U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF INSPECTOR GENERAL

Examination of Costs Claimed 

Under EPA Cooperative 

Agreements 2A-96104501 and 

2A-96107201 Awarded Under 

the Recovery Act to 

Chelsea Collaborative Inc., 

Chelsea, Massachusetts 

Report No. 13-R-0353 August 22, 2013 

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Report Contributors: Jean Bloom 

 Cara Lindsey 

 Shannon Schofield 

Abbreviations 

CA Cooperative Agreement 

CCI Chelsea Collaborative Inc. 

CFR Code of Federal Regulations 

DERA Diesel Emissions Reduction Act 

EPA U.S. Environmental Protection Agency 

FFR Federal Financial Report 

FY Fiscal Year 

NEPC New England Produce Center 

OIG Office of Inspector General 

OMB Office of Management and Budget 

Recovery Act American Recovery and Reinvestment Act of 2009 

TRU Trailer Refrigeration Unit 

Cover photo:	 Old and new transportation refrigeration units at the New England Produce 

Center in Chelsea, Massachusetts. (EPA OIG photo) 

Hotline 

To report fraud, waste, or abuse, contact us through one of the following methods: 

email: OIG_Hotline@epa.gov write: EPA Inspector General Hotline 

phone: 

fax: 

1-888-546-8740 

202-566-2599 

1200 Pennsylvania Avenue, NW 

Mailcode 2431T 

online: http://www.epa.gov/oig/hotline.htm Washington, DC 20460 
 

U.S. Environmental Protection Agency 13-R-0353 

August 22, 2013 Office of Inspector General 

At a Glance 

Why We Did This Review 

The U.S. Environmental 

Protection Agency awarded 

Chelsea Collaborative Inc. 

cooperative agreements 

2A-96107201 and 

2A-96104501 in 2009, under 

the American Recovery and 

Reinvestment Act of 2009, in 

the amounts of $1,563,480 and 

$357,946, respectively. The 

EPA Office of Inspector 

General conducted this review 

to determine whether CCI 

complied with federal 

requirements and the terms 

and conditions for Diesel 

Emissions Reduction Act 

grants awarded under the 

Recovery Act. 

This report addresses the 

following EPA Goal or 

Cross-Cutting Strategy: 

	 Taking action on climate 

change and improving air 

quality. 

For further information, contact 

our Office of Congressional and 

Public Affairs at (202) 566-2391. 

The full report is at: 

www.epa.gov/oig/reports/2013/ 

20130822-13-P-0353.pdf 

Examination of Costs Claimed Under 

EPA Cooperative Agreements 2A-96104501 and 

2A-96107201 Awarded Under the Recovery Act to 

Chelsea Collaborative Inc., Chelsea, Massachusetts 

What We Found 

CCI’s financial management system supports that funds drawn under the two 

cooperative agreements are reasonable, allocable and allowable in accordance 

with federal requirements and the terms and conditions for the Diesel Emissions 

Reduction Act. However, the system does not meet certain federal requirements 

under the Code of Federal Regulations in 40 CFR 30.21, as it was unable to 

provide timely financial information and reporting. As a result, there was limited 

assurance that the recipient claimed all eligible costs or the financial 

management system and Federal Financial Reports reflect the actual costs. 

CCI generally complied with the applicable Recovery Act requirements. 

We reviewed CCI’s compliance with select Recovery Act requirements and 

determined that: 

 The Buy American requirements under Section 1605 of the Recovery Act 

were not applicable. 

 The Wage Rate requirements under Section 1606 of the Recovery Act 

were met. 

CCI’s methodology for calculating its estimate of the number of jobs created or 

retained with Recovery Act funding did not meet Office of Management and 

Budget reporting guidance for Section 1512 of the Recovery Act. 

 Recommendations and Planned Corrective Actions 

We recommend that the regional administrator, Region 1, require CCI to 

establish controls to ensure its financial management system complies with the 

requirement of 40 CFR 30.21 to provide accurate, current and complete 

disclosure, and attend future grant recipient training. We recommend that 

Region 1 ensure CCI’s calculations for number of jobs created or retained meets 

OMB guidance on Recovery Act reporting, and that CCI correct and submit the 

number of jobs created or jobs retained documentation. Lastly, we recommend 

that Region 1 report the findings in the Grantee Compliance Finding Database. 

Region 1 agreed to all the recommendations and provided corrective actions and 

completion dates. The recommendations remain open with corrective actions 

ongoing. No further response to the report is required. 

 Noteworthy Achievements 

CCI exceeded the expected outcome by repowering 98 diesel transportation 

refrigeration units with electric units rather than the 79 originally proposed. 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

THE INSPECTOR GENERAL 

August 22, 2013 

MEMORANDUM 

SUBJECT: Examination of Costs Claimed Under EPA Cooperative Agreements 

2A-96104501 and 2A-96107201 Awarded Under the Recovery Act to 

Chelsea Collaborative Inc., Chelsea, Massachusetts 

Report No. 13-R-0353 

FROM: Arthur A. Elkins Jr. 

TO: Curt Spalding, Regional Administrator 

Region 1 

This is our report on the subject examination conducted by the Office of Inspector General of the 

U.S. Environmental Protection Agency. This report contains findings that describe the problems the OIG 

has identified and corrective actions the OIG recommends. This report represents the opinion of the OIG 

and does not necessarily represent the final EPA position. 

We performed this examination as part of our responsibility under the American Recovery and 

Reinvestment Act of 2009. The purpose of our examination was to determine whether the amounts 

drawn by Chelsea Collaborative Inc. under Cooperative Agreements 2A-96104501 and 2A-96107201 

were reasonable, allocable and allowable in accordance with federal requirements and terms and 

conditions for Diesel Emission Reduction Act grants awarded under the Recovery Act. CCI received 

$1,921,426 in Recovery Act funds under the EPA awards. 

Action Required 

You are not required to provide a written response to this final report because you agreed to all 

recommendations and provided corrective actions and completion dates that meet the intent of the 

recommendations. The recommendations remain open with corrective actions ongoing. Should 

you choose to provide a response to this final report, we will post your response on the OIG’s 

public website, along with our memorandum commenting on your response. You should provide 

your response as an Adobe PDF file that complies with the accessibility requirements of 

Section 508 of the Rehabilitation Act of 1973, as amended. We will post this report to our website 

at http://www.epa.gov/oig. 

If you or your staff have any questions regarding this report, please contact Richard Eyermann, acting 

assistant inspector general for the Office of Audit, at (202) 566-0899 or eyermann.richard@epa.gov; 

or Robert Adachi, product line director, at (415) 947-4537 or adachi.robert@epa.gov. 
 

