Audit Report

OIG-19-002

GULF COAST RESTORATION

Escambia County’s Internal Control over Federal Awards

October 9, 2018

Office of

Inspector General

Department of the Treasury
This Page Intentionally Left Blank
Contents

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page i

Audit Report

Results in Brief........................................................................................... 1 

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

RESTORE Act......................................................................................... 2 

Escambia County .................................................................................... 4 

Audit Results .............................................................................................. 5 

Documented Policies and Procedures ........................................................ 6 

Risk Assessment .................................................................................... 7 

Conclusion............................................................................................. 8 

Appendices

Appendix 1: Objective, Scope, and Methodology........................................ 10

Appendix 2: Escambia County Management Response ................................ 14 

Appendix 3: Treasury Management Response ............................................ 15 

Appendix 4: Background on the Gulf Coast Restoration Trust Fund............... 16 

Appendix 5: Major Contributors to This Report...... ..................................... 19 

Appendix 6: Report Distribution................................................................ 20

Abbreviations

BOCC Board of County Commissioners

Clean Water Act Federal Water Pollution Control Act

Escambia County Escambia County, Florida

GAO Government Accountability Office

grants handbook Escambia County Grants Management Handbook

MYIP Multiyear Implementation Plan

OMB Office of Management and Budget
Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page ii 

RESTORE Act Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast 

States Act of 2012

Treasury Department of the Treasury

Trust Fund Gulf Coast Restoration Trust Fund 

Uniform Guidance Uniform Administrative Requirements, Cost Principles, and 

Audit Requirements for Federal Awards 
OIG Audit

Report

The Department of the Treasury

Office of Inspector General

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 1

October 9, 2018 

David A. Lebryk 

Fiscal Assistant Secretary 

This report presents the results of our audit of Escambia County, 

Florida’s (Escambia County) internal controls to administer grants 

under the Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast States Act 

of 2012 (RESTORE Act).

1

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

 We performed this audit as part of our 

ongoing oversight of programs and activities funded under the 

RESTORE Act. Our audit objective was to assess Escambia

County’s internal control over the administration of Federal awards 

in accordance with Federal laws, regulations, and the Department 

of the Treasury’s (Treasury) grant application requirements. The 

scope of our audit comprised Escambia County’s internal control in 

place during September 2014 through June 2017 as it related to 

the administration of Federal awards. Appendix 1 provides more 

detail of our audit objective, scope, and methodology.

Results in Brief

In brief, we concluded that Escambia County had designed and 

implemented a system of internal control2

2 OMB’s Uniform Guidance states “Internal control(s) means a process, implemented by a non-Federal 

entity, designed to provide reasonable assurance regarding the achievement of objectives in the 

following categories: (a) Effectiveness and efficiency of operations; (b) Reliability of reporting for 

internal and external use; and (c) Compliance with applicable laws and regulations.” (2 CFR Part 

200.61, Internal controls) 

to administer Federal 

awards as required by the Office of Management and Budget‘s 

(OMB) Uniform Administrative Requirements, Cost Principles, and 

Audit Requirements for Federal Awards (Uniform Guidance),

3

3 OMB’s Uniform Guidance became effective December 26, 2014.

Treasury’s RESTORE Act Financial Assistance Standard Terms and 

 
Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 2 

Conditions and Program-Specific Terms and Conditions, and 

Treasury’s RESTORE Act Direct Component Guidance and 

Application to Receive Federal Financial Assistance. While we 

reached this conclusion at the completion of our audit, not all 

control activities were in place at the start of our audit in July 

2015. That is, controls to administer grants in the areas of

budgeting, cash management, disbursements, financial reporting, 

inventory management, procurement, program management, and 

performance monitoring were in place and operating as evidenced 

in our process walkthroughs. However, certain control activities in 

these operational areas were not completed. Specifically, policies 

and procedures were not fully documented, and an entity-wide risk 

assessment had not been conducted.

