Environmental Protection: Factors Contributing to Lengthy Award Times for
EPA Grants (Letter Report, 07/14/1999, GAO/RCED-99-204).
Pursuant to a congressional request, GAO reviewed the timeliness of the
Environmental Protection Agency's (EPA) grant award process, focusing on
the: (1) the number and dollar value of the agency-requested and
congressionally directed grants awarded for fiscal years (FY) 1995-1998;
(2) median award time for both types of grants, as measured by the
number of days between the date of the fiscal year appropriation and the
date of the grant award; and (3) major reasons for lengthy awards.
GAO noted that: (1) from FY 1995 through FY 1998, the most recent years
for which complete grant data were available, EPA awarded 12,861
agency-requested grants valued at approximately $8.4 billion and 950
congressionally directed grants valued at approximately $1.4 billion;
(2) during fiscal years 1995-1998, the median time that EPA took to
award both agency-requested and congressionally directed grants, as
measured by the number of days between the date of the fiscal year
appropriation and the date of the grant award, was about the same for
each type of grant; (3) however, some grants took considerably longer to
award; (4) specifically, EPA took at least twice the median number of
days to award 409 agency-requested grants valued at $48 million and 30
congressionally directed grants valued at $27 million; (5) some grants
of both types took over 600 days to award; (6) several factors can
lengthen the time taken to award both agency-requested and
congressionally directed grants; (7) for example: (a) grantees may not
submit grant applications in a timely manner; (b) EPA may find problems
with grantees' proposed work plans; (c) grants may need to be awarded
competitively; and (d) grantees may not need funding immediately, even
though funding is available; (8) awarding congressionally directed
grants in a timely manner may involve issues that do not generally arise
for agency-requested grants; and (9) for example, grantees may be
unfamiliar with EPA's grant award process, and EPA may need to identify
specific grantees when the appropriations committees have not done so.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-99-204
TITLE: Environmental Protection: Factors Contributing to Lengthy
Award Times for EPA Grants
DATE: 07/14/1999
SUBJECT: Federal grants
Intergovernmental fiscal relations
Grant administration
Grant award procedures
Environmental monitoring
Statistical data
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Cover
================================================================ COVER
Report to the Chairman, Subcommittee on VA, HUD, and Independent
Agencies, Committee on Appropriations, House of Representatives
July 1999
ENVIRONMENTAL PROTECTION - FACTORS
CONTRIBUTING TO LENGTHY AWARD
TIMES FOR EPA GRANTS
GAO/RCED-99-204
Timeliness of EPA Grant Awards
(160464)
Abbreviations
=============================================================== ABBREV
EPA -
Letter
=============================================================== LETTER
B-282807
July 14, 1999
The Honorable James T. Walsh
Chairman, Subcommittee on VA, HUD,
and Independent Agencies
Committee on Appropriations
House of Representatives
Dear Mr. Chairman:
The Environmental Protection Agency (EPA) relies heavily on grants to
carry out its mission of protecting human health and safeguarding the
natural environment. These grants, which EPA awards to states,
tribes, localities, and academic institutions, provide assistance for
projects that range from conducting environmental research to
constructing wastewater treatment facilities.\1 A significant portion
of EPA's budget is used to fund grants. For fiscal year 1999, for
example, EPA projected that it would use about $4 billion, or 53
percent of its $7.6 billion budget, for grants.
EPA's grant award process consists of a series of steps that
generally begins when the agency receives its annual appropriation\2
and ends when it awards a grant to a recipient. As part of this
process, a grant applicant must prepare and submit a detailed grant
application, and EPA and the grantee agree on a work plan that
describes the tasks to be performed, as well as specific commitments
and deliverables.
EPA funds two broad categories of grantsagency-requested and
congressionally directed. Agency-requested grants implement ongoing
environmental programs and fund other executive-branch priorities.
Congressionally directed grants originate in EPA's appropriations
acts and in the committee reports accompanying the acts. These acts
and reports direct the agency to fund specific projects out of its
appropriations.
Because of your interest in the timeliness of EPA's grant award
process, you asked us to identify (1) the number and dollar value of
the agency-requested and congressionally directed grants awarded for
fiscal years 1995-98; (2) the median award time for both types of
grants, as measured by the number of days between the date of the
fiscal year appropriation and the date of the grant award; and (3)
the major reasons for lengthy awards.
