GMPO's Planning, Organizing, and Funding the 

1995 Gulf of Mexico Symposium 

TABLE OF CONTENTS

EXECUTIVE SUMMARY

CHAPTERS 

1 - INTRODUCTION

PURPOSE 

BACKGROUND 

SCOPE AND METHODOLOGY 

2 - POTENTIAL IMPROPER AUGMENTATION OF FEDERAL APPROPRIATIONS

BACKGROUND 

USE OF FEES AND DONATIONS FOR A FEDERAL EVENT 

CREATED A POTENTIAL UNAUTHORIZED AUGMENTATION 

CONCLUSION 

RECOMMENDATIONS 

3 - COOPERATIVE AGREEMENT MODIFICATION WAS PROCUREMENT NOT ASSISTANCE

BACKGROUND 

IMPROPER USE OF TGLO COOPERATIVE AGREEMENT 

USE OF COOPERATIVE AGREEMENT VIOLATED STATE LAW 

CONCLUSION 

RECOMMENDATIONS 

4 - AGENCY GUIDANCE NOT FOLLOWED

INADEQUATE SITE SELECTION PROCESS 

DIRECTED SUBCONTRACTING AND PRIVITY OF CONTRACT 

UNNECESSARY AND UNREASONABLE SYMPOSIUM COSTS 
RECOMMENDATIONS 

5 - ASSOCIATION WITH GMF CREATED A POTENTIAL COI AND EPA LIABILITY

RECOMMENDATIONS 

APPENDICES 

APPENDIX I: GLOSSARY OF ACRONYMS AND ABBREVIATIONS

APPENDIX II: GMP AND GMPO ORGANIZATION

APPENDIX III: REPORT DISTRIBUTION

CHAPTER 1

INTRODUCTION

PURPOSE

During fiscal 1994, the EPA Office of Inspector General (OIG) reviewed various activities of the Office of 

Water's Gulf of Mexico Program (GMP). The overall objective was to gain an understanding of the GMP and 

identify any high risk areas and/or activities that warranted further review or audit. 

One activity selected for further review was the Gulf of Mexico Program Office's (GMPO) plan for the 1995 

GMP Symposium to be held in Corpus Christi, Texas. Our preliminary review identified potential issues 

surrounding the planning, organization, and funding for the biennial symposium. Specifically, we were 

concerned that while the GMPO was officially promoting the symposium as a "co-sponsored event" with other 

Federal, state, and private organizations, the actual planning and funding for the 1995 Symposium appeared to 

be Federally directed and controlled through the GMPO and its on-site contractor (see Chapter 2 and Appendix 

II). As a result, we initiated an audit to: (1) evaluate the organizational structure of the 1995 Symposium; (2) 

determine GMPO's and other Federal agency involvement in planning and funding the event; and (3) determine 

whether the 1995 Symposium implementation and funding was consistent with applicable laws, regulations, and

Agency guidelines related to Federally sponsored conferences. 

BACKGROUND

In 1988, EPA Regions 4 and 6 agreed to establish a program to develop and implement a strategy for managing 

and protecting the resources of the Gulf of Mexico and associated coastal environments. As a result, the GMPO 

was organized and located at the John C. Stennis Space Center near Bay St. Louis, Mississippi. In its program 

literature, the GMPO described the GMP as a regionally focused program established to facilitate the 

cooperation and coordination of various Federal, state, and local agencies, academia, and private industry 

groups which share in and have significant interests in the coastal and marine resources of the Gulf. The 

GMPO, through the Policy Review Board (PRB) and related subcommittees (a Federal advisory committee 

structure), provided the organizational mechanism necessary to implement the GMP. 

GMPO Staffing

The GMPO, although established by EPA, is staffed by administrative and technical personnel from EPA and 

various other Federal organizations. According to GMPO staffing charts (February 7, 1995), 14 out of 34 listed 

personnel, or 41 percent of the GMPO workforce, were EPA employees. Other Federal agencies staffed six 

positions, or 18 percent of the workforce, while 14 EPA contractor and cooperator personnel made up the 
remaining 41 percent. The Gulf states have not yet provided any direct support to GMPO operations in the form 

of personnel or funding. The GMPO Director, Deputy Director, and the Chief Scientist have always been EPA 

employees. These individuals supervised the day-to-day operations of the GMPO including the activities of 

Federal personnel representing other Federal agencies. 

Program Management Responsibility

Prior to April 1994, GMPO reported directly to the Assistant Administrator for Water. While the Assistant 

Administrator for Water still serves as the National Program Manager for the GMP, the GMPO Director now 

reports to the Region 4 Deputy Administrator (footnote 1) who currently serves as the Federal Co-Chair of the 

PRB's Management Committee (MC) (footnote 2). The MC Federal Co-chair position rotates between Region 4 

and Region 6 every two years. Therefore, the day-to-day management and administration of the program resides 

with the region that holds the MC Federal co-chair position. 

History and Organization of the National GMP Symposium

An important part of GMPO's management strategy (footnote 3) is the development of an effective public 

information and education outreach program. As a part of this program, GMPO planned and conducted "Statusof-the-Gulf" symposiums, convened as a national biennial event. The symposium would provide an opportunity 

for people with expertise in various areas of science and management around the Gulf and the Nation to 

communicate and centralize their knowledge of the complex issues that affect the Gulf. 

In 1990, GMPO held its first GMP symposium in New Orleans, Louisiana. In 1992, a second symposium was 

held in Tarpon Springs, Florida. A third symposium was hosted in Corpus Christi, Texas from March 29 

through April 1, 1995. The actual total cost of the 1990 and 1992 symposiums was $196,000 and $307,000, 

respectively. Federal appropriations provided the majority of the funding for all three symposiums. Additional 

resources were generated for all three symposiums by charging registration and exhibitor fees and soliciting 

private donations. The 1995 registration and exhibitor fees were collected by a GMPO contractor and 

transferred to a cooperator under an off-site cooperative agreement for payment of symposium costs. The 

donations were generated and made available to pay symposium costs through an informal arrangement 

between GMPO, Texas General Land Office (TGLO), and the Gulf Of Mexico Foundation (GMF). 

SCOPE AND METHODOLOGY

We conducted a survey of the GMPO from April through August 1994. As a result of this survey, we initiated 

an audit of the planning, organization, and funding of the GMPO sponsored GMP symposium which was held 

in Corpus Christi, TX on March 29 through April 1, 1995. Our primary audit objectives were to: (1) evaluate 

Federal control, planning, and implementation of the symposium and (2) determine that symposium 

implementation and funding was consistent with applicable laws and regulations. Audit fieldwork was 

conducted from October 1994 through July 1995. 

To establish the purpose of GMPO sponsored symposiums and GMPO's approach toward organizing, planning 

and funding the 1995 Gulf of Mexico Symposium, we interviewed GMPO, Region 4, and Region 6 personnel 

involved in the symposium planning process. We also visited and followed up with the on-site contractor 

providing logistical support for the 1995 Symposium, the TGLO which was involved through a cooperative 

agreement, and the GMF which provided private donations to support symposium activities. From these 

organizations, we also obtained and reviewed files and other documentation related to symposium planning, 

implementation, and funding. This included meeting summaries for the PRB and its symposium steering 

committee; contract work assignments; subcontracts; the TGLO cooperative agreement and modifications, 

status reports, correspondence; symposium literature; OMB and Agency guidance on conference planning; 

invoices for symposium costs; and other documentation found related to the 1995 GMP Symposium. During the 
conduct of this audit, several legal issues were identified which were discussed in detail with the Office of 

General Counsel (OGC), OIG Division. 

This audit was conducted in accordance with Government Auditing Standards (1988 revision) issued by the 

Comptroller General of the United States. Our audit included an evaluation of existing controls, policies and 

procedures specifically related to the promotion of agency sponsored conferences. The findings in the report 

include any control weaknesses identified during the audit and our recommendations to correct the deficiencies, 

where appropriate. 

Certain background and summary information related to the 1995 Symposium was extracted from data 

maintained by GMPO, the GMPO's on-site support contractor, cooperator (TGLO), and the GMF, a private 

foundation. No audit tests were performed to evaluate the adequacy of the controls over the accumulation and 

accuracy of the information provided. However, the data we accumulated and present in this report was 

provided to the respective organizations for their review and nothing was brought to our attention which would 

indicate that the data as presented was inaccurate. Nevertheless, we can not and do not attest to the accuracy or 

completeness of the data provided. 

Other issues did come to our attention which we believed sufficiently material to warrant further audit effort. 

However, these issues were unrelated to the GMP symposium process and have either been addressed in a 

separate OIG report or are currently being developed for a future report. 

CHAPTER 2 

POTENTIAL IMPROPER AUGMENTATION OF

FEDERAL APPROPRIATIONS

GMPO's control over symposium planning/implementation and the collection and use of fees and donations 

through intermediaries (contractor, cooperator, and a nonprofit foundation) to pay obligations it incurred in 

implementing the 1995 GMP Symposium may have created an improper augmentation of EPA appropriations. 

