Grants Management: EPA Continues to Have Problems Linking Grants
to Environmental Results (20-JUL-04, GAO-04-983T).
The Environmental Protection Agency (EPA) has faced persistent
challenges in managing its grants, which constitute over one-half
of the agency's budget, or about $4 billion annually. These
challenges include achieving and measuring environmental results
from grant funding. It is easier to measure grant activities
(outputs) than the environmental results of those activities
(outcomes), which may occur years after the grant was completed.
In 2003, EPA issued a 5-year strategic plan for managing grants
that set out goals, including identifying and achieving
environmental outcomes. This testimony describes persistent
problems EPA has faced in addressing grants' environmental
results and the extent to which EPA has made progress in
addressing problems in achieving environmental results from its
grants. It summarizes and updates two reports GAO issued on EPA's
grant management in August 2003 and March 2004.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-983T
ACCNO: A11049
TITLE: Grants Management: EPA Continues to Have Problems Linking
Grants to Environmental Results
DATE: 07/20/2004
SUBJECT: Environmental monitoring
Environmental policies
Environmental research
Federal grants
Grant administration
Grant monitoring
Performance measures
Research grants
Strategic planning
******************************************************************
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GAO-04-983T
United States Government Accountability Office
GAO Testimony
Before the Subcommittee on Water Resources and Environment, Committee on
Transportation and Infrastructure, House of Representatives
For Release on Delivery
Expected at 2:00 p.m. EDT GRANTS MANAGEMENT
Tuesday, July 20, 2004
EPA Continues to Have Problems Linking Grants to Environmental Results
Statement of John B. Stephenson, Director Natural Resources and Environment
GAO-04-983T
Highlights of GAO-04-983T, testimony before the Subcommittee on Water
Resources and Environment, Committee on Transportation and Infrastructure,
House of Representatives
The Environmental Protection Agency (EPA) has faced persistent challenges
in managing its grants, which constitute over one-half of the agency's
budget, or about $4 billion annually. These challenges include achieving
and measuring environmental results from grant funding. It is easier to
measure grant activities (outputs) than the environmental results of those
activities (outcomes), which may occur years after the grant was
completed. In 2003, EPA issued a 5year strategic plan for managing grants
that set out goals, including identifying and achieving environmental
outcomes.
This testimony describes persistent problems EPA has faced in addressing
grants' environmental results and the extent to which EPA has made
progress in addressing problems in achieving environmental results from
its grants. It summarizes and updates two reports GAO issued on EPA's
grant management in August 2003 and March 2004.
July 20, 2004
GRANTS MANAGEMENT
EPA Continues to Have Problems Linking Grants to Environmental Results
EPA's problems in identifying and achieving environmental results from its
grants persist. The agency is still not consistently ensuring that grants
awarded are clearly linked to environmental outcomes in grant workplans,
according to GAO's analysis and EPA's internal reviews. For example, EPA's
2003 internal reviews found that less than one-third of grant workplans
reviewed-the document that lays out how the grantee will use the
funding-identified anticipated environmental outcomes. Not surprisingly,
given the lack of outcomes in grant workplans, the Office of Management
and Budget's recent review of 10 EPA grant programs found that 8 of the
grant programs reviewed were not demonstrating results. Furthermore, not
every EPA program office has yet developed environmental measures for
their grant programs.
EPA's progress in addressing problems in achieving environmental results
from grants to this point has been slower and more limited than planned.
While EPA had planned to issue an outcome policy-a critical ingredient to
progress on this front-in 2003, the policy's issuance has been delayed to
the fall of 2004, and will not become effective until January 2005. In the
meantime, EPA has issued a limited, interim policy that requires program
offices to link grants to EPA's strategic goals, but does not link grants
to environmental outcomes. Furthermore, as a result of the delay in
issuing an outcome policy, EPA officials do not expect to meet the 5-year
plan's firstyear target for the goal's performance measure. The
forthcoming draft policy we reviewed appears to be moving EPA in the right
direction for addressing environmental outcomes from its grants. For
example, the draft policy emphasizes environmental results throughout the
grant life cycle- awards, monitoring, and reporting. Consistent and
effective implementation of the policy will, however, be a major
challenge. Successful implementation will require extensive training of
agency personnel and broad based education of literally thousands of
grantees.
www.gao.gov/cgi-bin/getrpt?GAO-04-983T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact John B. Stephenson at (202)
512-3841 or [email protected].
