OFFICE OF INSPECTOR GENERAL 

Catalyst for Improving the Environment 

Audit Report 

EPA Grants Supported 

Restoring the Chesapeake Bay 

 Report No. 2006-P-00032 

 September 6, 2006 
Report Contributors: Randy Holthaus 

 Jennifer Hutkoff

 Michael Rickey 

Matthew Simber 

Cover photo: This photo shows part of an EPA-funded best management practice at a farm 

in Lebanon County, Pennsylvania. Pictured is a pipeline that distributes storm 

water flow through the pipe and on to splash pads after removal of manure 

from a cow feeding pen. Previously, the manure was not contained and had 

flowed downhill during rain storms. (Source: Office of Inspector General) 
U.S. Environmental Protection Agency 2006-P-00032 

Office of Inspector General September 6, 2006

At a Glance


Catalyst for Improving the Environment 

Why We Did This Review 

Chesapeake Bay partners and 

the media have expressed 

concerns on the slow progress 

of Bay cleanup. The U.S. 

Environmental Protection 

Agency (EPA) recently stated 

that key water quality and 

wildlife habitat restoration 

goals of the Chesapeake 2000 

Agreement will not be met by 

2010 as planned. We 

conducted this audit to answer 

the question: Has EPA 

effectively targeted funds 

toward grant projects that 

should maximize 

environmental benefit in the 

Chesapeake Bay? 

Background 

The Chesapeake Bay and its 

tributaries have been on 

EPA’s impaired waters list 

since 1998. The Chesapeake 

2000 Agreement established 

the goals and commitments to 

restore and protect the 

Chesapeake Bay ecosystem 

and its living resources. 

For further information, 

contact our Office of 

Congressional and Public 

Liaison at (202) 566-2391. 

To view the full report, 

click on the following link: 

www.epa.gov/oig/reports/2006/ 

20060906-2006-P-00032.pdf 

EPA Grants Supported Restoring the 

Chesapeake Bay 

What We Found 

EPA awarded assistance agreements (grants) that contributed toward meeting the 

goals of the Clean Water Act and the Chesapeake 2000 Agreement. These grants 

funded activities designed primarily to: reduce the nutrients and sediment entering 

the Bay and its tributaries, monitor ongoing efforts to restore Bay water quality, 

and model (estimate) the results of Bay implementation strategies. 

In fiscal years 2003, 2004, and 2005, Congress appropriated $23 million each 

year for EPA’s Chesapeake Bay Program. In each of those years, EPA awarded 

about $8 million for State implementation grants and $7 million for technical and 

other grants for specific projects. EPA used the remaining $8 million to fund 

EPA personnel and office management, interagency agreements, and 

congressional earmarks. 

EPA funded State restoration programs that designed and installed best 

management practices, monitored the progress and results of ongoing projects, 

and informed EPA’s partners and the public of their impacts on Bay water quality. 

EPA also funded technical project grants to: collect and track data on 

implementation efforts; model (estimate) future pollution levels and reductions 

gained from activities; monitor water quality and pollution levels; restore and 

protect fish and other living organisms; and educate the public and stakeholders 

about Bay restoration progress, obstacles, and strategies. These efforts 

contributed to EPA’s overall Bay restoration program. EPA estimated, based on 

computer modeling, that as of March 2006 the program partners had achieved 

37 percent of the nitrogen reduction goal, 53 percent of the phosphorus reduction 

goal, and 47 percent of the sediment reduction goal. 

EPA’s Chesapeake Bay Program Office responded to the draft report and 

concurred with our conclusion. The report does not contain recommendations. 
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

OFFICE OF 

INSPECTOR GENERAL

September 6, 2006 

MEMORANDUM 

SUBJECT: EPA Grants Supported Restoring the Chesapeake Bay 

Report No. 2006-P-00032 

TO: Donald S. Welsh 

Regional Administrator, EPA Region 3 

Rebecca W. Hanmer 

Director, Chesapeake Bay Program Office 

This is our report on assistance agreements awarded by the U.S. Environmental Protection 

Agency’s Chesapeake Bay Program Office conducted by the Office of Inspector General (OIG). 

This report does not contain findings or recommendations. The estimated cost of this report – 

calculated by multiplying the project’s staff days by the applicable daily full cost billing rates in 

effect at the time – is $187,667. 

Action Required 

Because this report contains no recommendations, you are not required to respond to this report. 

