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					                                                                                                                                  FY 2010 OIG Recovery Act Plan Overview
                                                                                                                                             (updated May 2010)


                                       OIG Name: U.S. Environmental Protection Agency




                                                     After EPA awards Recovery Act funds, the OIG will audit and investigate EPA’s management of the Recovery Act programs, how the funds are being used, and the accuracy of the information being reported. The OIG will
                                                     proactively prevent fraud, waste, abuse, and mismanagement of funds. Listed below are some of the areas we plan to audit and investigate.

                                                     Financial Audits

                                                     • funds were used as intended; and the use of funds was free of fraud, waste, abuse, and mismanagement.
                                                     • Work with EPA to update the Single Audit Compliance Supplements for the Clean Water and Drinking Water State Revolving Funds.
                                                     • Review Single Audit reports on Recovery Act funds and ensure that corrective action is taken.
                     OIG Broad Recovery Act Goals:



                                                     Investigations
                                                     • Investigate allegations raised by the public and others of fraud, waste, and abuse committed against EPA involving Recovery Act funds.
                                                     • Contact State recipients to facilitate ongoing communications regarding EPA Recovery Act funds distributed to local authorities.
                                                     • Through the review of EPA and State audits and evaluations, identify fraud indicators, program weaknesses, and potential problems.
                                                     • Gather information on potential instances of fraud being perpetrated with EPA Recovery Act funds from law enforcement officials, auditors, contractors, suppliers, and vendors at the federal, State, and local levels.




   OIG Broad Training and Outreach Recovery Act
                                                Contact State recipients to facilitate ongoing communications regarding EPA Recovery Act funds distributed to local authorities.
                                         Goals:
                                                     Evaluate the process for awarding funds, particularly competitive awards: Determine whether funds are being awarded and spent in a timely manner; Determine whether the Agency has sufficient staff with the skills and
      OIG Recovery Act Risk Assessment Process: knowledge needed to manage Recovery Act grants and contracts; Evaluate how the Agency is monitoring the use of the funds; Assess how performance is being measured and the process for computing jobs saved and created;
                                                     Review the quality of data systems and information EPA uses for reporting to meet Recovery Act requirements.

                         OIG Recovery Act Funds:
      Expiration Date of OIG Recovery Act Funds:


  OIG Recovery Act Funds Allocated to Contracts: No
              Purpose of Recovery Act Contracts:
     Types of Recovery Act Contracts Awarded to
                                          Date:

             Link to OIG Recovery Act Work Plan:     http://www.epa.gov/oig/reports/2009/InitialEPAOIG_StimulusPlan03-05-09.pdf




Page 1 of Overview                                                                                                                                                                                                                                             723b3ab1-13c3-4e06-9147-1cfe0aa2d5bc.xls
                                                                                                 OIG FY 2010 Recovery Act Work Plan
                                                                                                                  (updated May 2010)
                                                                                                                                                                                                                          Review
                                                                                                                                                                                                                        Included on                   Expected
                                   Recovery Act                            Entity                                                                                                                                                    Expected
                                                                                                                                                                                                                            Prior                     Quarter(s)
      Agency     Program Area    Funds Associated    Type of Review     Performing        Project Title                        Background                                              Objective                                      Quarter
                                                                                                                                                                                                                         Recovery                      Reports
                                 w/Program Area                           Review                                                                                                                                                    Work Begins
                                                                                                                                                                                                                          Act Plan                      Issued
                                                                                                                                                                                                                           (Y/N)
                                                                                                                                                                    As part of the annual audit of EPA’s overall
                                                                                                                                                                  consolidated financial statements, assess: internal
                                                                                                                                                                  controls over the financial reporting of Recovery
                                                                                                                                                                  Act funds; transactions to determine whether they
                                                                                     Audit of EPA's FY                                                            are properly authorized, recorded, and reported;
                                                    Administrative /                                                                                              compliance with Recovery Act provisions that
        EPA    Multiple                $7,200,000                      OIG Staff     2010 Financial                                                                                                                      No        Q3 FY 10         Q1 FY 11
                                                    Financial                                                                                                     could have a material or direct effect on the
                                                                                     Statements
                                                                                                                                                                  financial statements; and the ability or effectiveness
                                                                                                                                                                  of capturing data for external reporting.