Much of the cost paid or planned to be paid from these fees and donations were contracted for and incurred by 

GMPO's contractor (footnote 4) and, thus, represented a legal obligation and liability of the Agency. Therefore, 

we concluded that the fees and donations used to pay GMPO's financial obligations, whether through a 

contractor, cooperator or a foundation, represented miscellaneous receipts or gifts as defined under Federal 

appropriations law. 

According to 31 U.S.C 3302(b), the "miscellaneous receipts statute," a Federal agency can not retain and use 

miscellaneous receipts and/or gifts, whether received directly or by an agent for the Government, to augment its 

own appropriation unless authorized by statute or in the case of a repayment (footnote 5). EPA has no 

congressional authorization to retain and use miscellaneous receipts or gifts in support of a symposium. Without 

authorization, miscellaneous receipts must be deposited directly into the general fund of the U.S. Treasury. 

Agency Actions

GMPO had originally tasked the on-site contractor with receiving the registration/exhibitor fees and tracking 

both the fees and private donations. The contractor also coordinated the use of these monies in consultation with 

GMPO to pay symposium costs which were not allowable for payment from Federal funds (see Chapter 4). 

However, as a result of our audit and advice received from GAD, GMPO learned that fees and donations 

received by GMPO's contractor could not be used to pay the unallowable costs. Also, GAD was aware that if 

the GMPO contractor received the fees and donations an improper augmentation would occur. A March 1995 

memorandum from the Director, Office of Grants and Debarment, to the Acting Assistant Administrator for 

Administration and Resources Management concerning the symposium stated: 

If a contract had been used, any fees collected would have to have been returned to the U.S. Treasury. 
In order to avoid what they could not do under the contract, GMPO amended a cooperative agreement with the 

Texas General Land Office for the accumulation and use of the fees to pay these unallowable costs. However, 

we concluded the TGLO was tasked under the modification to act as an intermediary for GMPO and, therefore, 

the modification was procurement of services not assistance (see Chapter 2). In addition, the GMPO, through 

TGLO, instructed the GMF to pay certain symposium costs from its donations in lieu of the contractor receiving 

the donations and paying the costs. However, the on-site contractor, at GMPO's direction, had contracted for 

many of the symposium services provided and, therefore, the costs paid by GMF and TGLO from the fees and 

donations were primarily legal obligations of GMPO and the on-site contractor. Both the TGLO and the GMF 

repeatedly received instructions from the GMPO or its contractor on the use of the fees and donations and what 

symposium cost would be paid from these funds. 

BACKGROUND

The 1995 Gulf of Mexico Symposium was advertised as a GMP sponsored conference involving several 

Federal, state, and local agencies, academia, and private industry groups (footnote 6). However, the actual 

planning, organization, implementation, and funding of the 1995 Symposium was principally a Federal 

undertaking, controlled by EPA and other Federal contributors through the GMPO. Fifty-seven percent of the 

planned funding for the symposium was entirely from Federal appropriations with the remainder of the funding 

to come from symposium registration and exhibitor fees and private donations. The fees and donations were to 

be used to pay for entertainment, luncheons, receptions, invitational travel, and other costs that could not be 

paid from Federal appropriations. GMPO's contractor was to collect the registration and exhibitor fees and the 

GMF was to solicit donations. GMPO's contractor was to use the fees and donations to pay the costs 

unallowable for Federal funding. 

The same funding sources had also been used for the 1990 and 1992 GMP symposiums. The funding sources 

and amounts for the 1990, 1992, and 1995 symposiums are shown below: 

Federal Funds: (footnote 7)

 1995 1995 1992 1990

 Estimate Actual Actual Actual

 EPA $ 73,000 $161,000

 Other Federal Agencies 136,000 65,000 

 Total Federal $209,000 $226,000 $174,000 $120,000

Registration/Exhibit Fees 82,000 34,000 68,000 66,000

Private Donations 78,000 32,000 65,000 10,000 

Total Cost* $369,000 $292,000 $307,000 $196,000

* Note: The 1995 actual funds were obtained by OIG from the organizations involved after conclusion of the 

1995 Symposium. The EPA dollar amount represents the excess of costs, as determined by OIG, over available 

funding from all other sources. GMPO had not provided OIG with a final accounting of available funds and 

related costs as of July 31, 1995. Therefore, the actual funding available (including that required to be 

contributed by EPA/GMPO) may differ once GMPO finalizes all symposium related transactions. 

The GMPO not only controlled the funding for the 1995 Symposium but also controlled the planning and 

implementation as well. This control was exercised through the GMPO's PRB advisory committee which was 

dominated by Federal agencies. This control structure is detailed in Appendix II. A five member Executive 
Symposium Steering Committee (ESSC) under the PRB was the principal symposium planning committee. The 

ESSC was dominated by three EPA representatives with close ties to the GMPO. Federal control of the event 

was established by the GMPO Director at the first ESSC meeting when he told ESSC members that the PRB 

would review symposium recommendations "..because it is the PRB [Federal agencies] that sponsor and 

contribute financially to the symposium." In addition, GMPO furthered its control over the event by tasking its 

on-site contractor to coordinate implementation of the symposium with the GMPO, PRB, ESSC, and track 

leaders (footnote 8). Specific contractor tasks included tracking budget requirements, expenditures, including 

Federal and non-profit funding (footnote 9) and donations, and collecting, tracking, and disbursing registration 

and exhibitor fees. The GMPO work assignment manager for this task was also a member of the ESSC and was 

referred to as the "Symposium Coordinator." This GMPO employee provided direct guidance to the contractor 

in implementing the 1995 Symposium. The collection and disbursement of fees was subsequently removed 

from the contractor's work assignment and transferred to a cooperative agreement when concerns were raised 

regarding the propriety of the GMPO contractor receiving the fees and paying for unallowable costs. The task 

was included in a modification to a TGLO cooperative agreement on February 6, 1995, less than two months 

before the symposium was held. 

USE OF FEES AND DONATIONS FOR A FEDERAL EVENT 

CREATED A POTENTIAL UNAUTHORIZED AUGMENTATION

Because GMPO (1) controlled symposium funding and implementation and (2) directed the GMF and TGLO to 

use fees and donations to pay Federal obligations, we concluded that an improper augmentation of Federal 

appropriations may have occurred. In addition, the fees and donations were used by GMF and TGLO to pay 

certain symposium events and expenses, a potential noncash gift to GMPO. According to 16 Comptroller 

General 911 (1937), a government agency may not accept gifts of money or other property in the absence of 

specific statutory authority. Further, 25 Comptroller General 637, 639 (1946) defined a gift as "gratuitous 

conveyances [emphasis added] or transfers of ownership in property without consideration." Further, 

Comptroller decision B-139992, August 31, 1959, provides: 

Acceptance of a gift by an agency lacking statutory authority to do so is an improper augmentation. If an agency 

does not have statutory authority to accept donations, it must turn the money into the Treasury as miscellaneous 

receipts. 

Our review of events subsequent to the 1995 Symposium confirmed that GMPO, either directly or through the 

on-site contractor, exercised significant control over TGLO's and GMF's use of the fees and donations. Invoices 

for symposium costs were usually received by the contractor (unless contracted and paid directly by GMF or 

TGLO), who had contracted for the services billed as part of the GMPO work assignment. The contractor would 

pay for allowable costs from Federal appropriations, the remaining unallowable costs on invoices were 

forwarded to either TGLO or the GMF (through TGLO) for payment from available fees and donations. 

Personnel at both the TGLO and the GMF confirmed that the use of these funds was orchestrated from the 

GMPO. 

CONCLUSION

Because of the way the GMPO planned and implemented the 1995 Symposium and arranged for the use of the 

fees and donations to pay its legal obligations, we believe that the GMPO was in constructive receipt of these 

funds. Arranging for the collection of registration and exhibitor fees (miscellaneous receipts) and the 

solicitation of private donations (gifts) without proper statutory authority from Congress and then using those 

funds, either directly or indirectly, to defray the cost of a Federally sponsored event constitutes an unauthorized 

augmentation of the Agency's regular appropriation(s). 
In order for GMPO to establish a truly intragovernmental, privately sponsored symposium, GMPO will have to 

give up some control of the event. To use fees and donations without creating a potential improper 

augmentation, GMPO needs to allow the host states and/or private organizations to plan, fund, and implement 

future symposiums. GMPO funds can be transferred to the host state or organizations through grants and/or 

cooperative agreements. GMPO can contribute to the planning and funding, but GMPO must divest itself from 

the collection and use of fees and donations. 

RECOMMENDATIONS

We recommend that the Assistant Administrator for Water: 

2-1 Obtain a written legal opinion from OGC concerning the potential augmentation of Federal appropriations 

through the collection of fees and donations, whether through a contractor, cooperator, or public foundation, to 

pay Federal obligations for costs unallowable for Federal funding. 

2-2 If fees and donations are to be used for future symposiums, require a legal review of the symposium 

planning and funding to preclude any future improper augmentations of EPA appropriations. 

2-3 Consider allowing host states or some other appropriate organization to plan and implement future 

symposiums to include contracting for services and collecting fees and donations. GMPO can award a grant or 

cooperative agreement to the host organization in order to contribute financially to the symposium effort. 