We have no objections to the further release of this report to the public. This report will be 

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

If you or your staff have any questions regarding this report, please contact me at 202-566-0847 

or roderick.bill@epa.gov, or Janet Kasper at 312-886-3059 or kasper.janet@epa.gov. 

Sincerely, 

Bill A. Roderick 

Acting Inspector General 
EPA Grants Supported Restoring the Chesapeake Bay 

Table of Contents 

Purpose of Audit .................................................................................................................. 1 

Background ....................................................................................................................... 1 

EPA Assistance Agreements Supported Restoring the Bay ........................................... 2 

State Implementation Grants Focused on Reducing 

Nutrients and Sediment Entering the Bay ............................................................... 3 

Project Grants Measured and Reported Results..................................................... 5 

Conclusion ....................................................................................................................... 7 

Status of Recommendations and Potential Monetary Benefits....................................... 8 

Appendices 

A Scope and Methodology....................................................................................... 9 

B Detailed Logic Model on Chesapeake Bay Program 

Use of Assistance Agreements............................................................................ 10 

C Agency Response ................................................................................................. 11 

D Distribution ............................................................................................................ 12 

i 
Purpose of Audit 

The Chesapeake 2000 Agreement, established by the Chesapeake Bay partners to set goals for 

restoring the Bay’s ecosystem, stated that while the individual and collective accomplishments of 

the Bay partners’ efforts have been significant, greater effort will be required to address the 

enormous challenges that lie ahead. There have also been numerous media reports recently on 

the slow progress of the Bay cleanup. In 2000, the U.S. Environmental Protection Agency 

(EPA), along with five other signatory partners, had committed to restoring the Bay’s waters by 

2010. However, EPA recently stated in its draft Strategic Plan for 2006-2011 that key water 

quality and wildlife habitat restoration goals for the Bay will not be met by 2010 as planned. 

We conducted this audit to answer the following question: Has EPA effectively targeted funds 

toward grant projects that should maximize environmental benefit in the Chesapeake Bay? To 

answer this question, we sought to determine whether EPA funded grant projects for the Bay that 

met the goals of the Clean Water Act and the Chesapeake 2000 Agreement. We defined 

“projects that should maximize environmental benefits” as those projects that contribute toward 

fulfilling the goals of the Clean Water Act and the Chesapeake 2000 Agreement. The Clean 

Water Act directs EPA’s Administrator to maintain a Chesapeake Bay Program Office and for 

that Office to assist Bay partners in developing and implementing action plans to carry out the 

Chesapeake Bay Agreement. EPA is required to fund project grants to nonprofit organizations, 

State and local governments, colleges, universities, and interstate agencies to help meet the 

Chesapeake 2000 Agreement. EPA and the partners, by signing the Agreement, established a 

comprehensive set of goals to restore the Bay. 

We did not assess State decisions regarding the type or location of best management practices 

they implemented. We also did not review grant proposals that EPA chose not to fund. Finally, 

we did not assess the adequacy of the Chesapeake 2000 Agreement. Additional details on the 

scope and methodology for our review are in Appendix A. 

Background 

The Chesapeake Bay is North America’s largest and most biologically diverse estuary. The 

watershed area is home to more than 16 million people and 3,600 species of plants, fish, and 

animals. The watershed covers 64,000 square miles and includes parts of 6 States – Delaware, 

Maryland, New York, Pennsylvania, Virginia, and West Virginia – and all of the District of 

Columbia. The Chesapeake Bay watershed includes thousands of miles of waterways feeding 

into the Bay. This main Chesapeake Bay waterway is approximately 189 miles long and runs 

from the Susquehanna River in the north to the Atlantic Ocean in the south. Contributing 

waterways are referred to as “tributaries.” 

The Chesapeake Bay and its tributaries have been on EPA’s impaired waters list since 1998. 

Nutrients and sediment are the Bay’s two primary pollutants: 

• Nutrients: The primary sources of nutrients (nitrogen and phosphorus) are agricultural, 

urban, and suburban runoff; sewage treatment facilities; and the deposition of air 

pollution from numerous sources, such as power plants. Excess amounts of these two 

1 
nutrients cause conditions (“algal blooms”) that greatly reduce the amount of oxygen in 

the water that fish, crabs, and other aquatic organisms need to live. 

• Sediment: Sediment is loose particles of clay, silt, and sand that suspend in a body of 

water and eventually settle to the bottom. In the Chesapeake Bay, sediment diminishes 

water quality by preventing light from penetrating to the leaves and stems of underwater 

grass and other vegetation. 