 

 

 

 

 

 

 

 

 

 

Examination of Costs Claimed Under EPA Cooperative Agreements 13-R-0353 

2A-96104501 and 2A-96107201 Awarded Under the 

Recovery Act to Chelsea Collaborative Inc., Chelsea, Massachusetts 

Table of Contents 

Chapters 

1 Independent Attestation Report........................................................................ 1
 

2 Introduction ........................................................................................................ 4 

Purpose ....................................................................................................... 4 

Background ................................................................................................. 4 

 Noteworthy Achievements ........................................................................... 5 

Follow-Up on Prior Audit Issues .................................................................. 5 

3 Financial Management System Does Not Meet
 

Certain Federal Requirements .......................................................................... 6 

Recommendations ...................................................................................... 7 

EPA and Recipient Comments ................................................................... 7 

 OIG Response ............................................................................................. 8 

4 Job Reporting Not In Accordance With OMB Guidance................................. 9
 

Recommendations ...................................................................................... 10 

EPA and Recipient Comments ................................................................... 10 

 OIG Response ............................................................................................. 10 

Status of Recommendations and Potential Monetary Benefits.............................. 11 

Appendices 

A CCI Comments on Draft Report ........................................................................ 12 

B Region 1 Comments on Draft Report .............................................................. 20 

C Region 1 Corrective Milestone Dates .............................................................. 24 

D Distribution......................................................................................................... 26
 
 

 

Chapter 1

Independent Attestation Report 

As part of our oversight of cooperative agreement awards by the 

U.S. Environmental Protection Agency, we have examined Chelsea Collaborative 

Inc.’s compliance with the requirements of the Code of Federal Regulations under 

Title 2 Part 230, Cost Principles for Non-Profit Organizations; Title 40 CFR 

Part 30, Uniform Administrative Requirements for Grants and Agreements with 

Institutes of Higher Education, Hospitals, and Other Non-Profit Organizations; 

and the American Recovery and Reinvestment Act of 2009 applicable to the 

outlays for CAs 2A-96104501 and 2A-96107201. By accepting the funding 

provided through the CAs, CCI has responsibility for complying with these 

requirements. Our responsibility is to express an opinion on CCI’s compliance 

based on our examination. 

Our examination was conducted in accordance with generally accepted 

government auditing standards issued by the Comptroller General of the United 

States and the attestation standards established by the American Institute of 

Certified Public Accountants. We examined, on a test basis, evidence supporting 

management’s assertion, and performed such other procedures as we considered 

necessary in the circumstances. We believe that our examination provides a 

reasonable basis for our opinion. 

We made site visits to CCI’s office and the New England Produce Center located 

in Chelsea, Massachusetts, where the grant activities were carried out, and 

performed the following steps: 

	 Reviewed the grant applications and work plan to determine the scope of 

the projects and the budget planned for the project. 

	 Reviewed award documents and amendments for financial information 

and terms and conditions relevant to our review objective for this 

Recovery Act grantee. 

	 Interviewed CCI’s personnel to obtain an understanding of the 

organization’s accounting system, internal controls, Federal Financial 

Report preparation process, and costs reported under the CAs. 

	 Reviewed costs claimed by the recipient on the FFRs to obtain reasonable 

assurance that costs complied with the applicable federal laws and 

regulations and the CAs’ terms and conditions. 

	 Reconciled CCI’s FFRs to its accounting records, profit and loss statement 

and reviewed support for cash draws. 

	 Reviewed documentation to verify the destruction of diesel engines and 

conducted an unannounced inventory count to verify the electric engine 

replacements at the NEPC. 

13-R-0353 1 
 

 

 

	 Reviewed CCI’s procurement procedures to determine compliance with 

40 CFR Part 30. Obtained a list of contractors, subcontractors and vendors 

used and reviewed the request for proposals to determine whether 

contracts were advertised and awarded in an open and free competitive 

process. 

	 Selected a judgmental sample of four drawdowns for the NEPC grant and 

four drawdowns for the Diesel Retrofit grant. We reviewed supporting 

documentation for the samples to determine whether the drawdowns were 

reasonable, allocable, allowable and properly supported. 

	 Reviewed CCI’s FFR preparation process to ensure FFRs were prepared in 

accordance with the applicable laws, regulations and special grant 

conditions. 

	 Obtained and reviewed information to determine whether CCI complied 

with Recovery Act requirements, including the Buy American 

requirements under Section 1605, Wage Rate requirements under 

Section 1606, and report requirements under Section 1512. 

As part of obtaining reasonable assurance that the grantee’s cost claimed under 

the CAs are free of material misstatement, we performed tests of its compliance 

with the requirements of 2 CFR Part 230, 40 CFR Part 30, and the terms and 

conditions of the CAs. We also considered the grantee’s internal controls over 

cost reporting to determine our examination procedures and to express our 

opinion on the costs claimed. Our consideration of internal control would not 

necessarily disclose all internal control matters that might be material weaknesses. 

A material weakness is a deficiency, or combination of deficiencies, in internal 

control such that there is a reasonable possibility that a material misstatement will 

not be prevented, or detected and corrected on a timely basis. A significant 

deficiency is a deficiency, or a combination of deficiencies, in internal control that 

is less severe than a material weakness yet important enough to merit attention by 

those charged with governance. 

We conducted our audit work between October 2011 and April 2013. 

We determined that the funds drawn under the two CAs (2A-96104501 and 

2A-96107201) are reasonable, allocable and allowable in accordance with federal 

requirements and the terms and conditions for the Diesel Emissions Reduction 

Act. We also determined that the Buy American requirements under Section 1605 

of the Recovery Act were not applicable, and that the Wage Rate requirements 

under Section 1606 of the Recovery Act were met. 

Our examination disclosed internal control weaknesses with CCI’s financial 

management system and a reporting error. In particular, CCI’s: 

	 Financial management system could not provide timely information and 

reporting to ensure compliance with 40 CFR 30.21. 

13-R-0353 2 
 

 

 

	 Reporting of the number of jobs created or retained with Recovery Act 

funds did not follow Office of Management and Budget reporting 

guidance. 

 Robert K. Adachi

 Director for Forensic Audits 

 August 22, 2013 

13-R-0353 3 
 

 

 

Chapter 2

Introduction 

Purpose 

The EPA Office of Inspector General conducted this review to determine whether 

the amounts drawn under CAs 2A-96104501 and 2A-6107201 are supported by 

costs which are reasonable, allocable and allowable in accordance with applicable 

laws, regulations and special grant conditions awarded under the Recovery Act 

and to obtain reasonable assurance about whether CCI has complied with the 

grant requirements and applicable regulations. 

Background 

DERA was signed into law in August 2005 under Title VII, Subtitle G, of the 

Energy Policy Act of 2005. DERA authorized $200 million per year from fiscal 

years 2007 to 2011 (a total of $1 billion) for the EPA to fund programs to achieve 

significant reduction in diesel emissions in terms of tons of pollution produced 

and diesel emission exposures, particularly from fleets operating in areas 

designated by the agency as poor air quality areas. Of the authorized DERA 

amount, 70 percent is authorized for competitive national grant and low cost 

revolving loans, as determined by the EPA Administrator. The remaining 

30 percent is for state grant and loan programs. Congress appropriated funds for 

the first time under DERA in FY 2008, in the amount of $49.2 million. EPA then 

awarded $120 million for FYs 2009–2010 and $49.9 million in FY 2011. 