CHAPTER 3

COOPERATIVE AGREEMENT MODIFICATION WAS

PROCUREMENT NOT ASSISTANCE

The GMPO modified a TGLO cooperative agreement to obtain services and pay costs it could not legally obtain 

under a contract; specifically, the accumulation of registration/exhibitor fees that would represent an improper 

augmentation of EPA appropriations and the payment of symposium costs that were unallowable for Federal 

funding. Because (1) the modification was narrow in scope and provided for no independent action by the 

recipient, (2) the services provided were totally directed by the GMPO through its contractor for the direct 

benefit of GMPO, and (3) the fees were to be used primarily to pay costs incurred by GMPO and its contractor, 

we concluded that TGLO acted as an intermediary (footnote 10) for the GMPO in accumulating these fees and 

paying specific symposium costs. Therefore, the cooperative agreement modification was for the procurement 

of services not assistance. 

Under the cooperative agreement modification, the registration and exhibitor fees were classified as "program 

income." However, the fees were not "program income" as defined in EPA regulations and did not represent 

gross income directly generated by any TGLO supported activity or earned as a result of the TGLO agreement. 

The registration and exhibitor fees were merely received by TGLO from GMPO's contractor and held to pay 

costs identified by GMPO through the same contractor. In addition, the use of the TGLO cooperative agreement 

to pay for services that TGLO did not approve or contract for violated State law. 

In December 1994, GMPO received GAD approval for the modification to the TGLO cooperative agreement. 

However, GMPO documentation indicated that GAD approved the modification based on the Symposium and 

cooperative agreement, as a whole, being for a public purpose. GAD apparently did not consider the 

modification as a stand-alone agreement. Also, GAD may have approved the modification without all of the 

relevant information including the fact that the costs to be paid were GMPO obligations. Since the modification 

changed the scope of the agreement and added "program income," we believe that the modification should have 

been considered alone in determining whether it complied with the FGCAA. We could not locate any EPA 

policy that specifically addressed cooperative agreement modifications; however, our contact with other EPA 
grant specialists indicated that modifications have to be considered individually for compliance with laws and 

regulations. 

BACKGROUND

Early in the symposium planning process, GMPO's use of a grant or cooperative agreement to provide the 

logistical support for the 1995 Symposium was eliminated as an option. An early symposium steering 

committee meeting summary stated, "EPA Headquarters and Regional Offices indicate a grant mechanism 

would not [emphasis added] be appropriate for this symposium." Therefore, GMPO selected the contract as the 

appropriate funding mechanism and tasked its on-site contractor with providing the logistical and administrative 

support services needed to coordinate and implement plans for the 1995 Symposium. 

One of the tasks outlined for the contractor under the work assignment was collecting, tracking, and disbursing 

registration/exhibitor fees and accounting for all the funds provided -- including private donations. The plan was 

for the contractor to use available funds to pay, among other costs, the housing and transportation of students, 

educators, and both domestic and international guests to attend and participate in symposium activities. 

Because recent OIG reports had criticized EPA noncompliance with 31 U.S.C. 1345 restrictions on invitational 

travel for non-Federal personnel and EPA use of contractors and contract funds to pay for such invitational 

travel, GMPO's use of a contractor for this purpose became a concern to GMPO management. In a March 1995 

memorandum, GAD also expressed concern that use of a contractor to collect the fees would represent an 

augmentation of EPA's appropriations. In early December 1994, GMPO contacted GAD for advice on using the 

TGLO's existing GMP state coordinators grant (footnote 11) for the collection and use of symposium 

registration, exhibitor fees in lieu of the on-site contractor. Specifically, GMPO asked about the propriety of 

TGLO using the fees to pay for: 1) rental fees for the opening ceremony on the U.S.S. Lexington; 2) invitational 

travel costs for student speakers and their chaperons; 3) invitational travel costs for international speakers; 4) 

coffee, soft drinks, continental breakfasts, and snacks during the symposium; 5) rental fees for meeting rooms; 

and 6) entertainment costs (i.e., singers, dancers, luncheon speaker fees). 

GAD informed GMPO in December 1994 that TGLO could collect the registration and exhibitor fees and that 

the fees could be classified as program income under the grant. However, GAD cautioned that it would be 

inappropriate for the recipient to use the registration fees for entertainment. According to GAD, the other costs 

were allowable for payment from grant funds as long as GMPO could support their necessity and 

reasonableness. 

On February 6, 1995, seven weeks before the 1995 Symposium, the TGLO cooperative agreement was 

modified, under a no-cost extension from April 1995 until September 1995. The overall cooperative agreement 

project title and description (footnote 12) did not change; however, the TGLO task to promote the 1995 GMP 

Symposium in Corpus Christi, which was added in August 1994 (second modification), was expanded under 

this third modification to include collecting and disbursing the symposium registration and exhibitor fees. 

IMPROPER USE OF TGLO COOPERATIVE AGREEMENT

Although the symposium and the TGLO cooperative agreement appeared to be for a legitimate grant purpose, 

i.e., public support and stimulation, the February 6 modification, in our opinion, represented the acquisition of 

services that GMPO could not legally procure under a contract and that were for the direct benefit of the 

GMPO. Under this modification, the TGLO merely performed services at the explicit direction of the GMPO or 

its contractor. As a result, TGLO acted as an agent for the GMPO in accumulating the fees it received from 

GMPO's contractor and paying the invoices it received from the same contractor. TGLO used the fees to pay 

costs that were legal obligations of GMPO's contractor and ultimately GMPO. In addition, the fees were 

improperly classified as "program income" under the agreement modification because they were not generated 

by the agreement but by the actions of GMPO's contractor in implementing the symposium. 
The FGCAA distinguishes between the use of contracts and assistance. The Act states that an agency must use a 

procurement contract if the principal purpose is to acquire property or services for the direct benefit of the 

Federal government. Conversely, an agency should use an assistance agreement (grant or cooperative 

agreement) to transfer money, property, services, or anything of value to a recipient to accomplish a public 

purpose of support and stimulation. 

However, the modification to the TGLO cooperative agreement was not for public support and stimulation. The 

cooperative agreement was modified for the sole purpose of transferring the tasks of collecting and disbursing 

fees to TGLO in order to pay costs (primarily invitational travel) not allowable under a contract. However, 

TGLO did not collect the registration and exhibitor fees, GMPO's contractor collected the fees as part of the 

symposium registration process and merely forwarded these fees to TGLO. 

The General Accounting Office (GAO) in its Principles of Appropriation Law, Volume 1, Chapter 2, states that 

grant funds lose their identity once awarded and, therefore, are not normally subject to the restrictions on the 

use of Federal funds under 31 U.S.C. 1345 related to invitational travel. However, GAO further states: 

...an agency may not use the grant mechanism for the sole purpose of circumventing 31 U.S.C. 1345, that is, to 

do indirectly that which it could not do directly 

In GAO report GGD-81-88, related to Federal agency use of assistance versus procurement, GAO specifically 

stated "...the use of an intermediary to perform accounting and bill paying services for a Federal agency" is an 

improper use of assistance. GAO indicated that such services should be procured through a contract. 

GMPO Initiated the TGLO Modification

GMPO and TGLO records show that it was GMPO not TGLO who initiated the third modification. GMPO 

wrote TGLO on December 9, 1994, instructing the project manager to immediately send a letter to GMPO 

requesting that GMPO execute a no cost extension of the Cooperative Agreement CX821488 until September 

1995. GMPO also provided the exact wording that TGLO should use in requesting the modification. TGLO 

followed these instructions exactly in its January 4, 1995, modification proposal submitted to GMPO. 

Therefore, the change in TGLO's scope of work was initiated by GMPO. GMPO's request for an amendment 

proposal from TGLO, just three months before the symposium, was the initial indication that GMPO was using 

the TGLO cooperative agreement to do what they could not do under the contract - use fees to pay costs 

unallowable for Federal funding. 

Contractor's Tasks Did Not Materially Change

The tasks performed by the contractor related to the registration process did not fundamentally change after the 

responsibility for accumulating and disbursing fees was transferred to TGLO. The actual registration process 

was still handled by the contractor and the contractor still contracted for all the logistical arrangements for the 

symposium including hotel accommodations, airline tickets, luncheons, receptions, and catering. The only 

discernable change in the contractor's responsibilities was that, after the modification, the registration and 

exhibitor checks being received, processed, and accounted for by the contractor were being bundled and mailed 

to the TGLO. TGLO had to rely completely on the GMPO contractor to identify those individuals receiving 

invitational travel and those vendors due payment from the fees. It was the contractor who was directly billed 

for the invitational travel cost (airline tickets, hotel costs, and per diem and/or mileage charges for individual 

recipients). The contractor, in consultation with GMPO, segregated the cost on each invoice as to who would be 

making the payment. 

Although TGLO did perform various tasks under the cooperative agreement to promote the 1995 Symposium, 

TGLO was not directly involved in generating the symposium registration and exhibitor fees. Also, TGLO did 

not contract directly with nor receive services from the vendors and individual travelers to whom it was to make 
payments under the modification. Therefore, TGLO's prime function under the cooperative agreement 

modification was apparently to serve as an intermediate broker of the fees generated by GMPO and its 

contractor. 