Prior to the completion of our audit in June 2017, Escambia 

County completed documentation of policies and procedures in its 

Escambia County Grants Management Handbook (grants 

handbook), which we found to sufficiently document controls over 

Federal awards. Furthermore, a comprehensive entity-wide risk 

assessment was completed in August 2016 that identified relevant 

risks consistent with our earlier conclusions. As such, we make no 

recommendation in this report.

As part of our reporting process, we provided Escambia County an 

opportunity to comment on a draft of this report. In a written 

response, Escambia County management agreed with the report’s 

results and its accuracy and completeness. Escambia County

management’s response is provided in its entirety in appendix 2 of 

this report. 

In a written response, Treasury management concurred with the

report’s conclusions. Treasury management’s response in its 

entirety is included as appendix 3 of this report.

Background

RESTORE Act

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
Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 3 

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 (the Clean Water Act).

4

4 33 U.S.C. § 1251 et seq. 

Treasury is responsible for administering the Direct Component of 

the Trust Fund which is comprised of 35 percent of deposits from 

settlements plus interest. Direct Component funds are available to 

the Gulf Coast States in equal shares in the form of grants for the 

purpose of economic and ecological restoration. For the State of 

Florida, the funds will go directly to the impacted Florida counties, 

with 75 percent of funding going directly to the eight 

disproportionately affected counties5

5 Disproportionately affected counties means the counties of Bay, Escambia, Franklin, Gulf, Okaloosa, 

Santa Rosa, Wakulla, and Walton in the State of Florida.

impacted by the Deepwater 

Horizon oil spill and 25 percent going directly to the 15 

nondisproportionately impacted counties.

6

6 Nondisproportionately impacted counties means the counties of Charlotte, Citrus, Collier, Dixie, 

Hernando, Hillsborough, Jefferson, Lee, Levy, Manatee, Monroe, Pasco, Pinellas, Sarasota, and Taylor 

in the State of Florida.

 

Under the Direct Component, each eligible applicant must prepare a 

Multiyear Implementation Plan (MYIP) before submitting an 

application for funding, unless it is applying for planning assistance 

funds to develop its MYIP. Direct Component funds can be spent 

on: (a) restoration and protection of the natural resources,

ecosystems, fisheries, marine and wildlife habitats, beaches, and 

coastal wetlands of the Gulf Coast Region; (b) mitigation of 

damage to fish, wildlife, and natural resources; (c) implementation 

of a Federally approved marine, coastal, or comprehensive 

conservation management plan, including fisheries monitoring; (d) 

workforce development and job creation; (e) improvements to or on 

state parks located in coastal areas affected by the Deepwater 

Horizon oil spill; (f) infrastructure projects benefitting the economy 

or ecological resources, including port infrastructure; (g) coastal 

flood protection and related infrastructure; (h) promotion of tourism 

in the Gulf Coast Region, including promotion of recreational 

fishing; (i) promotion of the consumption of seafood harvested 

from the Gulf Coast Region; (j) planning assistance; and (k) 

administrative costs. Details of the RESTORE Act are provided in 

 
Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 4 

appendix 4.

Escambia County

Escambia County is located in northwestern Florida with coastlines 

along the Gulf of Mexico. Due to its location and coastlines, 

Escambia County is one of Florida’s disproportionately affected 

counties and will receive a greater percentage of Florida’s 

allocation of the Direct Component funds. Escambia County is 

estimated to receive $70.7 million based on the Federal 

government’s settlement with Transocean,7

7 Transocean defendants include Transocean Deepwater Inc., Transocean Offshore Deepwater Drilling 

Inc., Transocean Holdings LLC, and Triton Asset Leasing GmbH.

Anadarko Petroleum 

Corporation, and the BP Exploration & Production Inc. defendants. 

Of that amount, approximately $18.5 million has been made 

available8

8 The “amount made available” represents Escambia County’s portion of the Trust Fund deposits from 

all penalty payments plus interest available for award, and not necessarily the amount awarded to date.

to Escambia County under the Direct Component as of 

April 9, 2018.