--------------------
\1 In this report, the term grants includes both grants and
cooperative agreements. Grants provide organizations with financial
assistance to carry out programs without substantial federal
involvement. Cooperative agreements provide financial assistance
with substantial federal involvement. Both grants and cooperative
agreements are included in the broader category of assistance
agreements.
\2 The Office of Management and Budget (OMB) makes EPA's
appropriations available through an allotment process. We used OMB's
allotment date as the starting point in calculating how long it takes
EPA to award a grant.
RESULTS IN BRIEF
------------------------------------------------------------ Letter :1
From fiscal year 1995 through fiscal year 1998, the most recent years
for which complete grant data were available, EPA awarded 12,861
agency-requested grants valued at approximately $8.4 billion and 950
congressionally directed grants valued at approximately $1.4 billion
(see fig. 1).
Figure 1: Number and Dollar
Amounts of Grants Awarded by
EPA for Fiscal Years 1995-98
(See figure in printed
edition.)
Source: GAO's analysis of EPA's data.
During fiscal years 1995-98, the median time that EPA took to award
both agency-requested and congressionally directed grants, as
measured by the number of days between the date of the fiscal year
appropriation and the date of the grant award, was about the same for
each type of grant (see fig. 2).
Figure 2: Median Number of
Days to Award Grants, Fiscal
Years 1995-98
(See figure in printed
edition.)
Note: The median number of days is smaller for fiscal year 1996 than
for the other fiscal years because of some unusual circumstances,
including three government shutdowns that delayed EPA's
appropriations.
Source: GAO's analysis of EPA's data.
However, some grants took considerably longer to award.
Specifically, EPA took at least twice the median number of days to
award 409 agency-requested grants valued at $48 million and 30
congressionally directed grants valued at $27 million. Some grants
of both types took over 600 days to award.
Several factors can lengthen the time taken to award both
agency-requested and congressionally directed grants. For example,
-- grantees may not submit grant applications in a timely manner,
-- EPA may find problems with grantees' proposed work plans,
-- grants may need to be awarded competitively, and
-- grantees may not need funding immediately, even though funding
is available.
Awarding congressionally directed grants in a timely manner may
involve issues that do not generally arise for agency-requested
grants. For example, grantees may be unfamiliar with EPA's grant
award process, and EPA may need to identify specific grantees when
the appropriations committees have not done so.
BACKGROUND
------------------------------------------------------------ Letter :2
More than 55 EPA programs provide grants to states, tribes,
localities, and other regional or local authorities to fund
continuing environmental programs, such as air pollution monitoring.
These programs provide assistance to governments, institutions,
nonprofit organizations, and private parties to contribute data,
training, and research. EPA also provides grant funding to state
revolving loan funds that, in turn, provide financing to
municipalities for wastewater and drinking water facilities. Thus,
EPA accomplishes a large part of its mission by awarding grant funds
for other organizations to conduct environmental programs and
projects. In fiscal year 1998, EPA expected to obligate about $3.5
billion, or 47 percent of its $7.4 billion budget, for grant funding.
Each fiscal year, EPA submits its budget request to the Congress,
identifying the amounts it intends to award as grants throughout the
coming fiscal year. This budget request does not provide for
congressionally directed grants. During their deliberations, the
congressional appropriations committees often direct EPA to set aside
grant funds for particular programs or purposes. A committee may
identify the grantee and the grant amount. For example, the House
Appropriations Committee's conference report for fiscal year 1995
directs that a $2 million grant be awarded to the Gulf of Maine
Council. Alternatively, a committee may identify a purpose without
designating a grantee. For example, the same committee report
directs that $8.5 million be awarded for rural water technical
assistance activities. Generally, no additional appropriations are
provided specifically for funding or managing congressionally
directed grants.
As part of the yearly appropriations process, EPA prepareswithin 30
days of the enactment of its appropriations legislation--an operating
plan for approval by its appropriations committees. This plan
explains how the agency intends to implement its budget. Because the
agency does not usually receive advance notice for congressionally
directed grants, it must provide in its operating plan for funding
and managing these grants. The Office of Management and Budget (OMB)
makes funds available to EPA through an allotment process that
allocates funds after they are appropriated.