                                                                                                                                                                  Conduct forensic audits of Recovery Act fund
                                                                                                                                                                  recipients to determine whether: certain costs
                                                                                     Site Visits to ARRA                                                          incurred met federal requirements; funds were used
        EPA    Multiple                $7,200,000 Combination          OIG Staff     Subrecipients and                                                            as intended; procurement regulations were          Yes           Continuous       Continuous
                                                                                     Contractors                                                                  complied with; and the use of funds was free of
                                                                                                                                                                  fraud, waste, abuse, and mismanagement.

                                                                                                                                                                  Our objective is to determine whether EPA is
                                                                                                            EPA plans to use contracts to complete the            ensuring that contractors have the qualifications,
                                                                                                            Superfund remedial cleanup activities the Recovery    and past performance supports their ability, to carry
                                                                                                            Act authorized. In order to be successful at          out Recovery Act activities. We plan to answer
                                                                                     Audit of EPA's
                                                                                                            achieving mission goals and objectives, EPA needs     these questions: (1) Are contractor performance
                                                                                     Assessment of Past
                  Superfund/                                                                                to ensure that the contractors have the necessary     evaluations completed timely? and (2) Do EPA's
                                                                                     Performance and
                    Leaking                                                                                 qualifications and personnel to successfully          contractor performance and responsibility                                         Q2 FY 10
       EPA                           $800,000,000 Performance          OIG Staff     Determination of                                                                                                                   Yes        Q3 FY 09
                 Underground                                                                                complete their contracted tasks. Past performance     determination processes consider all available                                    (issued)
                                                                                     Responsibility for
                 Storage Tanks                                                                              evaluations provide an indication on the adequacy     sources of information?
                                                                                     Contractors Awarded
                                                                                                            of the contractor activities on other projects.
                                                                                     Recovery Act Funds
                                                                                                            Responsibility determinations assist the Agency in
                                                                                                            ensuring only qualified contractor receive Recovery
                                                                                                            Act funds.

                                                                                     Review of EPA
                                                                                     Systems and
                                                                                     Procedures for
                                                                                                                                                                  Our objective is to evaluate the implementation of
                                                                                     Tracking , Reporting
       EPA     Multiple                             Performance        OIG Staff                                                                                  EPA's processes for ensuring the quality of          Yes         Q4 FY 10         Q3 FY 10
                                                                                     and Accounting for
                                                                                                                                                                  recipient report data.
                                                                                     Recovery Act
                                                                                     Expenditures and
                                                                                     Accomplishments

Page 2 of Work Plan                                                                                                                                                                                                                  723b3ab1-13c3-4e06-9147-1cfe0aa2d5bc.xls
                                                                                       OIG FY 2010 Recovery Act Work Plan
                                                                                                          (updated May 2010)
               EPA Leaking
                                                                           Oversight of EPA’s                                                             Determine whether Agency oversight ensures that
               Underground
       EPA                                      Combination    OIG Staff   Leaking Underground                                                            ARRA-funded LUST cleanups comply with                    No    Q1 FY 10        Q1 FY 11
               Storage Tank
                                                                           Storage Tank Program                                                           applicable law, guidance, and regulation
               Program

                                                                           Effectiveness of EPA’s
                                                                           ARRA funding criteria
                                                                                                                                                          How effective were EPA's existing funding
                                                                           in targeting job
       EPA     Multiple                         Performance    OIG Staff                                                                                  processes and organizational structures in meeting       No    Q1 FY 10        Q1 FY 11
                                                                           creation and retention
                                                                                                                                                          ARRA goals?
                                                                           and meeting
                                                                           infrastructure needs