9

9 Current Trust Fund allocations, including funds available and funds obligated or transferred by 

RESTORE Act component are publicly available on the U.S. Treasury Restore Act homepage: 

https://www.treasury.gov/services/restore-act/Pages/home.aspx

Escambia County’s organizational structure is comprised of elected 

officers to include the Sherriff, the Supervisor of Elections, the 

Property Appraiser, the Tax Collector, the Board of County 

Commissioners (BOCC),

10

10 The Board of County Commissioners consists of five elected commissioners who serve as the 

legislative and policy setting body of Escambia County.

and the Clerk of the Circuit Court and 

Comptroller.

11

11 The Clerk of the Circuit Court and Comptroller oversees an organization that performs a wide range of 

recordkeeping, information management, and financial management in the judicial system and county 

government.

The BOCC appoints a County Administrator whose

responsibility is to implement the day-to-day operations of county 

government. The project managers within each of Escambia 

County’s departments are responsible for the oversight and 

administration of grants. The Natural Resources Management 

Department oversees the RESTORE Act grants with the support of 

the Financial Reporting and Grants Division within the Office of 

Clerk of the Circuit Court and Comptroller. 

On October 18, 2012, the BOCC adopted a resolution which

established an eleven member RESTORE Advisory Committee. The 

 
Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 5 

committee’s purpose was to develop a MYIP, solicit public input 

and set goals for Escambia County’s use of any funds received 

from the RESTORE Act, along with reviewing projects and 

submitting recommendations to the BOCC for consideration. In 

November 2014, Escambia County contracted with a professional 

services firm to assist the RESTORE Advisory Committee with 

developing a MYIP and recovery framework to use RESTORE Act 

funds. The Escambia County RESTORE Project Application Portal 

opened on July 1, 2015, and closed September 30, 2015. Project 

proposals were evaluated by the technical review team. The 

RESTORE Advisory Committee then recommended projects to the 

BOCC for final decisions before dissolving on April 7, 2016. 

On November 4, 2015, Treasury awarded Escambia County 

$415,850 for a planning assistance grant to develop a MYIP, 

which allowed funds to be used for personnel costs, supplies, 

services provided by the contractor, and indirect costs. On 

October 20, 2017, Treasury accepted Escambia County’s MYIP, 

which included 10 projects totaling $8,638,650. Of this amount, 

Treasury awarded $3,774,120 to fund five projects for planning 

assistance in early 2018.12

12 RESTORE Act grants were not within the scope of this audit given the timing of these awards. 

Treasury also awarded an additional 

$445,454 to develop amendments to the MYIP. 

Audit Results 

As a Federal grant recipient, Escambia County was required by the

Uniform Guidance to “establish and maintain effective internal 

controls over the Federal award that provides reasonable assurance 

that the non-Federal entity is managing the Federal award in 

compliance with Federal statutes, regulations, and the terms and 

conditions of the Federal award.” The Uniform Guidance further 

required that “these internal controls should be in compliance with 

the Government Accountability Office’s (GAO) Standards for 

Internal Control in the Federal Government.”13

13 GAO’s Standards for Internal Control in the Federal Government ((GAO-14-704G; September 2014)

provides the overall framework for establishing and maintaining effective internal control. 

Treasury affirmed 

the Uniform Guidance in its RESTORE Act Financial Assistance 

Standard Terms and Conditions and Program-Specific Terms and 

 
Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 6 

Conditions, and Treasury’s RESTORE Act Direct Component 

Guidance and Application to Receive Federal Financial Assistance. 

We concluded that Escambia County had designed and 

implemented a system of internal control to administer Federal 

awards in accordance with applicable requirements. While we 

reached this conclusion, not all control activities were completed at 

the start of our audit in July 2015. That is, controls to administer 

grants in the areas of budgeting, cash management, 

disbursements, financial reporting, inventory management, 

procurement, program management, and performance monitoring

were in place and operating as evidenced in our process 

walkthroughs. However, certain control activities within these 

operational areas were not completed. Specifically, policies and 

procedures were not fully documented, and an entity-wide risk 

assessment had not been conducted.

It should be noted that at the start of our audit, no RESTORE Act 

grants had been awarded to Escambia County. Furthermore, the 

Uniform Guidance became applicable for non-Federal entities 

receiving Federal grants in December 2014, and therefore, was 

being newly implemented. Nonetheless, we confirmed that 

Escambia County completed the following control activities prior to 

the completion of our audit.