EPA's headquarters and regional budget, program, and grant management
offices participate in the grant funding process. The budget office
makes funds available through its management of the agency's
operating plan; the program offices allocate funding amounts and are
responsible for programmatic, scientific, and technical oversight;
and the grant management offices perform and document administrative
reviews of grantees' application packages.
EPA's headquarters budget office monitors the appropriations process
and, shortly after the beginning of a new fiscal year, identifies and
assigns responsibility for each congressionally directed grant to a
specific EPA headquarters program office or regional office. The
program office, in turn, may retain the responsibility for awarding
the grant or assign this responsibility to a regional office. If the
responsibility is assigned, the program office transmits the
necessary funding to the regional office. EPA officials told us that
once a headquarters program office assigns responsibility for a grant
to a regional office, the program office does not generally follow up
on or monitor the status of the grant to see whether it is made
available in a timely manner. While EPA headquarters monitors
regional workload levels, it does not monitor the status of
individual grants unless a problem or issue arises. Because the
program offices play a pivotal role in the grant award process, they
are encouraged to establish an annual plan and schedule for awarding
both agency-requested and congressionally designated grants and to
communicate that plan and schedule to the appropriate budget and
grant management offices.
In September 1992, EPA issued a policy statement for one category of
agency-requested grants--continuing environmental programsrequiring
that these grants be awarded as quickly as possible after funds
become available." Under the policy, the appropriate EPA program and
grant management offices must decide within 60 days of receiving a
grant application whether to approve, conditionally approve, or
disapprove the application.\3 Within this period, EPA has 45 days to
inform the applicant in writing of the status of the application.
However, this EPA policy covers only about 20 percent of the agency's
grants. For other grants awarded by EPA headquarters, the agency has
established a 60-day customer service standard for acting on grant
applicationsincluding applications for congressionally directed
grants. According to EPA headquarters grant administration
officials, EPA regional offices are also developing customer service
standards.
--------------------
\3 EPA also requires that the program office attempt to complete the
review [of the grantee's application] within 3 weeks of receiving
the application.
EPA GRANTS FOR FISCAL YEARS
1995-98
------------------------------------------------------------ Letter :3
From fiscal year 1995 through fiscal year 1998, EPA awarded 12,861
agency-requested grants valued at approximately $8.4 billion and 950
congressionally directed grants totaling about $1.4 billion (see
table 1). During this period, the number of congressionally directed
grants ranged from about 4.3 percent to 8.5 percent of the total
number of grants awarded, and the dollar value of these grants ranged
from 7 percent to 26 percent of the total dollar value. In total,
EPA awarded 13,811 grants valued at $9.9 billion during the 4-year
period. EPA's regional offices awarded 93 percent of these grants
(including the congressionally directed grants) valued at $9.2
billion.
Table 1
EPA's Agency-Requested and
Congressionally Directed Grants, Fiscal
Years 1995-98
Congressionally
Agency-requested directed Total
---------------------- ---------------------- --------------------------
Fiscal year Number Amount Number Amount Number Amount
------------- ---------- ---------- ---------- ---------- ------------ ------------
1995 3,580 $2,631,039 160 $935,238,2 3,740 $3,566,277,9
,747 30 77
1996 2,588 625,967,62 214 94,682,988 2,802 720,650,610
2
1997 3,467 2,046,886, 276 172,940,84 3,743 2,219,827,03
190 9 9
1998 3,226 3,122,860, 300 232,283,17 3,526 3,355,143,93
759 4 3
Total 12,861 $8,426,754 950 $1,435,145 13,811 $9,861,899,5
,318 ,241 60
-----------------------------------------------------------------------------------------
Source: GAO's analysis of EPA's data.
TIME TAKEN TO AWARD GRANTS
------------------------------------------------------------ Letter :4
For fiscal years 1995-98, the median time that EPA took to award both
agency-requested and congressionally directed grants was about the
same (see table 2). The time taken to award a grant is the number of
days elapsed between the date OMB allots EPA's fiscal year
appropriation and the date EPA awards the grant. The median date is
the midpoint in a sequentially ordered list; half of the grants are
below the median number of days, and half are above. Because the
sizes of the intervals vary widely from one type of grant to another,
the median may be a more useful representation of the typical
number of days than the average or mean.