EPA awarded CA 2A-96104501 to CCI on July 10, 2009, to conduct 14 retrofit 

and four engine upgrades to city-owned vehicles. EPA awarded CA 2A-96107201 

to CCI on July 10, 2009, to repower privately owned stationary cold storage 

trailers at the NEPC, the second-largest produce market in the United States. 

Under the latter CA, 79 Tier 0 trailer refrigeration units burning off-road diesel 

24 hours/day were to be scrapped and 79 new electric-only TRUs, supplied by 

new conduit, were to be deployed in their place. 

According to the limited review performed for EPA’s Office of Grants and 

Debarment, CCI was established in 1988 as the Chelsea Human Services 

Collaborative. It operates as a Section 501(c)(3) non-profit organization, 

incorporated in the Commonwealth of Massachusetts. CCI is a civil rights, human 

empowerment and grassroots organizing force for the community of Chelsea, 

Massachusetts. CCI’s stated purpose is to enhance the social, environmental and 

economic health of the community and people. It has created programs to meet 

the current needs of the Chelsea community. One such program is called Green 

Space, which works to achieve environmental justice by engaging residents, 

13-R-0353 4 
 

 

environmentalists and health advocates in increasing and improving the amount 

and quality of open space, creating public access and educational opportunities 

along Chelsea Creek, planting trees, and reducing pollution-related health issues. 

The limited review also stated that CCI has about 1,000 regularly involved 

members and is governed by a board of directors. The general operations and 

programs are managed and performed by an executive director and supporting 

staff of nine full-time and 16 part-time employees and interns. 

Table 1 provides basic information about the two awards CCI received. 

Table 1: DERA awards under the Recovery Act awarded to CCI 

Agreement number 

and title 

Project description 

and budget period 

Amount of 

Recovery Act 

funds awarded 

CCI’s 

contribution 

2A-96007201 

National Diesel 

Northeast Produce 

Refrigeration 

Electrification 

Repower privatelyowned stationary 

cold storage trailers 

June 1, 2009, to 

June 30, 2011 

$1,563,480 $699,037 

2A-96104501 

Northeast Diesel 

Collaborative 

Emissions Reduction 

Program 

Provide 14 retrofits 

and four engines 

upgrades 

May 1, 2009, to 

September 30, 2011 

357,946 125,941 

Total $1,921,426 $824,978 

Source: EPA CA project files. 

Noteworthy Achievements 

Under CA 2A-96007201, CCI expected to repower and replace 79 diesel-powered 

TRUs at the NEPC. CCI exceeded it expected outcome by repowering 98 TRUs. 

Follow-Up on Prior Audit Issues 

We reviewed the limited-scope Administrative and Financial Management 

System Report issued by Leon Snead & Company, P.C., on behalf of the EPA 

Office of Grants and Debarment, dated May 2010. The auditors determined that 

there were no written policies and procedures for record retention, code of 

conduct and cost share. Their review of the draft policies and procedures found 

improvements were needed in the areas of financial management and 

procurement. We reviewed CCI’s response to the report and verified that the 

finalized policies and procedures were approved by the Board of Directors on 

June 21, 2010. 

13-R-0353 5 
 

 

  

Chapter 3

Financial Management System 

Does Not Meet Certain Federal Requirements
 

CCI’s financial management system does not meet certain federal requirements 

under 40 CFR 30.21 because it was unable to provide timely financial information 

and reporting related to its federally sponsored projects. Although CCI ultimately 

supported the claimed amounts in its FFRs, its financial management system did 

not maintain all information necessary to support the FFRs in a timely manner. 

This occurred because CCI: 

 Lacked established policies and procedures for recording, processing and 

reporting federal funds. 

 Had limited experience with federal grant requirements. 

 Lacked communication between the financial director and associate 

executive director regarding the accounting of grant costs. 

As a result, there was limited assurance CCI claimed all eligible costs it incurred 

under the CAs, nor that its financial management system and FFRs reflect actual 

costs. We reconciled the costs drawn and reported on the FFRs under the CAs to 

CCI’s financial management system, and found the costs to be compliant with the 

applicable federal requirements under the CAs. 

Title 40 CFR 30.21 (b) (1), (2) and (3) require recipients to maintain a financial 

management system that provides: 

 Accurate, current and complete disclosure of the financial results of each 

federally-sponsored project or program. 

 Records that identify adequately the source and application of funds for 

federally sponsored activities. These records shall contain information 

pertaining to federal awards, authorizations, obligations, unobligated 

balances, assets, outlays, income and interest. 

 Effective control over and accountability for all funds, property and other 

assets. 

CCI’s financial management system does not meet certain federal requirements 

because it does not provide current (timely) information and complete reporting 

of financial results. CCI prepared its FFRs based on financial information and 

external documentation maintained outside its accounting system (e.g., Excel 

spreadsheet, memorandum records, etc.). Two different employees maintained the 

financial and external memorandum records. CCI believed it could manage the 

two systems to adequately account for and report federal funds. Only after 

13-R-0353 6 
 

 

 

multiple attempts and delays were we able to reconcile the memorandum records 

to the FFRs. 

Although CCI had written policy and procedures, CCI did not establish written 

policies and procedures for recording, processing and reporting federal funds. 

Written policies and procedures are an integral component of any internal control 

system. CCI acknowledges both the absence and need for written procedures. 

Other than the associate executive director and the financial director, no one at 

CCI knew how the amounts were calculated and reported on the FFRs. The 

associate executive director maintained the Excel spreadsheets and the financial 

director maintained the accounting system records. Insufficient communication 

between the financial director and executive director regarding the accounting of 

grant costs complicated the reconciliation of total costs. 

These CAs were CCI’s first federal awards under the DERA program and 

Recovery Act. Therefore, CCI had limited experience with federal grant 

requirements. Since CCI received additional federal funds, it should plan to attend 

future training for grantees offered by EPA Region 1, which conducts annual new 

grant recipient training. 

Recommendations 

We recommend that the regional administrator, Region 1: 

1.	 Prior to awarding CCI any future grants, require CCI to update written 

policies and procedures to ensure the use of funding provided under the 

agreement is in compliance with 40 CFR Part 30.21. The controls should 

ensure: 

a.	 Accurate, current and complete disclosure of the financial results 

of the program funded under the CA. 

b.	 Records that identify adequately the source and application of 

funds provided under the CA. 

2. Require CCI to complete the agency’s mandatory non-profit recipient 

online training upon award of a future grant. 

3.	 Report the finding in the Grantee Compliance Findings database. 

EPA and Recipient Comments 

Region 1 and CCI provided written responses to the draft report on May 23, 2013. 

