Environmental Protection Agency: Problems Persist in Effectively Managing Grants
Published: 2003-06-11T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Over the years, EPA has had persistent problems in managing its grants. Grants constituted one-half of the agency's annual budget, or about $4.2 billion in fiscal year 2002. EPA uses grants to implement its programs to protect human health and the environment and awards them to over 3,300 recipients, including state and local governments, tribes, universities, and nonprofit organizations. EPA's ability to efficiently and effectively accomplish its mission largely depends on how well it manages its grant resources and builds in accountability. Since 1996, GAO and EPA's Office of Inspector General have repeatedly reported on EPA's problems in managing its grants. Because these problems have persisted, in January 2003, GAO cited grants management as a major management challenge for EPA. GAO is currently reviewing EPA's efforts to improve grants management at the request of the Chairman of the House Committee on Transportation and Infrastructure and Representative Anne Northup. For this testimony GAO is reporting on results of its previously issued reports and on the grants problems EPA faces, past actions to address these problems, and recently issued EPA policies and a 5-year grants management plan to address its long-standing grants management problems.
section_title: What GAO Found
paragraphs: EPA faces four key problems in managing its grants: (1) selecting the most qualified grant recipients from a large applicant pool, (2) effectively overseeing grantees throughout the life of the grant, (3) measuring the results of the grantees' work, and (4) effectively managing its grants staff and resources. EPA must resolve these problems in order to improve its management of grants. In recent years, EPA has taken a series of actions to address two of its key problem areas: grantee oversight and resource management. EPA actions include issuing several oversight policies, conducting training, and developing a new data system for grants management. However, these past actions were not consistently successful in resolving grants management problems because of weaknesses in implementation and insufficient management emphasis. For example, between 1998 and 2002, EPA issued three policies designed to improve oversight of grantees, but EPA staff did not consistently carry them out. Late in 2002, EPA launched new efforts to address some of its grants management problems. In September 2002, EPA, for the first time, issued a policy to promote competition in awarding grants. In December 2002, it issued a new policy designed to better ensure effective grant oversight. Finally, in April 2003, EPA issued a 5-year grants management plan to address its long-standing grants management problems. GAO is still reviewing these new efforts. Although EPA's recent actions seem promising, the agency has a long history of undertaking initiatives to improve grants management that have not solved its problems. If the future is to be different from the past, EPA must work to aggressively implement its new policies and its ambitious 5-year plan through a sustained, coordinated effort. It will be particularly important for all agency officials involved in managing grants to be committed to and held accountable for achieving the plan's goals and objectives.

section_title: Letter
paragraphs: We are pleased to be here today to discuss the Environmental Protection  Agency’s (EPA) management of its grants. My testimony is based on issued  GAO reports and ongoing work we are conducting at the request of the  Chairman of the House Committee on Transportation and Infrastructure  and Representative Anne Northup. We plan to issue our report this  summer.
As you know, over the years, EPA has had persistent problems in  managing its grants. Grants constituted one-half of the agency’s annual  budget or about $4.2 billion, in fiscal year 2002. EPA uses grants to  implement its ongoing programs to protect human health and the  environment and awards grants to over 3,300 recipients, including state  and local governments, tribes, universities, and nonprofit organizations.  With about half of its budget devoted to grants, EPA’s ability to efficiently  and effectively accomplish its mission largely depends on how well it  manages its grant resources and builds accountability into its efforts.  Because of its grants management problems, which we and the EPA  Inspector General have repeatedly reported on, we designated EPA’s  grants management as a major management challenge in January 2003.
Our testimony today describes the (1) major problems EPA faces in  managing its grants, (2) actions EPA has taken in the past to address these  problems, and (3) recently issued EPA policies and a 5-year plan to resolve  these problems. In addition to our own reports, we examined EPA’s Office  of Inspector General reports, EPA’s internal management reviews, and  other documents to identify EPA’s key grants management problems.
EPA faces four key problems in managing its grants: (1) selecting the most  qualified grant recipients from a large applicant pool, (2) effectively  overseeing grantees throughout the life of the grant, (3) measuring the  results of its grantees’ work, and (4) effectively managing its grants staff  and resources. EPA must resolve these problems in order to improve its  grants management.