                                                                           EPA’s Diesel Emission
                                                                                                                                                          Our objective is to determine whether ARRA
               EPA Air                                                     Reduction Act Grants
       EPA                                      Combination    OIG Staff                                                                                  grants were effective in obtaining diesel retrofits      No    Q2 FY 10        Q2 FY 11
               Program                                                     awarded under 2009
                                                                                                                                                          and associated emissions reductions.
                                                                           ARRA
                                                                                                                                                    Our objective is to determine what impediments
                                                                                                One of the primary goals of the Recovery Act was exist when EPA Recovery Act-funded assistance
                                                                                                to award the funds quickly for projects that were   agreements have not incurred expenses.
                                                                           Progress on Diesel
               Diesel Emission                                                                  "shovel ready." In order for the funds to have an
                                                                           Emissions Reductions
       EPA     Reduction Act       $300,000,000 Performance    OIG Staff                        impact, they must be used/ expended as intended.                                                                   No    Q3 FY10         Q2 FY11
                                                                           Act Recovery Act
               Grants                                                                           This assignment will sample the projects that have
                                                                           Projects
                                                                                                not incurred expenses as yet, and seek to determine
                                                                                                what obstacles exist to progress.

                                                                                                    EPA received $7.2 billion from the Recovery Act       Our objective is to determine whether EPA has
                                                                                                    through fiscal year 2011. The Recovery Act            sufficient qualified staff to administer its contracts
                                                                                                    awarded funds for the Clean Water State Revolving     and grants for both American Recovery and
                                                                                                    Fund, Drinking Water State Revolving Fund,            Reinvestment Act (Recovery Act) and non-
                                                                                                    Superfund Remedial, Brownfields, Leaking              Recovery Act activities.
                                                                           ARRA Staffing and        Underground Storage Tanks, and Diesel Emission
       EPA     Multiple           $7,200,000,000 Performance   OIG Staff   Qualifications for       Reductions programs. These offices were provided                                                               Yes   Q4 FY 09        Q4 FY 10
                                                                           Contracts and Grants     between 1 and 3.5 percent of appropriated funds for
                                                                                                    program management and oversight purposes.
                                                                                                    EPA’s management and oversight funds can be
                                                                                                    used for payroll, travel, awards, overtime and
                                                                                                    compensatory time.


                                                                                                                                                          Our objectives are:(1) What impediments exist to
                                                                                                  The Recovery Act included specific requirements         having projects under contract or construction by
                                                                                                  for State Revolving Fund activities. One                February 17, 2010 and (2) What steps has EPA
                                                                           Review of State
                Drinking Water                                                                    requirement instructed States to propose projects       taken to ensure projects meet this deadline?
                                                                           Processes to Develop                                                                                                                                          Q1 FY 10
       EPA      State Revolving   $2,000,000,000 Performance   OIG Staff                          that were ready to proceed to construction within                                                                Yes   Q3 FY 09
                                                                           Intended Use Plans for                                                                                                                                        (issued)
                     Funds                                                                        12 months. States were also to use at least 50
                                                                           Recovery Act Funding
                                                                                                  percent of the funds for forgiveness of principal,
                                                                                                  negative interest loans, or grants.

Page 3 of Work Plan                                                                                                                                                                                                       723b3ab1-13c3-4e06-9147-1cfe0aa2d5bc.xls
                                                                                        OIG FY 2010 Recovery Act Work Plan
                                                                                                          (updated May 2010)
                                                                                                                                                       Our preliminary objectives are as follows: (1)
                                                                                                                                                       Review the implementation of EPA's Stewardship
                                                                                                 The Recovery Act provided the EPA Superfund           Plan for Superfund contracts as it relates to cost
                                                                                                 program $600 million for Remedial clean-up            controls and (2) Review EPA's use of project
                                                                                                 activities. Remedial Action Contracts (RAC) are a management principles and techniques in managing
                                                                                                 primary acquisition vehicle used to conduct long      Recovery Act Superfund work to avoid
                                                                            Implementation of    term clean-up and remediation support activities. A unnecessary cost overruns and delays.
                                                                            American Recovery    fundamental risk that exists with contracts, task
                                                                            and Reinvestment Act orders, and work assignments is that EPA may not
       EPA     Superfund           $600,000,000 Performance    OIG Staff    (Recovery Act)       get what it paid for, EPA may not get the desired                                                        Yes    Q1 FY 10        Q4 FY 10
                                                                            Stewardship Plan for product or service, or that project delays may occur.
                                                                            Superfund Remedial   OMB's initial guidance on implementing the
                                                                            Program Contracts    Recovery Act identified an accountability objective
                                                                                                 that projects funded under the Recovery Act avoid
                                                                                                 unnecessary delays and cost overruns. Since the
                                                                                                 Recovery Act was onetime funding, additional
                                                                                                 funds may not be available to pay for cost overruns.


