EPA’s Pollution Prevention Grant Results Aligned with Program Goals, but a Supervisory Verification Process Is Needed

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Report Contributors

Erin Barnes-Weaver

Tina Eastman (formerly Lovingood)

Erica Hauck

Allison Krenzien

Guillermo Mejia

Roopa Mulchandani

Nicole Pilate

Gabriel Smith

Abbreviations

EPA U.S. Environmental Protection Agency

OIG Office of Inspector General

P2 Pollution Prevention

OPPT Office of Pollution Prevention and Toxics

U.S.C. United States Code

Cover Image

The waste management hierarchy, which lists the following from more preferable to less preferable:
pollution prevention (source reduction), reuse, recycling, treatment, and disposal release.

(EPA OIG image)

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At a Gla

24-P-0004
October 19, 2023

The EPA's Pollution Prevention Grant Results Aligned with Program
Goals, but a Supervisory Verification Process Is Needed

Why We Did This Audit

To accomplish this objective:

The U.S. Environmental Protection
Agency Office of Inspector General
conducted this audit to determine whether
the EPA accurately reports the
environmental results from the pollution
prevention grant program and whether
those results demonstrate alignment with
goals established for the program.

To conduct this audit, we reviewed
20 pollution prevention grants that had
results reported in fiscal years 2018 or
2019.

Pollution prevention, also referred to as
source reduction, is any practice that
reduces, eliminates, or prevents pollution
at its source. Through its pollution
prevention program, the EPA awards
grants to help businesses with source
reduction activities. In fiscal years 2018
through 2021, pollution prevention
program funds were used to award
89 grants totaling $18,697,623. The
pollution prevention program, within the
Office of Pollution Prevention and Toxics,
implements the Pollution Prevention Act.
The Act requires the EPA to establish
means for measuring the effectiveness of
the pollution prevention grants.

To support this EPA mission-related
effort:

• Operating efficiently and effectively.

To address this top EPA management
challenge:

• Mitigating the causes and adapting to
the impacts of climate change.

Address inquiries to our public affairs
office at (202) 566-2391 or
OIG.PublicAffairs@epa.gov.

What We Found

The EPA environmental results and monetary benefits of all 20 grants we reviewed
aligned with the goals of the pollution prevention, or P2, program: conserve natural
resources, decrease releases of toxics to the environment, and increase cost savings for
businesses and others.

The EPA accurately reported results for 18 of these 20 grants, which means that the
results were free from errors that would misrepresent the grant results. For the two
remaining grants, the EPA did not include the results or inaccurately reported the results
in its documentation. Therefore, the EPA could not demonstrate all the environmental
results and monetary benefits of the two grants. In addition, we also found two examples
in which the EPA did not consistently report P2 grant results across its different reporting
documentation; for example, in these two instances, we found that the results the EPA
reported in its quality assurance review documentation were inaccurate or missing from its
reporting summary spreadsheets.

We reviewed P2 program guidance and found that it does not describe a process for
supervisors to verify the reported grant results before the Office of Pollution Prevention
and Toxics staff incorporates them into public reports. A supervisory verification process
could help detect missing or inaccurate grant results. Without a supervisory verification
process, the program may report inaccurate P2 grant results to the public. For example,
the program may publish inaccurate information on the EPA website, in program
justifications, and in public outreach materials. Inaccurate environmental results and
monetary benefits of the grants could lead to uncertainty about the achievement of
program goals. The fact that the P2 program received $100 million in Infrastructure
Investment and Jobs Act funding from fiscal years 2022 through 2026 heightens the
importance of this issue.

The EPA's P2 grant results aligned with program goals, but without a
supervisory verification process, the program may report inaccurate
grant results to the public.

Recommendation and Planned Agency Corrective Actions

We recommend that the Office of Chemical Safety and Pollution Prevention establish
guidance for a process in which the supervisors at the Office of Pollution Prevention and
Toxics verify the accuracy of their staff's quality assurance review work prior to
publishing pollution prevention grant results. The Agency agreed with our
recommendation and provided an acceptable planned corrective action with an
estimated completion date. We consider the recommendation resolved with corrective
action pending. The Agency also provided technical comments, which we considered
and incorporated as necessary.

List of OIG reports.

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U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL

October 19, 2023

MEMORANDUM

SUBJECT: The EPA's Pollution Prevention Grant Results Aligned with Program Goals, but a
Supervisory Verification Process is Needed
Report No. 24-P-0004

This is our report on the subject of pollution prevention grants reporting conducted by the
U.S. Environmental Protection Agency Office of Inspector General. The project number for this audit is
OA-FY21-0225. This report contains findings that describe the problems the OIG has identified and
corrective actions the OIG recommends. Final determinations on matters in this report will be made by
EPA managers in accordance with established audit resolution procedures.

In accordance with EPA Manual 2750, your office provided acceptable planned corrective actions and
estimated milestone dates for Recommendation 1. This recommendation is resolved. A final response
pertaining to this recommendation is not required; however, if you submit a response, it will be posted on
the OIG's website, along with our memorandum commenting on your response.

We will post this report to our website at www.epaoig.gov.

To report potential fraud, waste, abuse, misconduct, or mismanagement, contact the OIG Hotline at (888) 546-8740 or OIG.Hotline@epa.gov.