Table 2
Median Number of Days Taken to Award EPA
Grants, Fiscal Years 1995-98
Median number of days taken to award
grants
--------------------------------------
Congressionally
Fiscal year Agency-requested directed
------------------------------ ------------------ ------------------
1995 270 312
1996 118 104
1997 327 327
1998 264 261
----------------------------------------------------------------------
Note: The median number of days is smaller for fiscal year 1996 than
for the other fiscal years because of some very unusual
circumstances, including three government shutdowns that delayed
EPA's appropriations.
Source: GAO's analysis of EPA's data.
According to EPA officials, the time taken to award grants is
influenced by the dates when EPA receives its appropriation, when the
appropriations committees approve its operating plan, and when its
program offices provide annual guidance to the regional offices on
the agency-requested and congressionally directed grants to be
awarded. Some EPA regional officials maintain that they must wait
for an approved operating plan before making grant awards. The
officials pointed out, for example, that although EPA's fiscal year
1999 appropriations act was passed in October 1998, the agency did
not have an approved operating plan until late February 1999. The
officials further indicated that the early assumptions about funding
levels used to prepare the plan do not always carry forward to the
final approved plan.
While there was very little difference in the median time taken to
award agency-requested and congressionally directed grants, some
grants of both types--409 agency-requested grants valued at $48
million and 30 congressionally directed grants valued at $27
million--took more than twice the median number of days to award.
Some grants of both types took over 600 days to award. For each
fiscal year from 1995 through 1998, figure 3 shows the percentage of
grants awarded within specific time frames.
Figure 3: Percentage of Grants
Awarded, by Time Taken for
Awards, Fiscal Years 1995-98
(See figure in printed
edition.)
Source: GAO's analysis of EPA's data.
MAJOR REASONS FOR LENGTHY
AWARDS
------------------------------------------------------------ Letter :5
Several factors influence the time taken to award grants, some of
which affect both agency-requested and congressionally directed
grants and others of which are particular to congressionally directed
grants. For example, awards of both types of grants may be delayed
when grantees do not submit their grant applications on time or when
EPA finds problems with the grantees' proposed work plans. EPA's
procedures for awarding grants competitively, including procedures
for soliciting and evaluating grant proposals, also take time.
Furthermore, grantees that have funding available from a prior year
often wait until they need additional funds to apply for a new grant.
Awards of congressionally directed grants may be delayed when
grantees are not familiar with EPA's grant award process or when EPA
needs to identify grantees after funds have been congressionally
directed but grantees have not been designated.
REASONS AFFECTING BOTH
AGENCY-REQUESTED AND
CONGRESSIONALLY DIRECTED
GRANTS
---------------------------------------------------------- Letter :5.1
Grantees may increase the time taken to award grants if they are late
in submitting their grant application packages to EPA or do not
include complete work plans as a part of these packages. According
to EPA, the grant review process cannot begin until the agency
receives the grantee's application package, and the agency cannot
approve the grant from a technical standpoint unless the grantee has
prepared an acceptable work plan defining the tasks that will be
accomplished. EPA officials said they found it much easier to deal
with the recipients of agency-requested grants, who are familiar with
the agency's grant award procedures, than to instruct new grantees in
the intricacies of the process. One regional official noted that
because each fiscal year usually brings new congressionally
designated grantees, it is difficult for EPA to establish ongoing
relationships with them.
Arriving at an acceptable work plan involves negotiation between EPA
and the grantee. Sometimes, these negotiations can take several
months. According to EPA regional grant officials, it takes about 4
to 5 months for the agency and a prospective congressionally
designated grantee to negotiate a work plan that meets congressional
intentions for a specific grant. Such a negotiation takes place
after EPA has received its annual grant appropriation. An EPA
headquarters grant administration official said that it can also take
several months to negotiate an acceptable work plan with the
recipient of a continuing environmental program grant. However,
because of the long lead times, the official said, the parties can
work ahead, starting negotiations over the work plan before EPA
receives its annual appropriation. In September 1998, EPA's
Inspector General reported, after reviewing 55 grant work plans, that
the agency's program officers did not always negotiate work plans
with well-defined commitments. The Inspector General recommended
increased training in this area for EPA officials.