                                                                                                                                                         The objective of our audit will be to determine
                                                                                                   The Recovery Act provided $4 billion and specific how effectively EPA and States ensure ARRA
                                                                                                   funding requirements for Clean Water State           CWSRF projects achieve intended project and
               EPA Clean                                                    State Administration Revolving Fund programs. The additional                environmental goals.
                                                               Both OIG
               Water Program -                                              and Oversight of State Recovery Act funds and requirements will pose
       EPA                        $4,000,000,000 Performance   Staff and                                                                                                                                   Yes   F2 FY 10        F2 FY 11
               State Revolving                                              Revolving Fund         significant challenges if States are not prepared to
                                                               Contractor
               Fund                                                         Projects               mange the additional projects not only for Recovery
                                                                                                   Act projects, but also for core program projects
                                                                                                   throughout the coming fiscal years.

                                                                                                                                                        Our preliminary objectives are to determine EPA's
                                                                                                                                                        effectiveness in ensuring adherence to the quality
               EPA Solid
                                                Combination    OIG Staff    Brownfields Program                                                         standards and requirements associated with the           Q1 FY 10        Q2 FY 11
               Waste Program
                                                                                                                                                        activities completed under Recovery Act
                                                                                                                                                        Brownfields.
                                                                                                                                                        Did the interagency agreements EPA awarded
                                                                                                    EPA plans to use interagency agreements to obtain using Recovery Act funds identify clear lines of
                                                                                                    services from the US Army Corps of Engineers for responsibility?
                                                                                                    assistance with remedial activities at Superfund
                   Clean and                                                EPA's Use of
                                                                                                    sites. EPA will also use interagency agreements     Were the interagency agreements EPA awarded
                Drinking Water                                              Interagency
                                                                                                    with the Indian Health Service to construct         using Recovery Act funds based on sound business Yes
       EPA      State Revolving   $6,600,000,000 Performance   OIG Staff    Agreements for                                                                                                                        Q4 FY 09         Q4 FY 10
                                                                                                    drinking water, sewer, and solid waste facilities.  decisions?
                    Funds /                                                 Recovery Act
                                                                                                    The decision to use an interagency agreement needs
                   Superfund                                                Activities
                                                                                                    to be based on a sound business decision, and
                                                                                                    interagency agreements need to identify clear lines
                                                                                                    of responsibility.