Last Minute Modification to TGLO Agreement

The validity of the purpose of TGLO modification is also questionable due to its timing. The task of collecting 

and disbursing symposium registration and visitor fees was added to the TGLO cooperative agreement only 

seven weeks (February 6, 1995) prior to the conference. This was a last minute adjustment to the sources of 

funding for the symposium to accomplish indirectly what GMPO could not legitimately do directly through its 

on-site contractor. 

The actual symposium planning process began 19 months earlier in July 1993. At the very next meeting 

(September 1993), a contract, not a cooperative agreement, was identified as the appropriate mechanism for 

providing the symposium's logistical and administrative support including the collection and disbursement of 

exhibitor and registration fees. Moving the task of collecting and disbursing registration and exhibitor fees to 

the TGLO cooperative agreement represented an attempt to rectify the problems that OIG and others had 

brought to GMPO's attention in late 1994. 

In a June 19,1995 post-symposium memorandum, which documented a meeting with between GAD and 

GMPO, GMPO delineated the chain of events which lead to the symposium organizational and funding 

problems. GMPO stated that it originally entered into a contractual agreement with the on-site contractor to 

provide the logistical services for the 1995 Symposium. The statement of work required that the contractor 

collect registration and exhibitor fees for the symposium. GMPO subsequently concluded that registration and 

exhibitor fees for a conference could not be collected through a contractual agreement and used for travel 

assistance for presenters at the symposium. GMPO further stated that, once the contractual deficiency was 

discovered, the GMPO and TGLO "... modified the existing (cooperative) agreement in good faith to collect the 

1995 Symposium fees and pay for the travel of presenters." GMPO also stated that it was TGLO who initiated 

the request for the amendment on January 4, 1995. However, as previously discussed, both GMPO and TGLO 

file documentation and/or interviews confirmed that GMPO actually initiated the modification of the TGLO 

cooperative agreement. Regardless, it was the on-site contractor who continued to collect the registration and 

exhibitor fees. 

Fees Did Not Qualify As Program Income

On December 9, 1994 and later on March 22, 1995, GAD advised GMPO that assigning TGLO the task of 

collecting and disbursing the fees by modifying the cooperative agreement was permissible. GAD further 

advised that the fees could be treated as program income and, thereby, used to pay invitational travel and other 

restricted costs. However, according to requirements of 40 CFR 31.25, the registration and exhibitor fees did 

not qualify as program income under the TGLO cooperative agreement. Under Subpart 31.25, program income 

is defined as "... gross income received by the grantee or subgrantee directly generated by a grant supported 

activity, or earned only as a result of the grant agreement." The registration and exhibitor fees were not 

"generated" or "earned" by TGLO through a grant supported activity, but merely forwarded to TGLO after 

collection by GMPO's contractor during the symposium registration process. Therefore, in actuality the 

registration and exhibitor fees were produced through the efforts of GMPO's contractor not TGLO. As a result, 

we concluded the fees represented miscellaneous receipts received by an agent for the Government (GMPO's 

on-site contractor), not program income to TGLO as indicated in the cooperative agreement. 

GAD Advice on Propriety of Modification Based on Misleading Information and Broad Scope of 

Symposium and Original Agreement
GAD advised GMPO in December 1994 that modifying the TGLO cooperative agreement to collect and 

disburse symposium fees would be proper. According to a March 1995 memorandum from the GAD Director to 

the Assistant Administrator for Administration and Resources Management, this decision was based on the fact 

that the cooperative agreement and the symposium, as a whole, were for a public purpose; support of the GMP 

and the 1995 Symposium. We agree that the purpose of the original cooperative agreement, titled "Year of the 

Gulf Texas Outreach Program," and the 1995 Symposium benefitted citizens, states, and local government, as 

well as EPA and other Federal participants in the GMP. However, the narrow purpose and scope of the 

February 1995 modification to the cooperative agreement, considered alone, did not, in our opinion, support a 

principal purpose of support and stimulation as required by the FGCAA. This modification not only added tasks 

and changed the scope of the original agreement but added expected program income of over $80,000 (original 

estimate). Prior to this modification, only about $50,000 in total EPA funds had been awarded to TGLO under 

the March 1993 cooperative agreement. 

We could not find any EPA guidance that specifically related to modifications of cooperative agreements and 

whether each modification had to meet FGCAA and EPA requirements. Our contacts with EPA grant specialists 

indicated that, not only does the original agreement have to meet the principle purpose test, but each 

modification, individually, must meet the requirements of the FGCAA. In addition, GAO report GGD-81-88 

implied that each cooperative agreement and subsequent modification(s) should be considered separately as to 

whether they comply with the requirements of FGCAA. The report states: 

This decision [procurement or assistance] must be made for each transaction because procurement authority is 

available in all assistance programs and any given transaction might be either procurement or assistance. 

The GAD Director's memorandum also indicated that the symposium was not to support EPA or FACA 

activities because EPA provided very little appropriated funding for the symposium ($73,000 budgeted). 

However, the Director did not recognize that the GMPO and its FACA committee planned and controlled the 

symposium and that the estimated total Federal appropriated funding represented 57 percent ($209,000) of the 

symposium budget and the remainder was fees and donations - potentially miscellaneous receipts to the 

Government. This included appropriated funds from seven Federal agencies, as well as EPA. Although GMPO 

is an EPA program office, the GMPO receives staffing and, in this case, funding support from various other 

Federal agencies. Also, the GMPO FACA committee consists of representatives from these various other 

Federal agencies. Therefore, you would have to consider all the Federal funding, not just EPA's contribution, in 

concluding whether or not the symposium directly supported EPA (as manager of the GMPO) and FACA 

activities. 

In addition, the GAD Director alluded to over 40 financial supporters (Federal and non-Federal) for the 

symposium. We do not know where the Director got this information, but the number must include each Federal 

agency that participates in the GMPO individually and those who donated funds through the GMF. The only 

sources of funds we identified were Federal appropriations and the fees and donations. The donations were only 

21 percent of the total funds budgeted for the symposium (11 percent of actual funding based on funding and 

cost information available as of July 31, 1995). No state funds were involved. 

USE OF COOPERATIVE AGREEMENT VIOLATED STATE LAW

In the rush to amend the TGLO cooperative agreement and avoid contract and appropriation law restrictions, 

GMPO, GAD, and TGLO did not adequately consider State of Texas procurement restrictions that would apply 

to the TGLO modification. In general, Texas procurement regulations do not allow payment for goods and 

services that were not preapproved and/or contracted for by the State. According to TGLO, they informed 

GMPO in January 1995 that they could not legally pay all the costs proposed in the amendment. As a result, 

over $95,000 in costs owed to the Symposium hotels, a travel agency, and individual invitational travelers had 

not been paid at the time our audit fieldwork ended (July 31, 1995). 
On June 2, 1995, TGLO, apparently acting upon instructions from GMPO, attempted to transfer $25,000 in fees 

to the GMF to help pay for services that TGLO could not pay for under Texas law. However, the cooperative 

agreement modification provided for no subagreements and no subagreements had been approved by EPA. The 

GMF refused to accept the funds and sent the check back to TGLO. 

In a June 14, 1995 letter, the TGLO informed the GMPO Director that: "After discussing [the] situation with 

our legal and purchasing divisions, we have determined that the Texas General Land Office cannot pay the 

travel costs incurred by the Gulf of Mexico Symposium." As explained by TGLO, the problem arose because 

TGLO was not responsible for procuring the travel arrangements for the symposium. State of Texas 

procurement regulations, required that three written bids be obtained from travel agencies. Also, TGLO would 

have had to approve which individuals received airline tickets and the issuing of the tickets from the travel 

agency. TGLO pointed out that it was not given authority under the agreement to arrange or approve the 

individual travel transactions. 

On July 6, 1995, TGLO's Director of the Environmental Section, Legal Services Division, returned the invoices 

related to invitational travel (travel agency invoice of $38,500 and claims from individual symposium 

participants, totaling $8,100) to GMPO's contractor and stated that these invoices were "inadvertently" 

delivered to TGLO. The letter further stated that: 

The Texas General Land Office never contracted with nor received any services from [travel agent]. We also 

received invoices from individual symposium participants, invited to attend the symposium by your office. 

Apparently these individuals were under the mistaken impression that the Land Office would pay the invoices. 

Again, the Land Office never contracted with nor received services from these individuals. Therefore, we are 

returning the invoices to the Gulf of Mexico Program for appropriate handling. 

This decision on the part of TGLO's legal counsel further supports our position that the GAD and GMPO 

decision to modify the TGLO agreement for the narrow purpose of obtaining a "collection and bill paying 

service" and to avoid Federal restrictions on the fees was improper. 

A June 20, 1995 memorandum, from GMPO's work assignment manager (WAM) to the GMPO Director, 

documented a June 19, 1995 meeting between GAD and the WAM. The meeting concerned resolution of the 

$38,000 travel agency bill for invitational travel that TGLO said they could not legally pay. As a result of the 

meeting, three possible solutions were proposed: (1) TGLO should investigate entering into a ratified contract 

(ratification of an unauthorized procurement) with the travel agency, (2) TGLO could make individual 

payments to invited travelers that also cover the travel agency expenses for airline tickets, and (3) GMPO could 

investigate resolution from the OIG and OGC. As of July 31, 1995, GMPO had taken none of the recommended 

actions. 