FROM: Sean W. O'Donnell, Inspector General

TO:

Michal liana Freedhoff, Assistant Administrator
Office of Chemical Safety and Pollution Prevention

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Table of Con

Chapters

1 Introduction 1

Purpose 1

Background 1

Responsible Office 4

Scope and Methodology 4

Prior Reports 6

2 Pollution Prevention Grant Results Aligned with Program Goals and Most Reported

Results Were Accurate 8

Pollution Prevention Grants Should Address EPA Strategic Goals 8

Pollution Prevention Grant Results Aligned with Program Goals 9

Most Reported Results Were Accurate 9

A Lack of Guidance for Supervisory Review of Staff Work Led to Missing or Inaccurately

Reported Results 11

No Guidance for a Process to Verify the Completeness and Accuracy of Results Can

Lead to Uncertainty About the Achievement of Program Goals 11

Conclusions 11

Recommendations 12

Agency Response and OIG Assessment 12

3 Status of Recommendations 13

A OIG Analysis of the Office of Chemical Safety and Pollution Prevention's Standard Operating

Procedures, Guidance, and Training Materials 14

B Agency Response to Draft Report 15

C Distribution List 18

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Chapter 1

Introduction

Purpose

The U.S. Environmental Protection Agency Office of Inspector General initiated this audit to determine
whether the EPA accurately reports the environmental results achieved from pollution prevention
grants and whether those results demonstrate alignment with the goals established for the program.

Top management challenge addressed

This audit addresses the following top management challenge for the Agency, as identified in the OIG's U.S.
Environmental Protection Agency Fiscal Year 2023 Top Management Challenges report, issued October 28, 2022:

• Mitigating the causes and adapting to the impacts of climate change.

Background

The EPA defines pollution prevention, or P2, as "any practice that reduces, eliminates, or prevents
pollution at its source." Also known as source reduction, P2 results in less waste to control, treat, or
dispose of. Some examples of P2 practices include conserving water and energy, reusing materials, and
using nontoxic or less toxic chemicals as cleaners. P2 can be applied to all potential and actual pollution-
generating activities—including those found in the energy, agriculture, consumer, and industrial sectors,
and in homes and schools. According to the EPA, P2 reduces both financial and environmental costs and
is essential for preserving wetlands, groundwater sources, and critical ecosystems.

The EPA awards P2 grants to states, colleges, and universities, and to federally recognized tribes and
intertribal groups. The awardees then provide technical assistance or training, or both, to businesses to
help them develop and adopt source reduction practices. As of fiscal year 2016, the EPA releases a
biennial request for proposals that serves as the announcement by which entities can begin applying for
grant funds. P2 GrantsPlus is the EPA's grant management database for managing regional projects in
the P2 program. According to the EPA, the main purpose of P2 GrantsPlus is to make regional
P2 projects and results transparent as elements of the P2 story by providing a place to upload and
search grant results and reports. Due to an Agency-required technology update, a new P2 grants
database will replace P2 GrantsPlus. As of winter 2022, the new database was under development.

Pollution Prevention Act

The Pollution Prevention Act of 1990, or P2 Act, codified in 42 U.S.C. chapter 133, was enacted as a
result of several congressional findings. According to the Act, "[t]he United States of America annually
produces millions of tons of pollution and spends tens of billions of dollars per year controlling this
pollution." Further, the Act states that "[a]s a first step in preventing pollution through source reduction,
the Environmental Protection Agency must establish a source reduction program which collects and

24-P-0004

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disseminates information, provides financial assistance to States, and implements the other activities
provided for in [42 U.S.C. chapter 133]." The EPA is the sole Agency charged with the enforcement of
the P2 Act. The P2 Act governs the EPA's P2 program, provides a directive and corresponding criteria to
"make matching grants to States for programs to promote the use of source reduction techniques by
businesses," and requires that the EPA establish "appropriate means for measuring the effectiveness of
the State grants."

Pollution Prevention Program Budget

Federal agencies create budget requests and submit them to the Office of Management and Budget
each year. The Office of Management and Budget considers agencies' requests as it develops the
president's budget proposal. The president submits the proposal to Congress early the next year, and
agencies then submit written justifications of their budget requests to the appropriate congressional
committees. Although Congress is not required to adopt the president's budget, Congress must pass,
and the president must sign, annual appropriations legislation funding government operations pursuant
to an enacted budget.

For fiscal years 2018 through 2021, the EPA proposed to eliminate the P2 program from the president's
budget. The EPA's fiscal year 2018 Justification of Appropriation Estimates for the Committee on
Appropriations explained that "[b]ased on previous investments in P2 solutions made under this
program/project, partners are expected to be able to continue to share best practices and seek
additional pollution prevention solutions."1 Additionally, the justification included a note for fiscal
years 2020 through 2021, which stated that the "EPA will continue to meet core statutory requirements
under the Pollution Prevention Act of 1990 in other programs." Despite the proposed elimination of the
program in the president's budget, Congress continued to fund it. In fiscal years 2018 through 2021,
P2 program funds were used to award 89 grants totaling $18,697,623.