Page 4 of Work Plan                                                                                                                                                                                               723b3ab1-13c3-4e06-9147-1cfe0aa2d5bc.xls
                                                                                                OIG FY 2010 Recovery Act Work Plan
                                                                                                                  (updated May 2010)
                                                                                                                                                               Our objective is to determine if EPA has fully
                                                                                                          The Recovery Act states that the use of Recovery    implemented an internal control structure that is
                                                                                                          Act funds should be transparent: reported clearly, effective in ensuring recipient data are reported
                                                                                    Review of the         accurately, and in a timely manner. The Recovery completely, accurately, and in a timely manner; and
                                                                                                                                                              that any material omissions and/or significant errors
                                                                                    Effectiveness of EPA Act required recipients to quarterly report how      are identified and corrected.
       EPA     Multiple             $7,200,000,000 Performance          OIG Staff                                                                                                                                   No         Q3 FY10         Q4 FY 10
                                                                                    Data Quality Review funds were spent and the jobs created from the use
                                                                                    Processes             of the funds. While the recipients were responsible
                                                                                                          for the data, Agencies are required to review the
                                                                                                          data to ensure its quality. This review is being
                                                                                                          done in conjunction with the Recovery
                                                                                                          Accountability and Transparency Board.
                                                                                                                                                              To determine whether EPA promoted competition
                                                                                                          EPA conducts annual competitions to award funds to the maximum extent possible and whether the
                                                                                                          under the National Clean Diesel Program. The        competitions met the goals and requirements of the
                                                                                    Review of EPA's
                                                                                                          Recovery Act provided $300 million to support       Recovery Act.
                                                                                    Competition and
                                                                                                          EPA's Clean Diesel Program activities. EPA
               Diesel Emission                                                      Selection of Recovery                                                                                                                                      Q2 FY 10
       EPA                           $300,000,000 Performance           OIG Staff                         planned to award Recovery Act funds using a                                                               No         Q4 FY 09
               Reduction Act                                                        Act, Diesel Emission                                                                                                                                       (issued)
                                                                                                          competition conducted prior to the passage of the
                                                                                    Reduction Act
                                                                                                          Act. EPA's selection process will have to consider
                                                                                    (DERA) Awards
                                                                                                          programmatic as well as Recovery Act-specific
                                                                                                          requirements.

                                                                                                            Accurate financial reporting is essential to inform   Objectives are to determine whether (1) amounts
                                                                                    Verification of         decision makers and the public .                      reported by EPA to OMB reconciled to EPA's
                                                     Administrative /
       EPA     Multiple                 $7,200,000                      OIG Staff   Amounts Reported to                                                           financial system, (2) EPA reported financial           Yes   Q2 FY 10        Q3 FY 10
                                                     Financial
                                                                                    OMB                                                                           information timely, and (3) financial reported
                                                                                                                                                                  complied with OMB guidance.
                                                                                    Audit of EPA's                                                                To determine if ARRA obligations, disbursements,
                                                     Administrative /                                                                                                                                                                          Q1 FY10
       EPA     Multiple                 $7,200,000                      OIG Staff   FY2009 Financial                                                              and payroll are fairly presented in EPA's financial Yes      Q3 FY09
                                                     Financial                                                                                                                                                                                 (Issued)
                                                                                    Statements                                                                    statements.

                                                                                                           The Clean Water and Drinking Water State
                                                                                                           Revolving Funds provide low-interest loans for
                                                                                                           protecting water quality and public health. The        To determine whether EPA has developed and
               Water
                                                                                                           ARRA provided $6 billion in capitalization grants      implemented adequate controls to ensure that
               Infrastructure/Sta                                                   EPA Guidance for                                                                                                                                           Q2 FY10
       EPA                        $1,200,000,000     Performance        OIG Staff                          to the States for these funds. ARRA                    States actively solicited for green reserve projects   No
               te Revolving                                                         Green Reserve Projects                                                                                                                                     (Issued)
                                                                                                           required at least 20 percent of this funding to        before reprogramming such funds to
               Fund
                                                                                                           support green projects: water or energy                traditional projects.
                                                                                                           efficiency, green infrastructure, or environmentally
                                                                                                           innovative activities.




Page 5 of Work Plan                                                                                                                                                                                                             723b3ab1-13c3-4e06-9147-1cfe0aa2d5bc.xls
                      OIG FY 2010 Recovery Act Work Plan
                               (updated May 2010)

                                     Expected
                                    Number of
                                      Reports




                                   1




                                   Multiple




                                   1




                                   1




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                      OIG FY 2010 Recovery Act Work Plan
                               (updated May 2010)

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                      OIG FY 2010 Recovery Act Work Plan
                               (updated May 2010)




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Page 8 of Work Plan                                        723b3ab1-13c3-4e06-9147-1cfe0aa2d5bc.xls
                      OIG FY 2010 Recovery Act Work Plan
                               (updated May 2010)




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Page 9 of Work Plan                                        723b3ab1-13c3-4e06-9147-1cfe0aa2d5bc.xls

				
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