EPA has taken a series of actions in the past to correct these problems,  but several of these actions were not consistently successful because of  weaknesses in implementation and insufficient management emphasis.  For example, EPA issued three policies designed to improve grantee  oversight, but EPA staff did not consistently carry them out.
Late in 2002, EPA launched new efforts to address some of its grants  management problems. In September 2002, EPA, for the first time, issued a  policy to promote competition in awarding grants. In December 2002, it  issued a new policy designed to better ensure effective grant oversight.  Finally, in April 2003, EPA issued a 5-year grant management plan to  address its long-standing grants management problems. While these  actions show promise, we are still early in our review of EPA’s new  efforts.
subsections: section_title: Background
paragraphs: EPA offers two types of grants—nondiscretionary and discretionary:    Nondiscretionary grants support water infrastructure projects, such as  renovating municipal drinking water facilities, and continuing  environmental programs, such as the Clean Air Program for monitoring  and enforcing Clean Air Act regulations. For these grants, Congress directs  awards to one or more classes of prospective recipients who meet specific  criteria for eligibility. These continuing environmental grants are often  awarded on the basis of formulas prescribed by law or agency regulation.  In fiscal year 2002, EPA awarded about $3.5 billion in nondiscretionary  grants. EPA has primarily awarded these grants to states or other  governmental entities.
Discretionary grants fund a variety of activities, such as environmental  research and training. EPA has the discretion to independently determine  the recipients and funding levels for these grants. In fiscal year 2002, EPA  awarded about $719 million in discretionary grants. EPA has awarded  these grants to nonprofit organizations and universities in addition to  governmental entities.
EPA administers and oversees grants through the Grants Administration  Division within the Office of Grants and Debarment, 12 program offices in  headquarters, and EPA’s 10 regional offices. The Grants Administration  Division develops overall grants policy. About 102 grant specialists in  headquarters and the regions are responsible for overseeing the  administration of grants. EPA also has approximately 3,000 project  officers within headquarter program offices and the regions. These officers  are responsible for overseeing the technical or programmatic aspects of  the grants. While grant specialists are dedicated to grants management,  EPA staff members who serve as project officers have other primary  responsibilities.
The grant process has four phases:    Pre-award. EPA reviews the application paperwork and makes an award  decision.
Award. EPA prepares the grant documents and instructs the grantee on  technical requirements, and the grantee signs an agreement to comply  with all requirements.
Post-award. EPA provides technical assistance and oversight; the grantee  completes the work, and the project ends.
Closeout of the award. The project officer ensures that the project is  completed; the grants management office prepares closeout documents  and notifies the grantee that the grant is completed.
EPA has had persistent problems in managing its grants. In 1996, EPA’s  Inspector General testified before Congress that EPA did not fulfill its  obligation to properly monitor grants. Acknowledging these problems,  EPA identified oversight, including grant closeouts, as a material  weakness—a management control weakness that the EPA Administrator  determines is significant enough to report to the President and Congress.  EPA’s fiscal year 1999 Integrity Act report indicated that this oversight  material weakness had been corrected, but the Inspector General testified  that the weakness continued. In 2002, the Inspector General and the Office  of Management and Budget recommended that EPA, once again, designate  grants management as a material weakness. EPA ultimately decided to  maintain this issue as an agency-level weakness, which is a lower level of  risk than a material weakness. EPA made this decision because it believes  its ongoing corrective action efforts will help to resolve outstanding grants  management problems. However, in adding EPA’s grants management to  GAO’s list of EPA’s major performance and accountability challenges in  January 2003, we signaled our concern that EPA has not yet taken action  to ensure that it can manage its grants effectively.
section_title: EPA Continues to Face Problems in Managing Its Grants in Four Key Areas
paragraphs: EPA faces four major, persistent problems in managing its grants. It must  resolve these problems in order to improve its grants management.  Specifically, EPA has not always    awarded its discretionary grants competitively or ensured that it solicits  these grants proposals from a large pool of applicants;   effectively overseen its grantees’ progress and compliance with the terms    managed its grants so that they are effectively used to achieve    effectively managed its grants management resources by holding its staff  accountable for performing their duties, ensuring that the staff are  adequately trained and appropriately allocated, and providing them with  adequate management information.