Documented Policies and Procedures

GAO’s Standards for Internal Control in the Federal Government

defines control activities as “policies, procedures, techniques, and 

mechanisms that enforce management’s directives to achieve the 

entity’s objectives and address related risks.” The standard also 

advises that documentation is a necessary part of an effective 

internal control system and provides a means to retain 

organizational knowledge and mitigate the risk of having that 

knowledge limited to a few personnel, as well as a means to 

communicate that knowledge as needed to external parties, such 

as external auditors.

At the start of our audit in July 2015, Escambia County had not 

documented policies and procedures governing Federal grants in 

the operational areas of cash management, inventory management, 
Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 7 

program management, and performance monitoring. Policies and 

procedures needed to include cash advances to subrecipients; 

indirect cost recovery; inventory management; and subrecipient 

monitoring to include a subrecipient risk assessment process.

Escambia County officials informed us that the policies and 

procedures for RESTORE Act grant funds had not been fully 

documented because the county had not completed its assessment 

of potential project activities and did not anticipate issuing 

advances to subrecipients unless the BOCC received pre-approval 

by the Clerk of the Circuit Court and Comptroller. 

Escambia County’s Grants Management Team14

14 The Grants Management Team included select administrative personnel under the BOCC, and staff 

from the Office of Purchasing, the Water Quality and Land Management Department, the Natural 

Resources Management Department, and the Clerk of the Circuit Court and Comptroller’s office. 

 developed the 

grants handbook in October 2015, which the BOCC adopted in 

January 2017. The grants handbook addressed the BOCC policy, 

Federal and State laws and regulations, and other relevant 

information pertaining to grants administration in Escambia County. 

The grants handbook also documented policies and procedures for 

the operational areas of cash management, inventory, program 

management, and performance monitoring. We confirmed that the 

grants handbook included procedures specific to cash advances to 

subrecipients, indirect cost recovery,15

15 On September 30, 2015, the Department of Housing and Urban Development, the Federal cognizant 

agency, approved Escambia County’s indirect cost rate of 10 percent. In April 2017, Escambia County 

confirmed that this rate was still in effect.

inventory management, and 

subrecipient monitoring to include a subrecipient risk assessment 

process.

Furthermore, we found that the grants handbook incorporated the 

Uniform Guidance requirements for risk assessments of 

subrecipients, and clearly specified how to effectively apply these 

requirements. The grants handbook also included a subrecipient 

checklist based on the Uniform Guidance requirements.

Risk Assessment

GAO’s Standards for Internal Control in the Federal Government

states that “the risk assessment component of internal control is 

assessing the risks facing an entity as it seeks to achieve its 

 
Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 8 

objectives. The assessment provides the basis for developing 

appropriate risk responses. Management assesses the risks the 

entity faces from both external and internal sources.” 

At the start of our audit in July 2015, Escambia County 

management had not performed an entity-wide risk assessment. 

According to management, it was unclear what the expectations 

were for risk assessments. Furthermore, management noted that it 

was not familiar with the requirements set forth in GAO’s 

Standards for Internal Control in the Federal Government. 

In early 2016, Escambia County contracted a professional services 

firm to perform an entity-wide risk assessment. The firm completed 

the risk assessment in August 2016, which we reviewed and found 

was comprehensive. The firm identified matters consistent with 

those identified in our audit, such as Escambia County’s need to 

document policies and procedures that are designed to ensure that 

grants are administered in accordance with grant agreements and 

related laws and regulations.

Conclusion

Prior to the completion of our audit, we confirmed that Escambia 

County’s grant handbook sufficiently documented controls over 

Federal awards. Furthermore, the entity-wide risk assessment 

identified relevant risks consistent with our earlier conclusions. As 

such, we make no recommendation in this report.
Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 9 

* * * * * 

We would like to extend our appreciation for the cooperation and 

courtesies extended to our staff during the audit. Major 

contributors to this report are listed in appendix 5. A distribution 

list for this report is provided as appendix 6. If you have any 

questions, please contact me at (202) 927-8782 or Eleanor Kang, 

Audit Manager, at (202) 927-8127. 

