2. The oversight body should oversee the entity's internal
control system.

3. Management should establish an organizational structure,
assign responsibilities, and delegate authority to achieve the
entity's objectives.

4. Management should demonstrate a commitment to
recruit, develop, and retain competent individuals.

5. Management should evaluate performance and hold
individuals accountable for their internal control
responsibilities.
X
Risk Assessment
Management assesses the risks facing
the entity as it seeks to achieve its
objectives. This assessment provides the
basis for developing appropriate risk
responses.

6. Management should define objectives clearly to enable
the identification of risks and define risk tolerances.
X
7. Management should identify, analyze, and respond to
risks related to achieving the defined objectives.
X
8. Management should consider the potential for fraud when
identifying, analyzing, and responding to risks.

9. Management should identify, analyze, and respond to
significant changes that could impact the internal control
system.
X
Control Activities
The actions management establishes
through policies and procedures to
achieve objectives and respond to risks in
the internal control system, which includes
the entity's information system.
X
10. Management should design control activities to achieve
objectives and respond to risks.

11. Management should design the entity's information
system and related control activities to achieve objectives
and respond to risks.
X
12. Management should implement control activities through
policies.

Information and Communication
The quality information management and
personnel communicate and use to
support the internal control system.

13. Management should use quality information to achieve
the entity's objectives.

14. Management should internally communicate the
necessary quality information to achieve the entity's
objectives.

15. Management should externally communicate the
necessary quality information to achieve the entity's
objectives.
X
Monitoring
Activities management establishes and
operates to assess the quality of
performance overtime and promptly
resolve the findings of audits and other
reviews.