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to discuss how the Environmental
Protection Agency (EPA) manages its grants to achieve a better environment
and improved public health. My testimony is based primarily on our recent
reports on EPA grants management issued in 2003 and 2004, as well as
additional work we conducted for this testimony.1
As you know, EPA has faced persistent challenges for many years in
managing its grants, which constitute over one-half of the agency's
budget, or about $4 billion annually. To support its mission of protecting
human health and the environment, EPA awards grants to a variety of
recipients, including state and local governments, tribes, universities,
and nonprofit organizations. As of June 2004, EPA had about 3,700 grant
recipients. Given the size and diversity of EPA's programs, its ability to
efficiently and effectively accomplish its mission largely depends on how
well it manages its grants resources and builds accountability for results
into its efforts.
Planning for grants to achieve environmental results-and measuring
results-is an important but difficult challenge. It is far easier to
measure environmental activities (outputs) than the results (outcomes) of
those activities. However, as we pointed out in an earlier report,2 it is
important to measure outcomes of environmental activities rather than just
the activities themselves. It is critical that EPA be able to demonstrate
the results achieved through its $4 billion annual investment in grant
programs, particularly their impact on protecting the nation's human
health and environment.
In April 2003, EPA issued a comprehensive 5-year grants management plan to
address its long-standing grants management problems.3 In the plan, EPA
identifies five major goals to address major challenges, which are
1See U.S. General Accounting Office, Grants Management: EPA Needs to
Strengthen Efforts to Address Persistent Challenges, GAO-03-846
(Washington, D.C.: Aug. 29, 2003) and U.S. General Accounting Office,
Grants Management: EPA Needs to Better Document Its Decisions for Choosing
between Grants and Contracts, GAO-04-459 (Washington, D.C.: Mar. 31,
2004).
2U.S. General Accounting Office, Managing for Results: EPA Faces
Challenges in Developing Results-Oriented Performance Goals and Measures,
GAO/RCED-00-77 (Washington, D.C.: Apr. 28, 2000).
3U.S. Environmental Protection Agency, Grants Management Plan, 2003-2008,
EPA-216-R-03-001 (Washington, D.C.: Apr. 2003).
similar to those we identified in our 2003 report, including the goal of
"identifying and achieving environmental outcomes."4
Our testimony today describes (1) persistent problems EPA has faced in
addressing grants' environmental results, and (2) the extent to which EPA
has made progress in addressing problems in achieving environmental
results from its grants.
As noted earlier, the work for this testimony is based primarily on two
previously issued GAO reports on grants management.5 To identify
persistent problems EPA has faced in addressing environmental results from
grants, we also reviewed EPA's Office of Inspector General reports, EPA's
internal reviews, and Office of Management and Budget's (OMB) reviews
using its Program Assessment Rating Tool. To determine the extent to which
EPA has made progress in addressing problems in achieving environmental
results from its grants, we interviewed officials at EPA's Office of
Grants and Debarment, reviewed EPA's policy, guidance, and Strategic Plan.
The additional work for this testimony was based on work performed in
April through June 2004 in accordance with generally accepted government
auditing standards.