Region 1 supplemented its response with a corrective action plan with estimated 

completion dates on June 13, 2013. We held exit conferences with Region 1 and 

CCI to discuss the draft report comments and their impact on our final report. 

13-R-0353 7 
 

 

 

The agency agreed with recommendations 1 and 3 and initially disagreed with 

recommendation 2. Upon further discussion and additional information, the 

agency subsequently agreed that the recipient should be required to take the 

agency’s mandatory non-profit training upon award of any future grants. 

EPA’s complete written response is in appendix B, and the corrective action plan 

is in appendix C. 

CCI’s written response did not agree or disagree with findings. However, CCI did 

state that it takes the findings seriously and is engaged with the EPA Region 1 

grants compliance officer to address OIG recommendations to ensure full 

compliance with all requirements of 40 CFR 30.21. CCI’s complete written 

response is in appendix A. 

OIG Response 

We agree with the agency’s corrective action plan submitted on June 13, 2013, 

and believe that, when implemented, the plan should address the 

recommendations. We have modified the report accordingly to address the 

agency’s and recipient’s comments to the draft report. 

13-R-0353 8 
 

 

Chapter 4

Job Reporting Not In Accordance With 

OMB Guidance 

CCI’s methodology for calculating its estimate of the number of jobs created or 

retained with Recovery Act funding was not in accordance with OMB reporting 

guidance for Section 1512 of the Recovery Act. CCI included non-Recovery Actfunded hours in its calculations because it did not understand OMB’s guidance. 

Consequently, CCI did not accurately report the number of jobs created or 

retained with Recovery Act funds. 

Recovery Act Section 1512 requires recipients to report an estimate of the number 

of jobs created and jobs retained by project or activity. OMB is responsible for 

providing guidance to federal agencies to improve the quality of data reported 

under Section 1512 of the Recovery Act. On December 18, 2009, OMB issued 

M-10-08, Updated Guidance on the American Recovery and Reinvestment Act – 

Data Quality, Non-Reporting Recipients, and Reporting of Job Estimates. This 

update required jobs created or retained to be calculated based on the work hours 

funded by the Recovery Act. Recipients of Recovery Act funds should maintain 

in their administrative files corrections for erroneous and missing data submitted 

in prior quarterly reports. Further, Section 1512 requires Recovery Act fund 

recipients to report the estimated number of jobs created and jobs retained by 

projects. These reports are due each quarter. The guidance requires recipients to 

report job estimates by dividing the hours worked in the reporting quarter by the 

hours in a full-time schedule in that quarter. 

The number of jobs created or retained by CCI did not follow OMB reporting 

guidance. According to OMB guidance, the calculation of jobs created or retained 

should only include work hours funded with Recovery Act funds. CCI’s 

methodology included non-Recovery Act-funded in-kind hours. For the fifth 

quarter Diesel Retrofit 1512 and sixth quarter New England Produce Center 1512 

report, CCI included 65 and 120 hours, respectively, of non-Recovery Act-funded 

in-kind hours. 

CCI’s associate executive director acknowledged it improperly included 65 hours 

in the calculation of jobs created and retained for the Diesel Retrofit Grant, and 

included 120 hours for the New England Produce Center Grant. This happened 

because CCI often found OMB’s guidance on jobs created and retained confusing 

and unclear. Further, the guidance was updated a number of times throughout the 

course of the CAs. CCI believed all hours worked on the project, regardless of 

funding, were to be included in the calculation. As a result, the inclusion of the 

in-kind hours in the calculation of the number of jobs created or retained with 

Recovery Act funding was not accurately reported in the 1512 quarterly reports. 

13-R-0353 9 
 

 

 

 

Recommendations 

We recommend that the regional administrator, Region 1: 

4.	 Assist CCI with developing a methodology for calculating the number of 

jobs created or retained for quarterly reports that meets OMB guidance on 

Recovery Act reporting. 

5.	 Direct CCI to review the calculation of jobs created or retained for all 

periods reported and correct those erroneous periods. 

6.	 Direct CCI to maintain the corrected jobs documentation in administrative 

records and submit the correction to the federal government after a 

schedule has been established by future Recovery Act guidance. 

7.	 Report the finding in the Grantee Compliance Findings database. 

EPA and Recipient Comments 

Region 1 and CCI provided written responses to the draft report on May 23, 2013. 

Region 1 supplemented its response with a corrective action plan with estimated 

completion dates on June 13, 2013. We held exit conferences with Region 1 and 

CCI to discuss the draft report comments and their impact on our final report. 

The agency agreed with recommendations 4, 5, 6 and 7, and suggested we modify 

the report to include additional language for the issuance of the guidance after 

award of the Recovery Act funds and the frequent changes to the guidance by the 

agency. The agency also suggested we modify the report to note CCI’s 

compliance with the Recovery Act reporting requirements with the exception of 

the job created and retained calculation. EPA’s complete written response is in 

appendix B, and the corrective action plan is in appendix C. 

CCI agreed it improperly included hours of individuals working on projects paid 

for with federal dollars and partner cost share and stated it will correct any job 

creation and retention documents required by the EPA. CCI noted in its response 

that OMB’s guidance on determining the number of jobs created was often 

confusing and unclear, and that guidance was updated throughout the course of 

the grants. CCI’s complete written response is in appendix A. 

OIG Response 

We agree with the agency’s corrective action plan submitted on June 13, 2013, 

and believe that, when implemented, it should address the recommendations. 

We have modified the report accordingly to address the agency’s and recipient’s 

comments to the draft report. 

13-R-0353 10 
 

 

 

 

 

 

 

 

 

 

 

 

Status of Recommendations and 

Potential Monetary Benefits 

POTENTIAL MONETARY 

RECOMMENDATIONS BENEFITS (in $000s) 

Rec. 

No. 

Page 

No. Subject Status1 Action Official 

Planned 

Completion 

Date 

Claimed 

Amount 

Agreed-To 

Amount 

1 

2 

3 

4 

5 

6 

7 

7 

7 

7 

10 

10 

10 

10 

Prior to awarding CCI any future grants, require 

CCI to establish written policies and procedures to 

ensure the use of funding provided under the 

agreement is in compliance with 40 CFR Part 

30.21. The controls should ensure: 

a. Accurate, current and complete disclosure of 

the financial results of the program funded 

under the CA. 

b. Records that identify adequately the source 

and application of funds provided under 

the CA. 

Require CCI to complete the agency’s mandatory 

non-profit recipient on-line training upon award of a 

future grant. 

Report the finding in the Grantee Compliance 

Findings database. 

Assist CCI with developing a methodology for 

calculating the number of jobs created or retained 

for quarterly reports that meets OMB guidance on 

Recovery Act reporting. 

Direct CCI to review the calculation of jobs created 

or retained for all periods reported and correct 

those erroneous periods. 

Direct CCI to maintain the corrected jobs 

documentation in administrative records and 

submit the correction to the federal government 

after a schedule has been established by future 

Recovery Act guidance. 