/s/

Cecilia K. Howland

Director, Gulf Coast Restoration Audits 
Appendix 1

Objective, Scope, and Methodology 

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 10 

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 Escambia County, 

Florida’s (Escambia County) internal controls to administer 

RESTORE Act grants in June 2015. The objective of our audit was 

to assess Escambia County’s internal control over the 

administration of Federal awards in accordance with Federal laws, 

regulations, and the Department of the Treasury’s (Treasury) grant 

application requirements.

The scope of our audit comprised Escambia County’s internal 

control in place during September 2014 through June 2017 as it 

related to the administration of Federal awards. This included 

policies, procedures, and practices with respect to Escambia 

County’s key controls over budgeting, cash management, 

disbursements, financial reporting, procurement, inventory 

management, program management, and performance monitoring.

RESTORE Act grants totaling $861,304 for planning assistance to 

develop the Multiyear Implementation (MYIP) and amendments, as 

well as, $3,774,120 awarded to fund five projects included in the 

MYIP approved by Treasury in October 2017, were not within the 

scope of this audit given the timing of these awards. Testing of 

controls over Federal awards was based on non-RESTORE Act 

grants awarded to Escambia County.

We contracted with Williams, Adley and Company-DC, LLP, a 

certified independent public accounting firm, to assist us with the 

audit. However, this report and the conclusion therein are the 

responsibility of the Treasury Office of Inspector General. As such, 

we take responsibility for all work performed on our behalf.

To meet our audit objective, we performed the following 

procedures: 

• We reviewed applicable Federal laws, regulations, and 

procedures including:

 The RESTORE Act, Pub. L. 112-141, July 6, 2012; 

 Treasury, Regulations for the Gulf Coast Restoration 

Trust Fund Interim Final Rule, 31 CFR Part 34, 

October 14, 2014 and Regulations for the Gulf Coast 
Appendix 1

Objective, Scope, and Methodology 

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 11 

Restoration Trust Fund Final Rule, 31 CFR Part 34, 

February 12, 2016; 

 Office of Management and Budget (OMB), Uniform 

Administrative Requirements, Cost Principles, and 

Audit Requirements for Federal Awards, 2 CFR Part 

200, December 26, 2014; 

 Treasury, Final Rule adopting Uniform Administrative 

Requirements, Cost Principles, and Audit 

Requirements for Federal Awards, 81 Fed. Reg. 4573 

(codified at 2 CFR Part 1000, January 27, 2016); 

 Treasury, RESTORE Act Financial Assistance Standard 

Terms and Conditions and Program-Specific Terms 

and Conditions, January 2015; 

 Treasury, RESTORE Act Direct Component Guidance 

and Application to Receive Federal Financial 

Assistance, August 2014; and

 Government Accountability Office, Standards for 

Internal Control in the Federal Government (GAO-14-

704G; September 2014). 

• We reviewed relevant documents related to Escambia 

County including:

 Escambia County’s Direct Component application for 

Federal financial assistance;

 Escambia County’s Multiyear Implementation Plan, 

October 20, 2017;

 “United States Department of the Treasury Resources 

and Ecosystems Sustainability, Tourist Opportunities, 

and Revived Economies of the Gulf Coast States Act 

(RESTORE Act) Operational Self-Assessment (OSA)”

dated September 11, 2014, June 29, 2015, June 29, 

2016, and June 26, 2017; 

 Enterprise Risk Assessment report dated August 30, 

2016; 

 “Comprehensive Annual Financial Report” for 

Escambia County, Florida for fiscal years ending 

September 30, 2014 and September 30, 2015; and

 Single Audit Report for Escambia County, Florida for 

fiscal years ending September 30, 2012 through

2016. 
Appendix 1

Objective, Scope, and Methodology 

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 12 

• We reviewed Escambia County’s applicable policies as 

follows: 

 Escambia County Grants Management Handbook, 

January 1, 2017; 

