Statutory Authority for EPA Assistance Agreements

	Office of Inspector General Audit Report
Statutory Authority for EPA Assistance Agreements
E3AMF8-11-0008-8100209
September 18, 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.

OBJECTIVE

Congress has granted EPA authority to enter into assistance agreements in many of the Agency's environmental statutes. The objective of this audit was to determine whether the activities funded by EPA were within EPA's assistance authorities as described in the relevant statutes.

RESULTS IN BRIEF

In our opinion, the cited statutes did not provide authority for 25 of the 57 assistance agreements reviewed:

Assistance agreements reviewed	57	$47,938,613
Assistance agreements questioned	25	8,343,274
Percent questioned	44%	17%

EPA, with the support of the Office of General Counsel (OGC), believes that all but one of the 25 questioned assistance agreements are allowable. EPA has taken a much broader interpretation of its assistance authorities than we believe is warranted to fund a wide range of projects which are related to EPA's mission and stimulate a public purpose. For example, Section 311(c) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) authorizes research aimed at understanding and mitigating the effects of pollutants on human health, and detection of hazardous substances. We questioned nine assistance agreements citing the use this authority to support such activities as technical assistance, environmental justice activities, and economic redevelopment studies.

RECOMMENDATIONS

We recommend that: EPA seek clear statutory authority for the types of awards that we identified as questionable; strengthen controls to prevent unauthorized awards; develop guidance to clarify the types of activities EPA will and will not fund; and provide additional training for personnel involved in such decisions.

Agency Response

The Acting Assistant Administrator for Administration and Resources Management stated that "contrary to many of the audit findings, the Agency believes that the activities questioned in the Draft Report are authorized by EPA's grant statutes. Although we disagree with many of the audit findings, we concur with the audit recommendations. The actions recommended will help ensure that our assistance programs continue to be administered properly and that activities funded are within the Agency's assistance authorities." See Appendix B for the full text of EPA's response.

OIG Evaluation

EPA has broadly interpreted its grant-making statutes in order to provide assistance for a wide range of environmental projects. While we understand why EPA has taken this approach, we can find nothing in the statutes themselves or the legislative histories which support EPA's position. We appreciate EPA's willingness to make the process improvements which we have recommended. We hope those actions will reduce or eliminate awarding assistance agreements to unauthorized entities or for unauthorized purposes.

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