In summary, we found the following:
o EPA's problems in identifying and achieving environmental results from
its grants persist. EPA is not consistently ensuring that environmental
outcomes are identified in the grant workplan-the document that lays out
how the grantee will use the funding-according to our analysis and EPA's
internal reviews. For example, EPA's 2003 internal reviews found that less
than one-third of grant workplans reviewed identified anticipated
environmental outcomes. Not surprisingly, given the lack of outcomes in
grant workplans, OMB's recent reviews of 10 EPA grant programs found that
8 of the grant programs examined were not demonstrating results. According
to program and regional officials, it is difficult to measure outcomes, in
part, because of the time lapse between grant activities and a cleaner
environment. These concerns demonstrate the need for guidance that
addresses the complexities of measuring and achieving environmental
4The plan's other goals are (1) enhancing the skills of EPA personnel
involved in grants management, (2) promoting competition in the award of
grants, (3) leveraging technology to improve program performance, and (4)
strengthening EPA oversight of grants.
5For these reports and a description of their methodologies see GAO-03-846
and GAO-04-459.
results. Furthermore, not every EPA program office has yet developed
environmental measures for their grant programs.
o EPA's progress in addressing problems in achieving environmental
results from grants has been slower and more limited than planned. While
EPA had planned to issue an outcome policy-a critical ingredient to
progress on this front-in 2003, the policy's issuance has been delayed to
the fall of 2004 and will not become effective until January 2005. In the
meantime, EPA has issued a limited, interim policy that requires program
offices to link grants to EPA's strategic goals,6 but does not link grants
to
environmental outcomes. Furthermore, as a result of the delay in issuing
an outcome policy, EPA officials do not expect to meet the 5-year plan's
first-year target for the goal's performance measure-increasing the
percentage of grant workplans with environmental outcomes from about 31
percent in 2003 to 70 percent in 2004. According to our review of a draft
of the forthcoming outcome policy, EPA is making progress at the policy
level in addressing outcomes.7 The major challenge EPA faces will be in
successfully implementing the policy throughout the agency. Realistically,
EPA has a long road ahead in educating its managers, supervisors and
staff, as well as thousands of potential grantees, about the complexities
of identifying and achieving environmental outcomes.
6EPA's strategic plan has five goals that address (1) clean air and global
climate change; (2) clean and safe water; (3) land preservation and
restoration; (4) healthy communities and ecosystems; and (5) compliance
and environmental stewardship. See U.S. Environmental Protection Agency,
2003-2008 EPA Strategic Plan: Direction for the Future, EPA-190-R03-003
(Washington D.C.: Sept. 2003).
7As of July 12, 2004, the draft policy, EPA Order: Environmental Results
under EPA Assistance Agreements, has not undergone the agency's directives
clearance process-a review for comment and approval by EPA's high-level
management, and therefore it is still subject to change.
Background EPA administers and oversees grants primarily through the
Office of Grants and Debarment, 10 program offices in headquarters,8 and
program offices and grants management offices in EPA's 10 regional
offices. Figure 1 shows the key EPA offices involved in grants activities
for headquarters and regions.
Figure 1: EPA's Key Offices Involved in Grant Activities
Source: GAO analysis of EPA information.
The management of EPA's grants program is a cooperative effort involving
the Office of Administration and Resources Management's Office of Grants
8According to EPA officials, two headquarters' offices, EPA's Office of
General Counsel, and the Office of the Chief Financial Officer conduct
limited grant activity.
and Debarment, program offices in headquarters, and grants management
offices in the regions. The Office of Grants and Debarment develops grant
policy and guidance. It also carries out certain types of administrative
and financial functions for the grants approved by headquarters program
offices, such as awarding grants and overseeing the financial management
of grants. On the programmatic side, headquarters program offices
establish and implement national policies for their grants programs and
set funding priorities. They are also responsible for the technical and
programmatic oversight of their grants. In the regions, grants management
offices carry out certain administrative and financial functions for the
grants, such as awarding grants approved by the regional program offices,
while the regional program staff provide technical and programmatic
oversight of their grantees.
As of June 2004, 134 grants specialists in the Office of Grants and
Debarment and the regional grants management offices were largely
responsible for administrative and financial grant functions. Furthermore,
2,089 project officers were actively managing grants in headquarters and
regional program offices. These project officers are responsible for the
technical and programmatic management of grants. Unlike grant specialists,
however, project officers generally have other responsibilities, such as
using the scientific and technical expertise for which they were hired.