16. Management should establish and operate monitoring
activities to monitor the internal control system and evaluate
the results.
X
17. Management should remediate identified internal control
deficiencies on a timely basis.
Source: Based on internal control components and principles outlined in GAO-14-704G, Standards for Internal
Control in the Federal Government (also known as the "Green Book"), issued September 10, 2014. (EPA OIG table)
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Appendix B
Region 1 Response to Draft Report
jjPUl %
M
5 POST OFFICE SQUARE, SUITE 100
%	BOSTON, MASSACHUSETTS 02109-3912
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION I
SUBJECT:
from::
TO:
Region 1 Response to Draft Report: Regions 1 and 5 Need to Require Tribes to Submit
More Detailed Workplans
OIG Project No. OA&E-FY19-G3I4 |
DENNIS
Dennis Dezid, Region 1 Regional Administrator D E Z1E L
Digta lv signed by
DrSNIS PEZ1EL
Or; i:Z0.03.25
:: r= ---oa'oo'
Michael D. Davis, Director, Efficiency Directorate, Office of Audit and Evaluation
Region 1 is in receipt of the Office of Inspector General's draft report: Regions 1 and 5
Need to Require Tribes to Submit More Detailed Workplans. Prior to the issuance of this
draft report, representatives from the Office of Inspector General conducted a performance
audit of a Passamaquoddy Tribe - Pleasant Point partnership performance grant (PPG15 -
BG99107315) in 2019-2020. The draft report contains the following summary findings and
recommendations pertaining to this grant:
•	The Passamaquoddy Tribe charged the grant for items such as meals, cell
phones, computer equipment and supplies, totaling $ 16,533 which were not
specified in the approved budget and work plan. Determine the allowability of
the $16,533 in unsupported costs claimed by the Passamaquoddy Tribe and
recover costs as appropriate.
•	Require the Passamaquoddy Tribe to submit detailed work plans, which include
estimatedfunding amounts for each work plan component.
Region 1 concurs with the findings in the OIG's draft report and proposes a phased
approach of corrective actions to address the OIG's recommendations as follows.
Recommendation 1#: Determine the allowability of $16,533 in unsupported costs
claimed by the Passamaquoddy Tribe and recover costs as appropriate.
Due to travel restrictions and lack of physical access to tribal records related to the
current COVID-19 situation, Region 1 proposes the following approach:
(1) Request additional documentation from the tribe to support the charges cited in the
draft report and provide the tribe with a date by which the supporting information is to be
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submitted. Completion date:
September 30, 2020
(2)	Conduct an initial review of the submitted information, and if necessary, conduct a
site visit to the tribe to jointly review the tribal files and obtain additional information as
necessary. Completion date:
November 30, 2020
(3)	Conduct a final review of the information obtained, determine whether the charges
were allowable, allocable, and reasonable in accordance with applicable laws, regulations,
and grant terms and conditions, and initiate cost recovery if deemed appropriate.
Completion date: December 31,2020
Proposed Completion Date for Recommendation #1: December 31, 2020.
OIG RESPONSE 1: Region 1 agreed with Recommendation 1 and provided acceptable
corrective actions and estimated completion dates. We consider this recommendation resolved
with corrective actions pending.
Recommendation 2#: Require the Passamaquoddy Tribe to submit detailed work plans,
which include estimated funding amounts for each work plan component.
Region 1 is committed to conducting additional training for all grantees to provide
guidance on developing detailed and approvable workplans. Region 1 hosted a training
webinar for all Region 1 tribes on April 23, 2020 to provide instruction on the level of
detail needed within an acceptable workplan.
Additionally, EPA hosted a draft workplan review session for the Passamaquoddy Tribe -
Pleasant Point on May 21, 2020 to provide feedback on the Tribe's draft workplan prior to
final submission. Staff from Passamaquoddy Tribe - Pleasant Point participated in both the
training webinar and the workplan review session and have been working in partnership
with EPA staff to negotiate the most recent workplan.
Region 1 will continue to assist tribes in improving the level of detail provided within an
approved workplan while also allowing for flexibilities outlined in grant regulations,
guidance and the EPA strategic plan. Region 1 plans to provide a targeted training
session for tribes to improve their workplan submissions, with a specific focus on
alignment of workplan components with budgeted costs.
OIG RESPONSE 2: Region 1 agreed with Recommendation 2 and provided an acceptable
corrective action and estimated completion date. We consider this recommendation resolved
with corrective actions pending.
Proposed Completion Date for Recommendation #2: February 28, 2021.
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Please inform Region 1 if the proposed completion dates are acceptable to the Office of
Inspector General. If you have any questions concerning this memorandum, please contact
Valerie Bataille, Region 1 Audit Follow-up Coordinator, of my staff at 617-918-1674.
cc: Arthur Johnson, Director, Mission
Support Division Fred Weeks, Deputy
Director, Mission Support Division
Cheryl Scott, Grants Management Officer
Michael Stover, Indian Program Manager
Valerie Bataille, Audit Follow-Up Coordinator/ Management &
Program Analyst Diane Culhane, Grants Specialist
Sandra Brownell, Chief, Grants and Program Support Branch
Cassandra Schwartz, Project Officer, Passamaquoddy Tribe - Pleasant Point
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Appendix C
Region 5 Response to Draft Report
MEMORANDUM
SUBJECT: Response to Office of Inspector General's Draft Report: Regions 1 and J Need to
Thank you for the opportunity to respond to the findings and recommendations in the draft audit
evaluation report titled "Regions 1 and 5 Need to Require Tribes to Submit More Detailed
Workplans, " transmitted on July 14, 2020. This Memorandum covers portions of the report
specific to Region 5 and the Fond du Lac Tribe. As requested, it addresses factual accuracy of