On September 25, 1995, a TGLO official informed us that they had informed GMPO in January 1995, before 

award of the cooperative agreement amendment, that TGLO could not pay certain costs as proposed under the 

amendment. However, GMPO personnel informed TGLO that the amendment was just a mechanism to resolve 

concerns over the use of their on-site contractor for collection and use of registration and exhibitor fees. GMPO 

indicated that TGLO would not be held responsible for paying the costs specified in the proposed amendment. 

CONCLUSION

A cooperative agreement could have been properly awarded by GMPO to provide financial support for the 

symposium as long as the recipient, not GMPO, controlled the organization, planning, and overall funding of 

the event. Such a broad-based agreement would have served a legitimate purpose of public support and 

stimulation, and program income, in the form of fees and donations, would have been generated by cooperator 

actions or operations as required in 40 CFR 31.25. 
However, the TGLO agreement modification was accomplished for the sole purpose of processing 

miscellaneous receipts, received by the GMPO contractor, as "program income" under the cooperative 

agreement so that the money could be used to pay expenses which could not be legally paid under a contract. 

Because TGLO was only providing a service and was not given the authority to act independently in approving 

and contracting for the services to be paid for, we concluded, as TGLO's legal counsel apparently has, that this 

was not a proper purpose for an assistance agreement. 

While GMPO maintained that the TGLO modification was intended to rectify a contract deficiency, the 

deficiency resulted from GMPO's inadequate consideration of Federal requirements and appropriation law 

during the initial symposium planning process 19 months earlier. Awarding a modification to allow TGLO to 

act as an intermediary for GMPO in collecting fees and paying predetermined costs was inconsistent with 

FGCAA and Texas procurement regulations. The General Accounting Office (GAO) (footnote 13) has 

maintained the position that such "intermediary" situations as arranged with TGLO represent procurement not 

assistance. Therefore, a contract would have been the appropriate mechanism. 

RECOMMENDATIONS

We recommend that the Assistant Administrator for Water: 

3-1 Obtain formal OGC advice upon the propriety of the modification to TGLO's cooperative agreement for the 

collection and disbursement of fees considering only the actual purpose and narrow scope of the modification as 

presented in this chapter. This advice should include OGC's opinion as to whether individual agreement 

modifications must meet the requirements of the FGCAA and Agency guidance for use of assistance versus 

procurement without consideration of the overall purpose of the agreement as originally awarded. 

3-2 Based upon OGC's advice and in consultation with GAD, issue clarifying guidance to program offices 

concerning the proper use of assistance versus procurement in modifications to assistance agreements and 

require that each modification to an assistance agreement, individually, meet the requirements of the FGCAA 

and Agency policies. 

3-3 If a cooperative agreement or grant are determined to be the appropriate mechanism for support of future 

symposiums: 

Ensure that cooperators are given control and authority over the symposium logistical functions they are to 

support under the Agreement to include contracting for goods and services, approval of vendors and invitational 

travelers, and the actual collection of fees or donations that may be used to pay for these goods and services. 

Request that the recipient have its proposal subjected to a legal review by its governing authority to ensure 

compliance with all applicable State and local laws and regulations. 

We also recommend that the Assistant Administrator for Administration and Resources Management: 

3-4 Require GAD to provide written clarification of EPA-wide policies on procurement versus assistance as it 

relates to modifications of assistance agreements. This will aid users in understanding that each substantial 

change in agreement scope through a modification should "stand-alone" in meeting the requirements for use of 

an assistance agreement versus procurement. 

3-5 Require GAD personnel to ensure that future agreement modifications, that change an agreements scope 

and tasks, meet, individually, the same stringent requirements as the original agreement award. 

CHAPTER 4

AGENCY GUIDANCE NOT FOLLOWED
GMPO actions in the 1995 GMP Symposium planning process conflicted with certain OMB and EPA 

guidelines concerning Federally sponsored conferences. Specifically, GMPO (1) did not document the rationale 

or cost effectiveness of the symposium site selected, (2) directed its contractor to subcontract with specific firms 

and violated privity of contract between the prime contract and subcontractor, and (3) paid 

unallowable/unreasonable costs from Federal receipts or gifts. 

Interviews with GMPO personnel involved in the symposium planning process disclosed that they were 

unaware of any direction and/or restrictions regarding conferences and conference related activities. However, 

GMPO management had not solicited any advice from the Office of Water regarding conference planning or 

requested legal advice from OGC to clarify GMPO responsibilities in sponsoring a national conference. 

INADEQUATE SITE SELECTION PROCESS

GMPO did not document the rationale used in selecting the conference site for the 1995 Symposium. Further, 

GMPO did not justify the selection by performing a cost comparison of at least three alternative sites. 

OMB Bulletin 93-11 (footnote 14) requires that agencies exercise strict fiscal responsibility when selecting 

conference sites. Agencies shall select conference sites and make other conference arrangements to ensure that 

conference costs are kept to a minimum. Agencies shall document the alternatives considered and rationale used 

in selecting conference sites. EPA Comptroller Policy Announcement 94-10 (footnote 15) expanded on the 

OMB Bulletin by requiring that an appropriate cost comparison be made of "... at least, three alternative 

conference sites" and that the selection rationale be documented. The cost comparison should consider: 

attendee's time; all administrative costs (e.g., shipping, conference room rental, equipment, etc.); and the cost of 

each attendee's travel. 

During a September 1993 GMPO Symposium steering committee meeting, Corpus Christi, Texas, was 

potentially identified as the symposium's host city with the Sheraton and Marriott Hotels as potential locations. 

Neither the minutes for the September meeting nor meeting minutes for earlier meetings documented any 

discussions of other potential sites, or the benefits the Sheraton and Marriott Hotels in Corpus Christi would 

have over any other potential locations. On February 2, 1994, the GMPO symposium steering committee held a 

meeting at the Marriott Hotel in Corpus Christi with the Acting GMPO Director in attendance. The meeting 

summary documented that a final decision had been reached to hold the symposium at the Marriott and 

Sheraton Hotels in Corpus Christi, Texas. 

There was no documentation which indicated the rationale for selecting Corpus Christi as the host city or any 

consideration of conference sites other than the Marriott and Sheraton Hotels. The only documentation provided 

to support site selection was an April 1, 1993 form letter from the GMPO Acting Director addressed to 

"Potential Applicants." We were later provided an address list of convention/visitors bureaus located on the 

coast of the State of Texas. We were told by GMPO personnel that each of these bureaus received an invitation 

to provide a proposal. We were also told that there was intense competition between Corpus Christi and 

Galveston, Texas, to host the symposium. However, we did not find any file documentation which would 

support either of these statements. All file references we found concerning site selection discussed only Corpus 

Christi and the Marriott and Sheraton Hotels. 

DIRECTED SUBCONTRACTING AND PRIVITY OF CONTRACT

Directed Subcontracting

During the September 1993 symposium steering committee meeting, the minutes documented that Corpus 

Christi would be recommended to the PRB as the host city for the 1995 Symposium. On February 2, 1994, 

during a meeting held at the Marriott - Bayfront Hotel in Corpus Christi, the symposium steering committee 

announced the decision to hold the symposium at the Marriott and Sheraton Hotels (Corpus Christi Bayfront). 
GMPO originally tasked a Region 6 contractor (LWI [footnote 16]) with logistical arrangements for the 1995 

Symposium. The proposed work assignment for the symposium support contractor was discussed at the next 

symposium steering committee meeting on March 7, 1994. One of the stated tasks (task 2b) was to: 

Secure the symposium site, which can accommodate 2000-2500 participants, capable of providing full 

conference facilities, in Corpus Christi (emphasis added). ... 

On March 15, 1994, LWI responded to the task of securing a symposium site in its workplan. Based on this 

workplan, it was obvious that the contractor was expected to subcontract for a variety of goods and services 

needed to put on the conference. However, its pricing proposal did not reflect any estimates for the cost of 

subcontracting. Only LWI's direct labor charges, travel, and a small amount of other direct cost were estimated 

under this work assignment. 

LWI was not given the latitude to select its own subcontract support. Vendors were selected under the direction 

or in consultation with the symposium steering committee and/or the GMPO symposium coordinator (an EPA 

employee). Under the work assignment, the contractor was informed as to which hotels would be used for the 

symposium. In the March 15, 1994 workplan, the contractor responded to task 2b under the work assignment as 

follows: 

We understand the Marriott and Sheraton Hotels have already been selected by the steering committee. One part 

of this task is to provide the formal contract mechanism for securing these sites. Then, based on past Symposia 

and on input from the Symposium Steering Committee, we will develop an inventory of needs for facilities and 

services ... . 

The subcontracting direction that was provided by the symposium steering committee conflicts with Agency 

guidance. EPA's Contract Administration Manual states: 

The government cannot direct the contractor to subcontract any part of the work. The government may also not, 

under any circumstances, direct the prime contractor to subcontract with a specific firm. Even a suggestion of a 

particular firm or firms would be improper. 

