Audit Report

OIG-16-009

RESTORE ACT

Louisiana Made Progress Establishing a Center of Excellence

November 12, 2015

Office of

Inspector General

Department of the Treasury

Contents

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Audit Report.................................................................................. 1

Background ................................................................................................ 2

Audit Results .............................................................................................. 4

 Competitive Selection of The Water Institute ............................................ 4

 Policies for Administering Center of Excellence Grants ............................... 6

 Next Steps ........................................................................................... 7

Appendices

Appendix 1: Objective, Scope, and Methodology........................................ 9

Appendix 2: Coastal Protection and Restoration Authority Response............. 11

Appendix 3: Treasury Management Response.... ........................................ 12

Appendix 4: Major Contributors to This Report........................................... 13

Appendix 5: Report Distribution................................................................ 14

Abbreviations and Acronyms 

Center of Excellence Centers of Excellence Research Grants Program

CPRA Coastal Protection and Restoration Authority

RESTORE Act Resources and Ecosystems Sustainability, Tourist

 Opportunities and Revived Economies of the Gulf States

 Act of 2012

RFP Request for Proposals

The Water Institute The Water Institute of the Gulf

Treasury Department of the Treasury

Trust Fund Gulf Coast Restoration Trust Fund
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This Page Intentionally Left Blank.
OIG Audit

Report

The Department of the Treasury

Office of Inspector General

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November 12, 2015

David A. Lebryk

Fiscal Assistant Secretary

This report presents the results of our audit of the State of 

Louisiana’s progress to establish a Centers of Excellence Research 

Grants Program (Center of Excellence) authorized by the 

requirements set forth in the Resources and Ecosystems 

Sustainability, Tourist Opportunities, and Revived Economies of the 

Gulf Coast States Act of 2012 (RESTORE Act).

1 We performed this 

audit as part of our ongoing oversight of programs, projects, and 

activities to be funded under the RESTORE Act. Our audit objective 

was to assess the Coastal Protection and Restoration Authority’s 

(CPRA) progress in establishing Louisiana’s Center of Excellence for 

conducting research in the Gulf Coast region in accordance with 

Section 1605 of the RESTORE Act. Appendix 1 provides more 

detail about our audit objective, scope, and methodology.

In brief, we found that CPRA made progress in establishing

Louisiana’s Center of Excellence in accordance with the 

requirements set forth in the RESTORE Act, Louisiana procurement 

laws, and the Department of the Treasury’s (Treasury) regulations2

and grant application guidelines.

3 Specifically, CPRA 

(1) competitively selected The Water Institute of the Gulf (The 

 

1 Pub. L. 112-141, 126 Stat. 588-607 (July 6, 2012)

2 On August 15, 2014, Treasury published the Interim Final Rule and the Preamble for 31 CFR Part 34, 

Department of the Treasury Regulations for the Gulf Coast Restoration Trust Fund. The Interim Final 

Rule became effective on October 14, 2014.

3 Treasury’s application requirements and process are detailed in the “Centers of Excellence Research 

Grants Program Guidelines and Application to Receive Federal Financial Assistance.”
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Water Institute)4in February 2014 to serve as the Center of 

Excellence, (2) published draft policies for administering Center of 

Excellence grants in March 2015, and (3) planned for completing 

the remaining steps necessary to make application to Treasury for 

Federal financial assistance. We make no recommendations in this 

report.

As part of our reporting process, we provided CPRA an opportunity 

to comment on a draft of this report. In a written response, CPRA’s

Chief Financial Officer expressed commitment to ensuring that 

CPRA follows all Federal grant requirements as Louisiana proceeds 

to establish its Center of Excellence. See appendix 2 for CPRA’s 

response in its entirety.

In a written response, Treasury management committed to 

evaluating CPRA’s grant application and confirming that the 

selection process and resulting selection address the requirements 

of the RESTORE Act and Treasury regulations. Management further 

noted that pursuant to its grants management procedures, Treasury 

disburses funds only after a grantee satisfies all criteria. Treasury 

management’s response is provided as appendix 3.

Background

The RESTORE Act established the Gulf Coast Restoration Trust 

Fund (Trust Fund) within Treasury to provide funds for 

environmental and economic restoration of the Gulf Coast region

that was damaged by the 2010 Deepwater Horizon oil spill. 

Deposits into the Trust Fund will be comprised of 80 percent of all 

civil and administrative penalties paid after July 6, 2012, under the 

Federal Water Pollution Control Act.5 As of February 2015, the 

Trust Fund had received approximately $816 million as a result of 

the Federal government’s settlement with the Transocean 

 

4 The Water Institute is a not-for-profit, independent research institute, dedicated to advancing the 

understanding of coastal, deltaic, river and water resource systems, both within the Gulf Coast and

around the world. Their mission is to support the practical application of innovative science and 

engineering, providing solutions that benefit society.