Figure 1 shows the president's and enacted budget for fiscal years 2015 through 2023.2 As shown in the
figure, for fiscal years 2018 through 2021, the president's budget requested $0 for the P2 program. The
enacted budget for the program steadily declined from $13.1 million in fiscal year 2016 to $11.1 million
in fiscal year 2020. On November 15, 2021, Congress passed the Infrastructure Investment and Jobs Act.
The P2 program received a total of $100 million in Infrastructure Investment and Jobs Act funding for
fiscal years 2022-2026.

1 The EPA's budget justification documents for fiscal years 2019 through 2021 contained similar text.

2 In the fiscal year 2023 Justification of Appropriation Estimates for the Committee on Appropriations, the fiscal
year 2023 president's budget increased to $17,121,000 and stated, "Work in this program directly supports Goal
7/Objective 7.2, Promote Pollution Prevention in the FY2022 - 2026 EPA Strategic Plan."

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Figure 1: President's and enacted P2 program budget by fiscal year (dollars in thousands)

$18,000.0
$16,000.0
$14,000.0
$12,000.0
$10,000.0
$8,000.0
$6,000.0
$4,000.0
$2,000.0
$-

2015 2016 2017 2018 2019 2020 2021 2022 2023

~ President's Budget 0 Enacted

Source: OIG summary of fiscal years 2015-2023 EPA budget justification documents. (EPA OIG image)

Pollution Prevention Goals and Measures

The Office of Management and Budget Circular No. A-123, Management's Responsibility for Enterprise
Risk Management and Internal Control, states that federal leaders and managers are responsible for
establishing and achieving goals and objectives. Appendix A to Office of Management and Budget
Circular No. A-123 states that "management has responsibility in determining risk to achieving reporting
objectives and aligning the level of control activities to provide reasonable assurances" that these are
met. According to the appendix, materiality for controls is defined as the risk of error or misstatement
that would impact management's or users' decisions or conclusions.

National emphasis areas are the priorities that P2 grants are designed to accomplish. The EPA sets
national emphasis areas or P2 goals to ensure that P2 grants reflect national environmental themes and
priorities and direct resources and funds to generate more impactful and measurable results. For this
report, we use the terms priorities and P2 goals interchangeably to refer to what the P2 grants are
designed to accomplish. According to the EPA's pollution prevention website, "measuring grantee
results is one way to determine the success of technical assistance or a training effort." The EPA defines
P2 grant results to include metrics that are the outcome measures of the pollution prevention program.
In 2006, P2 grantees began publicly reporting the environmental benefits and monetary results of
grants. They report the following measures:

• Reductions in hazardous releases and hazardous inputs, measured in pounds.

• Reductions in greenhouse gas releases, measured in metric tons of carbon dioxide
equivalent.

• Reduced water consumption, measured in gallons.

• Cost savings associated with reducing hazardous pounds, greenhouse gas releases, and
water consumption.

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The EPA has a quality assurance process for collecting and reporting the P2 grant results that grantees
submit. We outline this process in Figure 2. First, grantees submit the results of their P2 efforts to the
EPA regional offices. Next, the EPA grant project officers in the regional offices review the reported
results. The regional offices then summarize the results and provide the summaries to the Office of
Pollution Prevention and Toxics, or OPPT, in EPA headquarters. OPPT staff perform a quality assurance
review of the regional offices' reported results. The OPPT then compiles and publicly reports the results
of this quality assurance review.

Figure 2: Quality assurance review process steps

Grantees
submit results
to regions

Regions
review results

and submit
regional totals
to OPPT

OPPT reviews
and compiles
P2 grant
results

OPPT publicly

reports P2
grant results

Source: OIG depiction of grant results quality assurance review. (EPAOIG Image)

Responsible Office

The OPPT manages programs under the Toxic Substances Control Act and the P2 Act. The OPPT is within
the Office of Chemical Safety and Pollution Prevention.

Scope and Methodology

We conducted this performance audit from July 2021 to May 2023 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 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 assessed the internal controls necessary to satisfy our audit objectives.3 In particular, we assessed
the internal control components—as outlined in the U.S. Government Accountability Office's Standards
for Internal Controls in the Federal Government—significant to our audit objectives. Any internal control
deficiencies we found are discussed in this report.

To answer whether the EPA accurately reports the environmental results from P2 grants and whether
those results demonstrate alignment with goals established for the program, we reviewed the

3 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, Standards for Internal Control in the Federal Government (also known as the "Green Book"), issued
September 10, 2014.

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requirements under the P2 Act, the Department of Homeland Security's records directive and the Office
and Management and Budget records memorandum, the EPA's P2 program websites, P2 grant program
guidance, and the EPA's budget documentation. At the start of our audit, we interviewed OPPT
management and staff to understand how the P2 grant program operates and request documentation,
such as training materials, P2 measurement guidance, and quality management plans and reported
grant results for fiscal years 2018-2019. In addition, we requested and received access to the program's
grant management system, P2 GrantsPlus, to confirm the completeness of our grant documentation
request to the Agency and to check the grant results that the EPA staff put into the grant management
system.