the draft report; and responds to each finding and recommendation that includes a timeframe for
action.
FACTUAL ACCURACY
1.	At a Glance Page, What We Found, first paragraph: We do not fully agree with the
accuracy of the statement that "the workplans from these Tribes lacked adequate details
on the work to be performed, time frame for completion, and funding amounts."
Although we agree that the funding amounts for each component were missing, we
believe that the details for the work to be performed and the time frame for completion
were adequately detailed in the Fond du Lac Performance Partnership Grant workplan.
2.	Page 5, Results: We do not fully agree with the accuracy of the statement that "the
workplans from these Tribes lacked adequate details on the work to be performed, time
frame for completion, and funding amounts." Although we agree that the funding
amounts for each component were missing, we believe that the details for the work to be
performed and the time frame for completion were adequately detailed in the Fond du
Lac Performance Partnership Grant workplan.
3.	Page 6, third paragraph: "The Fond Du Lac Tribe's work plan lacked detail in all the
components because Region 5 did not require it." We recognize that the regional
Performance Partnership Grant (PPG) workplan template did not include a column or
Require Tribes to Submit More Detailed Workpltms,
Project No. OA&E-FY19 it 14
FROM: Kurt A.Thiede
KURT
IHIEDE
Regional Administrator
Region 5
TO:
Michael D. Day is. Director
Efficiency Directorate
Office of Audit and Evaluation
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row to enter workplan component costs but, all other required details are included in the
regional PPG template that is shared with tribal governments.
4. Page 6, fourth paragraph: "In addition, neither region adhered to the Almanac when
conducting cost reviews of grantee applications." We do not agree with this statement. A
cost review was conducted by the Project Officer for the Fond du Lac grant application.
They adhered to the EPA Assistance Almanac requirements detailed at the bottom of
page five of the report, including utilization of the budget narrative.
OIG RESPONSE 3: We revised the final report to indicate that the Fond du Lac Band Tribe's
work plan did not contain estimated funding amounts for any of the work plan components.
5. The format in which vendors submitted invoices of certain costs was questioned, such as
having an invoice submitted via email. EPA does not review and approve each
transaction that a grantee makes, so we rely on them to follow their own internal policies
and procedures regarding procurement and payment for goods and services. We have
reviewed the supporting documentation for the invoices in question and believe that the
tribal government followed their internal procedures to verify the validity of the
invoices. We believe that the invoice in question does not lack documentation to prevent
a reviewer from discerning whether a payment was proper as found in:
2 CFR §200.53 Improper payment.
(a)	Improper payment means any payment that should not have been made or
that was made in an incorrect amount (including overpayments and underpayments)
under statutory, contractual, administrative, or other legally applicable requirements;
and
(b)	Improper payment includes any payment to an ineligible party, any payment
for an ineligible good or service, any duplicate payment, any payment for a good or
service not received (except for such payments where authorized by law), any
payment that does not account for credit for applicable discounts, and any payment
where insufficient or lack of documentation prevents a reviewer from discerning
whether a payment was proper.
OIG RESPONSE 4: We recognize that the electronic form of records is acceptable. However,
as indicated in OIG Response 7, there was a lack of adequate information contained in the
electronic invoice.
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RESPONSE TO SPECIFIC REPORT RECOMMENDATIONS
Number
Recommendation
Intended Corrective
Action(s)
Estimated Completion
& Contacts
1
Determine the allowability
of the $11,309 in
unsupported costs claimed
by Fond Du Lac Tribe and
recover costs as
appropriate.
(a)	We concur with the
following cost recovery
recommendations:
$2,037 from 9/16/16
Invoice charged on 6/1/17.
(b)	We do not concur with
the following cost
recovery
recommendation:
$9,271.47 of expenditures
classified as
"entertainment costs" (as
explained in Note 1
below) and "contractual
services" (as explained in
Note 2 below).
Complete by end of 1st
Quarter FY21: Request
reimbursement of
$2,037 costs
Complete by end of 2nd
quarter FY21: Recovery
of $2,037 costs
2
Require the Fond du Lac
Tribe to submit detailed
work plans, which include
estimated funding
amounts for each work
plan component.
We concur with this
recommendation. (And
see Note 3 below.)
Complete by end of 2nd
Quarter FY21: Inclusion
of workplan component
costs in workplan.
OIG RESPONSE 5: We agree with the proposed corrective actions to recover the $2,037 in
costs by March 31, 2021.
Note 1: Some costs have been classified as "entertainment costs". The Region, in consultation
with the Office of Regional Counsel, classified the costs of traditional tribal dancers and
drummers as "education and outreach" costs. These activities occurred in conjunction with a
conference opening ceremony and had a spiritual and cultural component, which we do not
classify as "entertainment." The drummers, dancers, and keynote speaker served to educate the
conference attendees about the cultural diversity and history of the Tribe along with the value
and meaning of environmental protection to the Tribe. The invoices associated with the costs
described above contained acceptable information to allow the payments as they did not fit the
description in 2 CFR §200.53 of "improper payment."
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OIG RESPONSE 6: Our review of the work plan recognized that the activity and costs were
approved by the regional counsel. The invoice indicated those that were paid by check and
those that were paid in cash. We therefore concur with Region 5 that the supporting
documentation is adequate. We revised our report to delete the $4,700 cost associated with
these activities from our total questioned costs.