The Chesapeake 2000 Agreement established the goals and commitments to restore and protect 

the Chesapeake Bay ecosystem and its living resources. The Chesapeake Bay partnership began 

in 1983 and was formalized through a series of agreements, the most recent in 2000. The 

signatories of the 2000 Agreement were EPA, Maryland, Pennsylvania, Virginia, the District of 

Columbia, and the Chesapeake Bay Commission. Collectively, these signatories are known as 

the Chesapeake Executive Council. The ultimate goal of the Agreement is to improve the Bay 

and its tributaries’ water quality and have them all removed from the impaired waters list by 

2010. Because restoration needs differed from State to State, the signatory States each 

developed their own tributary strategy to meet their Chesapeake 2000 Agreement water quality 

restoration commitments. Tributary strategies are river-specific cleanup strategies. West 

Virginia, New York, and Delaware are neighbors of the signatory States, and although they did 

not sign the Bay Agreement they have also made a commitment to participate in improving Bay 

water quality. 

EPA administers Chesapeake Bay Program funding under Section 117 of the Clean Water Act. 

Section 117 directs EPA to maintain the Chesapeake Bay Program Office and provide support to 

the Chesapeake Executive Council and Chesapeake 2000 Agreement signatory partners. Section 

117(b) lists the types of projects and activities EPA is authorized to fund. Under Section 117(d), 

EPA awards technical assistance and other assistance agreements to nonprofit organizations, 

State and local governments, colleges, universities, and interstate agencies for specific projects to 

implement the goals of the Chesapeake 2000 Agreement. Under Section 117(e), EPA awards 

assistance agreements to States for overall implementation and monitoring. 

The EPA Office of Inspector General has initiated a series of studies to examine challenges and 

opportunities affecting the ability to achieve and sustain water quality goals in the Chesapeake 

Bay. In this series, we are focusing on principal contributors of point and nonpoint source 

contamination. This audit of Bay grants complements this series. 

EPA Assistance Agreements Supported Restoring the Bay 

In fiscal years 2003, 2004, and 2005, Congress appropriated $23 million each year for EPA’s 

Chesapeake Bay Program. In each of those years, EPA awarded about $8 million for State 

implementation grants and $7 million for technical and other assistance agreements (project 

grants). EPA used the remaining $8 million to fund EPA personnel and office management, 

interagency agreements, and congressional earmarks. Details on what we found regarding the 

implementation grants and specific project grants follow. 

2 
EPA awarded assistance agreements (grants) that contributed toward meeting the goals of the 

Clean Water Act and the Chesapeake 2000 Agreement. These grants funded activities designed 

primarily to: reduce the nutrients and sediment entering the Bay and its tributaries, monitor 

ongoing efforts to restore Bay water quality, model (estimate) the results of Bay implementation 

strategies, and accomplish the goals of the Chesapeake 2000 Agreement. The funded activities 

included the States’ restoration programs, which designed and installed best management 

practices, monitored the progress and results of ongoing projects, and informed EPA’s partners 

and the public of their impacts on Bay water quality. These major areas of concentration have 

contributed to EPA’s efforts in restoring the Chesapeake Bay. 

EPA estimated, based upon computer modeling, that as of March 2006 the program partners 

have achieved 37 percent of the nitrogen reduction goal, 53 percent of the phosphorus reduction 

goal, and 47 percent of the sediment reduction goal. 

Figure 1 below is a brief representation (logic model) of how funded grant activities contribute to 

restoring the Bay. For a more detailed picture, see Detailed Logic Model on Chesapeake Bay 

Program Use of Assistance Agreements – which we prepared – in Appendix B. 