 Capital Assets Internal Control Processes Document, 

September 30, 2016; 

 Escambia County, Clerk of the Circuit Court and 

Comptroller Finance Department Capital Assets Policy; 

 Escambia County, Clerk of the Circuit Court and 

Comptroller Financial Reporting/Grants Division 

“Grants Policies and Procedures,” June 2015;

 Board of County Commissioners’ (BOCC) Policy 

Manual, Section II, Part A.2 “Budget Amendments”

June 20, 2002; 

 BOCCs’ Policy Manual, Section II, Part A.6 

“Competitive Grant Application Policy” December 6, 

2007; and

 BOCCs’ Office of Purchasing “Purchasing 

Procedures,” February 19, 2010. 

• We performed walkthroughs of processes to identify controls 

over Federal awards for the purpose of assessing Escambia 

County’s internal control. During the walkthroughs, we 

reviewed documentation to determine if processes and 

controls were designed and implemented in accordance with

OMB’s Uniform Administrative Requirements, Cost 

Principles, and Audit Requirements for Federal Awards. We 

performed walkthroughs of processes as follows:

 budgeting;

 cash management;

 disbursements; 

 financial reporting;

 inventory management; 

 procurement;

 program management; and 

 performance monitoring. 

• We interviewed key officials and staff within Escambia

County’s departments as follows: 

 Clerk of the Circuit Court and Comptroller

 Executive Assistant and Special Projects; 
Appendix 1

Objective, Scope, and Methodology 

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 13 

 Manager, Financial Reporting/Grants;

 Information Technology Director;

 Manager, Disbursements/Contracts; and

 Accounting Operations Supervisor. 

 BOCC

 Director of Natural Resources Management; 

 Manager, Office of Budget; 

 Manager, Office of Purchasing; 

 Director of Human Resources; 

 Division Manager, Community & Environment 

Department; 

 Director of Public Works; 

 Accounting Manager, Public Works; 

 Manager, Water Quality & Land Management; 

and

 RESTORE Coordinator. 

We conducted our fieldwork between June 2015 and June 2017, 

at the Escambia County office in Pensacola, Florida, and at the 

Treasury Office of Inspector General office in Washington, D.C. 

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

Escambia County Management Response

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 14 
Appendix 3

Treasury Management Response

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 15 
Appendix 4 

Background on the Gulf Coast Restoration Trust Fund

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 16 

The Resources and Ecosystems Sustainability, Tourist 

Opportunities, and Revived Economies of the Gulf Coast States Act 

of 2012 (RESTORE Act) established the Gulf Coast Restoration 

Trust Fund (Trust Fund) within the Department of the Treasury 

(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 

comprise 80 percent of all civil and administrative penalties related 

to Deepwater Horizon paid under the Federal Water Pollution 

Control Act (Clean Water Act) after July 6, 2012. 

Fund Sources

Approximately $5.3 billion has been designated for the Trust Fund 

resulting from settlement agreements between the U.S. 

Department of Justice and the following parties:

• approximately $4.4 billion plus interest from BP Exploration & 

Production Inc.16

16 A $20.8 billion civil settlement between the Department of Justice and BP Exploration & Production 

Inc. was approved on April 4, 2016. Of this amount, $4.4 billion will be deposited into the Trust Fund 

over 15 years. BP Exploration & Production Inc. made the first Clean Water Act penalty payment to the 

Department of Justice on April 3, 2017, and 80 percent of that payment, or approximately $303 

million, was deposited into the Trust Fund on April 10, 2017. A second payment of approximately $152 

million was deposited into the Trust Fund on April 9, 2018. 

• approximately $800 million plus interest from the Transocean 

defendants17

17 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 in three installments. Of this 

amount, $800 million plus interest was transferred to the Trust Fund; the final amount was deposited in 

the Trust Fund in February 2015.

• approximately $127 million plus interest from Anadarko 

Petroleum Corporation18

18 On December 16, 2015, the civil settlement between the Department of Justice and Anadarko 

Petroleum Corporation was approved. Anadarko agreed to civil penalties of $159.5 million. Of this 

amount, approximately $127 million was deposited in the Trust Fund in March 2016.