5 Pub. L. 92-500 (as amended) 
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defendants.6In July 2015, BP Exploration & Production Inc. agreed 

to settle with the Federal government and the Gulf Coast States for

$18.7 billion, of which approximately $5.5 billion plus interest 

relates to civil and administrative penalties under the Federal Water 

Pollution Control Act. Of this amount, $4.4 billion is expected to be 

deposited into the Trust Fund over 15 years. On October 5, 2015, 

the Department of Justice published the settlement in a proposed 

consent decree for a 60 day comment period ending on 

December 4, 2015. After considering comments, the Federal 

government and the Gulf Coast States will determine whether to 

seek court approval of the consent decree.

The RESTORE Act allocates money in the Trust Fund to the 

following 5 components: (1) 35 percent will be made available to 

the Gulf Coast States (Alabama, Florida, Louisiana, Mississippi, and 

Texas) in equal shares under the Direct Component; (2) 30 percent 

plus 50 percent of interest earned on the Trust Fund will be made 

available for grants under the Comprehensive Plan Component;

(3) 30 percent will be made available for grants under the Spill 

Impact Component; (4) 2.5 percent plus 25 percent of interest 

earned on the Trust Fund will be made available to the Science 

Program Component; and (5) 2.5 percent plus 25 percent of 

interest earned on the Trust Fund will be made available to the 

Centers of Excellence Component. Treasury’s Office of the Fiscal 

Assistant Secretary is responsible for administering the Direct 

Component and the Centers of Excellence Component. The Gulf 

Coast Ecosystem Restoration Council is responsible for 

administering the Comprehensive Plan Component and the Spill 

Impact Component. The National Oceanic and Atmospheric 

Administration is responsible for administering the Science Program

Component.

Under Sections 1603 and 1605 of the RESTORE Act, 2.5 percent 

of funds plus interest earned on the Trust Fund will be made 

available to the Gulf Coast States in equal shares to establish 

Centers of Excellence for the purpose of conducting research in the 

 

6 On February 19, 2013, the civil settlement between the Department of Justice and Transocean 

defendants (Transocean Deepwater Inc., Transocean Offshore Deepwater Drilling Inc., Transocean 

Holdings LLC, and Triton Asset Leasing GmbH) was approved. Among other things in the settlement, 

the Transocean defendants paid a $1 billion civil penalty plus interest. Of this amount, $800 million plus 

interest was deposited into the Trust Fund.
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Gulf Coast region. Each Center of Excellence must focus on 

science, technology, and monitoring in at least one of the following 

disciplines: (1) coastal and deltaic sustainability, restoration and 

protection, including solutions and technology that allow citizens to 

live in a safe and sustainable manner in a coastal delta in the Gulf 

Coast region; (2) coastal fisheries and wildlife ecosystem research 

and monitoring in the Gulf Coast region; (3) offshore energy 

development, including research and technology to improve the 

sustainable and safe development of energy resources in the Gulf 

of Mexico; (4) sustainable and resilient growth, economic and 

commercial development in the Gulf Coast region; and 

(5) comprehensive observation, monitoring, and mapping of the 

Gulf of Mexico.

The duties of each Gulf Coast State must be carried out by the 

applicable Gulf Coast State entity or task force, as defined in the 

act. In the case of Louisiana, the RESTORE Act names CPRA as 

the State entity with this responsibility.

Audit Results

We found that CPRA made progress in establishing Louisiana’s 

Center of Excellence in accordance with the requirements set forth 

in the RESTORE Act, Louisiana procurement laws, and Treasury’s

regulations and grant application guidelines. Specifically, CPRA 

(1) competitively selected The Water Institute in February 2014 to 

serve as the Center of Excellence, (2) published draft policies for 

administering Center of Excellence grants in March 2015, and 

(3) planned for completing the remaining steps necessary to make 

application to Treasury for Federal financial assistance.

Competitive Selection of The Water Institute

Section 1605 of the RESTORE Act specifies that the Gulf Coast 

States use the amounts made available from the Trust Fund to 

award competitive grants to nongovernmental entities and 

consortia in the Gulf Coast region, including public and private 

institutions of higher education, for the establishment of Centers of 

Excellence. In the absence of Treasury regulations defining the 

competitive process, CPRA followed existing State of Louisiana 
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procurement laws7to select The Water Institute. CPRA published a 

request for proposals (RFP) on October 18, 2013, seeking an entity 

to serve as the State’s Center of Excellence.