 Figure 1: Logic Model on Chesapeake Bay Program Assistance Agreement Use 

Activities Outputs Short-Term Outcomes Long-Term Outcomes 

Implementation Nutrient reduction Site-specific load Bay waters, habitats, and 

grants strategies designed and reductions living resources restored 

installed 

Monitoring Ongoing efforts Known water quality Bay waters removed from 

measured results and status Impaired List 

Modeling Estimates of results Improved implementation Strategies achieve water 

strategies quality restoration 

Outreach Publications on Bay Increased public awareness Bay partners and the public 

health and progress of how daily actions continue to maintain water 

impact the Bay quality 

Source: EPA Office of Inspector General analysis 

State Implementation Grants Focused on Reducing Nutrients and Sediment 

Entering the Bay 

During 2005, EPA provided $2.3 million each to Maryland, Pennsylvania, and Virginia in 

overall implementation grants for the Chesapeake Bay Program. States were required to match 

that amount. State workplans described the activities the States planned to conduct to achieve 

their State tributary strategies. Each of the tributary strategies provided long-term goals for 

nutrient and sediment reductions to restore the Bay. Further, each State spent significantly more 

than the Federal funding they received for restoring the Bay. For example, according to 

Maryland officials, the State spent $292 million in 2005 on restoring the Bay; of that amount, 

3 
10 percent came from the Federal Government (EPA as well as other Federal agencies). Details 

on activities undertaken by the three States follow. 

Maryland: The State’s 2005 implementation grant addressed four major objectives: 

water quality protection and restoration, vital habitat protection and restoration, 

stewardship and community engagement, and governance. Under the State’s work plan, 

staff are expected to carry out many tasks, including: 

• Provide grants to Maryland farmers to install best management practices.1 

• Manage nutrient removal projects from specific facilities. 

• Compile discharge monitoring data from 310 point sources and 10 industrial 

wastewater treatment facilities. 

• Analyze and estimate nutrient loads to show the State’s progress in meeting 

nutrient reduction goals. 

• Analyze and assess trends in water quality, habitat, and aquatic species relative 

to nutrient load changes. 

• Educate farmers so they can become certified to write their own nutrient 

management plans. 

• Train 150 producers in 14 counties on how to calibrate their equipment and take 

manure and soil samples. 

All of the above activities contributed to Maryland’s tributary strategy by either focusing 

on reducing nutrients and sediments entering the Bay or monitoring ongoing efforts to 

assess impact and effectiveness. Maryland's 2010 tributary strategy goals were to reduce 

nitrogen and phosphorus by 69 percent from 1985 levels and sediment by 43 percent. 

Pennsylvania: The State’s 2005 State implementation grant included 10 objectives. 

Under these 10 objectives, Pennsylvania proposed to: 

• Complete 132 total maximum daily load studies. 

• Submit data to EPA on point and nonpoint source reductions. 

• Conduct nutrient monitoring. 

• Provide training to technical field staff. 

• Educate various audiences, including farmers and local government officials. 

• Install 300 best management practices. 

• Complete 150 nutrient management plans. 

• Prepare or revise 38 County Implementation Plans. 

• Install 17 miles of stream bank fencing. 

• Conduct two Watershed Academy training courses. 

The workplan also included funding for technicians, engineers, and engineering assistants 

in the conservation districts. The technicians help landowners develop nutrient 

management plans and install best management practices. The engineering specialists 

1

 EPA’s Chesapeake Bay Program Office uses the term “best management practices” to describe practices used by 

all sectors to reduce point and nonpoint source pollution. 

4 
and assistants provide technical assistance to the conservation districts for design and 

analysis of engineering work related to installing best management practices. All of the 

State implementation grant activities are targeted toward Pennsylvania’s Tributary 

Strategy to meet the 2010 Goals of the Chesapeake 2000 Agreement. Pennsylvania’s 

Tributary Strategy goals were to reduce nitrogen by 40 percent, phosphorus by 

44 percent, and sediment by 20 percent from 1985 levels. 

Virginia: The State’s 2005 State implementation grant addressed three major objectives: 

water quality protection and restoration, sound land use and stewardship, and community 

engagement. Under the workplan, staff are to: 

• Create and revise nutrient management plans that affect 52,000 acres of land. 

• Review 150 waste permits. 

• Take and test 1,400 soil samples. 

• Make over 500 inspections and field visits to farms, tidal areas, and other sites. 

• Engage 150 local governments and key stakeholders in tributary strategies. 

• Participate in a multitude of roundtable and educational events. 

All projects focused on reducing nonpoint source pollution in the Chesapeake Bay and 

implementing the Chesapeake 2000 Agreement and Virginia tributary strategies. 

Virginia’s 2010 tributary strategy goals were to decrease the State’s 1985 baseline 

nitrogen load level by 47 percent, lessen its phosphorus load level by 57 percent, and 

reduce its sediment amount by 44 percent. 

