U.S. ENVIRONMENTAL PROTECTION AGENCY 

OFFICE OF INSPECTOR GENERAL 

Catalyst for Improving the Environment 

Site Inspection Report 

American Recovery and 

Reinvestment Act Site Inspection 

of the High-Rate Water Treatment 

Facility, City of Newark, Ohio 

 Report No. 10-R-0147 

 June 16, 2010 
Report Contributors: Richard Howard 

 Lisa McCowan 

 Leah Nikaidoh 

Cover photo: Wastewater treatment facility under construction at the City of Newark, Ohio. 

(EPA OIG photo) 
 

 

U.S. Environmental Protection Agency 10-R-0147 

June 16, 2010 Office of Inspector General 

At a Glance 

Catalyst for Improving the Environment 

Why We Did This Review	 American Recovery and Reinvestment Act 

Site Inspection of the High-Rate Water The U.S. Environmental 

Protection Agency’s Office of Treatment Facility, City of Newark, Ohio

Inspector General conducts 

site visits of American What We Found 

Recovery and Reinvestment 

Act of 2009 (Recovery Act) 

clean water and drinking water 

projects. We selected a 

project in the City of Newark, 

Ohio, for review. 

Background 

The City received a 

$20,360,232 loan from the 

Ohio Environmental 

Protection Agency and the 

Ohio Water Development 

Authority under the Clean 

Water State Revolving Fund 

program. This amount 

included $5,000,000 in 

Recovery Act funds for 

principal forgiveness. The 

City will construct a high-rate 

treatment facility at its 

wastewater treatment plant. 

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/ 

20100616-10-R-0147.pdf 

We conducted an onsite inspection of the water treatment project in the City of 

Newark, Ohio, in December 2009. As part of our inspection, we toured the 

project, interviewed City representatives and contractor personnel, and reviewed 

documentation related to Recovery Act requirements. 

Based upon our site inspection, nothing came to our attention that would require 

action from the City, the State of Ohio, or the U.S. Environmental Protection 

Agency. 
 

 

 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

WASHINGTON, D.C. 20460 

OFFICE OF 

INSPECTOR GENERAL 

June 16, 2010 

MEMORANDUM 

SUBJECT:	 American Recovery and Reinvestment Act 

Site Inspection of the High-Rate Water Treatment Facility, 

City of Newark, Ohio 

Report No. 10-R-0147 

FROM:	 Melissa M. Heist 

Assistant Inspector General for Audit 

TO:	 Susan Hedman 

Regional Administrator, Region 5 

U.S. Environmental Protection Agency 

This is our report on the subject site visit conducted by the Office of Inspector General of the 

U.S. Environmental Protection Agency. The report summarizes the results of our site inspection 

of a City of Newark, Ohio, high-rate water facility project. 

We performed this site inspection as part of our responsibility under the American Recovery and 

Reinvestment Act of 2009 (Recovery Act). The purpose of our site inspection was to determine 

the City’s compliance with selected requirements of the Recovery Act pertaining to the Clean 

Water State Revolving Fund program. The Ohio Environmental Projection Agency approved the 

City’s project. The City received a $20,360,232 loan, including $5,000,000 in Recovery Act 

funds for principal forgiveness. 

The estimated cost of this report – calculated by multiplying the project’s staff days by the 

applicable daily full cost billing rate in effect at the time – is $117,789. 

Action Required 

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

The report will be made available at http://epa.gov/oig. If you or your staff have any questions 

regarding this report, please contact Robert Adachi at (415) 947-4537 or adachi.robert@epa.gov, 

or Leah Nikaidoh at (513) 487-2365 or nikaidoh.leah@epa.gov. 
10-R-0147 

Purpose 

The purpose of our review was to determine the City of Newark, Ohio’s, compliance with 

requirements for subrecipients of American Recovery and Reinvestment Act of 2009 (Recovery 

Act) funds under the Clean Water State Revolving Fund program. 

Background 

The City received a $20,360,232 loan from the Ohio Environmental Protection Agency and the 

Ohio Water Development Authority under the Clean Water State Revolving Fund program. This 

amount included $5,000,000 in Recovery Act funds for principal forgiveness. The City will 

construct a high-rate treatment facility at its wastewater treatment plant. 