States' concerns about the timing of EPA's grant awards led EPA, in
1992, to issue a policy memorandum on awarding grants for continuing
environmental programs. The memorandum cited two possible causes of
delays--confusion about when grant funds become available and
difficulties in obtaining approval of work plans. The memorandum
also noted that disagreements over EPA/state initiatives and
requirements delayed EPA and state program officials' negotiations of
work plans. Such disagreements can hold up grant awards until all
work plan issues have been resolved and the work plans have been
approved. To address this problem, the policy memorandum established
a requirement for EPA to approve, conditionally approve, or
disapprove an application for a continuing environmental program
grant (including the work plan) within 60 days of receiving the grant
application package.
Also adding time to grant awards, according to EPA officials, are the
agency's procedures for awarding grants competitively, including
those for soliciting and evaluating grant proposals. Although EPA
has no overall requirements for competition, some program offices
award agency-requested grants competitively to help ensure that only
the best proposals are funded. For example, EPA's Office of Research
and Development conducts an independent scientific peer review of
proposed research grants, which, officials said, adds about 4 weeks
to the grant award process. Most of EPA's congressionally directed
environmental justice and some environmental equity grants are also
awarded competitively.\4 EPA officials say they must use an extensive
scoring process to determine the most eligible grantees for limited
funds in this area.
Still another reason for the time taken to award grants, disclosed by
our review of selected grant files, is that the recipients of both
agency-requested and congressionally directed grants do not always
need funding when grant funds become available. When grantees have
not liquidated all of their grant funds from the prior fiscal year,
our review showed, they sometimes postpone the submission of their
applications for new grant funds. For example, if a construction
project was late in getting started and grant funds are therefore
left over from the prior fiscal year, a grantee may postpone the
submission of an application for an agency-requested construction
grant. Similarly, EPA grant officials noted, if the recipient of a
congressionally directed grant in one fiscal year is designated as a
grantee in the following fiscal year and the grantee has not spent
all of the funds from the first fiscal year, the grantee may postpone
the submission of a grant application until new funding is required.
--------------------
\4 Environmental justice is defined by EPA as the fair treatment
and meaningful involvement of all people regardless of race, color,
national origin, or income with respect to the development,
implementation, and enforcement of environmental laws, regulations,
and policies. Fair treatment means that no group of people,
including racial, ethnic, or socioeconomic group should bear a
disproportionate share of the negative environmental consequences
resulting from industrial, municipal, and commercial operations or
the execution of federal, state, local, and tribal programs and
policies. EPA defines environmental equity as equal protection
from environmental hazards for individuals, groups, or communities
regardless of race, ethnicity, or economic status.
ISSUES WITH CONGRESSIONALLY
DIRECTED GRANTS
---------------------------------------------------------- Letter :5.2
According to EPA officials, one of the major reasons for delays in
awarding congressionally directed grants is that the grantees are not
familiar with the federal grant application process. Even
organizations identified as grantees in the appropriations
committees' reports are required to submit detailed grant
applications and work plans. Not all grantees are aware of this
requirement. EPA officials said that they do not generally assist
new grantees in preparing their grant application packages and do not
take a proactive role in expediting grant awards. However, according
to EPA grant administration officials, the agency assists grantees
that ask for help in developing their work plans, to the extent
appropriate. The officials pointed out that the grantees are still
responsible for preparing the plans. Some EPA regions assist the
grantees by providing workshops and training. EPA officials pointed
out that the agency has developed a grant-writing tutorial, available
on CD-ROM and the Internet, for new or small grantees. However, one
regional official noted that EPA's grant application packages do not
generally indicate that such assistance is available.
EPA officials pointed out that, in some cases, a specific grantee may
not be identified in the appropriations committees' reports; instead,
the committees simply direct that funding go to a particular area of
interest. In these cases, EPA must either identify the intended
grantee through research or competitively award the grant by
soliciting and evaluating grant proposals. Each of these steps adds
time to the process. An EPA regional official also said that
administering congressionally directed grants is difficult because
EPA does not receive advance notice of them and has no information to
work with until the grants are designated in the appropriations
committees' conference reports.
