Grants Management:

EPA Needs to Strengthen Efforts to Address Persistent Challenges

GAO-03-846: Published: Aug 29, 2003. Publicly Released: Sep 25, 2003.

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The Environmental Protection Agency (EPA) has long faced problems managing its grants, which constitute over one-half of the agency's annual budget, or about $4 billion. EPA uses grants to implement its programs to protect human health and the environment and awards grants to thousands of recipients, including state and local governments, tribes, universities, and nonprofit organizations. EPA's ability to efficiently and effectively accomplish its mission largely depends on how well it manages its grant resources. As requested, GAO determined (1) major challenges EPA faces in managing its grants and how it has addressed these challenges in the past, (2) extent to which EPA's recently issued policies and grants management plan address these challenges, and (3) promising practices, if any, that could assist EPA in addressing these challenges.

EPA continues to face four key management challenges, despite past efforts to address them. These challenges are (1) selecting the most qualified applicants, (2) effectively overseeing grantees, (3) measuring the results of grants, and (4) effectively managing grants staff and resources. In recent years, EPA has taken a series of actions to address these challenges by, among other things, issuing policies, conducting training, and developing a new data system for grants management. However, these past actions had mixed results because of the complexity of the problems, weaknesses in design and implementation, and insufficient management emphasis. EPA's 2002 competition and oversight policies and 2003 grants management plan focus on the major challenges GAO identified, but will require strengthening, enhanced accountability, and a sustained commitment to succeed. For example, EPA's new oversight policy mandates more in-depth monitoring of grantees but it does not build in a process for analyzing the results of the in-depth monitoring to address systemic grantee problems. Such analysis could better target EPA's oversight efforts. In addition, its 5-year grants management plan does offer, for the first time, a comprehensive road map with objectives, goals, and milestones for addressing grants management challenges. However, the plan does not completely address how EPA will hold all managers and staff accountable for successfully fulfilling their management responsibilities. Therefore, EPA cannot ensure the sustained commitment required for the plan's success. Although information on promising grants management practices is limited, the federal agencies and other organizations GAO contacted identified some practices for each of EPA's four major challenges that may further assist EPA in improving its grants management. For example, one federal agency takes into account applicants' potential to achieve results when selecting grantees. A private foundation conducts preaward reviews of some applicants to learn about the organization and assess its fiscal health. In addition, GAO has developed a guide for federal agencies to use to hold managers and staff accountable for achieving desired agency results. This guide could be useful in helping EPA ensure accountability for grants management performance.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To better inform Congress about EPA's achievements in improving grants management, the Administrator of EPA should report on the agency's accomplishments in meeting the goals and objectives developed in the grants management plan and other actions to improve grants management, beginning with its 2003 annual report to Congress.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In response to a GAO recommendation in "Grants Management: EPA Needs to Strengthen Efforts to Address Persistent Challenges" (GAO-03-846), EPA agreed to report to Congress on its accomplishments in meeting the goals of its Grants Management Plan beginning with EPA's FY 2003 Annual Report. In its FY 2003 Annual Report, EPA began reporting to Congress on its progress in meeting the plan's goals, which should assist Congress in providing oversight of EPA's grants management efforts.

    Recommendation: To strengthen EPA's efforts, the Administrator should evaluate the promising practices identified in this report and implementing those that could potentially improve EPA grants management.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In our report, "Grants Management:EPA Needs to Strengthen Efforts to Address Persistent Challenges (August 2003), GAO found that EPA could benefit from considering practical approaches successfully implemented by other federal agencies and organizations. We identified promising practices in federal agencies and organizations. We recommended that EPA evaluate the promising practices in the report and implement those that could potentially improve EPA's grants management. EPA reviewed these practices and contacted some of the agency and organizations we identified such as the U.S. Department of Health and Human Services. In response, for example, EPA piloted a pre-award review program to assess non-profit applicants' ability to manage funds, and in turn, EPA issued a policy on assessing the capabilities of non-profit applicants that was implemented on March 31, 2005.

    Recommendation: To strengthen EPA's efforts, the Administrator should incorporate accountability for grants management responsibilities through performance standards that address grants management for all managers and staff in headquarters and the regions responsible for grants management and holding managers and staff accountable for meeting these standards.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In our report "Grants Management: EPA Needs to Strengthen Efforts to Address Persistent Management Challenges" (August 2003), GAO found that successful implementation of grants management practices requires that all staff to be fully committed to, and held accountable for, grants management. However, we identified problems that could hamper holding EPA project officers and mid-level managers responsible for grants accountable in that they both lacked performance standards that incorporate grants management responsibilities. We recommended that EPA incorporate accountability for grants management responsibilities through performance standards that address grants management for all managers and staff responsible for grants management and holding managers and staff accountable for meeting these standards. EPA substantially met the intent of our recommendation by issuing guidance on including performance standards for project officers and managers that incorporate grants management responsibilities. EPA also issued a memorandum requiring that managers performance agreements reflect grants management responsibilities. EPA took steps to validate that both managers and project officers grants management responsibilities were incorporated into their performance agreements.