subsections: section_title: EPA Has Not Always Awarded Grants Competitively and Ensured Widespread Solicitations
paragraphs: Until September 2002, EPA did not have a policy for competing the  discretionary grants that might be eligible for competition—about $719  million of its total $4.2 billion in grant funding in fiscal year 2002.  Consequently, EPA was not promoting competition. According to EPA’s  own internal management reviews and an Inspector General report, EPA  did not always compete its discretionary grants when competition might  have been warranted. By competitively soliciting grants, EPA would be  able to choose the best project at the least cost to the government and is  encouraged by the Federal Grant and Cooperative Agreement Act of 1977.
EPA can award its discretionary grants noncompetitively; however, it is  required by agency guidance to document the reasons for these decisions  in a “decision memorandum.” It has not consistently done so, according to  EPA’s internal management reviews. Lack of documentation raises  questions about the award process and ultimately about whether EPA is  providing its grant funds to the best-qualified applicants.
Furthermore, EPA has not always engaged in widespread solicitation  when it could be beneficial to do so. This type of solicitation would  provide greater assurance that EPA receives proposals from a variety of  eligible and highly qualified applicants who otherwise may not have  known about grant opportunities. According to a 2001 EPA Inspector  General report, program officials indicated that widespread solicitation  was not necessary because “word gets out” to eligible applicants.  Applicants often sent their proposals directly to these program officials  who funded them using “uniquely qualified” as the justification for a  noncompetitive award. This procedure creates the appearance of  preferential treatment by not offering the same opportunities to all  potential applicants. In addition, the agency provided incomplete or  inconsistent public information on its grant programs in the Catalog of  Federal Domestic Assistance and therefore the public and potential  applicants may not have been adequately informed of funding  opportunities.
section_title: EPA Has Not Always Effectively Overseen Grant Recipients
paragraphs: EPA has faced five persistent problems in overseeing its grants. First,  EPA’s internal reviews found that grantees’ progress reports, one of the  best sources of information for monitoring recipients, did not include  required financial information, and grantees had not always submitted  progress reports in a timely fashion. EPA generally requires recipients to  submit progress reports to the project officer within a specified time  frame. These reports are to include progress to date, any difficulties  encountered, a discussion of expenditures compared to work completed,  and an explanation of significant discrepancies. Although the recipient is  responsible for submitting timely progress reports that discuss the  project’s financial status, the project officer is responsible for ensuring  that the recipient has done so.
Second, project officers and grant specialists did not always document  their monitoring activities, which raises questions about the extent of the  monitoring they did conduct. According to an EPA internal review, for  example, one grants management office developed a form to ensure  monitoring activities were completed, but the form was missing from 50  percent of the grant files reviewed, and when the monitoring form was  used, it was not always completed. Furthermore, project officers did not  always document that they had monitored required key areas, such as  ensuring compliance with the terms and conditions of the grant award.
Third, EPA has not always ensured that different types of grantees have  adequate financial and internal controls to ensure that they use federal  funds properly. For example, in 2001, we reported that EPA’s oversight of  nonprofit grantees’ costs did not ensure that grant funds were used for  costs allowed under guidance published by the Office of Management and  Budget. In particular, EPA’s on-site reviews were flawed. The reviews did  not include transaction testing to identify expenditures that are not  allowed, such as lobbying. We also found that EPA had conducted on-site  reviews at only 4 percent of nonprofit grantees who might have had  inexperienced staff and inadequate financial and internal controls. In 2000  and 2002, the EPA Inspector General reported that one state’s department  of environmental management and two tribes, respectively, lacked  adequate financial and internal controls. These problems could have been  identified through EPA oversight of grantees.
Fourth, EPA has sometimes not ensured that grantees are complying with  certain grant regulations, such as those pertaining to grantee procurement  and conflict-of-interest. In 2002, the EPA Inspector General reported that  EPA did not monitor grantees’ procurements to determine if the grantees  were using a competitive process to obtain the best products, at the best  price, from the most qualified firms. In 1999 and 2002, the EPA Inspector  General reported conflict-of-interest problems because grant recipients  had awarded contracts to parties who had assisted them in preparing their  grants and therefore had advance knowledge about grantees’ plans to  award contracts.