To determine the accuracy of the grant results reported and whether those results aligned with program
goals, we sampled P2 grants with results reported to the EPA for fiscal years 2018 through 2019. At the
time of our audit, these were the most recent fiscal years that had grants with results reported to the
EPA. We analyzed whether the EPA accurately reported the results the grantees provided in its P2 grant
reporting documentation; specifically, we analyzed whether the results that the EPA reported were free
from errors that would misrepresent the grant results. We planned to review all 89 P2 grants with
results reported for fiscal years 2018 to 2019, but OPPT management stated that gathering work plans
for all 89 grants would increase the burden of collecting supporting documentation for regional office
staff. Therefore, we reduced our sample size from 89 grants to 20 judgmentally selected grants. In other
words, we chose which grants to include based on our own assessment rather than statistical sampling
techniques. Specifically, from the grants with results reported in fiscal years 2018 and 2019,4 we
selected one grant from each of the two fiscal years for each of the ten EPA regions, with six of the
regions having the same grantee selected both fiscal years. For simplicity, we refer to our sample size as
20 grants. The grants we chose were those that had the highest dollar value. See Figure 3 for a map of
the grantee locations in our sample. The EPA provided the grant documentation needed for the
20 grants in our sample. See Figure 3 for a map of the grantees in our sample.

4 The pollution prevention grants with results reported in fiscal years 2018 and 2019 include grants that were
awarded in fiscal years 2016 and 2017.

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Figure 3: Map of grantees in sample

Note: The following grantees were sampled In both fiscal year 2018 and 2019: the Iowa Department of Natural
Resources, Montana State University, Pennsylvania State University, Rowan University, the University of Texas at
Arlington, and the Washington Department of Ecology.

Source: OIG depiction of grantees. (EPA OIG image)

We analyzed the following grant documentation from P2 GrantsPlus and the Agency:

• Work plans—documentation that the grantee submits. Work plans include a project summary,
national emphasis areas, and information on programmatic capability and environmental
results.

• Semiannual progress or final technical reports—a semiannual report summarizes the grant
outputs. A final technical report should include a summary of the project task(s), the milestones
and results achieved, and the costs of the project(s), as well as a description of successes,
problems, and lessons learned from the project(s). A semiannual and a final technical report are
required.

• Headquarters grant results documents—documents that the OPPT uses in its review of grant
results that include information on gallons of water saved, hazardous materials reduced, dollars
saved, or other metrics.

Prior Reports

In EPA OIG Report No. JL5-P-0276. EPA Needs Accurate Data on Results of Pollution Prevention Grants to
Maintain Program Integrity and Measure Effectiveness of Grants, issued on September 4, 2015, we
determined how the EPA has ensured pollution prevention goals are achieved through P2 grants. We
recommended that the assistant administrator for Chemical Safety and Pollution Prevention:
(1) implement the P2 GrantsPlus database to begin the process for enhancing the reporting and

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recording of its P2 grants, and (2) develop and implement controls to ensure accurate reporting of
regional results to headquarters and documentation of revisions made by headquarters. The EPA agreed
with our recommendations and proposed acceptable corrective actions. The Agency reported that all
corrective actions have been completed.

In EPA OIG Report No. 09-P-0088, Measuring and Reporting Performance Results for the Pollution
Prevention Program Need Improvement, issued on January 28, 2009, we sought to verify the accuracy of
P2 Program data provided for Office of Management and Budget's 2006 Program Assessment Rating
Tool evaluation and determine what actions have been taken to address the recommendations in the
Program Assessment Rating Tool program improvement plan. We recommended developing
performance metrics, a P2 Division Quality Assurance Project Plan for data collection and reporting, and
a program improvement plan. The Agency officials agreed with all the recommendations and reported
that all corrective actions have been completed.

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Chapter 2

Pollution Prevention Grant Results Aligned with
Program Goals and Most Reported Results Were

Accurate

The environmental results and monetary benefits of all 20 grants we reviewed aligned with the goals of
the P2 program: conserve natural resources, decrease releases of toxics to the environment, and
increase cost savings for businesses and others. The EPA accurately reported results for 18 of the
20 grants, which means that the results were free from errors that would misrepresent the grant results.
For the two remaining grants, the EPA did not include the results or inaccurately reported the results in
its documentation. Therefore, the EPA could not demonstrate all the environmental results and
monetary benefits of the two grants. In addition, we also found two examples in which the EPA did not
consistently report P2 grant results across its different reporting documentation; for example, in these
two instances, we found that the results EPA reported in its quality assurance review documentation
were inaccurate or missing from its reporting summary spreadsheets.

We reviewed P2 program guidance and found that it does not describe a process for supervisors to
verify the reported grant results before OPPT staff incorporate the results into public reports. A
supervisory verification process could help detect missing or inaccurate grant results. Without a
supervisory verification process, the program may report inaccurate P2 grant results to the public. For
example, the program may include inaccurate information on the EPA website, in program justifications,
and in public outreach materials. Inaccurate environmental results and monetary benefits of the grants
could lead to uncertainty about the achievement of program goals.

Pollution Prevention Grants Should Address EPA Strategic Goals

In general, the EPA awards grants to address its strategic goals. The strategic goal for the P2 program is
to reduce the amount of pollution and waste produced. The program aims to do this by awarding grants
to states and tribes to provide businesses with technical assistance to help them develop and adopt
P2 practices. In fiscal years 2016-2017 and 2018-2019, the EPA required P2 grant program applicants to
meet one or more of the EPA's national emphasis areas as the basis for their P2 grant proposals.