In fiscal year 2003, EPA took 6,753 grant actions involving funding
totaling about $4.2 billion.9 These awards were made to six main
categories of recipients, as shown in figure 2.
9Grant actions involving funding include new awards, increase and decrease
amendments. The 6,753 grant actions involving funding were composed of
3,512 new grants, 2,416 increase amendments, and 825 decrease amendments.
In addition, EPA awarded 3,344 no cost extensions, which did not involve
funding, in fiscal 2003.
Figure 2: Percentage of EPA Grant Dollars Awarded by Recipient Type,
Fiscal Year 2003
EPA offers two types of grants-nondiscretionary and discretionary:
o Nondiscretionary grants support water infrastructure projects, such as
the drinking water and clean water state revolving fund programs, and
continuing environmental programs, such as the Clean Air Program for
monitoring and enforcing Clean Air Act regulations. For these grants,
Congress directs awards to one or more classes of prospective recipients
who meet specific eligibility criteria; the grants are often awarded on
the basis of formulas prescribed by law or agency regulation. In fiscal
year 2003, EPA awarded about $3.6 billion in nondiscretionary grants. EPA
has awarded these grants primarily to states or other governmental
entities.
o Discretionary grants fund a variety of activities, such as
environmental research and training. EPA has the discretion to
independently determine the recipients and funding levels for these
grants. In fiscal year 2003, EPA awarded $656 million in discretionary
grants. EPA has awarded these grants primarily to state and local
governments, nonprofit organizations, universities, and Native American
tribes.
To highlight persistent problems and, it is hoped, to focus greater
attention on their resolution, we designated EPA's grants management,
including
Problems Persist in Addressing Grants' Environmental Results
achieving environmental results, as a major management challenge in our
January 2003 performance and accountability report.10 In August 2003, we
further addressed the question of environmental results. We reported that
EPA (1) had awarded some grants before considering how the results of the
grantees' work would contribute to achieving environment results; (2) had
not developed environmental measures and outcomes for its grants programs;
and (3) often did not require grantees to submit workplans that explain
how a project will achieve measurable environmental results. We also found
that EPA's monitoring efforts had not called for project officers to ask
grantees about their progress in using measures to achieve environmental
outcomes.
For its grants programs, EPA is still not effectively linking grants to
environmental results. The problems we identified in our previous 2003
report continue. Further, in our recent report, in 2004, we identified an
additional problem. That is, we could not determine from EPA's databases
the types of goods and services provided by grants. To identify goods and
services obtained from discretionary grants, we surveyed discretionary
grant recipients.11 On the basis of our survey responses, we identified a
total of eight categories (see table 1).12 We estimated that of all the
goods and services indicated by grant recipients, 59 percent were in three
of these categories: (1) research and development; (2) training,
workshops, and education; and (3) journals, publications, and reports.
10See U.S. General Accounting Office, Major Management Challenges and
Program Risks: Environmental Protection Agency, GAO-03-112 (Washington,
D.C.: Jan. 2003).
11EPA uses two databases for grant management purposes-the Grants
Information and Control System and the Integrated Grants Management
System. In 2004, we reported that these databases are useful for
retrieving information about specific grants but that neither is useful in
analyzing the kinds of goods and services funded by discretionary grants.
12These results apply to discretionary grants closed out in fiscal years
2001 and 2002 that had projects starting after October 1, 1997.
Table 1: Types of Goods and Services Reported by Surveyed Discretionary
Grant Recipients, 2004
Dollars in millions
Percentage of grants Estimated dollars
for
Types of goods and listing this category goods or service
of
services goods or service category
Training, workshops, and
education 34 $40a
Research and development 24 67b
Journals, publications, and 20 54b
reports
Cleanup, monitoring, and 15 56b
site
assessment
Meetings, conferences, and 15 27a
presentations
Project support and 10 19c
assistance
Web sites 7 14c
Other 8 18a
Source: GAO analysis of survey responses.