EPA grant administration officials said they take the award and
management of congressionally directed grants seriously. This view
was echoed by EPA regional officials, who indicated that every effort
is made to accommodate congressionally directed grants. However, the
officials noted, the agency does not receive additional staff and
resources to manage these grants. According to several EPA
headquarters and regional grant administration officials,
congressionally directed grants are sometimes seen as not furthering
the agency's mission or as not aligned with its priorities.
AGENCY COMMENTS
------------------------------------------------------------ Letter :6
We provided EPA with a draft of this report for review and comment.
We discussed the draft report with the Director of EPA's Office of
Grants and Debarment, who said EPA generally agreed with the findings
in the report and suggested that we clarify the applicability of
EPA's customer service standard for processing and awarding grants.
According to the Director, this standard applies to EPA headquarters
offices, and regional offices are also developing such standards. We
incorporated this and other technical comments into the report.
SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7
To identify the number and dollar value of, and the median time taken
to award, agency-requested and congressionally directed grants, we
obtained data from EPA's Integrated Financial Management System
(IFMS), including the most recent financial and award date
information for fiscal years 1995-98. The data provided by EPA were
for newly awarded grants for each of the 4 fiscal years and did not
include any amendments to the grants. We analyzed these data by
calculating, for each grant, the number of days between the date that
OMB allotted funds to EPA and the date the grant was awarded. The
dates of allotment were provided to us by EPA's headquarters budget
office. We used these dates in our calculations because OMB must
allot EPA's appropriation before EPA can award grant funds.
For some of EPA's agency-requested grants, the number of days between
OMB's allotment date and EPA's grant award date, as indicated by IFMS
data, was erroneous because EPA uses a budget procedure called
forward funding. Under this procedure, EPA uses funds carried over
from a prior year for a grant, as well as new funding authority.
While a grant may be awarded in a short time, IFMS can overstate the
time taken for the award because it does not recognize that funds are
being carried over to a new fiscal year. IFMS does not separately
identify forward-funded grants, and EPA officials could not provide
us with information that would allow us to do so. These grants are
included in our analysis and would influence any calculations of
average numbers of days. We therefore used the median, or middle
value of a data set, to describe the timeliness of a grant award.
Another factor influenced our calculation of the number and dollar
value of grants and of the median time taken to award them. For
fiscal year 1996, OMB's allotment of funds to EPA, which would
normally have occurred in October or November 1995, did not occur
until May 1996. The allotment occurred later than usual because of
special circumstances, including the budget crisis of fiscal year
1996 and the associated government shutdowns. Consequently, for
fiscal year 1996, calculations using IFMS data showed that the time
taken to award some grants was negative because the grants were
awarded before the allotment date under continuing budget
resolutions. We eliminated all such grants from our review.
Therefore, the number of grants and the amounts associated with
agency-requested grants for fiscal year 1996 are understated.
To obtain information on the reasons for lengthy awards, we talked
with EPA officials at selected locations about the agency's policy on
timeliness and about how the agency oversees the grant award process.
Because information on the reasons for lengthy awards is not
available in IFMS, we reviewed selected hardcopy grant files to
identify reasons for the delays and other information. This effort
pointed to circumstances affecting congressionally directed grants.
We then reviewed the files for 23 congressionally directed grants and
26 agency-requested grants, which we selected on the basis of the
time taken to award the grants. We performed our review at EPA
headquarters in Washington, D.C., and at the three EPA regional
offices that managed the most grants for fiscal years 1995-98the
Chicago, Philadelphia, and San Francisco offices. We also reviewed
documents related to EPA's grant award process, such as regulations,
policies, and directives, as well as appropriations acts and
associated committee reports. We conducted our review from February
through June 1999 in accordance with generally accepted government
auditing standards.
---------------------------------------------------------- Letter :7.1
We are sending copies of this report to the Chairs and Ranking
Minority Members of the Senate and House Committees and Subcommittees
with responsibility for EPA's grants. We will also send copies of
this report to Carol M. Browner, Administrator, EPA, and Jacob Lew,
Director, Office of Management and Budget. Copies will also be made
available to others upon request.
If you have any questions about this report, please contact me at
(202) 512-6111 or John A. Wanska at (312) 220-7628. Key
contributors to this assignment were Willie E. Bailey, Julian M.
Fogle, James B. Hayward, and John D. Yakaitis.
Sincerely yours,
David G. Wood
Associate Director, Environmental Protection
Issues
*** End of document. ***