National emphasis areas reflect national environmental themes and priorities. The national emphasis
areas for the fiscal years within the scope of our audit were as follows.

Fiscal years 2016-2017 national emphasis areas:

• Climate change mitigation/prevention of greenhouse gas emissions.

• Food manufacturing and processing.

• State or community approaches to hazardous materials source reduction.

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Fiscal years 2018-2019 national emphasis areas:

• Business-based pollution prevention solutions supporting Toxic Substances Control Act
priorities and chemical safety.

• Food and beverage manufacturing and processing.

• Hazardous materials source reduction approaches in states or communities.

To support program goals, the OPPT reviews P2 grant results that grantees submit to the EPA and
compile them in the following:

• Quality assurance document—describes the performance measure result adjustments
made by the OPPT to ensure that the measures reported by grantees adhere to the EPA
reporting guidance. The document also has screenshots from P2 GrantsPlus.

• Regional results summary spreadsheets—contains the adjusted final performance measure
results for each grantee project in a region.

Pollution Prevention Grant Results Aligned with Program Goals

The Agency provided us the grant documentation and results reported in fiscal years 2018 and 2019 for
the 20 P2 grants in our sample. We compared this information with the national emphasis areas listed in
the EPA's request for proposal and the grant work plans. We found that all grant results aligned with the
P2 program goals. The callout boxes in this chapter have examples of P2 grant results.

P2 Grant Results for the University of Illinois, Illinois Sustainable Technology Center, 2019:

The University of Illinois, Illinois Sustainable Technology Center's grant purpose was to provide on-site P2 technical
assistance within lllinois's underserved communities and businesses by reducing water, energy and hazardous materials use
and by lowering greenhouse gas emissions and costs. According to the grantee, this project supported two national
emphasis areas on its Request for Proposals: Climate Change Mitigation/Prevention of Greenhouse Gas Emissions and Food
Manufacturing and Processing. This grant had a reduction of 15,435 metric tons of carbon dioxide equivalent, 548,288
gallons of water and a cost savings of $1,504,063.

Most Reported Results Were Accurate

During our analysis of the results reported, we found that the grantees submitted the results to the EPA
and the EPA accurately reported the results that the grantees submitted for 18 of the 20 grants, as
exhibited in Figure 4. The results reported for these grants were free from any errors that would
misrepresent the grant results. For the two remaining grants, the EPA did not include the results or
inaccurately reported the results in its documentation.

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Figure 4: Number of grant results the EPA did or did not accurately report in sample

A Q Grant results ^
I O accurately reported!

2 Grant results inaccurately reported
or not included

Source: OIG depiction of grant results reported in sample. (EPA OIG image)

For grant number NP96344901, the EPA awarded Pennsylvania State University $180,000. The purpose
of the grant was to deliver a complete set of activities to continue economy, energy, and environment
best management practices in Pennsylvania. These activities included technical assistance, events, and
webinars that explained the Resource Conservation and Recovery Act definition of "solid waste"
exclusions for Toxics Release Inventory reporting. We found that two results for this grant were not
included in quality assurance calculations. The two results were 25,100 kilowatt hours per year in energy
savings and $36,600 in monetary benefits from grant activities. We found no evidence that the OPPT
reported these grant results in its quality assurance document, in its regional results summary
spreadsheet, or in P2 GrantsPlus. In the Agency's technical comments on our draft report, the Agency
stated that the $36,600 in monetary benefits should have been $2,234 based on measurement
guidance. However, the $2,234 in monetary benefits was also not included in quality assurance
calculations. Therefore, the reported results were inaccurate.

For grant number NP00A00149, the EPA awarded the Connecticut Department of Energy and
Environmental Protection $160,000. The purpose of the grant was to reduce energy use and greenhouse
gas emissions from healthcare facilities, promote sustainability to dry cleaners and communities, publish
the P2 View and Your Environmental Connection quarterly newsletters, and support a green lodging
project and continuous improvement in P2 sector outreach materials and data collection. To fulfill the
grant's purpose, the Connecticut Department of Energy and Environmental Protection performed four
separate projects. We found that the OPPT did not perform a quality assurance review for the results of
one of the four grant projects. Additionally, we found that the OPPT did not complete its quality
assurance document and regional results summary spreadsheet for the project. Therefore, the OPPT
could not demonstrate all the environmental results and monetary benefits of this grant.

We also found two examples in which the OPPT reported the results in the quality assurance document
and P2 GrantsPlus system but missed or inaccurately reported the results in the regional results
summary spreadsheet. This demonstrated inconsistencies in the OPPT's documentation. We notified the
OPPT about the two grants with unreported results and the inconsistencies across different grant
documents. The OPPT confirmed the errors.