Report the finding in the Grantee Compliance 

Findings database. 

O 

O 

O 

O 

O 

O 

O 

Regional Administrator, 

Region 1 

Regional Administrator, 

Region 1 

Regional Administrator, 

Region 1 

Regional Administrator, 

Region 1 

Regional Administrator, 

Region 1 

Regional Administrator, 

Region 1 

Regional Administrator, 

Region 1 

December 

2013 

December 

2013 

March 2014 

December 

2013 

March 2014 

March 2014 

June 2014 

O = recommendation is open with agreed-to corrective actions pending 

C = recommendation is closed with all agreed-to actions completed 

U = recommendation is unresolved with resolution efforts in progress 

13-R-0353 11 

1 
 

 

     

       

       

     

           

           

   

     

           

                                     

                             

                   

                        

                               

                         

                       

                              

                        

                             

                                 

                                       

   

                                 

                           

                                  

             

                                  

        

Appendix A 

CCI Comments on Draft Report 

May 23, 2013

Mr. Robert K. Adachi

Director of Forensic Audits

Ms. Jean Bloom

US EPA Office of Inspector General

5 Post Office Square, Suite 100

OIG 15‐1

Boston, MA 02109‐3912

Dear Mr. Adachi and Ms. Bloom:

On behalf of the Board of Directors and staff of the Chelsea Collaborative, Inc., we thank you for this

opportunity to share our written response to the Office of Inspector General’s (OIG) Draft Report

Examination of Costs Claimed Under EPA Cooperative Agreements 2A‐96104501 and 2A‐96107201

Awarded Under the Recovery Act to Chelsea Collaborative, Inc., Project Number OA‐FY11‐0061.

We’re pleased that the Office of Inspector General (OIG) found the Chelsea Collaborative’s “costs to be

compliant with the applicable federal requirements” and that the Chelsea Collaborative “exceeded the

expected outcomes by repowering 90 diesel transportation refrigeration units with electric units rather

than the 79 originally proposed.”1 The Chelsea Collaborative offers the following correction to the OIG

report. The total number of transportation refrigeration units repowered through the two projects

was 98 rather than 90. The Chelsea Collaborative’s success with the two diesel emissions reductions

projects has been recognized by the EPA as a 2012 Breathe Easy Award Recipient, as the highlighted

success story for EPA Region 1 Recovery Act Projects and through site visits from the US EPA and US OIG

national offices.

The Chelsea Collaborative takes this report’s findings seriously and is engaged in a process with the US

EPA Region 1 Grants Compliance Officer to address OIG recommendations to ensure full compliance

with all requirements of 40 CFR 30.21. The Chelsea Collaborative also will correct any job creation and

retention documents required by the US EPA.

1 Examination of Costs Claimed Under EPA Cooperative Agreements 2A‐96104501 and 2A‐96107201 Awarded Under the Recovery Act to Chelsea

Collaborative, Inc. OA‐FY11‐A‐0061 At a Glance

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Background on Chelsea Collaborative

The Chelsea Collaborative, Inc. (the Collaborative), founded in 1988, is a not‐for‐profit organization

dedicated to the needs of the community of Chelsea. Our mission is to enhance the social,

environmental and economic health of the community and its people. We achieve our mission through

community organizing and education. The Collaborative sees organizing as a way to build community

and achieve lasting change.

The Collaborative’s environmental justice work is carried out by the Chelsea Green Space and Recreation

Committee (Green Space), a grassroots community committee that receives staffing support from the

Collaborative. Green Space votes on and carries out its own work plan. It was established in 1994 when

precious open space was built upon for the construction of new schools in Chelsea. In 1996, Green

Space became engaged in large‐scale environmental justice and public health campaigns. The work

supported by the two economic stimulus grants 2A‐96104501 (diesel retrofit grant) and 2A‐96107201

(New England Produce Center grant) were efforts to reduce diesel air emissions and to bring about a

cleaner and healthier environment for all in Chelsea.

Chelsea: Environmental Injustice and Compromised Public Health

Chelsea, at 1.8 square miles, is the smallest city in the state of Massachusetts and one of the most

densely populated in the nation. With almost 40,000 residents living within just over a third of the city’s

total land (only 37.6% of the city is zoned for residential uses), one can see that there is limited open

and green space for residents to recreate, relax and enjoy the environmental benefits that so many

other communities take for granted.

Approximately 75% of Chelsea residents identify as Hispanic, Black or African American, American

Indian, Alaskan Native, Asian and Native Hawaiian or other Pacific Islander. Chelsea’s economic reality is

stark. The median household income for Chelsea is $40,487 compared to a statewide median of

$64,509. Similarly, 24% of Chelsea people live below the poverty level compared to 10.5% for the State

of Massachusetts.

The Executive Office of Environmental Affairs Environmental Justice Policy classifies every single

neighborhood in Chelsea as an environmental justice population.2 According to Dr. Daniel R. Faber and

Dr. Eric Krieg, Chelsea is the 3rd most intensively overburdened community in Massachusetts.3

Along the Chelsea Creek, more than 123 million gallons of petroleum product are stored for regional

use. All of the jet fuel used at Logan International Airport and 70‐80%4 of the New England Region’s

heating needs are stored in tanks owned by Global, Gulf Oil and Conoco Philips. In addition to the

numerous sources of pollution located along the Chelsea Creek, Chelsea residents must deal with

elevated levels of air emissions. Chelsea’s level of diesel exhaust exceeds the EPA’s reference

concentration by 20%.5 According to the Clean Air Task Force (CATF), Chelsea is in the highest category

for expected lifetime cancer cases from diesel pollution. More than 501 people in Chelsea are likely to

develop cancer from diesel pollution, compared to locations like Nantucket which could expect

2 www.mass.gov/envir/ej

3 Faber, Dr. Daniel R., and Dr. Eric J. Krieg, Unequal Exposure to Ecological Hazards 2005: Environmental Injustices in the Commonwealth of

Massachusetts, page 48, October 12, 2005. 4 Boston Harbor Association 5 www.epa.gov/ne/eco/airtox/diesel.html

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anywhere from zero to 30 cancer cases.6 Chelsea has the highest rate of strokes, heart disease and

major cardiovascular disease when compared to Boston, Medford, Everett, Malden, Revere, Somerville,

Winthrop and Cambridge. These rates are statistically significantly higher than all cities and towns

within Route 128 and statistically significantly higher than the state of Massachusetts as a whole.7

Chelsea’s rate of hospitalizations for all respiratory illnesses for children ages 0 ‐14 is 54% higher than

the state of Massachusetts; and likewise is 53% higher for seniors ages 65 and older.8

Background on How the Collaborative Sought EPA Funding

Living and working in Chelsea, Green Space members understood that Chelsea was not the model of

good health and a clean environment. However, when a dirty diesel power plant was proposed for the

banks of the Chelsea Creek, members learned just how bad Chelsea’s ambient air was – even before the

introduction of a new major source of air pollution. Using Mass Chip data, state air quality data and EPA

non‐attainment information, activists became even more aware of just how dire Chelsea’s air quality

problem was. Green Space organized a successful grassroots campaign with widespread support to stop

the permitting and construction of the power plant. Green Space and the entire community of Chelsea

celebrated the victory; however the revel was short‐lived. Given the bleak air quality data, Green Space

immediately launched an air quality campaign to reduce pollutants, particularly those caused by diesel

engines.