    Recommendation: To strengthen EPA's efforts, the Administrator should modify its in-depth review protocols to include questions on the status of grantees' progress in measuring and achieving environmental outcomes.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In our report, "Grants Management: EPA Needs to Strengthen Efforts to Address Persistent Challenges" (August 2003), GAO found that EPA did not adequately address the need to assess grantee's progress towards achieving environmental results. If EPA tracked grantees' progress during in-depth reviews, it would better help the agency manage grants for results. GAO recommended that EPA modify its in-depth review protocols of grantees to include questions on the status of grantee's progress in measuring and achieving environmental results. Based on our recommendation, in 2005, EPA revised its protocols for in-depth review to incorporate questions on the status of the agency's progress in measuring and achieving environmental results.

    Recommendation: To strengthen EPA's efforts, the Administrator should develop a plan, including modifications to the grantee compliance database, to use data from its various oversight efforts--in-depth reviews, significant actions, corrective actions taken, and other compliance information--to fully identify systemic problems, inform grants management officials of areas that need to be addressed, and take corrective action as needed.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In our report "Grants Management: EPA Needs to Strengthen Efforts to Address Persistent Challenges" (August 2003), we found that EPA had not made maximum use of information in its grants database to fully identify systemic problems and then inform grants management officials about oversight areas that needed to be addressed. GAO recommended that EPA should develop a plan to use data from its oversight efforts to fully identify systemic problems, inform grants management officials of areas that need to be addressed, and take corrective actions as needed. In response, EPA developed a process that addressed the intent of our recommendation by using its grants database to identify systematic problems and issues with grantees. The process incorporated statistical techniques--an approach that we also recommended--to sample grantee recipients for in-depth reviews. Using this approach, EPA identified the key grantee issues, such as lack of internal controls by category of grantee: tribe, university, or nonprofit agency. EPA identified corrective actions to be taken agencywide to address these issues and other potential actions that could improve agency management practices. In July 2007, EPA presented this information to a high-level, agencywide grants management council for its consideration.

    Recommendation: To strengthen EPA's efforts, the Administrator should require EPA staff to use a standard reporting format for in-depth reviews so that the results can be entered into the grant databases and analyzed agencywide.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In GAO's report "Grants Management: EPA Needs to Strengthen Efforts to Address Persistent Challenges" (August 2003), GAO found that EPA did not have a standard reporting format to ensure consistency and clarity in reporting results from in-depth reviews the agency conducted on grantees. Standard information is important so that EPA can use the information obtained from the in-depth reviews to guide its oversight efforts agencywide. GAO recommended that EPA develop a standard reporting format for in-depth reviews. Based on our report, EPA implemented use of a standard reporting format for reviewing grants into its database for a full-year cycle by December 31,2004.

    Recommendation: To ensure that EPA's recent efforts to address its grants management challenges are successful, the Administrator of EPA should provide sufficient resources and commitment to meeting the agency's grants management plan's goals, objectives, and performance targets within the specified time frames.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In our report "Grants Management: EPA Needs to Strengthen Efforts to Address Persistent Challenges" (August 2003), GAO found that to address its major challenges, EPA grants management will require strengthening, sustained commitment, and enhanced accountability. GAO recommended that the Administrator of EPA provide sufficient resources and commitment to meet the agency's grants management goals. In response, EPA has strengthened its commitment by providing $3 million annually for improved grants management efforts. EPA reports that this funding has strengthened grants management because it is used for, among other things, statistical sampling of in-depth reviews of grantees so that the results of reviews can be projected to all grantees, and thus, improve grants oversight.

    Recommendation: To strengthen EPA's efforts, the Administrator should incorporate appropriate statistical techniques in selecting grantees for in-depth reviews.

    Agency Affected: Environmental Protection Agency

    Status: Closed - Implemented

    Comments: In our report "Grants Management: EPA Needs to Strengthen Efforts to Address Persistent Challenges (August 2003), GAO found that EPA did not use statistical techniques to select grantees for in-depth monitoring reviews. As a result, EPA could not project the results from its reviews to the entire grantee population. We recommended that EPA incorporate statistical techniques in selecting grantees for in-depth reviews. EPA has significantly implemented use of statistical techniques in selecting grantees for its in-depth reviews by using them for administrative reviews beginning in January 2006. EPA reports that a statistical approach has been beneficial in developing information about grantees so that it can more effectively address grantee problems.

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