Sneak Preview: EPA Urged To Limit Risks, Plan for IIJA Workload
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) After evaluating past audits of the Environmental Protection Agency’s (EPA) grant program oversight, the EPA Office of Inspector General (OIG) is calling for the agency to implement better controls to identify and limit program risks, and to plan for adequate resources needed to handle expected workload increases resulting from awards issued under the Infrastructure Investment and Jobs Act (IIJA) (Pub. L. 117-58).
While EPA typically manages about 6,000 active grants totaling some $21 billion annually, the agency expects to receive about $55 billion in additional funding under IIJA for state and tribal grants over a five-year period through federal fiscal year (FY) 2026.
Office of Management and Budget (OMB) Memorandum M-22-12, Advancing Effective Stewardship of Taxpayer Resources and Outcomes in the Implementation of the Infrastructure Investment and Jobs Act, requires federal agencies to implement IIJA-funded programs efficiently and effectively by developing program implementation plans that, among other things, confirm a program-level approach to financial management controls and risk mitigation strategies. It also states that agencies should work with their respective OIGs to identify risks so that agencies can reduce the need for costly after-the-fact enforcement by adopting a risk-based approach, which should include procedures to mitigate risks to achieve program goals and objectives. Therefore, OIG evaluated its own prior audits, as well as reports issued by the Government Accountability Office (GAO), pertaining to EPA’s grant programs from FY 2017-2021 to identify the agency’s outstanding key administrative challenges as it proceeds to issue IIJA awards.
OIG determined that the agency had specific oversight deficiencies in three particular areas that it should address to enable it to better administer IIJA funds. First, it called on the agency to enhance its grants oversight workforce and strengthen monitoring and reporting, citing findings within nine previous OIG/GAO audit reports.
For example, a June 2020 OIG report (20-P-0204) noted that project officers did not always enforce recipient compliance with progress reporting requirements, and the program office did not always document the review of these reports. “With late or missing progress reports, recipients may not have informed EPA project officers in a timely manner of any potential delays or obstacles in completing grant objectives or work,” the OIG stated. “Further, although EPA policy and award agreements required recipient reporting and review of progress reports, the agency did not have adequate controls to verify that those steps had taken place.”
(The full version of this story has now been made available to all for a limited time here.)
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