In June 2008, working with health institutions, businesses, community partners and other key

stakeholders in Chelsea, Green Space decided to apply to the EPA’s Diesel Emissions Reduction Act

(DERA) National Funding Assistance Program to retrofit municipal vehicles in Chelsea. Unfortunately

that initial application was denied.

Green Space members continued to work on diesel emission reductions and identified the New England

Produce Center (NEPC) as a significant source of diesel air pollution. NEPC is the second largest produce

distribution center in the nation. With more than 35 companies, the NEPC provides produce to much of

New England and the Mid‐Atlantic States. Working with the NEPC Management and Board of Directors,

Green Space identified stationary cold storage trailers as a significant source of diesel emissions. The

trailers, also known as Transportation Refrigeration Units (TRUs), are cab‐less, non‐road worthy trucks

that provide additional storage space for produce. The TRUs must be temperature controlled. Prior to

our work, this climate control was provided through the use of diesel engines. The engines typically

were tier 0 engines utilizing red fuel, or diesel fuel with the highest content of sulfur. The fuel is dyed

red to ensure it is not used for on‐road vehicles. These engines would operate twenty‐four hours a day,

every day of the year to cool or warm the trailers.

Seeing the TRUs as significant contributors to air pollution and understanding Green Space members’

concerns, the Collaborative decided once again to apply for funding from the EPA’s DERA funding

6 Clean Air Task Force database used The Lingering Threat Report (2005) 7 MassCHIP, Massachusetts Department of Public Health, Rate of Hospitalizations for Circulatory Conditions, 1990 – 2003 prepared by Professor

Neenah Estrella‐Luna, PhD 8 MassCHIP, Massachusetts Department of Public Health, Rate of Hospitalizations for Respiratory Illnesses, 1990 – 2003 prepared by Professor

Neenah Estrella‐Luna, PhD

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initiative. At this time in April 2009, economic stimulus funding was made available to achieve further

reaching goals with the DERA program. The Collaborative was successful in its application to repower

TRU engines at NEPC (EPA project No. 2A‐96107201). In addition, EPA staff reached out to the

Collaborative to invite us to re‐apply for funding for the retrofit grant that was denied the prior year. In

April 2009, the Collaborative sent a revised proposal requesting funding to retrofit municipal and private

vehicle fleets in Chelsea. That retrofit grant was favorably awarded (EPA project No. 2A‐96104501).

Both grants began in July 2009.

Grant Management, Oversight and Results

The Collaborative is a small non‐profit that focuses on community organizing and empowerment

projects to make lasting changes in Chelsea. Though the organization has grown since its inception in

1988, it remains a small community‐based agency. Presently, the Collaborative has a team of nine full

time staff. During the implementation of the two EPA grants, the Collaborative had even fewer full time

staff. The Collaborative’s annual operating budget for the past five years has not exceeded $1,598,089.

This encompasses all of the various programs, full and part‐time staff and a summer youth employment

initiative which hires 250 youth each summer.

The two DERA grants far exceeded the total organizational budget of the Collaborative. The sum of the

federal share of the two grants totaled $1,921,426. Further, the original goals for project match totaled

$494,870. The Collaborative completed both DERA projects with 100% success and far exceeded

original goals. The Collaborative secured $322,722 in additional project match for the two projects

resulting in final cost share of $817,592. Rather than repower 79 TRU engines as proposed in April 2009,

the Collaborative completed 98 TRU engine repowers at NEPC; implemented emission control

technology and repowered engines on eleven vehicles owned privately and publicly (by the City of

Chelsea); and leveraged diesel emissions control technology on five additional vehicles. More than forty

individual pieces of equipment (delivery trucks, construction vehicles, marine vessels and TRUs) from

twelve fleets were evaluated for inclusion in our project.

The projects also leveraged additional air quality benefits in Chelsea through the following outcomes: 1)

Eastern Minerals converted its non‐road fleet to ultra‐low sulfur diesel; 2) Eastern Minerals made fleet

improvements and overhauls of its non‐road fleet; and 3) five additional vehicles were retrofitted with

diesel oxidation catalysts with funding provided by NESCAUM (mentioned above).

In short, our efforts were successful and achieved lasting results. The tables below demonstrate the

qualitative air quality improvements of these two projects.

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CHELSEA COLLABORATIVE ‐ DPW, Fire Engine and Eastern Mineral Repower and Retrofits

Annual

Reduction

[ton]

Chelsea

Retrofits

TOTAL

REDUCTION [ton]

Annual 10

year

Value

[$/ton]1,2

TOTAL VALUE

Annual 10‐year

PM 0.72 0.7 7.2 $1,400,000 $1,013,600 $10,136,000

NOx 4.65 4.6 46.5 $3,900 $18,119 $181,194

VOC 1.41 1.4 14.1 $1,700 $2,400 $24,004

CO 16.27 16.3 162.7 $0 $0 $0

CO2 78.00 78.0 780.0 $7 $546 $5,460

TOTAL $1,034,666 $10,346,658 1 U.S. Department of Transportation, National Highway Traffic Safety Administration, Draft

Environmental Impact Statement, Corporate Average Fuel Economy Standards, Passenger

Cars and Light Trucks, Model Years 2011‐2015, June 2008, Appendix C, Table VIII‐B (Emission

Damage Costs) (For NOx, VOC, CO & CO2) 2 PM Emission Damage Costs came from the EPA Diesel Emission Quantifier specifically for

Suffolk County, MA

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The success of these grants was celebrated by the US EPA with a visit from Deputy Administrator Bob

Perciasepe in September 2010. Accompanying Mr. Perciasepe were Region 1 Administrator Curt

Spalding, MA Department of Environmental Protection (DEP) Commissioner Laurie Burt, Jeffrey Simon

Director of Massachusetts Recovery and Reinvestment Office and other elected officials. The NEPC

project was highlighted in a video entitled “Chelsea New England Produce Center EPA Clean Diesel TRU

Project” and featured on EPA’s website http://www.epa.gov/region1/eparecovery/.

Photo from US EPA Headquarters Check Presentation

From L – R:

Mark DeMichaelis, NEPC Vice President, Jeffrey Simon Director, MA Recovery and Reinvestment Office, MA Senator Sal

DiDomenico, Peter D’Arrigo, NEPC President, Chelsea City Manager Jay Ash, Roseann Bongiovanni, US EPA Deputy

Administrator Bob Perciasepe, Green Space member Cate Maas, US Region 1 Administrator Curt Spalding and MA DEP

Commissioner Laurie Burt

In addition, the Collaborative was a recipient of the US EPA’s Breathe Easy Award in April 2012 for its

success on these two important projects; and the US EPA has highlighted this work as the Top Recovery

Project Success Story for Region 1.