Scope and Methodology 

Due to the time-critical nature of Recovery Act requirements, we did not perform this 

assignment in accordance with generally accepted government auditing standards. Specifically, 

we did not perform certain steps that would allow us to obtain information to assess the City’s 

internal controls and any previously reported audit concerns. As a result, we do not express an 

opinion on the adequacy of the City’s internal controls or compliance with all federal, State, or 

local requirements. 

We conducted an onsite inspection at the City during December 1-2, 2009. During our 

inspection, we: 

1.	 Toured the project 

2.	 Interviewed City and contractor personnel 

3.	 Reviewed documentation maintained by the City or its contractors on the following 

matters: 

a.	 Buy American requirements under Section 1605 of the Recovery Act 

b.	 Davis-Bacon Act wage requirements under Section 1606 of the Recovery Act 

c.	 Contract procurement 

d.	 Financial management and reporting requirements under Section 1512 of the 

Recovery Act 

Results of Site Inspection 

Based upon our site inspection, nothing came to our attention that would require action from the 

U.S. Environmental Protection Agency, the State of Ohio, or the City. We have summarized 

specific inspection results below. 

Buy American Requirements 

The project was exempt from the Buy American requirements. The City qualified for the 

nationwide Buy American requirements waiver for both of its prime contracts. The City 

advertised for bids on December 5, 2008, and opened the bids on January 15, 2009. Both 

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10-R-0147 

the bid advertisement and bid opening dates were within the nationwide Buy American 

waiver timeframe of October 1, 2008, to February 17, 2009. The City advertised for bids 

in anticipation of receiving funding from the State. Therefore, the City qualifies for the 

nationwide Buy American waiver and is exempt from the requirements. 

Davis-Bacon Act 

We reviewed the City’s compliance with the Davis-Bacon Act, and no issues came to our 

attention. To comply with Davis-Bacon Act requirements, contractors signed weekly 

payrolls certifying compliance with Davis-Bacon Act rates. The contractors submitted 

certified payroll reports to the City’s utilities superintendent. The superintendent 

randomly checks the payroll reports to ensure compliance with Davis-Bacon Act 

requirements. We reviewed certified payrolls and verified compliance with Davis-Bacon 

Act rates. 

Contract Procurement 

We reviewed the City’s procurement of its contractors, and no issues came to our 

attention. The City hired two construction contractors, one for general 

construction/HVAC/plumbing work and one for electrical work. Each contract was a 

lump-sum agreement. The City awarded the contracts competitively to the lowest bidder 

using the sealed-bid method. 

Financial Management and Reporting. 

We reviewed the Water Pollution Control Loan Fund Agreement that the City entered 

into with the State of Ohio on February 12, 2009. We also reviewed the supplement to 

the loan agreement that the City signed on July 12, 2009. No issues came to our 

attention. 

The City initially estimated that it would create or retain approximately 204 jobs due to 

the Recovery Act funding it received. We obtained copies of the Recovery Act jobs 

created/retained reports the City submits to the Ohio Environmental Protection Agency to 

determine the process the City is using to provide information to the State. The State 

uses this information to prepare the report required under Section 1512(c) of the 

Recovery Act. 

Based on our review of the reports, the information provided meets Recovery Act 

requirements. In its first quarterly report, the City reported that it created or retained 26.8 

jobs from July through September 2009. In its second quarterly report, the City reported 

that it had created or retained 24.15 jobs from October through December 2009. In its 

third quarterly report, the City reported that it created or retained 18.29 jobs from January 

through March 2010, and that the City had completed approximately 33 percent of the 

project. 

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Recommendations 

We have no recommendations. 

Subrecipient’s Response and Office of Inspector General Comment 

We held an exit conference with the City of Newark on June 9, 2010. The City had no 

comments, since the report did not have any findings. The Office of Inspector General also had 

no comments. 

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10-R-0147 

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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10-R-0147 

Appendix A 

Distribution 

Office of the Administrator 

Regional Administrator, Region 5 (Action Official) 

Director, Grants and Interagency Agreements Management Division, 

Office of Administration and Resources Management 

Agency Follow-up Official (the CFO) 

Agency Follow-up Coordinator 

General Counsel 

Associate Administrator for Congressional and Intergovernmental Relations 

Associate Administrator for Public Affairs 

Audit Follow-up Coordinator, Region 5 

Public Affairs Officer, Region 5 

Mayor, Newark, Ohio 

Director, Ohio Environmental Protection Agency 

Acting Inspector General 

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