Nevertheless, as instructed, the contractor negotiated an agreement with the Marriott Hotel, Corpus Christi, 

Texas. Under this agreement, overflow services would be provided through the Sheraton Hotel located across 

the street. 

Based on GMPO's file documentation, the symposium steering committee preselected the 1995 Symposium site 

as early as September 1993 and made formal commitment to the Marriott and Sheraton Hotels sometime prior 

to March 1994 before the work assignment task was finalized with the logistics contractor. In our opinion, the 

actions of the symposium planners constituted directed subcontracting by EPA. 

Privity of Contract

EPA's Contract Administration Manual cautions that the government's only direct contractual relationship is 

with the prime contractor. EPA has no right to direct subcontracting or to deal directly with a subcontractor on 

any issue. By ignoring rules against communicating directly with subcontractors, government personnel could 

create "privity" between EPA and the subcontractors. This means that a contractual relationship might be 

developed between the GMPO and the subcontractor, of which the prime contractor may or may not be a part. 

As discussed above, EPA personnel were involved in recommending subcontracting selections to its logistics 

contractors. The March 7, 1994 symposium steering committee meeting summary noted: 
LWI [Lee Wilson] has asked the Marriott and Sheraton hotels in Corpus Christi, where the symposium is to be 

held, to send the contract to [EPA employee], Work Assignment Manager (EPA Region 6), who will forward to 

LWI. 

Agency guidance specifically cautions project officers and work assignment managers against becoming 

involved in the subcontracting process. This involvement apparently clouded the prime contractor's 

understanding of its responsibility for providing a formal contract for the symposium site. In a letter to the 

Marriott Hotel on April 12, 1994 the contractor stated: 

Our understanding is that ... Lee Wilson and Associates, Inc., as contractor to the Environmental Protection 

Agency Region 6, has no financial obligation to the Bayfront Connection [subcontractors - Marriott and 

Sheraton Hotels]. Our signature on this contract is based on this understanding. If we are incorrect, please notify 

us at once in order that alternative contracting arrangements can be made. 

Therefore, because of EPA's direct involvement in the hotel procurement, the contractor did not recognize that 

the payment for the goods and services provided under the agreement with the Marriott and Sheraton Hotels 

was its contractual responsibility. GMPO's on-site NASA contractor later assumed Lee Wilson's contract with 

the hotels but did not enter into a new agreement with the Marriott. Another potential problem was that the 

GMPO symposium coordinator was listed by the Marriott Hotel as a point of contact. This individual, as well as 

other EPA personnel visited the Marriott Hotel on several occasions prior to the symposium and may have 

interacted directly with the Hotel. 

In conclusion, based on interviews and file documentation, we concluded that: 1) the subcontract with the 

Marriott and Sheraton Hotels was directed by EPA/GMPO personnel; 2) the work assignment manager 

apparently reviewed and passed on the subcontract prior to signature by the prime contractor; and 3) that the 

GMPO Symposium Coordinator (an EPA employee), as point of contact for the subcontractor, dealt directly 

with the subcontractor. As a result, we believe that EPA created an improper "privity of contract" between EPA 

and the Marriott and Sheraton Hotels. 

UNNECESSARY AND UNREASONABLE SYMPOSIUM COSTS

In reviewing 1995 Symposium costs, we identified about $99,000 in costs which would be considered 

unnecessary, unreasonable, and/or unallowable for a Federally sponsored conference. While we recognize that 

the overall GMPO goal was to put on a first class event, we found no documented justifications for the elaborate 

nature of some of the proposed events or the reasonableness of the cost. Symposium registration/exhibitor fees 

and private donations were collected to pay these questionable costs. GMPO, late in the symposium planning 

process, transferred the collection and use of these funds from its contractor to a cooperator in order to avoid an 

augmentation of EPA appropriations and Federal restrictions on the payment of certain symposium costs. 

However, as shown in Chapters 2 and 3, we concluded that the modification of a cooperative agreement to 

transfer collection and use of the fees and donations was procurement not assistance and the fees and donations 

represented miscellaneous receipts to GMPO. Therefore, the restrictions on the use of Federal funds for certain 

conference costs were applicable. 

In addition, our review disclosed in June 1995 that the GMF had collected only $32,000 of the $80,000 

budgeted for private donations and that the TGLO could not use registration and exhibitor fees to cover certain 

symposium costs because of a conflict with State law (see Chapter 3). As a result, there may be insufficient fees 

and donations to pay all of the questionable costs as originally planned. Because GMPO's contractor and 

ultimately the GMPO are liable for these costs, GMPO may have to use appropriated funds to pay these 

unliquidated obligations. 

Comptroller Policy Announcements 92-18 (footnote 17) and 94-10 caution that entertainment, recreation, 

meals, and other unallowable costs incurred at EPA conferences should not be included as part of the 
conference room fee or included in registration fees. However, plans for the 1995 GMP Symposium indicated 

that registration and exhibitor fees, as well as the private donations would be used to pay for these types of 

unallowable costs. The apparent rationalization was that, since this was a "GMP" symposium and the GMP 

(through the advisory committee structure) was made up of a coalition of Federal, state, and local agencies, 

academia, and private industry groups, such expenses could be legitimately paid as long as appropriated funds 

were not used. However, as demonstrated in Chapter 2 and Appendix II, the 1995 Symposium was principally a 

Federal controlled and funded event. Therefore, the costs shown below were not eligible for Federal funding 

under existing Agency guidelines. 

Receptions: Three formal receptions were planned. Actual cost $17,000 (does not include entertainment 

provided). 

March 29th -- A two hour opening ceremony was planned aboard the USS Lexington and a tour of the 

Lexington. Later on March 29, a two hour welcome reception was planned at the Texas State Aquarium with a 

Spanish theme and musical entertainment (free admission to attendees). 

March 30th -- A two hour "Happy Hour Fiesta" was held at the Corpus Christi Art Center located on the bay. 

Entertainment was provided by a mariachi band and a Mexican ballet. Later on March 30, a two hour reception 

was held in the poster/exhibit space at the hotel with food and additional entertainment. 

Luncheons/Continental Breakfast/Breaks: Luncheons were held on three days of the conference. Guest speakers 

were provided. In addition, a continental breakfast was made available for three of the four conference days. 

Coffee and soft drinks were provided twice a day at scheduled breaks. Costs for these activities was $22,000. 

Symposium Mementos: Each attendee was provided "souvenir items" including a tote bag with the symposium 

logo, poster, and lapel pin at a total cost of $13,000. 

Travel Cost: Airfare ($38,000), lodging ($15,000), meals and incidental costs ($8,000) for students, chaperons, 

educators, and international speakers at a total cost of $61,000. 

While some of these expenditures could possibly be justified, others would be considered unnecessary or 

unreasonable, while still others such as the attendee travel, entertainment, souvenir items, etc. could not be 

legitimately funded at a Federally sponsored event. Because Agency managers have a responsibility for 

controlling conference costs, paying for such perquisites either directly through symposium fees and/or 

donations (miscellaneous receipts), or indirectly by having a second party pay for the goods or services (a gift) 

does not justify the expenditure. 

RECOMMENDATIONS

We recommend that the Assistant Administrator for Water: 

4-1 Require GMPO to obtain all Agency and OMB guidance concerning Federally sponsored 

symposiums/meetings. Also, require GMPO to perform and document the required cost comparisons and 

justifications when selecting conference sites. 

4-2 Remind GMPO personnel of the restrictions on EPA involvement in a prime contractor's subcontract 

awards and the resulting liability that could be placed on EPA for noncompliance. 

4-3 Establish oversight processes to ensure that future symposium perquisites and related costs are reasonable, 

allowable, and justified and that symposium planning and implementation comply with all applicable laws, 

regulations, and related guidance. 
CHAPTER 5

ASSOCIATION WITH GMF CREATED A POTENTIAL

COI AND EPA LIABILITY

The relationship between GMF principal officers and GMPO staff and committees created the appearance of a 

conflict of interest (COI). Also, GMF's solicitation of donations for GMPO sponsored symposiums may have 

created a liability for EPA as to the manner in which the donations were solicited and used by the GMF. Some 

current and former members of GMPO's advisory committees were officers of GMF and the GMPO director 

was a GMF ex-officio director. Since the GMPO and its advisory committees made decisions concerning the 

organization and funding of symposiums, including the use of GMF solicited donations, a potential conflict 

existed between GMPO and GMF. Also, GMPO had no written agreement with GMF related to donations 

solicited for GMP symposiums. GMPO was not aware of how the donations were solicited. However, GMPO 

and its contractor apparently instructed GMF, through TGLO, as to what symposium costs would be paid from 

donations. In our opinion, the relationship between GMF and GMPO, and GMPO's indirect use of private 

donations to pay symposium costs incurred by its on-site contractor represented a inherent approval of GMF 

operations and actions and, without a written agreement, created a potential liability for EPA as to any 

misrepresentations in GMF's solicitations or GMF's use of the donations. 