EPA has two primary means to ensure results and outcomes from State implementation grants – 

review State-submitted data, and review the States’ semi-annual progress reports. States submit 

data to EPA from monitoring and implementation efforts. Monitoring efforts produce data on 

water quality and nutrient and sediment levels, enabling EPA to track progress, estimate future 

pollution levels, and assess the overall condition of the Bay. Implementation efforts produce 

data – such as the location of and type of best management practices installed – that EPA can use 

to estimate future pollution levels. States also submit semi-annual progress reports to EPA 

detailing accomplishments under the grants. The States provide information specific to each 

workplan objective, including: a comparison of actual versus anticipated accomplishments, 

reasons why anticipated outcomes were exceeded or not met, and information on the rate of 

expenditure under the grant versus progress. States submitted the required data to EPA timely, 

and progress reports adequately detailed State progress under the implementation grants. 

Project Grants Measured and Reported Results 

The remainder of EPA’s Bay grant funding is awarded for an assortment of specific projects. 

In fiscal years 2003, 2004, and 2005, EPA awarded a total of 110 grants for Bay projects for 

$20.9 million. We reviewed 23 of these grants, totaling nearly $4.7 million, as categorized in 

Table 1: 

Table 1: Grant Project Categories 

5 
Number of Amount of 

Category Grants Reviewed Funds Awarded 

Modeling 5 $ 1,187,860

Outreach 4 1,261,834

Chesapeake Bay Executive Council Support 2 879,176

Monitoring 3 833,531

New Practices Research 4 255,394

Protecting and Restoring Fish and Living Organisms 4 221,500 

Coordination 1 60,000 

 Total Reviewed 23 $ 4,699,295 

Source: EPA Office of Inspector General analysis 

The Maryland Assistant Secretary for Bay Programs, who is also a member of the Chesapeake 

Bay Budget Steering Committee, told us that modeling and monitoring activities in particular are 

critical. Modeling uses mathematical representations of the real world to estimate the effects of 

complex and varying environmental events and conditions. Monitoring is the collection of 

comprehensive data for a current description of the Bay. Over time, monitoring data may reveal 

trends regarding Bay water quality. Maryland’s Assistant Secretary said one should not 

implement best management practices until one knows how potential areas can affect the Bay 

(by modeling) and also know if, ultimately, water quality is improving (by monitoring). 

Additional information on what we found for each category follows. 

Modeling: States used the modeling information to set priorities and strategies for 

restoring the Bay. For example, EPA awarded two assistance agreements to the 

University of Maryland for nonpoint source data analysis. The university took State 

implementation data and entered it into a computer watershed model; once input, the 

recipient produced reports showing the costs versus the results of State implementation 

efforts. 

Outreach: EPA funded projects in support of the Clean Water Act and Chesapeake 2000 

Agreement goal to implement outreach programs for public information and to increase 

awareness. Outreach efforts are aimed at updating residents within the watershed on the 

quality of the Bay as well as how residents’ actions can affect the Bay. Activities 

included organizing media events, producing e-newsletters for the Bay program’s 

Website, disseminating fact sheets and brochures, and producing The Bay Journal. 

Chesapeake Bay Executive Council Support: One grant provided staff to Council 

subcommittees to carry out functions per Clean Water Act Section 117(b)(2)(B). The Act 

directs EPA to provide support to the Chesapeake Executive Council by implementing 

and coordinating support services and developing and making available information 

pertaining to the environmental quality and living resources of the Chesapeake Bay 

ecosystem. The other grant was to analyze Federal farm programs and provide 

recommendations to the Council regarding potential changes that could be applied in the 

Bay restoration effort, and determine whether reauthorization of Federal farm programs 

could be used to authorize additional funding for agricultural conservation practices. 

6 
Monitoring: These grants provided data analysis and monitoring information to EPA’s 

partners and stakeholders on the status and trends of Bay water quality. Monitoring 

grants enable grantees to collect water samples for analysis to measure the nutrient and 

sediment levels. EPA grantees monitored water quality in the tributaries, shallow waters, 

and the Bay main stem to measure water quality improvement progress. 

New Practices Research: Some grants funded research into new best management 

practices. One grantee received a grant to develop ideas to achieve low-cost reductions at 

wastewater treatment facilities and encourage other systems to implement similar 

strategies, and produced several suggestions that signatory States used. The other three 

project grants looked at ammonia emissions from agricultural and urban sources, to 

develop best management practices to reduce emissions. Ammonia contributes nitrogen 

to the Bay, and data collected led to a best management practice that reduces the amount 

of ammonia deposited in water and on land. 

