Pre-Award Management of EPA Assistance Agreements

	Office of Inspector General Audit Report
ASSISTANCE AGREEMENTS
Pre-Award Management of EPA Assistance Agreements
E1FMB8-11-0001-8100256
September 30, 1998

EXECUTIVE SUMMARY

INTRODUCTION

Assistance is the transfer of anything of value for a public purpose of support or stimulation authorized by law. EPA program offices provide funding and are responsible for programmatic and technical oversight of the assistance process. The Grants Administration Division (GAD) assures assistance application completeness by performing an administrative review of the assistance application.

OBJECTIVES

EPA's FY 1996 Integrity Act Report to the President and Congress declared post-award oversight of assistance agreements and grants closeouts material weaknesses. The purpose of our audit was to review the Agency's pre-award process (steps the Agency takes to award assistance agreements) to identify opportunities for improvement.

RESULTS IN BRIEF

Project Officers (POs) did not always negotiate workplans with well-defined commitments, adequately determine and document that costs submitted with assistance applications were reasonable, or prepare decision memoranda which contained all information required to support recommendations for award. Neither POs, nor those program officials reviewing and signing assistance approval documents, were following established guidance in these areas. Senior Resource Officials (SROs), supervisors of POs and other assistance approval officials are not usually required to attend training. Therefore, they may not have recognized that additional information was needed or have seen the need to hold POs accountable. Expanded training for those involved in assistance management and enhanced oversight are needed. EPA can use the pre-award approval process to improve post-award oversight capabilities. Complete funding packages assist program officials, including the SRO, in holding recipients accountable for expected outputs, determining whether expenditures are reasonable for the work performed, and ensuring that funded activities are accomplished.

Of 55 Environmental Justice Through Pollution Prevention (EJP2) assistance agreements awarded by the Office of Prevention, Pesticides, and Toxic Substances (OPPTS) during FY 1997, 28 were improperly funded using resources intended for other purposes. Improper use of funds happened because of poor funds controls within OPPTS, because OPPTS division directors acted to avoid carrying over excess funds, and because the Grants Administration Division's "check and balance" process did not identify the improper funding. This resulted in the reprogramming of $1.9 million without required Congressional approval.

RECOMMENDATIONS

We recommend that the Acting Assistant Administrator for Administration and Resources Management direct GAD to take the lead in the development of PO refresher training courses; develop guidance explaining the types of omissions which will result in GAD returning incomplete assistance funding packages to the program offices; and work with program offices to develop a coordinated post-award management strategy.

We recommend that the Acting Assistant Administrator for OARM raise the need for additional grants training to the Resource Management Council, including an estimate of the minimum resources required to deliver training Agency-wide, and options for delivering the training.

We recommend that the Acting Assistant Administrator for OARM and the Chief Financial Officer, as co-chairs of the Resource Management Committee, inform program offices of the Committee's decision(s) regarding resources for grants administration training and the method(s) of delivery.

We recommend that Assistant Administrators require SROs to train all levels of staff involved in assistance awards.

We recommend that GAD rewrite EPA Order 5730.1 to assign responsibility for ensuring the use of correct program elements or program results codes exclusively to program offices.

Agency Response

Written responses to the draft audit report and a subsequent meeting with OARM and program office representatives indicated support for PO refresher training and manager training, but disagreement over who should provide the training. There was support for returning incomplete assistance packages to the program offices, although not, in all cases, to the SROs. There was also support for developing post-award monitoring plans, but program offices wanted to consider options other than post-award plans for each assistance award. The program offices agreed that EPA Order 5730.1 should be revised as we recommended. See Appendix B for the full text of the responses.

OIG Evaluation

We agree with the need for integrated manager training and flexibility in planning post- award oversight. We also agree that not all incomplete assistance funding packages should be returned to the SRO. Accordingly, we have revised our recommendations in these areas.

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