Relationships Between GMPO and GMF

The GMF is a nonprofit, tax exempt organization, located in Corpus Christi, Texas. The Foundation was 

established to promote environmental quality, resource management, public health, and economic, education, 

and cultural development in the Gulf region. The founder and past GMF president (current vice president) was a 

former chairman of the GMPO's CAC, a PRB subcommittee, and continues to serve as a CAC advisor. The 

current GMF executive director and other individuals, identified from file documentation as associated with the 

GMF, also served as members or advisors to the PRB and CAC. In addition, the acting GMPO Director was 

listed on the GMF's Board of Director's (April 1995) as an ex-officio (footnote 18) member. The acting GMPO 

director also served on the PRB as its Executive Secretary. Therefore, the close association GMPO had with the 

GMF was of particular concern because GMPO used the PRB and related subcommittees (ESSC) for decisionmaking related to the planning and funding of GMP symposiums. The PRB and its subcommittees did not 

perform in an "advisory" role for symposiums, but actually made planning, implementation, and funding 

decisions including use of GMF donations. 

GMPO Decisions Related to GMF Activities

The PRB, PRB subcommittees (primarily the ESSC), and GMPO made the principle decisions concerning the 

planning, organization, and funding of the 1995 Symposium. This included the use of $70,000 to $80,000 in 

estimated donations pledged by GMF in support of the 1995 Symposium. The original ESSC funding plan 

included using the private donations solicited by GMF in conjunction with the registration and exhibitor fees to 

pay those symposium costs which were not eligible for Federal funding under existing Federal guidelines. 

However, GMPO did not have a written agreement with the GMF to establish the level and extent of support to 

be provided for the symposium, or to limit EPA's liability for GMF's actions in regard to any solicitation and/or 

use of donations raised on behalf of the GMP symposium. 

In response to our concerns regarding the receipt and use of private donations by GMPO's contractor for 

symposium costs, GMPO management assured that this had been changed and that while GMF would be 

soliciting private donations on behalf of the symposium, GMF would make the arrangements for and directly 

fund specific symposium activities. However, GMF later informed us that while it did collect and hold the 

private donations and arrange for some symposium services, the majority of the funds it collected were used to 

pay obligations identified by TGLO through instructions and invoices TGLO had received from GMPO or its 

contractor. Therefore, GMPO was orchestrating the use of virtually all available symposium funds, including 

those made available through the GMF, to pay GMPO obligations arranged through its contractor. In our 
opinion, GMF was merely a convenient funding mechanism to assist GMPO in funding the 1995 Symposium. 

The GMF was used by GMPO as a tool to accomplish what it did not have authority to do alone; solicit 

donations to pay unallowable costs. 

During our visit to the GMF, in June 1995, GMF officials would not allow us access to their records to 

determine the total amount of donations collected, the use of all donations, and how donations were solicited. 

However, the GMF officials did provide a summary of donations received and related symposium costs it paid 

with the donations, either directly or through instructions and invoices received from GMPO through the 

TGLO. 

RECOMMENDATIONS

We recommend that the Assistant Administrator for Water: 

5-1 Require that future GMPO associations with GMF, especially involving the use of donations, are formally 

established through written agreements to preclude or limit any EPA liability for GMF actions. OARM should 

consult with OARM concerning the propriety and requirements for any such agreement. 

5-2 Require that for future associations, GMPO maintain an arms-length relationship between GMPO 

staff/committees and GMF to preclude any appearance of a conflict of interest. 

Appendix I 

GLOSSARY OF ACRONYMS AND ABBREVIATIONS

CAC Citizens Advisory Committee 

CFR Code of Federal Regulations 

COI Conflict Of Interest 

EPA Environmental Protection Agency 

ESSC Executive Symposium Steering Committee 

FACA Federal Advisory Committee Act 

FGCAA Federal Grant and Cooperative Agreement Act 

GAD Grants Administration Division 

GAO General Accounting Office 

GMF Gulf of Mexico Foundation 

GMP Gulf of Mexico Program 

GMPO Gulf of Mexico Program Office 

LWI Lee Wilson Associates, Incorporated 
MC Management Committee 

NASA National Aeronautics and Space Administration 

OGC Office of General Counsel 

OIG Office of Inspector General 

OMB Office of Management and Budget 

PRB Policy Resolution Board 

TGLO Texas General Land Office 

U.S.C. United States Code 

GMP AND GMPO ORGANIZATION

Background

In 1988, EPA Regions 4 and 6 agreed to establish a program to develop and implement a comprehensive 

strategy for managing and protecting the resources of the Gulf of Mexico and associated coastal environments. 

The joint program - the Gulf of Mexico Program (GMP) - was a regionally focused institutional structure 

established to facilitate full cooperation and coordination of various Federal, state, and local agencies, 

academia, and private industry groups which share in and have significant interests in coastal and marine 

resources. The overall objective of the GMP was to achieve a balance between the needs and demands of 

human related activities and the preservation and enhancement Gulf resources through coalition building and 

consultive decision-making among all the many organizations that carry out programs effecting the Gulf of 

Mexico. The Regions' intent was not to establish another layer of bureaucracy, but rather a forum for addressing 

Gulf-wide problems and solutions. 

Organization

To accomplish their goal, Regions 4 and 6 established the Gulf of Mexico Program Office (GMPO) located at 

John C. Stennis Space Center near Bay St. Louis, Mississippi. While not statutorily based, the GMPO through 

its interagency agreements (memoranda of understanding)(footnote 19) provided the organizational mechanism 

needed to develop and implement a management strategy to protect, restore and maintain the health and 

productivity of the Gulf. GMPO's first hurdle was to establish and implement the institutional structure 

(advisory committees) needed for the GMP. 

The GMP consists of the GMPO and several interacting committees including four oversight committees, eight 

issue area committees, and two operations support committees. 

Gulf of Mexico Program Office (GMPO): - The GMPO serves to coordinate and support its advisory 

committees in addition to overall planning and implementation of GMP activities. The GMPO staff consists of 

administrative and technical personnel from EPA and various other Federal and contractual organizations. 

GMPO staffing charts showed that 14 out of 34 on-site personnel, or 41 percent of the GMPO workforce, were 

EPA employees. EPA contractor/cooperator personnel totalled 14, or 41 percent of the workforce. Other 

Federal agencies staffed six positions, or 18 percent of the workforce. The Gulf States have not yet provided 

personnel or funding in direct support of GMPO operations. 
The GMPO Director, Deputy Director, and the Chief Scientist have always been EPA employees. These 

individuals supervise the everyday operations of the office including the activities of Federal personnel 

representing the other Federal partners. Prior to April 1994, GMPO reported directly to the Assistant 

Administrator for Water. Under a revised Memorandum of Understanding between the Office of Water and 

Regions 4 and 6, the GMPO Director now reports to the Deputy Regional Administrator for the Regional Office 

that is serving as the MC Federal co-chair. The MC Federal co-chair is rotated between Region 4 and Region 6 

on a two year cycle. 

Policy Review Board (PRB): - The PRB provides overall guidance for the GMP. The PRB consists of senior 

level representatives of Federal and state agencies with regulatory or management mandates in the Gulf of 

Mexico (12 Federal and 5 state members) and the two top officers of the Citizens Advisory Committee. The 

chairmanship of the PRB is rotated between the Region 4 and 6 Administrators. The Executive Secretary of the 

PRB is the GMPO Director. 

According to GMPO organizational information, the PRB provides Agency and state level implementation 

oversight; directs program activities, establishes strategic program goals, objectives, and priorities; conducts 

Agency and state level coordination and exchange of intergovernmental ideas and recommendations. 

Management Committee (MC): - The MC serves to facilitate implementation of program objectives approved 

by the PRB through its ability to commit resources, make management decisions, and meet frequently enough 

to accomplish tasks. The MC consists of 12 members: one from each of the five major Federal agencies 

participating in the GMP (footnote 20); a state appointed representative from each of the five Gulf states 

(footnote 21); and two members of the CAC. The MC is co-chaired by the Deputy Regional Administrator of 

Region 4 or Region 6 (alternate in co-chair position) and one state representative. 

According to GMPO organizational information, the MC guides program operations and manages program 

objectives. This includes: establishing program office budget activities and priorities; developing integrated 

budget proposals for consideration of the PRB; establishing the scope of action agendas; supporting the CAC; 

appoints members and directs the activities of the TAC and individual issue committees. 

Citizen's Advisory Committee (CAC): - The CAC is composed of 25 members. Five members are appointed by 

the governor of each of the Gulf coastal states, representing the areas of: environment; agriculture; 

business/industry; development/tourism; and fisheries. Officers of the CAC are elected by its members. 

According to GMPO organizational information, the CAC provides advice and guidance to the PRB on the 

public's perspective concerning the programs goals, objectives, priorities, budget and project activities. The 

CAC also provides advice and guidance to the MC on engaging public participation in the development of 

strategies and solutions. 

Technical Advisory Committee (TAC): - The TAC consists of environmental scientists who represent a broad 

range of expertise from across the Gulf coast region. Voting membership of the TAC is limited to 50. 

Membership is approved by the MC. The Chief Scientist of the GMPO is the Federal co-chair of the TAC. The 

non-Federal co-chair is elected by the TAC membership. 