Note: Percentage totals are greater than 100 because many grants provided
more than one good or service.
aSampling error is between one-third and one-half of the value of this
estimate.
bSampling error is between one-fourth and one-third the value of this
estimate.
cSampling error is between 60 and 70 percent of the values of this
estimate.
While we were able to identify goods and services from survey responses,
we could not link them to results. We reviewed the files of 67 grantees to
identify if there was any link between goods and services and program
measures or outcomes in grant workplans.13 We found that none of the 67
grants identified measures and only 9 of the 67 grants identified
anticipated outcomes in their workplans.
EPA has also found that grantee workplans often do not identify
environmental outcomes. In 2003, EPA began conducting internal reviews
that-for the first time-quantified the extent to which its grant-issuing
offices, including program and regional offices, ensured that
13These files were not a statistical sample. They were the universe of
grant files where survey respondents had identified that their grants were
beneficial to EPA.
environmental outcomes are identified in grant workplans.14 EPA reported
that, overall, less than one-third of the 93 grant workplans reviewed
identified environmental outcomes. (See table 2.) Among EPA's offices, the
percent of workplans that identify environmental outcomes ranged from 0 to
50.
Table 2: Results of EPA's 2003 Review of EPA Grant Workplans
Number of Number of
workplans workplans with
EPA office reviewed outcomes Percent
Office of the Administrator 15 7 46.7
Office of Air and Radiation 12 6 50.0
Office of Environmental Information 8 2 25.0
Office of Solid Waste and Emergency
Response 10 3 30.0
Region 4 15 4 26.7
Region 5 16 7 43.8
Region 9 17 0
Total 93 29 31.2
Source: GAO analysis of EPA data.
In 2004, EPA plans to review seven other offices. As of July 2004, EPA had
completed reviews of three offices. Among these three offices, EPA found
environmental outcomes in a little less than half of grant workplans.
Final agencywide data will not be available until the end of 2004, when
EPA completes its internal reviews.
Not surprisingly, given the lack of outcomes in the workplans, OMB found
that EPA grant programs are not demonstrating results. In February 2004,
OMB found that 8 of the 10 EPA grant programs it reviewed were "not
14In 2003, EPA's Office of Grants and Debarment began to conduct
"comprehensive grant management reviews" on the 21 EPA offices that award
grants-one-third of these offices will be reviewed annually. As part of
this review, reviewers select a judgmental sample of grant files to
identify the extent to which grants workplans identify environmental
outcomes, among other things.
demonstrating results."15 These programs total about $2.8 billion. (See
table 3.) OMB rated the two remaining grant programs-Brownfields and
Tribal Assistance Programs-totaling $224 million as "adequate" in
demonstrating results.
Table 3: EPA Grant Programs OMB Rated As "Not Demonstrating Results"
Dollars in billions
Grant program Fiscal year 2003 funding
Clean Water State Revolving Fund $1.341
Drinking Water State Revolving Fund .850
Nonpoint Source .237
Leaking Underground Storage Tanks .072
Ecological Research .132
Environmental Education .009
Particulate Matter Research .061
Pollution Prevention and New Technologies .049
Total $2.751
Source: GAO analysis of OMB data.
According to EPA's Inspector General, EPA's failure to consistently
identify environmental measures and outcomes can weaken grant oversight.
For example, the Inspector General recently reported that EPA Region 6
could not determine whether its oversight of water, hazardous waste, and
air programs in Louisiana was effective because, in part, Region 6 had not
linked these programs to environmental outcomes.16 Region 6 had focused
only on program outputs; it therefore could not
15OMB evaluated these programs using its Program Assessment Rating Tool
(PART), a questionnaire that evaluated four critical areas of performance:
purpose and design, strategic planning, management and results and
accountability. These assessments, which were part of the President's
fiscal year 2005 budget submission, were published in February 2004.