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P2 Grant Results for the Arizona Department of Environmental Quality, 2019

The Arizona Department of Environmental Quality intended to expand "outreach activities and technical assistance to
Arizona facilities by partnering with student interns from Arizona State University (ASU) to target the hotel section of the
hospitality industry in Arizona. The goal is to provide technical assistance and training to hotels and motels to reduce waste
and increase energy and water conservation." Per the grantee, this project supported all national emphasis areas on the
grantee's request for proposal: "prevention of greenhouse gas emissions, food manufacturing, and hazardous materials
source reduction." Additionally, the project had a reduction of 31,317 pounds of hazardous waste; 922 metric tons of
carbon dioxide equivalent; and 31,432,105 gallons of water; and produced a cost savings of $374,097.

A Lack of Guidance for Supervisory Review of Staff Work Led to
Missing or Inaccurately Reported Results

There was no indication that a supervisory review to verify the reported grant results occurred. We
analyzed 15 program guidance documents, detailed in Appendix A, and found no guidance for a
supervisory review of quality assurance documents to validate that all grant results are reported and
free from material errors.

Per Office of Management and Budget Circular No. A-123, it is management's responsibility to have
control activities that provide reasonable assurances that program goals are met. Having guidance for a
process for management to verify the results before they are reported to the public could help detect
missing or inaccurately reported results and serve as a control activity that provides reasonable
assurance about what the EPA publicly reports regarding the P2 program's grant results.

No Guidance for a Process to Verify the Completeness and Accuracy
of Results Can Lead to Uncertainty About the Achievement of
Program Goals

Although P2 grants may align with program goals, missing or inaccurately reported grant results inhibit
the EPA's ability to verify that the grants achieved P2 grant goals. In the two cases of unreported results,
the EPA provided $340,000 in total for the grants. Because the EPA did not report the results, we cannot
confirm whether the grant goals were fully achieved. Without a supervisory verification process, the
program may report inaccurate environmental results and monetary benefits of P2 grant results to the
public.

Conclusions

The OPPT has a quality assurance process for collecting and reporting P2 grant results that grantees
submit to the EPA, but nonsupervisory OPPT staff perform this process. Supervisors do not verify the
accuracy of grant results before publicly reporting the results. Guidance on how supervisors should
review their staff's work will strengthen the program's quality assurance process and improve the
accuracy of the grant results that the EPA reports on its website, in program justifications, and in public
outreach materials. The P2 program received $100 million in Infrastructure Investment and Jobs Act
funding, making it imperative that the program accurately demonstrate the environmental results or
monetary benefits of P2 grants.

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Recommendation

We recommend that the assistant administrator for the Office of Chemical Safety and Pollution
Prevention:

1. Establish guidance for a process in which the supervisors in the Office of Pollution Prevention
and Toxics verify the accuracy of their staffs quality assurance review work prior to publishing
pollution prevention grant results.

Agency Response and OIG Assessment

Appendix B contains the Office of Chemical Safety and Pollution Prevention's response to our draft
report. The Office of Chemical Safety and Pollution Prevention also provided technical comments, which
we considered and incorporated as necessary when we finalized this report. The Office of Chemical
Safety and Pollution Prevention agreed with our recommendation and provided an acceptable planned
corrective action plan and estimated completion date. Specifically, the Office of Chemical Safety and
Pollution Prevention stated that it will establish guidance for a process for supervisors to use a
representative sampling approach to verify the accuracy of staffs quality assurance review work prior to
publishing P2 grant results. The office also stated that based on the sampling results, it will adjust the
frequency of supervisor verification as needed. We believe that the proposed corrective action will
satisfy the intent of the recommendation. Therefore, we consider the recommendation resolved with
corrective action pending.

In response to the draft report, the Agency provided technical comments concerning the draft report's
Appendix A titled, Pollution Prevention Act Reporting Requirement, which was deleted from this report.
We had observed in our draft report that "[p]ursuant to 42 U.S.C. section 13107, the EPA was required
to submit a report to Congress with certain information within 18 months after enactment of the P2 Act,
followed by biennial reports thereafter containing certain other P2 information." Although the P2 Act
specifies that "Each biennial report... after the first report shall contain each of [nine categories of
information]," the P2 Act also states that, "[i]n the report following the first biennial report," seven of
those categories "may be included at the discretion of the Administrator." Appendix A of our draft
report discussed the OIG's and EPA's differing interpretations regarding this text. In response to our
draft report, the Office of Chemical Safety and Pollution Prevention provided legislative history that
specifically addressed the P2 Act text at issue. Although the legislative history pertained to a bill that
was not enacted, the legislative history discussed bill text that mirrors what was enacted as the P2 Act in
Pub. L. 101-508 (1990).5 We agreed that this legislative history was relevant and supported the Agency's
interpretation, and we removed the reporting requirement appendix from the final report.

5 The Office of Chemical Safety and Pollution Prevention provided S. Rep. 101-526 (1990), which pertained to
S. 585, "Pollution Prevention Act of 1990," a bill that was not enacted.

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Status of Recommendation

Rec. No. Page No.

Recommendation Status*

Action Official

Planned
Completion Date

1 12

Establish guidance for a process in which the supervisors in the Office of R
Pollution Prevention and Toxics verify the accuracy of their staffs quality
assurance review work prior to publishing pollution prevention grant results.

