Sneak Preview: EPA Guidance Aims To Improve Monitoring Reviews

July 17, 2015 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) The Environmental Protection Agency (EPA), Office of Grants and Debarment said it plans to issue comprehensive guidance by October to help EPA grant officers and specialists conduct better in-depth desk and onsite reviews of EPA grant recipients. The planned procedures stem from a recent EPA Office of Inspector General (OIG) audit that found that agency grant specialists lack effective guidance to conduct consistent advanced administrative monitoring reviews.

EPA’s Office of Grants and Debarment is responsible for baseline reviews (i.e., periodic reviews of a grant recipient’s progress and compliance with an award) and advanced administrative monitoring reviews (i.e., in-depth assessments of a recipient’s progress and management of a grant). This office selects a percentage of grants for advanced monitoring each year. All advanced monitoring activities must be recorded in EPA’s Grantee Compliance and Recipient Activity summary database. Findings from the reviews are submitted to recipients when corrective action is needed.

During an audit from April 2014 to March 2015 to assess EPA’s advanced monitoring performance by and available guidance to EPA’s grant specialists, OIG sampled 13 grant recipients that were among the 119 recipients that had advanced monitoring reviews in fiscal year 2013. The OIG found that while EPA provided some guidance on the allowability of costs and conducting advanced monitoring reviews to its grant specialists, the agency does not always ensure that monitors confirm that grant recipient costs were allowable, allocable and reasonable, or that the grant recipients’ policies and procedures are acceptable.

“Insufficient oversight of the [advanced monitoring] reviews increases the risk of improper payments made with taxpayer dollars,” EPA’s OIG said, adding that its audit found inadequate documentation of costs totaling more than $500,000. “Also, EPA did not always follow up on corrective actions, and some corrective actions only received follow-up after the OIG inquiry.”

EPA’s OIG found that in seven of the 13 advanced monitoring reviews it evaluated, EPA –grants and program officers did not adequately review supporting cost documentation to determine whether costs were allowable, allocable and reasonable. Grants specialists told OIG that they failed to seek support for the costs because they either did not realize that 100 percent review of documentation was required; had limited access to records; or did not understand the grant recipient’s accounting system. In one case involving support for payroll costs, the EPA grant specialists accepted time reports from the accounting system and pay stubs to support time charged to the grant, even though agency regulations required personnel activity reports (PARs) signed by the employee and validated by the supervisor to support labor charges. Out of the 13 reviews OIG sampled, it determined that 38 percent of the tested transactions should have been questioned or were not adequately supported, yet EPA only questioned less than 5 percent of the tested transactions.

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site).

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