Protecting and Restoring Fish and Living Organisms: EPA funded grants to install 

fish passages. Barriers such as large drains, dikes, water diversions, and dams prevent 

fish from migrating, keeping fish from important habitats for spawning and growing. As 

a result, several fish populations have died off or have been greatly reduced in number. 

Fish passage projects improve the ability of fish to swim upstream, past these barriers. 

Protecting and restoring living resources is a goal of the Chesapeake 2000 Agreement 

and a requirement of the Clean Water Act Section 117. 

Coordination: The grant provided for the examination of local ordinances and 

comparison of those ordinances to model ordinances to see how local regulations can be 

revised. Recognizing that growth in the Bay area will continue, the grant is designed to 

support low impact development to minimize the amount of stormwater runoff. 

Conclusion 

We determined that EPA effectively awarded grant funds toward projects that should maximize 

environmental benefits in the Chesapeake Bay. The State implementation grants and project 

grants we reviewed contributed toward EPA’s Clean Water Act goals or one or more of the goals 

of the Chesapeake 2000 Agreement. EPA funded activities, such as implementation and 

outreach, which contributed to localized load reductions. Monitoring the effects of those 

activities allowed EPA to measure progress toward achieving improved water quality. Modeling 

estimates long-term effects and demonstrates what reductions and results EPA and its partners 

should expect from future efforts. Lastly, EPA awarded other project grants that increased 

citizens’ awareness of how their practices at home can impact the Bay, developed new best 

management practices, and helped to restore the Bay’s living resources. While EPA and its 

partners agree that there is much work to be done, the grants we reviewed should provide 

environmental benefits that contribute to restoring the Bay. 

EPA’s Chesapeake Bay Program Office concurred with the conclusion in our draft report. The 

office’s response is in Appendix C. 

7 
Status of Recommendations and 

Potential Monetary Benefits 

POTENTIAL MONETARY 

RECOMMENDATIONS BENEFITS (in $000s) 

Planned 

Rec. 

No. 

Page 

No. Subject Status1 Action Official 

Completion 

Date 

Claimed 

Amount 

Agreed To 

Amount

 No recommendations 

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

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

U = recommendation is undecided with resolution efforts in progress 

8 

1 
Appendix A 

Scope and Methodology 

We conducted this audit in accordance with Government Auditing Standards, issued by the 

Comptroller General of the United States. We obtained an understanding of the program through 

analysis of the laws, regulations, and guidance pertaining to grants awarded through the 

Chesapeake Bay Program and an evaluation of internal controls over them. Our understanding 

of the internal controls was gained through the performance of the procedures previously 

outlined. We did not test the validity or reliability of the data in the Integrated Grants 

Management System because the data was not significant to our findings. We performed our 

audit field work from February to April 2006. 

We visited EPA Region 3 in Philadelphia, Pennsylvania, and the Chesapeake Bay Program 

Office in Annapolis, Maryland. We interviewed the Chesapeake Bay Program Director and 

Deputy Director, Associate Directors, and project officers. We sought to determine whether 

EPA effectively targeted funds toward grant projects that maximize environmental benefits 

based on the goals of the Clean Water Act and the Chesapeake 2000 Agreement. We did not 

assess State decisions regarding the type or location of best management practices they 

implemented. We also did not review proposed grant projects that EPA elected not to fund. 

Finally, we did not assess the adequacy of the Chesapeake 2000 Agreement. 

EPA awarded about half of the $15 million in grant funding each year to three States: Maryland, 

Pennsylvania, and Virginia. We examined all of these State implementation grants for fiscal 

years 2003, 2004, and 2005. We reviewed the files and visited the Maryland Department of 

Natural Resources in Annapolis, Maryland; the Pennsylvania Department of Environmental 

Protection in Harrisburg, Pennsylvania; and the Virginia Department of Conservation and 

Recreation in Richmond, Virginia. We interviewed the State managers and grants management 

staff. We visited three sites that implemented best management practices funded through EPA 

State implementation grants: a “green” roof site in Richmond, Virginia; a dairy farm in Lebanon 

County, Pennsylvania; and riparian forest buffers in Frederick and Monocacy, Maryland. 