Assistant Administrator for
Chemical Safety and Pollution
Prevention

1/31/24

* 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

OIG Analysis of the Office of Chemical Safety and
Pollution Prevention's Standard Operating
Procedures, Guidance, and Training Materials

File

Purpose

Office of Chemical Safety and Pollution Prevention Final
FY 2016-2017 National Program Manager Guidance

Sets "forth the strategies and actions the EPA and its
state and tribal partners will undertake to protect human
health and the environment."

Office of Chemical Safety and Pollution Prevention
National Program Manager Guidance Fiscal Years 2018-
2019

Sets "forth the strategies and actions the EPA and its
state and tribal partners will undertake to protect human
health and the environment."

Final Office of Chemical Safety and Pollution Prevention
National Program Guidance Fiscal Year 2020-2021

Sets "forth the strategies and actions the EPA and its
state and tribal partners will undertake to protect human
health and the environment."

Tip Sheet 2018

A "tip sheet to reduce errors in P2 Grants Plus metrics."

Regional P2 Measurement Guidance, Collecting and
Reporting Results

Provides regions definition of terms, useful measurement
tools for greenhouse gas reductions, cost savings and
pound reductions, information on the P2 GrantsPlus
database, a commitment schedule, and guidelines related
to the following:

1. "Projected results"

2. "Actual results"

3. "Annual results"

4. "Quality Assurance Project Plan"

5. Eligible results

6. "Itemized results"

Application Review Materials, including the following:
FY18-19 P2 Grants: Proposal Review Training,
FY20-21 P2 Grants: Application Review Training,
National Review of FY18-19 P2 Grant Proposals, and
National Review of FY20-FY21 P2 Grant Applications.

Provides proposal review training and the national review
process of grant proposals for FYs 2018-2019 and
FYs 2020-2021.

Documenting P2 Best Practices and Innovations: Part 1
Grant Reporting Requirements

Discusses performance reporting requirements.

Reporting Pollution Prevention Results to the US EPA for
Fiscal Year 2020

Provides information on grantee reporting.

P2 Measures and Reporting Requirements, EPA P2
Meeting - Session 4 December 17, 2020

Provides information on "P2 outcome measures," "key
documents," and "Required facility-level follow-up and
report formatting."

Basic Orientation Video for P2 GrantsPlus

Provides information for the regions on how to use
GrantsPlus.

Regional P2 Reporting Guidance: Measuring and
Reporting P2 Results

Provides terms and guidelines for the regions to:

1. "Set reporting expectations for grantees in four areas."

2. "Meet program expectations for reporting new annual
results to HQ [headquarters]."

3. "When reporting, know which entities' results to include
or exclude."

4. "When reporting results, know when to count less than
100%."

5. "When reporting results, know what [the EPA is]
measuring."

P2 Grants and Grantee Process and Database Needs

Provides a "Detailed Description of P2 Grant Process,
Grantees Technical Assistance, Data Entry and later use
of Info."

Source: OIG analysis and summary of the Office of Chemical Safety and Pollution Prevention's standard operating
procedures, guidance, and training materials. (EPA OIG table)

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.W;

X. msfif

Appendix B

Agency Response to Draft Report

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

$ WASHINGTON, D.C. 20460

OFFICE OF CHEMICAL SAFETY
AND POLLUTION PREVENTION

MEMORANDUM

SUBJECT: Response to Draft Report entitled "The EPA's Pollution Prevention Grant Results
Aligned with Program Goals, but a Supervisory Verification Process is Needed."

FROM: Michal I. Freedhoff, Ph.D. M,CHAL FREEDHOFF «rdbyM'CHAL

Assistant Administrator Date2023.06.2909:25:44-04W

TO: Sean W. O'Donnell

Inspector General

This memorandum provides EPA's response to the Office of Inspector General (OIG) Draft
Report entitled "The EPA's Pollution Prevention Grant Results Aligned with Program Goals, but
a Supervisory Verification Process is Needed," Report No. OA-FY21-0225, dated May 12, 2023.

I. General Comments

EPA's Office of Chemical Safety and Pollution Prevention (OCSPP) appreciates the OIG's effort
in evaluating:

• "[WJhether the EPA accurately reports the environmental results from the pollution
prevention grant program and whether those results demonstrate alignment with goals
established for the program."

OCSPP agrees that appropriate oversight of the reporting of environmental results is important
and necessary for the pollution prevention (P2) grant program to demonstrate auditable
environmental results and benefits to the public, and accordingly we are proposing corrective
actions to implement the OIG's recommendation for increased supervisory oversight.

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OCSPP's strong commitment to accurate reporting and data integrity is evident in its data review
process for the P2 grants program. The P2 grant program has for several years implemented a
grant reporting process that includes multiple levels of oversight at both the regional and
headquarters levels. This detailed oversight process culminates with careful review of the data by
a supervisory-equivalent (GS-15) subject matter expert with general experience in grant
reporting and with specialized and focused experience in P2 grant reporting.

More specifically, EPA's oversight process for P2 grants reporting is as follows:

• Quality assurance (QA) review of P2 grantee reporting by EPA grant project officers in
EPA regional offices.

• An intensive second round QA review by a headquarters-based Office of Pollution
Prevention and Toxics (OPPT) supervisory-equivalent (GS-15) subject matter expert.

This reviewer is a senior staff member person with more than a decade of experience
reviewing P2 grant reporting at the GS level equivalent to a Branch Chief.