Finally, EPA has not fully ensured that recipients are submitting final  reports in a timely manner and meeting grant objectives. For example, in  2000, we reported that EPA had not adequately tracked its Science To  Achieve Results research grants to ensure their on-time completion. We  found that 144 of the nearly 200 grants we reviewed had missed their  deadline for submitting final reports, even after some extensions had been  given. Also, in 1998, EPA’s Inspector General reported that EPA had not  monitored training assistance grants to nonprofit grantees to determine  how many students were being trained or how much the training cost.
section_title: EPA Has Not Always Managed Its Grants to Achieve Environmental Results
paragraphs: EPA awarded some grants before considering how the results of the  grantees’ work would contribute to achieving environmental results. In  2001, we reported that EPA program officials treated EPA’s strategic goals  and objectives not as a tool to guide the selection of grants, but rather as a  clerical tool for categorizing grants after the funds were already awarded.  By assessing the relevance of these grants to EPA’s strategic plan after  selecting the grantees, EPA cannot ensure that it is selecting the projects  that will best help it accomplish its mission.
EPA has also not developed environmental measures and outcomes for all  of its grant programs. In 2000, we reported that EPA did not have program  criteria to measure the effectiveness of its Science To Achieve Results  program. Instead, EPA’s management of the program focused on the  procedures and processes of awarding grants. As a result, EPA was  uncertain what the program was achieving. Similarly, the Office of  Management and Budget recently evaluated four EPA grant programs to  assess the programs’ effectiveness at achieving and measuring results.  The office found that these four EPA grant programs lacked outcome- based measures—measures that demonstrated the impact of the programs  on improving human health and the environment. The office concluded  that one of EPA’s major challenges was demonstrating program  effectiveness in achieving public health and environmental results.
EPA often does not require grantees to submit work plans that explain  how a project would achieve measurable environmental results. The  grantee work plan describes the project, its objectives, and the method the  grantee will use to accomplish the objectives. An effective work plan  should, among other things, list the grant’s expected outcomes. The  project officer uses the work plan to evaluate performance under the  agreement. In 2002, EPA’s Inspector General reported that EPA approved  some grantees’ work plans without determining the projects’ long-term  human health and environmental outcomes. In fact, for almost half of the  42 grants reviewed, EPA did not even attempt to measure the projects’  outcomes. Instead, EPA funded grants on the basis of work plans that  focused on short-term procedural results, such as meetings or  conferences. In some cases, it was unclear what the grant funding had  accomplished.
section_title: EPA Has Not Effectively Managed Its Grant Resources
paragraphs: Both EPA’s internal management reviews and its Inspector General  reports have noted several problems in how effectively and efficiently EPA  manages its grants staff and other resources. In terms of staff, the agency  has not always held accountable its staff responsible for grants  management, such as project officers and grant specialists. EPA’s internal  management reviews have found that, in some cases, job descriptions or  performance standards were inadequate. The Inspector General recently  reported similar findings. According to the Inspector General, agency  leadership had not always emphasized the importance of project officer  duties, nor held project officers accountable for performing certain duties.  More specifically, project officer responsibilities were not clearly defined  in their performance agreements and position descriptions, and there were  no consequences when required duties were not performed.
EPA has also not provided all grant staff with the training necessary to  properly manage all aspects of grants. EPA’s internal management reviews  have noted that some staff who were managing grants had not completed  the basic project officer training. Other staff may have completed the basic  training but needed additional training to refresh their skills or to become  familiar with all of their grants management responsibilities and  requirements. For example, in some instances, project officers were not  familiar with the five key areas they were to review when monitoring  grantees, such as the financial aspects of a grantee’s performance.
Internal management reviews also identified other staff-related problems.  For example, some internal reviews stated that EPA did not have enough  staff to adequately manage the number of grants it awards. Furthermore,  other reviews noted that uneven distribution of workload among staff  resulted in poor grants management.