Although we are using OMB data, GAO has identified concerns about OMB's
PART. See U.S. General Accounting Office, Performance Budgeting: OMB's
Performance Rating Tool Presents Opportunities and Challenges for
Evaluating Program Performance, GAO-04-550T (Washington D.C.: Mar. 11,
2004).
16These programs are the National Pollutant Discharge Elimination System,
the Resource Conservation and Recovery Act, and the Title V programs. See
EPA Office of Inspector General, EPA Region 6 Needs to Improve Oversight
of Louisiana's Environmental Programs, Report No. 2003-P-00005
(Washington, D.C.: Feb. 3, 2003).
determine whether it was using its resources wisely and achieving program
results.
EPA's program and regional grants officials have identified difficulties
in measuring and achieving environmental outcomes. For example:
o In response to EPA's internal reviews, Region 9 officials noted that
it is costly and difficult to measure outcomes when there is a substantial
time lag between implementing the grant and achieving environmental
outcomes. Moreover, it is difficult to attribute environmental outcomes to
one specific grant when dealing with complex ecosystems. In addition,
Office of Environmental Information project officers stated that
environmental outcome requirements should not apply to support functions
like information management.
o Responding to the recent Inspector General report faulting Region 6
for its oversight of Louisiana's environmental programs, Region 6
officials indicated that they had been unfairly criticized for not
implementing environmental measures since the agency, as a whole, had been
unable to do so.
These concerns demonstrate the need for guidance that addresses the
complexities of measuring and achieving environmental results.
Furthermore, not every EPA program office has yet developed environmental
measures for their grant programs. For example, in June 2004, the
Inspector General found that EPA has been working on developing
environmental measures for the Clean Water State Revolving Fund program
since 1998.17 However, EPA has not yet developed these measures or a
comprehensive plan on how it plans to develop these measures, although it
plans to develop these measures by February 2005.
17According to the Inspector General, as of 2003, the Clean Water State
Revolving Fund had about $47 billion dollars available for projects since
1988. Through the program, all 50 states have a revolving loan fund that
provides sources of low-cost financing for a range of water quality
projects. Initially, EPA provides grants to states to establish and
further fund the states' Clean Water State Revolving Fund programs; states
are required to provide matching funds. The states run their programs and
make loans to communities. Loan repayments are recycled back into each
individual state's program to fund new water quality projects. See EPA
Office of Inspector General, Stronger Leadership Needed to Develop
Environmental Measures for Clean Water State Revolving Fund, Report No.
2004-P-00022 (Washington, D.C.: June 23, 2004).
EPA's Plan Focuses on Results, but Initial Implementation Has Been Slow and
Limited
In 2003, we reported that EPA's new 5-year grants management plan was
promising. In the plan, EPA had established the goal of "identifying and
achieving environmental outcomes" with the objectives and associated
milestones shown in table 4. As table 4 shows, EPA's progress in
implementing the plan's environmental outcomes objectives is behind
schedule.18
18EPA's Office of Grants and Debarment formed an agency-wide Environmental
Results Workgroup to develop policies, guidance, and other steps to
achieve these objectives, which includes representatives from headquarter
and regional offices and representatives from grants administration as
well as program offices.
Table 4: EPA Progress in Meeting Grants Management Plan's Objectives for
Environmental Outcomes
Original plan Revised Objectivesa date date
Objective 1: Ensuring that grantees include expected environmental
outcomes and performance measures in grant workplans
Issue grants policy guidance to ensure that all grant 2003 2004b
workplans, decision memoranda, and/or terms of
condition include environmental outcomes and
measurements for them
Develop a tutorial for grantees on how to develop 2003 2005 performance
measures for workplans
Require a discussion of expected environmental 2004 2005
outcomes and performance measures in grant
solicitations
Objective 2: Improving reporting on grantee progress made in achieving
outcomes
Establish reporting on environmental outcomes as a 2005 2005 criterion for
approval of grantee interim and final reports
Incorporate success in reporting on outcomes into the 2005 2006 criteria
for awarding new grants
Address Paperwork Reduction Act requirements to 2004 2004 enable
cooperative agreement recipients to easily collect
c
information on environmental results and outcomes
Source: GAO analysis of EPA data.