• An additional opportunity for regional grant project officers to review and comment on
OPPT senior staff QA findings.

• A final QA discussion of the results between the OPPT subject matter expert and the
Sustainability and Pollution Prevention (SPPB) Branch Chief to resolve any final QA
issues.

The OIG's Draft Report demonstrates that EPA's process for reviewing P2 grants ensures
consistently accurate results, but that the process has some room for improvement. In nearly all
the grants reviewed by the OIG, "the results were free from errors that would misrepresent the
grant results." Moreover, the OIG found virtually no instances of misapplied quality assurance
rules, calculations, or other inaccuracies once a project was in the second round of review
conducted by the GS-15 headquarters QA subject matter expert. Implementation of EPA's
planned online Pollution Prevention Grants Reporting Database will further enhance the
accuracy of the reporting process and reduce the resources required for effective QA of P2 grant
program results. As an additional safeguard, OCSPP will establish guidance for a process in
which OPPT supervisors use a sampling approach to verify the accuracy of their staffs QA
review work prior to publishing P2 grant results.

We have attached OCSPP's Technical Comments to this response, which we respectfully request
remain internal to EPA. These comments include corrections and proposed language changes,
including a request to remove Appendix A as being outside of the scope and purpose for the
audit and not comporting with EPA's reasonable interpretation of the PPA § 6608(b) reporting
provision.

II. OCSPP's Response to the Recommendations

Recommendation 1: We recommend that the Office of Chemical Safety and Pollution
Prevention establish guidance for a process in which the supervisors at the Office of Pollution
Prevention and Toxics verify the accuracy of their staff's quality assurance review work prior to
publishing pollution prevention grant results.

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• Discussion: EPA agrees. In addition to the recommended guidance, OCSPP is confident
that implementation of the planned online Pollution Prevention Grants Reporting
Database will further enhance the accuracy of the reporting process and reduce the
resources required for effective QA of the P2 grant program results.

• Proposed Corrective Action 1: OCSPP will establish guidance for a process in which
OPPT supervisors use a representative sampling approach to verify the accuracy of their
staffs QA review work prior to publishing P2 grant results and based on the sampling
results, adjust the frequency of supervisor verification as needed.

• Target Completion Date: January 31, 2024.

Thank you for the opportunity to comment on the Draft Report. If you have questions, please
contact Janet L. Weiner, OCSPP's Senior Audit Liaison at weiner.janet@epa.gov.

cc: Richard Keigwin, OCSPP
Jennie Romer, OCSPP
Jake Li, OCSPP
Denise Keehner, OCSPP/OPPT
Kevin DeBell, OCSPP/OPPT
David Widawsky, OCSPP/OPPT
Thomas Tillman, OCSPP/OPPT
Daniel Helfgott, OCSPP/OPPT
Erica Hauck, OIG
Guillermo Mejia, OIG
Roopa Mulchandani, OIG
Gabriel Smith, OIG
Jeff Prieto, OGC
Jim Payne, OGC
Randy Hill, OGC/PTSLO
Jori Reilly-Diakun, OGC/PTSLO
Janet L. Weiner, OCSPP

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Appendix C

Distribution List

The Administrator

Deputy Administrator

Chief of Staff, Office of the Administrator

Deputy Chief of Staff for Management, Office of the Administrator
Agency Follow-Up Official (the CFO)

Assistant Administrator for Chemical Safety and Pollution Prevention
Regional Administrators, Regions 1-10
Agency Follow-Up Coordinator
General Counsel

Associate Administrator for Congressional and Intergovernmental Relations
Associate Administrator for Public Affairs
Deputy Regional Administrators, Regions 1-10

Deputy Assistant Administrator for Pesticide Programs, Office of Chemical Safety and Pollution
Prevention

Deputy Assistant Administrator for Chemical Safety and Pollution Prevention

Deputy Assistant Administrator for Management, Office of Chemical Safety and Pollution Prevention
Director, Office of Continuous Improvement, Office of the Chief Financial Officer
Director, Office of Pollution Prevention and Toxics, Office of Chemical Safety and Pollution Prevention
Director, Office of Regional Operations

Deputy Directors, Office of Pollution Prevention and Toxics, Office of Chemical Safety and Pollution

Prevention
Office of Policy OIG Liaison
Office of Policy GAO Liaison

Audit Follow-Up Coordinator, Office of the Administrator

Senior Audit Advisor, Office of Chemical Safety and Pollution Prevention

Audit Follow-Up Coordinator, Office of Pollution Prevention and Toxics, Office of Chemical Safety and

Pollution Prevention
Regional Audit Follow-Up Coordinators, Regions 1-10

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Whistleblower Protection

U.S. Environmental Protection Agency
The whistleblower protection coordinator's role
is to educate Agency employees about
prohibitions against retaliation for protected
disclosures and the rights and remedies against
retaliation. For more information, please visit
the OIG's whistleblower protection webpage.

Congressional Inquiries: OIG.CoiwessionalAffairs(53epa.gov

Media Inquiries: OIG,PublicAffairs@epa.gov
line EPA OIG Hotline: OIG.Hotline@epa.gov

w Web: epaoig.gov

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YouTube: youtube.com/epaoig

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