EPA has also not adequately managed its resources for supporting grant  staff. Some EPA internal management reviews noted a lack of resource  commitment—time and money—to conduct grant management activities  and develop staff. This lack of resources has hampered staff in performing  their duties, according to these reviews. For example, some of these  reviews noted that grantee oversight, particularly the on-site reviews, was  limited by the scarcity of such resources as travel funds.
Finally, staff did not always have the information they needed to  effectively manage grants. According to several EPA internal management  reviews, staff lacked accessible or useable reference material—such as  policy and guidance documents, and other information resources, such as  reports of grantee expenditures. Additionally, we and others have reported  that EPA does not use information from performance evaluations or  information systems to better manage its grants. For example, one EPA  region did not analyze the results of its own internal surveys, which were  designed to assess the effectiveness of its internal grants management  operations.
section_title: EPA’s Past Actions Have Targeted Some of the Key Problems but Have Not Been Consistently Successful
paragraphs: In recent years, EPA has taken a series of actions to address two of its key  problem areas: grantee oversight and resource management. It has issued  several oversight policies, conducted training, and developed a new data  system for grants management. However, EPA’s corrective actions have  not been consistently successful because of weaknesses in their  implementation and insufficient management emphasis.
subsections: section_title: EPA Has Taken Actions to Improve Oversight of Grantees and Resource Management
paragraphs: Between 1998 and 2002, EPA issued three policies to improve its oversight  of its grant recipients. These policies have tried to improve oversight by  establishing, expanding, and refining the activities of EPA staff involved in  managing grants. EPA took additional actions to reduce the backlog of  grants needing closeout.
EPA’s first policy, issued in May 1998, required grants management office  staff to monitor the financial progress and administrative compliance of  grant recipients’ activities. The policy also required the staff to conduct  site visits or desk reviews to review the adequacy of some grantees’  administrative and financial systems for managing their grants.  Furthermore, the grants management offices had to submit biennial  monitoring plans, which included their proposed monitoring activities.  Finally, the policy included suggested criteria for selecting grantees to be  reviewed and guidelines for how to conduct the oversight activities.
EPA’s second policy, issued in April 1999, added oversight responsibilities  for program staff in headquarters and the regions. The policy required  headquarters and regional program offices to submit annual plans  outlining their proposed monitoring activities. The policy also suggested  activities to be included in these plans, such as monitoring grantees’  progress of work, documenting their efforts, and closing out grants in a  timely manner.
EPA’s third policy, issued in February 2002, further refined its oversight  requirements by having grant management and program offices conduct  in-depth monitoring on at least 5 to 10 percent of their grant recipients.  The grant management offices had to assess grantees’ financial and  administrative capacity, while the program offices had to assess the  grantees’ activities in five key areas, such as progress of work and  financial expenditures. Furthermore, the grant management offices, as  well as regional and headquarters program offices, had to report quarterly  on their in-depth monitoring activities. Additionally, the policy committed  the Office of Grants and Debarment to the development of a database,  which, according to an EPA official, the grants management offices would  use to store the results of their in-depth monitoring activities. Finally, the  policy included suggested guidance for how to conduct program office  reviews.
One of the final steps in monitoring is “closing out” grants to ensure that  the project was completed and that any remaining funds are recovered. In  1996, EPA had a backlog of over 19,000 grants needing closeout. To reduce  such backlogs and prevent future backlogs, EPA, among other things,  developed specific procedures for closing out nonconstruction grants and  identified a strategy for closing construction grants that included assessing  impediments to closing out grants.
In terms of resource management, EPA provided grants management  training for its staff and some grant recipients. It developed and  periodically updated a training manual for project officers. EPA also  required project officers to attend a 3-day training course based on this  manual and periodically take a refresher course. EPA developed a  database to certify that project officers had completed this training.  According to an EPA official, grants specialists have also received some  training. Finally, EPA conducted a 1-day grants management training  course for nonprofit grantees and pilot-tested a standard training course  for grants specialists.
Finally, EPA has taken steps to improve another critical resource—its  primary data system for managing grants. In 1997, it began developing the  Integrated Grants Management System (IGMS), which, according to an  EPA official, will allow electronic management throughout the life of the  grant. EPA believes IGMS could help resolve some of the long-standing  problems in grants management by implementing controls to prevent  certain documents from being submitted without required elements and  providing electronic reminders of when certain activities or documents are  due. Additionally, EPA designed the system to reduce the potential for  data entry errors.