aEPA also plans to incorporate into its grants management plan our August
2003 report recommendation that the agency modify the suggested protocols
it uses to monitor grantees to include questions about their progress in
measuring and achieving environmental outcomes.
bEPA expects the policy to become effective January 2005.
cAccording to EPA officials, OMB's implementation of its rules under the
Paperwork Reduction Act can be an impediment to identifying results in
cooperative agreements because cooperative agreement recipients must
obtain the approval of OMB to survey nine or more parties.
EPA plans to issue its environmental outcomes policy-a key objective
originally scheduled for 2003-in fall 2004, but the policy will not become
effective until January 2005. EPA officials stated that the policy was
delayed because of the difficulty in addressing environmental outcomes.
Furthermore, as a result of this delay, EPA has delayed meeting the
objectives of developing a tutorial for grantees, requiring outcomes in
solicitations, and incorporating success on achieving outcomes into the
criteria for awarding grants-objectives that are contingent on the
issuance of the policy. EPA is also delaying the objective of
incorporating grantee's previous success in identifying outcomes into the
criteria for
awarding new grants in order to give grantees a year to understand the new
policy.
In the absence of a final outcomes policy, EPA issued an interim policy in
January 2004.19 The interim policy is a positive step in that for the
first time EPA is requiring project officers to identify-at the pre-award
stage-how proposed grants contribute to achieving the agency's strategic
goals under the Government Performance and Results Act of 1993 (GPRA).20
(See fig. 3, example 1.) As we reported, project officers were linking the
grant to the agency's goal after the award decision, so that the linkage
was a recordkeeping activity rather than a strategic decision.21
19The policy went into effect on funding packages submitted on or after
February 9, 2004.
20Pub. L. No. 103-62, 107 Stat. 285 (1993).
21U.S. General Accounting Office, Environmental Protection: Information on
EPA Project Grants and Use of Waiver Authority, GAO-01-359 (Washington,
D.C.: Mar. 9, 2001) and GAO-03-846.
Figure 3: EPA's Interim Policy Requires Linking Grants to Strategic Goals,
but It Does Not Require Linking Grants to Environmental Outcomes
While the interim policy is a positive first step, it does not require
project officers to link grant funding to environmental outcomes. Instead,
it "encourages" project officers to link grant funding to outputs,
outcomes, and performance goals, as illustrated in figure 3, example 2.
EPA officials explained that the interim policy did not require the full
strategic plan/GPRA "architecture"-goals, objectives, subobjectives,
program/project, outputs, outcomes, and annual performance goals- because
not all EPA staff are trained on how to implement the strategic plan/GPRA
architecture. However, when EPA's outcome policy becomes effective, it
will require every grant workplan to address the full strategic plan/GPRA
architecture, including outcomes.
Finally, EPA will not meet the grant management's plan first-year (2004)
target for the performance measure of the environmental outcomes goal- the
percentage of grant workplans, decision memoranda, and terms of conditions
that discuss how grantees plan to measure and report on environmental
outcomes. For this performance measure, using 2003 as its baseline year,
EPA determined that, as previously discussed, less than onethird of its
grant workplans had environmental outcomes. EPA established targets that
progressively increase from this baseline to 70 percent in 2004, to 80
percent in 2005, to 100 percent in 2006. EPA officials do not expect that
EPA will meet its target for 2004 because its outcome policy is not yet in
place.
EPA has drafted a policy and guidance on environmental outcomes in grants.