8 The RFP advised 

bidders that research would focus on the five disciplines of science 

and technology stipulated for Centers of Excellence in Section 

1605 of the RESTORE Act as well as issues pertinent to Louisiana 

with emphasis on advancing the Louisiana Coastal Master Plan.9

Louisiana procurement laws require adequate public notice of RFPs 

with proposed actions greater than $50,000. CPRA met this 

requirement by advertising the RFP in ”The Advocate,” the official 

journal of the State; providing written notice of the RFP to 

applicable parties; and posting the RFP on the Louisiana Division of 

Administration’s website. CPRA’s Center of Excellence RFP 

complied with other State procurement and contracting 

requirements including defining: (1) the relative importance of price 

and other evaluation factors, (2) tasks to be performed under the 

contract, (3) criteria to evaluate the proposals, and (4) timeframes 

for work completion. Included in the RFP’s schedule of events was 

an interim deadline for public comments and inquiries, which ended 

on December 2, 2013. Proposals were accepted through 

January 6, 2014, thus fulfilling the public notice period required by 

State statute.

10

To adhere to Louisiana laws prohibiting conflicts of interest in 

procurement actions, CPRA imposed a period of no-contact 

between applicants and CPRA representatives involved in the 

Center of Excellence selection from the time the RFP was issued 

until the selection was announced. 

CPRA officials told us that they anticipated there would be multiple 

responses to the RFP; however, the only proposal received for the 

Center of Excellence was from The Water Institute. The Water 

 

7 La. R.S. § 39:1503, “Requests for Proposals”

8 Louisiana’s RFP was issued on October 18, 2013, and the deadline for receipt of comments and 

written inquiries was December 2, 2013; a period of 45 days. The deadline for receipt of proposals was 

January 6, 2014; a period in excess of 30 days after the public comment period ended.

9 Louisiana’s Comprehensive Master Plan for a Sustainable Coast (known as the Louisiana Coastal 

Master Plan), is published by CPRA and can be found at http://www.coastalmasterplan.la.gov/.

10 La. R.S. § 39:1503 requires that the RFP be available for public comment for a period no less than 30 

days before the last day that proposals will be accepted.
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Institute’s proposal was evaluated on the following criteria: 

(1) technical and administrative approach; (2) experience and 

capacity; and (3) cost. On February 20, 2014, CPRA notified The 

Water Institute of its selection as Louisiana’s Center of Excellence.

It was not until the RESTORE Act regulations were published in

August 2014 that detailed procedures and clarifying information 

regarding the Centers of Excellence were available and CPRA 

officials confirmed that their competitive selection of The Water 

Institute met Treasury’s requirements. Among other things, the 

regulations stipulate that when applying for funding, the State 

must describe the competitive process used to select one or more 

Centers of Excellence. Specifically, the State must demonstrate 

that rules and policies for selecting a Center, including the 

competitive process, were published for public review and 

comment for a minimum of 45 days, and adopted after 

consideration of meaningful input from the public. This stipulation 

for public review and comment on the competitive process does 

not apply to a process required by State law or regulation, as in the 

case of Louisiana.

Policies for Administering Center of Excellence Grants

The Treasury regulations stipulate that a State must describe its 

rules and policies for administering Center of Excellence grant 

subawards and publish those policies for public comment for a

minimum of 45 days.

After Treasury’s regulations became effective in October 2014, 

CPRA officials spoke with Treasury officials about the Louisiana 

Center of Excellence selection process. CPRA officials determined 

that in addition to the competitive selection of the center, they 

needed to provide Louisiana’s Center of Excellence grants 

management rules and policies as part of the application for 

funding. In March 2015, CPRA published Draft Internal Agency 

Policies for Administering Grants Governing the State of 

Louisiana’s Center of Excellence under the Resources and 

Ecosystems Sustainability, Tourist Opportunities, and Revived 

Economies of the Gulf Coast States Act to give the required 

opportunity for public review and feedback on the grants 

management process. 
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Next Steps

CPRA representatives shared with us that once the public comment 

period ends,

11 they will review the comments, update the policies 

accordingly, and submit Louisiana’s Center of Excellence grant 

application to Treasury. Once Treasury approves the application 

and awards funds to the State, CPRA representatives plan to make 

a subaward to The Water Institute to establish the Center of 

Excellence. 

Coastal Protection and Restoration Authority Response

In a written response, CPRA’s Chief Financial Officer expressed 

commitment to ensuring that CPRA follows all Federal grant 

requirements as Louisiana proceeds to establish its Center of 

Excellence. See appendix 2 for CPRA’s response in its entirety.

Treasury Management Response

In a written response, Treasury management committed to 

evaluating CPRA’s grant application and confirming that the 

selection process and resulting selection address the requirements 

of the RESTORE Act and Treasury regulations. Management further 

noted that pursuant to its grants management procedures, Treasury 

disburses funds only after a grantee satisfies all criteria. See 

appendix 3 for management’s response in its entirety. 

