U.S. ENVIRONMENTAL PROTECTION AGENCY 

OFFICE OF INSPECTOR GENERAL 

Catalyst for Improving the Environment 

Audit Report 

EPA Submitted Accurate 

and Timely Recovery Act 

Financial Reports 

 Report No. 10-R-0151 

 June 22, 2010 
 

Report Contributors: Paul Curtis 

 Arthur Budelier 

Sheree James 

Demetrios Papakonstantinou 

 Javier Negron 

Abbreviations 

EPA U.S. Environmental Protection Agency 

FACTS II Federal Agency Centralized Trial-Balance System II 

IFMS Integrated Financial Management System 

OCFO Office of the Chief Financial Officer 

OEI Office of Environmental Information 

OIG Office of Inspector General 

OMB Office of Management and Budget 

RAT Recovery Accountability and Transparency 

TAFS Treasury Appropriation Fund Symbol 
 

 

U.S. Environmental Protection Agency 10-R-0151 

June 22, 2010 Office of Inspector General 

At a Glance 

Catalyst for Improving the Environment 

Why We Did This Review 

We performed this review to 

determine whether (1) the U.S. 

Environmental Protection Agency’s 

(EPA’s) financial reporting for the 

American Recovery and 

Reinvestment Act of 2009 

complied with Office of 

Management and Budget (OMB) 

guidance and Recovery Act 

requirements; (2) the amounts EPA 

reported to OMB reconciled to 

EPA’s financial system; and 

(3) EPA submitted the reports in a 

timely manner. 

Background 

The Recovery Act provided EPA 

with $7.22 billion for specific 

programs. OMB issued guidance 

on how federal agencies should 

manage and report on Recovery 

Act activities. OMB’s guidance 

requires EPA to report, on a weekly 

basis, the cumulative Recovery Act 

funds obligated and expended. 

OMB provides for Recovery Act 

funds transparency and 

accountability by requiring that 

EPA’s reports be posted on the 

Internet for public access. 

For further information, contact 

our Office of Congressional, 

Public Affairs and Management at 

(202) 566-2391. 

To view the full report, 

click on the following link: 

www.epa.gov/oig/reports/2010/ 

20100622-10-R-0151.pdf 

EPA Submitted Accurate and Timely 

Recovery Act Financial Reports 

What We Found 

EPA complied with OMB guidance and Recovery Act requirements in its 

weekly financial activity reporting. EPA submitted accurate and timely 

financial reports. EPA ensured its financial reporting was transparent to the 

public by posting data to the EPA Recovery Act Website and submitting data 

to the Recovery and Accountability Transparency Board for posting to the 

government-wide Website. 

Our review assures EPA and the public that EPA’s weekly Recovery Act 

financial activity reports are accurate, timely, and transparent. 
 

 

 

 

 

 

 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

OFFICE OF 

INSPECTOR GENERAL 

June 22, 2010 

MEMORANDUM 

SUBJECT:	 EPA Submitted Accurate and Timely 

Recovery Act Financial Reports 

Report No. 10-R-0151 

FROM: Melissa M. Heist 

Assistant Inspector General for Audit 

TO: Barbara J. Bennett 

 Chief Financial Officer 

This is our report on the American Recovery and Reinvestment Act of 2009 financial reporting 

review conducted by the Office of Inspector General of the U.S. Environmental Protection 

Agency. 

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 $104,776. 

Action Required 

We made no recommendations; therefore, no action is required. We will close out the report in 

our tracking system upon issuance. 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 have any questions, please do not hesitate to contact me at 202-566-2523 or 

curtis.paul@epa.gov, or Arthur Budelier at 312-353-9529 or budelier.arthur@epa.gov. 
 

 

EPA Submitted Accurate and Timely 10-R-0151 

Recovery Act Financial Reports 

Table of Contents 

Purpose........................................................................................................................... 1 

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

Scope and Methodology ............................................................................................... 1 

Results of Review .......................................................................................................... 2 

EPA Complied with OMB Guidance and Recovery Act Requirements ................ 2 

EPA Submitted Accurate Financial Reports......................................................... 3 

EPA Submitted Timely Financial Reports ............................................................ 3 

Agency Comments and OIG Evaluation ...................................................................... 3 

Status of Recommendations and Potential Monetary Benefits................................. 4 

Appendix 

A Distribution ......................................................................................................... 5 
 

10-R-0151 

Purpose 

The Office of Inspector General (OIG) performed this review to determine whether the U.S. 

Environmental Protection Agency’s (EPA’s) financial reporting for the American Recovery and 

Reinvestment Act of 2009 complied with Office of Management and Budget (OMB) guidance 

and was accurate and timely. 

The objectives of our review were to determine whether: 

•	 EPA’s financial reports complied with OMB guidance and Recovery Act 

requirements; 

•	 Amounts EPA reported to OMB reconciled to EPA’s financial system; and 

•	 EPA submitted the Recovery Act reports in a timely manner. 

Background 

The purpose of the Recovery Act is to create and save jobs and spur economic activity and 

investment in long-term growth. The Recovery Act provided EPA $7.22 billion for specific 

programs. The Recovery Act requires stringent accountability for performance and results, as 

well as unprecedented transparency. The Recovery Accountability and Transparency (RAT) 

Board provides transparency in the use of Recovery Act-related funds. 

OMB memoranda M-09-10, dated February 18, 2009, and M-09-15, dated April 3, 2009, 

published guidance to federal agencies for implementing Recovery Act programs and activities. 