As drafted, this policy appears to have EPA moving in the right direction
for addressing environmental outcomes. The policy
o Is binding on managers and staff throughout the agency, according to
EPA officials. Previously, the Office of Grants and Debarment targeted
only project officers through brief guidance on outcomes in their training
22
manual.
o Emphasizes environmental results throughout the grant life cycle-
awards, monitoring, and reporting. In terms of awards, the draft policy
applies to both competitive and noncompetitive grants. For example,
program offices and their managers must assure that competitive funding
announcements discuss expected outputs and outcomes. In terms of grant
22U.S. Environmental Protection Agency, Managing Your Financial Assistance
Agreements: Project Officer Responsibilities, Fifth Edition, EPA
202-B-96-002 (Washington, D.C.: Feb. 2003).
monitoring, the policy requires program offices to assure that grantees
submit interim and final grantee reports that address outcomes.
o Requires that grants are both aligned with the agency's strategic
goals and linked to environmental results. Specifically, the draft policy
requires that EPA program offices (1) ensure that each grant funding
package includes a description of the EPA strategic goals and objectives
the grant is intended to address and (2) provide assurance that the grant
workplan contains well-defined outputs, and to the "maximum extent
practicable," well-defined outcome measures. According to an EPA official,
while the policy requires that program offices assure that there are
well-defined outputs and outcomes, the grant funding package-an internal
EPA document-will not identify each output and anticipated outcome. EPA is
concerned that certain types of grants have too many outputs and outcomes
to enumerate. Potential grant recipients also will not be required to
submit workplans that mirror the strategic plan/GPRA architecture, owing
to EPA's concern that such a requirement would cause the grant to be for
EPA's benefit, and thus, more like a contract. EPA included the provision
to "the maximum extent practicable" because it recognized that some types
of grants do not directly result in environmental outcomes. For example,
EPA might fund a research grant to improve the science of pollution
control, but the grant would not directly result in an environmental or
public health benefit.
EPA's forthcoming policy and guidance faces implementation challenges.
First, while the guidance recognizes some of the known complexities of
measuring outcomes, it does not yet provide staff with information on how
to address them. For example, it does not address how recipients will
demonstrate outcomes when there is a long time lag before results become
apparent. Second, although the policy is to become effective in January
2005, all staff will not be trained by that time. EPA has planned some
training before issuing the policy and has issued a long-term training
plan that maps out further enhancements for training grant specialists and
project officers on environmental results.23 Finally, EPA has not yet
determined how environmental results from its programs will be reported in
the aggregate at the agency level. EPA's forthcoming order establishes
that program offices must report on "significant results" from completed
grants through existing reporting processes and systems, which each
23U.S. Environmental Protection Agency, Long-Term Grants Management
Training Plan, 2004-2008, EPA-216-R-04-001 (Washington, D.C.: Feb. 2004).
program has developed. EPA plans to convene an agencywide work group in
fiscal year 2005 to identify ways to better integrate those systems.
In conclusion, we believe that if fully implemented, EPA's forthcoming
outcome policy should help the agency and the Congress ensure that grant
funding is linked to EPA's strategic plan and to anticipated environmental
and public health outcomes. We believe that the major challenge to meeting
EPA's goal of identifying and achieving outcomes continues to be in
implementation throughout the agency. Realistically, EPA has a long road
ahead in ensuring that its workforce is fully trained to implement the
forthcoming policy and in educating thousands of potential grantees about
the complexities of identifying and achieving environmental results.
Given EPA's uneven performance in addressing its grants management
problems to this point, congressional oversight is important to ensuring
that EPA's Administrator, managers, and staff implement its grants
management plan, including the critical goal of identifying and achieving
environmental results from the agency's $4 billion annual investment in
grants.
Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or Members of the Subcommittee may have.
Contacts and For further information, please contact John B. Stephenson at
(202) 5123841. Individuals making key contributions to this testimony were
Avrum Acknowledgments I. Ashery, Andrea W. Brown, Tim Minelli, Carol
Herrnstadt Shulman, Rebecca Shea, Bruce Skud, and Amy Webbink.
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