We extracted all Chesapeake Bay project grants for fiscal years 2003, 2004, and 2005 from 

EPA’s Integrated Grants Management System. From that list, we selected a random sample for 

review. Out of the 110 grants awarded during that period totaling $20.9 million, we reviewed 

the project officer files for 23 project grants totaling $4.7 million while visiting the Chesapeake 

Bay Program Office. We grouped the project grants into seven general categories. We did not 

observe any deficiencies in the project officer files, and the workplans and deliverables 

confirmed the information the project officers provided during the interviews. 

Government Auditing Standards require auditors to design the audit to detect violations of legal 

and regulatory requirements, contract provisions, or grant agreements, including fraud and abuse. 

The team did not detect any information or documentation that appeared to be fraudulent in 

nature or suggested a pattern of fraud. 

There were no pertinent prior audit reports on the issues that we reviewed. 

9 
Inputs Activities Outputs Customers Short-Term Intermediate 

Outcomes Outcomes 

Congressional Implement and coordinate Best management practices State appropriation to EPA: about $23 million per year Funding from other Federal AgenciesFunding from States Chesapeake Bay Program Office staff 

science, research, modeling, and monitoring Collect, analyze, and manage environmental data Develop and distribute information on environmental quality Track implementation activities Evaluate restoration progress 

developed and implemented Strategies for pollution reduction developed Strategies for restoring ecosystem functions Ecosystem-based fisheries management plans Modeling and monitoring data collected and submitted to EPA 

governments: MD, PA, VA, NY, DE, WV, and District of Columbia Other Federal agencies Local governments Public living in Bay watershed 

Changes to fertilizer products produced and applied within the Bay watershed Site-specific load reductions Federal, State, and local government priorities better targeted 

Reduction of annual nitrogen loads by 110 million pounds or 39 percent Reduction of annual phosphorus loads by 6.3 million pounds or 33 percent Reduction of annual 

Staff from other Federal Agencies State personnel: MD, PA, VA, NY, DE, WV, and District of Columbia Clean Water Act 

Help Bay partners develop and implement specific action plans Coordinate actions of EPA with other partners Implement public outreach programs 

Reports and publications on Bay health and restoration progress provided to the public Research resulting in improved information and management actions Progress and Final Reports 

Businesses in Bay that depend on crabs, oysters, etc.Farmers and landowners 

Increased public awareness of how their daily actions affect the Bay Waterway access improvements for fish to migrate, spawn, and grow 

sediment loads by 890,000 tons or 18 percent More acres of forest buffers, wetlands, and sensitive lands preserved 

Chesapeake 2000 Agreement State Tributary Strategies 

Support Chesapeake 2000 Agreement goals: living resources, vital habitat, water quality, sound land use, and stewardship and 

Executive Council meetings Final reports and data submitted to EPA 

community engagement Fish passages installed 

Ï Ï Ï Ï Ï Ï 

Externalities 

Changes in Federal and State funding levels, population increases, land development, weather, and introduction of non-native predatory aquatic specie

Source: EPA Office of Inspector General analysis 

Detailed Logic Model on Chesapeake Bay Program Use of Assistan

10 
Appendix C 

Agency Response 

DATE: August 24, 2006 

SUBJECT: Draft Audit Report 

 EPA Grants Supported Restoring the Chesapeake Bay 

 Assignment No. 2005-01688 

FROM: Rebecca Hanmer 

Director, Chesapeake Bay Program Office 

TO: Janet Kasper 

Acting Director, Assistance Agreement Audits 

Thank you for the opportunity to review your Draft Audit Report, No. 2005-01688. 

We concur with the conclusion in this review of the Chesapeake Bay Program’s assistance agreements. 

As you know, we devote important resources and oversight to this effort, and we are especially pleased to 

read your conclusion: “We determined that EPA effectively awarded grant funds toward projects that 

should maximize environmental benefits in the Chesapeake Bay.” (Draft Report, p. 7). 

Thank you again for the opportunity to review and comment on this Draft Report. We look forward to 

receiving the final copy. 

11 
Appendix D 

Distribution 

Office of the Administrator 

Regional Administrator, Region 3 

Director, Chesapeake Bay Program Office 

Deputy Director, Chesapeake Bay Program Office 

Associate Director, Chesapeake Bay Program Office 

Audit Followup Official 

Audit Followup Coordinator 

Audit Followup Coordinator, Office of Water 

Regional Audit Followup Coordinator, Region 3 

General Counsel 

Associate Administrator for Congressional and Intergovernmental Relations 

Associate Administrator for Public Affairs 

Acting Inspector General 

12