According to an EPA official, IGMS is being developed through modules.  In 2001, EPA began implementing the system to control the application  and award phases of a grant. Using IGMS, EPA will be able to review the  grantee’s application, prepare and review EPA’s documents, and approve  the award electronically. In April 2003, EPA will begin using the post- award module of IGMS. This module will allow project officers to enter  project milestones into the system, communicate with other staff involved  in overseeing grants, receive electronic reports from grantees, and initiate  closeout activities electronically. EPA expects that all staff will be using  IGMS to electronically manage grants by September 2004.
section_title: EPA’s Past Actions Have Had Mixed Results and Have Not Been Consistently Successful in Resolving Grants Management Problems
paragraphs: EPA continues to face grant management problems, despite the corrective  actions it has taken to date. In 2002, EPA’s Inspector General reported that  EPA’s corrective actions were not effectively implemented and  specifically, for monitoring, found, among other things,  inconsistent performance of monitoring responsibilities, inadequate preparation of monitoring plans, incomplete submission of quarterly compliance reports, and   considerable differences among the programs and the regions in the  number of on-site evaluations they conducted.
As part of our ongoing review, we are assessing EPA’s corrective actions  for monitoring and have found mixed results. On the one hand, we have  seen some problems. For example, we identified two weaknesses in the  database EPA created to store the results of its in-depth reviews. First,  only grant management offices—not program offices—had to enter the  results of their reviews into this database, and according to an EPA official  familiar with the database, not all of them did so. Second, according to the  same official, EPA did not design the database so that it could analyze the  results of the in-depth reviews to make management improvements.
On the other hand, however, we found that EPA’s corrective actions  increased the oversight of its grant recipients. In 2002, EPA reported that it  had conducted 578 on-site reviews, and 629 desk reviews, which is an  increase in both the number of on-site reviews and the number of reviews  some offices conducted. In addition, EPA’s 2002 internal reviews  indicated some improvements in oversight compared with the prior year’s  performance.
On another positive note, EPA has made improvements in closing out  grants. In 1998, we reported that in some instances EPA’s corrective  actions to close out grants were not initially successful.  For example, we  had found that strategies to reduce the closeout backlog were not always  consistently implemented or failed to close out a considerable number of  grants, despite making some progress. However, EPA had successfully  resolved its backlog problem by 2002. As a result, EPA has been able to  eliminate this backlog as a material weakness and receive better assurance  that grant commitments have been met.
With respect to resource management, EPA implemented corrective  actions to improve training, but these actions have not been fully  successful. For training, the EPA Inspector General reported that the  agency did not have adequate internal controls in place to ensure that  project officers were in compliance with the training requirements.  Specifically, one region did not track the names and dates of project  officers who received training, the agencywide database on training for  project officers was inaccurate and had limited functionality, and the on- line refresher course did not have the controls necessary to prevent staff  from obtaining false certifications.
In addition to the weaknesses in the corrective actions for specific  problem areas, the EPA Inspector General found two other problems.  First, the agency’s internal grant management reviews did not consistently  examine issues to identify and address systemic weaknesses, did not  adequately identify the causes of specific weaknesses or how the proposed  corrective actions would remedy the identified weakness, and were not  sufficiently comprehensive. Furthermore, the Grants Administration  Division did not assess the results of these reviews to make management  improvements. Second, EPA’s senior resource officials did not ensure  compliance with EPA policies or sufficiently emphasize grantee  oversight. The Inspector General concluded that the lack of emphasis  contributed to the identified implementation weaknesses. In response to  this assertion, senior resource officials stated that monitoring is affected  by the limited availability of resources, and that they lack control over  how regional program offices set priorities. The Inspector General pointed  out that these officials are responsible for providing adequate resources;  however, none of the officials interviewed had conducted assessments to  determine whether they had adequate resources.