The guidance requires agencies to report to the RAT Board, on a weekly basis, all cumulative 

Recovery Act obligations and gross outlays (expenditures) in a standard reporting format. The 

financial information that agencies report must use the same U.S. standard general ledger 

account balances that they report to the Federal Agency Centralized Trial-Balance System II 

(FACTS II). OMB Bulletin 09-02, dated February 25, 2009, requires agencies to use separate 

Treasury Appropriation Fund Symbols (TAFSs) to track and report Recovery Act obligations 

and disbursements. Federal agencies report the cumulative activity through Friday and submit 

their weekly reports the following Tuesday before 5:30 p.m. The weekly reports include a list of 

the major Recovery Act actions completed to date and the major planned actions. Senior 

accountable officials clear these communications before their release. 

Several EPA offices coordinate to prepare and submit EPA’s weekly reports. EPA’s Office of 

the Chief Financial Officer (OCFO) prepares the financial section of the reports. The Office of 

Environmental Information (OEI) prepares the “Major Actions Completed” and “Major Actions 

Planned” sections. The Recovery Act Accountable Official in the Office of Administration and 

Resources Management reviews and approves the weekly reports. OEI transmits the reports, and 

the RAT Board posts the reports to www.recovery.gov and provides them to OMB. 

Scope and Methodology 

We conducted this audit in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain sufficient, appropriate 

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10-R-0151 

evidence to provide a reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. We conducted our audit from January 25 to 

June 2, 2010. 

We reviewed EPA’s weekly Recovery Act financial reports and the process for preparing them. 

We tested the compliance and accuracy of EPA’s weekly financial activity reports by comparing 

them to reports that we independently generated from the Integrated Financial Management 

System (IFMS). We tested 5 reports from a universe of 49 reports dated from March 3, 2009, 

through February 2, 2010. We selected report dates that provided representative audit coverage 

for the entire reporting period. We tested the timeliness of reporting by examining e-mail 

confirmations of report submissions, and we traced report postings to www.recovery.gov. We 

examined the EPA senior accountable official’s written approval of the reports. 

We assessed EPA’s internal controls related to the weekly financial activity reporting. We 

gained an understanding of the reporting process and internal controls through interviews of 

OCFO and OEI personnel and examination of OCFO’s report preparation instructions. We did 

not review the internal controls over IFMS from which we obtained data reports, but relied on 

the review conducted during the audit of EPA’s Fiscal Year 2009 financial statements. 

We found no prior OIG or U.S. Government Accountability Office reports with findings or 

recommendations related to EPA’s Recovery Act financial reporting. 

Results of Review 

EPA submitted accurate and timely Recovery Act financial reports in compliance with OMB 

guidance and Recovery Act requirements. 

EPA Complied with OMB Guidance and Recovery Act Requirements 

EPA complied with OMB guidance and Recovery Act requirements for submitting its financial 

activity reports by: 

•	 Submitting weekly reports of its cumulative Recovery Act obligations and gross 

outlays in the prescribed format. 

•	 Using separate TAFSs for Recovery Act funds. 

•	 Using the same U.S. standard general ledger accounts that it reported to FACTS II. 

•	 Including in the weekly reports a list of the major Recovery Act actions completed to 

date and the major planned actions. 

•	 Obtaining approval of the EPA senior accountable official to release the 

communications. 

•	 Ensuring Recovery Act financial reporting is transparent to the public by posting data 

to the EPA Recovery Act Website and submitting data to the RAT Board for posting to 

the government-wide Website. 

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10-R-0151 

EPA Submitted Accurate Financial Reports 

We found that EPA submitted accurate weekly reports of cumulative Recovery Act obligations 

and gross outlays. We verified the accuracy of EPA’s reports by matching them to reports that 

we independently developed. We generated data from EPA’s IFMS accounting system and 

tested five EPA reports. All five reports were accurate. However, OCFO’s written instructions 

for preparing the weekly financial reports contained a misstatement about reporting Recovery 

Act funds transfers within EPA. The instructions stated that vendor code type 9 transactions 

representing funds transfers within EPA should be excluded from the weekly financial reports. 

However, OMB guidance states that weekly reports should include transfers within an agency 

from one TAFS account to another. Because EPA’s reports correctly included transfers within 

EPA, there was no inaccurate accounting, only a misstatement in the written instructions. OCFO 

provided us corrected internal instructions on April 7, 2010. 

EPA Submitted Timely Financial Reports 

We found that EPA submitted timely financial reports to the RAT Board. The reports include 

obligation and gross outlay activity through the prior Friday. EPA transmits the weekly reports 

to the RAT Board through an e-mail to a General Services Administration feed. OMB requires 

federal agencies to transmit the reports each Tuesday by 5:30 p.m., but will allow an extension 

until 10:00 a.m. Wednesday. The RAT Board includes, in its weekly posting to 

www.recovery.gov, the reports of agencies transmitted by 10:00 a.m. Wednesday. Of the five 

reports reviewed, EPA submitted one report to the RAT Board after the deadline, on Tuesday, 

February 2, 2010, at 10:48 p.m. However, the RAT Board included the posting to 

www.recovery.gov due to its extension policy. EPA’s late transmission had no effect on the 

timely posting of Recovery Act activity for public access. 

Agency Comments and OIG Evaluation 

In an e-mail dated June 11, 2010, the Agency stated it had no comments on our report. 

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10-R-0151 

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 

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Appendix A 

Distribution 

Office of the Administrator 

Chief Financial Officer 

Deputy Assistant Administrator for Environmental Information and

 Deputy Chief Information Officer 

Assistant Administrator for Administration and Resources Management 

Agency Follow-up Coordinator 

General Counsel 

Associate Administrator for Congressional and Intergovernmental Relations 

Associate Administrator for Public Affairs 

Audit Follow-up Coordinator, Office of the Chief Financial Officer 

Audit Follow-up Coordinator, Office of Environmental Information 

Acting Inspector General 

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