Response to OIG Chapter 3: Financial Management System Does Not Meet Federal Requirements

The Collaborative feels strongly that this chapter is improperly titled and unnecessarily harsh. The

Collaborative underwent pre‐award certification from the EPA regarding our administrative procedures;

and we had an Advance Monitoring Review of our administrative systems. That Review was successfully

closed due to our administrative capabilities being compliant with EPA requirements.

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Though the title of this section alludes to a complete failure by the Collaborative’s financial

management system, the main statement of this section proves that the Collaborative’s costs were fully

justified and the grant was carried out appropriately and correctly. The OIG states that the Collaborative

did “support [...] the claimed amounts in the FFRs” and [the Collaborative’s] “costs [were] compliant

with the applicable federal requirements under the CAs.”

The OIG’s criticism focused on not having the documentation in a timely manner. While the

Collaborative agrees that the documentation may not have been provided as quickly as the OIG may

have liked, all appropriate documentation was provided to the auditors as quickly as possible. As stated

earlier, the Collaborative is a small organization with few staff who carry out multiple roles on many

different projects and administrative duties. The Financial Director works part‐time and the Associate

Executive Director, who was the primary manager of the grants, works in office three days per week and

began working with the OIG auditors on her first day back to work after a three‐month maternity leave.

All staff involved in the audit worked expeditiously and thoroughly to meet the requests of OIG auditors.

The Collaborative partially agrees that it had limited experience with federal grant requirements. While

the Collaborative did have experience with federal grants; the Collaborative did not have any experience

with the additional requirements of the economic stimulus funded grants. Collaborative staff

participated in all required trainings and worked with grant officers to ensure full compliance with all

grant requirements. The Recovery Act required many more staff hours to complete two sets of quarterly

reports per grant and jobs analysis in addition to the standard EPA forms and reports. The Collaborative

is proud of its work in meeting all deadlines and completing the required reports timely and accurately.

Response to OIG Chapter 4: Grantee Did Not Comply With Recovery Act and OMB Reporting

Requirements

The Collaborative recognizes that it did improperly include, on two quarterly reports (out of seven total

reports), hours of persons working on the two projects who were paid for with federal dollars and

partner cost share (rather than the hours just covered by federal dollars). However, the OMB guidance

on determining the number of jobs created was often confusing and unclear. In addition, the OMB

issued guidance on how grantees were to determine the job creation seven months after the grants

were awarded. Further, there were a number of updates made to this guidance throughout the course

of the Collaborative’s grants. While minor errors may have been made in this area, it is again

unnecessary and harsh to suggest that the Collaborative “did not comply with Recovery Act and OMB

Reporting Requirements.” This statement simply is not true and negatively characterizes the

Collaborative and the great work it accomplished.

Response to OIG Recommendations:

Though most of the recommendations in the report are for EPA Region 1, the Collaborative takes the

OIG report and recommendations seriously and will work with all parties, as it has in the past, to ensure

the Collaborative is fully compliant with all grant requirements. As stated above, the Collaborative is

engaged in a process with the US EPA Region 1 Grants Compliance Officer to address OIG

recommendations to ensure our financial management system complies with all requirements of 40 CFR

30.21. In addition, the Collaborative also will correct any job creation and retention documents required

by the US EPA.

Conclusion:

The OIG does little to highlight the Collaborative’s achievements in implementing two significant DERA

projects. The Collaborative achieved ambitious results on time and on budget; and accomplished more

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aggressive air quality benefits than originally projected. As stated above, the US EPA and the

Massachusetts Office of Reinvestment and Recovery underscored this great work through various

accolades, awards and with their visit in September 2010. The OIG also came to Chelsea to see the

accomplishments of the NEPC Project.

The board and staff of the Collaborative find it necessary to stress the fact that we carried out these two

impressive projects with limited staffing resources. Of the more than $1.9 million in federal funding,

only $81,730 of the total was used for personnel and fringe to manage and implement these projects

and complete all reporting requirements. That totals 4.25% of the total federal share of the projects.

The Collaborative feels that one of the reasons why our grant proposals were successful was due to the

fact that DERA grant scoring criteria favored applications with slender administrative budgets in order to

maximize funds dedicated to equipment upgrades. As you can see from the above numbers, the

Collaborative’s administrative budget was in fact slender. In general, ARRA DERA recipients began their

projects with relatively slender personnel budgets, and in Chelsea’s specific case we worked under

budget to comply with reporting requirements and other administrative tasks that were imposed (and

periodically tweaked) after the grants were awarded and closed out including the lengthy and time

consuming process of the OIG audit. A main section of the OIG report focuses on not having information

from the Collaborative in a “timely manner.” The Collaborative; however, has been awaiting the OIG

draft report for more than eight months.

In closing, we strongly believe we accomplished great results with very limited staffing resources. The

OIG’s draft report, if not amended, will negatively impact future federal funding opportunities for the

Collaborative. Thank you for this opportunity to provide a written response to the OIG draft report.

Sincerely,

Rosalba Medina Gladys Vega Roseann

Bongiovanni

Collaborative Board President Executive Director Associate

Executive Director

Cc: Curt Spalding, EPA Region 1 Administrator

Ira Leighton, EPA Region 1 Deputy Regional Administrator

Valerie Marshall, EPA Region 1 Grants Compliance Office

Abby Swaine, EPA Region 1 Grant Project Officer

Marge Miranda, EPA Region 1 Grant Project Officer

Chelsea Collaborative Board of Directors

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Appendix B 

Region 1 Comments on Draft Report 

MEMORANDUM

FROM: Michael Kenyon, EPA Region 1, Assistant Regional Administrator

TO: Arthur A. Elkins, Jr. Inspector General

DATE: May 23, 2013

OIG Project Number: OA‐FY11‐A‐0061

SUBJECT: Examination of Costs Claimed Under EPA Cooperative Agreements 2A‐96104501 and

2A‐96107201 Awarded Under the Recovery Act to Chelsea Collaborative Inc., April 8, 2013

Thank you for the opportunity to respond to the issues and recommendations in the above

referenced OIG Draft Audit Report.

Below is a summary of the Agency’s overall position, along with its position on each of the draft

Audit Report recommendations. For those report recommendations with which the agency

agrees, we have provided the status of the recommendation, the Agency’s explanation and

proposed alternatives. For those report recommendations with which the agency does not

agree, we have explained our position and proposed alternatives to the recommendations.