section_title: EPA Has Recently Issued New Policies and Developed a Plan to Address Its Grants Management Problems
paragraphs: EPA has recently issued new policies to address two of the key problems  we have identified—competition and oversight—and developed a 5-year  plan to address its long-standing grants management problems. In  September 2002, EPA issued a policy to promote competition in awarding  grants by requiring that certain grants be competed. These grants may be  awarded noncompetitively only if certain criteria are met, in which case, a  detailed justification must be provided. The new policy also created a  senior-level advocate for grants competition to oversee the  implementation of the policy. In December 2002, EPA also issued a new  oversight policy that increases the amount of in-depth monitoring—desk  reviews and on-site reviews—that EPA conducts of grantees; mandating  that all EPA units enter compliance activities into a database; and  requiring transaction testing for unallowable expenditures, such as  lobbying, during on-site evaluations reviews.
In April 2003, EPA issued a 5-year Grants Management Plan. EPA’s  Assistant Administrator for Administration and Resources Management  has called implementation of this plan the most critical part of EPA’s  grants management oversight efforts. The grants management plan has  five goals and accompanying objectives:    Promote competition in the award of grants by identifying funding  priorities, encouraging a large and diverse group of applicants, promoting  the importance of competition within the agency, and providing adequate  support for the grant competition advocate.
Strengthen EPA’s oversight of grants by improving internal reviews of EPA  offices, improving and expanding reviews of EPA grant recipients,  developing approaches to prevent or limit grants management  weaknesses, establishing clear lines of accountability for grants oversight,  and providing high-level coordination, planning, and priority setting.
Support identifying and achieving environmental outcomes by including  expected environmental outcomes and performance measures in grant  workplans, and improving the reporting on progress made in achieving  environmental outcomes.
Enhance the skills of EPA personnel involved in grants management by  updating training materials and courses and improving delivery of training  to project officers and grants specialists.
Leverage technology to improve program performance by, for example,  enhancing and expanding information systems that support grants  management and oversight.
Although we have not fully assessed EPA’s new policies and grants  management plan, I would like to make a few preliminary observations on  these recent actions based on our ongoing work. Specifically, EPA’s plan:    Recognizes the need for greater involvement of senior officials in ensuring  effective grants management throughout the agency. The plan calls for a  senior-level grants management council to provide high-level coordination,  planning, and priority-setting for grants management.
Appears to be comprehensive in that it addresses the four major  management problems—competitive grantee selection, oversight,  environmental results, and resources—that we identified in our ongoing  work. Previous EPA efforts did not address all these problems, nor did  they coordinate corrective actions, as this plan proposes. EPA’s plan ties  together recent efforts, such as the new policies and ongoing efforts in  staff and resource management, and proposes additional efforts to resolve  its major grants management problems.
Identifies the objectives, milestones, and resources needed to help ensure  that the plan’s goals are achieved. Furthermore, EPA is developing an  annual companion plan that will outline specific tasks for each goal and  objective, identify the person responsible for completing the task, and set  an expected completion date.
Begins to build accountability into grants management by establishing  performance measures for each of the plan’s five goals. Each performance  measure establishes a baseline from which to measure progress and target  dates for achieving results. For example, as of September 2002, 24 percent  of new grants to nonprofit recipients that are subject to the competition  policy were competed—EPA’s target is to increase the percentage of these  competed grants to 30 percent in 2003, 55 percent in 2004, and 75 percent  in 2005. The plan further builds accountability by identifying the need for  performance standards for project officers and grants specialists that  address grant management responsibilities.
Although these actions appear promising, EPA has a long history of  undertaking initiatives to improve grants management that have not solved  its problems. If the future is to be different from the past, EPA must work  aggressively to implement its new policies and its ambitious plan through  a sustained, coordinated effort. It will be particularly important for all  agency officials involved in managing grants to be committed to and held  accountable for achieving the plan’s goals and objectives.
Mr. Chairman, this concludes my testimony. I would be happy to answer  any questions that you or Members of the Subcommittee may have.
section_title: Contacts and Acknowledgments
paragraphs: For further information, please contact John B. Stephenson at (202) 512- 3841. Individuals making key contributions to this testimony were Andrea  Wamstad Brown, Christopher Murray, Paul Schearf, Rebecca Shea, Carol  Herrnstadt Shulman, Bruce Skud, and Amy Webbink.
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