Note 2: Although the invoice related to the questioned "Contractual Costs," was contained in the
body of an email and not on official letterhead, it still contained the basic necessary elements to
satisfy Federal regulations for receipt of award-related information. This position is consistent
with 2 CFR 200.335 - Methods for collection, transmission & storage information, which states
in part:
In accordance with the May 2013 Executive Order on Making Open & Machine
Readable the New Default for Government Information, the Federal awarding agency and
the no-Federal entity should, whenever practicable, collect, transmit, and store Federal
award-related information in open and machine readable formats rather than in closed
formats or on paper. The Federal awarding agency or pass-through entity must always
provide or accept paper versions of Federal award related information to and from the
non-Federal entity upon request. If paper copies are submitted, the Federal awarding
agency or pass-through entity must not require more than an original and two copies.
When original records are electronic and cannot be altered, there is no need to create and
retain paper copies.
OIG RESPONSE 7: We reviewed the information provided by Region 5 and 2 C.F.R.
§ 200.335, which states that the electronic form of records is acceptable. The invoice, however,
did not contain a company letterhead, business address, or contact information. Additionally,
the invoice identified per diem for two people but lacked details, such as names and locations,
which makes it difficult to verify the accuracy of the per diem charge. At the exit conference on
September 4, 2020, the Region agreed with our position and stated that it plans to request and
recover the $4,205 in unsupported costs associated with these contractual services by
March 31, 2021. We agree with the proposed corrective actions.
Note 3. In addition to ensuring workplan requirements are met for Fond du Lac, Region
5's Tribal & Multi-media Programs Office is committed to regularly educating all
grantees on grant rules and requirements and had planned to provide a training
specifically on workplan component costs in March 2020. This training was cancelled
due to COVID-19 but will be rescheduled in FY2021.
OIG RESPONSE 8: Region 5 agreed with Recommendation 4 and provided an
acceptable corrective action and estimated completion date. We consider this
recommendation resolved with corrective action pending.
We appreciate the efforts of the audit team and consideration of our comments on the initial draft
of this report. If you have any questions regarding this response, please contact Alan Walts,
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Director, Tribal & Multi-media Programs Office at (312) 353-8894 or walts.alan@epa.gov,
William Massie, Chief, Acquisition and Assistance Branch at (312) 886-5855 or
massie.william@epa.gov or Farah Martinez, Region 5 Audit Follow-up Coordinator at (312)
886-6142 or martinez.farah@epa.gov.
Cc:
Debra Coffel, Office of Inspector General
Juliana Ilieva, Office of Inspector General
Heather Layne, Office of Inspector General
Cara Lindsey, Office of Inspector General
Detravion White, Office of Inspector General
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Subsequent Information Provided by Region 5
NOTE: Region 5 provided the following information to us via email on September 2, 2020,
and confirmed at our exit conference on September 4, 2020, that the information should be
included as part of its response:
1) July 2018 Invoice submitted by employee for fuel expenses did not have receipt attached for
fuel purchase (Unsupported $92.08)
Action: EPA agrees that this invoice was not properly supported by a copy of the receipt that
reflected the entire purchase cited in the accounting report. The remaining $92.08 will be
included in our request to recover costs.
OIG RESPONSE 9: We agree with the proposed corrective actions to recover the $92.08 of
the $9,271.47 in questioned costs. At our September 4, 2020 meeting, Region 5 provided a
milestone date of March 31, 2021, for the recovery of costs. We agree with the proposed
corrective actions.
2) February 2019 Online invoice for $274.39 submitted by employee for 2018 Chevrolet
Suburban accessories (Ineligible $274.39)
Action: EPA does not agree that the costs associated with this invoice are ineligible. The vehicle
is used in the day to day implementation of the activities outlined in the workplan. The work is
often completed in the harsh weather conditions found in the upper midwest. The work
conducted involves employees moving in and out of waterways, contaminated sites, and other
terrain. The purchase and use of floor liners and cargo liners is a low cost solution to address not
only the health and safety of the staff operating the vehicles, but it increases the longevity of the
vehicles used by the department and the equipment loaded into the truck bed. Based on this
information, the Project Officer believes the costs are eligible.
OIG RESPONSE 10: We find Region 5's explanation for these costs reasonable and in
support of the claimed costs. We revised our report to delete the $274.39 associated with this
invoice from our total questioned costs.
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Distribution
The Administrator
Assistant Deputy Administrator
Associate Deputy Administrator
Chief of Staff
Deputy Chief of Staff/Operations
Agency Follow-Up Official (the CFO)
Agency Follow-Up Coordinator
General Counsel
Regional Administrator, Region 1
Regional Administrator, Region 5
Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Deputy Regional Administrator, Region 1
Deputy Regional Administrator, Region 5
Director, Office of Regional Operations
Comptroller, Region 5
Director, Office of Continuous Improvement, Office of the Administrator
Director, Mission Support Division, Regions 1 and 5
Deputy Director, Mission Support Division, Regions 1 and 5
Director, Tribal & Multi-media Programs Office, Region 5
Chief, Grants Management Branch, Region 1
Chief, Acquisition and Assistance Branch, Region 5
Indian Program Manager, Region 1
Audit Follow-Up Coordinator, Office of the Administrator
Audit Follow-Up Coordinator, Region 1
Audit Follow-Up Coordinator, Region 5
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