 
Appendix 4

Background on the Gulf Coast Restoration Trust Fund

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 17 

RESTORE Act Components

The RESTORE Act allocates monies from the Trust Fund into the 

following five components. 

• Direct Component – Treasury Administered

 35 percent is to be equally divided among the five 

Gulf Coast States for ecosystem restoration, 

economic development, and tourism promotion 

accordingly:

• Louisiana – 30 percent to the coastal 

parishes based on an allocation formula and 

70 percent to the state;

• Florida – 75 percent to the counties most 

affected by the oil spill and 25 percent to 

the other counties based on an allocation 

formula;

• Mississippi – 100 percent to the Department 

of Environmental Equality;

• Alabama – 100 percent to the Alabama Gulf 

Coast Recovery Council; and

• Texas – 100 percent to the Texas 

Governor’s Office; 

• Comprehensive Plan Component – Gulf Coast Ecosystem 

Restoration Council Administered

 30 percent plus 50 percent of interest earned from 

Trust Fund investments is to be used for 

restoration activities under the Comprehensive 

Plan; 

• Spill Impact Component – Gulf Coast Ecosystem 

Restoration Council Administered

 30 percent is to be divided among the five Gulf 

Coast States according to a formula to implement 

State Expenditure Plans, which require approval by 

the Council;

• National Oceanic and Atmospheric Administration’s 

RESTORE Act Science Program – National Oceanic and 

Atmospheric Administration Administered
Appendix 4

Background on the Gulf Coast Restoration Trust Fund

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 18 

 2.5 percent plus 25 percent of interest earned from 

Trust Fund investments is to be used for a science, 

observation, monitoring, and technology program; 

and

• Centers of Excellence Research Grants Program – 

Treasury Administered

 2.5 percent plus 25 percent of interest earned from 

Trust Fund investments is to be used for research 

on the Gulf Coast Region.

Availability for Escambia County

Escambia County is estimated to receive $70.7 million based on

the Federal Government’s settlement with Transocean, Anadarko 

Petroleum Corporation, and BP Exploration & Production Inc. 

defendants. As of April 9, 2018, the Trust Fund had received 

approximately $1.4 billion, including related interest. Of that 

amount, approximately $18.5 million has been made available to 

Escambia County under the Direct Component.

19

19 Current Trust Fund allocations, including funds available and funds obligated or transferred by 

RESTORE Act component are publicly available on the U.S. Treasury Restore Act homepage: 

https://www.treasury.gov/services/restore-act/Pages/home.aspx

 
Appendix 5

Major Contributors to This Report

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 19 

Eleanor P. Kang, Audit Manager

Michael A. Levin, Auditor-in-Charge

Alexis Satterwhite, Auditor

Kevin A. Guishard, Referencer
Appendix 6

Report Distribution

Escambia County’s Internal Control over Federal Awards (OIG-19-002) Page 20 

 Department of the Treasury

Counselor to the Secretary 

Under Secretary for Domestic Finance

Fiscal Assistant Secretary

Deputy Assistant Secretary, Fiscal Operations and Policy

Director, Office of Grants and Asset Management

Director, Office of Gulf Coast Restoration

Office of the Deputy Chief Financial Officer, Risk and Control

Group

Office of Strategic Planning and Performance Improvement

 

Office of Management and Budget

OIG Budget Examiner

 

 State of Florida 

Chair of the Board of County Commissioners, Escambia 

County, Florida 

Auditor General, State of Florida

 
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Treasury OIG Website

Access Treasury OIG reports and other information online: 

http://www.treasury.gov/about/organizational-structure/ig/Pages/default.aspx

Report Waste, Fraud, and Abuse

OIG Hotline for Treasury Programs and Operations – Call toll free: 1-800-359-3898

Gulf Coast Restoration Hotline – Call toll free: 1-855-584.GULF (4853)

Email: Hotline@oig.treas.gov

Submit a complaint using our online form: 

https://www.treasury.gov/about/organizational-structure/ig/Pages/OigOnlineHotlineForm.aspx