AGENCY’S OVERALL POSITION

The R1 AFC gathered regional input on the draft Audit report and held a conference call with

the OIG Auditors to discuss the Region’s concerns regarding this report. She presented the

general view of the Region that Chelsea Collaborative is one of the Region’s show case

recipients and that the regional staff was concerned that the recipient needs to be accurately

portrayed in the report because this report will be made public and the region does not want to

see this recipient negatively impacted from this report. She mentioned that this is one of the

recipients that has been able to do more with less and that we want to continue to support the

work they do.

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OIG’S OVERALL RESPONSE TO THE REGION’S CONCERNS

After hearing the Region’s concerns, the Auditor’s agreed that there are several instances

where the report needs to have a more balanced approach and that word‐smithing is

appropriate to change the tone of the report. They agreed that the recipient needs to develop

some procedures, but, that they were in a general a good recipient and the report did not

reflect that there were procedures in place. The OIG was very receptive to the Region’s

concerns and was open to amending the report to reflect the Region’s concerns.

AGENCY’S RESPONSE TO REPORT RECOMMENDATIONS:

AGREEMENTS‐The proposed alternatives have been shared with the OIG Auditors. The OIG was

open to working with the Region and the OIG indicated that the final report would address a

vast majority of the regional concerns. This agreement was documented in a memo. The Region

is not submitting the memo at this time. It may submit the memo as a technical document to

the final report depending on how well the Region’s concerns are addressed in the final report.

No. Recommendation Status Agency

Explanation/

Response

Proposed

Alternative

1 Prior to awarding CCI any future grants,

require CCI to establish written policies

and procedures to ensure the use of

funding provided under the agreement is

in compliance with 40 CFR Part 30.21 The

controls should ensure:

a. Accurate, current, and complete

disclosure of the financial results of

the program funded under the CA.

b. Records that identify adequately

the source and application of funds

provided under the CA.

O The Regional Grants

Compliance Officer

is working with CCI

to assist them with

amending its written

accounting

procedures to

address the OIG

recommendations.

Language should

be added to the

OIG draft report to

reflect that CCI

had written

procedures.

However, the

procedures need

to be revised to

address this

recommendation.

3 Report the finding in the Grantee

Compliance Findings database.

O This is standard

protocol required

under the 2750

manual.

4 Assist CCI with developing a methodology

for calculating the number of jobs created

or retained for quarterly reports that

meets OMB guidance on Recovery Act

reporting.

O CCI has corrected

this problem.

Language should

be added to the

report to reflect

that the ARRA

funds were

awarded prior to

the Agency issuing

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guidance.

Moreover, the

guidance that was

issued was

frequently

amended or

revised by the

Agency. The

report should

reflect that CCI

complied with all

the ARRA

reporting

requirements

except this one.

5 Direct CCI to review the calculation of jobs

created or retained for all periods

reported and correct those erroneous

periods.

O CCI has corrected

this problem.

6 Direct CCI to maintain the corrected jobs

documentation in administrative records

and submit the correction to the federal

government after a schedule has been

established by future Recovery Act

guidance.

O The Agency’s Grants

Compliance Officer

will work with CCI to

address this

recommendation

7 Report the finding in the Grantee

Compliance Findings database.

O This is standard

protocol required

under the 2750

manual.

DISAGREEMENTS
 

2 Prior to awarding CCI any future grants,

require CCI to attend future grant

recipient training.

CCI did attend the

mandatory non‐

profit training.

CCI should be

awarded future

grants and the

Agency will

encourage CCI to

attend training

that is made

available to non‐

profit recipients

This

recommendation

should be changed

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to reflect that the

recipient did

participate in the

required

mandatory grant

training

O = recommendation is open with agreed‐to corrective actions pending

C = recommendation is closed with all agreed‐to actions completed

U = recommendation is unresolved with resolution efforts in progress

CONTACT INFORMATION:

If you have any questions regarding this response, please contact Valerie Marshall, EPA Region 1

Audit Follow‐up Coordinator.

cc:	 Jean Bloom: OIG Project Auditor
 

Cara Lindsey, OIG Project Auditor
 

Abby Swaine, EPA R1 Project Officer
 

Jean Crocker, EPA R1 Grants Specialists
 

Valerie Marshall, EPA R1 Audit Follow‐up Coordinator
 

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Appendix C 

Region 1 Corrective Milestone Dates 

MEMORANDUM

FROM: Michael Kenyon, EPA Region 1, Assistant Regional Administrator

TO: Arthur A. Elkins, Jr. Inspector General

DATE: June 13, 2013

OIG Project Number: OA‐FY11‐A‐0061

SUBJECT: Examination of Costs Claimed Under EPA Cooperative Agreements 2A‐96104501 and

2A‐96107201 Awarded Under the Recovery Act to Chelsea Collaborative Inc., April 8, 2013

This memo is a follow‐up to the Agency’s response submitted on May 23, 2013. Based on our

discussions with the OIG during the exit conference, the Agency was able to develop a

Corrective Action Plan for the recommendations identified in the above referenced draft

report.

The agency agrees with the report recommendations as amended per our discussion during the

exit conference and is submitting the high‐level intended corrective actions and estimated

completion dates. The following Corrective Action Plan supplements the Agency’s response

submitted on May 23, 2013:

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No. Recommendation Estimated Completion by 

Quarter and FY 

1 Prior to awarding CCI any future grants, require CCI to establish

written policies and procedures to ensure the use of funding

provided under the agreement is in compliance with 40 CFR

Part 30.21 The controls should ensure:

a. Accurate, current, and complete disclosure of the

financial results of the program funded under the CA.

b. Records that identify adequately the source and

application of funds provided under the CA.

1st Quarter FY 2014

2 **Require CCI to complete the Agency’s mandatory non‐profit

recipient training, upon award of any future grants.

1st Quarter FY 2014

3 Report the finding in the Grantee Compliance Findings

database.

2nd Quarter FY 2014

4 Assist CCI with developing a methodology for calculating the

number of jobs created or retained for quarterly reports that

meets OMB guidance on Recovery Act reporting.

1st Quarter FY 2014

5 Direct CCI to review the calculation of jobs created or retained

for all periods reported and correct those erroneous periods.

2nd Quarter FY 2014

6 Direct CCI to maintain the corrected jobs documentation in

administrative records and submit the correction to the federal

government after a schedule has been established by future

Recovery Act guidance.

2nd Quarter FY 2014

7 Report the finding in the Grantee Compliance Findings

database.

3rdQuarter FY 2014

** Recommendation amended based on discussions with the OIG. It may not reflect the exact 

language used by the OIG in the final report, due to the OIG clearance yet to occur for the final 

report. 

13-R-0353 25 
 

 

 

Appendix D 

Distribution 

Regional Administrator, Region 1 

Deputy Regional Administrator, Region 1 

Director, Grants and Interagency Agreements Management Division, 

Office of Administration and Resources Management 

Agency Follow-Up Official (the CFO) 

Agency Follow-Up Coordinator 

Audit Follow-Up Coordinator, Region 1 

Public Affairs Officer, Region 1 

Executive Director, Chelsea Collaborative Inc. 

13-R-0353 26