According to GMPO organizational information, the TAC provides advice and guidance to the MC on the 

scientific and technical approaches presented in the action agendas and other as hoc technical review matters as 

determined necessary by the MC, issue committees, or the GMPO Director. 

Issue Committees: - These committees provide specific guidance to the TAC on technical issues in the areas of: 

habitat degradation; public health; freshwater inflow; marine debris; coastal and shoreline erosion, nutrient 

enrichment; toxics and pesticides; and living aquatic resources. These committees provide advise and guidance 

on research, data management, modeling, sampling, and monitoring efforts relative to their respective issue 
area. Membership varies, but total membership is limited to a maximum of 30. Members are appointed by the 

committee co-chairs (one Federal and one state technical representative). The co-chair appointments are made 

by the MC. 

Operations Support Committees: - provide guidance and support to the issue committees and the TAC on 

mechanisms for coordination and communication within the GMP and among other programs. Like Issue 

Committees, Operations Support Committee membership is limited to 30 and co-chaired by a Federal and a 

state representative appointed by the MC.

These advisory (footnote 22) committees managed and supported by the GMPO make up the organizational 

component of the GMP. The GMP is described in GMP literature as a grass roots program that serves as a 

catalyst to promote sharing of information, pooling of resources, and coordination of efforts to restore and 

reclaim wetlands and wildlife habitat, clean up existing pollution, and prevent future contamination and 

destruction of Gulf resources. 

GMPO's advisory committee and its subcommittees are subject to the requirements of the Federal Advisory 

Committee Act (FACA). Under FACA, advisory committees are utilized solely for advisory functions. 

Therefore, the actual determinations regarding program actions or policy, while possibly based on matters 

which an advisory committee reported or made recommendations, shall be made solely by an officer of the 

Federal government. In this case the PRB serves the GMPO. 

Planning Process for the 1995 GMP Symposium

Planning for the 1995 symposium was conducted through a system of committees. From the very start of the 

planning process, the PRB was established as the final approval authority over symposium plans. The PRB 

members, primarily Federal, would approve all symposium recommendations. The Executive Symposium 

Steering Committee (ESSC) was the coordinating/functional committee. Of the five member ESSC, three 

members were EPA employees who were closely associated with the GMPO. These three EPA employees 

included the Symposium Coordinator from GMPO and the Region 4 and 6 GMP Coordinators. The Region 4 

Coordinator served as chairman of the ESSC. The other two members, who also serve on the CAC, were State 

of Texas employees from the TGLO and the Texas Water Commission. A Texas Symposium Steering 

Committee, chaired by the TGLO representative on the ESSC, assisted the ESSC in planning the symposium. 

Based on ESSC meeting records, the Texas Symposium Steering Committee was instructed to take direction 

from the ESSC and to present their symposium recommendations directly to the ESSC for its endorsement. The 

ESSC reported Symposium recommendations directly to the GMPO PRB which, like the ESSC, was also 

Federally controlled. As previously discussed, the PRB serves in an advisory capacity to the GMPO under the 

authority of the FACA. 

From the prior symposiums, the ESSC planners recognized that outside support, in the form of registration and 

exhibitor fees would be required to implement the symposium plans. The fees and donations would be used to 

pay for symposium activities which could not be supported using appropriated funds. As indicated in the 

original work assignment for the GMPO contractor and confirmed through interviews, the original plan was to 

bring all the appropriated funds, fees, and donations together to be distributed for symposium expenses through 

the GMPO contractor; however, the collection and disbursement of the fees was later transferred to TGLO 

under a modification to a cooperative agreement. 

The GMF was designated as the organization to solicit and collect private donations for the symposium. GMPO 

did not execute a formal agreement with the GMF for the collection of these private donations. However, our 

review of symposium documentation clearly indicates that the ESSC and the PRB planned on between $70,000 

and $80,000 in private donations to fund symposium activities. A steering committee meeting summary 

documented discussions concerning fundraising and coordination of luncheons, receptions, and other events to 
be funded by the GMF through GMPO's on-site contractor. The summary asserted that: "All funds raised by the 

Foundation will be earmarked for these events and established under a separate account." In another meeting 

summary, an ESSC member was attributed with stating that the Executive Director of the GMF needed a 

complete list of the symposium events and activities needing sponsorship. The ESSC member and the 

foundation director were to work jointly on the reception planning and billing activities as well as several other 

listed activities. In subsequent meeting summaries, these special events were repeatedly discussed in more detail 

with the Executive Director of the GMF attending. 

REPORT DISTRIBUTION

Inspector General (2410) 

Assistant Administrator for Water (4101) 

Assistant Administrator for Administration and Resources Management (3101) 

Office of General Counsel (2310) 

Regional Administrator, Region 4 

Director, Financial Management Division (3303F) 

Comptroller (3301) 

Agency Follow-up Official (3101) 

Agency Followup Coordinator (3304) 

Attention: Director, Resources Management Division 

Footnotes

1 Memorandum of Understanding dated April 17, 1994 between the Office of Water and Regions 4 and 6. 

2 The Management Committee is a subcommittee of GMPO's PRB advisory committee. The PRB was 

chartered under the Federal Advisory Committee Act (FACA) and is the principle advisory committee to the 

GMPO (see Appendix II for details). 

3 Gulf of Mexico Program: Five Year Strategy (1988-1992), April 18, 1989. 

4 The original contract for support of the 1995 GMP Symposium was awarded to Lee Wilson and Associates, 

Inc., under a Region 6 work assignment. On expiration of the Lee Wilson contract on June 30, 1994, GMPO 

arranged for a work assignment with Johnson Control World Services, Inc. Johnson Controls was under 

contract to the National Aeronautics and Space Administration (NASA) and routinely provided on-site technical 

and administrative support to GMPO through the EPA/NASA Host Tenant Agreement. For purposes of this 

report, the NASA contractor will be referred to as the "GMPO contractor," "on-site contractor," or "contractor." 

5 A repayment represents a "reimbursement" to an appropriation (authorized by law) for Federal goods or 

services rendered, or a "refund" to an appropriation resulting from a payment error or adjustment for previous 

amounts disbursed. Refunds may be credited directly to appropriations. 
6 See Appendix A for a description of the organization of the GMP, including the GMPO and its advisory 

committee structure. 

7 See Appendix II for list of other Federal agencies involved. 

8 The 1995 Symposium Track Leaders (those individuals selecting symposium participants and organizing 

track activities and now coordinating with the TGLO through the contractor) were either EPA employees, 

employees of other federal organizations working under Interagency Agreements at GMPO, or other GMPO onsite cooperator employees. 

9 Although the work assignment mentions state funds for the symposium, we did not find where any state funds 

were provided. 

10 Intermediary in this situation represented GMPO's placement of TGLO between its on-site prime contractor 

and the prime's subcontractors in order to legally use the fees for costs not allowable for Federal funding and to 

preclude augmentation. 

11 The original award entailed producing promotional materials for teachers and students to recruit their 

support and participation in the 1995 Gulf of Mexico Symposium. Total budget $22,000 (EPA's share $20,000). 

12 TGLO project title: EPA YEAR OF THE GULF TEXAS OUTREACH PROGRAM -Expand public 

awareness and knowledge of the importance of the Gulf of Mexico. Promote a sense of stewardship over Gulf 

resources. Foster public/private partnership for wise use of Gulf Resources. 

13 GAO first articulated this position in GAO report GGD-81-88, dated September 4, 1981. In response, EPA 

concurred with the Comptroller General's interpretation. 

14 OMB Bulletin 93-11, April 19, 1993 -- Fiscal Responsibility and Reducing Perquisites. 

15 EPA, Office of Comptroller Policy Announcement 94-10, September 14, 1994 -- Conference Planning.

16 Lee Wilson Associates, Inc., Contract Number 68-D3-0142. When LWI's work assignment expired on June 

30, 1994, GMPO transferred the Symposium logistical tasks to its on-site NASA contrctor, Johnson Controls. 

17 EPA, Office of Comptroller Transmittal 92-18, March 27, 1992 -- Charging of an EPA Conference/Meeting 

Registration Fee. 

18 An ex-officio director/member serves as an advisor and may participate in GMF meetings/discussions. 

However, an ex-officio director/member does not have voting rights. 

19 GMPO has negotiated interagency agreements with: EPA, Regions 4 and 6; EPA, Office of Water; National 

Marine Fisheries Service; Fish and Wildlife Service; Food and Drug Administration; Soil Conservation Service; 

Corps of Engineers; and National Aeronautics and Space Administration. There are no separate agreements 

with the Gulf of Mexico states. 

20 Federal participants: Environmental Protection Agency (EPA); U.S. Fish and Wildlife Service (FWS); U.S. 

Corps of Engineers (COE); U.S. Department of Agriculture, Soil Conservation Service (SCS); National Marine 

Fisheries Service (NMFS). 

21 The five Gulf states: Florida; Alabama; Mississippi; Louisiana; and Texas. 
22 Advisory Committees means any committee, board, commission, council, conference, panel, task force, or 

other similar group including any subcommittees or other subgroup thereof, which was established or utilized 

by one or more agencies in the interest of obtaining advise or recommendations