 

11 Public comments on CPRA’s draft internal agency policies for administering grants governing the 

State of Louisiana’s Center of Excellence were accepted through April 17, 2015.
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* * * * * *

We appreciate the courtesies and cooperation extended by your 

staff as we inquired about these matters. Major contributors to this 

report are listed in appendix 4. A distribution list for this report is 

provided as appendix 5. If you have any questions, you may 

contact me at (202) 927-5762 or Cecilia Howland, Audit Manager, 

at (202) 927-8782. 

/s/ 

Deborah L. Harker 

Director, Gulf Coast Restoration Audits 
Appendix 1

Objective, Scope, and Methodology

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As part of our oversight of programs, projects, and activities 

authorized by the Resources and Ecosystems Sustainability, 

Tourist Opportunities, and Revived Economies of the Gulf Coast 

States Act of 2012 (RESTORE Act), we initiated an audit of the 

State of Louisiana’s progress to establish a Center of Excellence

Research Grants Program (Center of Excellence) on March 7, 

2014. The objective of our audit was to assess the Coastal 

Protection and Restoration Authority of Louisiana’s (CPRA) 

progress in establishing a Center of Excellence for conducting 

research in the Gulf Coast region in accordance with Section 

1605 of the RESTORE Act.

To accomplish our objective, we conducted fieldwork at CPRA

and The Water Institute of the Gulf’s (The Water Institute)

offices in Baton Rouge, Louisiana, and at our office in 

Washington, D.C. We performed our fieldwork between March 

2014 and March 2015 which comprised the following steps.

 We reviewed applicable Federal laws, regulations, and 

procedures related to the establishment of the Center of 

Excellence, including:

 RESTORE Act requirements;

 Department of the Treasury (Treasury) Interim Final 

Rule for RESTORE Act and Preamble, and 31 CFR 

Part 34, effective October 14, 2014; and

 Treasury RESTORE Act Centers of Excellence 

Research Grants Program Guidelines and 

Application to Receive Federal Financial 

Assistance, August 2014.

 We reviewed CPRA’s website and documents, including:

 CPRA Request for Proposal (RFP) #2503-14-08, 

RESTORE Act Center of Excellence;

 Notice of CPRA’s RFP published in multiple 

newspapers; 

 CPRA Proposal Review Committee evaluation;

 CPRA’s Center of Excellence Award Letter to The 

Water Institute; and

 CPRA’s Draft Internal Agency Policies for 

Administering Grants Governing the State of 

Louisiana’s Center of Excellence under the 
Appendix 1

Objective, Scope, and Methodology

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Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf 

Coast States Act (Restore Act); and The Water 

Institute of the Gulf proposal.

 We reviewed the State of Louisiana’s website, including 

procurement and contracting laws, guidance, and 

documents, including:

 La. R.S. § 39:1503, Requests for Proposals; 

 Louisiana Division of Administration’s Office of 

Contractual Review’s Procedures for Submitting 

Contracts Awarded through the Request for 

Proposals (RFP) Process; 

 Louisiana Division of Administration’s Office of 

Contractual Review’s Prequalified Offerers List; and

 Louisiana Division of Administration’s Procurement 

and Contract Network website.

 We interviewed key personnel responsible for establishing 

the Louisiana Center of Excellence, including:

 CPRA – Chairperson; Legal Advisor; Special 

Advisor; Executive Director; and Chief Financial 

Officer; and

 The Water Institute – President and Chief 

Executive Officer; Assistant Vice President Grants 

and Contracts; Chief Financial Officer and Director 

of Operations; Director of Planning, Coordination 

and Outreach; and Director of Policy Research and 

General Counsel.

We conducted this performance audit in accordance with 

generally accepted government auditing standards. Those 

standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis 

for our findings and conclusions based on our audit objectives. 

We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on our audit 

objectives.
Appendix 2 

Coastal Protection and Restoration Authority Response 

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Appendix 3 

Treasury Management Response 

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Appendix 4 

Major Contributors to This Report 

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Cecilia K. Howland, Audit Manager 

Michael A. Levin, Auditor 

Dionne L. Smith, Auditor 

Justin D. Summers, Referencer 
Appendix 5

Report Distribution

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Department of the Treasury

Deputy Secretary

Under Secretary for Domestic Finance

Fiscal Assistant Secretary

Deputy Assistant Secretary, Fiscal Operations and Policy

Office of the Deputy Chief Financial Officer, Risk and Control 

Group

Office of Strategic Planning and Performance Management

Office of Management and Budget

OIG Budget Examiner

State of Louisiana

Chairperson, Coastal Protection and Restoration Authority

Legislative Auditor
Treasury OIG Website 

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Email: Hotline@oig.treas.gov

Submit a complaint using our online form: 

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